September 14_ 2009

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					September 14, 2009
                         CITY OF LAKEVILLE, MINNESOTA
                                2010 Proposed Budget
                                  Table of Contents

                                                                               Page
Executive Summary
        Budget Message                                                         1
        Distinguished Budget Presentation Award                                19
        Elected and Appointed Officials                                        20
        Organizational Structure                                               21
        Relationships between Departments and Funds                            22
        Financial and Budget Policies                                          23
        2010 Budget Development Process and Calendar                           27
        Description of City Funds and Accounting Structure                     28
        Strategic Plan                                                         30
        Revenue Sources, Trends and Assumptions                                33
        Combined Budgetary Funds Summary - All Appropriated Fund Types         40
        Property Tax Levy Information                                          42

General Fund
        Fund Balance Discussion                                                52
        Statement of Revenues, Expenditures, and Changes in Fund Balance       53
        Schedule of Revenues
          General Property Taxes                                               54
          Licenses and Permits                                                 55
          Intergovernmental                                                    56
          Charges for Services                                                 57
          Court Fines, Investment Income, Miscellaneous, and Other Financing   59
        Department/Program Budget Descriptions and Expenditures
          General Government
            Mayor and Council                                                  60
            Committees and Commissions                                         63
            City Administration                                                64
            Public Communications                                              66
            City Clerk                                                         68
            Legal Counsel                                                      71
            Planning                                                           72
            Community and Economic Development                                 78
            Inspections                                                        82
            General Government Facilities                                      86
            Finance                                                            90
            Information Systems                                                93
            Human Resources                                                    96
            Insurance                                                          99



                                              i
                           CITY OF LAKEVILLE, MINNESOTA
                                  2010 Adopted Budget
                                    Table of Contents
                                          (continued)
                                                                                      Page
General Fund (continued)
           Public Safety
            Police                                                                    100
            Fire                                                                      105
            Ambulance                                                                 109
           Public Works
            Engineering                                                               110
            Streets                                                                   115
           Parks and Recreation
            Parks                                                                     119
            Recreation                                                                124
            Arts Center                                                               127
Special Revenue Funds
         Combining Schedule of Revenues, Expenditures, and changes in Fund Balances   130
         Fund balance Discussion                                                      132
         Communications Fund                                                          133
         Benefit Accrual Fund                                                         138
         Surface Water Management Fund                                                140
         Economic Development Fund                                                    145
Debt Service Funds
         Combining Schedule of Revenues, Expenditures, and changes in Fund Balances   146
         Special Assessments Fund                                                     148
         Property Taxes Fund                                                          149
         State-Aid Fund                                                               150
         Tax Increment Fund                                                           151
         Water Revenue Fund                                                           152
         Arena Revenue Fund                                                           153
         HRA Lease Revenue Fund                                                       154
         Legal Debt Margin                                                            155
         Combined Schedule of Governmental Debt Service Requirements                  156
Capital Projects Funds
         Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances   157
         Municipal State Aid Fund                                                     160
            Capital Improvement Plan Projects                                         161
         Pavement Management Fund                                                     162
            Capital Improvement Plan Projects                                         163
         Improvement Construction Fund                                                164
            Capital Improvement Plan Projects                                         165


                                              ii
                           CITY OF LAKEVILLE, MINNESOTA
                                  2010 Adopted Budget
                                    Table of Contents
                                           (continued)
                                                                                   Page
Capital Projects Funds (continued)
         Building Fund                                                             166
             Capital Improvement Plan Projects                                     167
         Tax Increment Fund                                                        168
             Capital Improvement Plan Projects                                     169
         Equipment Fund                                                            170
             Capital Improvement Plan Projects                                     171
         Park Dedication Fund                                                      173
             Capital Improvement Plan Projects                                     174
         Storm Sewer Fund                                                          175
             Capital Improvement Plan Projects                                     176
         Water Fund                                                                177
             Capital Improvement Plan Projects                                     178
         Sanitary Sewer Fund                                                       179
             Capital Improvement Plan Projects                                     180
         Police Station and Central Maintenance Facility Construction Fund         181
         Ice Arena Construction Fund                                               182

Enterprise Funds
         Liquor Fund                                                               183
          Net Assets Discussion                                                    186
         Utility Fund                                                              190
          Net Assets Discussion                                                    193

Internal Service Fund
         Municipal Reserves Fund                                                   205
          Net Assets Discussion                                                    206

Appendices
         Community Profile                                                         207
         Map of Lakeville                                                          210
         Number of City Employees (Full Time Equivalent)                           211
         Listing of Principal Employers                                            215
         Listing of Principal Tax Payers                                           216
         Commercial and Industrial Building Permits Issued - Years 2008 and 2007   217
         Glossary of Budget Terms                                                  218




                                                 iii
Executive Summary
September 14, 2009

To the Honorable Mayor, Members of the City Council and the Citizens of Lakeville:

It is my privilege to present the proposed 2010 budget of the City of Lakeville. The budget
policies and tax levy are shaped in large part by the prevailing economic conditions, legislative
taxing constraints and City Council financing and taxation policy decisions.

The City of Lakeville, as well as business and individuals, have had to adjust the new realities of
these economic challenges that have confronted us during the past year. The potential of a near
term extension of the current economic environment presents possible further challenges as we
prepare for the coming year. To hopefully grasp the full width and dimensions of such
challenges one must revisit the recent past and how we have evolved to this point in time.


                                   Historical Perspective
The City Council, at its May 5, 2008 meeting, approved a Resolution Authorizing the Execution
of an Agreement with Regard to a Transit Service Expansion Plan for the City of Lakeville. As a
result, the Metropolitan Council would levy $370,000 to Lakeville properties in 2009 and
approximately $743,000 in 2010.

The City Council approved the Resolution with the understanding that the cost of the
Metropolitan Council Transit Tax Levy would be offset by City budget reductions for property
taxes payable in 2009-2010. The Council stated that its objective is that there would not be a net
property tax increase as a result of the Metropolitan Council Transit Tax Levy.

Reallocate the allowed maximum amount of Municipal State Aid revenues from a construction
account to the General Fund for MSA-eligible street maintenance expenses ($293,012) and
budget adjustments ($76,988) to offset the 2009 tax levy reduction ($370,000). The re-allocation
of MSA roadway funds will reduce the City’s ability to fund future construction projects on
MSA-eligible roadways using MSA funds. The Council recognized that this would result in
property tax increases should the Council wish to improve MSA City and County roadways in
the future. For 2010, the City budget for expenditures (and therefore services) must be reduced
by an additional $373,000 or new revenues must be generated to off-set the reduction in the
City’s levy.



                                                1
At its May 2008 and July 2008 Council work sessions, the Council discussed various financial
challenges related to the 2009 budget including the fiscal impact of the May 5 Resolution
relating to the Transit Levy, projected $1 million State budget deficit and constraints of newly re-
imposed levy limits.

As the summer of 2008 progressed, the number of building permits and new plats had dropped
dramatically and the economy continued to show signs of stress. By late summer the City
Council decided not to fill five vacant positions in the Engineering, Environmental Services,
Communications, Planning, and Street departments. Also, for the first time in its history, the City
of Lakeville terminated two positions in the Inspections Department and one position in the
Engineering Department.

Although there was speculation of potential un-allotment of the December Market Value
Homestead Credit, no formal action was taken by the Governor until late December. Lakeville
lost $305,000 in Market Value Homestead Credit on December 26, 2008 due to the un-allotment.

The housing crisis morphed into foreclosed homes and an increasing rate of tax delinquencies.
The deterioration in the financial markets resulted in an investor “flight to quality” and a
decrease in investment earnings. As such, the City had to respond to a $1.44 million budget
shortfall which needed to be addressed.

