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09/07/2010 Work Session
CITY OF COLUMBIA HEIGHTS Mayor C;my L. Peterson Councilmembers Robert A. Wit /lams 40th Bruce Nawrueki 590 40 Avenue NE, Columbia Heights, MN 55421 -3878 (763)706 -3600 TDD (763) 706 -3692 7ln,unero Diel,m Veit our website at: www.ci. columbia- heiRhts.mn.us Bruce Kel:enherg City Manager Walter R. Fehr, ADMINISTRATION NOTICE OF CITY COUNCIL MEETING * * * * * * * * * * ** to be held in the CITY OF COLUMBIA HEIGHTS as follows: Meeting of: COLUMBIA HEIGHTS CITY COUNCIL Date of Meeting: TUESDAY, SEPTEMBER 7, 2010 Time of Meeting: 7:00 P.M. Location of Meeting: CONFERENCE ROOM 1 Purpose of Meeting: WO SESSION 1. Inflow /Infiltration Program - Sanitary sewer collection district 2 flow testing: report and analysis. 2. Certain fund balance transfers, classifications, and policies explanation/discussion. 3. Institutional Network discussion. 4. 2011 Budget discussion. The City of Columbia Heights does not discriminate on the basis of disability in the admission or access to, or treatment or employment in, its services, programs, or activities. Upon request, accommodation will be provided to allow individuals with disabilities to participate in all City of Columbia Heights' services, programs, and activities. Auxiliary aids for handicapped persons are available upon request when the request is made at least 96 hours in advance. Please call the City Clerk at 763 - 706 -3611 to make arrangements. (TDD /706 -3692 for deaf or hearing impaired only) CITY COUNCIL LETTER Meeting of: AGENDA SECTION: Work session discussion ORIGINATING DEPARTMENT: CITY MANAGER NO: PUBLIC WORKS ITEM: Sanitary Sewer Collection District 2: I/I report BY: K. Hansen By 4./ 7/ and analysis DATE: DATE: Background: The City of Columbia Heights is currently paying a surcharge on our sanitary sewer bill to Metropolitan Council Environmental Services (MCES) in the amount of $81,900, annually. This surcharge is for non - sewage flow from inflow or infiltration (I /I) sources in sewer collection district 2 (see attached map). This surcharge may be reduced to zero, or offset, by eligible expenditures the City makes in I/I reduction measures annually. An example of this is the sump pump disconnect program. In 2005 the Metropolitan Council adopted the following policy: The Council will not provide additional capacity within its interceptor system to serve excessive inflow and infiltration. The Council will establish inflow and infiltration goals for all communities discharging wastewater to the Metropolitan disposal System based on the designed peak -hour capacity of the interceptor(s) serving the community. Communities that have excessive inflow and infiltration in their sanitary sewer systems will be required to eliminate the excessive inflow and infiltration within a reasonable time period. The reasonable time period the MCES established and related surcharge is in place is for a 5 -year period from 2007 -2012. A report detailing the MCES I/I Surcharge Program may be found at: hap : / /metrocounci I.org /envi ronment/ProjectTeams/ documents /I- I- SurchargeProQram2005.pdf Analysis /Conclusions: Peak exceedance is still occurring at the MCES meter located at 37 Avenue and 5 Street from collection district 2. When the sump pump disconnect program was initiated in 2007, it was known that it may only be a first step in reducing clear water sources and that additional reduction measures may be required depending on source types of inflow or infiltration (such as foundation drains). To further evaluate and better define potential inflow sources, flow testing was conducted in District 2 in smaller tributary areas or sub - collection districts. A copy of the flow testing report is attached for reference. The monitoring found that in 2 of the 4 sub - districts (5 Street metershed and Jefferson Street metershed) showed a directly related increase in flow to rainfall events. The meter data provided that the buildup in flow was gradual, which would indicate foundation drain connections. The report recommended that these lines be televised with a day or two after a rainfall event to corroborate increased (from dry weather) flows from services. Over the last several weeks, staff has been televising the sewer lines immediately following rainfall events. Several services have been shown with a continuous stream of clear water, further supporting the foundation drain connections. What was also shown is the high incidence of infiltration in the main line pipes and manholes in this area. Staff recommends the following: 1. Adding in the most significant infiltrating pipe sections to the 2010 Sanitary Sewer Lining program and subsequent years program. 2. Reconstruction of `brick' type manholes in this areas street rehabilitation zone year of 2011. It should be noted that these are eligible expenses that will offset the City's annual surcharge. A foundation drain disconnect program can be very expensive to a property owner depending how and where the drain is connected (range of $1,000 to $2,000, with some as high as $3,000). St. Anthony has a foundation drain disconnect program through a point of sale inspection. They have reported an average cost of $1,200 (2005 data). Staff recommends additional testing in this area by smoke testing or televising those service lines found to be continuous draining. RECOMMENDED MOTION: Discussion and direction on: 1. Additional sewer lining in the identified areas in Collection District 2; 2. Consideration of a Foundation Drain testing and disconnect program. COUNCIL ACTION: Inflow and Infiltration Flow Monitoring Final Report District #2 Foth Project Number: 100015 Prepared for City of Columbia Heights, Minnesota Prepared by Foth Thomas J. Madigan, PE July 29, 2010 8550 Hudson Blvd N. Lake Elmo, Minnesota 55042,651)288-8500, FAX: 651/288-8550 Table of Contents Page Executive Summary 1 Background and Findings 2-3 Recommendations 3-4 Graphs: 5 Street Flow Monitoring Graphs versus Rainfall Jefferson Street Flow Monitoring Graph versus Rainfall 39 Avenue Flow Monitoring Graph versus Rainfall 40 Avenue Flow Monitoring Graph versus Rainfall MCES Meter M107 Graph of Flow versus Rainfall Executive ,���CDIDve Summary The City of Columbia Height is currently paying Metropolitan Council Environmental Services for non-sewage flow at its 37Ih Avenue and 5th Street N.E. metering station. The City hired Foth Companies to install four meters to monitor flow within the City's District #2 sewer area to narrow down what areas within District #2 may be contributing k» the non-sewer flow. The meters were installed on May 3,2Ul0 and removed nn June l4,2OlU. The meters were installed at the following locations: • 5 Street N.B. and Orendorf Way (City manhole 35C106) • Jefferson Street N.E. south of4O' Avenue N.E. (City manhole ]5D67) • 39 th Avenue N.E. east ofJefferson Street N.E. (City manhole 35D34) • 40 Avenue N.E. west ofT.H. 65/Central Avenue N,E. (City manhole 35D27) Significant rainfall was recorded during the metering period totaling 5.27 inches which was well in excess of the average rainfall for this period. Three m jor rainfall events occurred during the monitoring, ay 7 (1 inch), _Tune 8 (0.87 inches), and June ll m (0.87 inches). The monitoring data from the four meters indentified that two of the locations (5`" Street and Jefferson Street) showed a correspond jump in flow tied to the rainfall events on June 8 and 11 There was not a similar jump on May 7, however, precipitation was 50% to 75% below norrnal for March and April leading up to the installation of the meters. Given the gradual buildup in flow from the ram events, we suspect that the flows are from foundation draM connections. We recommend that the City pursue a program of additional investigations. There are a number of options that it cari take including televising the sewer rnains the next day or two after a rainfall event to see if the sewage discharges from services increase compared to a non-rainfall period. Two other options would be to continue metering of manholes within the 5 Street and Jefferson Street areas to try to further pin down where the flows are coming from or televising the sanitary sewer service connections. The sewer service televising could be done in discrete sections of the two sewer areas within District #2. lfbin determined that foundation dram conneetions are prevalent, the City should explore establishing a program to separate the drains into sump pumps to discharge to the outside ground surface or direct to storm sewer in the street if it is available rather than to the sanitary sewer system. x:\wS\|s\2olo\}n[nl5-Oo\|000n Reports \cityv[ Columbia Heights | and | metering report T]wo7zy10 (Final).doc Page Recommendations Background The City of Columbia Heights is experiencing additional flows in District #2 during rainfall events as monitored by the Metropolitan Council Environmental Services (MCES) Meter located at 5 Street N.E. and 37 Avenue N.E has shown. The MCES has been ch ing the City for this additional flow. The City has completed sump pump inspection throughout the entire City including District #2 and any violations have been corrected. In addition, the City has televised all ofits sanitary sewer pipes es within District #2 with no problems identified. The City wishes to reduce its non-sewage flow within District #2 but desires to do so by focusing its resources on the problem area since the District encompasses approximately 300 acres of area. In order to do so, the City authorized Foth Infrastructure and Environment, L.L.C. on April 23, 2010 to install meters in four locations within District #2. The locations were as foliows: • 5 Stoct N.E. and OrendorfWay (City manhole 35C106) • Jefferson Street N.E. south 0f40 Avenue N.E. (City manhole 35D67) • 39 Avenue N.E. east ofJefferson Street N.E. (City manhole 35D34) • 4O"' Avenue N.E. west ofT.B. 65/Centrul Avenue [4.E. (City manhole 35D27) Flow meters were installed in these locations on May 3, 2010 and were removed on June 14" 2010. Findings There was significant rainfall during the metering period as recorded by the City' own rain gauge � located at the Public Works Building at 637 38 u ` AveuoeN.E. which is within the District #2 sanitary sewer area. A total of 5.27 inches of rain fell over the six weeks the meters were in place. Average rainfall for May is 3.24 inches. There were three significant rainfalls over that ' ' period with one day totals of 1 inch on May 7 0.87 inches on June 8 and 0.87 inches on June ]l"' Rain durations for the three largest raM events extended from 4 to 9 hours. The Jefferson Street and 5 Street meters had sediment buildup that affected the velocity readings in early June. However when the data is adjusted to reflect the dry flow conditions, the infoiniation on rainfall effects on flow is still evident. The attached graphs show the results ofthe metering at each location. Bach graph compares the flow at each meter against the rainfall data. We have provided the graphs of the MCES Meter to show the corresponding jumps in flow. The data indicates that two of the ouete locations, Street N.E. and Jefferson Street N,E. had sewage flow spikes that occurred after the June 9 uodll m ram events. The si ificaotrubn x:\M5\|E\unln\locu)s-nn\|0000 Reports \oryof Columbia Heights | and | metering report 7]wn7zelo 2 (pina|).doc Page Recommendations m event did not show a correspondi jump. We believe that this is due to the dry weather perio that had occurre ior to that date and that led to lowe levels. March and April were particularly dry months for rain or snowfall with precipitation averaging 50 to 75% below normal. There were 110 significant changes to flow as a result of rain events for the other two meter ' � locations. In both affected meters where flow increased, the 5 Street meter showed a defined spike in flow the next day while the Jefferson Street meter gradually showed an increase in flow after the events for a period of a few days. Recommendations Based on the metering performed this spring, Foth recommends the following: A. Focus future resources within the tributary areas that discharge through the 5 Street and Jefferson Street maiiholes. The 5 Street manhole area extends north DmzuOr�odozf��ay1nbal�n/uyhotvvoco42 n Avenue Avenue to the north and bounded hy University Avenue and 6 Street. The Jefferson Street manhole area extends north 0f40th Avenue to 42 Avenue frno from Street to � Quincy Street. ��ut. There is some commercial development along 40 Avenue but most ofthe areas are residential in nature with homes dating back to the mid 1900s. B. Because the City has completed the sump pump inspection program and televised all of the sewers for these areas and made the necessary conections the timing and extent of flow increases from the rainfall events indicate that much of this flow is due to foundation dram connections. We recommend that the City pursue a program of additional investigations in an effort to further define where the problem areas are. There are a number of options that it can take including televising the sewer mains the next day after a rainfall event to see if the sewage discharges from services increases compared to a non-rainfall period. The affected homes would be identified from the distance from the manholes. Two other options would be to contiriue metering ofmanholes within the 5 � 81zeetondJefferoouS1reutazcaototrytnfbrtberpiodovvuvvbcretboDnvvaaco coming from. A final option would be televising the individual sanitary sewer service connections. The sewer service televising could be done in discrete sections of the two sewer areas within District #2. lf foundation drains are connected directly to the sewer services during the spot checks, then a more complete sewer service televising effort would need to be undertaken. This could be done in selected neighborhoods and extend over a nuinber of years to control the overall costs. X: \ MS \ IE \ 2010 \ 100015-00 \ 10000 Reports \City of Columbia Heights I and I metering report TJM 072910 3 (Final).doc Page Recommendations C. The City will then need to develop a program to provide for the interception of the foundation drain pipes and placement ofa sump and pump with discharge to the outside ground surface. Our experience with these types ofprograms is that they are poorly received from property owners due to the cost and disruption. Some cities have provided financial support to the property owners to make the changes. Some have set up the program using City approved contractors to perform the work. A few cities have taken on the separation p ject and assessed the costs to the benefited properties. Others have provided a deadline to separate and have low interest loans available for property owners. The City could also consider giving non-compliant property owners a surcharge on their sewer bilis until they have completed the necessary changes. Given the surcharge costs currently incurred from MCES, we believe a program that provides some financial support is the best possible solution. Compliance and enforcement become obstacles for success. The period to make the corrections must extend out a few years to give property owners time to complete the work. Work should be spread over a number of years by breaking down the areas into neighborhoods. The costs associated with further investigation vary with the approach. Since the City has its own televising equipment to inspect its sewer mains, the verification of fiows after a rainfall event will be the lowest cost option. The challenge will be to time the televising to catch the discharges after the rainfall event. Additional metering costs $400 per meter per week. The cost for individual service televising will present tlie most expensive and intrusive investigation given that property owners will need to be involved in order to access the sewer service from within the home. This would probably require some excavation and restoration of the properties to access the service along with the cost of television itself. x:\mS\|c\zo/o\}0Cols-oo\lo000 Reports \Citypf Columbia Heights | and / metering report l]worzy1n 4 (Final).doc Page 1 ' VI ------------- t'' 1 ----- ,--7- ›, o --z----- (19 ... C4 -- co S. R -------1- - ,.. ,..... 10 L.V 63 > . o ? =''''''_._ ,,-"-. 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CITY OF COLUMBIA HEIGHTS DATE: SEPTMBER 3, 2010 TO: MAYOR AND CITY COUNCIL MEMBERS WALT FEHST, CITY MANAGER CC: BILL ELRITE, FINANCE DIRECTOR FROM JOE KLOIBER, ASSISTANT FINANCE DIRECTOR RE: SEPTEMBER 7, 2010 WORK SESSION AGENDA ITEM OF FUND BALANCE TRANSFERS, CLASSIFICATIONS AND POLICIES The Government Accounting Standards Board (GASB) has issued a new reporting standard - Statement 54 - which changes fund balance reporting and fund type definitions for governmental funds, effective January 1, 2011. This changes the terminology used to classify fund balance, and in some cases requires consolidation of funds that no longer qualify to be reported as stand-alone funds. In addition to the need to implement these GASB changes, the Finance Department occasionally must obtain Council authorization to transfer and/or close various funds for which the original purpose of the fund is no longer relevant or for which some other financial "housekeeping" is required. The Finance Department will be recommending Council adoption of three resolutions over the remainder of 2010 in regard to such items. Broadly categorized, these resolutions include the following: 1. Resolution 2010-81 authorizes the transfer and consolidation of cash and land from a large number of small funds into a smaller number of larger funds, plus some miscellaneous financial housekeeping. Attached is a three page table listing the transactions included in this resolution. Staff will put this resolution on the September 13, 2010 agenda. 2. Resolution 2010-XX authorizes transfers to adjust bond debt service funds for various differences between forecasted cash flow and actual cash flow. This resolution will presented to Council in October or November 2010. 3. Resolution 2010-XY declares the purpose and classification of the City/EDA/HRA funds, and formally adopts certain fund balance policies that have been the City's long term practices. 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E .92 0 in Lo r- 01 CO CD C) 0 0 .0 CN 5 co z 1- ;-; 7) .7- 2 N N N I V' Amendment No. MN- I2093- 081610 -0I /AI FIRST AMENDMENT To Network Services Agreement No. MN- 12093- 081610 -01 This First Amendment ( "Amendment ") is concurrently entered into on August 16, 2010 ( "Effective Date ") in conjunction with Network Services Agreement No. MN- 12093- 081610 -01 ( "Agreement ") by and between Comcast Business Communications, LLC ( "Company ") and City of Columbia Heights ( "Customer "), individually referred to herein as "Party" and jointly referred to as "Parties ". In the event of conflict between this Amendment and the Agreement, the Terms and Conditions of this Amendment shall take precedence in the interpretation of the explicit matter in question. Unless otherwise set forth herein, all capitalized terms set forth herein shall have the same meaning as set forth in the Agreement. Whereas, the Parties desire to amend the Agreement by this writing to reflect the amended or additional Terms and Conditions to which the Parties have agreed to; Now, therefore, in consideration of the mutual covenants, promises, and consideration set forth in this First Amendment, the Parties agree as follows: 1. Section 1.2 of the Agreement is hereby modified to read as follows: "Except as set forth in Schedule A, the Service does not include connection to the public switched network, building wire, any Local Area Networks ( "LANs "), customer premise equipment, IP addressing capability, firewalls or any other equipment, electronics, or wiring required on the Customer's side of the Demarcation Point." 