AGENDA

EDEN PRAIRIE CITY COUNCIL MEETING

TUESDAY, SEPTEMBER 15, 2020 7:00 PM, CITY CENTER Council Chamber 8080 Mitchell Road

CITY COUNCIL: Mayor Ron Case, Council Members Brad Aho, Kathy Nelson, Mark Freiberg, and PG Narayanan

CITY STAFF: City Manager Rick Getschow, Public Works Director Robert Ellis, Community Development Director Janet Jeremiah, Parks and Recreation Director Jay Lotthammer, City Attorney Maggie Neuville, and Council Recorder Jan Curielli

I. CALL THE MEETING TO ORDER

II. PLEDGE OF ALLEGIANCE

III. OPEN PODIUM INVITATION

IV. PROCLAMATIONS / PRESENTATIONS

A. EDEN PRAIRIE COMMUNITY FOUNDATION RECOGNITION

B. WEEKEND TO UNITE PROP FOOD DRIVE PROCLAMATION

C. DIRECT SUPPORT PROFESSIONAL (DSP) RECOGNITION WEEK PROCLAMATION

V. APPROVAL OF AGENDA AND OTHER ITEMS OF BUSINESS

VI. MINUTES

A. COUNCIL WORKSHOP HELD TUESDAY, SEPTEMBER 1, 2020

B. CITY COUNCIL MEETING HELD TUESDAY, SEPTEMBER 1, 2020

VII. REPORTS OF ADVISORY BOARDS AND COMMISSIONS

VIII. CONSENT CALENDAR

A. CLERK’S LICENSE LIST

B. PRAIRIE HEIGHTS by Norton Homes LLC. Second Reading of an Ordinance for PUD District review with waivers and zoning change from Rural to R1-9.5 on 9.6 acres; Development Agreement (Ordinance for PUD District Review; Development Agreement)

CITY COUNCIL AGENDA September 15, 2020 Page 2

C. APPROVE AGREEMENT WITH BERGANKDV FOR AUDITING SERVICES FOR 2020 TO 2022

D. ADOPT RESOLUTION TO PARTICIPATE IN METROPOLITAN COUNCIL’S LIVABLE COMMUNITIES ACT PROGRAMS FROM 2021- 2030

E. APPROVE EXECUTION OF SUBORDINATION AGREEMENT AND AMENDED AND RESTATED ASSIGNMENT OF TAX INCREMENT FINANCING FOR SUMMIT PLACE

F. APPROVE AGREEMENT WITH SRF FOR CONSTRUCTION ADMINISTRATION SERVICES FOR WEST 62ND STREET PROJECT

G. AWARD WEST 62ND STREET CONTRACT TO S.M. HENTGES & SONS, INC. FOR WEST 62ND STREET RECONSTRUCTION PROJECT

H. ADOPT RESOLUTION DECLARING COSTS TO BE ASSESSED AND ORDERING PREPARATION FOR SPECIAL ASSESSMENT ROLL AND SETTING HEARING DATE

I. APPROVE CHANGE ORDER NO. 1 WITH BITUMINOUS ROADWAYS, INC. FOR 2020 PAVEMENT MANAGEMENT PROJECT

J. AWARD CONSTRUCTION CONTRACT TO MINGER CONSTRUCTION CO. FOR SUMMER PLACE EROSION REPAIRS

IX. PUBLIC HEARINGS / MEETINGS

X. PAYMENT OF CLAIMS

XI. ORDINANCES AND RESOLUTIONS

XII. PETITIONS, REQUESTS, AND COMMUNICATIONS

XIII. APPOINTMENTS

XIV. REPORTS

A. REPORTS OF COUNCIL MEMBERS

B. REPORT OF CITY MANAGER

1. Resolution Certifying the Proposed 2021 Property Tax Levy, Accepting the Proposed 2021 Budget, Setting the Date for Public Hearing, and Consenting and Approving the HRA Tax Levy

CITY COUNCIL AGENDA September 15, 2020 Page 3

C. REPORT OF COMMUNITY DEVELOPMENT DIRECTOR

D. REPORT OF PARKS AND RECREATION DIRECTOR

E. REPORT OF PUBLIC WORKS DIRECTOR

F. REPORT OF POLICE CHIEF

G. REPORT OF FIRE CHIEF

H. REPORT OF CITY ATTORNEY

XV. OTHER BUSINESS

XVI. ADJOURNMENT AGENDA

CITY OF EDEN PRAIRIE

HOUSING AND REDEVELOPMENT AUTHORITY

TUESDAY, SEPTEMBER 15, 2020 7:00 PM, CITY CENTER Council Chamber 8080 Mitchell Road

HOUSING AND REDEVELOPMENT AUTHORITY MEMBERS: Chair Ron Case, Members Brad Aho, Kathy Nelson, Mark Freiberg, and PG Narayanan

CITY STAFF: City Manager Rick Getschow, Community Development Director Janet Jeremiah, City Attorney Maggie Neuville, City Planner Julie Klima, Finance Director Sue Kotchevar and Recorder Jan Curielli

I. ROLL CALL / CALL THE HRA MEETING TO ORDER

II. APPROVE MINUTES OF HRA MEETING HELD ON JANUARY 7, 2020

III. ADOPT RESOLUTION APPROVING THE PROPOSED 2021 PROPERTY TAX LEVY AND ACCEPTING THE PROPOSED 2021 BUDGET

IV. ADJOURNMENT

UNAPPROVED MINUTES

HOUSING AND REDEVELOPMENT AUTHORITY

TUESDAY, JANUARY 7, 2020 7:00 PM, CITY CENTER Council Chamber 8080 Mitchell Road

HOUSING AND REDEVELOPMENT AUTHORITY MEMBERS: Chair Ron Case, Council Members Brad Aho, Mark Freiberg, PG Narayanan, and Kathy Nelson

CITY STAFF: City Manager Rick Getschow, Public Works Director Robert Ellis, Parks and Recreation Director Jay Lotthammer, Community Development Director Janet Jeremiah, Finance Director Sue Kotchevar, City Attorney Maggie Neuville, and Council Recorder Jan Curielli

I. ROLL CALL / CALL THE HRA MEETING TO ORDER

Chair Case called the meeting to order at 7:02 PM. All HRA members were present.

II. APPROVE MINUTES OF HRA MEETING HELD ON DECEMBER 3, 2019

MOTION: Aho moved, seconded by Narayanan, to approve the HRA minutes from December 3, 2019. Motion carried 5-0.

III. ADOPT RESOLUTION HRA NO. 2020-01 AUTHORIZING EXECUTIVE DIRECTOR TO EXECUTE DOCUMENTS ON BEHALF OF HRA

Getschow explained this is a resolution prepared by former City Attorney Rosow to allow the Executive Director and the Chair to execute documents on behalf of the HRA.

MOTION: Narayanan moved, seconded by Nelson, to adopt Resolution HRA No. 2020- 01 authorizing the Executive Director to execute documents on behalf of the Eden Prairie Housing Redevelopment Authority. Motion carried 5-0.

IV. APPROVE ASSIGNMENT OF TAX INCREMENT NOTE AND HRA CONSENT AND AUTHORIZE EXECUTION BY THE EXECUTIVE DIRECTOR

Getschow said Windsor Plaza, LLC entered into a Tax Increment Development Agreement with the HRA on September 4, 2007. Pursuant to the agreement, tax increments are being provided by the HRA through a Tax Increment Note issued by the HRA to Windsor Plaza. Windsor Plaza, LLC is refinancing its mortgage. The Lender requires an assignment by Windsor Plaza, LLC of the Tax Increment Note and the consent to such assignment by the HRA.

MOTION: Nelson moved, seconded by Freiberg, to approve the assignment of Tax Increment Note and HRA consent and authorize execution by the Executive Director. Motion carried 5-0.

HRA MINUTES January 7, 2020 Page 2

V. ADOPT RESOLUTION HRA NO. 2020-02 APPROVING PARTICIPATION OF HENNEPIN COUNTY HOUSING AND REDEVELOPMENT AUTHORITY IN CITY AFFORDABLE HOUSING PROJECTS USING AFFORDABLE HOUSING INCENTIVE FUND FOR WEST HENNEPIN HOUSING LAND TRUST

Getschow said we have worked closely with the West Hennepin Affordable Housing Land Trust (WHAHLT) to develop single family affordable housing throughout Eden Prairie. We do the work through the Community Development Block Grant program. There are also other sources of funding from Hennepin County. We need to adopt a resolution that will cover the City’s support of these developments in the future.

MOTION: Freiberg moved, seconded by Aho, to adopt Resolution HRA No. 2020-02 approving participation of the Hennepin County Housing and Redevelopment Authority in Eden Prairie affordable housing projects using the Affordable Housing Incentive Fund (AHIF) for West Hennepin Affordable Housing Land Trust (WHAHLT). Motion carried 5-0.

VI. ADJOURNMENT

MOTION: Narayanan moved, seconded by Nelson, to adjourn the HRA meeting. Motion carried 5-0. Chair Case adjourned the meeting at 7:05 PM.

HOUSING AND REDEVELOPMENT AUTHORITY DATE:

AGENDA September 15, 2020

DEPARTMENT/DIVISION: ITEM DESCRIPTION: HRA ITEM NO.:

Office of the City Manager / Resolution approving the proposed 2021 III. Finance, Sue Kotchevar HRA property tax levy and accepting the proposed 2021 budget

Requested Action

Move to: Adopt the resolution to approve the proposed 2021 property tax levy to be $200,000 and accept the proposed 2021 budget of $200,000.

Synopsis

Minnesota Law authorizes the HRA to levy a tax with the consent of the City Council. The HRA must adopt a proposed net property tax levy by September 30 and certify it to the county auditor. Per Minnesota Statute, Housing and Redevelopment Authorities can levy a tax of up to .0185 percent of estimated market value. The proceeds may be spent on planning and implementation of redevelopment and/or low-rent housing assistance programs with the City. The limit for the City of Eden Prairie is $2,057,539.

Attachment

Resolution HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF EDEN PRAIRIE HENNEPIN COUNTY, MINNESOTA

H.R.A. RESOLUTION NO. 2020-

A RESOLUTION APPROVING THE HRA PROPOSED 2021 PROPERTY TAX LEVY AND ACCEPTING A PROPOSED BUDGET FOR GENERAL OPERATIONS

WHEREAS, the Housing and Redevelopment Authority of the City of Eden Prairie has reviewed the proposed 2021 budget and tax levy; and

WHEREAS, the Housing and Redevelopment Authority has decided to accept these recommendations.

NOW, THEREFORE, BE IT RESOLVED that the Housing and Redevelopment Authority:

1. Approves the following proposed taxes on real and personal property within the City of Eden Prairie for the 2021 budget contingent upon City Council approval.

Levy on Tax Capacity $200,000

2. Approves the 2021 proposed budget totaling $200,000 at this time.

ADOPTED by the Housing and Redevelopment Authority on September 15, 2020.

______Ronald A. Case, Chairperson

SEAL

ATTEST:

______Rick Getschow, Executive Director CITY COUNCIL AGENDA DATE: SECTION: Proclamations / Presentations September 15, 2020

DEPARTMENT / DIVISION: ITEM DESCRIPTION: ITEM NO.: Mayor Ron Case Weekend to Unite PROP Food Drive IV.B. Proclamation

Requested Action

No formal action requested. The Mayor will read the proclamation.

Synopsis

PROP’s mission is to compassionately provide food and comprehensive support to people in Eden Prairie and Chanhassen who are facing financial hardship or crisis to create a path toward greater self-sufficiency. Their primary services include a food shelf, short-term financial help, support for low-income families with children and teens, and support for seniors and individuals with disabilities.

Night to Unite, an annual end of summer community event, has historically been paired with a food drive for PROP. In order to help PROP replenish their supply of non-perishable food items, PROP is hosting a “Weekend to Unite” food drive September 19-20, 2020.

Attachment

Proclamation

PROCLAMATION ITEM NO.: IV.B.

City of Eden Prairie Hennepin County, Minnesota WHEREAS, PROP is an integral part of the Eden Prairie community; and

WHEREAS, In 2019, PROP provided food assistance, one of their many services, to 3,500 individuals from their Fresh Choice Market and distributed 770,000 pounds of food; and

WHEREAS, Night to Unite, an annual end of summer community event, is typically paired with a food drive for PROP. During the 2019 Night to Unite, PROP received 9,179 pounds of food, $80 in cash and $200 in gift cards to be used to aid the community; and

WHEREAS, Due to the Coronavirus pandemic, Night to Unite has been canceled for 2020; and

WHEREAS, The weekend of September 19-20, 2020, PROP will be hosting a city-wide food drive “Weekend to Unite”; and

WHEREAS, The City Council encourages Eden Prairie residents to participate in any way they can to help those in need in our community; and

NOW, THEREFORE, BE IT RESOLVED, the Eden Prairie City Council does hereby declare the weekend of September 19-20, 2020 as the Weekend to Unite, PROP Food Drive, in the City of Eden Prairie.

ADOPTED by the Eden Prairie City Council on September 15, 2020.

Ronald A. Case, Mayor City of Eden Prairie CITY COUNCIL AGENDA DATE: SECTION: Proclamations / Presentations September 15, 2020

DEPARTMENT / DIVISION: ITEM DESCRIPTION: ITEM NO.: Mayor Ron Case Direct Support Professional (DSP) IV.C. Recognition Week Proclamation

Requested Action

No formal action requested. The Mayor will read the proclamation.

Synopsis

Eden Prairie is home to a number of residences and businesses that employ direct support professionals (DSPs). The DSP workforce is well over 4.5 million workers in the United States. DSPs provide a broad range of individualized, essential support all while building close, respectful, and trusted relationships with individuals with disabilities.

Attachment

Proclamation

ITEM NO.: IV.C. Proclamation

City of Eden Prairie Hennepin County, Minnesota

WHEREAS, direct support professionals are the primary providers of publicly-funded, long- term support services for millions of individuals with disabilities; and

WHEREAS, direct support professionals must build close, respectful, and trusted relationships with individuals with disabilities because they assist them with their most intimate needs; and

WHEREAS, direct support professionals provide essential support that helps individuals with disabilities stay connected to family, friends and the community, while living life to its fullest; and

WHEREAS, direct support professionals provide a broad range of individualized supports, including meal preparation, medication assistance, bathing, dressing, mobility, and other daily tasks; and

WHEREAS, an adequate workforce of high-quality direct support professionals is necessary for the state to meet obligations to people with disabilities and minimize more costly settings, such as hospitalization or institutional care; and

WHEREAS, direct support professional is one of the fastest growing positions in America in terms of demand, and yet low wages and demographic trends are creating a growing shortage of direct support professionals, leading to burnout and increased turnover; and

WHEREAS, public officials have a key role to play in building awareness around, advocating for, and addressing the issues facing this publicly-funded workforce.

NOW, THEREFORE, BE IT RESOLVED, to honor and support the important work of direct support professionals in our community, the week of September 13-19, 2020 in the City of Eden Prairie will be proclaimed DIRECT SUPPORT PROFESSIONAL (DSP) RECOGNITION WEEK

ADOPTED by the Eden Prairie City Council on September 15, 2020.

______Ronald A. Case, Mayor

UNAPPROVED MINUTES

CITY COUNCIL WORKSHOP & OPEN PODIUM

TUESDAY, SEPTEMBER 1, 2020 CITY CENTER 5:00 – 6:25 PM, HERITAGE ROOMS 6:30 – 7:00 PM, COUNCIL CHAMBER

CITY COUNCIL: Mayor Ron Case, Council Members Brad Aho, Kathy Nelson, Mark Freiberg, and PG Narayanan

CITY STAFF: City Manager Rick Getschow, Police Chief Greg Weber, Fire Chief Scott Gerber, Public Works Director Robert Ellis, Community Development Director Janet Jeremiah, Parks and Recreation Director Jay Lotthammer, Administrative Services/HR Director Alecia Rose, Communications Manager Joyce Lorenz, City Attorney Maggie Neuville, and Recorder Katie O’Connor

GUEST: Economic Development Manager David Lindahl

Workshop - Heritage Rooms I and II (5:30)

I. ECONOMIC DEVELOPMENT UPDATE

Lindahl, Economic Development Manager, provided an overview of all economic development updates since June of 2019 when he last presented to the Council.

Lindahl stated when COVID-19 began, the first communications were with City tenants about rent relief due to limited or no business. Smith Coffee’s rent was abated from April to June, and starting July 1 they have been paying 50 percent of their rent. They are also concerned about the upcoming colder months as their business has been outdoors. Lotus Nails rent was also abated from late March to August. In September, they are beginning to pay 50 percent of their rent. Chuck & Don’s rent was reduced by 30 percent from April to June, and it will be repaid in 2021 over a 12 month period. Eden Prairie Montessori’s rent was abated from June to August. A temporary order was issued to allow businesses to establish drive-up, drive thru areas, and outdoor seating. A group of staff reviewed business plans for traffic flow and pedestrian walkways. Tavern 4&5, Flying Dutchman, and Smith Coffee are some of the businesses who have made these temporary changes.

Aho asked how the City decided how much rent relief to provide for each City tenant. Lindahl replied the amount of rent relief was based on whether or not the Governor’s ordered required them to close. Businesses not required to close, such as Chuck & Don’s and Eden Prairie Montessori, were asked to quantify how much business was lost. Communications staff have also been very helpful in providing resources to businesses about available federal, state, and county aid.

City Council Workshop Minutes September 1, 2020 Page 2

Lindahl stated after last year’s Kauffman Foundation conference, Mayor Case has been working with staff, the school district, Eden Prairie Chamber of Commerce, and Patrick Donohue from 1 Million Cups on an entrepreneurial initiative. Some of those goals include improving the City’s entrepreneurial eco-system, supporting projects that enhance entrepreneurial environment and stimulate small business innovation and growth, support alternative employment pathways for young people outside of the traditional college degree route, and create a space for entrepreneurs where they feel safe and can thrive. The group has met monthly. Much of the focus has been at a high school level. The school district has a vacant and available space, and this has been named the “Innovation Sandbox”. The Innovation Sandbox would be a place to provide educational programing around entrepreneurship and innovation sciences, to mentor and have idea exchanges between entrepreneurs and students, a space for entrepreneurs to teach, a space available after hours to local entrepreneurs and a meeting space for Eden Prairie 1 Million Cups, a place to showcase ideas and products, and provide point of sale activities for certain products. The space at Eden Prairie High School would have its own access from the outside of the building. Initially, the kick-off was going to be at an entrepreneur after hour’s event at Fat Pants Brewing this fall. It was canceled due to COVID-19, but hopefully the event will be rescheduled in the near future.

Lindahl stated the Strategic Plan for Housing and Economic Development has been in existence since 2005 and is updated every four to five years. The purpose of the plan is to identify and prioritize housing and economic development initiatives.

Narayanan recommended reaching out to Tom Kieffer, an entrepreneur who has built and sold multiple companies. Lindahl noted they intend to have Elizabeth Anderson, Fat Pants owner, as the keynote speaker. Narayanan also recommended Phil Soran, an information technology entrepreneur. Lindahl replied he has met with him on a few occasions.

Lindahl stated other reasons for the strategic plan are to report on the status of activities, outline regulatory and financial implementation strategies, coordinate between City departments, and to keep the public informed of various projects and initiatives. The plan will be presented at the October 20 City Council workshop. The strategic plan will include the entrepreneurial initiative, Prairie Center Drive bridge improvements, transit-oriented development (TOD) completed redevelopments and opportunity sites, business retention activity, City entry monument signs, Town Center Public Plaza, light rail transit (LRT) station area improvements, Golden Triangle branding, and co-work collaboration space. Staff are currently collaborating with public works on installing new decorative lights on the Prairie Center Drive Bridge. The bridge will also include the City logo similar to the Shady Oak Bridge. This should be completed by the end of the year.

Lindahl stated Elevate is a completed TOD redevelopment. Brick & Bourbon is still trying to open up their restaurant at this location, hopefully by quarter one of 2021. The Hampton Inn City Council Workshop Minutes September 1, 2020 Page 3

is also completed, but they are experiencing low occupancy due to COVID-19. The Bluestem property is now the Eagle Ridge Partners redevelopment concept location. They would like to intensify development of the entire 40 acres up by Golden Triangle including corporate offices, workforce housing, market rate housing, commercial, and maybe a hotel.

Narayanan inquired if the hotel would have a large conference space. Lindahl stated staff are encouraging the concept. Eagle Ridge Partners conversations are continuing. They recently discussed workforce housing development.

Lindahl stated there are a lot of opportunities for redevelopment in the Town Center area. The Champs and Petco may be an opportunity for redevelopment. The property is currently for sale. The Bowlero property also has a lot of potential for vertically integrated use. Other potential redevelopment opportunities include Eden Prairie Center. JCPenny will be staying open for some time after an agreement with the new owners. If redeveloped, there could be an opportunity for hotel space, retail, and office or medical.

Freiberg noted this seems to be the direction most malls are taking. Lindahl added retail has been incorporating experiences and entertainment uses to drive customers to their facilities.

Lindahl stated Winter Park is still on a short term lease with Lifetime Fitness. In the next few years, they will likely be looking into redeveloping this site. There have been conversations about developing a hotel at this location. Getschow noted it was a three year lease.

Lindahl stated Eden Road was recently change to Town Center Place. The City is working with the LRT project office on utilizing the corner of Town Center Place and Flying Cloud Drive for a public plaza or entry monument sign. There have also been discussion about potentially locating the flying red horse there. Recent development activities include Flying Cloud Commons, which will be under construction once the Castle Ridge building is taken down. Other activities include the Golden Triangle Area Industrial Opus building, the 65,000 square foot Duke Industrial redevelopment on the old Kabuki site, Paravel Apartments starting construction later this year, Flagstone Senior Housing, and the Tennant Corporation renovation. Narayanan inquired how many jobs this building will have. Lindahl replied initially about 600 jobs with space to grow. He believes their plan for the second building space is to build an innovation center.

Lindahl stated Mayor Case and Council Member Aho met with many of the large businesses in the City last year such as Optum Health, C.H. Robinson, Starkey Labs, Emerson Rosemount, United Natural Foods Inc. (UNFI), Eaton, and MTS.

Freiberg asked what C.H. Robinson’s status is. Lindahl replied they are looking at a new location in either Eden Prairie or Minnetonka. They are looking at the Eagle Ridge property.

City Council Workshop Minutes September 1, 2020 Page 4

Lindahl stated the City collaborates with the Eden Prairie Chamber of Commerce on many Economic Development events and tours. In regards to City leasing updates, Chuck and Don’s signed a ten year lease through 2029. Eden Prairie Montessori School has a five year lease through 2022, and they have stated they like the building and intend to stay. UNFI has a lease term through June 2022, and they will need to give at least 12 months’ notice if they plan to move. Eden Prairie School’s lease runs through May 2024, but they have a provision to terminate early in 2021. They do plan to move next year. The City is actively looking for new tenants. Smith Coffee and Café is doing well. Their lease runs through December 2027.

Lindahl stated the Economic Development fund assisted with the Singletree Lane streetscape improvements. The City also qualified for a grant to provide a trail connection between Singletree Lane and the future Town Center Station. The West 70th Street extension was completed a few years ago, and the east segment will begin in 2021. The improvements will be continued up to Shady Oak Road. Sierra opens on October 3 at the old Sports Authority space. Ulta will open up next to Sierra. The Burger Kings locations will likely not open until quarter two of next year. Gander Outdoors is still a fairly large vacancy. There would either be a new tenant for the building or a redevelopment on the site. A medical office was interested in the Jake’s site, but Walmart was able to say no due to some existing agreements in place. Pier 1 Imports also recently closed.

Lindahl stated in regards to business communications, most has pertained to Southwest LRT. Redstone is doing well with outdoor seating and the first segment of Town Center Place being completed. Champps has had minimal disruption to their outdoor dining area with LRT tree cutting. Discount Tires continues to do well.

Aho asked how Redstone is expected to do long-term with parking impacts. Lindahl replied once parking changes are made, there should be enough on-street parking. They will permanently lose 20 spaces. There are still discussions with the project office about solutions. Flying Dutchman also had some temporary parking and access impacts.

Narayanan inquired if the City hosts any events for small business owners and entrepreneurs to share with the community. Lindahl replied the entrepreneurial event originally planned for this fall would be an opportunity for business owners and entrepreneurs to gather.

Freiberg inquired why the City owns and leases certain properties such as Eden Prairie Montessori. Lindahl replied the City acquired the property in negotiations over the Singletree Road project. The property now generates revenue for the City.

Aho inquired about any updates on current businesses looking to move. Lindahl replied Stratasys was looking at a property to consolidate their buildings but never fully got the support from their headquarters.

City Council Workshop Minutes September 1, 2020 Page 5

Narayanan asked how many residents also work in Eden Prairie. Lindahl stated some of this information used to be obtained from traffic data. He does not have current numbers. Nelson added there are a lot more jobs in Eden Prairie than residents to fill. Lindahl stated there may be a trend in the near future of businesses moving from Minneapolis to the suburbs.

Open Podium - Council Chamber (6:30)

II. OPEN PODIUM

Tim Travis, 6752 Harlan Drive, stated he does not believe the City should defund the police department. He is interest in the Council’s stance on the topic.

Nelson responded the City has continued with their funding of the police department. Eden Prairie police officers are required to have emergency medical technician (EMT) certification; therefore, the police officers also have a health care perspective. Aho added he believes the City has a different philosophy on policing. The City emphasizes training for officers, specifically de-escalation procedures. Their philosophy is customer service first. Leadership plays an important role in fostering this culture. Narayanan added the Council had more in-depth conversations about the police department at the last Council workshop. The police department has high standards and works to engage with the community, including participating in many events throughout the year. It may be beneficial to provide more funding to the department to add a social worker. Aho noted in order to reform many police departments, it takes more funds to provide adequate training for officers.

Travis asked if the City has done contingency planning in case of an emergency due to protesting.

Aho stated the Police Chief and staff have plans in place. They continue to work with surrounding law enforcement to make sure there is mutual aid in place if needed. Earlier this summer, the City put a temporary curfew in place to provide officers with a tool to disperse gatherings. Nelson added the City has an Emergency Action Plan for any emergency the City may encounter, including weather related. This summer there were two large peaceful and friendly protests in the City. Narayanan added the police and fire departments have a good working relationship.

III. ADJOURNMENT

UNAPPROVED MINUTES

EDEN PRAIRIE CITY COUNCIL MEETING

TUESDAY, SEPTEMBER 1, 2020 7:00 PM, CITY CENTER

CITY COUNCIL: Mayor Ron Case, Council Members Brad Aho, Mark Freiberg, P G Narayanan, and Kathy Nelson

CITY STAFF: City Manager Rick Getschow, Public Works Director Robert Ellis, Community Development Director Janet Jeremiah, Parks and Recreation Director Jay Lotthammer, Police Chief Greg Weber, Fire Chief Scott Gerber, City Attorney Maggie Neuville, and Council Recorder Jan Curielli

I. CALL THE MEETING TO ORDER

Acting Mayor Aho called the meeting to order at 7:00 PM. Mayor Case was absent.

II. PLEDGE OF ALLEGIANCE

III. OPEN PODIUM INVITATION

IV. PROCLAMATIONS / PRESENTATIONS

V. APPROVAL OF AGENDA AND OTHER ITEMS OF BUSINESS

MOTION: Narayanan moved, seconded by Nelson, to approve the agenda as published. Motion carried 4-0.

VI. MINUTES

A. COUNCIL WORKSHOP HELD TUESDAY, AUGUST 18, 2020

B. CITY COUNCIL MEETING HELD TUESDAY, AUGUST 18, 2020

MOTION: Nelson moved, seconded by Freiberg, to approve the minutes of the City Council Workshop held Tuesday, August 18, 2020, and the City Council meeting held Tuesday, August 18, 2020, as published. Motion carried 4-0.

VII. REPORTS OF ADVISORY BOARDS AND COMMISSIONS

VIII. CONSENT CALENDAR

A. APPROVE CHANGE TO EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION BYLAWS CITY COUNCIL MINUTES September 1, 2020 Page 2

B. APPROVE CHANGE ORDER NO. 3 WITH VEIT COMPANY FOR EDEN PRAIRIE ROAD EXTENSION PROJECT

MOTION: Narayanan moved, seconded by Freiberg, to approve Items A-B, on the Consent Calendar. Motion carried 4-0.

IX. PUBLIC HEARINGS / MEETINGS

A. ASPIRE COMP PLAN AMENDMENT NO. 2 by City of Eden Prairie. Resolution 2020-83 for Comprehensive Guide Plan change from Industrial Flex Tech to Parks and Open Space on one acre (Resolution No. 2020-83 for Comprehensive Plan Change)

Getschow explained Items A and B are two similar items to update the comprehensive plan for two development projects that have occurred and outlots that were dedicated. Staff is asking that the rezoning or comprehensive guide plan change take effect at those locations. They are similar to housekeeping items or vacating easements. The first item is a rezoning from Industrial Flex Tech to Parks and Open Space of an approximately one acre outlot owned by the City of Eden Prairie and located at the intersection of Golden Triangle Drive and Valley View Road. The parcel was deeded to the City as part of the Golden Triangle Industrial project. The area will be maintained as conservation open space.

There were no comments from the audience.

MOTION: Freiberg moved, seconded by Narayanan, to close the public hearing, and to adopt Resolution No. 2020-83 for guide plan change from Industrial Flex Tech to Parks and Open Space. Motion carried 4-0.

B. ASPIRE COMP PLAN AMENDMENT NO. 3 by City of Eden Prairie. Resolution 2020-84 for Comprehensive Guide Plan change from Low Density Residential to Parks and Open Space on 2.66 acres; First reading of an ordinance for Zoning District change on 2.66 acres (Resolution No. 2020-84 for Comprehensive Plan Change; Ordinance for Zoning District Change)

Getschow described the comprehensive plan change from Low Density Residential to Parks and Open Space on 2.66 outlot on the north portion of the Highland Oaks development project. The outlot is adjacent to a City-owned conservation area already zoned and guided Parks and Open Space. The area was deeded to the City through the Highland Oaks development project and will be maintained as a conservation area.

There were no comments from the audience.

MOTION: Nelson moved, seconded by Narayanan, to close the public hearing; to adopt Resolution No. 2020-84 for guide plan change from Low Density Residential to Parks and Open Space; and to approve the first reading of the ordinance for rezoning from R1-9.5 to Park and Open Space on 2.66 acres. Motion carried 4-0. CITY COUNCIL MINUTES September 1, 2020 Page 3

X. PAYMENT OF CLAIMS

MOTION: Narayanan moved, seconded by Freiberg, to approve the payment of claims as submitted. Motion was approved on a roll call vote, with Freiberg, Narayanan, Nelson and Aho voting “aye.”

XI. ORDINANCES AND RESOLUTIONS

XII. PETITIONS, REQUESTS, AND COMMUNICATIONS

XIII. APPOINTMENTS

XIV. REPORTS

A. REPORTS OF COUNCIL MEMBERS

B. REPORT OF CITY MANAGER

1. Absentee Voting Update

Getschow stated Council Member Nelson asked at the last meeting about the City’s process and procedures for absentee voting. He explained absentee voting has increased greatly since the change was made to “no excuse” absentee voting for the 2016 and 2018 elections. Eden Prairie, Hennepin County and the State of Minnesota election officials encourage people to vote by mail. Voting by mail is a very viable option. From September 18 until November 2 people can vote by absentee ballot, which then can be mailed or dropped off at City Hall. Voters can also come in to City Hall to vote in person. In addition, starting October 27, the voter can put their completed ballot through the ballot counter. Prior to that week, all the absentee ballots will go to Hennepin County. He emphasized the voter can track a mailed-in ballot at mnvotes.org. to see if their ballot has been received, similar to the way a UPS package is tracked. Staff believes there is a long period of time for people to come in early to vote at City Hall, to vote by mail, or to vote on Election Day. As of yesterday, he reported one-third of the eligible voters in Eden Prairie have already applied for an absentee ballot.

Getschow related just over 11,000 ballots were cast by Eden Prairie voters in the recent Primary election, and over 7300 of those were absentee ballots. There are a few cities in Minnesota who may provide boxes or containers to take ballots. The Hennepin County Attorney’s Office has given guidance that drop boxes must be supervised, secured and an agent delivery log must be kept. They do not recommend un-attended drop boxes.

Aho asked about the requirements for the date by which ballots must be postmarked because there seem to have been different rules in different jurisdictions. He asked if Hennepin County allows ballots to be postmarked the CITY COUNCIL MINUTES September 1, 2020 Page 4

day of the election and received several days after the election. Getschow replied he believed a time of seven days after the election will be allowed for ballots to be accepted at Hennepin County.

Nelson noted voters can also do curbside voting during the time of absentee balloting and at the polls on Election Day. Getschow said he would verify that with the City Clerk. He also noted the City may develop a plan to have curbside drop-off of absentee ballots.

Narayanan reiterated there are multiple ways voters can cast ballots during the early voting period. Aho noted we try to be as accommodating as possible.

C. REPORT OF COMMUNITY DEVELOPMENT DIRECTOR

D. REPORT OF PARKS AND RECREATION DIRECTOR

E. REPORT OF PUBLIC WORKS DIRECTOR

1. Curbside and Drop Off Recycling Event

Ellis said the City is planning a curbside recycling pickup event for the two weeks from October 5 to October 16. Residents can schedule an appointment for curbside pickup of items like refrigerators, tires, or lawn mowers during the two-week period. The cost is the same as the charge for items during the drop off event. All items picked up will be recycled. They also plan to add mattress and furniture pickup. In addition, there will be a drop off for electronics only on Saturday, October 17 at the yard waste drop off site. He noted the only cost to the City will be the labor involved in the drop off day event. They plan to publicize the event on City media.

Narayanan commented this is a great idea and is a good example of how the City reacts to the needs of residents. He has received many calls, emails and texts asking for this type of event.

Aho observed this will be a great service for our residents and will enable them to stay within the City and not travel outside to find a place that accepts unwanted items.

F. REPORT OF POLICE CHIEF

G. REPORT OF FIRE CHIEF

H. REPORT OF CITY ATTORNEY

XV. OTHER BUSINESS

CITY COUNCIL MINUTES September 1, 2020 Page 5

XVI. ADJOURNMENT MOTION: Freiberg moved, seconded by Nelson, to adjourn the meeting. Motion carried 4-0. Acting Mayor Aho adjourned the meeting at 7:24 p.m. CITY COUNCIL AGENDA DATE: SECTION: Consent Calendar September 15, 2020

DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: Christy Weigel, Clerk’s License Application List VIII.A. Police/ Support Unit

These licenses have been approved by the department heads responsible for the licensed activity.

Requested Action Motion: Approve the licenses listed below

New On-Sale Wine with Strong Beer and 3.2 Beer License (Currently holds On-Sale 3.2 Beer License) AMK Research Services LLC DBA: Inside Edge Golf 16514 West 78th Street Approval is contingent upon passing final inspections and receiving approval by MN Department of Public Safety – Alcohol & Gambling Enforcement and Hennepin County Health.

- 1 - CITY COUNCIL AGENDA DATE: SECTION: Consent Calendar September 15, 2020

DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: Community Development/Planning Prairie Heights VIII.B. Janet Jeremiah/Sarah Strain

Requested Action

Move to: • Approve the 2nd reading of the Ordinance for Planned Unit Development District Review with waivers and a Zoning District Change from Rural to R1-9.5 on 9.6 acres; • Approve the Development Agreement for Prairie Heights.

Synopsis

This is the final approval of the development agreement and plans for Prairie Heights. The property is located at 12701 Pioneer Trail and vacant lot 27-166-22-14-0035. The applicant is proposing to develop the two (2) parcels into 23 single-family lots for villa style homes and four (4) outlots. The four (4) outlots will be deeded to the City. The project is consistent with the Low-Density Residential guiding. The applicant is requesting to rezone the property from Rural to R1-9.5. The properties are bordered by single-family development to the east, MAC airport property to the south and west, and residential and industrial uses to the north across Pioneer Trail.

Background

On August 18, 2020, the City Council approved the 1st reading of the Ordinance for the PUD with waivers and a Zoning District Change for Prairie Heights and directed staff to prepare a Development Agreement. Consistent with the plans reviewed at the 1st Reading, the Developer has provided right of way to the MAC property line at the site’s western property line to allow for the future extension of Surrey Street if and when the MAC property develops. A right-in, right-out from Surrey Street to Pioneer Trail will be built to serve the development until the future extension through the MAC property is created. The Development Agreement includes a disclosure agreement about the proximity of the lot to Flying Cloud Airport that will be provided to the buyer prior to a purchase agreement for any of the 23 lots.

The 120-Day review period expires on October 16, 2020.

Attachments

1. Ordinance – PUD District Review with waivers and Zoning District Change 2. Ordinance Summary 3. Development Agreement PRAIRIE HEIGHTS

CITY OF EDEN PRAIRIE HENNEPIN COUNTY, MINNESOTA

ORDINANCE NO. 13-2020-PUD-8-2020

AN ORDINANCE OF THE CITY OF EDEN PRAIRIE, MINNESOTA, REMOVING CERTAIN LAND FROM ONE ZONING DISTRICT AND PLACING IT IN ANOTHER, AMENDING THE LEGAL DESCRIPTIONS OF LAND IN EACH DISTRICT, AMENDING THE DESIGNATION OF CERTAIN LAND WITHIN A ZONING DISTRICT, AND ADOPTING BY REFERENCE CITY CODE CHAPTER 1 AND SECTION 11.99 WHICH, AMONG OTHER THINGS, CONTAIN PENALTY PROVISIONS

THE CITY COUNCIL OF THE CITY OF EDEN PRAIRIE, MINNESOTA, ORDAINS:

Section 1. That the land which is the subject of this Ordinance (hereinafter, the “land”) is legally described in Exhibit A attached hereto and made a part hereof.

Section 2. That action was duly initiated proposing that the land be removed from the Rural Zoning District and be placed in the R1-9.5 Zoning District.

Section 3. That action was duly initiated proposing that the designation of the land be amended within the R1-9.5 Zoning District as 13-2020-PUD-8-2020 (hereinafter "PUD-8- 2020”).

Section 4. The City Council hereby makes the following findings:

A. PUD-8-2020 is not in conflict with the goals of the Comprehensive Guide Plan of the City.

B. PUD-8-2020 is designed in such a manner to form a desirable and unified environment within its own boundaries.

C. The exceptions to the standard requirements of Chapters 11 and 12 of the City Code that are contained in PUD-8-2020 are justified by the design of the development described therein.

D. PUD-8-2020 is of sufficient size, composition, and arrangement that its construction, marketing, and operation are feasible as a complete unit without dependence upon any subsequent unit.

Section 5. The proposal is hereby adopted and the land shall be, and hereby is removed from the Rural Zoning District and placed in the R1-9.5 Zoning District respectively as noted in Exhibit A and shall be included hereafter in the Planned Unit Development PUD-8-2020 and the legal descriptions of land in each district referred to in City Code Section 11.03, subdivision 1, subparagraph B, shall be and are amended accordingly.

Section 6. The land shall be subject to the terms and conditions of that certain Development Agreement dated as of September 15, 2020, entered into between Norton Homes, LLC, and the City of Eden Prairie, (hereinafter “Development Agreement”). The Development Agreement contains the terms and conditions of PUD-8-2020, and are hereby made a part hereof.

Section 7. City Code Chapter 1 entitled “General Provisions and Definitions Applicable to the Entire City Code Including Penalty for Violation” and Section 11.99 entitled “Violation a Misdemeanor” are hereby adopted in their entirety by reference, as though repeated verbatim herein.

Section 8. This Ordinance shall become effective from and after its passage and publication.

FIRST READ at a regular meeting of the City Council of the City of Eden Prairie on August 18, 2020, and finally read and adopted and ordered published in summary form as attached hereto at a regular meeting of the City Council of said City on the 15th day of September, 2020.

ATTEST:

______Kathleen Porta, City Clerk Ronald A. Case, Mayor

PUBLISHED in the Sun Current News on September 24, 2020.

EXHIBIT A

Legal Description Prior to Final Plat:

That part of the Southwest Quarter of the Northwest Quarter of Section 26, Township 116, Range 22, West of the 5th Principal Meridian, described as follows:

Commencing at a point on the West line of said Section 26 distant 1765.9 feet South from the Northwest corner thereof; thence continuing South along said West line a distance of 514.04 feet; thence at a right angle East a distance of 561.33 feet; thence at a right angle North a distance of 514.04 feet; thence at a right angle West along a line which if extended passes through the point of beginning a distance of 270 feet; thence at a right angle North 323 feet more or less to the center line of County Road No. 1; thence West along the center line of said County Road No. 1 to the West line of Section 26; thence South along West line of said Section 26 to the point of beginning, except the West 31.5 feet thereof and subject to easement for road over the North 33 feet thereof.

And,

Outlot A, FRASER CHARLSON ADDITION

Hennepin County, Minnesota Abstract Property

Legal Description After Final Plat:

Lots 1-2, Block 1; Lots 1-21, Block 2; and Outlots A, B, C, and D, Prairie Heights, Hennepin County, Minnesota

PRAIRIE HEIGHTS

CITY OF EDEN PRAIRIE HENNEPIN COUNTY, MINNESOTA

SUMMARY OF ORDINANCE NO. 13-2020-PUD-8-2020

AN ORDINANCE OF THE CITY OF EDEN PRAIRIE, MINNESOTA, REMOVING CERTAIN LAND FROM ONE ZONING DISTRICT AND PLACING IT IN ANOTHER, AMENDING THE LEGAL DESCRIPTIONS OF LAND IN EACH DISTRICT, AMENDING THE DESIGNATION OF CERTAIN LAND WITH A ZONING DISTRICT, AND ADOPTING BY REFERENCE CITY CODE CHAPTER 1 AND SECTION 11.99, WHICH, AMONG OTHER THINGS, CONTAIN PENALTY PROVISIONS

THE CITY COUNCIL OF THE CITY OF EDEN PRAIRIE, MINNESOTA, ORDAINS:

Summary: This ordinance allows rezoning of land located at 12701 Pioneer Trail and PID 27-116-22-14-0035 from the Rural Zoning District to the R1-9.5 Zoning District and amends the designation of that land into a Planned Unit Development District. Exhibit A, included with this Ordinance, gives the full legal description of this property.

Effective Date: This Ordinance shall take effect upon publication.

ATTEST:

______Kathleen Porta, City Clerk Ronald A. Case, Mayor

PUBLISHED in the Sun Current News on September 24, 2020.

(A full copy of the text of this Ordinance is available from City Clerk.)

CITY COUNCIL AGENDA DATE:

SECTION: Consent Calendar September 15, 2020

DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.:

Finance Division Professional Services Agreement for Auditing VIII.C. Sue Kotchevar Services

Requested Action

Move to: Approve professional services agreement with BerganKDV for auditing services for 2020 to 2022.

Synopsis

As a standard business practice, the City completes a request for proposal process for auditing services every three years with an option to extend annually for an additional three years. This year, BerganKDV submitted the lowest qualified all-inclusive bid totaling $93,255.

Background Information

Staff’s recommendation to choose BerganKDV is based on: 1. Experience – For the fiscal year ending December 31, 2019, BerganKDV audited 62 Minnesota Cities, Townships, and Villages. Audited cities include many similar engagements to Eden Prairie, such as Minnetonka, Richfield, Shakopee, Woodbury, and St. Cloud. BerganKDV proposes to have 5 staff members on the City’s audit. One of these staff members is a reviewer for the GFOA Certificate of Achievement for Excellence in Financial Reporting program. These staff members are knowledgeable of any changes affecting the CAFR and will present ideas on how other cities handle different situations or implementations.

2. Price - For the three years of the audit contract, BerganKDV had the lowest all-inclusive bid of $97,255. The bids ranged from $97,255 to $126,700.

In addition to having the lowest bid overall, BerganKDV’s proposed schedule of hours to be worked results in a rate of $112/hour for 270 hours of City audit time. Other bids ranged from $102/hour for 320 hours worked to $140/hour for 250 hours worked.

3. Quality – BerganKDV’s references have indicated a high degree of satisfaction with the firm’s quality of work. They stated that BerganKDV is knowledgeable and up-to-date on new pronouncements and in helping cities implement these changes. In addition, staff has been available and responsive to cities’ questions during the audit and throughout the year. Finally, staff has been accommodating to cities’ timelines in conducting the audit.

Attachments

Professional Services Agreement Exhibit A (City of Eden Prairie RFP) Exhibit B (BerganKDV Proposal) 2017 06 01

Agreement for Professional Services

This Agreement (“Agreement”) is made on the 15th day of September 2020, between the City of Eden Prairie, Minnesota (hereinafter "City"), whose business address is 8080 Mitchell Road, Eden Prairie, MN 55344, and BerganKDV, Ltd (“Consultant”), a Minnesota Limited Company (hereinafter "Consultant") whose business address is 3800 American Blvd W #1000, Bloomington, MN 55431.