                 Revenue source                                Reason                    Amount
   Market Value Homestead Credit             State aid cancelled by Legislature      $     602,161
   Tax delinquencies                         Economic downturn                             165,000
   Building permits                          Economy: construction slowdown                259,000
   Development related fees                  Economy: reduced development activity         150,000
   Engineering fees - improvement projects   Construction projects cancelled                95,000
   Interest on investments                   Market conditions - lower yields.             170,000
       Total revenue reduction                                                       $   1,441,161

At its April 6, 2009 meeting the City Council responded with budget adjustments. The following
is a summary of the salient adjustments.

                    Employee furloughs
                    Fees for Financial Management Services for Lakeville Arenas
                    Community and economic development marketing endeavors
                    Reduction in number of outdoor ice rinks from 11 to 6 sites
                    Contract mowing reductions
                    Major maintenance projects eliminated
                    Reduced snow plowing of trails and certain sidewalks.
                    Reduction in contingency
                    Budget “trimming”
                    Re-appropriation of tax levy for Benefit Accrual Fund




                                                  2
City services and programs are delivered primarily by personnel. The following is a summary of
staff personnel reductions approved in order to address the budget issues.

                                                      2009                   2008
                                                Employee Positions     Employee Positions
                 Employee Position             Reduced Eliminated     Reduced Eliminated
     Associate Planner                                          1.0
     Planning Assistant                                                               1.0
     Senior Building Inspector                                  1.0
     Building Inspector                                         1.0                   1.0
     Building Administrative Assistant                                                1.0
     Cable Coordinator                                                                1.0
     Civil Engineer                                                                   1.0
     Engineering Senior Project Coordinator                                           1.0
     Engineering Technician                                                           1.0
     Engineering Property Data Specialist                       1.0
     Accountant II                                  0.3
     Payroll Technician                             0.3
     Information Systems Technician                             1.0
     Police Officer                                             1.0
     Police Criminal Analyst                                                          1.0
     Police Records Administrative Assistant                                          0.5
     Community Public Safety Officer                            1.0
     Park Ranger (seasonal)                                     0.3
     Street Maintenance II                                      1.0
     Warming House Attendants (seasonal)                        0.2
     Gardner (seasonal)                                         0.3
     Recreation Program Assistant                    -          0.6        -           -

                      Total                         0.6         9.4        -          8.5




                                                3
                        Factors Affecting Budget and Tax Levy
The budget policies and tax levy are shaped in large part by the prevailing economic conditions,
legislative taxing constraints and City Council financing and taxation policy decisions.

Economy

Recession. The current recession appears to be the worst on record in more than 6 decades.
Unemployment is at 9.4% and trending toward 9.9%. Retail sales appears to be leveling off but
is highly dependent on consumer wealth spending in order to recover to previous levels.

Growth communities such as Lakeville are highly dependent on new construction to finance pre-
existing debt obligations, future infrastructure and current operations. The subprime mortgage
problems and bursting of the housing bubble has resulted in a precipitous fall in housing values
and new construction.




Financial institutions struggling with the degradation of balance sheets due to the fall out from
subprime mortgage issues have also become much more judicious in their lending standards
thereby resulting in reduction of credit for new housing projects. There is a high probability that
it may take years for the mortgage foreclosures to stabilize, inventories to return to normal levels
and valuations to improve.

A recent proliferation of data seems to suggest the economy, both in the U.S. and globally is
improving. The question therefore becomes how fast will the economy recover? How long will
before the economy returns to normal? Will inflation become a factor for the future?

Community growth. The residential, commercial and industrial growth is at or near historical
low levels due to the current national economic factors. Foreclosures and bankruptcies are on
the rise. Lending is constrained as financial institutions try to restructure under the weight of the
mortgage crisis. There is no significant community development planning activity currently in
progress.




                                                 4
The budget is premised on the assumption that Lakeville’s permit activity for single family and
town homes will experience very modest improvements for the coming year.

                                                RESIDENTIAL PERMITS
                         700
                         600
                         500
               PERMITS


                         400
                         300
                         200
                         100
                           0
                           2005         2006    2007    2008      2009          2010       2011
                                                       YEAR
                                                                                Total Residential Units
                                                                                Single Family



Minnesota population will grow and so will the need for housing and business. The eventual
economic recovery will result in a resumption of community growth and revenues associated
with construction such as development fees and building permits. Lakeville is well positioned to
receive that growth when it happens.

Commercial and industrial development appears to be decreasing when compared to previous
year’s activities. Recent significant economic development is derived primarily from companies
purchasing or leasing existing vacant facilities.

                               COMMERCIAL - INDUSTRIAL BUILDING CONSTRUCTION

                          $45,000,000
                          $40,000,000
                          $35,000,000
                          $30,000,000
                 VALUE




                          $25,000,000
                          $20,000,000
                          $15,000,000
                          $10,000,000
                           $5,000,000
                                  $-
                                         2005   2006   2007    2008      2009      2010     2011
                                                               YEAR




Lakeville has come to rely on new construction to finance the operations of its engineering,
planning and inspections departments. Much of Lakeville’s infrastructure is financed with debt
obligations in anticipation of the connection and development related fees from the new
construction. The recession and the probability that it may take years for before construction
levels return to previous levels will result in financial stress for Lakeville’s General, debt service
and capital project funds.
                                                          5
The oxymoron is however, that the punitive levy limit laws whereby Lakeville can only levy
taxes for half its growth will result in a reduction in the ability to finance operations – such as
police, fire, and streets over the long term.
If the growth related restriction in the levy limit laws are not remedied, Lakeville may need to
consider restricting growth and financing existing debt with higher taxes and/or user fees.

Delinquent property taxes. Banks and lending institutions are struggling with the disposition
of foreclosed homes. Developers struggling with debt payments on vacant landing during this
adverse real estate market are searching for ways to cash flow their operations.

As such the delinquency rate for tax collections is rising. In 2008, the net delinquent taxes
receivables increased by $154,500. The trend will likely continue until the housing, real estate
and financial markets improve.

Investment income. The deterioration in the financial markets has resulting in investor “flight
to quality”. As such yields on short-term investments are at unprecedented historic low rates.
Over the balance of 2009 and into the first half of 2010 yields on short-term debt should be kept
low by the Fed’s promise to keep the federal funds target rate (the interest at which banks lend to
other member banks) at or near 0% for the “extended period”.

Assessors Estimated Taxable Market Value. The assessors estimated taxable market values
for residential market values declined on the average home by approximately 7.75% for taxes
payable 2010. This follows a reduction of 3.3% in value for taxes payable in 2009.


                                     ASSESSORS ESTIMATED MARKET VALUE
                                        Median Value Homesteaded Residential

                          $300,000
           Market Value




                          $280,000
                          $260,000
                          $240,000
                          $220,000
                          $200,000
                                      2004    2005   2006    2007   2008       2009   2010
                                                             Year



The overwhelming majority of commercial and industrial properties are showing no changes in
market valuations for taxes payable 2010. The decreasing market valuations values for
residential properties however results in a shift in tax burden from residential to commercial and
industrial properties.




                                                        6
Commercial properties are therefore paying an increasing portion of the total tax burden to the
extent that they are approaching levies that existed prior to the 2001 omnibus tax laws changes.

       90%

       80%
                                    81%     79    79%       79%     79%        79%
                             78%                                                     76%
       70%           74%                    %                                               74%
              72%
       60%

       50%

       40%

       30%

       20%     24%    23%
                                                                                     20%    21%
                             19%                                    17%        17%
       10%                          16%     16%       16%   16%


        0%
              2000   2001   2002   2003    2004   2005      2006   2007    2008      2009   201
                                                                                            0
                                   Residential         Commercial/Industrial



State of Minnesota

State Aid for property tax relief – Market Value Homestead Credit. The state legislature
created the Market Value Homestead Credit (MVHC) program in 2001 to provide state-paid
property tax relief to owner’s homesteaded residential property. The credit to homeowners
reduces a city’s property tax receipts by the amount of the credit allocated to the city. This
means the city will receive less than its certified tax levy form taxpayers. The state makes up the
difference by reimbursing the city for the city portion of the credit received by property owners.
The combination of after-credit tax receipts and the MVHC reimbursement should equal the
city’s certified levy.