2. Section 6.1 of the Agreement is hereby modified to read as follows: "Notwithstanding any other term or provision in this Agreement, Customer shall have the right, in its sole discretion, to terminate this Agreement at any time during the Term, or any Renewal Term, upon (i) sixty (60) days prior written notice to Company and (ii) the payment of all remaining Monthly Recurring Charges (`Termination Charges ") payable to Company within ten (10) days following termination of the Agreement (`Termination Charges "), as follows: a. If terminated at any time during month one (1) through month twenty -four (24) of the Agreement Term, Termination Charges shall equal 100% of all remaining Monthly Recurring Charges b. If terminated at any time during month twenty -five (25) through month forty-eight (48) of the Agreement Term, Termination Charges shall equal 75% of all remaining Monthly Recurring Charges c. If terminated at any time during month forty-nine (49) through month sixty (60) of the Agreement Term, Termination Charges shall equal 50% of all remaining Monthly Recurring Charges" IN WITNESS WHEREOF, the Parties hereto have executed this First Amendment as of the day and year written below and the persons signing covenant and warrant that they are duly authorized to sign for and on behalf of the respective Parties. Except as otherwise modified by this Amendment, all other Terms and Conditions of the original Network Services Agreement shall remain in full force and effect. City of Columbia Heights Comcast Business Communications, LLC Signature: Signature: Printed Name: Printed Name: Title: Title: Date: Date: Comcast Business Communications, LLC CONFIDENTIAL and PROPRIETARY Page I of I a - E 2 i 4 Ci. 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I- ww wwwwww 4 z E z z z O 0 - W us us 2 0 000000 8 § 8288 -.7.100 0 00000000000000000000000000 Proposed Budget and Levy Review September 7, 2010 Table of Contents Page Budget Memo from the City Finance Director 1 -3 2011 City Manager's Budget Message 4 -6 Four -year Budget Plan established in 2009 7 -13 2009 Standard and Poor's Bond Rating 14 -16 Budget Comparison & Projection 2008 to 2011 17 Police Department Summary of Cost Factors for 2011 Budget 18 -19 Proposed Resolution Adopting Proposed Budget and Proposed Levy for 2011 20 -21 Alternate Proposed Resolution 22 -23 Budget Memo from the City Finance Director CITY OF COLUMBIA HEIGHTS DATE: SEPTEMBER 1, 2010 TO: WALT FEHST CITY MANAGER FROM: WILLIAM ELRITE FINANCE DIRECTOR RE: CITY COUNCIL WORK SESSION OF SEPTEMBER 7, REVIEW OF PURPOSED 2011 BUDGET AND LEVY FOR TAX SUPPORTED FUNDS (PAGE 1 OF 3) Attached to this memo are copies of the City Manager's Budget Message from the proposed 2011 budget book, the original four -year budget plan that was established in 2009, a copy of the Standard and Poor's Bond Rating from 2009, budget comparison & projection 2008 to 2011, a copy of the Police Department's Summary of Cost Factors for the 2011 budget, the proposed resolution adopting the proposed budget and proposed levy for 2011, and an alternate proposed resolution reducing the total levy by utilizing fund balance to cancel a portion of the debt service levy for the Public Safety Building. I feel that all of these documents should be an important part of the 2011 budget review. First, the four -year budget plan established the goal of not being dependent on local government aid by the year 2013. This plan provided for property tax increases in a decreasing amount for all four years. Under the plan the property tax increase for 2011 would be 8 %, for 2012 it would be 6.35 %, and for 2013 4.98 %. Under the plan in the year 2013 we would be totally free from dependence on local government aid for general operations. Also under the plan any LGA that was received in future years could be applied to reducing the debt levy, which would be a direct reduction in the property tax levy and the amount of property taxes paid by residents. The alternate resolution has wording that would accomplish this reduction in the property tax levy. I have also included a copy of the Standard and Poor's Bond Rating letter dated June 8, 2009. As you recall Standard and Poor's increased our bond rating by two steps to an AA rating. Page two of this letter includes four factors for their rationale on this improvement. One of these factors was the City's "healthy finances as demonstrated by a strong fund balance ". The next factor was "good financial management planning and procedures which have sustained the City's good financial standing and provide further stability ". A large factor in Standard & Poor's rationale to increase the city's bond rating was the four -year financial plan that successfully dealt with the loss of LGA. If the City is going to deviate from the current four -year plan and reduce the proposed property tax levy for 2011, it is important that the four -year plan also be modified. To maintain a good bond rating it is essential that the City have a long -range financial plan to deal with the loss of State Aids. Extending the plan an additional year or two with smaller property tax increases but still maintain the goal and objective of being free from dependence on Page 1 local government aid should be beneficial in maintaining our high bond rating. Lowering the levy without a long -range financial plan could be detrimental to our bond rating. When it comes to the proposed 2011 budget it is clearly a down to basics, no frills budget proposal. When you look at the major departments in the General Fund 90% or more of the costs are in the area of personnel. Of the remaining 8 -10% of the departmental budget the majority of that is for required expenditures such as utilities, vehicle expense, and statutory or union contract required items. The remaining 1% or less of the budget is for essential supply items. Since the year 2003, when we first saw major reductions in local government aid, budgets have been reduced and staff positions eliminated or not filled in an effort to deal with the major reduction in revenue. As we approach the 2011 budget process there were no longer any areas whatsoever that could be cut without eliminating some traditional City services. I have attached the Police Department Summary of Cost Factors page to demonstrate just how tight budgets are. I chose the Police Department budget for this demonstration for two reasons: first, it is truly essential services and secondly it comprises approximately one -third of the total General Fund budget. The first page of this document shows the personnel costs, which represents 90% or a total of $3,262,516 out of the budget that totals $3,616,965. On page two of the Summary of Cost Factors sheet I have categorized the various expenses with category one being the personnel expense. Category two are items required by statute, union contract or essential to the operation of the department. As you can see from the list of category two items this includes utilities on the Police portion of the Public Safety Building, vehicle repairs, maintenance, gas, oil, lubricants, uniform, ammo and required training. After personnel this is the next largest portion of the budget totaling 8.36% or $302,219. The next category of expenditures is category three. These are items that are not required by statute or contract but are essential to running a successful department. This category includes building maintenance, car washing, legal notice publications for the City auction and maintenance services, which includes the maintenance of office equipment. This category totals $27,710 or less then 1% of the budget. The fourth category of expenses is again less then 1 %, totals $24,520 or 0.68% of the budget and is for basic office supplies, janitorial supplies, forms, printer and fax toner, and a few computer supplies. If this category of the budget were totally eliminated, which would not be practical or feasible, it would amount to an average property tax reduction of about $0.28 per month or $3.36 per year to each property in Columbia Heights (the actual reduction would vary based on property classification and value). This same type of scenario applies to the other departments in the General Fund, which comprise the remaining two- thirds of the budget. If the City Council wants to cut expenses it is virtually impossible to do so without significant staff reductions or major reductions in services provided. To keep this thought in prospective the average budgeted compensation for a full time position in the city costs each property in Columbia Heights an average of $0.98 per month or $11.79 per year (the actual reduction would vary based on property classification and value). On this basis it would take a significant reduction in staff to have a major effect on property taxes. Although staff does not recommend a reduction in services there are certain significant service levels that the City of Columbia Heights provides that other cities our size and larger do not provide. Eliminating these services could reduce the budget and levy by more then a million dollars. This could result in a 2011 tax levy lower then the tax levy for 2010. However, as Page 2 mentioned previously this is not staff's recommendation but it is an alternative available to the Council if the main goal is only to reduce property taxes. WE:slh 1009071CM Attachments: 2011 City Manager's Budget Message Four-year Budget Plan established in 2009 2009 Standard and Poor's Bond Rating Budget Comparison & Projection 2008 to 2011 Police Department Summary of Cost Factors for 2011 Budget Proposed Resolution Adopting Proposed Budget and Proposed Levy for 2011 Alternate Proposed Resolution Page 3 2011 City Manager's Budget Message CITY OF COLUMBIA HEIGHTS 2 011 BUDGET MESSAGE The budget message and document have been put together