Preliminary Statement

The City has adopted a policy regarding the selection and hiring of consultants to provide a variety of professional services for City projects. That policy requires that persons, firms or corporations providing such services enter into written agreements with the City. The purpose of this Agreement is to set forth the terms and conditions for the provision of professional services by Consultant for audit services hereinafter referred to as the "Work".

The City and Consultant agree as follows:

1. Scope of Work. The Consultant agrees to provide the professional services shown in Exhibit A (City of Eden Prairie RFP) and Exhibit B (BerganKDV, Ltd Proposal) in connection with the Work. Exhibit A is intended to be the scope of service for the work of the Consultant. Any general or specific conditions, terms, agreements, consultant or industry proposal, or contract terms attached to or a part of Exhibit A are declined in full and, accordingly, are deleted and shall not be in effect in any manner.

2. Term. The term of this Agreement shall be for the 2020 through 2022 audit, the date of signature by the parties notwithstanding. This Agreement may be extended upon the written mutual consent of the parties for such additional period as they deem appropriate, and upon the terms and conditions as herein stated.

3. Compensation for Services. City agrees to pay the Consultant on an hourly basis plus expenses in a total amount not to exceed $34,325 (this includes $4,000 for single audit of one major program), $31,080, and $31,850 respectively for the services as described in Exhibit A. a. Any changes in the scope of the work which may result in an increase to the compensation due the Consultant shall require prior written approval by an authorized representative of the City or by the City Council. The City will not pay additional compensation for services that do not have prior written authorization.

Version 2017 06 01 b. Special Consultants may be utilized by the Consultant when required by the complex or specialized nature of the Project and when authorized in writing by the City.

c. If Consultant is delayed in performance due to any cause beyond its reasonable control, including but not limited to strikes, riots, fires, acts of God, governmental actions, actions of a third party, or actions or inactions of City, the time for performance shall be extended by a period of time lost by reason of the delay. Consultant will be entitled to payment for its reasonable additional charges, if any, due to the delay.

4. City Information. The City agrees to provide the Consultant with the complete information concerning the Scope of the Work and to perform the following services: a. Access to the Area. Depending on the nature of the Work, Consultant may from time to time require access to public and private lands or property. As may be necessary, the City shall obtain access to and make all provisions for the Consultant to enter upon public and private lands or property as required for the Consultant to perform such services necessary to complete the Work.

b. Consideration of the Consultant's Work. The City shall give thorough consideration to all reports, sketches, estimates, drawings, and other documents presented by the Consultant, and shall inform the Consultant of all decisions required of City within a reasonable time so as not to delay the work of the Consultant.

c. Standards. The City shall furnish the Consultant with a copy of any standard or criteria, including but not limited to, design and construction standards that may be required in the preparation of the Work for the Project.

d. City's Representative. A person shall be appointed to act as the City's representative with respect to the work to be performed under this Agreement. He or she shall have complete authority to transmit instructions, receive information, interpret, and define the City's policy and decisions with respect to the services provided or materials, equipment, elements and systems pertinent to the work covered by this Agreement.

5. Method of Payment. The Consultant shall submit to the City, on a monthly basis, an itemized invoice for professional services performed under this Agreement. Invoices submitted shall be paid in the same manner as other claims made to the City for: a. Progress Payment. For work reimbursed on an hourly basis, the Consultant shall indicate for each employee, his or her name, job title, the number of hours worked, rate of pay for each employee, a computation of amounts due for each employee, and the total amount due for each project task. Consultant shall verify all statements submitted for payment in compliance with Minnesota Statutes Sections 471.38 and 471.391. For reimbursable expenses, if provided for in Exhibit A, the Consultant shall provide an itemized listing and such

Page 2 of 10 2017 06 01 documentation as reasonably required by the City. Each invoice shall contain the City’s project number and a progress summary showing the original (or amended) amount of the contract, current billing, past payments and unexpended balance of the contract.

b. Suspended Work. If any work performed by the Consultant is suspended in whole or in part by the City, the Consultant shall be paid for any services set forth on Exhibit A performed prior to receipt of written notice from the City of such suspension.

c. Payments for Special Consultants. The Consultant shall be reimbursed for the work of special consultants, as described herein, and for other items when authorized in writing by the City.

d. Claims. To receive any payment on this Agreement, the invoice or bill must include the following signed and dated statement: “I declare under penalty of perjury that this account, claim, or demand is just and correct and that no part of it has been paid.”

6. Project Manager and Staffing. The Consultant shall designated a Project Manager and notify the City in writing of the identity of the Project Manager before starting work on the Project. The Project Manager shall be assisted by other staff members as necessary to facilitate the completion of the Work in accordance with the terms established herein. Consultant may not remove or replace the Project Manager without the approval of the City.

7. Standard of Care. Consultant shall exercise the same degree of care, skill and diligence in the performance of its services as is ordinarily exercised by members of the profession under similar circumstances in Hennepin County, Minnesota. Consultant shall be liable to the fullest extent permitted under applicable law, without limitation, for any injuries, loss, or damages proximately caused by Consultant's breach of this standard of care. Consultant shall put forth reasonable efforts to complete its duties in a timely manner. Consultant shall not be responsible for delays caused by factors beyond its control or that could not be reasonably foreseen at the time of execution of this Agreement. Consultant shall be responsible for costs, delays or damages arising from unreasonable delays in the performance of its duties.

8. Termination. This Agreement may be terminated by either party by seven (7) days written notice delivered to the other party at the address written above. Upon termination under this provision, if there is no fault of the Consultant, the Consultant shall be paid for services rendered and reimbursable expenses until the effective date of termination. If however, the City terminates the Agreement because the Consultant has failed to perform in accordance with this Agreement, no further payment shall be made to the Consultant, and the City may retain another consultant to undertake or complete the Work identified herein.

Page 3 of 10 2017 06 01 9. Subcontractor. The Consultant shall not enter into subcontracts for services provided under this Agreement except as noted in the Scope of Work, without the express written consent of the City. The Consultant shall pay any subcontractor involved in the performance of this Agreement within ten (10) days of the Consultant's receipt of payment by the City for undisputed services provided by the subcontractor. If the Consultant fails within that time to pay the subcontractor any undisputed amount for which the Consultant has received payment by the City, the Consultant shall pay interest to the subcontractor on the unpaid amount at the rate of 1.5 percent per month or any part of a month. The minimum monthly interest penalty payment for an unpaid balance of $100 or more is $10. For an unpaid balance of less than $100, the Consultant shall pay the actual interest penalty due to the subcontractor. A subcontractor who prevails in a civil action to collect interest penalties from the Consultant shall be awarded its costs and disbursements, including attorney's fees, incurred in bringing the action.

10. Independent Consultant. Consultant is an independent contractor engaged by City to perform the services described herein and as such (i) shall employ such persons as it shall deem necessary and appropriate for the performance of its obligations pursuant to this Agreement, who shall be employees, and under the direction, of Consultant and in no respect employees of City, and (ii) shall have no authority to employ persons, or make purchases of equipment on behalf of City, or otherwise bind or obligate City. No statement herein shall be construed so as to find the Consultant an employee of the City.

11. Insurance. a. General Liability. Prior to starting the Work, Consultant shall procure, maintain and pay for such insurance as will protect against claims or loss which may arise out of operations by Consultant or by any subcontractor or by anyone employed by any of them or by anyone for whose acts any of them may be liable. Such insurance shall include, but not be limited to, minimum coverages and limits of liability specified in this Paragraph, or required by law.

b. Consultant shall procure and maintain the following minimum insurance coverages and limits of liability for the Work:

Worker’s Compensation Statutory Limits

Employer’s Liability $500,000 each accident $500,000 disease policy limit $500,000 disease each employee

Commercial General $1,000,000 property damage and bodily Liability injury per occurrence $2,000,000 general aggregate $2,000,000 Products – Completed Operations Aggregate $100,000 fire legal liability each occurrence $5,000 medical expense

Page 4 of 10 2017 06 01

Comprehensive Automobile Liability $1,000,000 combined single limit each accident (shall include coverage for all owned, hired and non-owed vehicles.)

Umbrella or Excess Liability $1,000,000 c. Commercial General Liability. The Commercial General Liability Policy shall be on ISO form CG 00 01 12 07 or CG 00 01 04 13, or the equivalent. Such insurance shall cover liability arising from premises, operations, independent contractors, products- completed operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract). There shall be no endorsement or modification of the Commercial General Liability form arising from pollution, explosion, collapse, underground property damage or work performed by subcontractors. d. Professional Liability Insurance. In addition to the coverages listed above, Consultant shall maintain a professional liability insurance policy in the amount of $2,000,000. Said policy need not name the City as an additional insured. It shall be Consultant’s responsibility to pay any retention or deductible for the professional liability insurance. Consultant agrees to maintain the professional liability insurance for a minimum of two (2) years following termination of this Agreement. e. Consultant shall maintain “stop gap” coverage if Consultant obtains Workers’ Compensation coverage from any state fund if Employer’s liability coverage is not available. f. All policies, except the Worker’s Compensation Policy, Automobile Policy, and Professional Liability Policy, shall name the “City of Eden Prairie” as an additional insured including products and completed operations. g. All policies, except the Professional Liability Policy, shall apply on a “per project” basis. h. All General Liability policies, Automobile Liability policies and Umbrella policies shall contain a waiver of subrogation in favor of the City. i. All policies, except for the Worker’s Compensation Policy and the Professional Liability Policy, shall be primary and non-contributory. j. All polices, except the Worker’s Compensation Policy, shall insure the defense and indemnity obligations assumed by Consultant under this Agreement. The

Page 5 of 10 2017 06 01 Professional Liability policy shall insure the defense and indemnity obligations assumed by Consultant under this Agreement except with respect to the liability for loss or damage resulting from the negligence or fault of anyone other than the Consultant or others for whom the Consultant is legally liable.

k. Consultant agrees to maintain all coverage required herein throughout the term of the Agreement and for a minimum of two (2) years following City’s written acceptance of the Work.

l. It shall be Consultant’s responsibility to pay any retention or deductible for the coverages required herein.

m. All policies shall contain a provision or endorsement that coverages afforded thereunder shall not be cancelled or non-renewed or restrictive modifications added, without thirty (30) days’ prior notice to the City, except that if the cancellation or non-renewal is due to non-payment, the coverages may not be terminated or non- renewed without ten (10) days’ prior notice to the City. n. Consultant shall maintain in effect all insurance coverages required under this Paragraph at Consultant’s sole expense and with insurance companies licensed to do business in the state in Minnesota and having a current A.M. Best rating of no less than A-, unless specifically accepted by City in writing. o. A copy of the Consultant’s Certificate of Insurance which evidences the compliance with this Paragraph, must be filed with City prior to the start of Consultant’s Work. Upon request a copy of the Consultant’s insurance declaration page, Rider and/or Endorsement, as applicable shall be provided. Such documents evidencing Insurance shall be in a form acceptable to City and shall provide satisfactory evidence that Consultant has complied with all insurance requirements. Renewal certificates shall be provided to City prior to the expiration date of any of the required policies. City will not be obligated, however, to review such Certificate of Insurance, declaration page, Rider, Endorsement or certificates or other evidence of insurance, or to advise Consultant of any deficiencies in such documents and receipt thereof shall not relieve Consultant from, nor be deemed a waiver of, City’s right to enforce the terms of Consultant’s obligations hereunder. City reserves the right to examine any policy provided for under this paragraph.

p. Effect of Consultant’s Failure to Provide Insurance. If Consultant fails to provide the specified insurance, then Consultant will defend, indemnify and hold harmless the City, the City's officials, agents and employees from any loss, claim, liability and expense (including reasonable attorney's fees and expenses of litigation) to the extent necessary to afford the same protection as would have been provided by the specified insurance. Except to the extent prohibited by law, this indemnity applies regardless of any strict liability or negligence attributable to the City (including sole negligence) and regardless of the extent to which the underlying occurrence (i.e., the event giving rise to a claim which would have been covered by the specified insurance) is attributable to

Page 6 of 10 2017 06 01 the negligent or otherwise wrongful act or omission (including breach of contract) of Consultant, its subcontractors, agents, employees or delegates. Consultant agrees that this indemnity shall be construed and applied in favor of indemnification. Consultant also agrees that if applicable law limits or precludes any aspect of this indemnity, then the indemnity will be considered limited only to the extent necessary to comply with that applicable law. The stated indemnity continues until all applicable statutes of limitation have run.

If a claim arises within the scope of the stated indemnity, the City may require Consultant to: i. Furnish and pay for a surety bond, satisfactory to the City, guaranteeing performance of the indemnity obligation; or ii. Furnish a written acceptance of tender of defense and indemnity from Consultant's insurance company.

Consultant will take the action required by the City within fifteen (15) days of receiving notice from the City.

12. Indemnification. Consultant will defend and indemnify City, its officers, agents, and employees and hold them harmless from and against all judgments, claims, damages, costs and expenses, including a reasonable amount as and for its attorney’s fees paid, incurred or for which it may be liable resulting from any breach of this Agreement by Consultant, its agents, contractors and employees, or any negligent or intentional act or omission performed, taken or not performed or taken by Consultant, its agents, contractors and employees, relative to this Agreement. City will indemnify and hold Consultant harmless from and against any loss for injuries or damages arising out of the negligent acts of the City, its officers, agents or employees.

13. Ownership of Documents. All plans, diagrams, analyses, reports and information generated in connection with the performance of the Agreement (“Information”) shall become the property of the City, but Consultant may retain copies of such documents as records of the services provided. The City may use the Information for its purposes and the Consultant also may use the Information for its purposes. Use of the Information for the purposes of the project contemplated by this Agreement (“Project”) does not relieve any liability on the part of the Consultant, but any use of the Information by the City or the Consultant beyond the scope of the Project is without liability to the other, and the party using the Information agrees to defend and indemnify the other from any claims or liability resulting therefrom.

14. Mediation. Each dispute, claim or controversy arising from or related to this agreement shall be subject to mediation as a condition precedent to initiating arbitration or legal or equitable actions by either party. Unless the parties agree otherwise, the mediation shall be in accordance with the Commercial Mediation Procedures of the American Arbitration Association then currently in effect. A request for mediation shall be filed in writing with the American Arbitration Association and the other party. No arbitration or legal or equitable action may be instituted for a period of 90 days from the filing of the request

Page 7 of 10 2017 06 01 for mediation unless a longer period of time is provided by agreement of the parties. Cost of mediation shall be shared equally between the parties. Mediation shall be held in the City of Eden Prairie unless another location is mutually agreed upon by the parties. The parties shall memorialize any agreement resulting from the mediation in a mediated settlement agreement, which agreement shall be enforceable as a settlement in any court having jurisdiction thereof.

GENERAL TERMS AND CONDITIONS

15. Assignment. Neither party shall assign this Agreement, nor any interest arising herein, without the written consent of the other party.

16. Compliance with Laws and Regulations. In providing services hereunder, the Consultant shall abide by statutes, ordinances, rules, and regulations pertaining to the provisions of services to be provided. Any violation of statutes, ordinances, rules and regulations pertaining to the services to be provided shall constitute a material breach of this Agreement and entitle the City to immediately terminate this Agreement.

17. Conflicts. No salaried officer or employee of the City and no member of the Council of the City shall have a financial interest, direct or indirect, in this Agreement. The violation of this provision renders the Agreement void.

18. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be considered an original.

19. Damages. In the event of a breach of this Agreement by the City, Contractor shall not be entitled to recover punitive, special or consequential damages or damages for loss of business.

20. Employees. Contractor agrees not to hire any employee or former employee of City and City agrees not to hire any employee or former employee of Contractor prior to termination of this Agreement and for one (1) year thereafter, without prior written consent of the former employer in each case.

21. Enforcement. The Contractor shall reimburse the City for all costs and expenses, including without limitation, attorneys' fees paid or incurred by the City in connection with the enforcement by the City during the term of this Agreement or thereafter of any of the rights or remedies of the City under this Agreement.

22. Entire Agreement, Construction, Application and Interpretation. This Agreement is in furtherance of the City’s public purpose mission and shall be construed, interpreted, and applied pursuant to and in conformance with the City's public purpose mission. The entire agreement of the parties is contained herein. This Contract supersedes all oral agreements and negotiations between the parties relating to the subject matter hereof as well as any previous agreements presently in effect between the parties relating to the subject matter hereof. Any alterations, amendments, deletions, or waivers of the

Page 8 of 10 2017 06 01 provisions of this Contract shall be valid only when expressed in writing and duly signed by the parties, unless otherwise provided herein.

23. Governing Law. This Agreement shall be controlled by the laws of the State of Minnesota.

24. Non-Discrimination. During the performance of this Agreement, the Consultant shall not discriminate against any employee or applicants for employment because of race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, disability, sexual orientation or age. The Consultant shall post in places available to employees and applicants for employment, notices setting forth the provision of this non-discrimination clause and stating that all qualified applicants will receive consideration for employment. The Consultant shall incorporate the foregoing requirements of this paragraph in all of its subcontracts for program work, and will require all of its subcontractors for such work to incorporate such requirements in all subcontracts for program work. The Consultant further agrees to comply with all aspects of the Minnesota Human Rights Act, Minnesota Statutes 363.01, et. seq., Title VI of the Civil Rights Act of 1964, and the Americans with Disabilities Act of 1990.

25. Notice. Any notice required or permitted to be given by a party upon the other is given in accordance with this Agreement if it is directed to either party by delivering it personally to an officer of the party, or if mailed in a sealed wrapper by United States registered or certified mail, return receipt requested, postage prepaid, or if deposited cost paid with a nationally recognized, reputable overnight courier, properly addressed to the address listed on page 1 hereof. Notices shall be deemed effective on the earlier of the date of receipt or the date of mailing or deposit as aforesaid, provided, however, that if notice is given by mail or deposit, that the time for response to any notice by the other party shall commence to run one business day after any such mailing or deposit. A party may change its address for the service of notice by giving written notice of such change to the other party, in any manner above specified, 10 days prior to the effective date of such change.

26. Rights and Remedies. The duties and obligations imposed by this Agreement and the rights and remedies available thereunder shall be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law.

27. Services Not Provided For. No claim for services furnished by the Consultant not specifically provided for herein shall be honored by the City.

28. Severability. The provisions of this Agreement are severable. If any portion hereof is, for any reason, held by a court of competent jurisdiction to be contrary to law, such decision shall not affect the remaining provisions of this Agreement.

29. Statutory Provisions. a. Audit Disclosure. The books, records, documents and accounting procedures and practices of the Consultant or other parties relevant to this Agreement are subject to

Page 9 of 10 2017 06 01 examination by the City and either the Legislative Auditor or the State Auditor for a period of six (6) years after the effective date of this Agreement.

b. Data Practices. Any reports, information, or data in any form given to, or prepared or assembled by the Consultant under this Agreement which the City requests to be kept confidential, shall not be made available to any individual or organization without the City's prior written approval. This Agreement is subject to the Minnesota Government Data Practice Act, Minnesota Statutes Chapter 13 (Data Practices Act). All government data, as defined in the Data Practices Act Section 13.02, Subd 7, which is created, collected, received, stored, used, maintained, or disseminated by Consultant in performing any of the functions of the City during performance of this Agreement is subject to the requirements of the Data Practice Act and Consultant shall comply with those requirements as if it were a government entity. All subcontracts entered into by Consultant in relation to this Agreement shall contain similar Data Practices Act compliance language.

30. Waiver. Any waiver by either party of a breach of any provisions of this Agreement shall not affect, in any respect, the validity of the remainder of this Agreement.

Executed as of the day and year first written above.

CITY OF EDEN PRAIRIE

Mayor

City Manager

CONSULTANT

Andrew Grice By: Government Audit Partner Its:

Page 10 of 10 2017 06 01

City of Eden Prairie, Minnesota

Request for Proposals

Professional Auditing Services

July 27, 2020

City of Eden Prairie 8080 Mitchell Road Eden Prairie, MN 55344

Shannon Melville Accountant, Finance Division Phone: (952) 949-8308 Fax: (952) 949-8383 [email protected] www.edenprairie.org Table of Contents 1. Introduction a) General Information b) Terms of Engagement c) Subcontracting

2. Nature of Services Required a) Scope of Work to be Performed b) Auditing Standards to be Followed c) Reports to be Issued d) Working Paper Retention and Access to Working Papers e) Contract Termination

3. Description of the Government a) Contact Person b) Background Information c) Federal and State Assistance d) Component Units

4. Time Requirements a) Anticipated Proposal Calendar b) Schedule for the 2020 Fiscal Year Audit c) Assistance Provided to the Auditor

5. Proposal Requirements a) General Requirements b) Required Components c) Technical Proposal

6. Evaluation Procedures a) Mandatory Elements b) Technical Qualifications c) Price d) Oral Presentations e) Final Selection

Attachment A – Proposer Guarantees and Warranties Attachment B – Schedule of Professional Fees and Expenses Attachment C – Sample Copy of Standard Agreement for Professional Services Attachment D – Fire Relief Association 2018 Audited Financial Statements

CITY OF EDEN PRAIRIE Request for Proposal for Professional Auditing Services

1. Introduction

a) General Information

The City of Eden Prairie is requesting proposals from qualified firms of certified public accountants to audit the financial statements for the City and the Eden Prairie Firefighter Relief Association for the years ending December 31, 2020, 2021 and 2022 with an option of auditing the financial statements for each of the three subsequent years, 2023, 2024, and 2025.

The audit of the City is to be performed in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the provisions of the federal Single Audit Act and U.S. Office of Management and Budget (OMB) Circular A-133, Audits of State and Local Governments as well as all other Federal, State and local requirements in effect now or placed in effect during the engagement.

To be considered, a copy of the proposal must be received by Shannon Melville, Finance Division, 8080 Mitchell Road, Eden Prairie, MN 55344, by 4:30 p.m. on Monday, August 17, 2020. The City reserves the right to reject any or all proposals submitted. The City reserves the right, where it may serve the City’s best interest, to request additional information or clarifications from proposers, or to allow corrections of errors or omissions. At the discretion of the City, firms submitting proposals may be requested to make oral presentations as part of the evaluation process.

The City reserves the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance by the firm of the conditions contained in this request for proposal (RFP), unless clearly and specifically noted in the proposal submitted.

All questions and requests for clarification should be submitted by email to [email protected] no later than August 14, 2020. Firms shall not contact any other City staff with any questions or inquiries. Only information that the City provides in writing will be binding. All responses will be sent to each firm which has been provided a copy of this RFP. Upon receipt of the RFP from any source, firms should immediately contact the City and provide its name and email address so that amendments to the RFP or other communications can be sent to it.

The City reserves the right to amend this RFP prior to the deadline for proposal submission. Any amendment shall be in writing and shall be provided to each firm which provides its name and email address to the City.

It shall be understood that all proposals, responses, inquiries, or correspondence relating to or in reference to this RFP, and all reports, charts and proposal or referencing information submitted in response to this RFP, shall become the property of the City, and will not be returned. The City is subject to the Minnesota Government Data Practices Act, Minnesota Statute Chapter 13, and all information submitted shall be disclosed as required by the Act. b) Terms of Engagement

An initial three-year contract with the City is contemplated, subject to annual review of performance by the City. In the event of unsatisfactory performance, or when in the best interest of the City, proposals may be solicited before the end of the three year period. An optional three-year renewal may be considered beyond the initial three-year contract. Contract renewal will be at the sole discretion of the City with scope of services and pricing to be negotiated. The City may select a formal bid process after the initial three-year contract. Formal bidding is required after six consecutive years of service.

The contract shall be in the form of the City’s Agreement for Professional Services (Attachment C). The City reserves the right to negotiate all terms and conditions of the contract. In the event the City and the firm are unable to agree upon all contract provisions, the City reserves the right to cease negotiations, reject the firm’s proposal, and proceed to negotiate with the next selected firm. c) Subcontracting

No subcontracting will be allowed without the express prior written consent of the City.

2. Nature of Services Required a) Scope of Work to be Performed

The City of Eden Prairie desires the auditor to express an opinion on the fair presentation of its general purpose financial statements in conformity with generally accepted accounting principles.

For the City of Eden Prairie, the auditor is required to audit the basic financial statements, Required Supplementary Information, combining and individual fund statements.

The City also desires the firm to review the presentation of the statistical section of the comprehensive annual financial report, in so far as current generally accepted auditing standards require such review. The auditor is not required to audit the schedule of expenditures of federal awards if such audit is not triggered by the threshold of funding received by the City.

For the Eden Prairie Firefighter Relief Association CRC, the auditor is required to audit the financial statements and prepare the reports listed below.

b) Auditing Standards to be Followed

To meet the requirements of this request for proposal, the audit shall be performed in accordance with: • Generally accepted auditing standards as set forth by the American Institute of Certified Public Accountants (AICPA) • The standards for financial audits as set forth in the U.S. General Accounting Offices’ (GAO) Government Auditing Standards • The provisions of U.S. Office of Management and Budget (OMB) Circular A- 133 • The provisions of the Minnesota Legal Compliance Audit Guide for Local Government • Any other Federal, State and local requirements in effect now, or placed into effect during the engagements c) Reports to be Issued

Following the completion of the audit of the fiscal year’s financial statements, the auditor shall:

1. Issue an opinion letter on the City’s basic financial statements in conformity with auditing standards generally accepted in the United States of America.

2. Issue a report on the consideration of the City’s internal control over financial reporting.

3. Issue a report on the City’s compliance with applicable laws and regulations.

4. Communicate in a letter to management any reportable conditions found during the audit.

5. If applicable, issue a report on the Schedule of Expenditures of Federal Awards required by OMB Circular A-133. If a single audit is needed, the schedule of federal financial assistance and related auditor’s report, as well as the reports on the internal controls and compliance, will not be included in the CAFR. They will be the responsibility of the auditor.

6. Prepare forms FIRE-19 (Financial Investment and Reporting), IRS 990 and SC-99 (Schedules 1 and 2) for the Firefighter Relief Association.

7. Prepare any other requested or required reports agreed upon in the annual engagement letter.

8. Ensure that the partner in charge of the audit and/or the Audit Manager is available to attend public meetings for discussion of the final report should his/her attendance be requested by the City Council. An exit conference with the City Manager and Finance staff will be conducted by the auditor in charge. At the exit conference, findings and recommendations regarding compliance and internal controls shall be discussed. The audit firm shall be required to make an immediate, written report to the Finance Manager of all irregularities and illegal acts or indications of illegal acts of which they become aware during the course of the audit.

If it should become necessary for the City to request the auditor to render any additional services to either supplement the services requested in this RFP or to perform additional work as a result of the specific recommendations included in any report issued on this engagement, then such additional work shall be performed only if set forth in an addendum to the contract between the City and the firm. Any such additional work agreed to between the City and the firm shall be performed at the same rates set forth in the schedule of fees and expenses included in the dollar cost bid. Such additional work may include providing assistance to City Finance staff to ensure compliance with new accounting pronouncements.

d) Working Paper Retention and Access to Working Papers

All working papers and reports must be retained, at the auditor’s expense, for a minimum of six (6) years following the issuance of an opinion, unless the firm is notified in writing by the City of the need to extend the retention period. The auditor will be required to make working papers available, upon request.

In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance.

e) Contract Termination

Either party may cancel the contract for an audit year by giving notice in writing to the other party at least ninety (90) days prior to January first of the audit year.

3. Description of the Government

a) Contact Person

The auditor's principal contact with the City will be:

Tammy Wilson, Finance Supervisor (952) 949-8376 [email protected]

b) Background Information

The City of Eden Prairie operates under a Statutory Plan B form of government. Policymaking and legislative authorities are vested in the governing council, which consists of a mayor and four-member council. For 2020, the City has approximately 279.7 full-time equivalent employees and a General Fund operating budget of approximately $49 million. There are eight employees in the Finance division.

The City’s accounting system, consisting of the General Ledger, Payroll, Accounts Payable, Accounts Receivable, Fixed Assets and Utility Billing systems, are fully automated. Budgets are recorded in the automated accounting system.

Moody's Investors Service has assigned an Aaa rating for the City’s debt instruments. Standard and Poor’s Financial Services has also assigned an AAA rating.

More information about the City can be obtained on our web site at www.edenprairie.org. Additional information on the Eden Prairie Fire Relief Association can be found in the Eden Prairie Firefighter Relief Association’s Audited Financial Statements for the year ended December 31, 2018, which are included in the RFP package (Attachment D).

c) Federal and State Assistance

In 2019, the City received federal funds from the Departments of Housing and Urban Development, Justice, Interior, and Transportation. Although a Single Audit was not required in 2019, the successful candidate would be able to provide Single Audit services should the need arise.

d) Component Units

The City is responsible for one component unit. The Housing and Redevelopment Authority (HRA) is reported as special revenue funds within the City’s Comprehensive Annual Financial Report.

4. Time Requirements

a) Anticipated Proposal Calendar

The following is a list of proposed key dates regarding the selection process:

Due date for proposals 4:30 p.m. Monday, August 17 Staff Review / Interviews August 18 – 28 City Council Approval September 1 or 15

b) Schedule for the 2020 Fiscal Year Audit

The schedule for interim work will be determined upon completion of the selection process. It is desirable to complete as much work as possible on an interim basis. The City will have the accounting records ready for audit in March. The City anticipates an audit start date of March 15, 2021. The City of Eden Prairie will prepare its own financial statements. The auditor is responsible for reviewing and editing the financial statements. The auditor shall have drafts of the audit reports and final recommendations to management available for review by the end of April. Presentation to Council is anticipated in May.

c) Assistance Provided to the Auditor

City staff will complete and balance all accounts at year-end. The City will provide staff assistance to the auditor as is reasonably available. The City will furnish the following information and work papers in conjunction with the audit engagement:

• Trial balances for all funds subject to the audit • Detailed reconciling records and other information as required by the auditing firm and mutually agreed upon

5. Proposal Requirements a) General Requirements

Proposals must be submitted by 4:30 p.m. on Monday, August 17, 2020 and addressed to:

Shannon Melville, Finance Division City of Eden Prairie 8080 Mitchell Road Eden Prairie, MN 55344 email: [email protected] b) Required Components For a firm to be considered, a copy of the proposal is required to be received by Shannon Melville at the above address by 4:30pm August 17, 2020.

Proposals shall include the following:

1. Title Page showing the request for proposals’ subject; the firm’s name; the name, address and telephone number of the contact person; and the date of the proposal.

2. Table of Contents

3. Signed Letter of Transmittal briefly stating the proposers understanding of the work to be done, the commitment to perform the work within the time period, a statement why the firm believes itself to be best qualified to perform the engagement and a statement that the proposal is a firm and irrevocable offer for the three year period.

4. Technical Proposal which follows the order and contents outlined in Section 5c below.

5. Proposer Guarantees and Warranties executed copy (Attachment A). The selected audit firm will be required to provide proof of insurance satisfactory to the City for all applicable insurance in the amounts specified in the Professional Services Agreement. No proposal may contain a limitation on liability except for exclusion of punitive damages.

6. Schedule of Professional Fees and Expenses completed copy (Attachment B). The City will not be responsible for expenses incurred in preparing and submitting the proposal. Such costs should not be included in the proposal.

7. Professional Services Agreement (Attachment C). An executed copy will be required only from the selected firm. During the bidding process, firms should reference the sample Professional Services Agreement (Attachment C) to ensure their ability to meet all of the requirements outlined in the agreement.

c) Technical Proposal

The purpose of the Technical Proposal is to demonstrate the qualifications, competence and capacity of the firms seeking to undertake an independent audit of the City in conformity with the requirements of this RFP. As such, the substance of proposals will carry more weight than their form or manner of presentation. The Technical Proposal should demonstrate the qualifications of the firm and of the particular staff to be assigned to this engagement. It should also specify an audit approach that will meet the RFP requirements.

The proposal should address all the points outlined in the RFP. The proposal should be prepared simply and economically, providing a straightforward, concise description of the proposer's capabilities to satisfy the requirements of the RFP. While additional data may be presented, the following subjects must be included. They represent the criteria against which the proposal will be evaluated.

1. Independence – The firm should provide an affirmative statement that it is independent of the City as defined by generally accepted auditing standards of the U.S. General Accounting Office's Government Auditing Standards.

The firm should also list and describe the firm’s professional relationship involving the City, its component units, or any of its agencies for the past five (5) years, together with a statement explaining why such relationships do not constitute a conflict of interest relative to performing the proposed audit.

In addition, the firm shall give the City written notice of any professional relationships involving the City, its component units, or its agencies, entered into during the period of this agreement.

2. License to Practice in Minnesota – An affirmative statement should be included that the firm and all assigned key professional staff are properly registered and licensed to practice in Minnesota.

3. Firm Qualifications and Experience -- The proposer should state the size of the firm, the size of the firm's governmental audit staff, and the location of the office from which the work on this engagement is to be performed. The firm is also required to submit a copy of its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements.

The firm shall also provide information on the results of any federal or state desk reviews or field reviews of its audits during the past three (3) years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with state regulatory bodies or professional organizations.

4. Partner, Supervisory, and Staff Qualifications and Experience -- Identify the principal supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement. Indicate whether each such person is licensed to practice as a certified public accountant in Minnesota. Provide information on the government auditing experience of each person, including information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit.

Provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. Indicate how the quality of staff over the term of the agreement will be assured.

Audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience.

5. Similar Engagements with Other Governmental Entities -- For the firm’s office that will be assigned responsibility for the audit, list the most significant engagements performed in the last three (3) years that are similar to the engagement described in this RFP and are cities awarded the GFOA Certificate of Achievement for Excellence in Financial Reporting. These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact.

6. Identification of Anticipated Potential Audit Problems – The proposal should identify and describe any anticipated potential audit problems, the firm’s approach to resolving these problems, and any special assistance that will be requested from the City. 6. Evaluation Procedures

Proposals submitted will be evaluated by the Finance Manager, Finance Supervisor, other key finance employees as needed, and the Firefighter Relief Association Treasurer. The City reserves the right to negotiate and award only a portion of the requirements. The Firefighter Relief Association may choose a different auditor. Hence, proposals should include a cost for these services as a separate item from the other services that are to be provided. Space is provided on the Schedule of Fees and Expenses (Attachment B).

Proposals will be evaluated using three sets of criteria. Firms meeting the mandatory criteria will have their proposals evaluated for both technical qualifications and price.

The following represent the principal selection criteria which will be considered during the evaluation process. a) Mandatory Elements

1. The audit firm is independent and licensed to practice in Minnesota

2. The firm has no conflict of interest with regard to any other work performed by the firm for the City

3. The firm adheres to the instructions in this RFP on preparing and submitting the proposal

4. The firm submits a copy of its last external quality control review report and the firm has a record of quality audit work b) Technical Qualifications

1. Expertise and Experience

i. The firm's past experience and performance on comparable government engagements

ii. The quality of the firm's professional personnel to be assigned to the engagement and the quality of the firm's management support personnel to be available for technical consultation

iii. The firm’s expertise with the GFOA Certificate of Achievement in Financial Reporting program

2. Audit Approach

i. Adequacy of a proposed staffing plan for various segments of the engagement

ii. Adequacy of sampling techniques

iii. Adequacy of analytical procedures c) Price d) Oral Presentations During the evaluation process the City may, at its discretion, request any or all firms to make oral presentations. Such presentations will provide firms with an opportunity to answer any questions the City may have on a firm's proposal. Interviews are tentatively planned to be held the week of August 24. e) Final Selection Staff will recommend to the City Council the appointment of an independent CPA firm judged to be in the best interests of the City. The final decision with respect to the appointment will be made by the City Council.

ATTACHMENT A

PROPOSER GUARANTEES AND WARRANTIES

I. The proposer certifies it can and will provide and make available, as a minimum, all services set forth in the RFP.

II. Proposer warrants that it is willing and able to obtain an errors and omissions insurance policy providing coverage for the willful or negligent acts, or omissions of any officers, employees or agents thereof in the amounts specified in the Professional Services Agreement (Attachment C).

III. Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the prior written permission of the City of Eden Prairie and the Firefighter Relief Association.

IV. Proposer warrants that all information provided by it in connection with this proposal is true and accurate.

Signature of Official: ______

Name (typed): ______

Title: ______

Firm: ______

Date: ______

ATTACHMENT B

SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE DECEMBER 31, 2020 FINANCIAL STATEMENTS

Standard Quoted Hourly Hourly Hours Rates Rates Total Partners Manager(s) Supervisor(s) Staff Other: ______specify Subtotal

Other (specify fees): Single Audit Fees, if required

Total all-inclusive maximum price for 2020 City audit

Total all-inclusive maximum price for 2021 City audit

Total all-inclusive maximum price for 2022 City audit

Eden Prairie Fire Relief Association (specify fees):

Total all-inclusive maximum price for 2020 Fire Relief audit

Total all-inclusive maximum price for 2021 Fire Relief audit

Total all-inclusive maximum price for 2022 Fire Relief audit

Note: the rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the total all-inclusive maximum price.

ATTACHMENT C

SAMPLE COPY OF STANDARD AGREEMENT FOR PROFESSIONAL SERVICES

Agreement for Professional Services

This Agreement (“Agreement”) is made on the ______day of______, 20__, between the City of Eden Prairie, Minnesota (hereinafter "City"), whose business address is 8080 Mitchell Road, Eden Prairie, MN 55344, and ______(“Consultant”), a Minnesota ______(hereinafter "Consultant") whose business address is ______.

Preliminary Statement

The City has adopted a policy regarding the selection and hiring of consultants to provide a variety of professional services for City projects. That policy requires that persons, firms or corporations providing such services enter into written agreements with the City. The purpose of this Agreement is to set forth the terms and conditions for the provision of professional services by Consultant for______hereinafter referred to as the "Work".

The City and Consultant agree as follows:

1. Scope of Work. The Consultant agrees to provide the professional services shown in Exhibit A (______) in connection with the Work. Exhibit A is intended to be the scope of service for the work of the Consultant. Any general or specific conditions, terms, agreements, consultant or industry proposal, or contract terms attached to or a part of Exhibit A are declined in full and, accordingly, are deleted and shall not be in effect in any manner.

2. Term. The term of this Agreement shall be from ______through ______the date of signature by the parties notwithstanding. This Agreement may be extended upon the written mutual consent of the parties for such additional period as they deem appropriate, and upon the terms and conditions as herein stated.

3. Compensation for Services. City agrees to pay the Consultant on an hourly basis plus expenses in a total amount not to exceed $______for the services as described in Exhibit A. a. Any changes in the scope of the work which may result in an increase to the compensation due the Consultant shall require prior written approval by an authorized representative of the City or by the City Council. The City will not pay additional compensation for services that do not have prior written authorization.

b. Special Consultants may be utilized by the Consultant when required by the complex or specialized nature of the Project and when authorized in writing by the City.

c. If Consultant is delayed in performance due to any cause beyond its reasonable control, including but not limited to strikes, riots, fires, acts of God, governmental actions, actions of a third party, or actions or inactions of City, the time for performance shall be extended by a period of time lost by reason of the delay. Consultant will be entitled to payment for its reasonable additional charges, if any, due to the delay.

4. City Information. The City agrees to provide the Consultant with the complete information concerning the Scope of the Work and to perform the following services: a. Access to the Area. Depending on the nature of the Work, Consultant may from time to time require access to public and private lands or property. As may be necessary, the City shall obtain access to and make all provisions for the Consultant to enter upon public and private lands or property as required for the Consultant to perform such services necessary to complete the Work.

b. Consideration of the Consultant's Work. The City shall give thorough consideration to all reports, sketches, estimates, drawings, and other documents presented by the Consultant, and shall inform the Consultant of all decisions required of City within a reasonable time so as not to delay the work of the Consultant.

c. Standards. The City shall furnish the Consultant with a copy of any standard or criteria, including but not limited to, design and construction standards that may be required in the preparation of the Work for the Project.

d. City's Representative. A person shall be appointed to act as the City's representative with respect to the work to be performed under this Agreement. He or she shall have complete authority to transmit instructions, receive information, interpret, and define the City's policy and decisions with respect to the services provided or materials, equipment, elements and systems pertinent to the work covered by this Agreement.

5. Method of Payment. The Consultant shall submit to the City, on a monthly basis, an itemized invoice for professional services performed under this Agreement. Invoices submitted shall be paid in the same manner as other claims made to the City for: a. Progress Payment. For work reimbursed on an hourly basis, the Consultant shall indicate for each employee, his or her name, job title, the number of hours worked, rate of pay for each employee, a computation of amounts due for each employee, and the total amount due for each project task. Consultant shall verify all statements submitted for payment in compliance with Minnesota Statutes Sections 471.38 and 471.391. For reimbursable expenses, if provided for in Exhibit A, the Consultant shall provide an itemized listing and such documentation as reasonably required by the City. Each invoice shall contain the City’s project number and a progress summary showing the original (or amended) amount of the contract, current billing, past payments and unexpended balance of the contract.

b. Suspended Work. If any work performed by the Consultant is suspended in whole or in part by the City, the Consultant shall be paid for any services set forth on Exhibit A performed prior to receipt of written notice from the City of such suspension.

c. Payments for Special Consultants. The Consultant shall be reimbursed for the work of special consultants, as described herein, and for other items when authorized in writing by the City.

d. Claims. To receive any payment on this Agreement, the invoice or bill must include the following signed and dated statement: “I declare under penalty of perjury that this account, claim, or demand is just and correct and that no part of it has been paid.”

6. Project Manager and Staffing. The Consultant shall designated a Project Manager and notify the City in writing of the identity of the Project Manager before starting work on the Project. The Project Manager shall be assisted by other staff members as necessary to facilitate the completion of the Work in accordance with the terms established herein. Consultant may not remove or replace the Project Manager without the approval of the City.

7. Standard of Care. Consultant shall exercise the same degree of care, skill and diligence in the performance of its services as is ordinarily exercised by members of the profession under similar circumstances in Hennepin County, Minnesota. Consultant shall be liable to the fullest extent permitted under applicable law, without limitation, for any injuries, loss, or damages proximately caused by Consultant's breach of this standard of care. Consultant shall put forth reasonable efforts to complete its duties in a timely manner. Consultant shall not be responsible for delays caused by factors beyond its control or that could not be reasonably foreseen at the time of execution of this Agreement. Consultant shall be responsible for costs, delays or damages arising from unreasonable delays in the performance of its duties.

8. Termination. This Agreement may be terminated by either party by seven (7) days written notice delivered to the other party at the address written above. Upon termination under this provision, if there is no fault of the Consultant, the Consultant shall be paid for services rendered and reimbursable expenses until the effective date of termination. If however, the City terminates the Agreement because the Consultant has failed to perform in accordance with this Agreement, no further payment shall be made to the Consultant, and the City may retain another consultant to undertake or complete the Work identified herein.

9. Subcontractor. The Consultant shall not enter into subcontracts for services provided under this Agreement except as noted in the Scope of Work, without the express written consent of the City. The Consultant shall pay any subcontractor involved in the performance of this Agreement within ten (10) days of the Consultant's receipt of payment by the City for undisputed services provided by the subcontractor. If the Consultant fails within that time to pay the subcontractor any undisputed amount for which the Consultant has received payment by the City, the Consultant shall pay interest to the subcontractor on the unpaid amount at the rate of 1.5 percent per month or any part of a month. The minimum monthly interest penalty payment for an unpaid balance of $100 or more is $10. For an unpaid balance of less than $100, the Consultant shall pay the actual interest penalty due to the subcontractor. A subcontractor who prevails in a civil action to collect interest penalties from the Consultant shall be awarded its costs and disbursements, including attorney's fees, incurred in bringing the action.

10. Independent Consultant. Consultant is an independent contractor engaged by City to perform the services described herein and as such (i) shall employ such persons as it shall deem necessary and appropriate for the performance of its obligations pursuant to this Agreement, who shall be employees, and under the direction, of Consultant and in no respect employees of City, and (ii) shall have no authority to employ persons, or make purchases of equipment on behalf of City, or otherwise bind or obligate City. No statement herein shall be construed so as to find the Consultant an employee of the City.

11. Insurance. a. General Liability. Prior to starting the Work, Consultant shall procure, maintain and pay for such insurance as will protect against claims or loss which may arise out of operations by Consultant or by any subcontractor or by anyone employed by any of them or by anyone for whose acts any of them may be liable. Such insurance shall include, but not be limited to, minimum coverages and limits of liability specified in this Paragraph, or required by law.

b. Consultant shall procure and maintain the following minimum insurance coverages and limits of liability for the Work:

Worker’s Compensation Statutory Limits

Employer’s Liability $500,000 each accident $500,000 disease policy limit $500,000 disease each employee

Commercial General $1,000,000 property damage and bodily Liability injury per occurrence $2,000,000 general aggregate $2,000,000 Products–Completed Operations Aggregate $100,000 fire legal liability each occurrence $5,000 medical expense

Comprehensive Automobile Liability $1,000,000 combined single limit each accident (shall include coverage for all owned, hired and non-owed vehicles.)