However, since the implementation of the 2001 Omnibus Tax Law, Lakeville has (a) lost all of
its LGA (Local Government Aid) and (b) has only received its full entitlement of the Market
Value Homestead Credit twice in the last eight years.

Unless there is a significant improvement in the State sales and income tax revenues, there is
high probability that municipalities such as Lakeville will remain vulnerable to the loss of its
Market Value Homestead Credit for the foreseeable future. The sales and income tax revenues
are highly dependent on retail sales and employment.

State of Minnesota – Taxation laws. The Legislature has enacted taxation laws which are
creating very challenging budgeting issues for Lakeville especially as it relates to (a) Special tax
levy to recapture loss of MVHC (b) Levy Limits - constraint of growth and (c) Levy Limits –
inflationary factors.

                                                  7
       (a) Tax Levy to recapture MVHC revenue loss.
       The current levy limit law allows cities to levy for any loss of state aid that is “un-
       allotted” by the governor. In other words, if the City Council chooses to do so, it can
       levy in 2010 for the $305,479 and $630,561 loss of Market Value Homestead Credit in
       December 2008 and 2009 respectively.

       (b) Levy limits – growth limitations.
       Levy limits have existed for 30 out of the last 35 years. In all but one of those years
       (2009), cities have been able to levy for community growth (residential and businesses).
       Starting in 2009, cities can only levy for half the increase in residential growth (based on
       the number of households). Likewise, the tax levy for commercial and industrial
       property can only increase for half the growth based on market value for new
       construction. For growth cities such as Lakeville, this will be a very ominous financial
       problem in future years when the economy rebounds. The problem will compound over
       time.

       (c) Levy limits – inflation factors.
       The levy limit laws limit tax increases to changes in the Implicit Price Deflator – not to
       exceed 3.9%. For taxes payable 2010 – the deflator is only .89% which would provide
       approximately $93,008 in additional tax levy authority.


City Initiatives

Metro Transit Levy. The Lakeville City Council initiative on May 6, 2008 provided transit
opportunities for Lakeville residents. It also results in an increased Metropolitan Council transit
tax levy. The City Council approved the transit tax levy subject to a corresponding decrease in
the City tax levy.

The City reduction in tax levy is financed with State Aid Street Funds (2009) and a reduction in
budget (2010). The 2010 budget reduction comes at a time when the State has un-appropriated
all of Lakeville’s Market Value Homestead Credit and City revenues are declining as a result of
deteriorating economic conditions.

Transportation. The County Road 70/Interstate construction project will be completed this
year. The City share of costs is being financed by a combination of Municipal State Aid
Construction funds and the issuance of street reconstruction bonds which will be repaid from
property tax levies over a 25 year period. The estimated 2010 and 2011 tax levies to repay the
debt is approximately $397,000 and $565,000 respectively.

The Dodd Boulevard improvement project from 186th Street to Hayes Avenue is anticipated to
commence in the coming year. The project will be financed from street reconstruction bonds
which will be repaid from property tax levies. The 2011 tax levy will be approximately
$220,000 per year.

WSB Engineering is in the process of completing the Pavement Management analysis to
determine which streets will need to be reconstructed in the coming years. The City policy is to
specially assess 40% of the cost to benefited property owners. The remaining balance is finance
                                                8
with the issuance of street improvement bonds which are repaid from property tax levies. It is
anticipated that there will be streets that will require reconstruction in 2010 which will impact
the 2011 and future tax levies.
Pavement Management. The WSB Engineering report also provide an analysis and
recommendations regarding the annual pavement management program relating to seal coating,
cracksealing, patching and overlays of City streets. The recommendations are unknown at this
time. A tax levy of $1.258 million for pavement management is provided for in the proposed
levy consistent with that of prior years.

Major Maintenance Projects. All of the major maintenance projects were deleted from the
General Fund budget in April 2009. The various revenue constraints such as Levy limitations,
loss of Market Value Homestead Credit, tax levy reductions due the Transit Levy tax policy and
revenue reductions due to economic conditions will have continued to limit the city’s ability to
finance major maintenance projects.

                                      Budget Overview
Municipalities organize their financial activities into separate “funds” in order to properly
manage and account for the services provided. Each fund can be thought of as a separate
business organized for a specific purpose. Each of the funds has a different purpose, different
constraints on its resources and a different method of accounting for its activities. The City has
attempted to allocate resources among its different funds in order to achieve the Council’s goals
in the most cost-effective manner possible.

The General Fund accounts for all revenues and expenditures necessary to provide a full range
of services, including general government administration, community and economic
development, public safety, public works, and parks and recreation.




                                                9
                                        GENERAL FUND EXPENDITURES
                                          BY FUNCTION $20,747.325


                   Public safety
                    $9,549,446                                                              Public works
                       46%                                                                   $3,080,323
                                                                                                15%




                                                                                                    Parks and
                                                                                                    recreation
                                          General                                                  $3,254,980
                                        government                                                     16%
                                        $4,553,507                         Other
                                           22%                          $309,069 1%




The major functions are financed with a combination of revenues - taxes being the largest source.
The following graph illustrates the revenue sources and impacts of the loss of Market Value
Homestead Credit.


                                REVENUE SOURCE BY FUNCTION - 2010


       9,500,000                                        1,659,988

       8,500,000
                                                        8,279,381
       7,500,000

       6,500,000

       5,500,000

       4,500,000
                                1,443,782
       3,500,000
                                3,263,418                                     942,350                       601,148
       2,500,000
                                                                                                           2,784,993
                                                                             2,243,639
       1,500,000

        500,000

        (500,000)                (121,871)                (309,189)             (83,788)                    (104,004)
                                    t
                                  en                        ety                  ks                          rts
                               rnm                       af                    or                        c ,A
                           e                            S                     W
                         ov                         lic                   lic                          Re
                     G                          Pu
                                                  b
                                                                      Pu
                                                                        b                         s,
                  al                                                                         rk
               er                                                                          Pa
           G en
                                             Tax Levy     Other Revenue      Market Value Credit


                                                               10
Tax revenues will increase primarily as a result of the special levy to recover the loss of State aid
- Market Value Homestead Credit. License and permit activity is less than the prior year due to
building construction. Charges for services have decreased because of the transfer of street light
revenues (and expenditures) to the Utility Fund. Franchise fees for electric and gas companies
are a new revenue source proposed to be implemented in the coming year.

Based on the budget challenges for the coming years, there will be no new initiatives in the
coming year unless the staff is directed to do so by the Council or there is no budgetary impact.

The majority of the city budget, especially in the General Fund, is related to personnel costs and
services. Since mid-2008, the City has adjusted its budget as a result of economic conditions and
council initiatives.

Since service and costs are primarily derived from personnel services, there has been a
corresponding reduction in the City staffing levels.

                                                  2007     2008     2009       2010
                                                  Actual   Actual   Actual   Proposed
                General government                 45.6     43.2     38.6      37.2
                Public safety
                 Police                            64.1     65.2     62.1      62.3
                 Fire                               4.6     4.6       4.6       4.6
                Public works
                 Engineering                       13.4     11.9      9.3       9.0
                 Streets                           19.8     20.0     19.4      19.0
                Parks and recreation
                 Parks                             15.0     15.0     14.5      15.0
                 Recreation                         5.3     5.3       4.9       4.7
                 Arts Center                        3.2     3.6       3.7       3.7

                 Total General Fund and Special
                        Revenue Funds             171.0    168.8    157.1     155.5

                Liquor Fund                        26.4     25.9     25.7      25.7
                Utility Fund                       17.5     18.0     18.0      18.0
                   Total employees                214.9    212.7    200.8     199.2



The 2010 budget is premised on the assumption there are no significant increases in
compensation with the exception of scheduled step increases. In order to accomplish this
objective, the City needs to negotiate with the collective bargaining groups to adjust pay
schedules or employment conditions which currently provide for cost of living in the 2010
contracts. The budget provides appropriations in anticipation of an 8% increase in health care
costs and a mandated .25% increase in the employer share of coordinated PERA costs. The
budget includes a Police Patrol officer who will be returning from military service in Iraq
starting in July 2010.