to comply with the City Charter and state statute requirements for providing budget information and adopting a proposed budget and proposed tax levy. Under state statutes the City of Columbia Heights must adopt a proposed budget and a proposed tax levy and certify it to the County Auditor's office prior to September 15. The City then has until December 28 to adopt and certify a final budget and levy to the County Auditor's office. The final levy can be less than the proposed levy but it cannot be greater than the proposed levy. Based on this, staff traditionally recommends establishing a proposed levy that is adequate to cover budgetary needs with the understanding that as the budget process is finalized, the City Council has the opportunity to reduce the final property tax levy. Budget Format The City of Columbia Heights budget is prepared and distributed in a format that includes useful narrative information that highlights department activities, objectives, and budget summary. This format is designed to provide the user of the budget with a more descriptive narrative explaining the highlights of the budget. Under this format the budget is broken down into ten functional areas and is prepared with a narrative budget message for each of these areas. When the City Council meets with the various departments, a detailed budget workbook will be distributed to the Council for each of the functional areas. The workbook is intended for utilization during the work session to provide more detail for each individual budget. At the end of the City Council budget review process, a summary of the budget will be assembled for distribution to the public at the City's budget hearing, which is held in December. Budget Overview Historic LGA Information In the 1970's the state legislature passed legislation that created LGA to cities. With this legislation a formula was developed to distribute the aid to cities based on need and other factors. Throughout the years the LGA formula was very beneficial to the City of Columbia Heights. By 2003, the City's certified LGA was $2,651,999 or 30% of the City's General Fund revenue. At this point, the City had become very reliant on LGA to cover the costs of basic, essential services such as police, fire and public works. In 2003 when the governor and state legislature made significant reductions to LGA, it was devastating to cities such as Columbia Heights who were reliant on this aid for essential Page 4 G: \Next \City Manager's Budget Message 2011 \CM Budget Message 2011.doc services. The alternative cities had was to increase property tax levies to maintain the current service level or cut essential services. During the period of time from 2003 thru 2010 the City's lost state aid, LGA and MVHC totals $12,020,989. In 2003 prior to the State's financial crisis the City of Columbia Heights was certified to receive $2,651,999 in aid. So far in 2010 this has been reduced by $1,063,487 ($697,703 in LGA and $365,784 in MVHC) leaving the City with $529,396 in aid. For budget purposes we are projecting aid revenue of $425,338. The 2010 Legislature also made the 2010 MVHC reduction amounts permanent (under M.S. §273.1384, subd. 6), meaning that the amount of the 2010 MVHC reimbursement reduction will also be reduced from aid payments in future years. For the 2011 budget the City is projecting that we will continue to see reductions in LGA and MVHC aid, which will leave us receiving $425,338 compared to the $2,651,199 that we received previously. 2011 Budget Highlights The attached detail budget pages cover the recommended increases and decreases to the various budgets. In summary, the department proposed 2011 budget for the General Fund, Library Fund and the EDA levy is $8,752,142, which is within the scope of the four -year budget plan. The 2011 budget process started in 2009 With the large State of Minnesota deficit and the anticipation of a major loss in LGA for 2009 and future years, the 2010 budget process was started very early. Staff met with the City Council at a work session on April 6, 2009, to present the basic plan of a four -year budget that would include a reduction of expenses, a reduction of several city services, and a four -year levy plan that would eliminate the reliance on LGA for the City's general operating budget by the year 2013. On the expenditure side, the starting point was based on the 2008 adopted budget. It should be noted that the 2008 adopted budget for the General Fund, the Library Fund and the EDA levy only increased by 3.3% from the adopted 2003 budget. Subsequently, the starting point for the 2010 budget has only seen minimal increases that are far below the cost of living for the five -year period from 2003 -2008. This brought the starting point for the 2010 budget to $10,233,657. We added $385,000 to this amount to cover utilities and maintenance expenses for the new gymnasium and new Public Safety building. The only other addition was $341,454 to cover cost of living pay increases that had already been approved by the City Council. This brought the cap for the 2010 budget to $10,960,111. The actual Department/City Manager proposed budget for 2010 was $10,897,205, which was $62,906 under the preliminary goal for 2010. For the 2011 budget the goal was to allow a 1% increase, which would allow a budget of $11,006,177. The actual 2011 Page 5 G: \Next \City Manager's Budget Message 2011 \CM Budget Message 2011.doc proposed budget came in at $11,042,748. This covers the property tax supported budgets for the General Fund, the Library Fund and the EDA portion of the levy. On the revenue side the four -year budget plan looked at the primary goal of developing a revenue stream that would enable the City to eliminate its dependence on LGA for general operations. The plan accomplishes this with a four -year levy plan that sees significant decreases each year in the amount of the levy increase for general operations. In 2010 the levy would increase by 10.88 %, in 2011 it would increase by 8 %, and by 6.35% in 2012. In the year 2013 the City would no longer be reliant on any LGA for general operations. In that year the levy is projected to increase by 4.98 %. The plan also is dependent upon using slightly under $800,000 in fund balance for the years 2010 and 2011 and then seeing slight increases to fund balance in 2012 and 2013. Although this may appear to be a large levy increase in 2010, it does accomplish the goal of becoming independent from LGA within four years. Any LGA received that is in excess of the amount in the budget plan could be utilized to reduce the debt service levy, which would result in a direct reduction of property taxes. Future LGA could also be dedicated to other uses such as creating a capital building fund for the future replacement of city facilities and infrastructure. The four -year budget plan is attached to this message, as it is a significant part of the budget document. Also attached is a copy of the 2009 Standard and Poor's bond rating for the City of Columbia Heights. Our bond rating was upgraded two steps from an A -1 to an AA rating. In the rating upgrade Standard and Poor's assessed the City's management practices and policy and rated them "good." A strong factor in the assessment was that the City had a four -year budget plan to deal with the loss of LGA and a long -range plan to maintain infrastructure and essential services. During 2010 Moody's upgraded their bond rating of the City by two steps from an Al to AA2. Again, a major part of this strong rating is the City of Columbia Heights overall financial condition and the fact that the City has developed a long -range plan to deal with the State's financial crisis. Page 6 G: \Next \City Manager's Budget Message 2011 \CM Budget Message 2011 doe Four-year Budget Plan established in 2009 CITY OF COLUMBIA HEIGHTS DATE: MAY 7, 2009 TO: THE HONORABLE GARY PETERSON CITY COUNCIL MEMBERS TAMI DIEHM BRUCE KELZENBERG BRUCE NAWROCKI BOBBY WILLIAMS FROM: WILLIAM ELRITE FINANCE DIRECTOR RE: PREPARING FOR THE 2010 BUDGET (Page 1 of 2) At the work session on May 4 staff handed out information related to the preparation of the 2010 budget. Included in this was historic information regarding the budget, local government aid (LGA), levies, and past property tax increases. It should first be noted that this presentation only dealt with the city property tax levy that appears on the property tax statements as the city levy. The presentation did not include the school levy, the county levy, the city HRA levy or the county HRA levy for the city. The reason for concentrating on the city portion of the levy is that this is the primary funding for the General and Library funds. The HRA levies are separate levies used primarily for redevelopment within the city. As these are separate levies for a specific purpose they can be dealt with more efficiently at another time. Page 1 of the document shows the General and Library fund budgets for 2003 with a comparison to 2008 and a proposed 2010 funding level. It also shows the amount of personnel expenses along with the percent of the budget that makes up personnel. The largest departments, such as Police and Fire, have 91% and 90% of their budget in personnel costs. Subsequently it is very difficult to reduce budgets without reducing personnel and services provided. The reason for using the 2003 adopted budget as a basis is that it is our highest-level budget and it is the year that the state began to significantly reduce LGA. The next column shows the 2008 adopted budget. As you can see, the 2008 budget only increased by $317,635 over the 2003 budget. This is a 3.3% increase in expenditures over a five-year period. Staff is proposing that this be used as the basis for the 2010 budget. The next column shows the 2008 budget plus City Council approved pay increases through 2010. Using this column as the starting point in the preparation of