Umbrella or Excess Liability $1,000,000 c. Commercial General Liability. The Commercial General Liability Policy shall be on ISO form CG 00 01 12 07 or CG 00 01 04 13, or the equivalent. Such insurance shall cover liability arising from premises, operations, independent contractors, products-completed operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract). There shall be no endorsement or modification of the Commercial General Liability form arising from pollution, explosion, collapse, underground property damage or work performed by subcontractors. d. Professional Liability Insurance. In addition to the coverages listed above, Consultant shall maintain a professional liability insurance policy in the amount of $2,000,000. Said policy need not name the City as an additional insured. It shall be Consultant’s responsibility to pay any retention or deductible for the professional liability insurance. Consultant agrees to maintain the professional liability insurance for a minimum of two (2) years following termination of this Agreement. e. Consultant shall maintain “stop gap” coverage if Consultant obtains Workers’ Compensation coverage from any state fund if Employer’s liability coverage is not available. f. All policies, except the Worker’s Compensation Policy, Automobile Policy, and Professional Liability Policy, shall name the “City of Eden Prairie” as an additional insured including products and completed operations. g. All policies, except the Professional Liability Policy, shall apply on a “per project” basis. h. All General Liability policies, Automobile Liability policies and Umbrella policies shall contain a waiver of subrogation in favor of the City. i. All policies, except for the Worker’s Compensation Policy and the Professional Liability Policy, shall be primary and non-contributory. j. All polices, except the Worker’s Compensation Policy, shall insure the defense and indemnity obligations assumed by Consultant under this Agreement. The Professional Liability policy shall insure the defense and indemnity obligations assumed by Consultant under this Agreement except with respect to the liability for loss or damage resulting from the negligence or fault of anyone other than the Consultant or others for whom the Consultant is legally liable.

k. Consultant agrees to maintain all coverage required herein throughout the term of the Agreement and for a minimum of two (2) years following City’s written acceptance of the Work.

l. It shall be Consultant’s responsibility to pay any retention or deductible for the coverages required herein.

m. All policies shall contain a provision or endorsement that coverages afforded thereunder shall not be cancelled or non-renewed or restrictive modifications added, without thirty (30) days’ prior notice to the City, except that if the cancellation or non-renewal is due to non-payment, the coverages may not be terminated or non-renewed without ten (10) days’ prior notice to the City. n. Consultant shall maintain in effect all insurance coverages required under this Paragraph at Consultant’s sole expense and with insurance companies licensed to do business in the state in Minnesota and having a current A.M. Best rating of no less than A-, unless specifically accepted by City in writing. o. A copy of the Consultant’s Certificate of Insurance which evidences the compliance with this Paragraph, must be filed with City prior to the start of Consultant’s Work. Upon request a copy of the Consultant’s insurance declaration page, Rider and/or Endorsement, as applicable shall be provided. Such documents evidencing Insurance shall be in a form acceptable to City and shall provide satisfactory evidence that Consultant has complied with all insurance requirements. Renewal certificates shall be provided to City prior to the expiration date of any of the required policies. City will not be obligated, however, to review such Certificate of Insurance, declaration page, Rider, Endorsement or certificates or other evidence of insurance, or to advise Consultant of any deficiencies in such documents and receipt thereof shall not relieve Consultant from, nor be deemed a waiver of, City’s right to enforce the terms of Consultant’s obligations hereunder. City reserves the right to examine any policy provided for under this paragraph.

p. Effect of Consultant’s Failure to Provide Insurance. If Consultant fails to provide the specified insurance, then Consultant will defend, indemnify and hold harmless the City, the City's officials, agents and employees from any loss, claim, liability and expense (including reasonable attorney's fees and expenses of litigation) to the extent necessary to afford the same protection as would have been provided by the specified insurance. Except to the extent prohibited by law, this indemnity applies regardless of any strict liability or negligence attributable to the City (including sole negligence) and regardless of the extent to which the underlying occurrence (i.e., the event giving rise to a claim which would have been covered by the specified insurance) is attributable to the negligent or otherwise wrongful act or omission (including breach of contract) of Consultant, its subcontractors, agents, employees or delegates. Consultant agrees that this indemnity shall be construed and applied in favor of indemnification. Consultant also agrees that if applicable law limits or precludes any aspect of this indemnity, then the indemnity will be considered limited only to the extent necessary to comply with that applicable law. The stated indemnity continues until all applicable statutes of limitation have run. If a claim arises within the scope of the stated indemnity, the City may require Consultant to: i. Furnish and pay for a surety bond, satisfactory to the City, guaranteeing performance of the indemnity obligation; or ii. Furnish a written acceptance of tender of defense and indemnity from Consultant's insurance company.

Consultant will take the action required by the City within fifteen (15) days of receiving notice from the City.

12. Indemnification. Consultant will defend and indemnify City, its officers, agents, and employees and hold them harmless from and against all judgments, claims, damages, costs and expenses, including a reasonable amount as and for its attorney’s fees paid, incurred or for which it may be liable resulting from any breach of this Agreement by Consultant, its agents, contractors and employees, or any negligent or intentional act or omission performed, taken or not performed or taken by Consultant, its agents, contractors and employees, relative to this Agreement. City will indemnify and hold Consultant harmless from and against any loss for injuries or damages arising out of the negligent acts of the City, its officers, agents or employees.

13. Ownership of Documents. All plans, diagrams, analyses, reports and information generated in connection with the performance of the Agreement (“Information”) shall become the property of the City, but Consultant may retain copies of such documents as records of the services provided. The City may use the Information for its purposes and the Consultant also may use the Information for its purposes. Use of the Information for the purposes of the project contemplated by this Agreement (“Project”) does not relieve any liability on the part of the Consultant, but any use of the Information by the City or the Consultant beyond the scope of the Project is without liability to the other, and the party using the Information agrees to defend and indemnify the other from any claims or liability resulting therefrom.

14. Mediation. Each dispute, claim or controversy arising from or related to this agreement shall be subject to mediation as a condition precedent to initiating arbitration or legal or equitable actions by either party. Unless the parties agree otherwise, the mediation shall be in accordance with the Commercial Mediation Procedures of the American Arbitration Association then currently in effect. A request for mediation shall be filed in writing with the American Arbitration Association and the other party. No arbitration or legal or equitable action may be instituted for a period of 90 days from the filing of the request for mediation unless a longer period of time is provided by agreement of the parties. Cost of mediation shall be shared equally between the parties. Mediation shall be held in the City of Eden Prairie unless another location is mutually agreed upon by the parties. The parties shall memorialize any agreement resulting from the mediation in a mediated settlement agreement, which agreement shall be enforceable as a settlement in any court having jurisdiction thereof.

GENERAL TERMS AND CONDITIONS

15. Assignment. Neither party shall assign this Agreement, nor any interest arising herein, without the written consent of the other party.

16. Compliance with Laws and Regulations. In providing services hereunder, the Consultant shall abide by statutes, ordinances, rules, and regulations pertaining to the provisions of services to be provided. Any violation of statutes, ordinances, rules and regulations pertaining to the services to be provided shall constitute a material breach of this Agreement and entitle the City to immediately terminate this Agreement.

17. Conflicts. No salaried officer or employee of the City and no member of the Council of the City shall have a financial interest, direct or indirect, in this Agreement. The violation of this provision renders the Agreement void.

18. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be considered an original.

19. Damages. In the event of a breach of this Agreement by the City, Contractor shall not be entitled to recover punitive, special or consequential damages or damages for loss of business.

20. Employees. Contractor agrees not to hire any employee or former employee of City and City agrees not to hire any employee or former employee of Contractor prior to termination of this Agreement and for one (1) year thereafter, without prior written consent of the former employer in each case.

21. Enforcement. The Contractor shall reimburse the City for all costs and expenses, including without limitation, attorneys' fees paid or incurred by the City in connection with the enforcement by the City during the term of this Agreement or thereafter of any of the rights or remedies of the City under this Agreement.

22. Entire Agreement, Construction, Application and Interpretation. This Agreement is in furtherance of the City’s public purpose mission and shall be construed, interpreted, and applied pursuant to and in conformance with the City's public purpose mission. The entire agreement of the parties is contained herein. This Contract supersedes all oral agreements and negotiations between the parties relating to the subject matter hereof as well as any previous agreements presently in effect between the parties relating to the subject matter hereof. Any alterations, amendments, deletions, or waivers of the provisions of this Contract shall be valid only when expressed in writing and duly signed by the parties, unless otherwise provided herein.

23. Governing Law. This Agreement shall be controlled by the laws of the State of Minnesota.

24. Non-Discrimination. During the performance of this Agreement, the Consultant shall not discriminate against any employee or applicants for employment because of race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, disability, sexual orientation or age. The Consultant shall post in places available to employees and applicants for employment, notices setting forth the provision of this non-discrimination clause and stating that all qualified applicants will receive consideration for employment. The Consultant shall incorporate the foregoing requirements of this paragraph in all of its subcontracts for program work, and will require all of its subcontractors for such work to incorporate such requirements in all subcontracts for program work. The Consultant further agrees to comply with all aspects of the Minnesota Human Rights Act, Minnesota Statutes 363.01, et. seq., Title VI of the Civil Rights Act of 1964, and the Americans with Disabilities Act of 1990.

25. Notice. Any notice required or permitted to be given by a party upon the other is given in accordance with this Agreement if it is directed to either party by delivering it personally to an officer of the party, or if mailed in a sealed wrapper by United States registered or certified mail, return receipt requested, postage prepaid, or if deposited cost paid with a nationally recognized, reputable overnight courier, properly addressed to the address listed on page 1 hereof. Notices shall be deemed effective on the earlier of the date of receipt or the date of mailing or deposit as aforesaid, provided, however, that if notice is given by mail or deposit, that the time for response to any notice by the other party shall commence to run one business day after any such mailing or deposit. A party may change its address for the service of notice by giving written notice of such change to the other party, in any manner above specified, 10 days prior to the effective date of such change.

26. Rights and Remedies. The duties and obligations imposed by this Agreement and the rights and remedies available thereunder shall be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law.

27. Services Not Provided For. No claim for services furnished by the Consultant not specifically provided for herein shall be honored by the City.

28. Severability. The provisions of this Agreement are severable. If any portion hereof is, for any reason, held by a court of competent jurisdiction to be contrary to law, such decision shall not affect the remaining provisions of this Agreement.

29. Statutory Provisions. a. Audit Disclosure. The books, records, documents and accounting procedures and practices of the Consultant or other parties relevant to this Agreement are subject to examination by the City and either the Legislative Auditor or the State Auditor for a period of six (6) years after the effective date of this Agreement.

b. Data Practices. Any reports, information, or data in any form given to, or prepared or assembled by the Consultant under this Agreement which the City requests to be kept confidential, shall not be made available to any individual or organization without the City's prior written approval. This Agreement is subject to the Minnesota Government Data Practice Act, Minnesota Statutes Chapter 13 (Data Practices Act). All government data, as defined in the Data Practices Act Section 13.02, Subd 7, which is created, collected, received, stored, used, maintained, or disseminated by Consultant in performing any of the functions of the City during performance of this Agreement is subject to the requirements of the Data Practice Act and Consultant shall comply with those requirements as if it were a government entity. All subcontracts entered into by Consultant in relation to this Agreement shall contain similar Data Practices Act compliance language.

30. Waiver. Any waiver by either party of a breach of any provisions of this Agreement shall not affect, in any respect, the validity of the remainder of this Agreement.

Executed as of the day and year first written above.

CITY OF EDEN PRAIRIE

Mayor

City Manager

CONSULTANT

By:

Its:

ATTACHMENT D

EDEN PRAIRIE FIRE RELIEF ASSOCIATION AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION

FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

YEAR ENDED DECEMBER 31, 2018

EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION TABLE OF CONTENTS YEAR ENDED DECEMBER 31, 2018

INTRODUCTORY SECTION

BOARD OF TRUSTEES 1

FINANCIAL SECTION

INDEPENDENT AUDITORS’ REPORT 2

BASIC FINANCIAL STATEMENTS

GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS

GOVERNMENTAL FUND BALANCE SHEET AND STATEMENT OF NET POSITION 4

GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE AND STATEMENT OF ACTIVITIES 5

FIDUCIARY FUND FINANCIAL STATEMENTS

STATEMENT OF FIDUCIARY NET POSITION – SPECIAL PENSION TRUST FUND 6

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION – SPECIAL PENSION TRUST FUND 7

NOTES TO FINANCIAL STATEMENTS 8

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF CHANGES IN THE ASSOCIATION’S NET PENSION LIABILITY 26

SCHEDULE OF INVESTMENT RETURNS 27

OTHER INFORMATION

SCHEDULE OF CONTRIBUTIONS 28

OTHER REQUIRED REPORTS

INDEPENDENT AUDITORS’ REPORT ON MINNESOTA LEGAL COMPLIANCE 29

SCHEDULE OF FINDINGS AND RECOMMENDATIONS 30

INTRODUCTORY SECTION

EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION BOARD OF TRUSTEES YEAR ENDED DECEMBER 31, 2018

Eric Hayes President

Travis Jacobs Vice President

Collin O’Brien Treasurer

Thomas Wilson Secretary

Travis Dahlke Trustee

Doug Hayden Trustee

Kevin Schmieg Ex-officio, Fire Chief (Interim)

Sue Kotchevar Ex-officio, City Finance Director

Ron Case Ex-officio, City Council Member

(1)

FINANCIAL SECTION

INDEPENDENT AUDITORS’ REPORT

Board of Trustees Eden Prairie Firefighter Relief Association Eden Prairie, Minnesota

Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the general fund, and the special pension trust fund of the Eden Prairie Firefighter Relief Association (the Association), as of and for the year ended December 31, 2018, and the related notes to the financial statements, which collectively comprise the Association’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ 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. 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 Association’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Association’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

(2) Board of Trustees Eden Prairie Firefighter Relief Association

Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the general fund, and the special pension trust fund of the Association as of December 31, 2018, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Report on Summarized Comparative Information The Eden Prairie Firefighters Relief Association’s 2017 comparative information was derived from the prior year financial statements of the special pension trust fund and we expressed an unmodified opinion on those financial statements in our report dated June 11, 2018. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2017 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 schedule of changes in the Association’s net pension liability and schedule of investment returns 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 management’s 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.

Management has not presented the management’s discussion and analysis that governmental accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively compute the Association’s basic financial statements. The schedule of contributions is presented for purposes of additional analysis, and is not a required part of the basic financial statements. The schedule of contributions has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

CliftonLarsonAllen LLP

Minneapolis, Minnesota August 15, 2019

(3)

BASIC FINANCIAL STATEMENTS

EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION GOVERNMENTAL FUND BALANCE SHEET AND STATEMENT OF NET POSITION DECEMBER 31, 2018

Statement of Balance Net Position Sheet Governmental General Fund Adjustments Activities ASSETS Cash and Investments $ 9,400 $ - $ 9,400

FUND BALANCE/NET POSITION Fund Balance: Unassigned $ 9,400 (9,400) - Net Position: Unrestricted $ 9,400 $ 9,400

See accompanying Notes to Financial Statements. (4) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE AND STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER 31, 2018

Statement of Revenues, Expenditures, Statement of and Changes in Activities Fund Balance Governmental General Fund Adjustments Activities EXPENDITURES/EXPENSES Salaries and Wages $ 1,650 $ - $ 1,650 Flowers and Memorials 614 - 614 Office Expense 95 - 95 Other 163 - 163 Total Expenditures/Expenses 2,522 - 2,522

PROGRAM REVENUES Donations 2,073 - 2,073

Member Dues 3,836 - 3,836 Total Program Revenues 5,909 - 5,909

NET PROGRAM REVENUE (EXPENSES) 3,387 - 3,387

NET INCREASE (DECREASE) IN FUND BALANCE 3,387 (3,387) -

CHANGE IN NET POSITION - 3,387 3,387

FUND BALANCE/NET POSITION Beginning of Year 6,013 - 6,013

End of Year $ 9,400 $ - $ 9,400

See accompanying Notes to Financial Statements. (5) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION STATEMENT OF FIDUCIARY NET POSITION SPECIAL PENSION TRUST FUND DECEMBER 31, 2018 (WITH SUMMARIZED FINANCIAL INFORMATION AS OF DECEMBER 31, 2017)

2018 2017 ASSETS Cash $ 9,400 $ 95,070 Sweep/Money Markets 522,021 326,268 Corporate Notes/Bonds 2,710,585 2,687,447 Equity Securities 3,023,652 3,279,917 Mutual Funds 8,198,280 8,093,830 Alternative Investments 2,152,415 2,479,021 Fixed Income Securities 4,238,817 4,160,254 Real Estate Assets 21,566 1,352,011 Mortgage Backed Securities - 108,116 Prepaid Items 93,329 - Total Assets 20,970,065 22,581,934

LIABILITIES Accounts Payable 162,200 -

NET POSITION Net Position Restricted for Pension Benefits $ 20,807,865 $ 22,581,934

See accompanying Notes to Financial Statements. (6) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION STATEMENT OF CHANGES IN FIDUCIARY NET POSITION SPECIAL PENSION TRUST FUND YEAR ENDED DECEMBER 31, 2018 (WITH SUMMARIZED FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2017)

2018 2017 ADDITIONS Employer Contributions: State of Minnesota $ 369,759 $ 361,398 State of Minnesota - Supplemental Benefit 87,982 87,448 City of Eden Prairie 523,284 387,665 Total Contributions 981,025 836,511 Other Additions Miscellaneous Revenue 253 671 Total Other Additions 253 671 Investment Income: Net Appreciation (Depreciation) in Fair Value of Investments (1,647,312) 2,451,168 Dividends and Interest 488,906 433,424 Management Fees (116,449) (108,464) Total Investment Income (1,274,855) 2,776,128

Total Additions (293,577) 3,613,310

DEDUCTIONS Pension Benefits: Regular 1,447,720 1,084,111 Supplemental 2,000 - Salaries and Wages 7,750 9,500 Payroll Taxes and Fees 3,352 3,911 Professional Services 19,312 21,126 Office Supplies 358 - Other - 163 Total Deductions 1,480,492 1,118,811

INCREASE (DECREASE) IN NET POSITION (1,774,069) 2,494,499

Net Position Restricted for Pension Benefits - Beginning of Year 22,581,934 20,087,435

NET POSITION RESTRICTED FOR PENSION BENEFITS - END OF YEAR $ 20,807,865 $ 22,581,934

See accompanying Notes to Financial Statements. (7) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 1 ORGANIZATION STRUCTURE

Eden Prairie Firefighter Relief Association (the Association) was incorporated under the provisions of Minnesota Laws 1951 Chapter 550, Minnesota Statutes Section 317A, as amended.

The Association is governed by a board of trustees consisting of nine members including the president, vice-president, secretary, and treasurer of the Association and two general trustees. Six of the board members are elected by the members of the Association and three are appointed by the city as members of the board. Elected board members of the Association serve for three-year terms. The chief of the fire department, mayor, and city clerk are ex-officio members of the board of trustees.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation The financial statements of the Association have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The GASB pronouncements are recognized as accounting principles generally accepted in the United States of America for state and local governments.

Financial Reporting Entity For financial reporting purposes, the Association's financial statements include all funds, agencies, boards, and component units for which it is financially accountable. According to the GASB criteria, there is financial accountability if the primary government appoints a voting majority of an organization’s governing body and has the ability to impose its will on that governing body, or there is the potential for the organization to provide specific financial benefits or to impose specific financial burdens on the primary government. The Association does not have any component units.

Basic Financial Statement Presentation The Association meets the definition of a special-purpose government and is involved in only one program (i.e., general government). Accordingly, the Association is allowed to present its government-wide statements with the fund statements. At December 31, 2018 and for the year then ended, there were no reconciling items between the two types of statements.

The government-wide financial statements (i.e., the statement of net position and the statement of activities) display information about the reporting government as a whole. These statements include all financial activities of the Association, except for the Special Pension Trust Fund, which is a fiduciary fund. The Fiduciary Funds are only reported in the statement of fiduciary net position and statement of changes in fiduciary net position.

(8) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basic Financial Statement Presentation (Continued) The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Investment earnings and other items not properly included among program revenues are reported instead as general revenues.

The Association applies restricted resources first when an expense is incurred for a purpose for which both restricted and unrestricted net position is available.

Summarized Prior Year Information The basic 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 accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Association's financial statements for the year ended December 31, 2017, from which the summarized information was derived.

Fund Types Resources of the Association are accounted for in two fund types:

General Fund (Major Fund) The General Fund is a governmental fund which accounts for the resources other than those in the Special Pension Trust Fund. It is used for the good and benefit of the Association as determined by Association by-laws. Its resources consist of fund-raiser proceeds, member dues, donations, investment earnings, and miscellaneous sources. The fund balance of the general fund is unassigned.

Special Pension Trust Fund The Special Pension Trust Fund is a pension trust fund for the accumulation of resources to be used for retirement, dependency, and disability annuity payments of appropriate amounts and at appropriate times in the future. Resources are contributed by the City of Eden Prairie at amounts determined by law, including the 2% insurance premium tax, and amortization aid from the state of Minnesota. Net position of the Special Pension Trust Fund is restricted for pension benefits.

Measurement Focus and Basis of Accounting The accounting and financial reporting treatment applied is determined by its measurement focus and basis of accounting. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows.

(9) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Measurement Focus and Basis of Accounting (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this basis of accounting transactions are recorded in the following manner:

a. Revenue Recognition – Revenue is recognized when it becomes measurable and available. “Measurable” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Other revenues (except investment earnings) are recorded as revenue when received because they are generally not measurable until then. Investment earnings are recorded when earned because they are measurable and available. b. Recording of Expenditures – Expenditures are generally recorded when a liability is incurred. However, expenditures are recorded as prepaid for approved disbursements or liabilities incurred in advance of the year in which the item is to be used.

Investments Investments are reflected at fair value based on quoted market prices, except for money market investments and participating interest-earning investment contracts that have a remaining maturity at time of purchase of one year or less which are recorded at amortized cost, provided that the fair value of those investments is not significantly affected by the impairment of the credit standing of the issuer or by other factors. Money market investments are short-term, highly liquid debt instruments including commercial paper, banker’s acceptances, and U.S. treasury and agency obligations. Investments in external investment pools that meet the criteria of GASB Statement No. 79 are valued at amortized costs. If an external investment pool does not meet the criteria established in that Statement, investment in that pool is reported at fair value.

Interest and dividend income is recognized as revenue when earned. Unrealized appreciation and depreciation is recognized for the change in fair market value of investments during the period. Investments that do not have an established market are reported at estimated fair value. For the Special Pension Trust Fund, investments are stated at fair value in accordance with GASB Statement No. 67, Financial Reporting for Pension Plans – an Amendment of GASB Statement No. 25, securities traded on national or international exchange are valued at the last reported sales price at current exchange rates. Real estate assets are reported at fair value utilizing an income approach to valuation. By contract, an independent appraisal is obtained once every year to determine the fair market value of the real estate assets. In addition, investments that do not have an established market are reported at estimated fair value.

Budget The Association is not legally required to adopt a formal budget and no budget has been adopted.

(10) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates.

Income Tax Exemption The Association is exempt from income taxes under Minnesota Statutes §290.05, Subd 1.1 and Internal Revenue Code § 501(c)(4).

Accrued Pension Liability The actuarial accrued pension liability at December 31, 2018 has been determined in accordance with Minnesota Statutes §424A.093 for relief associations paying monthly service pensions for the purpose of determining the financial requirements of the special pension trust fund and the minimum obligation of the city of Eden Prairie. Also, in accordance with GASB Statement 67, Financial Reporting for Pension Plans – an Amendment of GASB Statement No. 25, the net pension liability of the Association has been measured as the total pension liability, less the amount of the pension plan's fiduciary net position, and an actuarial valuation of the total pension liability has been obtained. The benefits payable according to the benefit provisions are detailed in Note 4.

NOTE 3 DEPOSITS AND INVESTMENTS

Deposits Minnesota Statutes require that all deposits of the Association be protected by insurance, surety bond, or collateral. The market value of the 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 treasurer or in a financial institution other than that furnishing the collateral.

Custodial Credit Risk – Custodial Credit risk is the risk that in the event of a bank failure, the Association’s deposits may not be returned to it. As of December 31, 2018, the carrying and bank balance of the Associations deposits were $19,400. All deposits were fully insured by FDIC.

(11) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 3 DEPOSITS AND INVESTMENTS (CONTINUED)

Investments 1. Minnesota Statutes §§69.775 and 356A.06, subdivision 6 and 7 authorize the Association to invest in the following:

A) Securities Generally. The covered pension plan has the authority to purchase, sell, lend, or exchange the securities specified in paragraphs (B) to (J), including puts and call options and future contracts traded on a contract market regulated by a governmental agency or by a financial institution regulated by a governmental agency. These securities may be owned as units in commingled trusts that own the securities described in paragraphs (C) to (I), including real estate investment trusts and insurance company commingled accounts, including separate accounts.

B) Government Obligations. The covered pension plan may invest funds in governmental bonds, notes, bills, mortgages, and other evidences of indebtedness if the issue is backed by the full faith and credit of the issuer or the issue is rated among the top four quality rating categories by a nationally recognized rating agency. The obligations in which funds may be invested under this paragraph include guaranteed or insured issue of (1) the United States, its agencies, its instrumentalities, or organizations created and regulated by an act of Congress; (2) Canada and its provinces, provided the principal and interest is payable in United States dollars; (3) the states and their municipalities, political subdivisions, agencies, or instrumentalities; (4) the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Banks, the African Development Bank, or any other United States government sponsored organization of which the Unites States is a member, provided the principal and interest is payable in United States dollars.

C) Corporate Obligations. The covered pension plan may invest funds in bonds, notes, debentures, transportation equipment obligations, or any other longer term evidences of indebtedness issued or guaranteed by a corporation organized under the laws of the United States or any state thereof, or the Dominion of Canada or any province thereof that conform to the following provisions:

1) The principal and interest of obligations of corporations incorporated or organized under the laws of the Dominion of Canada or any province thereof must be payable in United States dollars; and 2) Obligations must be rated among the top four quality categories by a nationally recognized rating agency.

(12) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 3 DEPOSITS AND INVESTMENTS (CONTINUED)

Investments (Continued) D) Other Obligations. 1) The covered pension plan may invest funds in bankers acceptances, certificates of deposit, deposit notes, commercial paper, mortgage participation certificates and pools, asset backed securities, repurchase agreements and reverse repurchase agreements, guaranteed investment contracts, savings accounts, and guaranty fund certificates, surplus notes, or debentures of domestic mutual insurance companies if they conform to the following provisions: i) Bankers acceptances and deposit notes of United States banks are limited to those issued by banks rated in the highest four quality categories by a nationally recognized rating agency; ii) Certificates of deposit are limited to those issued by (A) United States banks and savings institutions that are rated in the highest four quality categories by a nationally recognized rating agency or whose certificates of deposit are fully insured by federal agencies; or (B) credit unions in amounts up to the limit of insurance coverage provided by the National Credit Union Administration; iii) Commercial paper is limited to those issued by United States corporations or their Canadian subsidiaries and rated in the highest two quality categories by a nationally recognized rating agency; iv) Mortgage participation or pass through certificates evidencing interest in pools of first mortgages or trust deeds on improved real estate located in the United States where the loan to value ratio for each loan as calculated in accordance with section 61A.28, subdivision 3, does not exceed 80% for fully amortizable residential properties and in all other respects meets the requirements of section 61A.28, subdivision 3; v) Collateral for repurchase agreements and reverse repurchase agreements is limited to letters of credit and securities authorized in this section; vi) Guaranteed investment contracts are limited to those issued by insurance companies or banks rated in the top four quality categories by a nationally recognized rating agency or to alternative guaranteed investment contracts where the underlying assets comply with the requirements of this subdivision; vii) Savings accounts are limited to those fully insured by federal agencies; and viii) Asset-backed securities must be rated in the top four quality categories by a nationally recognized rating agency. 2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do not apply to certificates of deposit and collateralization agreements executed by the covered pension plan under clause (1), item (ii).

(13) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 3 DEPOSITS AND INVESTMENTS (CONTINUED)

Investments (Continued) D) Other Obligations. (Continued) 3) In addition to investments authorized by clause (1), item (iv), the covered plan may purchase from the Minnesota Housing Finance Agency all or any part of a pool of residential mortgages, not in default, that has previously been financed by the issuance of bonds or notes of the Agency. The covered pension plan may also enter into a commitment with the Agency, at the time of any issue of bonds or notes, to purchase at a specific future date, not exceeding 12 years from the date of the issue, the amount of mortgage loans then outstanding and not in default that have been made or purchased from the proceeds of the bonds or notes. The covered pension plan may charge reasonable fees for any such commitment and may agree to purchase the mortgage loans at a price sufficient to produce a yield to the covered pension plan comparable, in its judgment, to the yield available on similar mortgage loans at the date of the bonds or notes. The covered pension plan may also enter into agreements with the Agency for the investment of any portion of the funds of the Agency. The agreement must cover the period of investment, withdrawal privileges, and any guaranteed rate of return.

E) Corporate Stocks. The covered pension plan may invest funds in stocks or convertible issues of any corporation organized under the laws of the United States or the states thereof, any corporation organized under the laws of the Dominion of Canada or its provinces, or any corporation listed on an exchange regulated by an agency of the United States or of the Canadian national government, if they conform to the following provisions:

1) The aggregate value of investments under this paragraph, plus paragraphs (F) and (J), plus equity investments under paragraphs (G), (H), and (I), as adjusted for realized gains and losses, must not exceed 85% of the market or book value, whichever is less, of a fund; and 2) Investments must not exceed 5% of the total outstanding shares of any one corporation.

F) Developed Market Foreign Stocks Investments. In addition to investments authorized under paragraph (E), the covered pension fund may invest in foreign stock sold on an exchange in any developed market country that is included in the Europe, Australia, and Far East Index.

G) Commingled or Mutual Investments. The covered pension plan may invest in index funds or mutual funds, including index mutual funds, through bank-sponsored collective funds and shares of open-end investment companies registered under the Federal Investment Company Act of 1940, to the extent that these funds comply with paragraphs (B) to (I).

(14) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 3 DEPOSITS AND INVESTMENTS (CONTINUED)

Investments (Continued) H) Real Estate Investment Trust; Related Investments. The covered pension plan may invest in real estate investment trusts secured by mortgages or deeds of trust and sold on an exchange, and insurance company commingled accounts, including separate accounts, of a debt or equity name.

I) Exchange Traded Funds. The covered pension plan may invest funds in exchange traded funds, subject to the maximums, the requirements, and the limitations set forth in paragraph (B) to (H), as applicable.

J) Other Investments. 1) In addition to the investments authorized in paragraphs (A) to (I), and subject to the provisions in clause (2), the covered pension plan may invest in: i) Venture capital investment businesses through participation in limited partnerships or corporations; ii) Real estate ownership interest or loans secured by mortgages or deeds of trust through investment in limited partnerships, banks sponsored collective funds; iii) Regional and mutual funds through bank sponsored collective funds and open-end investment companies registered under the Federal Investment Company Act of 1940, to the extent that a fund or a portion of a fund does not qualify under paragraph (G); iv) Resource investments through limited partnerships, private placements, and corporations; and v) International debt securities and emerging market equity securities. 2) The investments authorized in clause (1) must conform to the following provisions: i) The aggregate value of all investments made according to clause (1) including allocated amounts of index and mutual funds, may not exceed 20% of the market value of the fund for which the covered pension plan is investing; ii) There must be at least four unrelated owners of the investment other than the covered pension plan for investments made under clause (1), item (i), (ii), (iii), or (iv); iii) Covered pension plan participation in an investment vehicle is limited to 20% thereof for investments made under clause (1), item (i), (ii), (iii), or (iv); and covered pension plan participation in a limited partnership does not include general partnership interest or other interest involving general liability. The covered pension plan may not engage in any activity as a limited partner which creates general liability.

(15) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 3 DEPOSITS AND INVESTMENTS (CONTINUED)

Investments (Continued) 2. Up to 75% of the market value of the assets of the special fund, not including any money market mutual funds, may be invested in open-end investment companies registered under the Federal Investment Company Act of 1940, if the portfolio investments of the investment companies comply with the type of securities authorized under 1(A) through 1(J).

3. Securities held by the Association before June 2, 1989, that do not meet the requirements of this section, may be retained after that date if they were proper investments for the Association on that date.

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. Credit risk is measured using credit quality ratings of investments in debt securities as described nationally recognized rating agencies such as Moody’s and Standard and Poor’s. The following is a summary of the credit quality ratings per Moody’s and/or Standard and Poor’s of the Association’s investments as of December 31, 2018:

Investment Type Total AAA AA A BBB Unrated Corporate Notes/Bonds $ 2,710,585 $ 143,697 $ 270,612 $ 1,507,212 $ 789,064 $ - Equity Securities 3,023,652 - - - - 3,023,652 Mutual Funds 8,198,280 - - - - 8,198,280 Alternative Investments 2,152,415 - - - - 2,152,415 Real Assets 21,566 - - - - 21,566 Money Market 522,021 - - - - 522,021 Federal Agencies 2,267,274 - 396,323 - - 1,870,951 U.S. Treasury Notes/Bonds 1,828,423 - - - - 1,828,423 Mortgage Backed Securities 143,120 93,873 - - - 49,247 Total Investments $ 20,867,336 $ 237,570 $ 666,935 $ 1,507,212 $ 789,064 $ 17,666,555

A reconciliation of cash and investments held at December 31, 2018, is as follows:

Asset General Fund Pension Fund Deposits Held in Banks $ 9,400 $ 9,400 Investments - 20,867,336 Total Deposits and Investments $ 9,400 $ 20,876,736

Custodial Credit Risk For investments in securities, custodial credit risk is the risk that in the event of a failure of the counterparty, the Association will not be able to recover the value of its investment securities that is in the possession of an outside party. As of December 31, 2018, $8,198,280 of the Association’s investments was in open-end mutual funds. Investments in mutual funds are not evidenced by securities that exist in physical or book entry form and, therefore, are not subject to custodial credit risk disclosures. The remaining $12,669,056 of investments is invested in corporate bonds/notes, equity securities, and money markets which are protected by SIPC up to $500,000. The remaining investment balance above the $500,000 limit is exposed to custodial credit risk.

(16) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 3 DEPOSITS AND INVESTMENTS (CONTINUED)

Concentration of Credit Risk Concentration of credit risk is the risk of loss that may be attributed to the magnitude of the Association’s investment in a single issuer. State law limits investments in equity investments to 85% of the Association’s total investment portfolio and 5% of the outstanding shares of any one corporation.

The Association did not have any investment subject to concentration of credit risk as of December 31, 2018.

The Association’s investment policy requires that the Association maintain a portfolio using the range of assets in each of the following general investment classes. Actual portfolio weight used in the calculation of the discount rate and expected rate of return used by the actuaries in the current year is also included in the below table:

Current Year Portfolio Weight used in determining the Target Actuarial rate of Expected Class Asset Class/Sub-Asset Class Lower Limit Allocation Upper Limit return Return Fixed Income 28% 42% 48% 36% 3.70% Investment Grade 38% High Yield 0% International 0% Equities 28% 43% 48% 50% 7.20% U.S. Equity 23% Non-U.S. Equity 15% Real Assets 0% 5% 10% 11% 5.50% Complementary Strategies 0% 10% 20% 3% 2.25% Total Portfolio 100% 5.50%

Interest Rate Risk Interest rate risk is the risk that changes in the interest rates of debt investments could adversely affect the fair value of an investment. The Association’s investment policy does not limit investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. As of December 31, 2018, the Association had the following investments and maturities: Less than Investment Type Total N/A 1 Year 1 to 2 Years 2 to 5 Years Over 5 Years Corporate Notes/Bonds $ 2,710,585 $ - $ - $ 363,952 $ 759,478 $ 1,587,155 Equity Securities 3,023,652 3,023,652 - - - - Mutual Funds 8,198,280 8,198,280 - - - - Alternative Investments 2,152,415 2,152,415 - - - - Real Assets 21,566 21,566 - - - - Money Market 522,021 522,021 - - - Federal Agencies 2,267,274 - - - 346,497 1,920,777 U.S. Treasury Notes/Bonds 1,828,423 - 390,870 205,874 439,864 791,815 Mortgage Backed Securities 143,120 - - - 49,247 93,873 Total Investments $ 20,867,336 $ 13,917,934 $ 390,870 $ 569,826 $ 1,595,086 $ 4,393,620

(17) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 3 DEPOSITS AND INVESTMENTS (CONTINUED)

Rate of Return For the year ended December 31, 2018, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was -5.7%. The money- weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

Fair Value Measurements The Eden Prairie Firefighter Relief Association uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Eden Prairie Firefighter Relief Association follows an accounting standard that defines fair value, establishes a framework for measuring fair value, and requires expanded disclosures about fair value measurements.

In accordance with this standard, the Eden Prairie Firefighter Relief Association has categorized its investments, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices on active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Financial assets and liabilities recorded on the combined statements of financial position are categorized based on the inputs to the valuation techniques as follows:

Level 1 – Financial assets and liabilities are valued using inputs that are unadjusted quoted prices in active markets accessible at the measurement date of identical financial assets and liabilities.

Level 2 – Financial assets and liabilities are valued based on quoted prices for similar assets, or inputs that are observable, either directly or indirectly for substantially the full term through corroboration with observable market data.

Level 3 – Financial assets and liabilities are valued using pricing inputs which are unobservable for the asset, inputs that reflect the reporting entity’s own assumptions about the assumptions market participants and would use in pricing the asset.

(18) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 3 DEPOSITS AND INVESTMENTS (CONTINUED)

Fair Value Measurements (Continued) Assets are measured at fair value on a recurring basis:

Level 1 Level 2 Level 3 Total U.S. Agencies$ - $ 2,267,274 $ - $ 2,267,274 Corporate Notes/Bonds - 2,710,585 - 2,710,585 Equity Securities 3,023,652 - - 3,023,652 Mutual Funds 7,427,731 770,549 - 8,198,280 Alternative Investments - 2,152,415 - 2,152,415 Real Assets - 21,566 - 21,566 U.S. Treasury Bonds/Notes 1,828,423 - - 1,828,423 Mortgage Backed Securities - 143,120 - 143,120 Total $ 12,279,806 $ 8,065,509 $ - 20,345,315

Investments Measured at Amortized Cost 522,021 Deposits 18,800 Total $ 20,886,136

NOTE 4 DEFINED BENEFIT PENSION PLAN

Plan Description The Association is the administrator of a single employer Public Employee Retirement System (PERS) established to provide benefits for members of the Association.

Membership Information As of December 31, 2018, membership data related to the Association were:

Retirees and Beneficiaries Currently Receiving Benefits 102 Terminated Employees Entitled to But Not Yet Receiving Benefits 22 Active Members 94 Total 218

(19) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 4 DEFINED BENEFIT PENSION PLAN (CONTINUED)

Pension Benefits Each member who is at least 50 years of age, has retired from the Eden Prairie Fire Department, has served at least 10 years of active service with such department before retirement, and, has been a member of the Association in good standing for at least 10 years prior to such retirement, shall be entitled to receive a service pension based on the vested amount of service time accrued. Full vesting occurs at 10 years of service, with no provision for partial vesting. Upon retirement, an irrevocable election for one of the following two plan options must be made.

1) Monthly Service Pension – Each eligible member electing this plan is entitled to receive a monthly service pension calculated by multiplying $56 times each year that member has been an active firefighter in the Fire Department and member in good standing of the Relief Association, up to a maximum monthly pension of $1,792.

2) Lump Sum Service Pension – each eligible member electing this plan is entitled to receive a one-time lump sum service pension calculated by multiplying $10,000 times the years of service which the member would be entitled.

A member of the Association who has completed 10 or more years of active service with the Fire Department and has been an active member in the Association for at least 10 years, but has not reached age 50, shall have the right to retire from the Fire Department without forfeiting the right to a service pension. The member shall be entitled to a deferred service pension, and upon attaining the age of 50, the Association shall, upon application thereof, pay the member’s pension from the date the application is approved.

Disability Benefits A member, who is disabled with a fire service related disability, shall be eligible to collect a disability benefit. The member shall be eligible to receive the disability benefit immediately upon approval of the board of trustees. The disability benefit amount shall be equal to the service pension amount in effect on the date of the disability for each year of active service. A member must apply for and meet all the requirements for disability as defined in the bylaws in order to receive such benefits. A member currently receiving a disability benefit shall receive all approved increases in the monthly service pension applicable to that member’s number of years of active firefighting service.

(20) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 4 DEFINED BENEFIT PENSION PLAN (CONTINUED)

Pension Benefits (Continued) Death Benefits In the event of the death of an active or deferred member of the Association, the surviving spouse, if any, shall be paid 100% of the lump-sum benefit for each year of service. If such member who has no surviving spouse leaves a surviving child or children, such child or children as a group shall be paid 100% of the lump sum benefit for each year of active service. If such member has no spouse and no surviving children but has a designated beneficiary on file, such beneficiary shall be paid 100% of the lump-sum benefit for each year of active service. If such member has no spouse, no surviving children, and no designated beneficiary, the member’s estate shall be paid 100% of the lump-sum benefit. Such death benefits are payable without regard to minimum or partial vesting requirements.

If an active member dies before completing one year of active service, the Association shall pay a death benefit to his or her surviving spouse, surviving children, or designated beneficiary on file in the same order and procedure as describe above of $10,000.

In the event of the death of a retired member of the Association, the surviving spouse, if any, shall be paid until death or remarriage of the surviving spouse, monthly, two-thirds of the monthly service pension for each year of active service. If such member leaves a surviving child or children in the addition to a spouse, such child or children, in the aggregate, shall be paid, monthly, the sum of one-third of the monthly service pension. If such member is survived only by a child or children, such child or children, in the aggregate, shall be paid, monthly, the sum of 100% of the monthly service pension for each year of active service.

State Supplemental Benefits Minnesota Statutes Section 424A.10 provides for the payment of a supplemental benefit equal to 10% of a regular lump-sum distribution up to a maximum of $1,000. The supplemental benefit is in lieu of state income tax exclusion for lump sum distributions and will no longer be available if state tax law is modified to exclude lump-sum distributions from state income tax. The Association qualifies for these benefits.

(21) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 4 DEFINED BENEFIT PENSION PLAN (CONTINUED)

Funding Requirements Minnesota Statutes §424.093 specifies minimum contributions required on an annual basis. The minimum contribution from the city of Eden Prairie is determined as follows:

Normal Cost for the Next Year + Amortization of Unfunded Actuarial Liability as Reported in the Latest Actuarial Valuation + Administrative Expenses for the Prior Year Multiplied by a Factor of 1.035 - Anticipated State Aid (Not to Exceed the Fire Aid Received in the Prior Year Multiplied by a Factor of 1.035)

- Anticipated Contributions Required by the Association Bylaws from Active Members of the Association = Minimum Municipal Obligation

Funding Status and Progress The total pension benefit obligation has been determined as measure of the present value of pension benefits, adjusted for the effects of any step-rate benefits, estimated to be payable in the future as a result of service to date. The measure is used as a substitute of the standardized measure of the pension obligation and is intended to help users assess the Association’s funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among public employee retirement systems. This measurement is required by the state of Minnesota as part of the Association’s annual reporting. Also, in accordance with GASB Statement No. 67, Financial Reporting for Pension Plans – an Amendment of GASB Statement No. 25, the net pension liability of the Association has been measured as the total pension liability, less the amount of the pension plan's fiduciary net position, and an actuarial valuation of the total pension liability has been obtained. This measure is independent of the state required funding method used to determine contributions to the Association.

(22) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 4 DEFINED BENEFIT PENSION PLAN (CONTINUED)

Funding Status and Progress (Continued) The actuarial total pension liability was determined as of December 31, 2018, using the following actuarial assumptions applied to all periods included in the measurement:

Valuation Date January 1, 2019

Actuarial Cost Method Entry Age Normal

Amortization Method Level Dollar Closed

Actuarial Assumptions: Discount Rate 5.50% Expected Long-Term Investment Return 5.50% 20-Year Municipal Bond Yield 3.50% Projected Salary Increases 2.50% Includes Inflation at 2.50% Cost-of-Living Adjustments N/A Age of Service Retirement Later of Age 50 or 10 Years of Service

Mortality Assumed Life Expectancies Were Based on the RP-2014 Generational Mortality Table Projected with Improvement Scale MP- 2016.

Disability 25% of Active Disabilities are Assumed to be in the Line of Duty or Fire Service Related.

Withdrawal 6% Withdrawal Assumed at Age 20, Decreasing 0.24% Each Year Until 0% at Age 45, with no Withdrawal After Age 45.

Percent Married 85%

Age Difference 3 Years

Form of Payment 80% Annuity (66 2/3% J&S for Married), 20% Lump Sum

(23) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 4 DEFINED BENEFIT PENSION PLAN (CONTINUED)

Funding Status and Progress (Continued) The components of the net pension liability (asset) as of December 31, 2018 is as follows:

Retirees and Beneficiaries Currently Receiving Benefits and Terminated Members Not Yet Receiving Benefits $ 16,641,565 Current Members 5,118,159 Total Pension Liability (TPL) 21,759,724

Plan's Fiduciary Net Position 20,807,865

Net Pension Liability $ 951,859

The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the plan’s target investment allocation percentage and by adding expected inflation. See the discussion of the pension plan's investment policy and table summarizing the plan’s target investment allocation in Note 3.