A complete discussion of all General Fund departments, services and programs is provided in the
subsequent sections of this document.

                                                   11
The 2010 proposed General Fund budget is in balance with revenues equaling expenditures.

                                                                2010
                                                      Proposed      Increase
                                                       Budget      (Decrease)
           Revenues and other                       $ 20,747,325 $      (63,292)
           Expenditures                                20,747,325       (97,297)
           Net increase/(decrease)                              -        34,005
           Transfers to Capital Projects:
            Equipment Fund                                      -        1,263,647
           Fund Balance, January 1                      9,864,615         (811,542)
           Fund Balance, December 31                $   9,864,615 $        486,110
           Ratio: Fund balance to expenditures              47.5%

The designated fund balance represents the amount of funds required to operate during the first
six months of the year.          The City’s most significant revenue sources–taxes and
intergovernmental revenue–do not provide appreciable revenues until the second half of the year.
A healthy financial position also allows the City to avoid volatility in tax rates; helps minimize
the impact of state funding changes; allows for the adequate consistent funding of services,
repairs and unexpected costs; and can be a factor in determining the City’s bond rating and
resulting interest costs.

The proposed 2010 budget totals $20,747,325 with a $9,864,165 fund balance. The ratio of fund
balance to expenditures is 47.5%. In light of current economic conditions, levy limits and
uncertainty with respect to the State budget issues, the fund balance is adequate and sufficient
but not excessive.


Special Revenue Funds

Special Revenue Funds are used to account for the proceeds from specific revenue sources that
are legally restricted to expenditures for specific purposes. Establishment of such funds also
enables the City to more effectively manage its resources and minimize tax levies. Special
Revenue Funds such as Communications (formerly referred to as Cable TV), Surface Water
Management, Benefit Accrual, and Economic Development are self supporting with user fees
and grants.

The Communications Fund budget provides for increase in the Cable Production Technician
position increasing from 36 to 40 hours per week in order to adequately service the new channel
12 public access channel. The channel 12 was previously performed by a volunteer.

The Benefit Accrual Fund accounts for the accrued liability of employee benefits attributed to
severance compensation. Funding is provided by property taxes and interest earnings on
investments. Due to budget and tax levy constraints, there are no tax levies for 2009 or 2010.
Assets are approximately 52% of accrued liabilities.
                                               12
The Surface Water Management Fund provides a wide range of environmental services which
are described in subsequent sections. The programs are proposed to be financed with a $.50
increase (from $6.00/quarter in 2009 to $6.50/ quarter in 2010) in the Surface Water
Management Fee. There are also new fees proposed to be collected from developers; a complete
description of the new fees is discussed in the Appendix. The services financed by the new fees
were previously provided at no cost to the developer.

The Economic Development Fund accounts for a state grant received from the Minnesota
Department of Trade and Economic Development in 1995. The grant purpose is to provide loans
to businesses expanding in or locating to Lakeville. The fund also accounts for administrative
fees received from the issuance of conduit debt. No appropriations are proposed from the 2010
projected fund balance of $88,583.


Debt Service Funds

The City of Lakeville as of December 31, 2008, has approximately $103 million of debt
outstanding (excluding liquor revenue bonds), most of which is repaid from non-tax related
revenue sources such as special assessments, state aid street construction allocations, tax
increments, ice arena operations or liquor profits. The 2010 tax levy includes $6,071,085 for
debt repayment, a $141,690 decrease compared to the 2009 tax levy for debt.

Moody’s Investor Service has assigned Lakeville an Aa2 credit rating. In its opinion letter,
Moody’s stated “This very favorable rating reflects the City’s rapid growing tax base and
diversifying underlying economy; as well as its healthy financial operations characterized by
prudent management and sound fund balances.”


Capital Project Funds – City Facilities and Equipment

The City has historically been compelled to issue Certificates of Indebtedness – short term debt –
to finance the purchase of police, fire, street and park maintenance equipment. Certificates of
Indebtedness are repaid with property tax levies which are exempt from levy limits. The asset
transactions are accounted for in the Capital Projects Equipment Fund.

The overwhelming majority (94%) of the appropriations are related to vehicle and equipment
replacements which have exceeded their useful life.

One of the objectives of the 2009 adopted budget was to endeavor to reduce the City’s reliance
on debt financing for equipment with the expectation that lower taxes will be the ultimate
outcome as a result of reduced interest costs. Therefore, $1,263,647 was transferred from the
General Fund to the Equipment Fund in 2009 to reduce future financing and tax levies.

ALF Ambulance is contracting with Allina Medical Transportation for emergency medical
services effective February 1, 2009. The ALF assets are in the process of being liquidated and
distributed to member cities; Lakeville will receive $292,579 and $117,032 in 2009 and 2010 as
a result of the liquidation. The proposed budget appropriates the ALF distribution to the
acquisition of public safety equipment.
                                               13
All departments evaluated the overall condition of the fleet and equipment. In many cases, the
expected useful life of assets has been extended on the condition that there was no adverse
increase in repairs or operating costs. As such the proposed budget provides only $710,988 for
equipment acquisitions and replacements for the coming year.

Overall, the transfers from the General fund, net assets from the ALF distribution and extension
of the asset replacement schedules will enable the City to purchase all of the equipment in 2009
and 2010 without the need to issue debt.

The Capital Projects Building Fund accounts for non-routine construction or improvement
activity related to government buildings. The proposed budget anticipates the receipt of Federal
Stimulus funds for energy efficiency projects at the Lakeville Area Arts Center and other City
facilities. Life Time Fitness has a contractual obligation to pay the City $825,000 in 2010; the
funds will be appropriated to City Hall roof replacement and heating system upgrades,
technology improvements and the Fire Station #1 parking lot repaving.

There is approximately $681,000 of unencumbered funds remaining in the 2007 Capital
Improvement Police Station Construction Fund; this amount is proposed to be appropriated to
improvements at the old police station ($443,000) and the 2007 Capital Improvement Debt
Service Fund ($238,000) to reduce tax levies in 2010 thru 2012.

Capital Project Funds – Infrastructure

Infrastructure (streets, sewers, parks, etc.) is indispensable toward making the City safe,
attractive and prosperous. Financing of improvements is often accomplished through issuance of
debt because of its long useful life and in order to make the projects affordable.

Improvement projects are identified in the five-year capital improvement plan. However,
inclusion in the budget does not in itself confer authority to spend City resources. Capital
projects are subject to individual review and approval by the Council prior to commencement.

The most significant non-routine project contemplated in the Capital Improvement Plan is as
follows:

   •   Dodd Boulevard (County Road 9) from 195th Street to Hayes Avenue. The project will
       be designed in 2009, right-of-way acquired in 2010, and constructed in 2011. Dakota
       County will be responsible for 55% of the project costs. The three year project, initiated
       due to safety issues, will cost approximately $10.3 million. The City of Lakeville will
       finance its share of costs with the issuance of Street Reconstruction Bonds which will be
       repaid with future property tax levies. Dodd Boulevard is a County road and therefore
       has no impact on City operating costs.