the 2010 budget we would be freezing expenditures at the 2008 level with the exception of the approved pay increases. The next section, lines 34-37, shows the projection of utilities for the new gymnasium and public safety building as an addition to the base budget for 2010. The bottom section of this form, lines 39-48, reflects the projected revenues for 2010 through 2013 for the start of a four-year budget plan. The primary goal of this plan is to no longer be dependent on LGA as a funding source for general operations. As you can see, in 2013 the projected LGA for general operations is zero. Line 45 shows the effect this budget plan has on fund balance. In 2010 we would be utilizing $689,489 of fund balance. In 2011 the fund balance used is $99,090, then in 2012 and 2013 we begin a slow rebuilding of fund balance. The Page 7 Page Two bottom two lines show the percent and amount of inflation that is built into these budgets. The year 2010 has zero inflation, 2011 has 1%, and 2012 and 2013 have 2% inflation. Page 2 shows the history of the city levy and what we have received in LGA from 2003 through projected 2010. The top portion shows the years and our certified LGA and the cuts that we have received. As you can see, on line 16 the total lost LGA from 2003 through projected 2010 is $12,020,989. When you go to the bottom section of the chart it shows our levy history for the same period of time. Here, again, on the bottom you can see that the total revenue gained through increased property tax levies is $12,806,045, which does fully offset the lost LGA. The main point of this chart is that it shows that our property tax levies have basically covered and made up for the lost LGA. The last four columns on the bottom section of the chart show the percent of increase in the levy for 2003 through 2010. As you can see, our levy increases were high in 2004 and 2005 to make up for lost LGA and then decreased significantly. Likewise, the current four -year budget plan has the largest levy increase in the first year. Page 3 shows the four -year levy plan. In this plan 2010 is the heaviest year as it covers the new expenses for the gymnasium and public safety building as well as additional bonding to cover the Murzyn Hall improvements and the new public safety building. In the years 2011 through 2013 the levy is increased only to replace lost LGA and to begin replacing fund balance used in 2010 and 2011. The two bottom sections of the chart reflect the levy increases broken down for general operations and for debt. Lines 27 and 28 reflect the fund balance changes and the total percent of levy increase for the four years. Following this plan through to 2013 will result in 2013 having a property tax levy increase of less than 5% and an increase to fund balance of slightly over $100,000. One of the key points of this budget plan is to remove the reliance on LGA for general operations. The plan is based on receiving and using $425,338 in LGA for years 2010 through 2013. However, there is a possibility that we could receive more LGA in these years. If this holds true, any additional LGA that is received can be used to reduce the city's debt levy or put aside in a capital building replacement fund. Any portion that is used to reduce the debt levy will result in a direct property tax savings to the residents. For example, in 2010 the plan projects that we will receive $425,338 in LGA. If the city receives more than that, all or a portion of it can be used to reduce the debt levy, which will result in a reduction of the total city property taxes to the residents. Additional LGA of $300,000 would reduce the levy by approximately 4 %. Based on the discussions at the work sessions, staff will start preparation of the 2010 budget based on this four -year plan. This budget will be presented to the council following the same schedule that has been utilized in previous years. WE:sms 0905073C0UNCIL Page 8 A I B I C I D 1 E 1 F I G City of Columbia Heights, Minnesota Budget Comparison & Projection 2003 - 2010 General Fund, Library and EDA 2008 Budget General & Library Fund & EDA Plus Pay Personnel Levy Fund 2003 Adopted 2008 Adopte. Increase 2010 Personnel Percent of Budget Budget Thru 2010 Expense Budget 1 Mayor - Council 41110 211,014 183,523 190,778 117,089 61% 2 City Manager 41320 412,706 398,026 422,202 390,209 92% 3 City Clerk 41410 8,105 49,588 52,600 48,608 92% 4 Finance 41510 643,973 656,173 ' 694,978 626,317 90% 5 Assessing 41550 101,000 106,415 106,415 0 0% 6 Legal Services 41610 196,572 186,500 186,500 0 0% 7 Fire 42200 916,572 1,159,768 1,227,885 1,099,415 90% 8 Police 42100 2,786,587 3,075,586 3,317,120 3,024,189 91% 9 Gen Gov Bldgs. 41940 158,546 159,212 159,212 0 0% 10 Emergency Management 42500 84,973 22,344 23,126 12,621 55% 11 Animal Control 42700 16,150 15,470 15,470 0 0% 12 Weed Control 43260 16,428 21,493 22,276 12,631 57% 13 Recognition /Special Events 45050 71,368 41,700 41,700 0 0% 14 Contingencies 49200 50,000 100,810 100,810 0 0% 15 Transfers 49300 480,000 185,000 185,000 0 0% 16 Engineering 43100 319,076 321,402 339,357 289,796 85% 17 Streets 43121 690,319 760,897 787,880 435,505 55% 18 Street Lighting 43160 126,416 151,167 151,544 6,082 4% 19 Traffic Signs & Signals 43170 73,251 81,182 84,824 58,788 69% 20 Parks 45200 751,437 735,514 764,977 475,535 62% 21 Tree Trimming 46102 104,500 128,984 133,214 68,273 51% 22 Recreation Admin. 45000 224,417 158,608 167,790 148,190 88% 23 Youth Athletics 45001 19,702 33,293 34,845 25,044 72% 24 Adult Athletics 45003 25,328 29,419, 30,152 - 11,824 39% 25 CHASE II/Youth Enrichm. 45004 22,169 60,104 62,497 38,631 62% 26 Travel Athletics /CHASEIII 45005 22,635 31,139 32,227 17,554 54% 27 Trips & Outings 45030 38,666 57,212 58,344 18,277 31% 28 Senior Citizens 45040 78,580 81,689 85,539 62,139 73% 29 Murzyn Hall 45129 249,022 228,230 239,136 176,023 74% 30 Library Total 45500 679,700 738,346 772,743 555,169 72% 31 EDA Levy 140,569 78,622 83,971 83,971 100% 32 Sub Total 9,719,781 10,037,416 10,575,111 7,801,877 74% 34 New Expenses 35 Maint & Utilities new GYM 85,000 36 Maint & Util new Pub Safety 300,000 37 Total Expense Projection 9,719,781 10,037,416 10,960,111 39 Revenue &Exp Projections 2010 2011 2012 2013 40 Operating Levy 8,052,142 8,752,142 9,352,142 9,852,142 41 LGA 425,338 425,338 425,338 0 42 Other Revenue 1,793,142 1,793,142 1,793,142 1,793,142 43 Total Revenue 10,270,622 10,970,622 11,570,622 1 1,645,284 44 Expense 10,960,111 11,069,712 11,291,106 11,516,928 45 Fund Bal (Used) Increase (689,489) (99,090) 279,516 128,356 46 Exp Increase for Inflation 47 Percent 0.0% 1.0% 2.0% 2.0% 48 Amount 0 109,601 221,394 225,822 Page 9 0 0 0 O O co Co co = OOCAM o U a C C >' 4OI N-()0000 > OO COMMA - I'. CON J ONC!)C()CoCoCr)O = I-f-NI-0u C �et 0Nr 0 NI 0Nr O OO er �MC1)OI- I H etLri r- o5 co CO CD 17 > er Cb N c0 CD Q J 1 1 1 N 000 05 CO A et Co C O N o 0 0 0 0 0 to . L . 00 Nr Cr NCD N 85'). ChNNiNCO 0 . > C 0J— tl) 0 000)N CV C4 0 V CD . N CO co O > eJ•M OOOOCOCO 7- CD — I- I. co C() et I- CO CO O) (a "-' J T r er er ' I- CA 0 O OCDM O I� co 6 O C MCON CO O O • rf) Q a)Tr 0) NA - M OD NN U c C CV N- NN- 0)OON O W C O 0 Co O C() co_ et I- co, N 0 C O • , (0 N Cc") co 0 co N co U J N N U 5 N N M N 73 Q ¢ OOCDCO ©N- of OM O E ifs co I's OCDNNCl7 '' OCA( C40)0 (0 CA O a) 41 - N.0N- �LJ,J > C 1- 0 N-0) — lt)00 —O O 7 NNOONN0 _C - E C a) < 6 N 0) O 05 CI) - O cn CO O Cn ui M CO I� 00 f)<t Ne - NM CO0 O O O '-'NCoet0 .- 0)C) • 0 CO O I.- - CAC 7 J CO CO N CO e ` t 0 �) 0 0 CO N— et N O0 N L N • ca � 2 °o U -o `� O _ Q O) CD 00 Q a. E 0 O 0 CO C() OD CO E-(21:,) 0etO I-N-C) I"- CV '2 8)' ROM NM M co O >,M(0(0 CO A 0) - TD 73 J 0 CCA) NO ('4 N- 0 ( 0 - NM MM M C > cil V- CDNu)CC10OD T- C� a N O� CnMC7000 0 � 0 Ct7 . J N-NNN0(01 N 0 S O -0 Cn iiu,200LC)NM NN (DN N Et? CV �et0et0�rCn V O j Z, J CD CA CO O O N N Cn et O , a) 5 co co ..:r .- co u) Cn N O R3 � O N , cL) r r O G et NI CCU co co CD CD I� co cn U c 2 U a) Ox)M - u, or- O00ODCDCDCA000 NMet1COI�00 0 0 0 0 0 0 0 0 0 0 0 0 0 %. % V 0 0 0 0 0 0 0 0 N m N O O O N O O O O O N O N N O 0 N 0 N 0 0 0 0 0 CV 04 N L C3) a u) O a) N E O as C a) C) O W C .r U O C C C > Q p . > -r a) O O a) co . U U J t) O 4. 0 O • a) < a < 0 -45 w >, O a) - 0 0 C7 a) w C7 a) Q N J J - D J D Q J > �a4 oca°)0a)a)0ma)J C3 C= >,O U U U U +. �Q t Q �' • a) 't • O • O O 0 6 O Q U -J Q U IZIi U 0 ` _al ° Q 1-- N ��� °T- " BB�B ®®BaOa®0 Page 10 A I B I C I D I E City of Columbia Heights Four year levy plan Detail of projected levy increases Prepared 5/4/2009 Levy Year 2010 2011 2012 2013 1 Purpose for levy increase 2 Wage Increases (approved in 2007) 253,025 2013 does not use any LGA 3 Utility Maintenance Expense in the 4 New Public Safety Building 300,000 operating 5 New Gym 85,000 budget 6 Fund Balance used in Prior years 7 Makeup lost LGA 200,000 700,000 600,000 500,000 8 Total Operating Levy Increase 838,025 700,000 600,000 500,000 9 Murzyn Hall Improvement levy 72,640 10 Add'I Public Safety Bond (2 Million) 136,000 11 Increase in Pub Safety Bond Payment 304,500 12 TIF District Offset (304,500) 13 Total Debt Levy Increase 208,640 - - - 14 Total projected levy increase 1,046,665 700,000 600,000 _ 500,000 15 . 