The discount rate used to measure the total pension liability was 5.5%. Assets were projected using expected benefit payments and expected asset returns. Expected benefit payments were discounted by year using expected assets return assumption for years in which the assets were sufficient to pay all benefit payments. Any remaining benefit payments after the trust fund is exhausted are discounted at the municipal bond rate of return. The equivalent single rate is the discount rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members.

The following presents the net pension liability of the County, calculated using the discount rate of 5.5%, as well as what the Association’s net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (4.5%) or 1-percentage- point higher (6.5%) than the current rate:

Selected 1% Decrease Discount Rate 1% Increase Net Pension Liability (Asset)$ 3,350,087 $ 951,859 $ (1,029,859) Discount Rate 4.50% 5.50% 6.50%

(24) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 4 DEFINED BENEFIT PENSION PLAN (CONTINUED)

Contributions Required and Contributions Made Minnesota Statutes Chapter 424.093 specifies minimum contributions required on an annual basis. The minimum contributions from the employer municipality consists of a pass-through of state aid and municipal dollars are determined as the amount required to meet the normal cost plus anticipated administrative expenses plus amortizing any existing prior service costs over a 20-year period. The significant actuarial assumptions used to compute the municipal support are the same as those used to compute the accrued pension liability. The Association is comprised of volunteers; therefore, there are no payroll expenditures (i.e. there are no covered payroll percentage calculations).

Contributions totaling $836,511 were made by the City including $448,846 by the City as a pass-through of state aid, consisting of the 2% insurance premium tax from the state of Minnesota, and were made in accordance with state statute requirements for the year ended December 31, 2018. These contributions were entirely for normal service cost. Note the Association did not have a receivable due from the city for the remainder of its 2018 minimum contribution as of December 31, 2018.

NOTE 5 RISK MANAGEMENT

The Association is exposed to risks of loss primarily related to theft of assets. The Association purchases commercial insurance coverage for such risk. The treasurer and secretary of the Association are each covered by a bond in the amount of $500,000. Bonding is required by Minnesota Statute 69.051, subd. 2. There has been no significant reduction in insurance coverage from the previous year and there have been no claims resulting from these risks in any of the past three years.

(25)

REQUIRED SUPPLEMENTARY INFORMATION

EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION SCHEDULE OF CHANGES IN THE ASSOCIATION’S NET PENSION LIABILITY LAST TEN YEARS (SEE INDEPENDENT AUDITORS’ REPORT)

2018 2017 2016 2015 2014 Total Pension Liability

Service Cost $ 498,110 $ 485,961 $ 434,587 $ 449,426 $ 413,646 Interest on Total Pension Liability 1,147,434 1,123,468 1,151,849 1,104,701 1,083,202 Change in Assumptions 246,754 - 935,047 - - Change in Benefit Terms 338,844 - - - - Difference Between Expected and Actual Experience (29,793) - (233,976) - - Benefit Payments (1,449,720) (1,084,111) (1,135,264) (1,270,544) (1,027,216) Other Changes - - - - - Net Change in Total Pension Liability 751,629 525,318 1,152,243 283,583 469,632

Total Pension Liability - Beginning 21,008,095 20,482,777 19,330,534 19,046,951 18,577,319 Total Pension Liability - Ending (a) $ 21,759,724 $ 21,008,095 $ 20,482,777 $ 19,330,534 $ 19,046,951

Fiduciary Net Position

Employer Contributions $ 981,025 $ 836,511 $ 837,512 $ 836,343 $ 984,309 Net Investment Income 372,457 324,960 605,085 455,253 557,674 Net Gain or Loss on Investments (1,647,312) 2,451,168 287,005 (848,615) 88,689 Benefit Payments (1,449,720) (1,084,111) (1,137,136) (1,270,544) (1,027,216) Administrative Expenses (30,772) (34,700) (56,576) (26,702) (37,158) Other Changes 253 671 4,426 379 - Net Change in Fiduciary Net Position (1,774,069) 2,494,499 540,316 (853,886) 566,298

Fiduciary Net Position - Beginning 22,581,934 20,087,435 19,547,119 20,401,005 19,834,707 Fiduciary Net Position - Ending (b) $ 20,807,865 $ 22,581,934 $ 20,087,435 $ 19,547,119 $ 20,401,005

Association's Net Position Liability/ (Asset) - Ending (a) - (b) $ 951,859 $ (1,573,839) $ 395,342 $ (216,585) $ (1,354,054)

Fiduciary Net Position as a Percentage of the Total Pension Liability 95.63% 107.49% 98.07% 101.12% 107.11%

This schedule is being prepared prospectively starting in 2014, as the necessary information for the remaining years is not available.

(26) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION SCHEDULE OF INVESTMENT RETURNS LAST TEN YEARS (UNAUDITED) (SEE INDEPENDENT AUDITORS’ REPORT)

2018 2017 2016 2015 2014 2013 Annual Money Weighted Rate of Return, Net of Investment Expense -5.70% 13.90% 4.60% -1.92% 3.21% 8.79%

Note: This schedule is being prepared prospectively starting in 2013, as the necessary information for the remaining years is not available.

This schedule is being prepared prospectively starting in 2013, as the necessary information for the remaining years is not available.

(27)

OTHER INFORMATION

EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION SCHEDULE OF CONTRIBUTIONS LAST TEN YEARS (OTHER INFORMATION – UNAUDITED) (SEE INDEPENDENT AUDITORS’ REPORT)

Fiscal Year 2018 2017 2016 2015 2014 2013 2012

Statutorily Required Contribution $ 981,025 $ 836,511 $ 836,512 $ 834,343 $ 902,416 $ 999,271 $ 917,378

Actual Employer Contribution Municipal - State Aids $ 457,741 $ 448,846 $ 447,848 $ 435,948 $ 414,343 $ 416,299 $ 291,468 Municipal - Required 523,284 387,665 388,664 398,395 488,073 582,972 625,910 Municipal - Discretionary ------Total Actual Employer Contribution $ 981,025 $ 836,511 $ 836,512 $ 834,343 $ 902,416 $ 999,271 $ 917,378

Contribution Deficiency (Excess) $ - $ - $ - $ - $ - $ - $ -

(28)

OTHER REQUIRED REPORTS

INDEPENDENT AUDITORS’ REPORT ON MINNESOTA LEGAL COMPLIANCE

Board of Trustees Eden Prairie Firefighter Relief Association Eden Prairie, Minnesota

We have audited, in accordance with the auditing standards generally accepted in the United States of America, the financial statements of the governmental activities, the general fund, and the special pension trust fund of the Eden Prairie Firefighter Relief Association (the Association), as of and for the year ended December 31, 2018 and the related notes to the financial statements which collectively comprise the Association’s basic financial statements as listed in the table of contents, and have issued our report thereon dated August 15, 2019.

The Minnesota Legal Compliance Audit Guide for Relief Associations, promulgated by the State Auditor pursuant to Minn. Stat. §6.65, contains two categories of compliance to be tested in audits of relief associations: deposits and investments and relief associations. Our audit considered all of the listed categories.

In connection with our audit, nothing came to our attention that caused us to believe that Eden Prairie Firefighter Relief Association failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Relief Associations, except as described in the schedule of findings and recommendations as items 2018-001 and 2018-002. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the Relief Association's noncompliance with the above-referenced provisions, insofar as they relate to accounting matters.

The Association’s written responses to the legal compliance findings identified in our audit are described in the Schedule of Findings and Recommendations. The Association’s responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them.

The purpose of this report is solely to describe the scope of our testing of compliance relating to the provisions of the Minnesota Legal Compliance Audit Guide for Relief Associations and the results of that testing, and not to provide an opinion on compliance. Accordingly, this report is not suitable for any other purpose.

CliftonLarsonAllen LLP

Minneapolis, Minnesota August 15, 2019

(29) EDEN PRAIRIE FIREFIGHTER RELIEF ASSOCIATION SCHEDULE OF FINDINGS AND RECOMMENDATIONS YEAR ENDED DECEMBER 31, 2018

MINNESOTA LEGAL COMPLIANCE

2018-001: Statements of Economic Interest Criteria: Minnesota Statute §356A.06 subdivision 4, states the Fire Relief Association should file the Certified Listing of Individuals who completed a Statement of Economic Interest form by the 15th of January each year.

Condition: During the audit, we reviewed the Certified Listing of Individuals who completed a Statement of Economic Interest form and noted it was not signed nor dated so we were unable to determine it was filed on time.

Effect: The Eden Prairie Firefighter Relief Association is not in compliance with Minnesota Statutes.

Cause: The Eden Prairie Firefighter Relief Association potentially missed the filing deadline.

Recommendation: We recommend the Eden Prairie Firefighter Relief Association file the Certified Listing by the required January 15th deadline and date the form when signing it.

Management Response: The management of the Eden Prairie Firefighter Relief Association will file the Certified Listing more timely going forward.

2018-02: Broker Certification Criteria: Minnesota Statute 356A.06 requires the FRA provide a Broker Certification to confirm the restrictions on investments as set by the FRA before there can be any activity each year.

Condition: During the audit, we noted the FRA did not have a Broker Certification for 2018.

Effect: The Eden Prairie Firefighter Relief Association is not in compliance with the Minnesota Statute requiring a Broker Certification covering the restrictions before there can be account activity each year.

Cause: The Eden Prairie Firefighter Relief Association was without a signed Broker Certification for a prolonged period of time.

Recommendation: We recommend the Eden Prairie Firefighter Relief Association ensure an up to date Broker Certification be on file at all times. Ideally this would be obtained during January of each year so that it can be signed prior to any transactions for the fiscal year take place.

Management Response: The management of the Eden Prairie Firefighter Relief Association will file the Broker Certification more timely going forward.

(30)

CITY OF EDEN PRAIRIE, MINNESOTA PROPOSAL FOR AUDIT SERVICES

CONTACT: Andrew grice 3800 AMERICAN BLVD w #1000 BLOOMINGTON, MINNESOTA 55431 952.563.6862 [email protected]

PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

LETTER OF TRANSMITTAL

Shannon Melville, Finance Division City of Eden Prairie 8080 Mitchell Road Eden Prairie, MN 55344

Dear Ms. Melville,

On behalf of BerganKDV, I am pleased to submit this proposal for audit services for the City of Eden Prairie, Minnesota. We appreciate the opportunity to bid these services and your consideration of our firm.

The attached proposal addresses the information you requested, including the unique qualifications of BerganKDV, the depth and breadth of the services we will provide your City, and our commitment to providing the highest‐quality work through a process that is both efficient and effective.

We are especially qualified because of our extensive experience working with municipalities. What makes us unique is not so much what we do, but how we do it. We believe our technical expertise, combined with our attention to service, will provide you with an audit process that is beneficial to your City.

Our services would include, but not be limited to, the following for year ending December 31, 2020 through 2022. 1. Performing an audit of the City in accordance with auditing standards generally accepted in the United States of America, Government Auditing Standards, the audit requirements of Title 2, US Code of Federal Regulations Part 200. Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards (Uniform Guidance), and other federal, state, and local requirements, as applicable. 2. Providing an opinion on the City's basic financial statements and an "in‐relation to" report on the supporting schedules. 3. Providing separate reports required under Government Auditing Standards and Minnesota Legal Compliance. 4. Reviewing the City's financial statements and related note disclosures. 5. Reviewing, documenting, and providing recommendations on improving the City's internal control and financial operations. 6. Providing verbal and written guidance on new and ongoing Governmental Accounting Standards Board (GASB) Statements. 7. Meeting with City finance personnel and administration to review the financial statements and a draft of our letter of recommendations for improving the internal control and financial operations of the City. 8. Presenting the financial statements and communication letter to the City Council. 9. Providing bound copies of the report to the City of Eden Prairie for the Office of the State Auditor, including a searchable PDF of the report, and the communications letter. 10. Being available during the year to provide a wide range of consulting services and answer your questions as they arise.

1 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

We will work with your representatives to schedule specific fieldwork dates to ensure we are meeting your deadlines. The undersigned is a partner and is authorized to make representations for the firm. This proposal is a firm and irrevocable offer for 60 days.

Sincerely,

BerganKDV, Ltd

Andrew Grice, CPA Government Audit Partner BerganKDV, Ltd 952.563.6862 [email protected]

2 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

TABLE OF CONTENTS

Profile of Firm Proposing:

Executive Summary ...... 4

Who is BerganKDV? … ...... 5

Value‐Added Services Beyond the Audit ...... 8

Certifications and Independence ...... 10

Qualifications

Client References ...... 12

Dedicated Service Team ...... 13

Scope of Services and Proposed Project Schedule

Audit Approach and Timeline ...... 17

Fees and Compensation

Fees ………...... 20

Additional Information

Peer Review…………………………………………………………………………………………………………………………………21 Attachment A Attachment B

3 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

Executive Summary

Thank you for the opportunity to serve as a partner with City of Eden Prairie, Minnesota. It is our understanding that you are seeking competitive proposals from independent public accounting firms to provide professional financial audit services for year ending December 31, 2020 ‐ 2022.

Here are a few benefits of working with BerganKDV:  A Responsive Firm Who is there for You. We believe we’re your auditors not just at year‐end but throughout the year. This means being there for you when issues arise, available when you need us and being responsive to your requests. We demonstrate this through same‐day callbacks and in‐depth research to get to the heart of your questions. We take a collaborative approach in all our interactions with you.  Effective Communication. BerganKDV has set high internal standards for responding and communicating with our clients. Providing support exactly when and where you need it is the value our team brings. Your time is valuable; we will be clear and efficient in our communications, work to eliminate surprises and meet agreed‐upon deadlines. We have a proven track record of performing client’s requests based on their preferred timetable and delivering reports to our clients in advance of deadlines.  A Personalized Approach to the Audit. Our audit process includes an annual planning meeting with you to discuss any challenges and changes in the City over the past year, and to build future strategies. We enjoy learning about your City and will work to understand your City from an overall operational standpoint. We are not afraid to "roll up our sleeves" and delve into the details of your operations. This allows us to personalize our audit approach each year, bring best practices, and be a resource for you when it comes to GASB and other reporting standards.  Value for Time and Fees Invested. Receiving value for your fee investment is critical in City government. In addition to offering highly competitive fees, we work diligently to not incur fee surprises. We encourage frequent calls throughout the year, always at no cost to you. Our goal is to be your first call when you experience organizational challenges, and our current clients report that this has helped them save time, reduce costs and build confidence when solving issues.  Government Finance Expertise. Your audit firm needs to understand how municipalities operate and how the environment in which they function is regulated. Your audit firm also needs to understand the intricacies of these entities and how decisions that are made and affect the community as a whole. BerganKDV audit professionals are dedicated to your industry beyond the audit; we strive to be your trusted resource in all areas.  Innovative thinking and solutions driven. When working with BerganKDV, clients find that we focus on earning their trust by being actively involved and focused on helping them be successful in all they do. We solve problems. Whether that problem is technology, financial or operations related, we will find a way to help.

4 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

Who is bergankdv? We’re glad you asked!

We have an extensive background in working with clients through a strategic approach in all aspects; we don’t just keep pace with the trends; we stay ahead of the curve. We explore new ways to reduce costs and operate more efficiently.

THE BACKSTORY The history of our firm began in 1945, and since the beginning, BerganKDV has been firmly rooted in community. Today we are a Top 100 Firm, we operate in multiple states in nine different offices, employ over 450 experts, and service clients across the country. As we continue to grow, we acknowledge that we are not in the business to provide one‐size‐fits‐all solutions. Every client is different – from business problems to personal preferences. We invest the time to understand your needs and customize our services and solutions to meet them. Our playbook consists of business advisory, tax, assurance and accounting, workforce management, technology, wealth management and turnaround management services. Sure, we offer a robust and competitive service portfolio and notable processes but what really makes us different? OUR PEOPLE….. OUR PEOPLE Relationships are at the core of everything we do, and our products and services are designed to meet the specific needs of our clients. When working with BerganKDV, clients find that we focus on earning their trust by being actively involved and focused on helping them be successful in all they do. PERSONALIZED SERVICE Our philosophy is to provide timely, quality services that exceed the expectations of our clients. Outstanding client service requires a successful team effort within our firm and with our clients. Providing outstanding service involves enthusiastic, dependable and knowledgeable personnel who are responsible for knowing, understanding and caring about our clients. Our firm believes that outstanding service is a continual process that is refined and enhanced with each client contact.

5 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

ENGAGE© | Our Proven Value Creation Process We have aligned our team around our core values and are driven in our commitment to help clients and team members achieve their potential. We help clients reach their goals by utilizing our value creation process. Results of this process have led to more robust client relationships – deeper trust, enhanced communication and minimization of time for all. This process is a key component of our strategy in supporting and helping our clients further their organizations.

OUR BUSINESS LINES BerganKDV has a strong bench of resources and expertise available based on needs of the client. This ensures the most effective and efficient results are delivered!

6 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

COMMUNITY SUPPORT At BerganKDV, we believe in giving back. We support the organizations our people and clients are actively involved with. On average, we support multiple events a week in our communities. This year we supported over 35 civic, 15 health and wellness, 10 youth and four arts organizations. BerganKDV's culture promotes community involvement by providing employees with paid volunteer time off. VISION AND VALUES We are powered by people who do business the Midwest way delivering comprehensive business, financial and technology solutions. Our firm consists of highly talented individuals that put relationships before business deals and clients before profits. Our values drive our decisions.

OUR FOCUS and OUR PROMISE Empowering people and creating a wow experience for our clients. We go beyond so you can DO MORE.

We continue to align BerganKDV team member core values and sense of purpose with our firm core values and mission. We hire towards our core values and manage performance through real time feedback corresponding to our core values. We’ve found that this work results in more open conversations at BerganKDV which impacts employee engagement and client care.

7 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

VALUE-ADDED SERVICES BEYOND THE AUDIT

Our goal is to be your first call when you experience organizational challenges. We believe this can occur only when a relationship is developed and nurtured through strong communication and a thorough understanding of your mission, programs and operations. We are unwavering in our commitment to our clients and make it our mission to ask the right questions, listen actively, understand your expectations and deliver results. You can expect a partnership with professionals who value trust, integrity and relationships.

Collectively our core client solutions are unique in our industry. However, we recognize that in order to achieve our goal of wow experiences we need to offer clients more. We have executed on a strategy to seek out best‐of‐class providers to help when clients are stuck on a matter in finance, operations, marketing, technical tax and other areas.

Over the past several years we have had over 1,000 situations where we helped clients with introductions to our network to save them time and help increase confidence with a plan or strategy. We have an ability to make a greater difference in your City with experience in a variety of services, some of which are listed below [for a full listing of our solutions catalog, please visit bergankdv.com]. Extensive Governmental Auditing and Consulting Experience With over 50 years of experience serving the government community, we have a great appreciation for the unique issues and complexities that you face. We currently work with over 150 governmental entities, including cities, charter schools, school districts, colleges and universities, and other governmental entities, providing a wide array of services including accounting, auditing and consulting services.

We are dedicated to keeping informed of significant developments in the government community and the impact of those developments on our clients. We accomplish this through formal training, including annual seminars, workshops and professional sponsored classes on governmental accounting, auditing and reporting requirements. We are a member of the Governmental Audit Quality Center of the American Institute of Certified Public Accountants. The Center maintains standards for quality control in governmental audits for CPA firms nationwide.

In addition, many employees of our firm are members and have participated as instructors and speakers at seminars. These presentations have included the following topics:

 GASB Statement Nos. 34, 40, 45, 54, 63, 65, 68, 74, 75, 84 and 87 implementations  Auditing standards updates, include independence and risk suite  Levy process and related accounting  Internal controls, segregation of duties and corrective action plans  Property taxes and general fund budget  Budget issues related to the state budget deficit  Accounting and finance policies and procedures  Overview of investing and related legal compliance  Capital assets  Fraud  CARES Act, Uniform Guidance, and single audit topics

8 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

Peer Review Results Our firm is a member of the Private Companies Section of the AICPA Division for CPA Firms. This Division was founded in 1977 by the AICPA to promote CPA excellence and to provide a voluntary, objective means of monitoring adherence to professional standards. Each member firm is required to periodically subject its audit and accounting practice to a comprehensive quality review by specially trained outside CPAs. Our last such review was in August of 2017, at which time we received a clean report on our practices and methods. This peer review included an inspection of five governmental engagements. A copy of our peer review report is included on page 21. Keeping You Current We continue to stay abreast of new GASB regulations and innovatively consider all solutions for our clients. Our involvement in government entities has been recognized in the community as well. Historically, we have viewed time spent to keep our clients current with recent technical changes as part of the audit and not billed separately. We also have the capacity to provide you with additional accounting resources and inform you of any necessary changes or updates that may affect you. You can be confident that we are current and have the capacity to keep you updated.

9 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

CERTIFICATIONS AND INDEPENDENCE

We recognize when we audit a governmental entity, we are required to be familiar with certain rules, regulations and requirements and also, as a firm we are required to meet certain requirements. In that regard, we make the following affirmations:

 Our firm meets the independence requirements relating to the City defined by auditing standards generally accepted in the United States of America and Government Auditing Standards issued by the Comptroller General of the United States.  Our firm and all assigned key professional staff are properly licensed to practice in the State of Minnesota.  Our firm is a member of the American Institute of Certified Public Accountants and the Minnesota Society of Certified Public Accountants.  Our firm has never had a report rejected or classified as substandard by any state or federal agency, or by the Government Finance Officers Association.  Our firm has never had and currently does not have any pending disciplinary actions or investigations for alleged improper, fraudulent, disreputable, or unfair activities against our firm with state regulatory bodies or professional organizations.  We accept the professional obligation concerning the American Institute of Certified Public Accountants Interpretation 501‐3 “Failure to Follow Standards and/or Procedures or Other Requirements in Governmental Audits.”  Our professional personnel have received adequate continuing education to be in compliance with Government Auditing Standards and have received adequate continuing professional education over the past two years.  Our firm is an equal opportunity employer and does not discriminate in employment of persons upon the basis of race, color, creed, national origin, sex, age, or physical handicap, and have an affirmative action plan in place.  We do not expect any potential audit problems and are not aware of any conflicts of interest with regard to any work performed by the firm for the City.  We acknowledge and have adequate personnel to comply with the audit schedule provided in the request for proposals.

10 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

PROFILE OF FIRM PROPOSING – ORGANIZATION, SIZE AND STRUCTURE

BerganKDV is a leading professional services firm with a contagious culture; where growth is fostered and making a difference means something. Our values drive our decisions, and our passion is empowering people and creating a wow experience for our clients.

With more than 400 people in nine offices, we are powered by people who do business the Midwest way delivering comprehensive business, financial and technology solutions including business planning and consulting, tax, assurance and accounting, technology, wealth management and turnaround management services.

Our People and Our Values Relationships are at the core of everything we do and our products and services are designed to meet the specific needs of our clients. When working with BerganKDV, clients find that we focus on earning their trust by being actively involved and focused on helping them be successful in all they do. We continually work to align BerganKDV team member core values and sense of purpose with our firm core values and mission. We hire towards our core values and manage performance through real time feedback corresponding to our core values.

BerganKDV’s leadership team recognizes the importance of collaboration and being accessible to all employees. When we say “open door,” we mean it. Employees are encouraged to ask questions, discuss suggestions and address concerns with management in a comfortable, open and transparent environment.

Each quarter, employees participate in coaching sessions to share how they have lived those core values with peers and clients alike. They also obtain feedback and participate in a process to give live 360 feedback to supervisors so they can improve as leaders. The above processes contribute to more open and honest conversations at BerganKDV, which impacts employee engagement, and ultimately, client care.

Office Performing Audit The fieldwork for your audit will include individuals from a combination of our Bloomington, MN, and St. Cloud, MN offices. Individuals from both our Bloomington, MN and St. Cloud, MN offices only work on governmental audits. BerganKDV has a total of 28 individuals who have performed governmental audits. As our firm continues to grow our governmental practice in Minnesota, we will also grow our governmental auditors in our Minnesota offices.

11 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

QUALIFICATIONS – Client references and experience

A few of our municipality clients are listed below and we encourage you to contact them.

Ms. Gina Smith Mr. Darin Nelson City of New Brighton, MN City of Minnetonka, MN 651.638.2105 952.939.8253 Years Served: 10 Years Served: 2 Scope of Work: Audit of Financial Statements Scope of Work: Audit of Financial Statements

Mr. Chris Regis City of Richfield, MN 612.861.9723 Years Served: 6 Scope of Work: Audit of Financial Statements

Cities and Townships

Population (0‐2,000) Population (2,001‐5,000) Population (5,001‐15,000) Population (15,001<) Bock, MN Ashland, NE Big Lake, MN Cottage Grove, MN* Browns Valley, MN Becker, MN Corcoran, MN Crystal, MN* Carlton, MN Cascade, IA Dayton, MN Faribault, MN* Clear Lake, MN Deephaven, MN* Falcon Heights, MN* Forest Lake, MN* Clearwater, MN Elko New Market, MN Fergus Falls, MN* Hastings, MN* Cyrus, MN Greenfield, MN Gretna, NE La Vista, NE Eden Valley, MN Hanover, MN Lake Elmo, MN Maplewood, MN* Freeport, MN Haven Township Mendota Heights, MN Minnetonka, MN* Hilltop, MN Le Sueur, MN Oak Grove, MN New Brighton, MN* Maine Prairie Township Park Rapids, MN Osseo, MN* North Liberty, IA Millerville, MN Princeton, MN Ostego, MN Papillion, NE* Osakis, MN Princeton Township, MN Sauk Rapids, MN Richfield, MN* Richmond, MN Rockford Township, MN St. Joseph, MN St. Cloud, MN* Royalton, MN Rockville, MN Shorewood, MN Sartell, MN Silver Bay, MN Two Harbors, MN Wyoming, MN* Shakopee, MN* Watkins, MN Woodbury, MN* Waverly, MN

* indicates a Comprehensive Annual Financial Report (CAFR)

12 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

QUALIFICATIONS – DEDICATED SERVICE TEAM

BerganKDV has a personalized team of professionals to meet your unique needs. Your BerganKDV team has extensive experience working with governmental organizations. This translates into a greater ability to understand your unique organization. LEADERSHIP TEAM First, all governmental clients will interact with a member of the Government Market’s leadership team at least annually. There is no charge to our clients for these meetings. These individuals are instrumental in ensuring that our clients are receiving “WOW” service and having all their needs met.

JODI L. woodward, CPA, SHAREHOLDER, GOVERNMENT MARKET LEADER Role and Experience: In her role as Government Market Leader, Jodi is responsible for the government market by managing all aspects of the value creation cycle and will work with the governmental team members throughout the firm to ensure a wow experience is being delivered.

Jodi, who is located in the firm’s Omaha market, is a CPA with more than 25 years of experience in public accounting, focusing mainly on governmental and nonprofit entities; ERISA plans; commercial real estate, including HUD audits; and colleges & universities.

Jodi has a bachelor’s degree in accounting from Midland University and is active in the American Institute of Certified Public Accountants where she currently serves on the Employee Benefits Plan Audit Quality Center Executive Committee and is very involved in the Peer Review Program. Jodi is a member of the Nebraska Society of CPAs, CREW Omaha Metro and Omaha Academy of Ballet, where she serves on the board.

MICHAEL E. DUSCHER, GOVERNMENT CONSULTING LEADER Role and Experience: Mike serves clients in the government sector. He is responsible for growing the client base in the government market by building relationships with potential clients and working with them to help solve pain points they are experiencing in their business operations.

Mike received his bachelor’s degree in organizational communication and sociology. He is involved with Northern Voices, a nationally recognized school for deaf and hearing of children and Crescent Cover Respite & Hospice Home for Kids.

13 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

ENGAGEMENT TEAM Below are resumes of the engagement partner and in‐charge auditor that will be assigned to your engagement. Your engagement team will consist of an Engagement Partner, a Concurring Review Partner, an Audit Manager, an in‐charge auditor and one additional staff auditor. A partner or manager will be on‐site for most of the audit to ensure that our staff are provided direction and leadership. The individuals listed in this proposal are independent in accordance with Government Auditing Standards.

Jodi Woodward will also serve as the City of Eden Prairie’s concurring review partner.

Andrew grice, cpa Engagement Partner

Education: Bachelor of Science in accounting from St. Cloud State University, graduated Cum Laude Similar Clients: City of Cascade, City of New Brighton, City of Le Sueur

Experience, Professional and Civic Activities:  Twelve years of experience with financial reporting in accordance with GAAP, CAFR requirements, analysis of internal control, performing audits of financial statements and single audits in accordance with OMB Circulars and Uniform Guidance.  Responsible for the planning, fieldwork and reports for numerous audits of cities, school districts, charter schools, and other government entities.  Attends continuing education, workshops and conferences on city and school district accounting and reporting requirements on an annual basis that qualifies as “yellow book” continuing professional education and on governmental and single audit accounting, auditing and reporting  Extensive use of computer and software applications to assist in the preparation and performance of the audit process.  Presents audit reports, financial statements, and communications letters to management, school boards and city councils.  Instructor for the Minnesota Municipal Clerks Institute Fund Accounting and Budgeting course.  Instructor for the Government Finance Officers Association Intermediate Governmental Accounting course.  Develops internal training for BerganKDV government auditors.  Certified Public Accountant, licensed to practice in the State of Minnesota  Minnesota Society of Certified Public Accountants  American Society of Certified Public Accountants  Minnesota Association of School Business Officials  Government Finance Officers Association

14 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

Caraline stutsman, cpa Audit Manager

Education: Bachelor of Science Degree in accounting from Gustavus Adolphus College, graduated Cum Laude

Experience, Professional and Civic Activities: • Twenty years of experience in auditing governmental and nonprofit entities • Manager for numerous school districts and cities audits or agreed upon procedures • Member of the Special Review Committee of the Government Finance Officers Association whose purpose is to review Comprehensive Annual Financial Reports to determine eligibility for the Certificate of Achievement for Excellence in Financial Reporting • Professional reviewer for the National Association of School Business Officials whose purpose is to review Comprehensive Annual Financial Reports to determine eligibility for the Certificate of Achievement for Excellence in Financial Reporting • Presenter at the Government Finance Officers Association Intermediate Accounting Course, the Minnesota Association of School Business Official’s Institute of School Business Management, Minnesota Association of School Business Official’s first Certification Program class, the Minnesota Society of CPAs School District Audits Conference, and BerganKDV sponsored seminars • Attends workshops on school district, city, single audit, and non‐profit governmental accounting and reporting requirements on an annual basis that qualifies as “yellow book” continuing professional education • Provide consultative guidance on internal controls and accounting process development • Assist with internal training of BerganKDV government auditors • Present audit financial statements and communications letters to management, school boards and city councils • Certified Public Accountant, licensed to practice in the State of Minnesota • Minnesota Society of Certified Public Accountants • American Institute of Certified Public Accountants • Minnesota Association of School Business Officials • National Association of School Business Officials • Government Finance Officers Association • Minnesota Society of Certified Public Accountants City Audit Review Task Force • Minnesota Society of Certified Public Accountants School District Audit Review Task Force • Sartell JO Volleyball Finance Director • Sartell‐St. Stephen Education Foundation Treasurer

Commitment to Staff Continuity and Training To keep continuity and efficiencies high, we believe that consistent team members are advantageous for both our firm and your organization. We pride ourselves on maintaining the right balance of continuity on each of our engagements in order to ensure a “fresh” look at the annual audit process. Rotation of senior level staff only occurs after the merits of such rotation have been discussed and approved by your organization.

15 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

Independence Our firm has no conflict of interest regarding any other work performed by our firm for your organization. Our firm meets the independence requirements relating to your organization as defined by auditing standards generally accepted in the United States of America. We annually review independence related to all our client relationships as part of our internal control compliance process.

16 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

AUDIT APPROACH AND TIMELINE Our goal for you is to create value and to minimize surprises. We do this through a specific, well planned audit. What makes BerganKDV unique from other firms is that we continually improve our audit process beyond what is expected by our profession. A few of the BerganKDV advantages:

 Collaborative Audit Process. We see the audit process as a joint effort with you and BerganKDV. We want to work together to Beyond Expectations make it as painless as possible. BerganKDV takes a four‐phased  A comprehensive view of the City’s financial health. Through audit approach that gets results our extensive government experiences, we understand a City’s by: health is not only about the finances. The vision, mission and  Leveraging what is working programming provide the blueprint for the City’s direction. We well. review this information in relation to the financial statements  Focusing on pre audit and provide our observations based on a comprehensive view planning, collaboration and of the City’s health. communication.  Staying accountable to a  Technology resource on internal controls. Technology experts schedule. from the BerganKDV Technology Group are able to assist in evaluating your technology controls. Their expert advice has  Meeting with you and your proven to be a valuable resource as they answer technical team to ensure every detail questions and offer specific recommendations. has been finalized and the audit is complete.  Review of the work papers during fieldwork. We complete the  Exchanging information majority of our work in the field and provide a comprehensive regarding our performance, exit conference. The exit conference includes a review of the opportunities to enhance draft financial statement numbers, any internal control, experiences and future strategic opportunities. compliance and state statute findings.

 Managers and partners on‐site. The involvement of our managers and partners in the field is essential to being a trusted partner and delivering an exceptional client experience. We believe it is important to be on‐site and available to answer questions. This also allows our managers and partners to review documentation throughout the process.

 Meeting communications. Our presentations are designed to capture information that is useful and meaningful. Our presentations are focused on audit results, trends and other information relevant to your City and related entities, not details of the financial statement amounts.

17 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

Our audits are designed to focus our energy and our audit tests on the areas of your operations that contain the most risk. This equates to a better product for the City. Phase One – Initial Planning and Program Development Our main objective is to get to know the City as a resident or employee would. We want to understand not only your finances, but also your operational goals and objectives. What makes you City unique? How can that knowledge help us perform the best audit possible? When those questions are answered, we know we achieved our goal for Phase One.

During this phase, we gather the information we need to create an effective audit program and make preliminary judgments of materiality. Highlights include:  Reviewing your internal control documents and interviewing your key employees and representatives to gain operational information.  Discussing your goals, objectives, and the current challenges facing your operations; those are then shared across your BerganKDV team and incorporated into our audit plan.  Obtaining population sizes ranging from 25‐60 for certain transactions based finance systems and selecting which transactions we will test for internal control and compliance testing. Selections will be based on our data analysis results, analyzing transactions on a risk‐based level.  Obtaining your current financial reports and budgets and perform overall analytical review procedures.  Obtaining applicable City organizational charts, policies, bond documents, leases and other legal contracts.  Reviewing with your staff our audit documentation requests. We audit and request information that is used internally by your staff to manage operations, we do not require specific templates to be used.

We will work with the management team to determine the preferred means of communication, whether phone or email. In addition, we utilize Suralink, a workflow management software that improves efficiency by streamlining our audit request process. The simple interface includes team assignments and deadlines, so there are no misunderstandings on expectations.

Our audit process incorporates automated audit tools (Knowledge Coach) and work papers to provide our clients with timely information and effective and efficient audits. In addition, we use CCH's TeamMate Analytics, an Excel add‐on used to extract and analyze data quickly and efficiently. We also subscribe to various benchmarking and data analysis providers.

Your Expected Role: Provide BerganKDV with policies, internal control documents and a preliminary trial balance; provide contact information for all board members and staff so we may set up appointments/interviews with selected representatives; begin to gather documentation for fieldwork. Phase Two – Audit Program Execution Project execution is performing the procedures outlined in your audit plan as developed in Phase One. Our audit procedures will include examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. We will discuss potential ideas and best practices with your personnel relating to our recommendations for improving internal control, procedures and compliance with laws and regulations. Any issues identified, proposed audit adjustments, or other recommendations will be discussed

18 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN with management throughout the execution of our audit procedures. We perform test work with as little disruption as possible to City staff’s regular duties.

Highlights of this phase include:  Auditing year‐end account balances, testing internal control, assessing compliance to determine if your systems and controls are functioning as designed.  Using sampling techniques to test areas including transactions, internal controls and legal compliance using the scope mandated by the Office of the State Auditor. Sample sizes range from 25‐60 based on our risk assessment.  Using IDEAS data mining software, we look for trends and anomalies in your payroll, vendor payment, and cash receipts process.

Your Expected Role: Be available to answer questions during scheduled audit fieldwork, provide audit workpapers or reconciliations with documentation that is reasonable and reviewed during Phase One. Phase Three – Post-Audit Critique and Exit Conference This phase of the audit includes reviewing all the components of the financial statements and prepare the communications letter and relevant financial trend data for the Board presentation. Finally, opinions on the financial statements, Government Auditing Standards and Single Audit, if required, will be prepared.

We will then present this information to management allowing you time to review the financial statement reporting package including the draft financial statements and any internal control findings or recommendations that arise during the audit. This phase allows you time to assess, discuss and develop a corrective action plan, if needed.

Your Expected Role: Review preliminary financial statements and reports to provide BerganKDV with input and feedback.

Phase Four – Presentation of Audit Report The final phase of the process is the presentation of the reports to the City Council. The presentation provides the governing body with information about the year’s financial activity compared to past trends and expected results. We also provide other relevant and interesting observations relating to your financial statistics that will help provide the governing board with a deeper understanding of your operations. We understand all organizations have individual needs and we look forward to getting your feedback on graphs and statistics.

Professional standards require that we provide you with information regarding the auditor’s responsibility under generally accepted auditing standards, significant accounting policies, accounting estimates and management judgments, significant audit adjustments, other information in documents containing audited financial statements, disagreements with management, consultation with other auditors, major issues discussed with management prior to retention as auditors and difficulties encountered in performing the audit. We will provide this information in written form via the communications letter and will discuss with administration during the review of the preliminary audit report.

Your Expected Role: Provide BerganKDV with information and feedback for presentation preferences.

19 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

FEES and compensation

Our fees for the aforementioned services are based on the amount of time and the level of experience of the individuals who perform the services. In addition, we assume that the City's accounting personnel will provide the appropriate workpapers, documents, schedules, and clerical assistance, we will not encounter any significant or unusual circumstances which will affect the scope of our engagement, and no significant changes to the City’s operations will occur. However, if situations arise which affect the scope of the engagement, we will discuss them with you prior to incurring the additional cost. At no time will we bill the City for extra time or charges unless we have verbal communication regarding the issues, your options and an agreement for additional fees.

Following is a description of the services we will provide under this agreement for the year ended December 31, 2020:  Performing an audit of the City, in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards;  Providing an opinion on the basic financial statements and an “in‐relation to” report on the supplementary information and the Uniform Guidance, as applicable;  Providing separate reports required under Government Auditing Standards;  Presenting the financial statements and communications letter to the City Council.

See Attachment B for Fees and Compensation

Billing and Collection Expectations Our fees are due as services progress and are generally billed at the completion of each phase of the audit. These invoices are payable on presentation. Invoices are delinquent if not paid within 60 days. Off‐season Communication We encourage questions throughout the year and ask our clients to submit to us their monthly financial statements and board of director minutes, so we can stay abreast of their operations, and identify/resolve any issues prior to year‐end. We will not invoice additional amounts unless substantial research or work is required, in which case, we will discuss the scope of any additional work and proceed only after we have reached a mutually agreeable fee arrangement. As we begin scheduling for a subsequent year’s audit, we will communicate in writing any changes to your engagement team from the senior level and above. Typically, there is minimal turnover in key engagement personnel. Out of Scope Professional Services We do not surprise bill. If during our engagement you request additional services which require more than a minimum amount of time, we will provide an engagement letter with the fees and services specified, only after we have verbal communication and agreement. Additional special projects and consulting requested during the year will be billed at an hourly rate commensurate with the level of experience required. BerganKDV Commitment for Future Year Increases We continually review our pricing practices to ensure we are competitive with the market and provide value to our clients for the services and products we offer. We strive to come to an agreement with our continuing clients on a fee that is reasonable, fair and competitive. You can be assured that we will communicate with you regarding our pricing process. We take pride in our long client relationships, which are founded on principles of trust and mutual respect.

20 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

PEER REVIEW

21 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

PEER REVIEW [CONTINUED]

22 | PAGE BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. ATTACHMENT A

PROPOSER GUARANTEES AND WARRANTIES

A. The proposer certifies that it can and will provide and make available, as a minimum, all services set forth in the RFP. B. Proposer warrants that it is willing and able to obtain an errors and omissions insurance policy providing a prudent coverage for the willful or negligent acts, or omission of any officers, employees or agents thereof in the amounts specified in the Professional Services Agreement (Attachment C). C. Proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the express prior written permission of the City of Eden Prairie and the Firefighter Relief Association. D. Proposer warrants that all information provided by it in connection with this proposal is true and accurate.

Signature of Official:

Name (typed): Andrew Grice

Title: Government Audit Partner

Firm: BerganKDV, Ltd.

Date: August 17, 2020 ATTACHMENT B

SCHEDULE OF PROFESSIONAL FEES AND EXPENSES FOR THE AUDIT OF THE DECEMBER 31, 2020 FINANCIAL STATEMENTS

STANDARD QUOTED HOURLY HOURLY HOURS RATES RATES TOTAL Partners 30 290$ 205$ 6,150$ Manager(s) 45 190$ 140$ 6,300$ Supervisor(s) 65 170$ 115$ 7,475$ Staff 130 125$ 80$ 10,400$ Other ______

Subtotal 270 30,325$

Other (specify fees): Single Audit Fees, if required Single Audit per Major Program 4,000$

Total all‐inclusive maximum price for 2020 City audit, excluding single audit 30,325$ Total all‐inclusive maximum price for 2021 City audit, excluding single audit $ 31,080 Total all‐inclusive maximum price for 2022 City audit, excluding single audit 31,850$

Eden Prairie Fire Relief Association (specify fees): 2020 Audit $6,500 and IRS Form 990 $1,900 2021 Audit $6,650 and IRS Form 990 $2,050 2022 Audit $6,815 and IRS Form 990 $2,150

Total all‐inclusive maximum price for 2020 Fire Relief audit, including IRS Form 990 $ 8,400 Total all‐inclusive maximum price for 2021 Fire Relief audit, including IRS Form 990 8,700$ Total all‐inclusive maximum price for 2022 Fire Relief audit, including IRS Form 990 8,965$

Note: the rate quoted should not be presented as a general percentage of the standard hourly rate or as a gross deduction from the toal all‐inclusive maximum price. PROPOSAL PREPARED ESPECIALLY FOR CITY OF EDEN PRAIRIE, MN

THANK YOU. BERGANKDV.COM | 952.563.6862| [email protected]

BERGANKDV, LTD.|BERGANKDV.COM|DO MORE. CITY COUNCIL AGENDA DATE SECTION: Consent Calendar September 15, 2020

DEPARTMENT / DIVISION ITEM DESCRIPTION ITEM NO. Jonathan Stanley, Housing & Resolution to participate in the VIII.D. Community Services Metropolitan Council’s Livable Communities Act programs, 2021-2030 Janet Jeremiah, Community Development

Requested Action

Adopt the resolution as required by the Metropolitan Council to continue the City’s participation in the Livable Communities Act programs for the period of 2021-2030.

Synopsis

The Livable Communities Act (LCA) programs, inclusive of the Local Housing Incentives Account (LHIA), Livable Communities Demonstration Account (LCDA), LCDA-TOD, and the Tax Base Revitalization Account (TBRA) provide grants to local communities for housing and economic development. The Metropolitan Council requires communities to confirm their participation every ten years.

Background

Eden Prairie has long participated in the LCA suite of programs, recently securing critical funding for Elevate, Trail Pointe Ridge, and Paravel. The grants, which are extended to the developer in the form of long-term zero interest loans, help fill finance gaps often left after all other finance sources are obtained. The LCA grants enable the City to contribute financially to developments without use of its own resources. This reauthorization of participation will cover the period from 2021-2030.

Attachment

Resolution

CITY OF EDEN PRAIRIE HENNEPIN COUNTY, MINNESOTA

RESOLUTION NO.