                                              14
Enterprise Funds

Liquor Fund

The City of Lakeville has, since the repeal of Prohibition in 1933, owned and operated a
municipal liquor store with the intent of controlling the sale of alcohol in a responsible manner.
Lakeville operates three liquor stores that have a combined sales volume of more than $14
million. The net income derived from operations is committed to projects that are deemed to be
of benefit to the community.

The Liquor Fund will continue to provide $18,288 of financial support to Independent School
District 194 for the “School/Community Prevention Specialist” program. In addition, the Liquor
Fund has a long standing history of providing financial support to community projects. Projects
financed by the Liquor Fund are as follows.

                                          Purpose                        2010
                         Fire Station #4 debt                            190,097
                         Police Station debt                             100,000
                         General Fund support                             77,537
                         General Fund (P.I.L.T.)                          64,499
                                           Total                    $     432,133

Investment in our city’s entrepreneurial endeavors will enhance the City’s ability to continue to
provide significant future financial support for projects that benefit our community.


Utility Fund - Water Operation

The 2010 Water operation budget includes several major maintenance items that include the
rehabilitation of well 14, repainting the Dakota Heights water tower, and continuing the change
out of numeric readout water meters with newer digital maters. The 2010 Utility Fund budget
does not propose any new staff positions. The 2010 water operation budget does not propose
any rate increases.
                                                                      Increase/
                                                         2010        (Decrease)
                Revenues                             $ 4,087,355 $ 85,326
                Operating expenses                     (2,271,416)      (49,145)
                Major projects                         (1,188,836)     (874,717)
                Interfund transfers                      (140,231)        (4,818)
                Capital outlay                            (13,767)       15,583
                    Change in working capital        $    473,105       $ (827,771)




                                                15
Utility Fund – Sanitary Sewer Operation

More than 65% of the Sanitary Sewer Fund budget is for M.C.E.S. sanitary sewer fees for treatment
of system effluent. M.C.E.S. is proposed to increase sewer charges for the coming year; the extent
of the increase is unknown at this time. Major maintenance projects ($105,000) include inflow and
infiltration mitigation and rehabilitation of lift station #4. Capital outlay acquisitions include
replacement of the sewer vactor ($334,926) and other equipment ($15,418).

                                                                                                               Increase/
                                                                                      2010                    (Decrease)
                           Revenues                                                $ 3,909,698                $ 76,898
                           M.C.E.S. expense                                         (2,712,127)                  (66,685)
                           Operating expenses                                         (873,168)                   (2,234)
                           Major maintenance                                          (105,000)                  216,260
                           Interfund transfers                                        (140,230)                   (4,818)
                           Capital outlay                                             (350,336)                 (184,061)
                           Change in working capital                               $ (271,163) $                 35,360



Depending on the final M.C.E.S. costs for 2010, the City Council may need to consider sanitary
sewer rate increases for its customers. Overall Lakeville’s water and sanitary sewer fees are less
than those charged by other Minnesota metro area municipalities.

                         Commercial Quarterly Totals                                       Residential Quarterly Totals
                 M inneapolis                                                     M inneapolis
                      St Paul                                                          Savage
         Inver Grove Height s*                                                          St Paul
                    Richfield                                              Inver Grove Heights*
                      Savage                                                        Burnsville*
                 Farmington*                                                          Richfield
                 M innetonka                                                       M innetonka
                Bloomingt on                                                       Eden Prairie
                   Burnsville*                                                       Shakopee
                Coon Rapids                                                       Bloomington
               Apple Valley*                                                     Brooklyn Park
                    Plymouth                                                        Woodbury
                 LAKEVILLE*                                                          Plymouth
                       Blaine                                                    Coon Rapids
                      Eagan*                                                     Apple Valley*
               Brooklyn Park                                                      LAKEVILLE*
                   Shakopee                                                             Eagan*
                 Eden Prairie                                                     Farmington*
                  Woodbury                                                              Blaine
                 Rosemount*                                                       Rosemount*

                M aple Grove                                                      M aple Grove


                                 $-   $200      $400    $600      $800                            $-   $100     $200      $300      $400

                        Water 100,000 Gallons    Sew er 100,000 Gallons                  Wate 75,000 Gallons    Sew er 18,000 Gallons



                                                                          16
Utility Fund – Street Light Operation

Street lighting function is financed entirely with service charges billed to customer along with other
utility fees such as water, sanitary sewer and surface water management fees. Street lighting costs
were previously accounted for in the General Fund. Street lighting fees are proposed to increase for
the coming year. Residential street light fees will increase from $6.75 per quarter in 2009 to $7.85
per quarter in 2010; non-residential will increase from $.18869 per front foot per quarter in 2009 to
$.21957 per front foot per quarter in 2010.


Internal Service Fund

The Internal Service Municipal Reserves Fund was created to account for the City’s general liability,
excess liability, and property and casualty insurance costs. The City’s primary insurance carrier is
the League of Minnesota Cities Insurance Trust (LMCIT). Revenues are derived primarily by
transfers from benefited funds and insurance rebates. The City’s risk management costs are very
reasonable due to its favorable claims history and management practices. The favorable claims
history is due in large part to the safety conscientiousness of its employees.


Property Taxes
The 2010 proposed tax levy is based on the maximum permissible levy allowed by Minnesota
Statutes and includes special tax levies for public safety personnel. The tax levy also takes into
consideration the City Council directive to increase the levy for the loss of the 2009 Market
Value Homestead Credit and reduce the City levy equal to the corresponding increase in the
Metropolitan Council Transit Tax Levy.

The 2010 proposed tax levy will increase by $687,580 (2.9%) shown as follows:

                                                        2010              Increase/
                                                      Proposed           (Decrease)
        Operations                                $   16,884,970 $ 766,304            4.8%
        Street Improvement Bonds                       2,641,187       444,649     20.2%
        Equipment Certificates of Indebtedness           966,063      (627,706) -39.4%
        Pavement Management                            1,258,688        62,966        5.3%
        Capital Improvement Bonds - Police               868,863         7,835        0.9%
        Capital Improvement Bonds - CMF                  831,175        20,956        2.6%
        Park Bonds                                       417,519         3,263        0.8%
        Ice Arena Bonds                                  271,289         9,313        3.6%
        Arts Center Bonds                                 74,989           -          0.0%

                     Total Tax Levy               $   24,214,743   $ 687,580          2.9%


                                                 17
The tax base is experiencing change due to property market conditions. Residential properties
values are declining with the average home having an approximate 7.75% decrease in valuation
for taxes payable 2010. Conversely, property values on majority of commercial and industrial
properties are remaining stable. The affect of static values in one class of property while another
class is decreasing results in a shift in the tax burden form one class to another.

The average home is therefore projected to have an approximate .4% decrease in the City share
of taxes in 2010. A typical business will have an approximate 9% increase in the City share of
taxes for the coming year. The actual taxes and increase (or decrease) may vary from parcel to
parcel depending on property characteristics, location, market values and/or property
classification.

Distinguished Budget Presentation Award

The Government Finance Officers Association of the United States and Canada (GFOA)
presented a Distinguished Budget Presentation Award to the City of Lakeville, Minnesota for its
annual budget for the fiscal year beginning January 1, 2009. In order to receive this award, a
government must publish a budget document that meets program criteria as a policy document,
as an operations guide, as a financial plan, and as a communications device.

This award is valid for a period of one year only. We believe our current budget continues to
conform to program requirements, and we are submitting it to the GFOA to determine its
eligibility for another award.

Conclusion

Our community offers safe and secure neighborhoods; abundant parks, open spaces and trails; an
excellent transportation system; environmental amenities; and a diverse commercial/industrial
base. These are the reasons our residents and businesses consider Lakeville as their “home”.

The role of government is to provide public services deemed to be of value to the people we
serve.    Commitment to providing quality and efficient services, developing effective
partnerships, promoting comprehensive planning and seeking citizen participation remains a high
priority.