16 I 2010 1 2011 I 2012 2013 17 Prior Year City Levy 7,702,362 8,749,027 9,449,027 10,049,027 18 19 Total current Year levy 8,749,027 9,449,027 10,049,027 10,549,027 20 % Increase for General Operations 10.88% 8.00% 6.35% 4.98% 21 % Increase for Debt 2.71 % 0.00% 0.00% 0.00% 22 % Increase for Total Levy 13.59% 8.00% 6.35% 4.98% 23 24 1 2010 1 2011 1 2012 I 2013 25 Operating Levy 8,052,142 8,752,142 9,352,142 9,852,142 26 Debt Levy 696,886 696,886 696,886 696,886 27 Fund Balance (used) increase (689,489) (99,090) 279,516 128,356 28 % Increase for Total Levy 13.59% 8.00% 6.35% 4.98% Page 11 CITY COLTNCIL LETTER MEETING OF: FEBRUARY 9,2O09 AGENDA SECTION: OTHER ORDINANCES ORIGINATING DEPT: CITY MANAGER AND RESOLUTIONS FINANCE APPROVAL N(): ITEM: RESOLUTION REDUCING THE BY: WILLIAM ELRITE BY: ADOPTED 2009 BUDGET IN ANTICIPATION OF LOCAL DATE: FEBRUARY 5,2009 GOVERNMENT AID REDUCTIONS N(): In anticipation of reductions in the amount of money the City receives in local government aid, the City Manager and staff have made advance preparations based on Governor Pawlenty's proposal to reduce the City of Columbia Heights' aid by $400,000 for the year 2009. Through significant advanced planning and reductions, staff and the City Manager are recommending to make cuts and revenue enhancements to compensate for the governor's proposed reductions in the 2009 budget. These cuts and reductions are a combination of reducing services and expenses, some layoffs, and all employees taking an 80-hour furlough without pay in 2009. It should be recognized that this level of reductions cannot be made without serious impairment to services provided by the City of Columbia Heights. These reductions, as laid out in the attached resolution, should enable the City to deal with the governor's proposed aid reductions resulting in a corresponding reduction of services to residents. As has been discussed with the City Council, staff will continue to evaluate expenses and revenues during the preparation of the 2010 budget. This should allow for the adoption of a 2010 budget that will deal with any further aid reductions that are made by the state legislature. It is staff very strong recommendation that the council seriously look at increasing other revenue sources wherever possible. There are some instances where the City could make services self-sustaining rather than reliant on taxes or state aid. An example of this would be to establish a street light utility to collect service fees to cover this expense. Another example is that currently approximately $100,000 per year is used to supplement the operation of Murzyn Hall. Service fees should be established to cover the cost ofthis operation. The other area that needs to be clearly understood is that unlike the budget reductions of 2003 and 2004, the current reduction cannot be made without seriously reducing services. The cuts will mean having parks, streets, boulevard trees, and other public works items maintained at a much lesser level. Library hours (from 60 to 51), reference work, and other services will also be reduced. Murzyn [{o|/ would close when it is not in use for recreation programs or by a fee-paying group. This means fee waived groups would need to be rescheduled to times when the hall is open. Other services such as abatements for weeds and unkempt properties may not be at the same level as in 2008. In addition to this, we are exploring other reductions such as using an automated attendant for phone calls and encouraging all payments that do not require a receipt to be made in the payment drop box. It is important that the City Council understand that these service reductions may result in more citizen comments and input. RECOMMENDED MOTION: Move to waive the reading of Resolution 2009-24 there being ample copies available to the public. RECOMMENDED MOTION: Move to adopt Resolution 2009-24 being a resolution reducing the adopted 2009 budget in anticipation of local government aid reductions. WEzm, ovozumcoumc,L COUNCIL ACTION: Page 12 RESOLUTION NO. 2009-24 RESOLUTION REDUCING THE ADOPTED 2009 BUDGET IN ANTICIPATION OF LOCAL GOVERNMENT AID REDUCTIONS WHEREAS, the City of Columbia Heights is anticipating a reduction in excess of $460,000 in the amount of state aid the City will receive in 2009; and WHEREAS, the City of Columbia Heights is anticipating a reduction in excess of $960,000 in the amount of state aid the City will receive in 2010; and. WHEREAS, the City Manager has utilized advanced planning and preparation for these reductions; and WHEREAS, it is the overall goal to balance the City budget for 2009; and WHEREAS, the City Council recognizes that this budget reduction will have a significant impact on services provided to residents: NOW, THEREFORE, BE IT RESOLVED that the following budget reductions be made to the 2009 property tax supported budgets. Adopted Fund 2009 Budget Proposed Cuts General Fund 9,793,340 516,055 Library Fund 783,847 92,377 Community Development Fund 625,309 50,568 Estimated Furlough Expense 260,000 NOW, THEREFORE, BE IT FURTHER RESOLVED that the City Manager be authorized to develop a long - range budget plan to include the reduction of services and expenses, the generation of new revenue, and a projection of property tax increases needed to offset the loss of local government aid. NOW, THEREFORE, BE IT FURTHER RESOLVED that the City Manager instruct staff to explore all areas where City revenue and fees can be increased to offset the cost of providing services and present recommendations to the City Council for evaluation. Passed this day of , 2009 Offered by: Seconded by: Roll Call: Mayor Gary Peterson Patricia Muscovitz, City Clerk Page 13 2009 Standard and Poor's Bond Rating Summar . Colurn b Heights, Minnesota- General b Obi ig a tion US$4.845 mil GO pub fws & taxable GO tax iltrefftellt tads sm 2009A&B dtd 07/12/2009 due 0710112038 LON' AVM i?atirig table New Rationale The 'AA long-term rating assigned to Columbia Heights, Minn.'s series 2009A general obligation (GO) pul facilities bonds and series 2009B taxable GO tax increment bonds reflects the following credit qualities, in & Poor's Rating Services' opinion: * Very dose proximity to Minneapolis-St Paul with strong participation in the metropolitan economic bas including access to ample employment opportunities; • * Income and wealth indicators ran. I from adequate to very strong; * Healthy finances as demonstrated by a very strong fund balance; and * Good financial management planning and procedures, which have sustained the city's good financial star and provide further stability; and ic The city's full GO ad valorem pledge secures both series of bonds. Proceeds from the 2009A series will fina variety of projects, including a new public safety center, street and water infrastructure improvements, and renovations to a community building. The 2009B bonds will fund the acquisition of structures within a tax increment district Columbia Heights is located just four miles outside Minneapolis in Anoka County (AAA/Stable). A fully de inner ring suburb, the city has maintained a fairly stable population over the past decade, sliding 2% since reach 17,%3 currently. Residents are in close proximity to a wide variety of industries within the metropoli and a high-speed conunuter rail station set to open in the fall will further improve access. Income levels in t are adequate-to-good in our view, with a median household and per capita effective buying income at 87% 95% of national levels. Because the city is mostly built-out, tax base growth has occurred primarily through residential tear-downs fill-in development. Such improvements resulted in steady net tax capacity growth through 2008. In 2009, felt the impact of overall softening in the housing market, and net tax capacity slipped 1% to $15.66 billioi Indicated market value, a measure of true property value„ remains very strong on a per capita basis in our ( Summary Columbia Heights, Minnesota; General 0 ---------------- 2009, officials are preparing for a severe loss of LGA and have accordingly sharply cut expenditures by $90 (nearly 10% of the budget). The city has reduced programs, left positions open through attrition, and reque employees take a furlough. As a result, management expects an operating surplus or, at worst, a break-even depend,* on the level of LGA reduction. The city's financial forecast includes a use of fund balance in 201( 2011 as the city reduces its dependence on state aid. Columbia Height's management practices are considered "good" under Standard & Poor's Financial Manal Assessment (FMA). An FMA of good indicates that practices exist in most areas, although not all may be fo or regularly monitored by governance officials. The city engages in extensive planning, including long-tert financial plan through 2013 as well as a detailed five-year capital improvement plan. Both documents are uj annually and aid in budget planning. The city council maintain' s a policy to keep a minimum 45% of the pri year s e nditures in reserves. In our opinion, the city's overall debt burden is moderate at $2,850 per capita and 3.3% of the total markei Roughly half of the city's debt is supported by revenues, special assessments, or tax increments, which redui tax levy requirements on the overall tax base. The portion of operating expenditures devoted to debt service was high at 22.7% in 2007, in our view. Amortization is average; 49% of the city's direct debt is due to ma within 10 years and 91% within 20 years. The city has no additional plans to issue debt. 001100k The stable outlook reflects Standard 8c. Poor's ex ration that management will continue to engage in exte planning in order to respond to potential revenue decreases related to slipping net tax capacity and reductio state aid. We expect the city to maintain its long-term focus on maintaining at least a good reserve level. Th close proximity to Minneapolis and its participation in the metropolitan economic base provide further still the rating. Related Research USPF Criteria: "GO Debt," Oct. 12, 200 Complete ratings information is available to Ratin' gsDnect subscribers at www.ratnigsdirect.com. All rating affected by this rating action can be found on Standard 8c Poor's public Web site at www.standardandpoor under Ratings in the left navigation bar, select Find. a Rating. Budget Comparison & Projection 2008 to 2011 A I B I 0 1 D I E 1 F 1 G B H City of Columbia Heights, Minnesota Budget Comparison & Projection 2008 - 2011 General & Library Budgets and EDA Levy 2008 Budget General & Library Fund & Plus Pay 2010 2011 2011 2011 Prop Personal EDA Levy Fund Increase Adopted Budget CM Proposed Budget Thru 2010 Budget Plan Budget Amount Percent 1 Mayor - Council 41110 190,778 145,767 147,225 144,267 90,461 63% 2 City Manager 41320 422,202 414,148 418,289 412,243 385,115 93% 3 City Clerk 41410 52,600 177,213 178,985 72,967 60,862 83% 4 Finance 41510 694,978 714,600 721,746 721,700 651,400 90% 5 Assessing 41550 106,415 121,940 123,159 128,021 4,881 4% 6 Legal Services 41610 186,500 186,716 188,583 186,716 0 0% 7 Fire 42200 1,227,885 1,128,122 1,139,403 1,144,685 927,564 81% 8 Property Inspections 42300 188,265 190,148 184,866 176,898 96% 9 Police 42100 3,317,120 3,495,745 3,530,702 3,616,965 3,262,516 90% 10 Gen Gov Bldgs. 