RESOLUTION ELECTING TO PARTICIPATE IN THE LOCAL HOUSING INCENTIVES ACCOUNT PROGRAM UNDER THE METROPOLITAN LIVABLE COMMUNITIES ACT

CALENDAR YEARS 2021 THROUGH 2030

WHEREAS, the Metropolitan Livable Communities Act (Minnesota Statutes sections 473.25 to 473.255) establishes a Metropolitan Livable Communities Fund which is intended to address housing and other development issues facing the metropolitan area defined by Minnesota Statutes section 473.121; and

WHEREAS, the Metropolitan Livable Communities Fund, comprising the Tax Base Revitalization Account, the Livable Communities Demonstration Account, the Local Housing Incentive Account and the Inclusionary Housing Account, is intended to provide certain funding and other assistance to metropolitan-area municipalities; and

WHEREAS, a metropolitan-area municipality is not eligible to receive grants or loans under the Metropolitan Livable Communities Fund or eligible to receive certain polluted sites cleanup funding from the Minnesota Department of Employment and Economic Development unless the municipality is participating in the Local Housing Incentives Account Program under Minnesota Statutes section 473.254; and

WHEREAS, the Metropolitan Livable Communities Act requires that each municipality establish affordable and life-cycle housing goals for that municipality that are consistent with and promote the policies of the Metropolitan Council as provided in the adopted Metropolitan Development Guide; and

WHEREAS, a metropolitan-area municipality can participate in the Local Housing Incentives Account Program under Minnesota Statutes section 473.254 if: (a) the municipality elects to participate in the Local Housing Incentives Program; (b) the Metropolitan Council and the municipality successfully negotiate new affordable and life-cycle housing goals for the municipality; (c) the Metropolitan Council adopts by resolution the new negotiated affordable and life-cycle housing goals for the municipality; and (d) the municipality establishes it has spent or will spend or distribute to the Local Housing Incentives Account the required Affordable and Life-Cycle Housing Opportunities Amount (ALHOA) for each year the municipality participates in the Local Housing Incentives Account Program.

NOW, THEREFORE, BE IT RESOLVED THAT the City of Eden Prairie:

1. Elects to participate in the Local Housing Incentives Program under the Metropolitan Livable Communities Act for calendar years 2021 through 2030.

2. Agrees to the following affordable and life-cycle housing goals for calendar years 2021 through 2030:

Affordable Housing Goals Range Life-Cycle Housing Goal

774-1408 3000

3. Will prepare and submit to the Metropolitan Council a plan identifying the actions it plans to take to meet its established housing goals.

ADOPTED by the City Council on September 15, 2020.

______

Ronald A. Case, Mayor

ATTEST:

______

Kathleen Porta, City Clerk

CITY COUNCIL AGENDA DATE SECTION: Consent Calendar September 15, 2020

DEPARTMENT / DIVISION ITEM DESCRIPTION ITEM NO. Jonathan Stanley, Housing & Approve Subordination Agreement and VIII.E. Community Services Assignment of Tax Increment Financing for Summit Place Refinance Janet Jeremiah, Community Development

Requested Action

Approve Execution of Subordination Agreement and Amended and Restated Assignment of Tax Increment Financing for Summit Place

Synopsis/Background

Summit Place is a senior rental project located at Flying Cloud Drive and Fountain Place Road immediately south of the Eden Prairie Center. The project is part of a Tax Increment Financing (TIF) district created in 1999 to help subsidize 20% of the total units for seniors with incomes below 50% of the median income for the metro area. The City holds a note and mortgage on the property in connection with the TIF assistance

The owner/developer of Summit Place Senior Housing is refinancing the project’s 170-unit independent living facility. Pursuant to the Project Management Agreement between the City and the developer, the City is required to subordinate its TIF note and mortgage to the new mortgage loan provided by JLL Real Estate Capital, LLC and consent to the assignment of TIF to the new lender. City staff and the City Attorney have reviewed the Subordination Agreement and Amended and Restated Assignment of Tax Increment Financing and recommend approval.

Attachments

Subordination Agreement Amended and Restated Assignment of Tax Increment Financing

This instrument was drafted by, and after recording return to: James J. Schwert, Esq. Fox Rothschild LLP Campbell Mithun Tower – Suite 2000 222 South Ninth Street Minneapolis, MN 55402-3338

SUBORDINATION AGREEMENT (Affordable)

This SUBORDINATION AGREEMENT (this “Agreement”) dated as of September ___, 2020, is executed by and among (i) JLL REAL ESTATE CAPITAL, LLC, formerly known as JONES LANG LASALLE MULTIFAMILY, LLC, a Delaware limited liability company (“Senior Lender”), (ii) CITY OF EDEN PRAIRIE, MINNESOTA, a Minnesota municipal corporation (“Subordinate Lender”), (iii) EP SENIOR HOUSING, LLC, a Minnesota limited liability company (“Borrower”), and (iv) EP ASSISTED LIVING, LLC, a Minnesota limited liability company (“EP Assisted”).

RECITALS:

A. Pursuant to that certain Multifamily Loan and Security Agreement dated as of the date hereof, executed by and between Borrower and Senior Lender (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Senior Loan Agreement”), Senior Lender has agreed to make a loan to Borrower in the original principal amount of $39,493,000.00 (the “Senior Loan”), as evidenced by that certain Amended and Restated Multifamily Note dated as of the date hereof, executed by Borrower and made payable to the order of Senior Lender in the amount of the Senior Loan (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Senior Note”).

B. In addition to the Senior Loan Agreement, the Senior Loan and the Senior Note are also secured by a certain Multifamily Mortgage, Deed of Trust or Deed to Secure Debt dated as of the date hereof (as amended, restated, replaced, supplemented or otherwise modified from time to

Subordination Agreement (Affordable) Form 6456 Page 1 Fannie Mae 06-19 © 2019 Fannie Mae

time, the “Senior Security Instrument”), encumbering the property described on Exhibit “A” attached hereto and in the Senior Security Instrument as the “Mortgaged Property”.

C. SC Minnesota Properties, LLC, a Minnesota limited liability company (“SC Minnesota”), and the Subordinate Lender, entered into a certain Amended Project Management Agreement dated as of December 18, 2001, filed of record in the office of the Registrar of Titles, Hennepin County, Minnesota as Document No. 3502308, and in the office of the County Recorder, Hennepin County, Minnesota as Document No. 7652268 (the “Amended PMA”), amended by that certain Second Amended Project Management Agreement dated June 1, 2004, filed of record in the office of the Registrar of Titles, Hennepin County, Minnesota as Document No. 4646436 and in the office of the County Recorder, Hennepin County, Minnesota, as Document No. 9364952 (the “Second Amended PMA”), and amended by that certain Third Amendment to Project Management Agreement dated October 6, 2015, filed of record in the office of the Registrar of Titles, Hennepin County, Minnesota, as Document No. T5733231 and in the office of the County Recorder, Hennepin County, Minnesota as Document No. A10820560 (the “Third Amended PMA”) (the Amended PMA, the Second Amended PMA and the Third Amended PMA hereinafter referred to as the “Project Management Agreement”), setting forth the City’s agreement to provide certain tax increment financing to SC Minnesota with respect to the Mortgaged Property and the Adjacent Property and certain adjacent properties in the form of payments to SC Minnesota out of tax increments derived from the Tax Increment District (the “Tax Increment Financing”) as consideration for undertaking certain improvements and maintaining certain low income housing rental units; the PMA was assigned by SC Minnesota to EP Assisted and Borrower by assignment dated February 11, 2002, filed of record in the office of the Registrar of Titles, Hennepin County, Minnesota as Document No. 3502309, and in the office of the County Recorder, Hennepin County, Minnesota as Document No. 7652269.

D. In connection with the Project Management Agreement and as evidence of and security for payment and performance of the obligations under the Project Management Agreement on or about February 12, 2002, the Borrower, SC Minnesota and EP Assisted executed and delivered a TIF Repayment Promissory Note dated February 12, 2002 (“Subordinate Note”), and a mortgage to Subordinate Lender, in the original principal amount of Two Million Two Hundred Thousand and No/100 Dollars ($2,200,000.00) which document was recorded in the office of the County Recorder in and for the County of Hennepin, State of Minnesota, as Document No. 7652273 and in the office of the Registrar of Titles in and for the County of Hennepin, State of Minnesota as Document No. 3502317 (“Subordinate Mortgage”) encumbering the Mortgaged Property and the senior housing project adjacent to the Mortgaged Property described in Exhibit B attached hereto (“Adjacent Property”).

E. Borrower has requested Senior Lender to permit the obligations under the Project Management Agreement, the Subordinate Note and the Subordinate Mortgage (the “Subordinate Loan”) to remain outstanding and to allow the Subordinate Loan to continue to be secured by a mortgage lien against the Mortgaged Property.

F. Senior Lender has agreed to permit the Subordinate Loan and to allow the subordinate mortgage lien against the Mortgaged Property subject to all of the conditions contained in this Agreement.

Subordination Agreement (Affordable) Form 6456 Page 2 Fannie Mae 06-19 © 2019 Fannie Mae

AGREEMENTS:

NOW, THEREFORE, in order to induce Senior Lender to permit the Subordinate Loan to Borrower and to allow a subordinate mortgage lien against the Mortgaged Property, and in consideration thereof, Senior Lender, Subordinate Lender and Borrower and EP Assisted agree as follows:

1. Recitals.

The recitals set forth above are incorporated herein by reference.

2. Definitions.

In addition to the terms defined in the Recitals to this Agreement, for purposes of this Agreement the following terms have the respective meanings set forth below:

“Affiliate” means, when used with respect to a Person, any corporation, partnership, joint venture, limited liability company, limited liability partnership, trust or individual Controlled by, under common Control with, or which Controls such Person, and in all cases any other Person that holds fifty percent (50%) or more of the ownership interests in such Person.

“Borrower” means the Person named as such in the first paragraph on page 1 of this Agreement, any successor or assign of Borrower, including without limitation, a receiver, trustee or debtor-in- possession and any other Person (other than Senior Lender) who acquires title to the Mortgaged Property after the date of this Agreement.

“Business Day” means any day other than (a) a Saturday, (b) a Sunday, (c) a day on which Senior Lender is not open for business, or (d) a day on which the Federal Reserve Bank of New York is not open for business.

“Condemnation Action” means any action or proceeding, however characterized or named, relating to any condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Mortgaged Property, whether direct or indirect.

“Control” (including with correlative meanings, the terms “Controlling,” “Controlled by” and “under common Control with”), as applied to any entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or operations of such entity, whether through the ownership of voting securities, ownership interests or by contract or otherwise.

“Default Notice” means: (a) a copy of any written notice from Senior Lender to Borrower and Subordinate Lender stating that a Senior Loan Default has occurred under the Senior Loan Documents; or (b) a copy of the written notice from Subordinate Lender to Borrower and/or EP Assisted and Senior Lender stating that a Subordinate Loan Default has occurred under the Subordinate Loan Documents. Each Default Notice shall specify the default upon which such Default Notice is based.

Subordination Agreement (Affordable) Form 6456 Page 3 Fannie Mae 06-19 © 2019 Fannie Mae

“Person” means an individual, an estate, a trust, a corporation, a partnership, a limited liability company or any other organization or entity (whether governmental or private).

“Senior Lender” means the Person named as such in the first paragraph on Page 1 of this Agreement, its successors and assigns and any other Person who becomes the legal holder of the Senior Loan after the date of this Agreement.

“Senior Loan Default” means the occurrence of an “Event of Default” as that term is defined in the Senior Loan Documents.

“Senior Loan Documents” means the Senior Security Instrument, the Senior Note, the Senior Loan Agreement, and all other “Loan Documents” as that term is defined in the Senior Loan Agreement.

“Subordinate Lender” means the Person named as such in the first paragraph on page 1 of this Agreement, any successor or assign of Subordinate Lender, including without limitation, a receiver, trustee or debtor-in-possession and any other Person who becomes the legal holder of the Subordinate Note after the date of this Agreement.

“Subordinate Loan Default” means a default by Borrower or EP Assisted in performing or observing any of the terms, covenants or conditions in the Subordinate Loan Documents to be performed or observed by it, which continues beyond any applicable period provided in the Subordinate Loan Documents for curing the default.

“Subordinate Loan Documents” means the Project Management Agreement, Subordinate Note, the Subordinate Mortgage, and all other documents evidencing, securing or otherwise executed and delivered in connection with the Project Management Agreement.

“Subordinate Mortgage” means the mortgage, deed of trust or deed to secure debt encumbering the Mortgaged Property as security for the Subordinate Loan dated February 12, 2002, filed for record in the office of the County Recorder, Hennepin County, Minnesota as Document No. 7652273, and in the office of the Registrar of Titles, Hennepin County, Minnesota, as Document No. 3502317.

“Subordinate Note” means the TIF Repayment Promissory Note dated February 12, 2002 issued by SC Minnesota, Borrower and EP Assisted to Subordinate Lender, or order, to evidence the Subordinate Loan.

3. Permission to Place Mortgage Lien Against Mortgaged Property.

Senior Lender agrees, notwithstanding the prohibition against inferior liens on the Mortgaged Property contained in the Senior Loan Documents and subject to the provisions of this Agreement, to permit Subordinate Lender to maintain the Subordinate Mortgage and other recordable Subordinate Loan Documents of record against the Mortgaged Property to secure Borrower’s obligation to repay the Subordinate Note and all other obligations, indebtedness and liabilities of Borrower to Subordinate Lender under and in connection with the Subordinate Loan.

Subordination Agreement (Affordable) Form 6456 Page 4 Fannie Mae 06-19 © 2019 Fannie Mae

4. Borrower’s and Subordinate Lender’s Representations and Warranties.

Borrower and Subordinate Lender each makes the following representations and warranties to Senior Lender:

(a) Subordinate Loan Documents.

The Subordinate Loan is evidenced by the Project Management Agreement and the Subordinate Note and is secured by the Subordinate Mortgage and the Subordinate Loan Documents.

(b) Subordinate Note.

The Subordinate Note shall be deemed to contain the following provision:

The indebtedness evidenced by this Note is and shall be subordinate in right of payment to the prior payment in full of the indebtedness evidenced by a Multifamily Note (and any schedules) dated as of even date herewith in the original principal amount of $39,493,000.00, executed by EP Senior Housing, LLC and payable to the order of JLL Real Estate Capital, LLC (“Senior Lender”), to the extent and in the manner provided in that certain Subordination Agreement dated September ___, 2020 between the payee of this Note, and Senior Lender and EP Senior Housing, LLC and EP Assisted Living, LLC (the “Subordination Agreement”). The Mortgage, Deed of Trust or Deed to Secure Debt (and any exhibits) securing this Note is and shall be subject and subordinate in all respects to the liens, terms, covenants and conditions of the Multifamily Mortgage, Deed of Trust or Deed to Secure Debt (and any exhibits) securing the Multifamily Note and the terms, covenants and conditions of the Multifamily Loan and Security Agreement evidencing the terms of the Multifamily Note, as more fully set forth in the Subordination Agreement. The rights and remedies of the payee and each subsequent holder of this Note under the Mortgage, Deed of Trust or Deed to Secure Debt (and any exhibits) securing this Note are subject to the restrictions and limitations set forth in the Subordination Agreement. Each subsequent holder of this Note shall be deemed, by virtue of such holder’s acquisition of the Note, to have agreed to perform and observe all of the terms, covenants and conditions to be performed or observed by Subordinate Lender under the Subordination Agreement.

(c) Relationship of Borrower to Subordinate Lender and Senior Lender.

Subordinate Lender is not an Affiliate of Borrower or EP Assisted and is not in possession of any facts which would lead it to believe that Senior Lender is an Affiliate of Borrower or EP Assisted.

Subordination Agreement (Affordable) Form 6456 Page 5 Fannie Mae 06-19 © 2019 Fannie Mae

(d) Term.

The term of the Subordinate Note does end before the stated term of the Senior Note.

(e) Subordinate Loan Documents.

The executed Subordinate Loan Documents are substantially in the same forms as those submitted to, and approved by, Senior Lender prior to the date of this Agreement.

5. Deliveries.

Borrower shall submit the following items to Senior Lender on the effective date of the Senior Loan Documents:

(1) Title Policy Endorsement.

An endorsement to the policy of title insurance insuring the lien of the Senior Security Instrument which insures that (A) there are no liens or other encumbrances affecting the Mortgaged Property, other than “Permitted Encumbrances” (as defined in the Senior Security Instrument), the Subordinate Mortgage, and other Subordinate Loan Documents filed or recorded against the Mortgaged Property, (B) the lien of the Subordinate Mortgage is subordinate to the lien of the Senior Security Instrument, and (C) this Agreement has been recorded among the applicable land records.

(2) Certification.

A certification from Borrower to Senior Lender that the Subordinate Loan Documents do not contain any changes from the Subordinate Loan Documents submitted to, and approved by, Senior Lender prior to the date of this Agreement.

(3) Subordinate Loan Documents.

A complete set of the fully executed Subordinate Loan Documents, certified by Borrower to be true, correct and complete.

(4) Senior Loan Documents.

An executed copy of each of the Senior Loan Documents, certified by Borrower to be true, correct and complete.

Subordination Agreement (Affordable) Form 6456 Page 6 Fannie Mae 06-19 © 2019 Fannie Mae

6. Terms of Subordination.

(a) Agreement to Subordinate.

Senior Lender and Subordinate Lender agree that (1) the indebtedness evidenced by the Subordinate Loan Documents is and shall be subordinated in right of payment, to the extent and in the manner provided in this Agreement, to the prior payment in full of the Indebtedness evidenced by the Senior Loan Documents, and (2) the liens, terms, covenants and conditions of the Project Management Agreement, the Subordinate Mortgage and the other Subordinate Loan Documents are and shall be subject and subordinate in all respects to the liens, terms, covenants and conditions of the Senior Security Instrument and the other Senior Loan Documents and to all advances heretofore made or which may hereafter be made pursuant to the Senior Security Instrument and the other Senior Loan Documents (including but not limited to, all sums advanced for the purposes of (A) protecting or further securing the lien of the Senior Security Instrument, curing defaults by Borrower under the Senior Loan Documents or for any other purpose expressly permitted by the Senior Loan Documents, or (B) constructing, renovating, repairing, furnishing, fixturing or equipping the Mortgaged Property).

(b) Subordination of Subrogation Rights.

Subordinate Lender agrees that if, by reason of its payment of real estate taxes or other monetary obligations of Borrower or EP Assisted, or by reason of its exercise of any other right or remedy under the Subordinate Loan Documents, it acquires by right of subrogation or otherwise a lien on the Mortgaged Property which (but for this subsection) would be senior to the lien of the Senior Security Instrument, then, in that event, such lien shall be subject and subordinate to the lien of the Senior Security Instrument.

(c) Payments Before Senior Loan Default.

Until Subordinate Lender receives a Default Notice (or otherwise acquires actual knowledge) of a Senior Loan Default, Subordinate Lender shall be entitled to retain for its own account all payments made under or pursuant to the Subordinate Loan Documents.

(d) Payments After Senior Loan Default.

Borrower agrees that, after it receives a Default Notice (or otherwise acquires knowledge) of a Senior Loan Default, it will not make any payments under or pursuant to the Subordinate Loan Documents (including but not limited to principal, interest, additional interest, late payment charges, default interest, attorneys’ fees, or any other sums secured by the Subordinate Loan Documents) without Senior Lender’s prior written consent. Subordinate Lender agrees that, after it receives a Default Notice from Senior Lender with written instructions directing Subordinate Lender not to accept payments from Borrower on account of the Subordinate Loan, it will not accept any payments under or pursuant to the Subordinate Loan Documents (including but not limited to principal, interest, additional interest, late payment charges, default interest, attorneys’

Subordination Agreement (Affordable) Form 6456 Page 7 Fannie Mae 06-19 © 2019 Fannie Mae

fees, or any other sums secured by the Subordinate Loan Documents) without Senior Lender’s prior written consent. If Subordinate Lender receives written notice from Senior Lender that the Senior Loan Default which gave rise to Subordinate Lender’s obligation not to accept payments has been cured, waived, or otherwise suspended by Senior Lender, the restrictions on payment to Subordinate Lender in this Section 5 shall terminate, and Senior Lender shall have no right to any subsequent payments made to Subordinate Lender by Borrower prior to Subordinate Lender’s receipt of a new Default Notice from Senior Lender in accordance with the provisions of this Section 6(d).

(e) Remitting Subordinate Loan Payments to Senior Lender.

If, after Subordinate Lender receives a Default Notice from Senior Lender in accordance with Section 6(d), Subordinate Lender receives any payments under the Subordinate Loan Documents, Subordinate Lender agrees that such payment or other distribution will be received and held in trust for Senior Lender and unless Senior Lender otherwise notifies Subordinate Lender in writing, will be promptly remitted, in kind to Senior Lender, properly endorsed to Senior Lender, to be applied to the principal of, interest on and other amounts due under the Senior Loan Documents in accordance with the provisions of the Senior Loan Documents. By executing this Agreement, Borrower specifically authorizes Subordinate Lender to endorse and remit any such payments to Senior Lender, and specifically waives any and all rights to have such payments returned to Borrower or credited against the Subordinate Loan. Borrower and Senior Lender acknowledge and agree that payments received by Subordinate Lender, and remitted to Senior Lender under this Section 6, shall not be applied or otherwise credited against the Subordinate Loan, nor shall the tender of such payment to Senior Lender waive any Subordinate Loan Default which may arise from the inability of Subordinate Lender to retain such payment or apply such payment to the Subordinate Loan.

(f) Notice of Payment from Other Persons.

Subordinate Lender agrees to notify (telephonically or via email, followed by written notice) Senior Lender of Subordinate Lender’s receipt from any Person other than Borrower of a payment with respect to Borrower’s obligations under the Subordinate Loan Documents, promptly after Subordinate Lender obtains knowledge of such payment.

(g) Agreement Not to Commence Bankruptcy Proceeding.

Subordinate Lender agrees that during the term of this Agreement it will not commence, or join with any other creditor in commencing any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings against or with respect to Borrower, without Senior Lender’s prior written consent.

Subordination Agreement (Affordable) Form 6456 Page 8 Fannie Mae 06-19 © 2019 Fannie Mae

7. Default Under Subordinate Loan Documents.

(a) Notice of Subordinate Loan Default and Cure Rights.

Subordinate Lender shall deliver to Senior Lender a Default Notice within five (5) Business Days in each case where Subordinate Lender has given a Default Notice to Borrower or EP Assisted. Failure of Subordinate Lender to send a Default Notice to Senior Lender shall not prevent the exercise of Subordinate Lender’s rights and remedies under the Subordinate Loan Documents subject to the provisions of this Agreement. Senior Lender shall have the right, but not the obligation, to cure any Subordinate Loan Default within sixty (60) days following the date of such notice; provided, however that Subordinate Lender shall be entitled, during such sixty (60) day period, to continue to pursue its rights and remedies under the Subordinate Loan Documents. All amounts paid by Senior Lender in accordance with the Senior Loan Documents to cure a Subordinate Loan Default shall be deemed to have been advanced by Senior Lender pursuant to, and shall be secured by, the Senior Loan Agreement and the Senior Security Instrument.

(b) Subordinate Lender’s Exercise of Remedies After Notice to Senior Lender.

If a Subordinate Loan Default occurs and is continuing, Subordinate Lender agrees that, without Senior Lender’s prior written consent, it will not commence foreclosure proceedings with respect to the Mortgaged Property under the Subordinate Loan Documents or exercise any other rights or remedies it may have under the Subordinate Loan Documents, including, but not limited to accelerating the Subordinate Loan (and enforcing any “due on sale” provision included in the Subordinate Loan Documents), collecting rents, appointing (or seeking the appointment of) a receiver or exercising any other rights or remedies thereunder unless and until it has given Senior Lender at least sixty (60) days prior written notice; during such sixty (60) day period, however, Subordinate Lender shall be entitled to exercise and enforce all other rights and remedies available to Subordinate Lender under the Subordinate Loan Documents and/or under applicable laws, including without limitation, rights to enforce covenants and agreements of Borrower relating to income, rent, or affordability restrictions contained in any land use restriction agreement.

(c) Cross Default.

Borrower, EP Assisted and Subordinate Lender agree that a Subordinate Loan Default shall constitute a Senior Loan Default under the Senior Loan Documents and Senior Lender shall have the right to exercise all rights or remedies under the Senior Loan Documents in the same manner as in the case of any other Senior Loan Default. If Subordinate Lender notifies Senior Lender in writing that any Subordinate Loan Default of which Senior Lender has received a Default Notice has been cured or waived, as determined by Subordinate Lender in its sole discretion, then provided that Senior Lender has not conducted a sale of the Mortgaged Property pursuant to its rights under the Senior Loan Documents, any Senior Loan Default under the Senior Loan Documents arising solely from such Subordinate Loan Default shall be deemed cured, and the Senior Loan shall be reinstated, provided, however, that Senior Lender shall not be required to return or otherwise credit for the benefit of Borrower any default rate interest or other default related charges or payments received by Senior Lender during such Senior Loan Default.

Subordination Agreement (Affordable) Form 6456 Page 9 Fannie Mae 06-19 © 2019 Fannie Mae

8. Default Under Senior Loan Documents.

(a) Notice of Senior Loan Default and Cure Rights.

Senior Lender shall make reasonable efforts to deliver to Subordinate Lender a Default Notice within five (5) Business Days in each case where Senior Lender has given a Default Notice to Borrower. Failure of Senior Lender to send a Default Notice to Subordinate Lender shall not prevent the exercise of Senior Lender’s rights and remedies under the Senior Loan Documents, subject to the provisions of this Section 8(a), nor shall such failure constitute a default by Senior Lender under this Agreement. Subordinate Lender shall have the right, but not the obligation, to cure any such Senior Loan Default within sixty (60) days following the date of such Default Notice or the date on which Subordinate Lender otherwise acquires actual knowledge of Senior Loan Default; provided, however, that Senior Lender shall be entitled during such sixty (60) day period to continue to pursue its remedies under the Senior Loan Documents. Subordinate Lender may have up to ninety (90) days from the date of the Default Notice to cure a non-monetary default if during such ninety (90) day period Subordinate Lender keeps current all payments required by the Senior Loan Documents. In the event that such a non-monetary default creates an unacceptable level of risk relative to the Mortgaged Property, or Senior Lender’s secured position relative to the Mortgaged Property, as determined by Senior Lender in its sole discretion, then Senior Lender may exercise during such ninety (90) day period all available rights and remedies to protect and preserve the Mortgaged Property and the rents, revenues and other proceeds from the Mortgaged Property. All amounts paid by Subordinate Lender to Senior Lender to cure a Senior Loan Default shall be deemed to have been advanced by Subordinate Lender pursuant to, and shall be secured by the Subordinate Mortgage.

(b) Cross Default.

Subordinate Lender agrees that, notwithstanding any contrary provision contained in the Subordinate Loan Documents, a Senior Loan Default shall not constitute a default under the Subordinate Loan Documents (if no other default has occurred under the Subordinate Loan Documents) until either (1) Senior Lender has accelerated the maturity of the Senior Loan, or (2) Senior Lender has taken affirmative action to exercise its rights under the Senior Loan Documents to collect rent, to appoint (or seek the appointment of) a receiver or to foreclose on (or to exercise a power of sale contained in) the Senior Loan Documents. At any time after a Senior Loan Default is determined to constitute a default under the Subordinate Loan Documents, Subordinate Lender shall be permitted to pursue its remedies for default under the Subordinate Loan Documents, subject to the restrictions and limitations of this Agreement. If at any time Borrower cures any Senior Loan Default to the satisfaction of Senior Lender, as evidenced by written notice from Senior Lender to Subordinate Lender, any default under the Subordinate Loan Documents arising from such Senior Loan Default shall be deemed cured and the Subordinate Loan shall be retroactively reinstated as if such Senior Loan Default had never occurred.

9. Conflict.

Borrower, EP Assisted, Senior Lender and Subordinate Lender each agrees that, in the event of any conflict or inconsistency between the terms of the Senior Loan Documents, the

Subordination Agreement (Affordable) Form 6456 Page 10 Fannie Mae 06-19 © 2019 Fannie Mae

Subordinate Loan Documents and the terms of this Agreement, the terms of this Agreement shall govern and control solely as to the following: (a) the relative priority of the security interests of Senior Lender and Subordinate Lender in the Mortgaged Property; (b) the timing of the exercise of remedies by Senior Lender and Subordinate Lender under the Senior Loan Documents and the Subordinate Loan Documents, respectively; and (c) solely as between Senior Lender and Subordinate Lender, the notice requirements, cure rights, and the other rights and obligations which Senior Lender and Subordinate Lender have agreed to as expressly provided in this Agreement. Borrower and EP Assisted acknowledge that the terms and provisions of this Agreement shall not, and shall not be deemed to: extend Borrower’s time to cure any Senior Loan Default or Borrower’s or EP Assisted’s time to cure any Subordinate Loan Default, as the case may be; give Borrower or EP Assisted the right to notice of any Senior Loan Default or Subordinate Loan Default, as the case may be other than that, if any, provided, respectively under the Senior Loan Documents or the Subordinate Loan Documents; or create any other right or benefit for Borrower or EP Assisted as against Senior Lender or Subordinate Lender.

10. Rights and Obligations of Subordinate Lender Under the Subordinate Loan Documents and of Senior Lender under the Senior Loan Documents.

Subject to each of the other terms of this Agreement, all of the following provisions shall supersede any provisions of the Subordinate Loan Documents covering the same subject matter:

(a) Protection of Security Interest.

Subordinate Lender shall not, without the prior written consent of Senior Lender in each instance, take any action which has the effect of increasing the indebtedness outstanding under, or secured by, the Subordinate Loan Documents, except that Subordinate Lender shall have the right to advance funds to cure Senior Loan Defaults pursuant to Section 7(a) and advance funds pursuant to the Subordinate Loan Documents for the purpose of paying real estate taxes and insurance premiums, making necessary repairs to the Mortgaged Property and curing other defaults by Borrower under the Subordinate Loan Documents.

(b) Condemnation or Casualty.

Following the occurrence of (1) a Condemnation Action, or (2) a fire or other casualty resulting in damage to all or a portion of the Mortgaged Property (collectively, a “Casualty”), at any time or times when the Senior Security Instrument remains a lien on the Mortgaged Property the following provisions shall apply:

(A) Subordinate Lender hereby agrees that its rights (under the Subordinate Loan Documents or otherwise) to participate in any proceeding or action relating to a Condemnation Action or a Casualty, or to participate or join in any settlement of, or to adjust, any claims resulting from a Condemnation Action or a Casualty shall be and remain subject and subordinate in all respects to Senior Lender’s rights under the Senior Loan Documents with respect thereto, and Subordinate Lender shall be bound by any settlement or adjustment of a claim resulting from a Condemnation Action or a Casualty made by Senior Lender;

Subordination Agreement (Affordable) Form 6456 Page 11 Fannie Mae 06-19 © 2019 Fannie Mae

provided, however, this subsection or anything contained in this Agreement shall not limit the rights of Subordinate Lender to file any pleadings, documents, claims or notices with the appropriate court with jurisdiction over the proposed Condemnation Action or Casualty; and

(B) all proceeds received or to be received on account of a Condemnation Action or a Casualty, or both, shall be applied (either to payment of the costs and expenses of repair and restoration or to payment of the Senior Loan) in the manner determined by Senior Lender in its sole discretion; provided, however, that if Senior Lender elects to apply such proceeds to payment of the principal of, interest on and other amounts payable under the Senior Loan, any proceeds remaining after the satisfaction in full of the principal of, interest on and other amounts payable under the Senior Loan shall be paid to, and may be applied by, Subordinate Lender in accordance with the applicable provisions of the Subordinate Loan Documents, provided however, Senior Lender agrees to consult with Subordinate Lender in determining the application of Casualty proceeds, provided further, however, that in the event of any disagreement between Senior Lender and Subordinate Lender over the application of Casualty proceeds, the decision of Senior Lender, in its sole discretion, shall prevail.

(c) Insurance.

Subordinate Lender agrees that all original policies of insurance required pursuant to the Senior Security Instrument shall be held by Senior Lender. The preceding sentence shall not preclude Subordinate Lender from requiring that it be named as a loss payee, as its interest may appear, under all policies of property damage insurance maintained by Borrower with respect to the Mortgaged Property, provided such action does not affect the priority of payment of the proceeds of property damage insurance under the Senior Security Instrument, or that it be named as an additional insured under all policies of liability insurance maintained by Borrower with respect to the Mortgaged Property.

(d) No Modification of Subordinate Loan Documents.

Borrower, EP Assisted and Subordinate Lender each agree that, until the principal of, interest on and all other amounts payable under the Senior Loan Documents have been paid in full, it will not, without the prior written consent of Senior Lender in each instance, increase the amount of the Subordinate Loan, increase the required payments due under the Subordinate Loan, decrease the term of the Subordinate Loan, increase the interest rate on the Subordinate Loan, or otherwise amend the Subordinate Loan terms in a manner that creates an adverse effect upon Senior Lender under the Senior Loan Documents. Any amendment of the Subordinate Loan Documents or assignment of Subordinate Lender’s interest in the Subordinate Loan without Senior Lender’s consent shall be void ab initio and of no effect whatsoever.

Subordination Agreement (Affordable) Form 6456 Page 12 Fannie Mae 06-19 © 2019 Fannie Mae

11. Modification or Refinancing of Senior Loan.

Subordinate Lender consents to any agreement or arrangement in which Senior Lender waives, postpones, extends, reduces or modifies any provisions of the Senior Loan Documents, including any provision requiring the payment of money. Subordinate Lender further agrees that its agreement to subordinate hereunder shall extend to any new mortgage debt which is for the purpose of refinancing all or any part of the Senior Loan (including reasonable and necessary costs associated with the closing and/or the refinancing); and that all the terms and covenants of this Agreement shall inure to the benefit of any holder of any such refinanced debt; and that all references to the Senior Loan, the Senior Note, the Senior Loan Agreement, the Senior Security Instrument, the Senior Loan Documents and Senior Lender shall mean, respectively, the refinance loan, the refinance note loan agreement, the mortgage securing the refinance note, all documents evidencing securing or otherwise pertaining to the refinance note and the holder of the refinance note.

12. Default by Subordinate Lender or Senior Lender.

If Subordinate Lender or Senior Lender defaults in performing or observing any of the terms, covenants or conditions to be performed or observed by it under this Agreement, the other, non-defaulting lender shall have the right to all available legal and equitable relief.

13. Reinstatement.

To the extent that Borrower makes a payment to Senior Lender or Senior Lender receives any payment or proceeds of the collateral securing the Senior Loan for Borrower’s benefit, which payment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable doctrine, then to the extent of such payment or proceeds received and not retained by Senior Lender, this Agreement shall be reinstated and continue in full force and effect until full and final payment shall have been made to Senior Lender. Subordinate Lender agrees to hold in trust for Senior Lender and promptly remit to Senior Lender any payments received by Subordinate Lender after such invalidated, rescinded or returned payment was originally made.

14. Notices.

(b) Process of Serving Notice.

All notices under this Agreement shall be:

(1) in writing and shall be:

(A) delivered, in person;

Subordination Agreement (Affordable) Form 6456 Page 13 Fannie Mae 06-19 © 2019 Fannie Mae

(B) mailed, postage prepaid, either by registered or certified delivery, return receipt requested;

(C) sent by overnight courier; or

(D) sent by electronic mail with originals to follow by overnight courier;

(2) addressed to the intended recipient at the address(es) below the signature block, as applicable; and

(3) deemed given on the earlier to occur of:

(A) the date when the notice is received by the addressee; or

(B) if the recipient refuses or rejects delivery, the date on which the notice is so refused or rejected, as conclusively established by the records of the United States Postal Service or any express courier service.

(c) Change of Address.

Any party to Agreement may change the address to which notices intended for it are to be directed by means of notice given to the other parties identified in this Agreement.

(d) Receipt of Notices.

Senior Lender, Subordinate Lender or Borrower or EP Assisted shall not refuse or reject delivery of any notice given in accordance with this Agreement. Each party is required to acknowledge, in writing, the receipt of any notice upon request by the other party.

15. General.

(a) Assignment/Successors.

This Agreement shall be binding upon Borrower, EP Assisted, Senior Lender and Subordinate Lender and shall inure to the benefit of the respective legal successors, transferees and assigns of Borrower, EP Assisted, Senior Lender and Subordinate Lender. Borrower shall not assign any of its rights and obligations under this Agreement without the prior written consent of Senior Lender.

(b) No Partnership or Joint Venture.

Senior Lender’s permission for the Subordinate Loan to remain outstanding does not constitute Senior Lender as a joint venturer or partner of Subordinate Lender. Neither party hereto shall hold itself out as a partner, agent or Affiliate of the other party hereto.

Subordination Agreement (Affordable) Form 6456 Page 14 Fannie Mae 06-19 © 2019 Fannie Mae

(c) Senior Lender’s and Subordinate Lender’s Consent.

Wherever Senior Lender’s consent or approval is required by any provision of this Agreement, such consent or approval may be granted or denied by Senior Lender in its sole and absolute discretion, unless otherwise expressly provided in this Agreement. Wherever Subordinate Lender’s consent or approval is required by any provision of this Agreement, such consent or approval may be granted or denied by Subordinate Lender in its sole and absolute discretion, unless otherwise expressly provided in this Agreement.

(d) Further Assurances.

Subordinate Lender, Senior Lender and Borrower and EP Assisted each agrees, at Borrower’s expense, to execute and deliver all additional instruments and/or documents reasonably required by any other party to this Agreement in order to evidence that the Subordinate Mortgage is subordinate to the lien, covenants and conditions of the Senior Loan Documents, or to further evidence the intent of this Agreement.

(e) Amendment.

This Agreement shall not be amended except by written instrument signed by all parties hereto.

(f) Governing Law.

This Agreement shall be governed by the laws of the jurisdiction in which the Mortgaged Property is located without giving effect to any choice of law provisions thereof that would result in the application of the laws of another jurisdiction. Senior Lender, Subordinate Lender and Borrower and EP Assisted agree that any controversy arising under or in relation to this Security Instrument shall be litigated exclusively in the jurisdiction in which the Mortgaged Property is located. The state and federal courts and authorities with jurisdiction in such locale shall have exclusive jurisdiction over all controversies that arise under or in relation to this Agreement. The parties hereto irrevocably consent to service, jurisdiction, and venue of such courts for any such litigation and waive any other venue to which any might be entitled by virtue of domicile, habitual residence or otherwise.

(g) Severable Provisions.

If any provision of this Agreement shall be invalid or unenforceable to any extent, then the other provisions of this Agreement, shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

(h) Term.

The term of this Agreement shall commence on the date hereof and shall continue until the earliest to occur of the following events: (1) the payment in full of the principal of, interest on and other amounts payable under the Senior Loan Documents; (2) the payment in full of the principal of, interest on and other amounts payable under the Subordinate Loan Documents, other than by

Subordination Agreement (Affordable) Form 6456 Page 15 Fannie Mae 06-19 © 2019 Fannie Mae

reason of payments which Subordinate Lender is obligated to remit to Senior Lender pursuant to Section 6 hereof; (3) the acquisition by Senior Lender of title to the Mortgaged Property pursuant to a foreclosure or a deed in lieu of foreclosure of, or the exercise of a power of sale contained in, the Senior Loan Documents; or (4) the acquisition by Subordinate Lender of title to the Mortgaged Property pursuant to a foreclosure or a deed in lieu of foreclosure of, or the exercise of a power of sale contained in, the Subordinate Loan Documents, but only if such acquisition of title does not violate any of the terms of this Agreement.

(i) Counterparts.

This Agreement may be executed in any number of counterparts, each of which shall be considered an original for all purposes; provided, however, that all such counterparts shall together constitute one and the same instrument.

(j) Sale of Senior Loan.

Nothing in this Agreement shall limit Senior Lender’s (including any assignee or transferee of Senior Lender) right to sell or transfer the Senior Loan, or any interest in the Senior Loan. The Senior Loan or a partial interest in the Senior Loan (together with this Agreement and the other Loan Documents) may be sold one or more times without prior notice to Borrower or EP Assisted. [Remainder of Page Intentionally Blank]

Subordination Agreement (Affordable) Form 6456 Page 16 Fannie Mae 06-19 © 2019 Fannie Mae

IN WITNESS WHEREOF, Borrower, EP Assisted, Senior Lender and Subordinate Lender have signed and delivered this Agreement under seal (where applicable) or have caused this Agreement to be signed and delivered under seal (where applicable) by a duly authorized representative. Where applicable law so provides, Borrower, EP Assisted, Senior Lender and Subordinate Lender intend that this Agreement shall be deemed to be signed and delivered as a sealed instrument.

SENIOR LENDER:

JLL REAL ESTATE CAPITAL, LLC, formerly known as Jones Lang LaSalle Multifamily, LLC, a Delaware limited liability company

By: Name: Title: Closing Coordinator

Address: 2177 Youngman Avenue St. Paul, Minnesota 55116

With a copy to: Fannie Mae Attention: Multifamily Asset Management Drawer AM 1100 15th Street, NW Washington, DC 20005

STATE OF MINNESOTA ) ) SS COUNTY OF ______)

The foregoing instrument was acknowledged before me this _____ day of August, 2020, by______, Closing Coordinator of JLL REAL ESTATE CAPITAL, LLC, formerly known as Jones Lang LaSalle Multifamily, LLC, a Delaware limited liability company, on behalf of the limited liability company.

Notary Public

Subordination Agreement (Affordable) Form 6456 Page S-1 Fannie Mae 06-19 © 2019 Fannie Mae

SUBORDINATE LENDER:

CITY OF EDEN PRAIRIE, MINNESOTA, a Minnesota municipal corporation

By: Name: Ronald A. Case Title: Mayor

By: Name: Rick Getschow Title: City Manager

STATE OF MINNESOTA ) ) SS COUNTY OF HENNEPIN )

The foregoing instrument was acknowledged before me this 15th day of September, 2020, by Ronald A. Case and Rick Getschow, the Mayor and City Manager, respectively, of CITY OF EDEN PRAIRIE, MINNESOTA, a Minnesota municipal corporation, on behalf of the municipal corporation.

Notary Public

Subordination Agreement (Affordable) Form 6456 Page S-2 Fannie Mae 06-19 © 2019 Fannie Mae

BORROWER:

EP SENIOR HOUSING, LLC, a Minnesota limited liability company

By: E.J. Plesko & Associates, Inc., a Florida corporation

Its: Manager

By: Name: Andrew E. Plesko Title: President

Address: 120 South Sixth Street, Suite 2050 Minneapolis, Minnesota 55402

STATE OF MINNESOTA

COUNTY OF HENNEPIN

This instrument was acknowledged before me this ____ day of August, 2020 by Andrew E. Plesko, President of E.J. Plesko & Associates, Inc., a Florida corporation, the Manager of EP SENIOR HOUSING, LLC, a Minnesota limited liability company.

______

Notary Public

Printed Name: ______

My Commission Expires:

______

Subordination Agreement (Affordable) Form 6456 Page S-3 Fannie Mae 06-19 © 2019 Fannie Mae

EP ASSISTED:

EP ASSISTED LIVING, LLC, a Minnesota limited liability company

By: Name: Andrew E. Plesko Title: President

Address: 120 South Sixth Street, Suite 2050 Minneapolis, Minnesota 55402

STATE OF MINNESOTA

COUNTY OF HENNEPIN

This instrument was acknowledged before me this ____ day of August, 2020 by ______, ______of EP ASSISTED LIVING, LLC, a Minnesota limited liability company.

______

Notary Public

Printed Name: ______

My Commission Expires:

______

Subordination Agreement (Affordable) Form 6456 Page S-4 Fannie Mae 06-19 © 2019 Fannie Mae

EXHIBIT A

MORTGAGED PROPERTY

Subordination Agreement (Affordable) Form 6456 Page A-1 Fannie Mae 06-19 © 2019 Fannie Mae

EXHIBIT B

ADJACENT PROPERTY

Subordination Agreement (Affordable) Form 6456 Page B-1 Fannie Mae 06-19 © 2019 Fannie Mae

Active\113945191.v1-9/3/20 Active\113956707.v1-9/4/20

This instrument was drafted by, and after recording return to: James J. Schwert, Esq. Fox Rothschild LLP Campbell Mithun Tower – Suite 2000 222 South Ninth Street Minneapolis, MN 55402-3338

AMENDED AND RESTATED

ASSIGNMENT OF TAX INCREMENT FINANCING

THIS AMENDED AND RESTATED ASSIGNMENT OF TAX INCREMENT FINANCING (“Assignment”) is made as of the ____ day of September, 2020, by and among EP SENIOR HOUSING, LLC, a Minnesota limited liability company (“Borrower”), and EP ASSISTED LIVING, LLC, a Minnesota limited liability company (“EP Assisted”) each of whose address is 3601 Park Center Boulevard, Suite 210, St. Louis Park, Minnesota 55416 (EP Assisted and Borrower being sometimes hereinafter collectively referred to as “Assignors”) and JLL REAL ESTATE CAPITAL, LLC (formerly known as Jones Lang LaSalle Multifamily, LLC, formerly known as Oak Grove Commercial Mortgage, LLC), a Delaware limited liability company (“Lender”), whose address is 2177 Youngman Avenue, St. Paul, Minnesota 55116.

PRELIMINARY RECITALS:

A. Lender is the holder of a Second Amended and Restated Note dated February 1, 2013, in the original principal amount of Twenty-Three Million and No/100 Dollars ($23,000,000.00) made by Borrower and payable to the order of the Lender (the “Existing Note”), which Existing Note evidences a loan made by Lender to Borrower in the original principal amount of Twenty-Three Million and No/100 Dollars ($23,000,000.00) (the “Existing Loan”), and which Existing Note is secured by a Second Amended and Restated Multifamily Mortgage, Assignment of Leases and Rents, Security Agreement, and Fixture Filing dated as of February 1, 2013, filed for record in the office of the Registrar of Titles, Hennepin County, Minnesota, as Document No.