The challenge before us is to maintain the balance of fiscal stewardship during a period of
unprecedented economic stress with the continuation of service which meets our community’s
expectations. The 2010 budget and tax levy maintains that delicate balance of services in a
fiscally responsible manner.

Respectfully submitted,




Steven C. Mielke
City Administrator
                                                18
19
                             CITY OF LAKEVILLE, MINNESOTA
                                Elected and Appointed Officials


                                        Elected Officials

                                                             Term of Office

Mayor                          Holly Dahl                    01/01/09 – 12/31/10
Council Members                Mark Bellows                  01/01/07 – 12/31/10

                               Kevin Miller                  07/20/09 – 12/31/10
                               Laurie Rieb                   01/01/09 – 12/31/12
                               Kerrin Swecker                01/01/09 – 12/31/12



                                      Appointed Officials

City Administrator                                           Steven C. Mielke
Finance Director/Treasurer                                   Dennis Feller
City Clerk                                                   Charlene Friedges
Police Chief                                                 Thomas Vonhof
Fire Chief                                                   Scott Nelson
Director of Operations & Maintenance                         Christopher Petree
Parks and Recreation Director                                Gerald Michaud
Planning Director                                            Daryl Morey
Community and Economic Development Director                  David Olson
City Engineer                                                Keith Nelson
Liquor Director                                              Brenda Visnovec
Human Resources Manager                                      Cindi Joosten




                                                20
CITY OF LAKEVILLE, MINNESOTA
Organizational Structure
December 31, 2009




                                                                                                     Citizens of Lakeville



                                                                                                    Mayor and City Council


                                                                                                                                        Housing and
                                                                                                                                       Redevelopment
                                                                                               City Attorney                             Authority




                                                            Economic                                                                Parks, Recreation &
                                                                                              Planning                                                                 Telecommunications            Lakeville Area
                                                           Development                                                              Natural Resources
                                                                                             Commission                                                                    Committee               Arts Center Board
                                                           Commission                                                                   Committee



                                                                                                               City Administrator


                                                                                                                                            Communications




         Human                                 Community and
                                                                          Finance                     Police                    Fire              Engineering               Operations and          Parks and          Off Sale
        Resources             Planning           Economic
                                                                                                                                                                             Maintenance            Recreation          Liquor
                                                Development

       Labor Relations                                                      Accounting              Communication                                    Plan Review                   Streets           Development
                             Planning/Zoning     Building Inspection                                                           Inspection                                          Utilities
     Compensation/Benefits                                             Accounts Receivable           Investigation                                      Design                                       Maintenance
                                Recycling      Economic Development                                                            Prevention                                    Physical Facilities
         Recruitment                                                     Accounts Payable               Patrol                                        Inspection                                       Planning
                                                                           Utility Billing                                    Suppression                                    Fleet Management         Recreation
                                                                                                    Animal Control                                      Survey
                                                                       Information Systems                                                       Special Assessments                                  Arts Center
                                                                                                                                                         G.I.S.




                                                                                                                     21
CITY OF LAKEVILLE, MINNESOTA
Relationships Between Departments and Funds
December 31, 2009
                                       Community
                           General         and                                               Operations
                          Government    Economic                                                and        Parks and    Off-Sale
           Funds            Admin.     Development   Finance   Police   Fire   Engineering   Maintenance   Recreation   Liquor

General Fund                  X            X           X         X       X         X             X             X

Special Revenue Funds:
  Communications              X
  Benefit Accrual                                      X
  Surface Water Mgmt.                                                              X
  Economic Development                     X

Debt Service Funds:                                    X

Capital Projects Funds:
  Municipal State Aid                                                              X
  Pavement Mgmt.                                                                   X             X
  Improvement Const.                                                               X
  Building                    X                        X         X       X                       X             X
  Tax Increment                            X           X
  Equipment                                                      X       X                       X             X
  Park Dedication                                                                                              X
  Storm Sewer                                                                      X             X
  Water                                                                            X             X
  Sanitary Sewer                                                                   X             X

Enterprise Funds:
  Liquor                                                                                                                   X
  Utility                                                                                        X

Internal Service Fund:
  Municipal Reserves                                   X




                                                                22
                           FINANCIAL AND BUDGET POLICIES

These policies provide guidelines for the fiscal administration of the city. The budget for the
City of Lakeville serves as a comprehensive, rational guide for financial and programmatic
decision-making and operations management throughout each fiscal year. The budget is
intended to be not only a financial plan but also a performance plan linked to the strategic goals
established by the City Council and outlined in a separate section.

Accounting, Auditing and Financial Reporting

The financial reporting and budgeting systems of the City are organized on a fund basis. A fund
is a fiscal and accounting entity with a self balancing set of accounts. Funds are the control
structures that ensure that public monies are spent only for those purposes authorized and within
the amounts authorized. Funds are established to account for the different types of activities and
legal restrictions that are associated with a particular government function.

   •   An independent audit will be performed annually.
   •   The City will produce comprehensive annual financial reports in accordance with
       Generally Accepted Accounting Principles (GAAP).
   •   The City will endeavor to maintain the GFOA Certificate of Excellence in Financial
       Reporting.

Budgetary Basis of Accounting
Governmental fund budgets are adopted on a modified accrual basis of accounting consistent
with generally accepted accounting principles. Under the modified accrual basis, revenues are
recognized when they are susceptible to accrual (i.e., when they become measurable and
available). “Measurable” means the amount of the transaction can be determined and “available”
means collectible within the current period or soon enough thereafter to be used to pay liabilities
of the current period. Under the modified accrual basis, expenditures are generally recognized
when the liability is incurred, except for principal and interest on general long-term debt, which
is recognized when due. Governmental fund budgets include the General Fund, Special Revenue
Funds, Debt Service Funds, and Capital Projects Funds.
Proprietary fund budgets are adopted on an accrual basis of accounting consistent with generally
accepted accounting principles. The focus of accrual accounting is primarily upon the
determination of net income and the maintenance of capital. Therefore, included within these
funds are all assets and liabilities associated with the fund’s operations. Revenues are recognized
when earned and expenses are recorded as soon as they result in liabilities for benefits received,
notwithstanding that the receipt or payment of cash may take place in another accounting period.
Expenses are recognized in the accounting period in which the liability is incurred, which also
includes depreciation. For budgetary control purposes, the City also appropriates the capital
expenditures for the proprietary funds. Proprietary fund budgets include the Enterprise Liquor
and Utility Fund, and the Internal Service Municipal Reserves Fund.
A budget is not adopted for the City’s Fiduciary Agency Fund. The City’s audited financial
statement uses the modified accrual basis of accounting for all governmental funds (at the fund
level), and uses the accrual basis of accounting for all proprietary funds.


                                                23
                           FINANCIAL AND BUDGET POLICIES
                                            (continued)

Operating Budgets
The City’s operating budget policy sets forth guidance with respect to balanced operating
budgets, with an overriding goal of achieving structural balance over a longer-term period, while
recognizing that in certain period’s revenues and expenditures may not be equal. A balanced
budget for the general fund is defined as revenues and other sources equal to or exceeding
operating expenditures. Other sources can include that portion of general fund balance that is
allowed to be budgeted for use per the City’s fund balance policy. The budget will provide for
adequate maintenance of capital facilities and equipment and for their orderly replacement.
Balanced budgets for the proprietary enterprise funds are defined as providing sufficient
revenues to support the operations of those funds, without subsidy from the general fund or
property taxes. Charges from the Internal Service fund shall be sufficient to support such
activities, with no trend of operating deficits.
Budget amounts are as originally adopted or as amended by City Council. The legal level of
budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is
at the department level for the General Fund and total expenditures for Special Revenue Funds.
The City Administrator has authorization to expend funds in excess of the appropriation for
individual line items. Budgeted expenditure appropriations lapse at year-end. Supplementary
appropriations can be carried forward to the following year if approved by the City Council.
Encumbrances represent purchase commitments outstanding at year-end and are reported as
reservations of fund balances since they do not constitute expenditures or liabilities. Any changes
to the budget are approved by majority vote of the City Council.