41940 159,212 159,212 160,804 160,804 7,596 5% 11 Emergency Management 42500 23,126 0 0 0 0 12 Animal Control 42700 15,470 16,263 16,426 16,263 0 0% 13 Weed Control 43260 22,276 0 0 0 0 14 Recognition /Special Events 45050 41,700 37,305 37,678 37,678 0 0% 15 Contingencies 49200 100,810 50,000 50,500 50,000 0 0% 16 Transfers 49300 185,000 185,000 186,850 195,000 0 0% 17 Engineering 43100 339,357 336,590 339,956 340,370 279,954 82% 18 Streets 43121 787,880 791,768 799,686 801,765 433,649 54% 19 Street Lighting 43160 151,544 150,817 152,325 159,343 5,906 4% 20 Traffic Signs & Signals 43170 84,824 83,735 84,572 78,561 52,393 67% 21 Parks 45200 764,977 773,239 780,971 774,258 462,941 60% 22 Tree Trimming 46102 133,214 125,660 126,917 129,091 71,557 55% 23 Recreation Admin. 45000 167,790 178,204 179,986 180,355 156,503 87% 24 Youth Athletics 45001 34,845 34,992 35,342 34,955 22,429 64% 25 Adult Athletics 45003 30,152 25,732 25,989 25,761 12,580 49% 26 CHASE II/Youth Enrichm. 45004 62,497 61,107 61,718 58,935 34,842 59% 27 Travel Athletics /CHASEIII 45005 32,227 30,689 30,996 32,974 17,812 54% 28 ''; Trips & Outings 45030 58,344 55,744 56,301 55,959 18,692 33% 29 Senior Citizens 45040 85,539 85,458 86,313 85,428 62,073 73% 30 Murzyn Hall 45129 239,136 239,792 242,190 244,137 155,616 64% 31 Gym Fund 45130 0 125,000 126,250 126,250 40,040 32% 32 Library Total 45500 772,743 772,743 780,470 790,470 549,691 70% 33 EDA Levy 78,622 83,971 84,811 84,811 84,811 100% 34 Sub Total 10,569,762 10,975,537 11,085,292 11,075,598 8,028,782 72% 36 Origninal 2009 four -year budget plan 37 Maint & Utilities new GYM 85,000 The starting point for the 2010 budget was 38 Maint & Util new Pub Safety 300,000 the 2008 budget plus Council approved pay 39 Total Expense Projection 10,954,762 / increases and utilities on the new buildings 41 Revenue &Exp Projections 2010 2011 2012 2013 42 Operating Levy 8,052,142 8,752,142 9,352,142 9,852,142 43 LGA 425,338 425,338 425,338 0 44 Other Revenue 1,793,142 1,793,142 1,793,142 1,793,142 45 Total Revenue 10,270,622 10,970,622 11,570,622 11,645,284 46 Expense 10,954,762 11,064,310 11,285,596 11,511,308 47 Fund Bal (Used) Increase (684,140) (93,688) 285,026 133,976 48 Exp Increase for Inflation 49 Percent 0.0% 1.0% 2.0% 2.0% 50 Amount 0 _ 109,548 221,286 225,712 Page 17 Police Department Summary of Cost Factors for 2011 Budget BUDGET 2011 FUND NUMBER 2011 POLICE BUDGET 101-42100 SUMMARY OF COST FACTORS FOR THE COMING YEAR Explanation of Personnel 2010 Adopted 2011 Proposed Total Total FIE Total Total Comp Total Total Comp Position Title 2010 2011 Salaries Fringe & Fringe Salaries Fringe & Fringe Chief ofPolice 1.00 1.00 108.846 29.947 138.793 108.848 30,372 139.218 Captain 1.00 1.00 85.907 25.440 111,347 85.907 25,773 111.880 Sergeants 3.00 4.00 261.432 75.055 336.487 347,755 101.967 449.722 Corporals 2.00 2.00 155,889 45,835 201.724 155,838 46.482 202.270 Police Officers 18.00 18.00 1.359.938 403.395 1,763,333 1.372.126 408.710 1.780.838 Middle SchLiaison (grant) 1.00 0.00 63.304 19.072 82,376 27th Off-fed grant 1.00 1.00 54,373 19.387 73.760 61.130 18.889 80.019 28th Off-AIt School Liaison 0.00 1.00 0 57,774 18.230 76.004 Office Supervisor 1.00 1.00 50.309 17,599 73.908 51,617 17.013 88.630 Information Systems Spec 0.00 1.00 0 45.485 16.051 61.536 Records Technicians 2.00 2.00 86,221 27.060 113,281 85,768 29.260 115.028 ChiafoGeuretary 1.00 0.00 46.184 16.048 62,227 Clerk Typist 1.00 1.00 40.032 15.094 55,126 42.918 15.664 58,572 Comm Svc Officer 1.00 1.00 41.628 16.578 58.207| 41.629 16,719 58,348 PT Comm Svc Officer 0.85 0.85 30.900 5.686 36.586 ' 30.800 5.790 36.680 |nv/Liaison/Corppoy 14.592 2.816 17.408 14.592 2,873 17.465 , Inv/Liaison/Corp 5.000 966 5.966 ! 5.000 985 5.985 Insurance Schlemmer 6.900 6.900 6,900 6.900 Insurance Schmidt 8.940 0.940 8.940 8.940 Police Community Pgmo 4.024 776 4.800 4.084 800 4,864 |nhyndoptLabor - Rec / 6,881 1.276 8,157 Furlough -19.621 -3.866 -23,487 Une Item Rounding ` 3 0 3 to PoHce Comm Pgms (4.024) (776) (4.800) (4.064) (800) (4.804) Page 18 BUDGET 2011 FUND NUMBER 2011 POLICE BUDGET 101 -42100 SUMMARY OF COST FACTORS FOR THE COMING YEAR Category Description Amount Percent 1 Total Personnel Expenses 3,262,516 90.20% 2 Items required by Statue, Union Contract or essential to operate the Dept. 302,219 8.36% 3 Items not required by Statue or Contract, but essential to running a successful Dept. 27,710 0.77% 4 Essential general supply and maintenance items 24,520 0.68% Total Non - Personel Expenses: 354,449 9.80% Department Total 3,616,965 100.00% Category Description Category Description 2 Training ammo, mace & taser cartridges: 6,800 3 Building maintenance: 5,000 2 New /replacement uniforms - officers: 14,600 3 Car wash contract: 2,160 2 New /replacement uniforms - civilians: 500 3 Cellular telephones: 6,500 2 New /replacement vests: 5,280 3 Civilian training course fees: 800 2 Vehicle Repair /Parts: 18,800 3 Legal notice publishing for auction: 150 2 Gas, oil and lubricants: 58,900 3 Misc Mtnc Services: 7,000 2 Ammo & taser cartridges: 3,000 3 Mtnc - office equipment &pgms: 4,000 2 Rubber gloves & anti - bacterial wipes: 700 3 Range and miscellaneous rentals: 2,000 2 Evidence & Intox supplies & drug kits: 2,000 3 Tobacco compliance purchases: 100 2 Range & Training Room supplies: 1,500 4 Batteries, keys, misc supplies: 2,120 2 Fingerprinting & misc office & squad supplies: 1,500 4 Food Supplies for mtgs: 1,000 2 Shared costs for Central Records: 15,100 4 Forms, business cards: 3,000 2 Detox transports: 950 4 Janitor supplies (Mats &mops): 1,000 2 Pawn shop query fees: 290 4 Local travel expense: 900 2 Law Enf Driving course: 4,200 4 Misc small equipment: 4,500 2 Police training course fees: 4,700 4 Out of town travel expense: 3,000 2 Intoxilyzer recertification: 300 4 Paper, pens, notebooks, envelopes, folders: 3,500 2 Central telephone service: 4,950 4 Possible hiring /testing fees: 1,500 2 Wireless Internet Access svc: 4,200 4 Printer & fax toner, flash drives, disks: 2,000 2 MDT Access fee: 3,300 4 Property Damage: 500 2 Postage: central mailings: 1,900 4 Replacement computers & printers: 0 2 .Postage: specialized mailings: 100 4 Subscriptions and memberships: 1,500 Liability and Property Insurance: 66,018 2 CJDN quarterly charges: 3,000 2 Radio Service contract w /Anoka Co: 3,000 2 Garage, labor charges: 32,000 2 Metro Em Svcs Bd User fees for 800 mhz radic 1,500 2 Vehicle repair: 4,000 2 Garage space allocation: 631 2 DTF shared cost: 5,500 2 POST and vehicle licenses: 5,400 2 Electric: 24,000 2 Water: 600 2 Gas: 1,000 2 Sewer: 2,000 Page 19 Blank Page Proposed Resolution Adopting Proposed Budget and Proposed Levy for 2011 RESOLUTION 2010 - RESOLUTION ADOPTING A PROPOSED BUDGET FOR THE YEAR 2011, SETTING THE PROPOSED CITY LEVY, APPROVING THE HRA LEVY, APPROVING A TAX RATE INCREASE, AND ESTABLISHING A BUDGET HEARING DATE FOR PROPERTY TAXES PAYABLE IN 2011, NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL FOR THE CITY OF COLUMBIA HEIGHTS, MINNESOTA: that the following is hereby adopted by the City of Columbia Heights. Section A. The budget for the City of Columbia Heights for the year 2011 is hereby approved and adopted with appropriations for each of the funds listed below. Expense General Fund 10,200,317 Community Development Fund 263,823 Economic Development Fund 389,251 State Aid 157,545 Cable Television 129,442 Library 790,470 DARE Project 20,000 Infrastructure 233,297 Capital Improvement 922,897 Capital Equipment Replacement Funds 443,393 Construction Funds 1,129,500 Central Garage Fund 688,509 Liquor Operating 8,715,880 Liquor Capital /Non- Operating 688,955 Water Utility Fund 2,611,909 Sewer Utility Fund 1,845,696 Refuse Fund 1,568,787 Storm Sewer Fund 359,879 Data Processing 348,772 Debt Service Fund 2,625,900 Total Expense Including Interfund Transfers 34,134,222 Section B. The estimated gross revenue to fund the budget of the City of Columbia Heights for all funds, including general ad valorem tax levies and use of fund balances, as hereinafter set forth for the year 2011: Revenue General Fund 10,200,317 Community Development Fund 263,823 Economic Development Fund 389,251 State Aid 157,545 Cable Television 129,442 Library 790,470 DARE Project 20,000 Infrastructure 233,297 Capital Improvements 922,897 Capital Equipment Replacement Funds 443,393 Construction Funds 1,129,500 Central Garage Fund 688,509 Liquor Operating 8,715,880 Liquor Capital /Non - Operating 688,955 Water Utility Fund 2,611,909 Sewer Utility Fund 1,845,696 Refuse Fund 1,568,787 Storm Sewer Fund 359,879 Data Processing 348,772 Debt Service Fund 2,625,900 Total Revenue Including Interfund Transfers 34,134,222 Page 20 RESOLUTION 2010' RESOLUTION ADOPTING A PROPOSED BUDGET FOR THE ¥EAR 2011, SETT THE PROPOSED CITY LEVY, APPROVING THE HR LEVY, APPROVING A TAX RATE INCREASE, AND ESTABLISHING A BUDGET HEARING DATE FOR PROPERTY TAXES PAYABLE IN 2011. Section C. The following sums of money are levied for the current year, collectable in 2011, upon the taxable property in said City of Columbia Heights, for the foliowing purposes: Estimated General Fund Levy 7.909.711 Estimated Library Levy 757.620 Estimated EDA Fund Levy 84,811 Total 8,752,142 Section D. The City Council of the City of Columbia Heights hereby approves the Housing and Redevelopment