T504683 (the “Existing Mortgage”) encumbering a 170-unit independent living facility in Eden Prairie, Minnesota legally described on attached Exhibit “A” (the "Premises").

B. Lender and Borrower are now refinancing the Existing Loan to Borrower in the original principal amount of Thirty-Nine Million Four Hundred Ninety-Three Thousand and No/100 Dollars ($39,493,000.00) (the “Loan”).

C. As evidence of the Loan, Borrower is entering into a certain Multifamily Loan and Security Agreement dated as of September ___, 2020 (“Loan Agreement”), executing and delivering to the Lender its Amended and Restated Multifamily Note dated as of September ___, 2020, in the principal amount of $39,493,000.00 amending and restating the Existing Note (“Note”), and is executing and delivering its Amended and Restated Multifamily Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated of even date therewith amending and restating the Existing Mortgage and encumbering the Premises (the “Mortgage”), and certain other loan and security documents (collectively, the “Loan Documents”).

D. The Premises is a part of Tax Increment Financing District No. 15 (the “Tax Increment District”) created by the Eden Prairie Housing and Redevelopment Authority, a body corporate and politic (“Authority”).

E. SC Minnesota Properties, LLC, a Minnesota limited liability company (“SC Minnesota”), and the City of Eden Prairie, Minnesota, a Minnesota municipal corporation (the “City”), entered into a certain Amended Project Management Agreement dated as of December 18, 2001, filed of record in the office of the Registrar of Titles, Hennepin County, Minnesota as Document No. 3502308, and in the office of the County Recorder, Hennepin County, Minnesota as Document No. 7652268 (the “Amended PMA”), amended by that certain Second Amended Project Management Agreement dated June 1, 2004, filed of record in the office of the Registrar of Titles, Hennepin County, Minnesota as Document No. 4646436 and in the office of the County Recorder, Hennepin County, Minnesota, as Document No. 9364952 (the “Second Amended PMA”), and amended by that certain Third Amendment to Project Management Agreement dated October 6, 2015, filed of record in the office of the Registrar of Titles, Hennepin County, Minnesota, as Document No. 5733231 and in the office of the County Recorder, Hennepin County, Minnesota, as Document No. 10820560 (the “Third Amended PMA”) (the Amended PMA, the Second Amended PMA, and the Third Amended PMA are hereinafter referred to as the “PMA”), setting forth the City’s agreement to provide certain tax increment financing to SC Minnesota with respect to the Premises and certain adjacent properties in the form of payments to SC Minnesota out of tax increments derived from the Tax Increment District (the “Tax Increment Financing”) as consideration for undertaking certain improvements and maintaining certain low income housing rental units; the PMA was assigned by SC Minnesota to EP Assisted and Borrower by assignment dated February 11, 2002, filed of record in the office of the Registrar of Titles, Hennepin County, Minnesota as Document No. 3502309, and in the office of the County Recorder, Hennepin County, Minnesota as Document No. 7652269.

F. In connection with the PMA and as evidence of and security for payment and performance of the obligations under the PMA, Borrower, EP Assisted and SC Minnesota executed and delivered a TIF Repayment Promissory Note dated February 12, 2002 (the “TIF Note”).

– 2 –

G. As further security for repayment of the Existing Loan, Assignors executed and delivered to the Lender a Second Amended and Restated Assignment of Tax Increment Financing dated as of February 1, 2013, filed of record in the office of the Registrar of Titles, Hennepin County, Minnesota as Document No. T5046899 and in the office of the County Recorder, Hennepin County, Minnesota, as Document No. A09913105 (“Existing Assignment”).

H. The PMA, the TIF Note, and any and all amendments and documents related thereto shall be referred to jointly herein as the “Tax Increment Financing Documents”.

I. In connection with and as additional security for the Loan, Assignors and Lender now desire to amend and modify the terms of the Existing Assignment and have agreed, for purposes of convenience, to restate the Existing Assignment, in its entirety.

J. EP Assisted is related to the Borrower. EP Assisted is joining in this Assignment because it is a party to the Tax Increment Financing Documents and because it will materially benefit from the Loan.

NOW, THEREFORE, in consideration of the above recitals, and for value received, EP Assisted and Borrower hereby transfer, assign and grant a security interest in, pledge, and convey, to Lender all right, title and interest of EP Assisted and Borrower in and to the Tax Increment Financing and the Tax Increment Financing Documents, together with all proceeds thereof and the immediate and continuing right to receive and collect all amounts due or to become due thereunder and all other rights which may derive from or accrue thereunder and the right to amend, cancel, modify, alter or surrender the Tax Increment Financing Documents for the purpose of securing the following (hereinafter collectively referred to as the “Indebtedness Secured Hereby”):

One. Payment of the indebtedness evidenced by and performance of the terms and conditions of the Note;

Two. Payment of all other sums with interest thereon becoming due and payable to the Lender herein and in the Note;

Three. Performance and discharge of each and every obligation, covenant and agreement of the Borrower herein and in the Note, the Mortgage and all other Loan Documents.

AND EP ASSISTED AND BORROWER COVENANT, WARRANT, REPRESENT AND AGREE:

1. Representations and Warranties.

a. That EP Assisted is affiliated with the Borrower, is the owner of the property adjacent to the Premises legally described on attached Exhibit “B” (the “EP Assisted Property”), and will materially benefit from the development of the project on the Premises.

b. That Assignors, collectively, are the true and lawful, absolute owners of the Tax Increment Financing Documents free and clear from any and all liens, security

– 3 –

interest, encumbrances or other right, title or interest of any other person, firm or corporation;

c. That Assignors have the full right and title to assign and pledge the Tax Increment Financing and the Tax Increment Financing Documents; that there is no other assignment of the Tax Increment Financing Documents except in favor of Lender; that there will be no assignment, pledge, mortgage or encumbrance of the Tax Increment Financing Documents hereafter, except in favor of Lender; that there are no outstanding claims, assignments or pledges thereof; that there are no existing defaults under the Tax Increment Financing Documents on the part of makers thereof; that Assignors have fully complied with and are not in default with regard to the Tax Increment Financing Documents.

d. That to the best of Assignors’ knowledge, Assignors are in full compliance with the terms of the PMA.

e. That to the best of Assignors’ knowledge, no defaults exist under the terms of the PMA.

f. That to the best of Assignors’ knowledge, the PMA remains in full force and effect.

That to the best of Assignor’s knowledge as of the date hereof, there are no defenses, setoffs or counterclaims against or with regard to the PMA or the indebtedness evidenced thereby. The PMA has not been amended or modified except as provided herein and is valid and enforceable obligations of the City and Assignors in accordance with their terms.

2. Performance under the Tax Increment Financing Documents. EP Assisted and the Borrower shall enforce and secure the performance of each and every obligation of the City in the Tax Increment Financing Documents; shall not borrow against, further pledge or assign any payments due under the Tax Increment Financing Documents; shall not waive, excuse, condone or in any manner release or discharge the City from its obligations under the Tax Increment Financing Documents; and shall not take any action that would destroy or impair the security afforded to Lender under this Assignment.

3. Present Pledge and Assignment.

a. This Assignment shall constitute a perfect, absolute and present pledge and assignment of the Tax Increment Financing Documents to the Lender. Simultaneously with Borrower’s and EP Assisted’s execution and delivery of this Assignment, Borrower and EP Assisted shall duly endorse the TIF Note to Lender and deliver the original TIF Note (so endorsed) to Lender.

b. Borrower and EP Assisted shall retain their rights to collect the semi-annual payments under the PMA unless and until an Event of Default has occurred hereunder.

– 4 –

c. From and after an Event of Default hereunder upon notice to the City, payments on the TIF Note shall be paid directly to the Lender to be held and applied as provided herein. Should any of the Assignors thereafter receive any payments on the TIF Note, such Assignor(s) shall immediately turn over the same to the Lender.

4. Security Agreement. This Agreement constitutes a Security Agreement under the Uniform Commercial Code as adopted in Minnesota (the “Code”) and shall be governed by the Code. Assignors hereby authorize Lender to file Uniform Commerical Code financing statements, and other documents perfecting or evidencing such security interest, or otherwise deemed necessary by Lender.

5. Loan Documents. Any default by Borrower or EP Asssisted under the terms and conditions of the Tax Increment Financing Documents shall be an “Event of Default” under the Loan Documents.

6. Events of Default under this Assignment. An Event of Default shall occur hereunder upon the following:

a. A default or event of default beyond any applicable notice or grace period occurs under any of the terms of the Note, the Mortgage or the Loan Agreement; or

b. Failure to comply with or perform any of the terms, conditions or covenants of this Assignment; or

c. A default or event of default shall occur under any of the Loan Documents or any other instrument securing the Note; or

d. Any representation or warranty made by any Assignor herein, in the Note, the Mortgage, the Loan Agreement or in any other Loan Documents shall be false at the time made, breached or dishonored; or

e. Any failure by either Assignor to faithfully observe and perform all of the obligations and agreements of the Tax Increment Financing Documents.

7. Remedies. Upon or at any time after an Event of Default, the Lender may declare all Indebtedness Secured Hereby immediately due and payable and provide notice to the City to thereafter make all payments on the TIF Note to the Lender and apply all sums held by the Lender including the TIF Note to the Indebtedness Secured Hereby and may, at its option, enforce the payment thereof and exercise all of the rights of a holder of the Tax Increment Financing Documents. In addition, upon the occurrence of an Event of Default, the Lender may without demand, advertisement or notice of any kind (except such notice as may be required under the Code) and all of which are, to the extent permitted by law, hereby expressly waived:

a. exercise any of the remedies available to a secured party under the Code;

– 5 –

b. proceed immediately to exercise each and all of the powers, rights, and privileges reserved or granted to the Lender under the Note, the Mortgage, the Loan Agreement and the other Loan Documents;

c. proceed to protect and enforce this Assignment by suits or proceedings or otherwise, and for the enforcement of any other legal or equity available to the Lender.

In the event that any notice is required to be given under the Code such requirements for reasonable notice shall be satisfied by giving at least ten (10) days notice prior to the event or thing giving rise to the requirement of notice.

8. Allocation. Upon receipt of payments under the PMA, the Lender shall retain that portion thereof applicable to the Premises as determined by Lender and return to EP Assisted those respective portions applicable to the remainder of the Tax Increment District as determined by Lender. [NEED ADDITIONAL INFORMATION ABOUT ALLOCATION]

9. Authorization to City. The City is hereby irrevocably authorized and directed to recognize the claims of the Lender without investigating the reason for any action taken or the validity of or the amount of indebtedness owing to the Lender or the existence of any Event of Default and the Borrower and EP Assisted hereby irrevocably directs and authorizes the City to pay exclusively to the Lender or its assigns from and after the date hereof, all sums due under the Tax Increment Financing Documents without the necessity and to the extent such sums are paid to the Lender, the Borrower and EP Assisted agree that the City shall have no further liability to the Borrower or EP Assisted for the same. The sole signature of the Lender shall be sufficient for the exercise of any rights under this Assignment and the sole receipt by the Lender of any sum paid by the City shall be in discharge and release of that portion of any amount owed by the City.

10. Lender’s Rights. Lender will not be deemed in any manner to have assumed any of the obligations or liabilities related to the Tax Increment Financing Documents, nor shall Lender be liable to the City by reason of any default by any party under the Tax Increment Financing Documents. Lender shall in no event be obligated to perform any actions or incur any obligations or liabilities whatsoever, under the Tax Increment Financing Documents or otherwise, until such time as Lender elects, if at all, to undertake such oblgiatons or liabilities by written notice to Assignors and the City. This Assignment is not a commitment by Lender to lend.

11. Indemnity. Borrower and EP Assisted agree to indemnify and hold Lender harmless for, from and against any and all actions, suits, claims, demands, liabilities, losses, damages, obligations, and costs or expenses, including litigation costs and reasonable attorneys’ fees, arising from or in any way connected with the performance by Lender under and in accordance with this Assignment.

– 6 –

12. Additional Instruments. Each of the Assignors, upon the request of the Lender shall, at their expense, execute and deliver all assignments, certificates, financing statements or other documents and give further assurances and do all other acts and things as the Lender may request to perfect or to realize upon the Lender’s interest in the TIF Note and the Tax Increment Financing Documents or to protect, enforce, or otherwise effect the Lender’s rights and remedies. If any Assignor is unable or unwilling to execute any such other assignments, certificates, financing statements or other documents and to file financing statements or other public notices or recordings with the appropriate authorities, as and when reasonably requested by the Lender, each Assignor authorizes the Lender to sign and deliver as its true and lawful agent and attorney-in-fact any such assignment, certificate, financing statement or other document and to make any such filing.

13. Amendment. The Tax Increment Financing Documents shall not be amended, altered, cancelled, modified or surrendered without the prior written consent of the Lender.

14. Release. Upon payment and performance in full of the Indebtedness Secured Hereby, this Assignment shall be released and shall thereafter become null and void and be of no further effect.

15. Consent to Assignment. All parties hereto, do hereby consent to this Assignment and the assignment as called for herein.

16. Waiver. Nothing herein contained shall be construed as constituting a waiver or suspension by Lender of its right to enforce payment of the debts under the terms of the Loan Documents. Lender is not the agent, partner or joint venturer of Borrower, EP Assisted or the City.

17. Successors and Assigns. This Assignment, and each and every covenant, agreement and provision hereof shall be binding upon Assignors and their successors and assigns and shall inure to the benefit of the Lender and its successors and assigns.

18. Governing Law. This Assignment is intended to be governed by the laws of the State of Minnesota.

19. Validity Clause. The unenforceability or invalidity of any provision hereof shall not render any other provision or provisions herein contained unenforceable or invalid. Any provisions found to be unenforceable shall be severable from this Assignment.

20. Notices. Notices which any party hereto may desire or may be required to give to any other party shall be in writing and the mailing thereof by certified mail or equivalent, to the respective party’s address as set forth hereinabove, or such other place as such party may by notice in writing designate as its address shall constitute service of notice hereunder.

– 7 –

21. Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF BORROWER, EP ASSISTED AND LENDER COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS ASSIGNMENT, THAT IS TRIABLE OF RIGHT BY A JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

22. Attorneys’ Fees. Borrower agrees to pay all costs of collection, including reasonable attorneys’ fees, at any time paid or incurred by the Lender in connection with the enforcement of its rights hereunder.

[Signature pages follow]

– 8 –

IN WITNESS WHEREOF, Assignors and Lender have entered into this Amended and Restated Assignment of Tax Increment Financing to be executed as of the date first above written.

EP SENIOR HOUSING, LLC, a Minnesota limited liability company

By: Name: Andrew Plesko Its: Vice President

STATE OF MINNESOTA

COUNTY OF ______

This instrument was acknowledged before me September ___, 2020, by Andrew Plesko, as Vice President of EP SENIOR HOUSING, LLC, a Minnesota limited liability company.

______

Notary Public

Printed Name: ______

My Commission Expires:

______

– 9 –

EP ASSISTED LIVING, LLC, a Minnesota limited liability company

By: Name: Andrew Plesko Its: Vice President

STATE OF MINNESOTA

COUNTY OF ______

This instrument was acknowledged before me September ___, 2020, by Andrew Plesko, as Vice President of EP ASSISTED LIVING, LLC, a Minnesota limited liability company.

______

Notary Public

Printed Name: ______

My Commission Expires:

______

JLL REAL ESTATE CAPITAL, LLC (formerly known as Jones Lang LaSalle Multifamily, LLC, formerly known as Oak Grove Commercial Mortgage, LLC), a Delaware limited liability company

By: Name: Its:

STATE OF MINNESOTA ) ) ss. COUNTY OF RAMSEY )

The foregoing instrument was acknowledged before me this _____ day of September, 2020, by ______, the ______of JLL REAL ESTATE CAPITAL, LLC (formerly known as Jones Lang LaSalle Multifamily, LLC, formerly known as Oak Grove Commercial Mortgage, LLC), a Delaware limited liability company, for and on behalf of the limited liability company.

______Notary Public Printed Name: ______My Commission Expires: ______

– 11 –

CONSENT AND ACKNOWLEDGMENT OF THE CITY OF EDEN PRAIRIE

The City of Eden Prairie, Minnesota, a municipal corporation (the “City”), hereby consents to the assignment of the Tax Increment Financing Documents (as defined in and set forth in the foregoing Assignment) notwithstanding any limitations or provisions to the contrary contained in the Tax Increment Financing Documents. The foregoing consent shall in no event be deemed a waiver of any other terms and conditions of the Tax Increment Financing Documents, and any assignee of the rights under the Tax Increment Financing Documents shall be fully bound by and subject to the provisions of the Tax Increment Financing Documents. The City is executing the foregoing solely for the purpose of consenting to the assignment of the Assignors’ respective interests in the Tax Increment Financing Documents and agreeing to make payments under (and subject to the terms of) the Tax Increment Financing Documents to Lender when notified in accordance with the provisions of Paragraph 8 of the foregoing Assignment, and by such execution is not to be otherwise deemed to be bound by the terms of said Assignment or a party thereto.

CITY OF EDEN PRAIRIE, a Minnesota municipal corporation

By: Name: Ronald A. Case Its: Mayor

By: Name: Rick Getschow Its: City Manager

STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN )

The foregoing instrument was acknowledged before me this 15th day of September, 2020, by Ronald A. Case and Rich Getschow, as Mayor and City Manager, respectively, of the City of Eden Prairie, a Minnesota municipal corporation, on behalf of the corporation.

______Notary Public

– 12 –

EXHIBIT “A”

THE PREMISES

Real property in the City of Eden Prairie, County of Hennepin, State of Minnesota, described as follows:

PARCEL 1: Unit No. 1, Common Interest Community No. 1008, Summit Place Senior Campus Planned Community, located in Hennepin County, Minnesota. TORRENS PROPERTY: Certificate of Title No. 1079114.

PARCEL 2: Unit No. 3, Common Interest Community No. 1008, Summit Place Senior Campus Planned Community, located in Hennepin County, Minnesota. TORRENS PROPERTY: Certificate of Title No. 1079115.

PARCEL 3: Non-exclusive easements contained in the Declaration recorded as Document No. 7616071 in the office of the County Recorder and recorded as Document No. 3478131 in the office of the Registrar of Titles; as modified by the First Amendment To Declaration recorded as Document No. 7887454 in the office of the County Recorder and recorded as Document No. 3645186 in the office of the Registrar of Titles, all in Hennepin County, Minnesota.

PARCEL 4: Non-exclusive easements contained in the Declaration of Easements (Access) recorded as Document No. 7616073 and Document No. 7652267 in the office of the County Recorder, and recorded as Document No. 3478133 in the office of the Registrar of Titles, all in Hennepin County, Minnesota.

APN: 14-116-22-33-0031 and 14-116-22-33-0033

Active\112311230.v2-7/29/20 Active\113961569.v2-9/4/20

EXHIBIT “B”

EP ASSISTED PROPERTY

Real property in the City of Eden Prairie, County of Hennepin, State of Minnesota, described as follows:

PARCEL 1: Unit No. 2, Common Interest Community No. 1008, Summit Place Senior Campus Planned Community, located in Hennepin County, Minnesota.

PARCEL 2: Non-exclusive easements contained in the Declaration recorded as Document No. 7616071 in the office of the County Recorder and recorded as Document No. 3478131 in the office of the Registrar of Titles; as modified by the First Amendment To Declaration recorded as Document No. 7887454 in the office of the County Recorder and recorded as Document No. 3645186 in the office of the Registrar of Titles, all in Hennepin County, Minnesota.

PARCEL 3: Non-exclusive easements contained in the Declaration of Easements (Access) recorded as Document No. 7616073 and Document No. 7652267 in the office of the County Recorder, and recorded as Document No. 3478133 in the office of the Registrar of Titles, all in Hennepin County, Minnesota.

PARCEL 4: Unit NO. 4, Common INterest Community No. 1008, Summit Place Senior Campus, Planned Commumity located in Hennepin County, Minnesota.

Abstract and Torrens property: Certificate of Title No. 1079116.

APN: 14-116-22-33-0032

Active\112311230.v2-7/29/20 Active\113961569.v2-9/4/20

CITY COUNCIL AGENDA DATE: SECTION: Consent Calendar September 15, 2020

DEPARTMENT/DIVISION: ITEM DESCRIPTION: #19811 ITEM NO.: Carter Schulze Approve Professional Services VIII.F. Agreement with SRF Consulting Group, Public Works / Engineering Inc. for Construction Administration Services for the West 62nd Street Reconstruction Project

Requested Action

Move to: Approve Professional Services Agreement with SRF Consulting Group, Inc. for Construction Administration Services for the West 62nd Street Reconstruction Project in the amount of $196,778.00.

Synopsis

This Professional Services Agreement will provide construction administration (including construction observation, surveying, and various documentation) services for the West 62nd Street Project from Optum Way to the future SWLRT City West Station. The schedule anticipates that some utility construction will occur this fall and the remainder of the construction will occur in 2021.

Background Information

As part of the North Shady Oak Road Improvements completed in 2013, improvements to West 62nd Street were completed up to Optum Way. The plans for the continuation of West 62nd Street were completed to 95% at that time. According to the 2012 United HealthCare Services, Inc (UHG) development agreement, Phase Three Improvements include the east segment of West 62nd Street and these improvements shall be constructed by the opening of the LRT for passenger service or by the time of occupancy for the UHG Phase Three, whichever occurs earlier. With the SWLRT under construction, the Phase Three Improvements and the continuation of West 62nd Street are needed at this time.

Financial Implications

The Professional Services Agreement with SRF Consulting Group has an estimated cost of $196,778.00. The construction cost estimate for this project is estimated at $1.8M. All costs are to be assessed to UHG as part of their development agreement.

Attachment

Professional Services Agreement 2017 06 01

Agreement for Professional Services

This Agreement (“Agreement”) is made on the 15th day of September, 2020, between the City of Eden Prairie, Minnesota (hereinafter "City"), whose business address is 8080 Mitchell Road, Eden Prairie, MN 55344, and _SRF Consulting Group, Inc._ (“Consultant”), a Minnesota corporation (hereinafter "Consultant") whose business address is One Carlson Parkway North, Suite 150, Minneapolis, MN 55447-4443_.

Preliminary Statement

The City has adopted a policy regarding the selection and hiring of consultants to provide a variety of professional services for City projects. That policy requires that persons, firms or corporations providing such services enter into written agreements with the City. The purpose of this Agreement is to set forth the terms and conditions for the provision of professional services by Consultant for the In-Construction Services for West 62nd Street Improvements hereinafter referred to as the "Work".

The City and Consultant agree as follows:

1. Scope of Work. The Consultant agrees to provide the professional services shown in Exhibit A (__SRF Proposal Letter dated August 25, 2020_) in connection with the Work. Exhibit A is intended to be the scope of service for the work of the Consultant. Any general or specific conditions, terms, agreements, consultant or industry proposal, or contract terms attached to or a part of Exhibit A are declined in full and, accordingly, are deleted and shall not be in effect in any manner.

2. Term. The term of this Agreement shall be from September 15, 2020 through December 31, 2021 the date of signature by the parties notwithstanding. This Agreement may be extended upon the written mutual consent of the parties for such additional period as they deem appropriate, and upon the terms and conditions as herein stated.

3. Compensation for Services. City agrees to pay the Consultant on an hourly basis plus expenses in a total amount not to exceed $196,778.00 for the services as described in Exhibit A. a. Any changes in the scope of the work which may result in an increase to the compensation due the Consultant shall require prior written approval by an authorized representative of the City or by the City Council. The City will not pay additional compensation for services that do not have prior written authorization.

b. Special Consultants may be utilized by the Consultant when required by the complex or specialized nature of the Project and when authorized in writing by the City.

Version 2017 06 01

c. If Consultant is delayed in performance due to any cause beyond its reasonable control, including but not limited to strikes, riots, fires, acts of God, governmental actions, actions of a third party, or actions or inactions of City, the time for performance shall be extended by a period of time lost by reason of the delay. Consultant will be entitled to payment for its reasonable additional charges, if any, due to the delay.

4. City Information. The City agrees to provide the Consultant with the complete information concerning the Scope of the Work and to perform the following services: a. Access to the Area. Depending on the nature of the Work, Consultant may from time to time require access to public and private lands or property. As may be necessary, the City shall obtain access to and make all provisions for the Consultant to enter upon public and private lands or property as required for the Consultant to perform such services necessary to complete the Work.

b. Consideration of the Consultant's Work. The City shall give thorough consideration to all reports, sketches, estimates, drawings, and other documents presented by the Consultant, and shall inform the Consultant of all decisions required of City within a reasonable time so as not to delay the work of the Consultant.

c. Standards. The City shall furnish the Consultant with a copy of any standard or criteria, including but not limited to, design and construction standards that may be required in the preparation of the Work for the Project.

d. City's Representative. A person shall be appointed to act as the City's representative with respect to the work to be performed under this Agreement. He or she shall have complete authority to transmit instructions, receive information, interpret, and define the City's policy and decisions with respect to the services provided or materials, equipment, elements and systems pertinent to the work covered by this Agreement.

5. Method of Payment. The Consultant shall submit to the City, on a monthly basis, an itemized invoice for professional services performed under this Agreement. Invoices submitted shall be paid in the same manner as other claims made to the City for: a. Progress Payment. For work reimbursed on an hourly basis, the Consultant shall indicate for each employee, his or her name, job title, the number of hours worked, rate of pay for each employee, a computation of amounts due for each employee, and the total amount due for each project task. Consultant shall verify all statements submitted for payment in compliance with Minnesota Statutes Sections 471.38 and 471.391. For reimbursable expenses, if provided for in Exhibit A, the Consultant shall provide an itemized listing and such documentation as reasonably required by the City. Each invoice shall contain the City’s project number and a progress summary showing the original (or amended) amount of the contract, current billing, past payments and unexpended balance of the contract.

Page 2 of 10 2017 06 01

b. Suspended Work. If any work performed by the Consultant is suspended in whole or in part by the City, the Consultant shall be paid for any services set forth on Exhibit A performed prior to receipt of written notice from the City of such suspension.

c. Payments for Special Consultants. The Consultant shall be reimbursed for the work of special consultants, as described herein, and for other items when authorized in writing by the City.

d. Claims. To receive any payment on this Agreement, the invoice or bill must include the following signed and dated statement: “I declare under penalty of perjury that this account, claim, or demand is just and correct and that no part of it has been paid.”

6. Project Manager and Staffing. The Consultant shall designated a Project Manager and notify the City in writing of the identity of the Project Manager before starting work on the Project. The Project Manager shall be assisted by other staff members as necessary to facilitate the completion of the Work in accordance with the terms established herein. Consultant may not remove or replace the Project Manager without the approval of the City.

7. Standard of Care. Consultant shall exercise the same degree of care, skill and diligence in the performance of its services as is ordinarily exercised by members of the profession under similar circumstances in Hennepin County, Minnesota. Consultant shall be liable to the fullest extent permitted under applicable law, without limitation, for any injuries, loss, or damages proximately caused by Consultant's breach of this standard of care. Consultant shall put forth reasonable efforts to complete its duties in a timely manner. Consultant shall not be responsible for delays caused by factors beyond its control or that could not be reasonably foreseen at the time of execution of this Agreement. Consultant shall be responsible for costs, delays or damages arising from unreasonable delays in the performance of its duties.

8. Termination. This Agreement may be terminated by either party by seven (7) days written notice delivered to the other party at the address written above. Upon termination under this provision, if there is no fault of the Consultant, the Consultant shall be paid for services rendered and reimbursable expenses until the effective date of termination. If however, the City terminates the Agreement because the Consultant has failed to perform in accordance with this Agreement, no further payment shall be made to the Consultant, and the City may retain another consultant to undertake or complete the Work identified herein.

9. Subcontractor. The Consultant shall not enter into subcontracts for services provided under this Agreement except as noted in the Scope of Work, without the express written consent of the City. The Consultant shall pay any subcontractor involved in the performance of this Agreement within ten (10) days of the Consultant's receipt of payment by the City for undisputed services provided by the subcontractor. If the Consultant fails

Page 3 of 10 2017 06 01 within that time to pay the subcontractor any undisputed amount for which the Consultant has received payment by the City, the Consultant shall pay interest to the subcontractor on the unpaid amount at the rate of 1.5 percent per month or any part of a month. The minimum monthly interest penalty payment for an unpaid balance of $100 or more is $10. For an unpaid balance of less than $100, the Consultant shall pay the actual interest penalty due to the subcontractor. A subcontractor who prevails in a civil action to collect interest penalties from the Consultant shall be awarded its costs and disbursements, including attorney's fees, incurred in bringing the action.

10. Independent Consultant. Consultant is an independent contractor engaged by City to perform the services described herein and as such (i) shall employ such persons as it shall deem necessary and appropriate for the performance of its obligations pursuant to this Agreement, who shall be employees, and under the direction, of Consultant and in no respect employees of City, and (ii) shall have no authority to employ persons, or make purchases of equipment on behalf of City, or otherwise bind or obligate City. No statement herein shall be construed so as to find the Consultant an employee of the City.

11. Insurance. a. General Liability. Prior to starting the Work, Consultant shall procure, maintain and pay for such insurance as will protect against claims or loss which may arise out of operations by Consultant or by any subcontractor or by anyone employed by any of them or by anyone for whose acts any of them may be liable. Such insurance shall include, but not be limited to, minimum coverages and limits of liability specified in this Paragraph, or required by law.

b. Consultant shall procure and maintain the following minimum insurance coverages and limits of liability for the Work:

Worker’s Compensation Statutory Limits

Employer’s Liability $500,000 each accident $500,000 disease policy limit $500,000 disease each employee

Commercial General $1,000,000 property damage and bodily Liability injury per occurrence $2,000,000 general aggregate $2,000,000 Products – Completed Operations Aggregate $100,000 fire legal liability each occurrence $5,000 medical expense

Comprehensive Automobile

Page 4 of 10 2017 06 01 Liability $1,000,000 combined single limit each accident (shall include coverage for all owned, hired and non-owed vehicles.)

Umbrella or Excess Liability $1,000,000 c. Commercial General Liability. The Commercial General Liability Policy shall be on ISO form CG 00 01 12 07 or CG 00 01 04 13, or the equivalent. Such insurance shall cover liability arising from premises, operations, independent contractors, products- completed operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract). There shall be no endorsement or modification of the Commercial General Liability form arising from pollution, explosion, collapse, underground property damage or work performed by subcontractors. d. Professional Liability Insurance. In addition to the coverages listed above, Consultant shall maintain a professional liability insurance policy in the amount of $2,000,000. Said policy need not name the City as an additional insured. It shall be Consultant’s responsibility to pay any retention or deductible for the professional liability insurance. Consultant agrees to maintain the professional liability insurance for a minimum of two (2) years following termination of this Agreement. e. Consultant shall maintain “stop gap” coverage if Consultant obtains Workers’ Compensation coverage from any state fund if Employer’s liability coverage is not available. f. All policies, except the Worker’s Compensation Policy, Automobile Policy, and Professional Liability Policy, shall name the “City of Eden Prairie” as an additional insured including products and completed operations. g. All policies, except the Professional Liability Policy, shall apply on a “per project” basis. h. All General Liability policies, Automobile Liability policies and Umbrella policies shall contain a waiver of subrogation in favor of the City. i. All policies, except for the Worker’s Compensation Policy and the Professional Liability Policy, shall be primary and non-contributory. j. All polices, except the Worker’s Compensation Policy, shall insure the defense and indemnity obligations assumed by Consultant under this Agreement. The Professional Liability policy shall insure the defense and indemnity obligations assumed by Consultant under this Agreement except with respect to the liability for loss or damage resulting from the negligence or fault of anyone other than the Consultant or others for whom the Consultant is legally liable.

Page 5 of 10 2017 06 01 k. Consultant agrees to maintain all coverage required herein throughout the term of the Agreement and for a minimum of two (2) years following City’s written acceptance of the Work.

l. It shall be Consultant’s responsibility to pay any retention or deductible for the coverages required herein.

m. All policies shall contain a provision or endorsement that coverages afforded thereunder shall not be cancelled or non-renewed or restrictive modifications added, without thirty (30) days’ prior notice to the City, except that if the cancellation or non- renewal is due to non-payment, the coverages may not be terminated or non-renewed without ten (10) days’ prior notice to the City.

n. Consultant shall maintain in effect all insurance coverages required under this Paragraph at Consultant’s sole expense and with insurance companies licensed to do business in the state in Minnesota and having a current A.M. Best rating of no less than A-, unless specifically accepted by City in writing.

o. A copy of the Consultant’s Certificate of Insurance which evidences the compliance with this Paragraph, must be filed with City prior to the start of Consultant’s Work. Upon request a copy of the Consultant’s insurance declaration page, Rider and/or Endorsement, as applicable shall be provided. Such documents evidencing Insurance shall be in a form acceptable to City and shall provide satisfactory evidence that Consultant has complied with all insurance requirements. Renewal certificates shall be provided to City prior to the expiration date of any of the required policies. City will not be obligated, however, to review such Certificate of Insurance, declaration page, Rider, Endorsement or certificates or other evidence of insurance, or to advise Consultant of any deficiencies in such documents and receipt thereof shall not relieve Consultant from, nor be deemed a waiver of, City’s right to enforce the terms of Consultant’s obligations hereunder. City reserves the right to examine any policy provided for under this paragraph. p. Effect of Consultant’s Failure to Provide Insurance. If Consultant fails to provide the specified insurance, then Consultant will defend, indemnify and hold harmless the City, the City's officials, agents and employees from any loss, claim, liability and expense (including reasonable attorney's fees and expenses of litigation) to the extent necessary to afford the same protection as would have been provided by the specified insurance. Except to the extent prohibited by law, this indemnity applies regardless of any strict liability or negligence attributable to the City (including sole negligence) and regardless of the extent to which the underlying occurrence (i.e., the event giving rise to a claim which would have been covered by the specified insurance) is attributable to the negligent or otherwise wrongful act or omission (including breach of contract) of Consultant, its subcontractors, agents, employees or delegates. Consultant agrees that this indemnity shall be construed and applied in favor of indemnification. Consultant also agrees that if applicable law limits or precludes any aspect of this indemnity, then the indemnity will be considered limited only to the extent necessary to comply with that

Page 6 of 10 2017 06 01 applicable law. The stated indemnity continues until all applicable statutes of limitation have run.

If a claim arises within the scope of the stated indemnity, the City may require Consultant to: i. Furnish and pay for a surety bond, satisfactory to the City, guaranteeing performance of the indemnity obligation; or ii. Furnish a written acceptance of tender of defense and indemnity from Consultant's insurance company.

Consultant will take the action required by the City within fifteen (15) days of receiving notice from the City.

12. Indemnification. Consultant will defend and indemnify City, its officers, agents, and employees and hold them harmless from and against all judgments, claims, damages, costs and expenses, including a reasonable amount as and for its attorney’s fees paid, incurred or for which it may be liable resulting from any breach of this Agreement by Consultant, its agents, contractors and employees, or any negligent or intentional act or omission performed, taken or not performed or taken by Consultant, its agents, contractors and employees, relative to this Agreement. City will indemnify and hold Consultant harmless from and against any loss for injuries or damages arising out of the negligent acts of the City, its officers, agents or employees.

13. Ownership of Documents. All plans, diagrams, analyses, reports and information generated in connection with the performance of the Agreement (“Information”) shall become the property of the City, but Consultant may retain copies of such documents as records of the services provided. The City may use the Information for its purposes and the Consultant also may use the Information for its purposes. Use of the Information for the purposes of the project contemplated by this Agreement (“Project”) does not relieve any liability on the part of the Consultant, but any use of the Information by the City or the Consultant beyond the scope of the Project is without liability to the other, and the party using the Information agrees to defend and indemnify the other from any claims or liability resulting therefrom.

14. Mediation. Each dispute, claim or controversy arising from or related to this agreement shall be subject to mediation as a condition precedent to initiating arbitration or legal or equitable actions by either party. Unless the parties agree otherwise, the mediation shall be in accordance with the Commercial Mediation Procedures of the American Arbitration Association then currently in effect. A request for mediation shall be filed in writing with the American Arbitration Association and the other party. No arbitration or legal or equitable action may be instituted for a period of 90 days from the filing of the request for mediation unless a longer period of time is provided by agreement of the parties. Cost of mediation shall be shared equally between the parties. Mediation shall be held in the City of Eden Prairie unless another location is mutually agreed upon by the parties. The parties shall memorialize any agreement resulting from the mediation in a mediated settlement

Page 7 of 10 2017 06 01 agreement, which agreement shall be enforceable as a settlement in any court having jurisdiction thereof.

GENERAL TERMS AND CONDITIONS

15. Assignment. Neither party shall assign this Agreement, nor any interest arising herein, without the written consent of the other party.

16. Compliance with Laws and Regulations. In providing services hereunder, the Consultant shall abide by statutes, ordinances, rules, and regulations pertaining to the provisions of services to be provided. Any violation of statutes, ordinances, rules and regulations pertaining to the services to be provided shall constitute a material breach of this Agreement and entitle the City to immediately terminate this Agreement.

17. Conflicts. No salaried officer or employee of the City and no member of the Council of the City shall have a financial interest, direct or indirect, in this Agreement. The violation of this provision renders the Agreement void.

18. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be considered an original.

19. Damages. In the event of a breach of this Agreement by the City, Contractor shall not be entitled to recover punitive, special or consequential damages or damages for loss of business.

20. Employees. Contractor agrees not to hire any employee or former employee of City and City agrees not to hire any employee or former employee of Contractor prior to termination of this Agreement and for one (1) year thereafter, without prior written consent of the former employer in each case.

21. Enforcement. The Contractor shall reimburse the City for all costs and expenses, including without limitation, attorneys' fees paid or incurred by the City in connection with the enforcement by the City during the term of this Agreement or thereafter of any of the rights or remedies of the City under this Agreement.

22. Entire Agreement, Construction, Application and Interpretation. This Agreement is in furtherance of the City’s public purpose mission and shall be construed, interpreted, and applied pursuant to and in conformance with the City's public purpose mission. The entire agreement of the parties is contained herein. This Contract supersedes all oral agreements and negotiations between the parties relating to the subject matter hereof as well as any previous agreements presently in effect between the parties relating to the subject matter hereof. Any alterations, amendments, deletions, or waivers of the provisions of this Contract shall be valid only when expressed in writing and duly signed by the parties, unless otherwise provided herein.

Page 8 of 10 2017 06 01 23. Governing Law. This Agreement shall be controlled by the laws of the State of Minnesota.

24. Non-Discrimination. During the performance of this Agreement, the Consultant shall not discriminate against any employee or applicants for employment because of race, color, creed, religion, national origin, sex, marital status, status with regard to public assistance, disability, sexual orientation or age. The Consultant shall post in places available to employees and applicants for employment, notices setting forth the provision of this non- discrimination clause and stating that all qualified applicants will receive consideration for employment. The Consultant shall incorporate the foregoing requirements of this paragraph in all of its subcontracts for program work, and will require all of its subcontractors for such work to incorporate such requirements in all subcontracts for program work. The Consultant further agrees to comply with all aspects of the Minnesota Human Rights Act, Minnesota Statutes 363.01, et. seq., Title VI of the Civil Rights Act of 1964, and the Americans with Disabilities Act of 1990.

25. Notice. Any notice required or permitted to be given by a party upon the other is given in accordance with this Agreement if it is directed to either party by delivering it personally to an officer of the party, or if mailed in a sealed wrapper by United States registered or certified mail, return receipt requested, postage prepaid, or if deposited cost paid with a nationally recognized, reputable overnight courier, properly addressed to the address listed on page 1 hereof. Notices shall be deemed effective on the earlier of the date of receipt or the date of mailing or deposit as aforesaid, provided, however, that if notice is given by mail or deposit, that the time for response to any notice by the other party shall commence to run one business day after any such mailing or deposit. A party may change its address for the service of notice by giving written notice of such change to the other party, in any manner above specified, 10 days prior to the effective date of such change.

26. Rights and Remedies. The duties and obligations imposed by this Agreement and the rights and remedies available thereunder shall be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law.

27. Services Not Provided For. No claim for services furnished by the Consultant not specifically provided for herein shall be honored by the City.

28. Severability. The provisions of this Agreement are severable. If any portion hereof is, for any reason, held by a court of competent jurisdiction to be contrary to law, such decision shall not affect the remaining provisions of this Agreement.

29. Statutory Provisions. a. Audit Disclosure. The books, records, documents and accounting procedures and practices of the Consultant or other parties relevant to this Agreement are subject to examination by the City and either the Legislative Auditor or the State Auditor for a period of six (6) years after the effective date of this Agreement.

Page 9 of 10 2017 06 01 b. Data Practices. Any reports, information, or data in any form given to, or prepared or assembled by the Consultant under this Agreement which the City requests to be kept confidential, shall not be made available to any individual or organization without the City's prior written approval. This Agreement is subject to the Minnesota Government Data Practice Act, Minnesota Statutes Chapter 13 (Data Practices Act). All government data, as defined in the Data Practices Act Section 13.02, Subd 7, which is created, collected, received, stored, used, maintained, or disseminated by Consultant in performing any of the functions of the City during performance of this Agreement is subject to the requirements of the Data Practice Act and Consultant shall comply with those requirements as if it were a government entity. All subcontracts entered into by Consultant in relation to this Agreement shall contain similar Data Practices Act compliance language.

30. Waiver. Any waiver by either party of a breach of any provisions of this Agreement shall not affect, in any respect, the validity of the remainder of this Agreement.

Executed as of the day and year first written above.

CITY OF EDEN PRAIRIE

Mayor

City Manager

CONSULTANT

SRF Consulting Group, Inc.

By:

Its:

Page 10 of 10 2017 06 01

SRF 13132.PP August 25, 2020

Mr. Carter Schulze, PE Assistant City Engineer City of Eden Prairie 8080 Mitchell Road Eden Prairie, MN 55344 Subject: Proposal for Professional In-Construction Services for West 62nd Street, CP 19811 Eden Prairie, MN Dear Mr. Schulze: SRF Consulting Group, Inc. (SRF) has been assisting the City by preparing the final design of the West 62nd Street reconstruction project. The project is currently in the bidding phase, and we are prepared to support the City with professional services during construction of this project. Services would include construction contract administration, construction observation, construction staking, materials compliance, signal timing plan, and design support necessary for shop drawing review and plan clarifications.

Scope of Services Our scope of work will include all tasks associated with construction administration, construction observation, construction surveying, materials compliance, traffic control, and signal timing for the project. Field sampling and testing will be coordinated by SRF but will be performed by others.

Assumptions We have developed our scope of services based on the following assumed project schedule:

October 2020-November 2020 (4 weeks) Sanitary sewer and Watermain

April – July 2021 (12 weeks) Complete all construction Fall 2021 Punch-list and final documentation

Keeping the project on schedule may be the most significant factor that will impact our proposed construction services budget. However, as with any construction project, there are other factors beyond our control (such as weather or contractor efficiency and progress) that can influence the time required to be spent on construction services.

www.srfconsulting.com 1 Carlson Parkway North, Suite 150 | Minneapolis, MN 55447-4453 | 763.475.0010 Fax: 1.866.440.6364 An Equal Opportunity Employer Mr. Carter Schulze, PE August 25, 2020 City of Eden Prairie Page 2

Basis of Payment/Budget We propose to be reimbursed for our services on an hourly basis for the actual time expended. Other direct project expenses such as printing, supplies, reproduction, etc. will be billed at cost and mileage will be billed at the current allowable IRS rate for business miles. Business miles include only miles traveled in excess of an employee’s normal commute to and from the office and actual mileage on a construction site including visits to off-site facilities, such as material suppliers. Invoices are submitted on a monthly basis for work performed during the previous month. We have estimated the cost for providing professional in-construction services for this project. Each major task is subtotaled below. We have made every attempt to include a sufficient estimate of hours based on our experience with similar projects, while providing the City of Eden Prairie with a reasonable value. The fee shown below has been estimated based on our proposed work plan, our project experience to date, and our current understanding of the project schedule. The fee has been computed using our established rates for the City of Eden Prairie.

TASK FEE

1. Contract Administration $42,510.00

2. Construction Observation $86,100.00

3. Material Sampling and Testing Coordination $0 (included with Task 2)

4. Construction Surveying $52,900.00

5. Traffic Signal Timing $5,795.00

6. As-builts $4,360.00

7. Expenses $5,113.00

TOTAL $196,778.00

Changes in the Scope of Services It is understood that if the scope or extent of work changes, the cost will be adjusted accordingly. Before any out-of-scope work is initiated, however, we will submit a budget request for the new work and will not begin work until we receive authorization from you.