Revenue Policies
Revenue policy elements include:

   •   The City will project its annual revenues by a conservative objective and thorough
       analytical process.

   •   The City will endeavor to maintain a diversified and stable revenue system to shelter it
       from annual fluctuations in any one revenue source. All existing and potential revenue
       sources will be reexamined annually.

   •   New sources of non-property-tax revenue should be actively explored at all times.
   •   Where appropriate and not contrary to accepted public policy or statutes, emphasis will
       be directed toward full cost recovery through user fees. User fees and cost allocation
       formulas will be updated periodically (annually if needed).
   •   Ongoing, the City will review the full cost of activities supported by user fees to identify
       the impact of inflation and other cost increases and will review these fees along with the
       resulting net property tax costs with the City Council at budget time. Sensitivity to
       market rates will also be considered in setting fees.

   •   Intergovernmental grant requests are subject to fiscal review before the application is
       submitted. This review is to ensure that the grants do not create an obligation for

                                                24
                          FINANCIAL AND BUDGET POLICIES
                                            (continued)

       unfunded expenditures by the City relating to the grant’s purpose and to provide an
       overall budgetary review of grant proposals.
   •   Investment interest shall be budgeted conservatively.

Investments
   •   Investments made by the City will be in conformance with the City of Lakeville’s
       Investment Policy. All investments will address safety, liquidity, and yield. All temporary
       cash surpluses during the year are invested in securities permitted by state statute and the
       Investment Policy.
   •   It is the City’s policy to invest all available monies at competitive interest rates,
       coordinated with projections of the City’s operating and program cash flow needs.
       Interest earned from investment of available funds will be distributed to the funds
       annually based on each funds average monthly cash balance for the year.

Capital Improvement Budgets
   •   Capital outlay expenditures result in the acquisition of fixed assets that have a value over
       $1,000 and a useful life of greater than one year. They are tangible in nature in that the
       physical substance does not materially change its form through use.
   •   The City will adopt a five-year capital improvement plan and update it annually.
   •   The City will coordinate development of the capital improvement budget with the
       development of the operating budget. Future operating costs associated with new capital
       improvements will be projected and included in operating budget forecasts.
   •   The City will project its equipment replacement and maintenance needs for the next five
       years and will update this projection each year. From this projection, a maintenance and
       replacement schedule will be developed and included in the operating budget. In addition,
       the City will maintain all its assets at a level adequate to protect the City’s capital
       investment and to minimize future maintenance and replacement costs.
   •   The City staff will identify the estimated costs and potential funding sources, including
       the consideration of joint ventures with other cities, for each capital project proposal
       before it is submitted to the City Council for approval.
   •   The City will identify the estimated cost and potential funding sources for each capital
       project proposal before it is submitted to the Council for approval and in that process will
       determine the most effective financing method for the adopted project.
   •   Budget balances appropriated in capital improvement funds are designated for specific
       projects and are carried forward as available for expenditure until the project is complete
       or the balance is transferred to other eligible projects.

Debt
The City’s debt policy provides guidance to ensure that long-term debt is utilized appropriately
and in a fiscally prudent manner. Elements of the policy include:

                                                25
                           FINANCIAL AND BUDGET POLICIES
                                            (continued)

   •   Limiting long-term borrowing to capital improvements or other long-term projects which
       cannot, and appropriately should not, be financed from current revenues and/or funds
       established for equipment replacement.
   •   Final maturity of bonds and notes should not exceed the expected useful life of the
       underlying project for which it is being issued.
   •   Where possible, the City will endeavor to pledge special assessments, State aid or other
       non-tax revenues to debt service payments.
   •   Debt will not be used to finance current operations.
   •   State of Minnesota statutes limit the legal debt obligations to 3% of the City’s taxable
       market value.

Fund Balance
Fund balance or net assets are terms used to define the difference between a fund’s assets over its
liabilities. Fund balance is used in governmental fund types and net assets are used in proprietary
fund types.
The City’s General Fund unreserved fund balance, designated for working capital as of the end
of the year, should equal 40% to 50% of the next year’s budgeted expenditures.
Fund balance may be used for various contingencies including the following:
   •   Provide flexibility if state law significantly limits the City’s taxing and spending powers.
       This could include legislation regarding levy limits, property tax freezes, levy referendum
       requirements, etc.

   •   Provide flexibility if the State eliminates or reduces State revenue including fire pension
       aid, police pension aid, state street aid, or PERA aid.

   •   Provide some protection for future funding needs of the capital improvement plan
       including possible liquor operations legislation.

   •   Support the City’s bond rating.
   •   Cover expenses created by natural disaster, including flood, fire, or tornadoes.
   •   Cover a General Fund deficit when actual revenues are less than expenditures and to
       allow for a reasonable degree of error in budget forecasting.
   •   Protect against other unforeseen expenditures and any other items.

The fund balance policy protects the City in the event of temporary revenue shortfalls or
unpredicted expenditures and provides time to react to permanent changes in the City’s operating
environment.




                                                26
             2010 BUDGET DEVELOPMENT PROCESS AND CALENDAR

State statutes, local ordinances, and the City’s budget development policy prescribe the process
of budget review and adoption for the City of Lakeville. The laws require public input in the
budget process, including the publishing of a budget summary in the local media. Public input is
also available at the public meetings at which budget information is discussed. The following is
a calendar for the 2010 budget process:

April 2009
   • City Administrator directs staff to prepare their budget based on Council goals and
       objectives
   • Finance distributes budget preparation information to all departments
   • Preliminary budget meetings held with Department Directors and budget preparers

June/July 2009
   • Preliminary budgets are submitted to the City Administrator and to Finance
   • Finance reviews budget requests and prepares a preliminary budget
   • City Administrator reviews preliminary budget and directs revisions based on budget
       requests and revenue estimates

August 2009
   • Council work session on tax legislation, general fund budget history, budget requests,
      debt, property tax levy, and preliminary tax impacts
   • Staff reviews preliminary budget and makes revisions as directed by the City Council

September 2009
   • Special Council meeting to adopted budget and preliminary property tax levy as
      presented to the City Council at their September 14th meeting
   • 2010 adopted budget and preliminary property tax levy certified to Dakota County by
      September 15th

November 2009
   • Council work session to review changes to the adopted budget
   • Dakota County sends a notice to taxpayers indicating their property tax and the date of
     each taxing jurisdiction’s budget hearing

December 2009
   • City Council holds a “Truth in Taxation” public hearing on the adopted budget on
     December 14th
   • After listening to public comment, the Council closes the public hearing
   • City Council adopts the 2010 budget and final property tax levy on December 21st
   • Final property tax levy certified to Dakota County by December 25th




                                              27
         DESCRIPTION OF CITY FUNDS AND ACCOUNTING STRUCTURE

The accounts of the City are organized on the basis of funds, each of which is considered a
separate accounting entity. Certain City funds are classified according to generally accepted
accounting principles as major funds (generally defined as having total assets, liabilities,
revenues or expenditures/expenses totaling 10% of either governmental or proprietary fund
types). The City’s fiscal year is the calendar year.

Governmental Fund Types
Budgets are appropriated for the following governmental funds through which functions of the
City are financed:

       General Fund
       The general fund is the operating fund of the City. It is used to account for all financial
       resources except those required to be accounted for in another fund. The general fund is
       a major fund.