Authority Tax Levy for the fiscal year 2011 in the amount of $262,556. BE IT FURTHER RESOLVED BY THE COUNCIL OF THE CITY OF COLUMBIA HEIGHTS, MINNESOTA: That the public budget hearing is scheduled for December 13, 2010 at approximately 7:00 p.m. in the City Council Chambers. BE IT FURTHER RESOLVED BY THE COUNCIL OF THE CITY OF COLUMBIA HE|GHTS, COUNTY OF ANOKA, MINNESOTA: That the County Auditor is authorized to fix a property tax rate for taxes payable in the year 2011 that is higher than the tax rate calculated for the City for taxes levied in 2009, collectable in 2010. BE IT FURTHER RESOLVED : That the City has adequate fund balances and reserves to pay 2011 Bond principal and interest payments on General Obligation Bond Series 2003A in the amount of $43,800 and General Obligation Bond Series 2004A in the amount of $229,651, and that the County Auditor is authorized to cancel these Bond Levies for taxes payable in 2011 The City Clerk is hereby instructed to transmit a certified copy of this resolution to the County Auditor of Anoka County, Minnesota. Approved this ---------- day of ----------------- Offered By: Seconded By: Roll Call: Ayes: Nays: Mayor Gary L. Peterson Patricia Muocmvitz, CMC City Clerk Page 21 Blank Page Alternate Proposed Resolution Alternative RESOLUTION 2010 - RESOLUTION ADOPTING A PROPOSED BUDGET FOR THE YEAR 2011, SETTING THE PROPOSED CITY LEVY, APPROVING THE HRA LEVY, APPROVING A TAX RATE INCREASE, AND ESTABLISHING A BUDGET HEARING DATE FOR PROPERTY TAXES PAYABLE IN 2011. NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL FOR THE CITY OF COLUMBIA HEIGHTS, MINNESOTA: that the following is hereby adopted by the City of Columbia Heights. Section A. The budget for the City of Columbia Heights for the year 2011 is hereby approved and adopted with appropriations for each of the funds listed below. Expense General Fund 10,200,317 Community Development Fund 263,823 Economic Development Fund 389,251 State Aid 157,545 Cable Television 129,442 Library 790,470 DARE Project 20,000 Infrastructure 233,297 Capital Improvement 922,897 Capital Equipment Replacement Funds 443,393 Construction Funds 1,129,500 Central Garage Fund 688,509 Liquor Operating 8,715,880 Liquor Capital /Non - Operating 688,955 Water Utility Fund 2,611,909 Sewer Utility Fund 1,845,696 Refuse Fund 1,568,787 Storm Sewer Fund 359,879 Data Processing 348,772 Debt Service Fund 2,625,900 Total Expense Including Interfund Transfers 34,134,222 Section B. The estimated gross revenue to fund the budget of the City of Columbia Heights for all funds, including general ad valorem tax levies and use of fund balances, as hereinafter set forth for the year 2011: Revenue General Fund 10,200,317 Community Development Fund 263,823 Economic Development Fund 389,251 State Aid 157,545 Cable Television 129,442 Library 790,470 DARE Project 20,000 Infrastructure 233,297 Capital Improvements 922,897 Capital Equipment Replacement Funds 443,393 Construction Funds 1,129,500 Central Garage Fund 688,509 Liquor Operating 8,715,880 Liquor Capital /Non - Operating 688,955 Water Utility Fund 2,611,909 Sewer Utility Fund 1,845,696 Refuse Fund 1,568,787 Storm Sewer Fund 359,879 Data Processing 348,772 Debt Service Fund 2,625,900 Total Revenue Including Interfund Transfers 34,134,222 Page 22 Alternative RESOLUTION 2010 - RESOLUTION ADOPTING A PROPOSED BUDGET FOR THE YEAR 2011, SETTING THE PROPOSED CITY LEVY, APPROVING THE HRA LEVY, APPROVING A TAX RATE INCREASE, AND ESTABLISHING A BUDGET HEARING DATE FOR PROPERTY TAXES PAYABLE IN 2011. Section C. The following sums of money are levied for the current year, collectable in 2011, upon the taxable property in said City of Columbia Heights, for the following purposes: Estimated General Fund Levy 7,909,711 Estimated Library Levy 757,620 Estimated EDA Fund Levy 84,811 Total 8,752,142 Section D. The City Council of the City of Columbia Heights hereby approves the Housing and Redevelopment Authority Tax Levy for the fiscal year 2011 in the amount of $262,556. BE IT FURTHER RESOLVED BY THE COUNCIL OF THE CITY OF COLUMBIA HEIGHTS, MINNESOTA: That the public budget hearing is scheduled for December 13, 2010 at approximately 7 :00 p.m. in the City Council Chambers. BE IT FURTHER RESOLVED BY THE COUNCIL OF THE CITY OF COLUMBIA HEIGHTS, COUNTY OF ANOKA, MINNESOTA: That the County Auditor is authorized to fix a property tax rate for taxes payable in the year 2011 that is higher than the tax rate calculated for the City for taxes levied in 2009, collectable in 2010. BE IT FURTHER RESOLVED : That the City has adequate fund balances and reserves to pay 2011 Bond principal and interest payments on General Obligation Bond Series 2003A in the amount of $43,800 and General Obligation Bond Series 2004A in the amount of $229,651, and that the County Auditor is authorized to cancel these Bond Levies for taxes payable in 2011. BE IT FURTHER RESOLVED : That the City Council desires to reduce the property tax levy by using fund balance and state aids to further reduce the debt levy in the amount of $ BE IT FURTHER RESOLVED : That the City has adequate fund balances and reserves to pay $ of the $664,080 Bond principal and interest payments levy on Public Safety Building, General Obligation Bond Series 2008B, leaving a balance of $ to be levied. The City Clerk is hereby instructed to transmit a certified copy of this resolution to the County Auditor of Anoka County, Minnesota. Approved this day of Offered By: Seconded By: Roll Call: Ayes: Nays: Mayor Gary L. Peterson Patricia Muscovitz, CMC City Clerk Page 23 Amendment No.MN-12093-090710-02/A1 FIRST AMENDMENT To Network Services Agreement No. MN-12093-090710-02 This First Amendment (“Amendment”)is concurrently entered into on September 7, 2010 (“Effective Date”) in conjunction with Network Services Agreement No. MN-12093-090710-02 (“Agreement”) by and between Comcast Business Communications, LLC (“Company”) and City of Columbia Heights (“Customer”), individually referred to herein as “Party” and jointly referred to as “Parties”. In the event of conflict between this Amendment and the Agreement, the Terms and Conditions of this Amendment shall take precedence in the interpretation of the explicit matter in question. Unless otherwise set forth herein, all capitalized terms set forth herein shall have the same meaning as set forth in the Agreement. Whereas, the Parties desire to amend the Agreement by this writing to reflect the amended or additional Terms and Conditions to which the Parties have agreed to; Now, therefore, in consideration of the mutual covenants, promises, and consideration set forth in this First Amendment, the Parties agree as follows: 1. Section 1.2 of the Agreement is hereby modified to read as follows: “Except as set forth in Schedule A, the Service does not include connection to the public switched network, building wire, any Local Area Networks (“LANs”), customer premise equipment, IP addressing capability, firewalls or any other equipment, electronics, or wiring required on the Customer’s side of the Demarcation Point.” 2. Section 6.1 of the Agreement is hereby modified to read as follows: “Notwithstanding any other term or provision in this Agreement, Customer shall have the right, in its sole discretion, to terminate this Agreement at any time during the Term, or any Renewal Term, upon (i) sixty (60) days prior written notice to Company and (ii) the payment of all remaining Monthly Recurring Charges (‘Termination Charges”) payable to Company within ten (10) days following termination of the Agreement (‘Termination Charges”), as follows: a. If terminated at any time during month one (1) through month twenty-four (24) of the Agreement Term, Termination Charges shall equal 100% of all remaining Monthly Recurring Charges b. If terminated at any time during month twenty-five (25) through month forty-eight (48) of the Agreement Term, Termination Charges shall equal 75% of all remaining Monthly Recurring Charges c. If terminated at any time during month forty-nine (49) through month sixty (60) of the Agreement Term, Termination Charges shall equal 50% of all remaining Monthly Recurring Charges” 3. The following provision is hereby added to the Agreement to read as follows: “Portability. Customer may terminate an existing Service (an “Existing Service”) and turn up a replacement Service (i.e., having different termination points on Comcast’s network) (a “Replacement Service”) without incurring Termination Charges with respect to the Existing Service, provided that (a) the Replacement Service must have a Service Term equal to the remaining Service Term of the Existing Service; (b) the Replacement Service must have monthly recurring charges equal to or greater than the monthly recurring charges for the Existing Service; (c) Customer submits a Sales Order to Comcast for the Replacement Service within ninety (90) days after termination of the Existing Service and that order is accepted by Comcast; (d) Customer reimburses Comcast for any and all installation charges that were waived with respect to the Existing Service; and (e) Customer pays the actual costs incurred by Comcast in installing and provisioning the Replacement Service.” Comcast Business Communications, LLC CONFIDENTIAL and PROPRIETARY SH-A Page 1 of 2 Amendment No.MN-12093-090710-02/A1 IN WITNESS WHEREOF, the Parties hereto have executed this First Amendment as of the day and year written below and the persons signing covenant and warrant that they are duly authorized to sign for and on behalf of the respective Parties. Except as otherwise modified by this Amendment, all other Terms and Conditions of the original Network Services Agreement shall remain in full force and effect. City of Columbia Heights Comcast Business Communications, LLC Signature: Signature: Printed Name: Printed Name: Title: Title: Date: Date: Comcast Business Communications, LLC CONFIDENTIAL and PROPRIETARY SH-A Page 2 of 2