Mr. Carter Schulze, PE August 25, 2020 City of Eden Prairie Page 3

Notice to Proceed A signed Professional Services Agreement with a copy of this proposal, mailed or emailed to our office, will serve as our notice to proceed. The email address is [email protected]. We sincerely appreciate your consideration of this proposal and look forward to working with you on this important project. Please feel free to contact us if you have any questions or need additional information. Sincerely,

SRF CONSULTING GROUP, INC.

Robert G. Moore Principal RGM/ko Attachment A: Scope of Services This cost proposal is valid for a period of 90 days. SRF reserves the right to adjust its cost estimate after 90 days from the date of this proposal.

S:\Marketing\Proposals\2020 Letter Proposals\13132.PP_EP_W62nd\20200825_13132.PP_W62nd CS.docx

CITY COUNCIL AGENDA DATE: SECTION: Consent Calendar September 15, 2020

DEPARTMENT/DIVISION: ITEM DESCRIPTION: I.C. 19811 ITEM NO.: Carter Schulze Award Contract for West 62nd Street VIII.G. Public Works / Engineering Reconstruction Project to S.M. Hentges & Sons, Inc.

Requested Action

Move to: Award contract for the West 62nd Street Reconstruction Project (I.C. 19811) to S.M. Hentges & Sons, Inc. in the amount of $1,268,322.18.

Synopsis

Sealed bids were received on Thursday, September 4, 2020 for this project. Eleven (11) bids were received and are summarized in the attached Consultant Recommendation Letter. The low bid in the amount of $1,268,322.18 was submitted by S.M. Hentges & Sons, Inc. and is 26% below the Engineer’s Estimate. Our consultant and staff recommend awarding the contract for the project to S.M. Hentges & Sons, Inc. in the amount of $1,268,322.18.

Background Information

The West 62nd Street reconstruction project includes extending the previously constructed West 62nd Street improvements completed in 2012 to the SWLRT City West Station. According to the 2012 United HealthCare Services, Inc (UHG) development agreement, Phase Three Improvements include the east segment of West 62nd Street and these improvements shall be constructed by the opening of the LRT for passenger service or by the time of occupancy for the UHG Phase Three, whichever occurs earlier. With the SWLRT under construction, the Phase Three Improvements and the continuation of West 62nd Street are needed at this time.

Project Cost Summary

All project costs are to be assessed to UHG as part of their development agreement.

Attachments

Consultant Recommendation Letter Resolution Contract

SRF No. 10593

September 8, 2020

Mr. Carter Schulze, PE Assistant City Engineer City of Eden Prairie 8080 Mitchell Road Eden Prairie, MN 55344 Subject: West 62nd Street Reconstruction Project Award Recommendation City Project No. 19811

Dear Mr. Schulze: Sealed bids were opened for the above referenced project on Thursday, September 3, 2020, at Eden Prairie City Hall, 8080 Mitchell Road. A total of eleven (11) bids were received. All bids have been reviewed and are summarized below in order of value: CONTRACTOR TOTAL BID 1. S.M. Hentges & Sons, Inc. $1,268,322.18 2. RL Larson Excavating Inc. $1,339,869.74 3. Northwest $1,374,339.23 4. Northdale Construction Company, Inc. $1,418,477.64 5. Ryan Contracting Co. $1,425,015.60 6. Geislinger & Sons $1,439,914.40 7. Max Steininger, Inc. $1,448,871.26 8. Valley Paving, Inc. $1,452,372.10 9. New Look Contracting, Inc. $1,551,358.00 10. Meyer Contracting Inc. $1,605,343.03 11. Bituminous Roadways Inc. $1,624,527.53

Engineer’s Estimate $1,705,242.52

We recommend the Contract be awarded to the apparent low bidder S.M. Hentges & Sons, Inc. in the amount of $1,268,322.18.

Please contact us with any questions or concerns regarding this project.

Sincerely,

SRF CONSULTING GROUP, INC.

www.srfconsulting.com 1 Carlson Parkway North, Suite 150 | Minneapolis, MN 55447-4453 | 763.475.0010 Fax: 1.866.440.6364 An Equal Opportunity Employer Mr. Carter Schulze, PE September 8, 2020 City of Eden Prairie Page 2

Ben Hobert, PE (MN) Senior Associate

Enclosure cc: Becky Krugerud, SRF Consulting Group, Inc.

H:\Projects\10000\10593\Design\Docs\10593_AwardRecommendationLetter.docx CITY OF EDEN PRAIRIE HENNEPIN COUNTY, MINNESOTA

RESOLUTION NO. 2020-__

RESOLUTION ACCEPTING BID FOR WEST 62ND STREET RECONSTRUCTION PROJECT I.C. 19811

WHEREAS, pursuant to an advertisement for bids for the following improvement:

I.C. 19811: West 62nd Street Reconstruction Project bids were received, opened and tabulated according to law. Those bids received are shown on the attached Consultant Recommendation Letter; and

WHEREAS, the City Engineer recommends award of Contract to

S.M. Hentges & Sons, Inc.

as the lowest responsible bidder.

NOW, THEREFORE, BE IT RESOLVED by the Eden Prairie City Council as follows:

The Mayor and City Manager are hereby authorized and directed to enter into a Contract with S.M. Hentges & Sons, Inc. in the name of the City of Eden Prairie, in the amount of $1,268,322,18, in accordance with the plans and specifications thereof approved by the Council and on file in the office of the City Engineer.

ADOPTED by the Eden Prairie City Council on September 15, 2020.

Ronald A. Case, Mayor

ATTEST: SEAL

Kathleen Porta, City Clerk

FORM OF CONTRACT

THIS AGREEMENT, made and executed this 15th day of September 2020, by and between City of Eden Prairie hereinafter referred to as the "CITY", and S.M. Hentges & Sons, Inc. hereinafter referred to as the "CONTRACTOR",

WITNESSETH:

CITY AND CONTRACTOR, for the consideration hereinafter stated, agree as follows:

I. CONTRACTOR hereby covenants and agrees to perform and execute all the provisions of the Plans and Specifications prepared by the Public Works Department referred to in Paragraph IV, as provided by the CITY for:

I.C. _19811 West 62nd Street Reconstruction

CONTRACTOR further agrees to do everything required by this Agreement and the Contract Document.

II. CITY agrees to pay and CONTRACTOR agrees to receive and accept payment in accordance with the prices bid for the unit or lump sum items as set forth in the Proposal Form attached hereto which prices conform to those in the accepted CONTRACTOR'S proposal on file in the office of the City Engineer. The aggregate sum of such prices, based on estimated required quantities is estimated to be $_1,268,322.18__.

III. Payments to CONTRACTOR by City shall be made as provided in the Contract Documents.

IV. The Contract Documents consist of the following component parts:

(1) Legal and Procedural Documents

a. Advertisement for Bids b. Instruction to Bidders c. Accepted Proposal d. Contract Agreement e. Contractor's Performance Bond f. Contractor's Payment Bond

(2) Special Conditions

(3) Detail Specifications

(4) General Conditions

(5) Plans

FC-1

(6) Addenda and Supplemental Agreements

The Contract Documents are hereby incorporated with this Agreement and are as much a part of this Agreement as if fully set forth herein. This Agreement and the Contract Documents are the Contract.

V. CONTRACTOR agrees to fully and satisfactorily complete the work contemplated by this Agreement in accordance with the following schedule:

or in accordance with the Contract Documents.

VI. This Agreement shall be executed in two (2) copies.

IN WITNESS WHEREOF, the parties to this Agreement have hereunto set their hands and seals as of the date first above written.

In Presence Of: CITY OF EDEN PRAIRIE, MN.

By Its City Mayor

And Its City Manager

CONTRACTOR

In Presence Of: S.M. Hentges & Sons, Inc.

By Title

And Title

FC-2

CITY COUNCIL AGENDA DATE: SECTION: Consent Calendar September 15, 2020

DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: Denise Christensen Adopt Resolution Declaring Costs, Ordering VIII.H. Preparation of 2020 Special Assessment Roll, Public Works / Engineering and Setting Hearing Date

Requested Action

Move to: Adopt resolution declaring costs to be assessed, ordering preparation of 2020 Special Assessment Hearing roll, and setting Hearing date.

Synopsis

A Special Assessment Hearing is conducted annually in late October or early November. The assessments levied are for projects which have reached the point of substantial completion since the previous hearing and supplemental assessments for such things as trunk utility assessments, connection fees and contracted removal assessments. This process is conducted in accordance with State Statutes and procedure developed with the assistance of the City Attorney.

Attachments

Resolution Exhibit A - 2020 Special Assessments

CITY OF EDEN PRAIRIE HENNEPIN COUNTY, MINNESOTA

RESOLUTION NO. 2020-

RESOLUTION DECLARING COSTS TO BE ASSESSED AND ORDERING PREPARATION OF 2020 SPECIAL ASSESSMENT ROLLS AND SETTING HEARING DATE

WHEREAS, contracts have been let for the following listed improvements and the total project costs, including expenses incurred, or to be incurred and the City’s share, exclusive of that assignable to City Property, are established as shown on the attached Exhibit A.

NOW, THEREFORE, BE IT RESOLVED by the Eden Prairie City Council:

1. The costs of such improvements to be specially assessed are hereby declared to be those as set forth in Exhibit A.

2. The City Clerk with the assistance of the City Engineer shall forthwith calculate the proper amount to be assessed for each improvement against every assessable lot, piece or parcel of land within the district affected without regard to cash valuation, as provided by law, and shall file a copy of such proposed assessment in the office of the City Engineer for public inspection.

3. A hearing shall be held on the 20th day of October, 2020, at the Eden Prairie City Center, 8080 Mitchell Road, at 7:00 p.m., to pass upon such proposed assessments and at such time and place all persons owning property affected by such improvements will be given an opportunity to be heard with reference to such assessments.

4. The City Clerk is hereby directed to cause a notice of the hearing on the proposed assessments to be published once in the official newspaper at least two weeks prior to the hearing. The Clerk shall also cause mailed notice to be given to the owner of the record of each parcel described in the assessment roll not less than two weeks prior to the hearing.

ADOPTED by the Eden Prairie City Council on September 15, 2020.

Ronald A. Case, Mayor

ATTEST: SEAL

Kathleen Porta, City Clerk EXHIBIT A

2020 SPECIAL ASSESSMENTS September 15, 2020

Projects Total Cost Deferred Amt to be Assessed

I.C. 13-5844 Eden Prairie Rd So Extension to FCD (CSAH 61) Imp $227,045.00 $157,185.00 $69,860.00

Supplementals IC 13-5844 Utilities $237,601.00 $0.00 $237,601.00 Trunks & Connection Fees $334,087.95 $0.00 $334,087.95 SAC & WAC Fees $75,525.00 $0.00 $75,525.00 Trunk Sewer and Water $168,426.65 $0.00 $168,426.65 Trunk Water $220.00 $0.00 $220.00 IC 01-5537 Trunk Sewer & Water Exclusions $4,680.00 $0.00 $4,680.00 IC 01-5537 Trunk Lateral Exclusion $2,817.70 $0.00 $2,817.70 Water Connection Fee $8,858.80 $0.00 $8,858.80 Tree Removal $15,000.00 $0.00 $15,000.00 Tall Grass/Weed Removal $8,500.00 $0.00 $8,500.00

CITY COUNCIL AGENDA DATE: SECTION: Consent Calendar September 15, 2020

DEPARTMENT/DIVISION: ITEM DESCRIPTION: #20809 ITEM NO.: Mary Krause Approve Change Order No. 1 for the 2020 VIII.I. Pavement Management Project Public Works / Engineering

Requested Action

Move to: Approve Change Order #1 for the 2020 Pavement Management project in the amount of $167,358.52.

Synopsis

Change Order #1 consists of additional costs as a result of unanticipated poor subgrade conditions on several streets within the pavement management project area. The standard mill and overlay or reclamation strategies were not possible in these areas; a solution of utilizing Portland cement stabilized reclamation was selected. The change order reflects the additional costs of implementing the Portland cement stabilization. Staff recommends approval of the additional costs.

Background Information

The project started in early July 2020, all work was completed as of by the end of August.

Change Order #1 is for the materials needed to provide the necessary subgrade corrections in order to provide a stable subgrade to place the bituminous mat on. More detail is included with the attached change order.

Financial Implications

With this change order, the total contract amount increases from $2,522,525.00 to $2,689,883.52. Funding sources for this project include the Operating and Maintenance budget for mill and overlays and Pavement Management Funds.

Attachment

Change Order #1

CITY COUNCIL AGENDA DATE: SECTION: Consent Calendar September 15, 2020

DEPARTMENT/DIVISION: ITEM DESCRIPTION: I.C. 19821 ITEM NO.: Carter Schulze Award Contract for Summer Place VIII.J. Erosion Project to Minger Construction Public Works / Engineering Co.

Requested Action

Move to: Award contract for the Summer Place Erosion Project (I.C. 19821) to Minger Construction Co. in the amount of $115,003.00.

Synopsis

Quotes were received on Friday, September 5, 2020 for this project. Five (5) quotes were received and are summarized below. The low quote in the amount of $115,003.00 was submitted by Minger Construction Co. and is 19% below the Engineer’s Estimate. Staff recommend awarding the contract to Minger Construction Co.

Quote Summary:

Minger Construction Co. $115,003.00 Sunram Construction, Inc. $151,959.00 Blackstone Contractors, LLC $171,260.00 Minnesota Dirt Works, Inc. $175,987.00 GL Contracting, Inc. $177,618.50

Background Information

For the past several years, erosion on the slope behind 10280 and 10260 Summer Place has significantly altered the bluff line. The City intends to make repairs to stabilize the bluff to prevent further erosion. The property owners have agreed to cooperate with the City to make these repairs. Previously approved agreements outline City and Property owner responsibilities with respect to the project and future erosion issues.

Project Cost Summary

This project will utilize the storm water fund.

Attachment

Contract

FORM OF CONTRACT

THIS AGREEMENT, made and executed this 15th day of September 2020 by and between City of Eden Prairie hereinafter referred to as the "CITY", and Minger Construction Co. hereinafter referred to as the "CONTRACTOR",

WITNESSETH:

CITY AND CONTRACTOR, for the consideration hereinafter stated, agree as follows:

I. CONTRACTOR hereby covenants and agrees to perform and execute all the provisions of the Plans and Specifications prepared by the Public Works Department referred to in Paragraph IV, as provided by the CITY for:

I.C. _19821 Summer Place Erosion Repairs

CONTRACTOR further agrees to do everything required by this Agreement and the Contract Document.

II. CITY agrees to pay and CONTRACTOR agrees to receive and accept payment in accordance with the prices bid for the unit or lump sum items as set forth in the Proposal Form attached hereto which prices conform to those in the accepted CONTRACTOR'S proposal on file in the office of the City Engineer. The aggregate sum of such prices, based on estimated required quantities is estimated to be $_115,003.00__.

III. Payments to CONTRACTOR by City shall be made as provided in the Contract Documents.

IV. The Contract Documents consist of the following component parts:

(1) Legal and Procedural Documents

a. Advertisement for Bids b. Instruction to Bidders c. Accepted Proposal d. Contract Agreement e. Contractor's Performance Bond f. Contractor's Payment Bond

(2) Special Conditions

(3) Detail Specifications

(4) General Conditions

(5) Plans

FC-1

(6) Addenda and Supplemental Agreements

The Contract Documents are hereby incorporated with this Agreement and are as much a part of this Agreement as if fully set forth herein. This Agreement and the Contract Documents are the Contract.

V. CONTRACTOR agrees to fully and satisfactorily complete the work contemplated by this Agreement in accordance with the following schedule:

or in accordance with the Contract Documents.

VI. This Agreement shall be executed in two (2) copies.

IN WITNESS WHEREOF, the parties to this Agreement have hereunto set their hands and seals as of the date first above written.

In Presence Of: CITY OF EDEN PRAIRIE, MN.

By Its City Mayor

And Its City Manager

CONTRACTOR

In Presence Of: Minger Construction Co.

By Title

And Title

FC-2

CITY COUNCIL AGENDA DATE:

September 15, 2020 SECTION: Payment of Claims

DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: Sue Kotchevar, Office of the Payment of Claims X. City Manager/Finance

Requested Action

Move to: Approve the Payment of Claims as submitted (roll call vote)

Synopsis

Checks 276803 - 277062

Wire Transfers 1026012 - 1026118

Wire Transfers 7819 – 7839

Purchasing Card 7824

City of Eden Prairie Council Check Summary 9/15/2020

Division Amount Division Amount 000 General 1,874 308 E-911 306 100 City Manager 10,976 315 Economic Development 9,551 101 Legislative 6,202 509 CIP Fund 9,282 102 Legal Counsel 41,530 512 CIP Trails 1,093 110 City Clerk 934 513 CIP Pavement Management 127,283 111 Customer Service 4,711 522 Improvement Projects 2006 3,774 112 Human Resources -622 528 Shady Oak Rd-CR 61 North 71,354 113 Communications 8,494 532 EP Road Connect Flying Cloud 7,168 114 Benefits & Training 2,738 536 General LRT 226,063 130 Assessing 1,866 Total Capital Projects Fund 455,873 131 Finance 3,554 132 Housing and Community Services 3,271 601 Prairie Village Liquor 100,513 133 Planning 105 602 Den Road Liquor 154,800 136 Public Safety Communications 3,145 603 Prairie View Liquor 100,439 137 Economic Development -677 605 Den Road Building 1,111 150 Park Administration 390 701 Water Enterprise Fund 375,480 151 Park Maintenance 34,708 702 Wastewater Enterprise Fund 70,192 153 Organized Athletics 110 703 Stormwater Enterprise Fund 15,586 154 Community Center 5,087 Total Enterprise Fund 818,122 155 Beaches 611 156 Youth Programs 987 802 494 Commuter Services 15,730 157 Special Events 1,079 807 Benefits Fund 828,786 158 Senior Center 101 809 Investment Fund 3,810 159 Recreation Administration 4,394 811 Property Insurance 334,587 162 Arts 450 812 Fleet Internal Service 71,293 163 Outdoor Center 1,150 813 IT Internal Service 62,206 164 Park Rental Facilities 1,372 815 Facilites Operating ISF 28,177 168 Arts Center 2,912 816 Facilites City Center ISF 64,088 180 Police Sworn 17,948 817 Facilites Comm. Center ISF 21,074 184 Fire 22,183 Total Internal Svc/Agency Fund 1,429,751 186 Inspections 6,267 200 Engineering 2,574 Report Total 4,830,595 201 Street Maintenance 1,795,870 202 Street Lighting 127,876 Total General Fund 2,114,170

301 CDBG 12,329 303 Cemetary Operation 350 Total Special Revenue Fund 12,679 City of Eden Prairie Council Check Register by GL 9/15/2020

Check # Amount Supplier / Explanation Account Description Business Unit Comments 276828 1,228,199 BITUMINOUS ROADWAYS INC Asphalt Overlay Street Maintenance 2020 Pavement Mgmt 276819 442,869 ALLIED BLACKTOP CO Seal Coating Street Maintenance 2020 Sealcoat 276890 332,287 LEAGUE MN CITIES INS TRUST Insurance Property Insurance P/C renewal premiums 7829 304,173 HEALTHPARTNERS Medical/Dental Premiums Health and Benefits Premiums Sept 2020 7837 254,653 ULTIMATE SOFTWARE GROUP, THE Federal Taxes Withheld Health and Benefits Payrolltaxes PR Ending 08.28.20 277019 223,363 METRO TRANSIT Other Contracted Services General LRT Southwest LRT Project 7835 182,016 PUBLIC EMPLOYEES RETIREMENT ASSOCIATION PERA Health and Benefits PERA PR Ending 08.14.20 1026117 171,541 XCEL ENERGY Electric Traffic Signals Mulit location electric 1026107 113,574 PARROTT CONTRACTING INC Other Contracted Services CIP Pavement Management 2020 Sump Pump Collection Proj. 276970 103,112 ASTECH ASPHALT SURFACE TECHNOLOGIES CORP Seal Coating Street Maintenance 2020 Cracksealing project 1026060 82,344 SRF CONSULTING GROUP INC Design & Engineering EP Rd Connect to Flying Cloud 1026087 75,591 ADVANCED ENGINEERING & ENVIRONMENTAL SE Equipment Repair & Maint Wastewater Capital 276884 73,860 KEYS WELL DRILLING COMPANY Equipment Repair & Maint Water Capital 276901 48,731 MINNESOTA DEPT OF HEALTH Licenses, Taxes, Fees Utility Operations - General 1026047 45,731 GREGERSON ROSOW JOHNSON & NILAN LTD Legal Legal Criminal Prosecution 7824 44,691 USB-PURCHASING CARD Training Supplies Arts Center 1026049 40,484 LOGIS Network Support IT Operating 276927 40,293 REHBEIN'S AGRICULTURAL SERVICES Lime Residual Removal Water Treatment 277012 39,549 JOHNSON BROTHERS LIQUOR CO Liquor Product Received Prairie View Liquor Store 276883 33,750 JOHNSON BROTHERS LIQUOR CO Liquor Product Received Den Road Liquor Store 7839 27,037 EMPOWER Deferred Compensation Health and Benefits 276966 26,521 ABM ONSITE SERVICES-MIDWEST Janitor Service City Center - Tenant Cost 1026013 25,135 BRAUN INTERTEC CORPORATION Design & Engineering Capital Maint. & Reinvestment 7838 19,825 ICMA RETIREMENT TRUST-457 Deferred Compensation Health and Benefits 276863 19,623 GRAYMONT Treatment Chemicals Water Treatment 1026097 18,758 HANSEN THORP PELLINEN OLSON Design & Engineering Capital Maint. & Reinvestment 1026040 18,513 DIVERSE BUILDING MAINTENANCE Janitor Service Maintenance Facility 1026091 18,017 ESS BROTHERS & SONS INC Repair & Maint. Supplies Wasterwater Collection 276882 17,484 JJ TAYLOR DISTRIBUTING MINNESOTA Liquor Product Received Prairie View Liquor Store 276895 17,040 MANSFIELD OIL COMPANY Motor Fuels Fleet Operating 276977 16,762 CAPITOL BEVERAGE SALES LP Liquor Product Received Prairie Village Liquor Store 277049 16,382 SSI KEF SLB LLC Electric Water Treatment 7823 15,419 PRAIRIEVIEW RETAIL LLC Building Rental Prairie View Liquor Store 7827 15,271 LIFE INSURANCE COMPANY OF NORTH AMERICA Life Insurance EE/ER Health and Benefits 277001 14,780 GRAYMONT Treatment Chemicals Water Treatment 276804 14,676 GRI EDEN PRAIRIE, LLC Building Rental Prairie Village Liquor Store 276877 14,175 HP INC Computers IT Operating 276955 13,556 BREAKTHRU BEVERAGE MN BEER LLC Liquor Product Received Den Road Liquor Store 276941 13,274 UNITED TRUCK BODY CO. INC Autos Fleet Capital 7821 12,976 FURTHER - AKA SELECT HSA - Employee Health and Benefits 276875 12,188 HOOTSUITE Other Contracted Services Prairie View Liquor Store 277010 11,273 JJ TAYLOR DISTRIBUTING MINNESOTA Liquor Product Received Prairie View Liquor Store 276833 11,108 CAPITOL BEVERAGE SALES LP Liquor Product Received Prairie Village Liquor Store 277014 10,840 LANDMARK REMODELING LLC Other Contracted Services Rehab 7825 10,393 I-494 CORRIDOR COMMISSION Wages and Benefits 494 Corridor Commission 276996 10,312 EMERGENCY AUTOMOTIVE TECHNOLOGY INC Equipment Parts Fleet Capital 276957 9,990 SOUTHERN GLAZER'S WINE AND SPIRITS OF MN Liquor Product Received Den Road Liquor Store 1026061 9,660 ST CROIX ENVIRONMENTAL INC OCS-Well Field Mgmt Water Supply (Wells) Check # Amount Supplier / Explanation Account Description Business Unit Comments 276809 9,453 BREAKTHRU BEVERAGE MN WINE & SPIRITS Liquor Product Received Den Road Liquor Store 276810 8,965 SOUTHERN GLAZER'S WINE AND SPIRITS OF MN Liquor Product Received Den Road Liquor Store 276808 8,829 BREAKTHRU BEVERAGE MN BEER LLC Liquor Product Received Den Road Liquor Store 1026089 8,379 CDW GOVERNMENT INC. Software Maintenance IT Operating 276860 8,250 GOODPOINT TECHNOLOGY INC Other Contracted Services Park Maintenance 1026033 8,217 WENCK ASSOCIATES INC OCS - Monitoring Stormwater Non-Capital 276832 7,632 BRYAN ROCK PRODUCTS INC Asphalt Overlay Street Maintenance 277039 7,364 PHILLIPS WINE AND SPIRITS INC Liquor Product Received Prairie View Liquor Store 276920 6,807 PHILLIPS WINE AND SPIRITS INC Liquor Product Received Den Road Liquor Store 276850 6,750 DUNSMORE ASPHALT INC Asphalt Overlay Water Distribution 276826 6,566 ASTECH ASPHALT SURFACE TECHNOLOGIES CORP Crack Filling Street Maintenance 276956 6,427 BREAKTHRU BEVERAGE MN WINE & SPIRITS Liquor Product Received Den Road Liquor Store 1026103 6,418 METRO SALES INCORPORATED* Equipment Rentals Customer Service 276958 6,401 BREAKTHRU BEVERAGE MN BEER LLC Liquor Product Received Prairie Village Liquor Store 276963 6,270 SOUTHERN GLAZER'S WINE AND SPIRITS OF MN Liquor Product Received Prairie View Liquor Store 276813 6,204 SOUTHERN GLAZER'S WINE AND SPIRITS OF MN Liquor Product Received Prairie View Liquor Store 276823 6,157 ARTISAN BEER COMPANY Liquor Product Received Prairie View Liquor Store 277009 6,000 IRON MALTESE ATHLETICS Health & Fitness Fire 276841 5,777 COMMERCIAL ASPHALT CO Patching Asphalt Wasterwater Collection 277047 5,695 SMSC ENTERPRISES Landscape Materials/Supp Park Maintenance 276811 5,615 BREAKTHRU BEVERAGE MN BEER LLC Liquor Product Received Prairie View Liquor Store 276961 5,564 BREAKTHRU BEVERAGE MN BEER LLC Liquor Product Received Prairie View Liquor Store 276960 5,311 SOUTHERN GLAZER'S WINE AND SPIRITS OF MN Liquor Product Received Prairie Village Liquor Store 1026048 5,030 HAWKINS INC Treatment Chemicals Water Treatment 277051 5,000 STARING LAKE VILLAGE HOMES Rebates Water Conservation 1026057 4,976 PRAIRIE ELECTRIC COMPANY Contract Svcs - Electrical City Center - CAM 7834 4,940 FURTHER - AKA SELECT HRA Health and Benefits 276897 4,890 METERING & TECHNOLOGY SOLUTIONS Capital Under $25,000 Water Metering 7832 4,622 US BANK - CREDIT CARD MERCHANT ONLY Bank and Service Charges Finance 276962 4,556 BREAKTHRU BEVERAGE MN WINE & SPIRITS Liquor Product Received Prairie View Liquor Store 276807 4,343 SOUTHERN GLAZER'S WINE AND SPIRITS OF MN Liquor Product Received Prairie Village Liquor Store 276998 4,303 FIRE SAFETY USA INC Equipment Testing/Cert. Fleet Operating 276805 4,290 BREAKTHRU BEVERAGE MN BEER LLC Liquor Product Received Prairie Village Liquor Store 1026090 4,272 CENTERPOINT ENERGY Gas Prairie Village Liquor Store 276925 4,045 RAINBOW LAWN CARE Other Contracted Services Tree Removal 276855 4,042 EDEN PRAIRIE SCHOOL Outside Water Sales Water Enterprise Fund 276844 4,042 CORE & MAIN Repair & Maint. Supplies Stormwater Collection 276859 4,037 GM NORTHRUP Outside Water Sales Water Enterprise Fund 276991 3,983 DEPT OF EMPLOYMENT/ECONOMIC DEVELOPMENT Interest Economic Development Fund 276969 3,938 ARTISAN BEER COMPANY Liquor Product Received Prairie Village Liquor Store 276946 3,924 XTREME INTEGRATION Hardware Maintenance Capital Maint. & Reinvestment 1026019 3,888 GREENSIDE INC Contract Svcs - Lawn Maint. City Center - CAM 1026093 3,853 GENUINE PARTS COMPANY Operating Supplies City Hall (City Cost) 277023 3,851 MINNESOTA VALLEY ELECTRIC COOPERATIVE Electric Street Lighting 7833 3,810 PFM ASSET MANAGEMENT LLC Interest Investment Fund 276943 3,755 VEIT & CO Outside Water Sales Water Enterprise Fund 276936 3,700 TOLEDO YARDSCAPE LLC Contract Svcs - Lawn Maint. Fire Station #2 276978 3,700 CASTRO CLEANING LLC Janitor Service Utility Operations - General 276812 3,631 BREAKTHRU BEVERAGE MN WINE & SPIRITS Liquor Product Received Prairie View Liquor Store 276806 3,558 BREAKTHRU BEVERAGE MN WINE & SPIRITS Liquor Product Received Prairie Village Liquor Store 1026108 3,483 POMP'S TIRE SERVICE INC Tires Fleet Operating 277004 3,355 HOHENSTEINS INC Liquor Product Received Prairie View Liquor Store Check # Amount Supplier / Explanation Account Description Business Unit Comments 1026036 3,338 A-SCAPE INC Contract Svcs - Lawn Maint. Arts Center 1026100 3,318 ITRON INC. Maintenance Contracts Water Metering 277028 3,226 NATIONAL BUSINESS FURNITURE Operating Supplies Fire 276959 3,191 BREAKTHRU BEVERAGE MN WINE & SPIRITS Liquor Product Received Prairie Village Liquor Store 276821 3,161 ALTERNATIVE BUSINESS FURNITURE INC Contract Svcs - General Bldg City Hall (City Cost) 276906 3,125 MOVEFWD INC Other Contracted Services Housing and Community Service 1026116 3,117 WM MUELLER AND SONS INC Gravel Water Distribution 276938 3,100 TRUCK UTILITIES MFG CO Autos Fleet Capital 276887 3,040 LAVAN FLOOR COVERING Contract Svcs - General Bldg Police (City Cost) 276968 3,018 AMERICAN PRESSURE INC Equipment Repair & Maint Maintenance Facility 276838 3,000 CLEARPOINT STRATEGY Dues & Subscriptions City Council 277054 2,997 SUBURBAN RATE AUTHORITY Dues & Subscriptions City Council 1026037 2,874 BELLBOY CORPORATION Liquor Product Received Prairie View Liquor Store 1026115 2,832 WINE COMPANY, THE Liquor Product Received Prairie View Liquor Store 276846 2,700 DAHLEN, DWYER, FOLEY & TINKER, INC. Legal General LRT 276873 2,675 HILDI INC Audit & Financial Finance 276995 2,625 EHLERS & ASSOCIATES INC Other Contracted Services TIF-Elevate Apts 276909 2,597 NATIVE RESOURCE PRESERVATION Other Contracted Services Stormwater Non-Capital 277013 2,574 LAMERS PHILIP M Right of Way & Easement Engineering 276980 2,571 CENTURYLINK Telephone City Center - CAM 276990 2,518 CORE & MAIN Repair & Maint. Supplies Water Distribution 276874 2,504 HOHENSTEINS INC Liquor Product Received Prairie View Liquor Store 1026069 2,487 XCEL ENERGY Electric Water Supply (Wells) 1026101 2,409 JEFFERSON FIRE & SAFETY INC Small Tools Fire 276814 2,369 ABM EQUIPMENT AND SUPPLY COMPANY Equipment Parts Fleet Operating 276891 2,300 LEAGUE MN CITIES INS TRUST Insurance Property Insurance 276894 2,273 MACQUEEN EQUIPMENT INC Equipment Parts Fleet Operating 1026111 2,229 STREICHERS Clothing & Uniforms Fire 1026056 2,223 PIONEER MANUFACTURING COMPANY Operating Supplies Park Maintenance 1026051 2,220 METROPOLITAN MECHANICAL CONTRACTORS Contract Svcs - HVAC Prairie Village Liquor Store 276979 2,202 CEMSTONE PRODUCTS COMPANY Asphalt Overlay Street Maintenance 1026068 2,144 WM MUELLER AND SONS INC Gravel Stormwater Collection 276994 2,140 EDINA, CITY OF Operating Supplies PeopleFest 277059 2,135 WM CORPORATE SERVICES INC Waste Disposal Fire Station #1 277029 2,016 NATIVE RESOURCE PRESERVATION Other Contracted Services Stormwater Non-Capital 276945 2,009 WINE MERCHANTS INC Liquor Product Received Prairie View Liquor Store 276893 1,979 LUBE-TECH & PARTNERS LLC Lubricants & Additives Fleet Operating 1026118 1,963 ZIEGLER INC Equipment Repair & Maint Fleet Operating 276880 1,960 INTERNATIONAL UNION OF OPERATING Union Dues Withheld Health and Benefits 276868 1,930 HENNEPIN COUNTY ACCOUNTS RECEIVABLE Board of Prisoner Police Sworn 1026099 1,924 IDENTISYS Equipment Repair & Maint Public Safety Communications 276924 1,890 PRYES BREWING COMPANY Liquor Product Received Prairie View Liquor Store 277058 1,879 WINE MERCHANTS INC Liquor Product Received Prairie View Liquor Store 1026050 1,822 MENARDS Operating Supplies Police (City Cost) 1026020 1,700 GREGOIRE, DAVID Other Contracted Services Communications 277035 1,681 PAUSTIS & SONS COMPANY Liquor Product Received Prairie View Liquor Store 1026017 1,674 FLEETPRIDE INC Equipment Parts Fleet Operating 276857 1,647 FINLEY BROS INC Outside Water Sales Water Enterprise Fund 277027 1,631 NAC Building Repair & Maint. Utility Operations - General 277000 1,617 GRAPE BEGINNINGS Liquor Product Received Prairie Village Liquor Store 277005 1,583 HOME DEPOT CREDIT SERVICES Small Tools Fire Station #2 1026045 1,540 GARTNER REFRIGERATION & MFG INC Repair & Maint - Ice Rink Ice Arena Maintenance Check # Amount Supplier / Explanation Account Description Business Unit Comments 277037 1,533 PERA Wages and Benefits 494 Corridor Commission 276971 1,500 BEIERWALTES WILL Rebates Stormwater Non-Capital 276976 1,500 CAMP BOW WOW EDEN PRAIRIE Deposits General Fund 276861 1,490 GOPHER STATE ONE-CALL Other Contracted Services Utility Operations - General 276858 1,420 GIRARD'S BUSINESS SOLUTIONS INC Postage Customer Service 277025 1,412 MODIST BREWING COMPANY Liquor Product Received Prairie View Liquor Store 277008 1,368 INDEED BREWING COMPANY LLC Liquor Product Received Prairie View Liquor Store 276947 1,364 YORKTOWN OFFICES Rent 494 Corridor Commission 7831 1,353 FURTHER - AKA SELECT FSA - Dependent Care Health and Benefits 277020 1,335 MHSRC/RANGE Tuition Reimbursement/School Police Sworn 1026022 1,334 LYNDALE PLANT SERVICES Contract Svcs - Int. Landscape City Center - CAM 7822 1,326 FIDELITY SECURITY LIFE INSURANCE CO Vision Plan Health and Benefits 276837 1,321 CLEAR RIVER BEVERAGE CO Liquor Product Received Den Road Liquor Store 277006 1,303 HP INC Computers IT Operating 1026063 1,279 STREICHERS Clothing & Uniforms Police Sworn 1026082 1,254 VAN PAPER COMPANY Cleaning Supplies Facilities Operating ISF 1026071 1,249 AMERIPRIDE LINEN & APPAREL SERVICES Janitor Service Fire 276864 1,235 GREAT LAKES COCA-COLA DISTRIBUTION Liquor Product Received Concessions 276848 1,224 DALE GREEN COMPANY, THE Landscape Materials/Supp Park Maintenance 276908 1,218 NAC Equipment Repair & Maint Utility Operations - General 276827 1,200 BARTON SAND & GRAVEL CO Waste Blacktop/Concrete Street Maintenance 1026067 1,195 WINE COMPANY, THE Liquor Product Received Prairie View Liquor Store 276898 1,165 MHSRC/RANGE Tuition Reimbursement/School Fire 276822 1,150 APPLIED ECOLOGICAL SERVICES INC Other Contracted Services Park Maintenance 276817 1,149 ADVANTAGE PROPERTY MAINTENANCE INC Landscape Materials/Supp Street Maintenance 7820 1,144 FURTHER - AKA SELECT Other Contracted Services Health and Benefits 277017 1,139 MAVERICK WINE LLC Liquor Product Received Prairie View Liquor Store 276862 1,121 GRAPE BEGINNINGS Liquor Product Received Prairie View Liquor Store 277015 1,111 LUPULIN BREWING COMPANY Liquor Product Received Prairie View Liquor Store 1026086 1,103 YOUNGSTEDTS COLLISION CENTER Equipment Repair & Maint Fleet Operating 1026083 1,091 VINOCOPIA Liquor Product Received Prairie View Liquor Store 1026088 1,086 BELLBOY CORPORATION Liquor Product Received Prairie View Liquor Store 276918 1,078 PAUSTIS & SONS COMPANY Liquor Product Received Prairie View Liquor Store 277036 1,067 PEQUOD DISTRIBUTION Liquor Product Received Prairie Village Liquor Store 276999 1,060 FLYING CLOUD TRANSFER STATION 4553 Waste Disposal Park Maintenance 276818 1,017 AIRGAS USA LLC Supplies - Pool Pool Maintenance 1026030 1,006 VAN PAPER COMPANY Cleaning Supplies Facilities Operating ISF 1026070 973 ALLMANN, ANDY Tuition Reimbursement/School Organizational Services 276983 933 CLEAR RIVER BEVERAGE CO Liquor Product Received Prairie View Liquor Store 1026072 928 ASSOCIATED BAG COMPANY Operating Supplies Inspections-Administration 1026075 915 FLEETPRIDE INC Equipment Parts Fleet Operating 276981 913 CENTURYLINK Electric Water Treatment 277048 899 SNAP-ON TOOLS Small Tools Fleet Operating 277055 880 THE ADVENT GROUP Temp 494 Corridor Commission 1026102 868 MENARDS Operating Supplies Round Lake 276869 853 HENNEPIN COUNTY I/T DEPT Equipment Repair & Maint IT Operating 277018 828 MEGA BEER Liquor Product Received Prairie View Liquor Store 276975 819 BROTHERS FIRE PROTECTION Contract Svcs - Fire/Life/Safe IT Operating 1026095 793 GRAINGER Equipment Parts General Community Center 276967 781 AIRGAS USA LLC Supplies - Pool Pool Maintenance 276835 775 CEMSTONE PRODUCTS COMPANY Asphalt Overlay Stormwater Collection 276973 775 BLOOMINGTON, CITY OF Other Contracted Services Police Sworn Check # Amount Supplier / Explanation Account Description Business Unit Comments 1026014 774 CLAVER, BRIAN Mileage & Parking Park Facilities 1026031 757 VINOCOPIA Liquor Product Received Prairie View Liquor Store 1026112 756 TWIN CITY HARDWARE Supplies - Security Ice Arena Maintenance 277056 753 UNMAPPED BREWING CO Liquor Product Received Prairie View Liquor Store 1026077 750 GREENSIDE INC Contract Svcs - Lawn Maint. City Center - CAM 276972 736 BLACK STACK BREWING INC Liquor Product Received Prairie View Liquor Store 277011 681 JOHN HENRY FOSTER MINNESOTA INC Contract Svcs - General Bldg Fire Station #2 1026034 681 WISE JAMES J Mileage & Parking Assessing 1026059 680 SHERWIN WILLIAMS CO Operating Supplies Park Maintenance 276825 679 ASPEN MILLS Postage Fire 277021 677 MINNESOTA AIR INC Supplies - HVAC Maintenance Facility 277044 618 SAFETY VEHICLE SOLUTIONS Equipment Repair & Maint Fire 277002 610 HEADFLYER BREWING Liquor Product Received Prairie View Liquor Store 7836 603 ULTIMATE SOFTWARE GROUP, THE Garnishment Withheld Health and Benefits 1026105 576 MULCAHY COMPANY INC Supplies - HVAC General Community Center 277042 574 PRYES BREWING COMPANY Liquor Product Received Den Road Liquor Store 276915 573 OXYGEN SERVICE COMPANY EMS Supplies-Oxygen Supplies Fire 276935 570 THE ADVENT GROUP Temp 494 Corridor Commission 276849 557 DOMACE VINO Liquor Product Received Prairie View Liquor Store 276922 550 PRINCIPAL FINANCIAL GROUP Wages and Benefits 494 Corridor Commission 276896 550 MARTIN-MCALLISTER Employment Support Test Organizational Services 276916 546 PAFFY'S PEST CONTROL Contract Svcs - Pest Control General Community Center 1026028 543 THE OASIS GROUP Employee Assistance Organizational Services 276831 542 BROTHERS FIRE PROTECTION Contract Svcs - Fire/Life/Safe General Community Center 276974 519 BOURGET IMPORTS Liquor Product Received Prairie Village Liquor Store 1026055 517 NORTH CENTRAL LABORATORIES Laboratory Chemicals Water Treatment 277061 510 XTREME INTEGRATION Repair & Maint. Supplies Outdoor Center 277041 508 PRAIRIE RESTORATIONS INC Grounds Maintenance Utility Operations - General 1026044 501 FILTRATION SYSTEMS Supplies - HVAC Police (City Cost) 276989 500 CONSTRUCTION MATERIALS INC Asphalt Overlay Street Maintenance 1026076 484 GREATAMERICA FINANCIAL SVCS Postage Customer Service 1026039 482 CDW GOVERNMENT INC. Computers - Monitors IT Operating 7826 464 PMA FINANCIAL NETWORK INC Bank and Service Charges Wastewater Accounting 7819 458 FURTHER - AKA SELECT FSA - Dependent Care Health and Benefits 276934 452 SYSCO WESTERN MINNESOTA Merchandise for Resale Concessions 276889 451 LDV Equipment Parts Fleet Operating 276865 450 HALE, WILLIAM Other Contracted Services Staring Lake Concert 276888 450 LAWN RANGER, INC, THE Other Contracted Services Park Maintenance 1026025 438 SHAMROCK GROUP, INC - ACE ICE Liquor Product Received Prairie View Liquor Store 276911 435 NEUHARTH COMPANIES Other Contracted Services Capital Maint. & Reinvestment 276919 426 PEQUOD DISTRIBUTION Liquor Product Received Den Road Liquor Store 277034 425 PAPER ROLL PRODUCTS Printers -Accessories IT Operating 276878 401 INBOUND BREW CO Liquor Product Received Prairie View Liquor Store 277060 396 WOODEN HILL BREWING COMPANY LLC Liquor Product Received Den Road Liquor Store 276803 389 CAPREF EDEN PRAIRIE LLC Building Rental CDBG - Public Service 1026092 384 FORKLIFTS OF MINNESOTA INC Equipment Repair & Maint Utility Operations - General 276845 380 CORPORATE TECHNOLOGIES Computers 494 Corridor Commission 276829 378 BLACK STACK BREWING INC Liquor Product Received Prairie View Liquor Store 1026104 378 MTI DISTRIBUTING INC Equipment Parts Fleet Operating 277003 375 HENNEPIN COUNTY ACCOUNTS RECEIVABLE Accounts Receivable TIF-Eden Shores Senior Housing 276993 367 EARL F ANDERSEN INC Equipment Repair & Maint Fire 1026053 362 MINNESOTA ROADWAYS CO Patching Asphalt Street Maintenance Check # Amount Supplier / Explanation Account Description Business Unit Comments 277050 352 STAPLES ADVANTAGE Office Supplies Customer Service 276917 350 PARAGON DEVELOPMENT SYSTEMS Other Contracted Services IT Operating 276939 350 TWIN CITY MONUMENT CO Other Contracted Services Pleasant Hill Cemetery 1026106 350 NEW FRANCE WINE COMPANY Liquor Product Received Prairie View Liquor Store 1026018 344 GOODIN COMPANY Supplies - Plumbing Fitness/Conference - Cmty Ctr 276929 340 SHADYWOOD TREE EXPERTS INC Other Contracted Services Tree Removal 276871 338 HENNEPIN VILLAGE HERITAGE City Building Rental City Hall (City Cost) 277031 336 NORTH AMERICAN SAFETY INC Repair & Maint. Supplies Water Distribution 1026073 332 CUROE, BEN Mileage & Parking Park Facilities 1026012 331 AMERIPRIDE LINEN & APPAREL SERVICES Janitor Service Den Road Liquor Store 277052 330 STEEL TOE BREWING LLC Liquor Product Received Prairie View Liquor Store 276921 323 PLYMOUTH FRAMERY Other Contracted Services Police Sworn 276876 320 HORIZON GRAPHICS Operating Supplies Elections 1026042 317 EDEN PRAIRIE FIREFIGHTER'S RELIEF ASSOC Union Dues Withheld Health and Benefits 277046 316 SMALL LOT MN Liquor Product Received Prairie Village Liquor Store 1026026 315 STONEBROOKE Equipment Parts Fleet Operating 276879 314 INDEED BREWING COMPANY LLC Liquor Product Received Den Road Liquor Store 276914 301 OMNI BREWING COMPANY Liquor Product Received Prairie View Liquor Store 276842 300 COMMUNITY HEALTH CHARITIES OF MINNESOTA Charitable Contributions Health and Benefits 7830 290 US BANK - PAYMODE Bank and Service Charges Finance 1026054 287 MTI DISTRIBUTING INC Equipment Parts Fleet Operating 277007 284 INBOUND BREW CO Liquor Product Received Prairie View Liquor Store 1026080 280 SHAMROCK GROUP, INC - ACE ICE Liquor Product Received Prairie View Liquor Store 276940 275 UNITED STATES ICE RINK ASSOCIATION Dues & Subscriptions Ice Lessons 1026043 274 FACTORY MOTOR PARTS COMPANY Lubricants & Additives Fleet Operating 276964 272 56 BREWING LLC Liquor Product Received Prairie View Liquor Store 277030 269 NAVY SEAL Other Contracted Services Street Maintenance 1026085 265 WORKIN KATHRYN Mileage & Parking Park Facilities 276836 263 CENTURYLINK Telephone E-911 Program 276885 260 LANO EQUIPMENT INC Equipment Parts Fleet Operating 276982 238 CINTAS Operating Supplies Park Maintenance 276815 237 ACTIVAR PLASTIC PRODUCTS GROUP INC Equipment Repair & Maint Water Treatment 276937 231 TRANSUNION RISK & ALTERNATIVE DATA Other Contracted Services Police Sworn 276847 225 DALCO Cleaning Supplies Facilities Operating ISF 276870 225 HENNEPIN VILLAGE City Building Rental City Hall (City Cost) 276948 225 DALTON MICHAEL Plumbing Surcharge General Fund 1026023 221 QUALITY PROPANE Motor Fuels Ice Arena Maintenance 276834 221 CARLSEN, TODD Deposits General Fund 276872 220 HENNEPIN VILLAGE MASTER City Building Rental City Hall (City Cost) 1026079 217 QUALITY PROPANE Motor Fuels Ice Arena Maintenance 276933 214 SUBURBAN CHEVROLET Equipment Parts Fleet Operating 1026066 214 WATSON CO INC, THE Merchandise for Resale Concessions 1026058 212 PREMIUM WATERS INC Operating Supplies - Water Fire 1026038 201 BOYER TRUCKS Equipment Parts Fleet Operating 276856 200 EPCA HAPPY BEES DANCING GROUP Other Contracted Services PeopleFest 276867 200 HARISEN DAIKO Other Contracted Services PeopleFest 276923 196 PROP - PR Charitable Contributions Health and Benefits 1026096 171 GRAYBAR Supplies - Electrical Pool Maintenance 276926 170 RED BULL DISTRIBUTING COMPANY INC Liquor Product Received Den Road Liquor Store 1026046 169 GRAINGER Equipment Parts City Hall (City Cost) 1026041 164 ECM PUBLISHERS INC Legal Notices Publishing City Clerk 276992 158 DODGE OF BURNSVILLE Equipment Parts Fleet Operating Check # Amount Supplier / Explanation Account Description Business Unit Comments 1026062 157 STERICYCLE INC Other Contracted Services Police Sworn 1026052 155 MINNESOTA EQUIPMENT Equipment Parts Fleet Operating 276904 150 MINT CONDITION DETAILING INC Equipment Repair & Maint Fleet Operating 277024 150 MINT CONDITION DETAILING INC Equipment Repair & Maint Fleet Operating 1026064 150 USA SECURITY Maintenance Contracts Water Treatment 277045 146 SIGNSOURCE Protective Clothing Fire 276899 144 MIDWEST SIGN & SCREEN PRINTING SUPPLY CO Operating Supplies Traffic Signs 276851 141 E A SWEEN COMPANY Merchandise for Resale Concessions 1026109 141 SHI CORP Software IT Operating 276928 138 SCHLOSSMACHER, JIM Mileage & Parking Police Sworn 276932 138 STEEL TOE BREWING LLC Liquor Product Received Den Road Liquor Store 1026027 128 STOVRING, LESLIE Mileage & Parking Stormwater Non-Capital 277022 126 MINNESOTA ICE SCULPTURES LLC Liquor Product Received Prairie Village Liquor Store 277026 125 MWF PROPERTIES Deposits Stormwater Non-Capital 1026016 124 FASTENAL COMPANY Equipment Parts Fleet Operating 276986 123 COMCAST Cable TV Fire 277040 120 PRAIRIE LAWN AND GARDEN Equipment Repair & Maint Stormwater Collection 1026114 120 VIKING ELECTRIC SUPPLY Supplies - Electrical City Center - CAM 276913 120 OFFICE OF THE SECRETARY OF STATE Licenses, Taxes, Fees Human Resources 277038 120 PETERSON COUNSELING AND CONSULTING Other Contracted Services Police Sworn 277032 115 OXYGEN SERVICE COMPANY EMS Supplies-Oxygen Supplies Fire 276892 114 LONDONO MATIAS P&R Refunds Community Center Admin 277016 114 MACQUEEN EQUIPMENT INC Equipment Parts Fleet Operating 277043 110 ROOTSTOCK WINE COMPANY Liquor Product Received Den Road Liquor Store 276912 109 NORTHLAND CHEMICAL CORP Operating Supplies Fleet Operating 276903 109 MINNESOTA TROPHIES & GIFTS Operating Supplies Park Maintenance 277033 105 PAFFY'S PEST CONTROL Contract Svcs - Pest Control Historical Buildings 1026015 104 CONCRETE CUTTING AND CORING Equipment Repair & Maint Stormwater Collection 276902 100 MINNESOTA DEPT OF LABOR AND INDUSTRY Licenses, Taxes, Fees City Center - CAM 276944 92 VERIZON WIRELESS Telephone IT Operating 277062 90 MINNESOTA POST BOARD Licenses, Taxes, Fees Police Sworn 276988 90 COMCAST Internet IT Operating 276997 89 FAVORS HEATHER P&R Refunds Community Center Admin 276905 84 MODIST BREWING COMPANY Liquor Product Received Den Road Liquor Store 276843 82 CONTINENTAL SAFETY EQUIPMENT Repair & Maint - Ice Rink Ice Arena Maintenance 276824 81 ASPEN CARPET CLEANING Janitor Service Prairie View Liquor Store 1026094 80 GINA MARIAS INC Operating Supplies Volunteers 1026078 76 MILLENDER LARRY Mileage & Parking Round Lake Beach 1026098 75 HORIZON COMMERCIAL POOL SUPPLY Chemicals Round Lake 276816 74 ADCO PROPERTIES AR Utility Water Enterprise Fund 276886 73 LATTIMORE ANDREW Mileage & Parking Round Lake Beach 276907 72 MULTIHOUSING CREDIT CONTROL Other Contracted Services Police Sworn 276942 72 UNITED WAY Charitable Contributions Health and Benefits 276985 67 COMCAST Cable TV Fire 1026021 66 KRISS PREMIUM PRODUCTS INC Supplies - HVAC City Center - CAM 276931 63 ST FRANCIS VETERINARY CLINIC Canine Supplies Police Sworn 276830 62 BOUND TREE MEDICAL LLC EMS Supplies Fire 1026065 60 VIKING ELECTRIC SUPPLY Supplies - Electrical City Center - CAM 7828 59 PAYCHEX Payroll Admin. Fees 494 Corridor Commission 277057 59 URBAN GROWLER BREWING COMPANY LLC Liquor Product Received Den Road Liquor Store 276852 58 EDEN PRAIRIE CRIME PREVENTION FUND Charitable Contributions Health and Benefits 1026035 56 2ND WIND EXERCISE Equipment Repair & Maint Fitness Center Check # Amount Supplier / Explanation Account Description Business Unit Comments 276839 53 COMCAST Internet IT Operating 276900 50 MINNESOTA CITY/COUNTY MANAGEMENT ASSOCIA Dues & Subscriptions Administration 276910 48 NCPERS GROUP LIFE INSURANCE PERA Health and Benefits 276984 46 COMCAST Other Contracted Services Police Sworn 276866 45 HANZLIK, JAMES P&R Refunds Community Center Admin 276987 45 COMCAST Cable TV Fire 1026110 42 SPRINT Cell/Pager Plans IT Operating 277053 41 SUBURBAN CHEVROLET Equipment Parts Fleet Operating 276881 38 JERRY'S ENTERPRISES INC Equipment Parts Water Distribution 276853 30 EDEN PRAIRIE FOUNDATION Charitable Contributions Health and Benefits 276854 30 EDEN PRAIRIE FOUNDATION Charitable Contributions Health and Benefits 1026081 28 SVOBODA, ANTHONY Operating Supplies Fire 1026029 22 TOLL GAS AND WELDING SUPPLY Repair & Maint. Supplies Utility Operations - General 1026032 22 WAYTEK INC Equipment Parts Fleet Operating 1026024 20 RUNNING, DEAN Miscellaneous Organizational Services 1026084 17 WAYTEK INC Equipment Parts Fleet Operating 276930 17 SHRED RIGHT Waste Disposal City Hall (City Cost) 1026074 15 FASTENAL COMPANY Safety Supplies Fleet Operating 1026113 10 UPS Postage Fire 276840 2 COMCAST Other Contracted Services Police Sworn 276965 2 A TO Z RENTAL CENTER Repair & Maint. Supplies Fire 4,830,595 Grand Total City of Eden Prairie Purchasing Card Payment Report 9/15/2020

Amount Account Description Business Unit 7,885 Other Revenue General Fund 4,295 Tuition Reimbursement/School Police Sworn 2,286 Small Tools Fire 1,360 Conference/Training Utility Operations - General 911 Operating Supplies Inspections-Administration 868 Operating Supplies Riley Lake 861 Lubricants & Additives Fleet Operating 828 Bank and Service Charges Prairie View Liquor Store 819 Software Facilities Staff 675 Tuition Reimbursement/School Police Sworn 626 Training Supplies Police Sworn 613 Miscellaneous Volunteers 569 Other Contracted Services Prairie Village Liquor Store 569 Other Contracted Services Den Road Liquor Store 569 Other Contracted Services Prairie View Liquor Store 545 Conference/Training Assessing 480 Protective Clothing Fire 478 Operating Supplies Arts Center 460 Repair & Maint. Supplies Utility Operations - General 449 Clothing & Uniforms Community Center Admin 440 Repair & Maint. Supplies Police (City Cost) 430 Operating Supplies Ice Operations 412 Licenses, Taxes, Fees Fitness Classes 400 Conference/Training Assessing 390 Operating Supplies Police Sworn 375 Miscellaneous Parks Administration 361 Building Materials Street Maintenance 359 Tuition Reimbursement/School Police Sworn 347 Software/Hardware Maint. IT Operating 345 Conference/Training Assessing 341 Conference/Training Street Maintenance 340 Repair & Maint. Supplies Police (City Cost) 325 Equipment Repair & Maint Public Safety Communications 312 Advertising Arts Center 304 Conference/Training Pool Operations 299 Conference/Training Fleet Operating 295 Repair & Maint. Supplies City Center - CAM 292 Operating Supplies Police Sworn 274 Operating Supplies Youth Programs Admin 260 Office Supplies Police Sworn 259 Conference/Training Pool Operations 250 Licenses, Taxes, Fees Utility Operations - General 250 Awards Finance 242 Repair & Maint. Supplies Stormwater Collection Amount Account Description Business Unit 237 Repair & Maint. Supplies Facilities Operating ISF 225 Repair & Maint. Supplies Facilities Operating ISF 224 Clothing & Uniforms Pool Operations 220 Operating Supplies Round Lake Beach 217 Employee Award Organizational Services 214 Repair & Maint. Supplies Utility Operations - General 210 Operating Supplies Arts Center 210 Conference/Training Pool Operations 206 Miscellaneous City Council 205 Operating Supplies Arts Center 200 Lime Residual Removal Water Treatment 200 Conference/Training Utility Operations - General 194 Other Contracted Services Prairie Village Liquor Store 194 Other Contracted Services Den Road Liquor Store 194 Other Contracted Services Prairie View Liquor Store 186 Safety Supplies Utility Operations - General 183 Operating Supplies Arts Center 175 Operating Supplies Arts Center 169 Operating Supplies Prairie View Liquor Store 163 Operating Supplies Park Maintenance 155 Training Supplies Utility Operations - General 154 Operating Supplies Arts Center 150 Conference/Training Utility Operations - General 147 Repair & Maint. Supplies Stormwater Collection 147 Safety Supplies Park Maintenance 146 Operating Supplies Outdoor Center 144 Operating Supplies Arts Center 143 Operating Supplies Outdoor Center 143 Cleaning Supplies Facilities Operating ISF 142 Merchandise for Resale Concessions 140 Conference/Training Fleet Operating 140 Clothing & Uniforms Street Maintenance 132 Office Supplies Fire 127 Operating Supplies IT Operating 126 Operating Supplies Prairie View Liquor Store 124 Canine Supplies Police Sworn 123 Operating Supplies Outdoor Center 121 Operating Supplies Youth Programs Admin 120 Operating Supplies Elections 120 Operating Supplies Arts Center 117 Training Supplies Police Sworn 110 Office Supplies Fire 108 Operating Supplies Arts Center 108 Operating Supplies Arts Center 108 Dues & Subscriptions Fire 108 Operating Supplies Police Sworn 108 Video & Photo Supplies Community Center Admin 106 Operating Supplies Youth Programs Admin Amount Account Description Business Unit 104 Operating Supplies Park Maintenance 102 Operating Supplies Community Center Admin 102 Repair & Maint. Supplies Fire Station #1 102 Miscellaneous Volunteers 101 Operating Supplies Pool Operations 100 Conference/Training Heritage Preservation 100 Licenses, Taxes, Fees Fitness Classes 100 Operating Supplies Arts Center 100 Operating Supplies Arts Center 99 Operating Supplies Arts Center 98 Tuition Reimbursement/School Police Sworn 97 Operating Supplies Police Sworn 97 Operating Supplies Arts Center 96 Merchandise for Resale Concessions 93 Repair & Maint. Supplies Utility Operations - General 92 Operating Supplies IT Operating 90 Small Tools Fleet Operating 89 Safety Supplies Park Maintenance 87 Training Supplies Utility Operations - General 87 Software/Hardware Maint. Fire 86 Small Tools Fire 84 Operating Supplies Arts Center 80 Operating Supplies Preschool Events 80 Merchandise for Resale Concessions 77 Training Supplies Police Sworn 75 Tuition Reimbursement/School Police Sworn 75 Tuition Reimbursement/School Police Sworn 75 Tuition Reimbursement/School Police Sworn 75 Safety Supplies Utility Operations - General 75 Deposits General Fund 75 Operating Supplies Youth Programs Admin 73 Operating Supplies Arts Center 72 Operating Supplies Youth Programs Admin 71 Operating Supplies Riley Lake Beach 70 Clothing & Uniforms Recreation Admin 70 Computers IT Operating 70 Deposits General Fund 69 Operating Supplies Pool Operations 67 Equipment Parts Fleet Operating 66 Operating Supplies Round Lake Beach 65 Computers IT Operating 65 Process Control Equipment IT Operating 65 Operating Supplies Arts Center 64 Deposits General Fund 64 Operating Supplies Fleet Operating 64 Operating Supplies Police Sworn 61 Repair & Maint. Supplies Utility Operations - General 61 Office Supplies Police Sworn Amount Account Description Business Unit 60 Clothing & Uniforms Athletic Programs Admin 59 Operating Supplies Arts Center 59 Operating Supplies Outdoor Center 59 Operating Supplies Arts Center 58 Cleaning Supplies Facilities Operating ISF 56 Operating Supplies Arts Center 55 Process Control Equipment IT Operating 55 Dues & Subscriptions Police Sworn 55 Repair & Maint. Supplies Police (City Cost) 54 Operating Supplies Youth Programs Admin 52 Operating Supplies Arts Center 52 Repair & Maint. Supplies Stormwater Collection 51 Conference/Training Street Maintenance 50 Operating Supplies Elections 50 Equipment Repair & Maint Public Safety Communications 50 Operating Supplies Youth Programs Admin 45 Protective Clothing Fire 44 Operating Supplies Youth Programs Admin 43 Gas Stormwater Collection 40 Operating Supplies Senior Center Admin 40 Training Supplies Police Sworn 40 Operating Supplies Police Sworn 40 Dues & Subscriptions Police Sworn 40 Operating Supplies Fire 38 Operating Supplies Arts Center 37 Operating Supplies Police Sworn 37 Operating Supplies PeopleFest 36 Repair & Maint. Supplies Wasterwater Collection 36 Office Supplies Utility Operations - General 35 Operating Supplies Outdoor Center 35 Operating Supplies IT Operating 34 Office Supplies Fire 33 Operating Supplies Fitness Admin. 32 Equipment Repair & Maint Public Safety Communications 32 Operating Supplies Fleet Operating 32 Equipment Repair & Maint Water Treatment 30 Office Supplies Police Sworn 30 Operating Supplies Arts Center 29 Training Supplies Police Sworn 28 Operating Supplies Fitness Admin. 28 Operating Supplies Arts Center 28 Repair & Maint. Supplies Wastewater Lift Station 28 Operating Supplies Arts Center 28 Operating Supplies Youth Programs Admin 28 Training Supplies Police Sworn 28 Employee Award Organizational Services 27 Operating Supplies Youth Programs Admin 27 Operating Supplies Fire Amount Account Description Business Unit 27 Operating Supplies Youth Programs Admin 26 Operating Supplies Youth Programs Admin 26 Safety Supplies Fleet Operating 26 Operating Supplies Riley Lake Beach 25 Operating Supplies Outdoor Center 25 Operating Supplies Outdoor Center 24 Operating Supplies Outdoor Center 23 Operating Supplies Pool Lessons 23 Equipment Repair & Maint Water Treatment 22 Operating Supplies IT Operating 21 Operating Supplies Police Sworn 21 Repair & Maint. Supplies Wastewater Lift Station 21 Operating Supplies Ice Lessons 21 Training Supplies Fire 21 Operating Supplies Arts Center 21 Operating Supplies Arts Center 21 Operating Supplies Arts Center 21 Operating Supplies Outdoor Center 20 Employee Award Organizational Services 20 Software/Hardware Maint. IT Operating 20 Dues & Subscriptions Police Sworn 19 Operating Supplies Round Lake Beach 19 Operating Supplies Arts Center 19 Operating Supplies Ice Operations 19 Operating Supplies Arts Center 18 Operating Supplies Arts Center 18 Clothing & Uniforms Community Center Admin 18 Operating Supplies Arts Center 17 Operating Supplies Police Sworn 17 Operating Supplies Arts Center 16 Operating Supplies Pool Operations 16 Other Contracted Services Organizational Services 16 Dues & Subscriptions Housing and Community Service 16 Merchandise for Resale Concessions 16 Operating Supplies Ice Operations 16 Operating Supplies Arts Center 15 Operating Supplies Pool Lessons 15 Miscellaneous Parks Administration 15 Operating Supplies Riley Lake Beach 15 Operating Supplies Round Lake Beach 15 Operating Supplies Riley Lake Beach 15 Operating Supplies Round Lake Beach 14 Operating Supplies Volunteers 14 Equipment Repair & Maint Water Treatment 12 Repair & Maint. Supplies Utility Operations - General 12 Operating Supplies Arts Center 12 Operating Supplies Tree Disease 12 Operating Supplies Community Center Admin Amount Account Description Business Unit 11 Equipment Repair & Maint Public Safety Communications 10 Operating Supplies Arts Center 10 Operating Supplies Arts Center 9 Operating Supplies Park Maintenance 9 Repair & Maint. Supplies Stormwater Collection 9 Repair & Maint. Supplies Utility Operations - General 9 Merchandise for Resale Concessions 9 Operating Supplies Arts Center 9 Operating Supplies IT Operating 9 Operating Supplies Police Sworn 8 Operating Supplies Outdoor Center 8 Training Supplies Fire 6 Operating Supplies Arts Center 6 Licenses, Taxes, Fees Utility Operations - General 6 Training Supplies Police Sworn 6 Operating Supplies Arts Center 5 Merchandise for Resale Concessions 5 Licenses, Taxes, Fees Fleet Operating 5 Licenses, Taxes, Fees Fleet Operating 4 Dues & Subscriptions Police Sworn 4 Operating Supplies Youth Programs Admin 3 Bank and Service Charges Customer Service -8 Video & Photo Supplies Community Center Admin -14 Operating Supplies Prairie View Liquor Store -15 Training Supplies Police Sworn -21 Operating Supplies Arts Center -26 Training Supplies Police Sworn -40 Operating Supplies Arts Center -52 Operating Supplies Arts Center -75 Tuition Reimbursement/School Police Sworn -75 Tuition Reimbursement/School Police Sworn -95 Cleaning Supplies Facilities Operating ISF -99 Operating Supplies Arts Center -105 Conference/Training Assessing -110 Office Supplies Fire -350 Tuition Reimbursement/School Police Sworn -371 Conference/Training Human Resources -714 Deposits General Fund -1,783 Lab Supplies Water Treatment 44,691 Report Total CITY COUNCIL AGENDA DATE:

SECTION: Report of the City Manager September 15, 2020

DEPARTMENT/DIVISION: ITEM DESCRIPTION: ITEM NO.: Office of the City Manager/ Resolution certifying the proposed 2021 property tax XIV.B.1. Finance, Sue Kotchevar levy, accepting the proposed 2021 budget, setting the date for public hearing, and consenting and approving the HRA tax levy

Requested Action

Move to adopt the resolution that: • Certifies the proposed 2021 property tax levy to be $41,014,490; and • Sets December 1, 2020, as the meeting which will include discussion of the budget and provide for public comment; and • Accepts the proposed 2021 budget of $53,055,474; and • Consents and approves the HRA tax levy of $200,000.

Synopsis

Minnesota Law and administration rules prescribe a detailed process for public notification and participation in setting taxes and budgets of local governments. Cities must adopt a proposed property tax levy and certify that amount to the county auditor on or before September 30, 2020. In addition, the City Council must accept a proposed budget for the coming year.

The City must announce at this Council meeting the future time and date of the regularly scheduled meetings at which the budget and tax levy will be discussed and public testimony taken. The Council must adopt a final tax levy and budget by December 28.

Minnesota Law authorizes the HRA to levy a tax with the consent of the City Council. This resolution gives the consent needed for the HRA.

Attachments

Resolution Tax Levy Exhibit 2021 Proposed Budget Report

CITY OF EDEN PRAIRIE HENNEPIN COUNTY, MINNESOTA

RESOLUTION NO. 2020-__

A RESOLUTION ADOPTING THE CITY’S PROPOSED 2021 PROPERTY TAX LEVIES, ACCEPTING A PROPOSED BUDGET FOR GENERAL OPERATIONS AND TAX-SUPPORTED OBLIGATIONS FOR 2021, AND CONSENTING AND APPROVING THE 2021 HRA LEVY

WHEREAS, the City Council of the City of Eden Prairie has reviewed the City Manager’s recommended 2021 budget and tax levies; and

WHEREAS, the City Council has decided to accept these recommendations at this time.

NOW, THEREFORE, BE IT RESOLVED that the City Council:

1. Establishes the following proposed taxes on real and personal property within the City of Eden Prairie for the 2021 budget.

Taxes to be Levied Against Tax Capacity General Fund $ 38,061,490 Capital Improvements 400,000 Bonds and Interest 2012B SouthWest Fire Station 280,000 2014A Tax Abatement Bonds 0 Tax Capacity Levy for Certification 38,741,490

Less Fiscal Disparities Distribution 2,233,830 Net Tax Collectible 36,507,660

Taxes to be Levied Against Market Value 2012A Park Bonds 876,000

Market Value Tax Levy for Certification 876,000

Tax Abatement 1,397,000

Total Net Tax Collectible $ 38,780,660

Funds have been provided for principal and interest payments on all bond issues except as shown above, and no other levies are required (as shown in Exhibit 2).

The proposed total Levy may not be exceeded when the City Council sets the final tax levy for 2021.

2. Accepts the 2021 proposed levy of $41,014,490 and proposed budget totaling $53,055,474 at this time.

3. Consents and approves the 2021 HRA tax levy of $200,000.

ADOPTED by the City Council on September 15, 2020.

______Ronald A. Case, Mayor

ATTEST:

______Kathleen Porta, City Clerk

CITY OF EDEN PRAIRIE NOTICE OF ADJUSTMENT TO REQUIRED DEBT LEVIES LEVIED YEAR 2020, COLLECTED YEAR 2021 EXHIBIT 2

Debt levy amounts previously certified may be adjusted to the amounts shown below due to the availability of other repayment sources.

Date of Amount of Required Levy Actual Levy OUTSTANDING DEBT WITH REQUIRED LEVY Issue Issue 2019/2020 2020/2021

G.O. Park Bonds 2012A 03/01/12 $5,110,000 $986,114.07 $876,000 G.O. Capital Imrpovement Crossover Refunding Bonds 2012B 02/21/12 $3,170,000 $316,791.57 $280,000 G.O. Tax Abatement Bonds 2014A 06/17/14 $17,155,000 $1,459,408.13 $1,397,000

GRAND TOTAL $2,762,313.77 $2,553,000

City of Eden Prairie 2021 Proposed Budget September 15, 2020

TABLE OF CONTENTS

Table of Contents ...... 1

Budget Overview ...... 2

City Survey ...... 5

Tax Base ...... 7

Tax Levy and Budget ...... 8

Debt Levy ...... 8

Capital Levy ...... 9

General Fund Revenue Budget ...... 10

General Fund Expenditure Budget ...... 13

Housing and Redevelopment Authority (HRA) ...... 18

Conclusion ...... 19

1

BUDGET OVERVIEW The 2021 proposed budget provides the resources to achieve the City’s goals for Eden Prairie citizens. These goals are part of the Eden Prairie Promise and are embedded in the City’s vision, mission and performance measures. We are continuing to meet the needs of residents while finding ways for improvement and keeping costs affordable. As part to the two year budget process, the City developed objectives. Due to COVID-19, some objectives have changed. Below are the City Council 2020/2021 budget objectives with added objective for 2021 in bold type.

Achieve City Goals • Community Well-being & Safety • High Quality Efficient Services • Preserved & Beautiful Environment • Sense of Community • Innovative & Sustainable Practices • Economic Vitality

Provide Value to Citizens • Maintain High Quality City Services • Reasonable Tax Impacts

Maintain Employee Morale and Engagement • Implement efficiencies and innovations that motivate employees to continually improve the organization and providing salary changes that are consistent with public and private sector trends

Maintain Strong Financial Position • Maintain Bond Rating o Approve a Balanced Budget o Maintain Fund Balance Policies o Conservative Estimates of Revenues and Expenditures o Review fees and charges annually, at a minimum adjust for inflation o Capital Planning

2

The City Council is emphasizing the following areas to achieve City Goals for this budget cycle:

o Race Equity Initiative . Proposed Areas of Inquiry and Focus • City Emergency Response • City Program Accessibility and Culture • City Recruiting, Hiring and Retention • Connection to Community • Community Experience • Developing Future Leaders

o Affordable Housing . Implement Housing Task Force

o Sustainability . City-wide Energy Action Plan . City Solar . LED Lights . Organics . Yard Waste Drop-Off Site . Pollinators/”Keep the Prairie in Eden Prairie” . Fleet Electrification . Emerald Ash Borer Program

o Transportation . Oversee Light Rail Transit construction in Eden Prairie and over $20,000,000 in road improvement projects . Bridge Inspections and MSA Counts

o Sense of Community/Community Identity . PeopleFest – on-line 2020 . Hometown Celebration: July 3-4 - on-line 2020 . Art Events and Initiatives

3

. Entry Monument signs

. Promoting historic properties

. Provide ways to engage with City Government:

• City Government Academy – Cancelled 2020

• “Real Talk with Rick” Podcast

• Engagement through technology: Online Engagement Platform, Social Media, City Website, Email/Text Subscriptions, EP See Click Fix

o Public Safety . Add two additional police officers due to increased mental health and other calls, increased training requirements, and maintenance of minimum staffing levels. Add Officer to the Joint Terrorism Task Force.

o Parks and Recreation . Open new Staring Lake Building

The two year budget process began in March of 2019 with the review of the Community Survey. The process to date and future planned activities include the following: 2019 • March 2 – City Council Planning Session • March 5 – City Council Workshop on the Community Survey • May 21 – City Council Workshop o Council accepts 2018 financial results o Council adopts financial policies • July 16 - City Council Workshops • September 3 - Council adopts a preliminary tax levy and budget • November 12 – City Council Workshop on Enterprise Funds • December 3 - Public Meeting and Council adopts final tax levy and budget 2020 • May 5 – City Council Workshop - Council accepts 2019 financial results • August 18 – City Council Workshop • September 15 - Council adopts 2021 proposed tax levy and budget • December 1 - Public Meeting and adoption of final budget and tax levy 4

CITY SURVEY

The 2018 Quality of Life Survey provided residents the opportunity to rate the quality of life in the City of Eden Prairie, as well as the quality of service delivery and overall workings of local government. The survey also permitted residents to provide feedback to government on what is working well and what is not, and to share their priorities for community planning and resource allocation. The City uses the biannual citizen survey as one input tool for the budget.

Key Findings

Eden Prairie is a desirable place to live and raise a family. • Eden Prairie residents continue to boast a high quality of life, with 95% awarding excellent or good marks in 2018, which eclipsed averages seen across the nation, Minnesota and Central Region municipalities with populations over 15,000.

Residents’ high ratings for safety services contribute to their quality of life, though they have increasing concerns regarding youth crime and drugs.

• Residents commended safety services, such as fire, Hennepin County EMS, police and crime prevention, with each assigned excellent or good marks by 9 in 10 or more. Eden Prairie participants’ reviews for police and crime prevention outperformed all other municipality comparisons.

Community parks, recreation and natural environment continue to be a highlight. • More than 9 in 10 residents revealed admiration for the overall natural environment and opportunities for education and enrichment, maintaining standards set in previous years and outshining national, Minnesota and North Central communities with populations over 15,000.

Residents praise their City services. • In 2018, about 9 in 10 residents assigned high scores to the overall quality of services provided by the City of Eden Prairie, on par with 2016, but higher than 2014 levels. This measure eclipsed national, North Central and Minnesota comparisons.

5

Eden Prairie’s economy shines, but affordability could be an issue in the future. • Ninety-two percent of survey participants provided excellent or good assessments to the overall economic health of Eden Prairie, which surpassed ratings in communities elsewhere in the U.S., Minnesota and communities in the North Central Region with populations over 15,000.

The survey provides valuable input and demonstrates evidence of overall satisfaction with City services. The survey provided feedback on some concerns regarding affordable housing. The City Council goals include initiatives on affordable housing.

6

TAX BASE

The ability to levy and collect taxes is based on property market values, tax capacities, and the City tax rates. Below is a history of the City’s market value of all residential and commercial property.

$12,000,000,000

$10,000,000,000

$8,000,000,000

$6,000,000,000

Market Value Market $4,000,000,000

$2,000,000,000

$0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Year

The current estimated market value for taxes payable in 2021 is a market value increase to $11.4 billion, which is a 2.9% increase over 2020.

Below summarizes the City’s tax impact for residential, apartment, and commercial properties based on current information from the County.

Percent Property Type 2019/2020 2020/2021 Difference Change Residential ($415,800) $ 1,339 $ 1,335 $ (4) (0.3%) A partment ($5M ) $ 18,905 $ 19,973 $ 1,068 5.6% Commercial ($2M) $ 7,683 $ 7,682 $ (1) (0.0%)

7

TAX LEVY AND BUDGET

Below summarizes the proposed total tax levy and budget.

Tax Levy

2020 2021 Percent Fund Adopted Proposed Difference Change General Fund $ 36,668,102 $ 38,061,490 $ 1,393,388 3.8% Capital I mprovement Fund 400,000 400,000 - 0.0% Debt Levy 2,553,000 2,553,000 - 0.0% Sub-total 39,621,102 41,014,490 1,393,388 3.5% Less Fiscal Disparity Distribution (2,046,407) (2,233,830) (187,423) 9.2% Total Levy $ 37,574,695 $ 38,780,660 $ 1,205,965 3.2%

Budget

2020 2021 Percent Fund Adopted Proposed Difference Change General Fund $ 48,657,456 $ $ 50,102,474 $ 1,445,018 3.0% D ebt 2,553,000 2,553,000 - 0.0% Capital Levy 400,000 400,000 - 0.0% Total City Budget $ 51,610,456 $ $ 53,055,474 $ 1,445,018 2.8%

DEBT LEVY

For 2021 debt payments supported by the tax levy are projected to remain 5% to 6% of the general fund budget. The City has a policy of maintaining a percentage of 5% to 15% of the general fund budget as we consider this to be a moderate debt burden.

Moody’s Investors Service has assigned a rating of Aaa to the City of Eden Prairie’s (MN) bond for every debt issue since 2003, the highest rating from Moody’s. Standard & Poor’s has also assigned a rating of AAA to the City of Eden Prairie’s bonds outstanding, their higher rating as well. This ensures the City receives the most competitive interest rates. The City’s bond ratings reflect Eden Prairie’s extensive and diversified tax base, low amount of rapidly amortized debt, and capably managed operations. Of the 854 cities in Minnesota, there are only 14 rated Aaa by Moody’s Investors Service and 19 rated AAA by Standard & Poor’s.

8

For 2021, the total debt levy is the same as 2020 or $2,553,000. The City currently has three bonds that are supported by the debt levy. These include bonds for the SouthWest Fire Station, for Park Improvements including the community center, park, and trails, and for the aquatics expansion at the Community Center.

Below summarizes the detail of the 2021 debt levy.

2020 2021 Percent Debt Levy Adopted Proposed Difference Change Debt Levy on Tax Capacity 2012B SouthWest Fire Station $ 310,000 $ 280,000 (30,000)$ (9.7%) 2014 Tax A batement 1,397,000 1,397,000 - 0.0% Sub- total 1,707,000 1,677,000 (30,000) (1.8%)

Debt Levy on M arket Value 2011C Parks Referendum 165,000 - (165,000) (100.0%) 2012A Parks Referendum 681,000 876,000 195,000 28.6% Sub- total 846,000 876,000 30,000 3.5%

Total 2,553,000$ 2,553,000$ $ - 0.0%

CAPITAL LEVY

The City prepares a ten-year capital improvement plan and updates the plan every other year. The Capital Improvement and Maintenance fund (CIMF) pays for capital projects that do not have another funding source, for example, playground replacement, repair and expansion of trails, parking lot maintenance (parks), public safety radio replacement, etc. The CIMF is funded through liquor operations profit, rental income, antenna revenue, a tax levy, miscellaneous revenue, and one-time funds the City receives. For example, when the general fund has positive operating results, amounts not needed to meet the fund balance policy have been transferred to the CIMF. The capital levy is the same amount as 2020 and is $400,000 annually.

9

GENERAL FUND REVENUE BUDGET

Below summarizes the 2021 proposed General Fund Revenue Budget.

2020 2021 Percent Revenue Adopted Proposed Difference Change Taxes $ 35,959,740 $ 37,325,260 $ 1,365,520 3.8% Licenses and Permits 3,854,780 3,855,780 1,000 0.0% Intergovernmental Revenue 1,299,222 1,299,222 - 0.0% Charges for Services 6,331,556 6,468,995 137,439 2.2% Other Revenue 1,212,158 1,153,217 (58,941) (4.9%) Total $ 48,657,456 $ 50,102,474 $ 1,445,018 3.0% Property tax revenue is the single largest source of revenue and the City strives to balance increases in property taxes with the demand for City services. Property taxes account for 74% of the General Fund budget. The tax levy in the proposed budget is increasing 3.8% for 2021.

Charges for services is the second largest revenue source and accounts for 13% of the General Fund Budget. Charges for services are increasing $137,439 or 2.2% in 2021.

Licenses and permits revenue is the third largest revenue source to the General Fund and accounts for 8% of the General Fund revenues. Licenses and permits remains flat for 2021. Significant items to note include the following:

• Building permit and fees revenue was held flat for 2021 as we budget a higher increase every other year. The below history shows acutal amounts to 2019 and then budgeted amounts to 2021.

Building Permits & Fees Budget vs Actual $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 Actual $500,000 Budget $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

10

• Cable TV remains flat for 2021. As you can see from the graph below, cable revenue dropped for the first time in 2018.

Cable TV Revenue

$900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

11

Intergovernmental revenue (IGR) source includes Federal and State grants, State aid, and other local grants. During the legislative session PERA aid was eliminated as the legislature did not reauthorize this revenue source. Below is a history of Intergovernmental Revenue.

Intergovernmental Revenue

$1,400,000

$1,200,000

$1,000,000

$800,000

$600,000

$400,000

$200,000

$0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Police Pension Aid Fire Relief Assoc. Aid Other Intergovernmental Revenue

Other revenues that the General Fund receives consist of fines and penalties, contributions, interest income, reimbursements and transfers–in. These revenues make-up 2.5% of the General Fund Revenues.

12

GENERAL FUND EXPENDITURE BUDGET

2020 2021 Percent Expenses Adopted Proposed Difference Change Administration $ 4,734,458 $ 4,707,669 $ (26,789) (0.6%) Community Development 2,450,407 2,538,978 88,571 3.6% Parks and Recreation 13,020,985 13,382,734 361,749 2.8% Police 15,729,265 16,385,600 656,335 4.2% Fire 6,348,571 6,579,014 230,443 3.6% Public Works 6,353,770 6,488,479 134,709 2.1% Transfers 20,000 20,000 - 0.0% Total $ 48,657,456 $ 50,102,474 $ 1,445,018 3.0%

Revenues Less Expenses $ - $ - $ - 0.0% Expenditures are proposed to increase 3.0% in 2021. The following graph shows the budget changes by category:

2021 Budget Changes Other, $78,888

Facilities, $168,051

Information Technology, $100,963

Fleet Services, $67,017 Wages and Benefits, $1,009,537 Electricity, $32,727 Other Contracted Services, -$12,165

Since the City provides significant services to the community, wages and benefits make up 62% percent of the general fund budget. The most significant categories include wages, pension and taxes, health insurance, part-time wages, and workers compensation insurance. Other significant costs include amounts to maintain facilities, fleet services, information

13

technology, and electricity. These items make up another 23% of the budget. All other items make up 15% of the budget. The chart below illustrates the make-up of the budget.

2021 Budget by Category

Other, $6,178,204

Facilities, $5,520,672

Information Technology, $2,514,443 Wages and Benefits, $31,134,848 Fleet Services, $2,541,310

Electricity, $1,124,607

Other Contracted Services, $1,088,390

14

Below provides information on the significant items in the budget.

Full-Time Wages

With a staff of 228 full-time employees, the City provides its residents and businesses with a full range of municipal services consisting of police and fire protection, street maintenance, recreation programs, park maintenance, community and economic development, and building inspections.

Wages are proposed to increase 3.8% in 2021. This includes a 3% base increase, step increases and performance pay. In addition, a police officer position has been added. Through staff turnover, the City usually sees budget reduction as new staff are many times hired at a lower rate. However, new employees earn step increases and performance pay until they reach the target rate for their position, which then adds additional increases to the budget.

The City prepares the budget for wages by looking at trends within the private sector labor market and our local government peer group. Based on the compensation trends we are seeing, we are proposing a 3% wage increase in 2021. This proposal is in line with our peer cities and the private sector. We must continue to provide similar increases as the private sector and our public sector peer cities to remain competitive.

Part Time Wages

Wages part-time are decreasing $65,652 or 2.4% in 2021. For 2021, the election budget was decreased as we move into a year without an election.

Volunteer Wages/Duty Crew

Volunteer wages are increasing $28,000 or 3% in 2021. The duty crew model was implemented in July of 2012.

15

Fire Relief Pension Plan

Firefighters of the City of Eden Prairie are members of the Eden Prairie Firefighter Relief Association. The Association is the administrator of the single-employer defined benefit pension plan available to firefighters. The plan is administered pursuant to Minnesota Statutes Chapter 69, Chapter 424A, and the Association’s by-laws. As of December 31, 2017, membership includes 100 active participants, 97 retirees and beneficiaries currently receiving benefits, and 20 terminated employees entitled to benefit but not yet receiving them.

Minnesota Statues specifies minimum support rates required on an annual basis by the City. The Association completes an actuarial study every two years which documents the required contribution from the City. For 2020, the required amount is $677,535 annually, which was $290,991 less than 2019. We have budgeted the same amount for 2021. The City receives Fire Relief Pension Aid from the State of approximately $450,000, which offsets the City’s required contribution.

PERA

The City pays public employees retirement (PERA) benefits for all eligible employees. Generally all full time employees and part-time employees, who earn more than $425 a month, are PERA eligible. The City currently contributes 7.50% of salary for PERA except for the police and fire employees where the percent is 17.7% for 2021. The City also pays 7.65% of salary for FICA except for police and fire where the percentage is 1.45%. The City has budgeted $3,720,979 for PERA/FICA in 2021.

Health Insurance

The City periodically conducts a Request for Proposal (RFP) process to procure health insurance. State law requires that the City issue a RFP every five years. In 2017, the City Council approved a five-year health insurance contract with HealthPartners for 2018 to 2022.

For 2021, the rate cap is 9%, but the increase came in at 5.95%. The budget is increasing 7% due to the addition of the affordable care act fees. We are keeping the HSA/HRA payments

16

to employees the same which reduces the increase. Also, every year employees can choose different plan options which affects the change in costs.

INTERNAL SERVICE FUNDS

FACILITIES USER CHARGES

The Facilities Division is responsible for building related operations, preventative maintenance, remodeling, and long-term maintenance programs of the facilities owned by the City. The buildings include the City Center, Community Center, Senior Center, Outdoor Center, Art Center, Maintenance Facility, four Fire Stations, park shelters, and historical buildings. Facilities charges back to the internal users for these services.

Facility user charges are increasing from $5,352,621 in 2020 to $5,520,672 in 2021 which is a 3.1% increase.

IT USER CHARGES

The Information Technology Division is responsible for providing strategic technology direction and managing and implementing IT governance processes in support of City leadership. IT develops and implements IT operational policies and standards, manages contracts for IT services with various service providers, and coordinates major citywide activities including:

• General PC/Phone Systems Support; • Network Wellness (Network Hardware/Servers/Enterprise Applications); • Application Analysis, Implementation and Support and; • Technology Analysis, Recommendation and Implementation.

IT charges back to the internal users for these services.

For the General Fund, IT user charges are increasing from $2,413,480 in 2020 to $2,514,443 which is a 4.2% increase.

17

FLEET SERVICES USER CHARGES

Fleet services provides and maintains a safe, high quality, reliable and efficient fleet of vehicles and equipment. They manage approximately 300 vehicles and large pieces of equipment. The fleet includes police and fire vehicles, snowplows, dump trucks, pickup trucks and autos. Fleet Services is also continuing sustainability efforts this budget cycle to implement additional plug-in electric vehicles and improve building electrical infrastructure to support more electric vehicle charging stations. Fleet Services charges back to the internal users for these services.

Fleet services user charges for the general fund are increasing 2.7% in 2021 to $2,541,310. The Fleet Services budget is able to hold fairly constant through this budget cycle primarily due to the relative stability of fuel prices, regular maintenance of the fleet, and the City’s continued efforts to conserve fuel and improve vehicle and equipment fuel economy.

HOUSING AND REDEVELOPMENT AUTHORITY (HRA)

In 1980, the City of Eden Prairie established a Housing and Redevelopment Authority for the City. The HRA may spend resources for the following:

• to provide a sufficient supply of adequate, safe, and sanitary dwellings in order to protect the health, safety, morals, and welfare of the citizens of this state; • to clear and redevelop blighted areas; • to perform those duties according to comprehensive plans; • to remedy the shortage of housing for low and moderate income residents, and to redevelop blighted areas, in situations in which private enterprise would not act without government participation or subsidies.

Housing and Redevelopment Authorities can levy a tax of up to .0185 percent of estimated market value. The levy limit for the City of Eden Prairie HRA is approximately $2.1M. In 2006, the Council approved the HRA levy for the first time.

The HRA levies and pays for wages and benefits related to the support of housing in the City. It includes staff time from Housing and Community Services, Community Development, Planning, and Administratin of Rental Housing Licensing. Wages and benefits total $196,470 for 2021.

18

Other City resources for housing on an annual basis include:

• Tax Increment Financing, $1,400,000 • Community Development Block Grant, $300,000 to $500,000 • General Fund – Housing Inspections, 125,000 • HRA, $200,000

Amounts provided are 2021 estimates.

CONCLUSION

This document is intended to provide information on the proposed 2021 City of Eden Prairie budget. If you have any questions about the budget contact a member of the finance team or the individual operating areas.

19