       Special Revenue Funds
       Special revenue funds are used to account for the proceeds of specific revenue sources
       that are designated or legally restricted to expenditures for specified purposes. Special
       revenue funds utilized by the City include the following:

              Communications
              Benefit Accrual
              Surface Water Management
              Economic Development

       Debt Service Funds
       The debt service fund is used to account for the accumulation of resources for, and the
       payment of, long-term debt principal, interest and related costs not funded by proprietary
       fund type operations. The debt service property taxes fund is considered a major fund of
       the City. Debt service funds utilized by the City include the following:

              Special assessments
              Property taxes
              State-aid
              Tax increment
              Water revenue
              Arena revenue
              HRA Lease revenue

       Capital Projects Funds
       Capital projects funds are used to account for financial resources to be used for the
       acquisition of equipment, construction of major capital facilities, or other long-term
       projects. The City prepares a 5-year capital improvement plan budget and adopts the first
       year of the plan. Once the budget is adopted, the individual capital appropriations do not
       lapse. In budgeting capital funds, the City assumes that all budgeted amounts will be
       spent on the indicated projects within the fiscal year or shortly thereafter.

                                               28
         DESCRIPTION OF CITY FUNDS AND ACCOUNTING STRUCTURE
                                           (continued)

Governmental Fund Types (continued)

       Capital Projects Funds (continued)
       As such, appropriations for uncompleted capital projects are not available for re-
       appropriation in subsequent years. Capital projects funds utilized by the City include the
       following:

              Municipal state aid
              Pavement management
              Improvement construction
              Building
              Tax increment
              Equipment
              Park dedication
              Storm sewer
              Water
              Sanitary sewer
              Police station and central maintenance facility (CMF) construction
              Ice arena construction

Proprietary Fund Types
Budgets are appropriated for the following proprietary funds through which functions of the
City’s proprietary activities are funded primarily through retail sales and user charges:

       Enterprise Funds
       Enterprise funds are used to account for operations (a) that are financed and operated in a
       manner similar to private business – where the intent of the governing body is that the
       costs (expenses, including depreciation) of providing goods or services to the general
       public on a continuing basis be financed or recovered primarily through user charges, or
       (b) where the governing body has decided that periodic determination of revenues earned,
       expenses incurred, and/or net income is appropriate for capital maintenance, public
       policy, management control, accountability or other purposes. The budget for the City’s
       Enterprise Liquor Fund and Utility Fund are major funds.

       Internal Service Fund
       Internal service funds are used to account for the financing of goods or services provided
       by one department to other departments of the City.




                                               29
                               CITY OF LAKEVILLE, MINNESOTA
                                         Strategic Plan
                                            Mission Statement

       “The City of Lakeville provides the foundation for healthy neighborhoods and successful
    businesses by investing in: comprehensive planning; high quality and efficient services; citizen
                               participation; and effective partnerships.”


    The City of Lakeville espouses to advance, through implementation of the 2009 Operating and
                 Capital Budget, the following community and organizational goals:

                                               RESPONSIBLE
                 GOALS                                                 PERFORMANCE CRITERIA
                                               DEPARTMENT
TAXES (SERVICES) GOALS
Maintain and communicate the core
                                                                        Remain in the lower third of
level of services expected by Lakeville       City Administration
                                                                        tax rates in Dakota County
residents
                                                                        Reduction in property tax
Attract business development to increase    Community and
                                                                        dependence from the current
commercial/industrial tax base           Economic Development
                                                                        70%
Continue to develop collaborations/
partnerships with private interests and       City Administration
other governments on key projects
Identify and evaluate alternatives to the
                                                   Finance
property tax for paying for services
Acquire land for fourth liquor store           Off-Sale Liquor
TRANSPORTATION GOALS
                                                                        Reduction in reliance on City
Reduce reliance on City property taxes
                                                   Finance              property taxes for non-city
for regional/county road improvements
                                                                        roadway.
Continue needed improvements to local,
                                                                        Complete County Road 70/I-
county and regional transportation               Engineering
                                                                        35 interchanges by 2010
network:
                                                                        Complete improvement of
       East-West corridors                       Engineering            Dodd Blvd. from 194th Street
                                                                        to Cedar Avenue
                                                                        Upgrade County Road 70
       I-35 interchanges                         Engineering
                                                                        through Lakeville
       Dodd Blvd. as a major artery                                     More safety, less congestion,
       linking Lakeville residents to the        Engineering            economic development
       East-West corridor routes                                        opportunities

                                                   30
                               CITY OF LAKEVILLE, MINNESOTA
                                         Strategic Plan
                                                (continued)

                                                RESPONSIBLE
                 GOALS                                               PERFORMANCE CRITERIA
                                                DEPARTMENT
TELECOMMUNICATION GOALS
Complete feasibility planning for fiber to    Community and          Have a plan and ordinance
all homes and businesses                   Economic Development      adopted by the Council
DOWNTOWN REDEVELOPMENT GOALS
                                                                     Expand the types of
Continue to attract private investment to    Community and
                                                                     businesses that are open
fund downtown redevelopment               Economic Development
                                                                     downtown
Enhance public amenities in downtown            Community and        Implement a publicly
                                             Economic Development    managed parking system
                                                Community and        Full service restaurant in
                                             Economic Development    Central Business District
OPEN SPACES / RECREATION GOALS
Provide parks and open space for a fully                             Park dedication fees reflect
developed city prior to the loss of           Parks and Recreation   true land values
available and desired land to develop
                                                                     Expansion of city park land as
                                              Parks and Recreation   planned in the Parks and Open
                                                                     Space Plan
                                              Parks and Recreation   Passage of a park referendum
PUBLIC SAFETY GOALS
Be a regional leader in disaster                                     Improved measurements in
preparedness                                         Police          proactive police activities, as
                                                                     developed by the Police Chief
Prioritize police officer time on core law
enforcement – patrol and investigative               Police
functions
PLANNING GOALS
Plan for balance of housing types,                                   Finish and implement 2008
including workforce and life-cycle                                   Comprehensive Land Use Plan
                                                   Planning
housing that reflect the changes in
Lakeville’s population
Facilitate development of new housing
                                                   Planning
types without cost to the City
Continue orderly development of
                                                   Planning
Lakeville


                                                    31
                               CITY OF LAKEVILLE, MINNESOTA
                                         Strategic Plan
                                            (continued)

                                            RESPONSIBLE
                 GOALS                                             PERFORMANCE CRITERIA
                                            DEPARTMENT
TRANSIT GOALS
Prepare Lakeville for transit services                             Complete a full assessment of
                                                                   what Lakeville residents need
                                          City Administration
                                                                   and the ridership potential of
                                                                   transit alternatives
COMMUNITY AND ECONOMIC DEVELOPMENT GOALS
Plan and prepare for office park                                   Attract interest from private
                                            Community and
development in Lakeville                                           developers for office park
                                         Economic Development
                                                                   development
                                                                   Location and timetable for
                                            Community and
                                                                   office park agreed upon by the
                                         Economic Development
                                                                   Council and the developer
OTHER GOALS
Provide for framework for long-term                                Adopt long-term infrastructure
maintenance, replacement and financing                             maintenance and
of aging infrastructure                       Engineering          refurbishment program,
                                                                   including the plan needed to
                                                                   finance the improvements
Provide a sustainable source of water                              Reduce consumption of water
                                            Operations and
supply for Lakeville’s future                                      per customer over the next
                                         Maintenance (Utilities)
                                                                   three years
                                                                   Develop and implement a
                                            Operations and         comprehensive public
                                         Maintenance (Utilities)   information campaign on
                                                                   water supply
                                                                   Adopt a stronger conservation
                                            Operations and         policy to address diminishing
                                         Maintenance (Utilities)   water supply for future
                                                                   development




                                                32
                       REVENUE SOURCES, TRENDS AND ASSUMPTIONS

    The City of Lakeville maintains a number of funds for recording fiscal transactions to meet legal
    accounting requirements. The City’s revenue estimates are budgeted conservatively to avoid
    possible shortfalls due to unanticipated changes in the economy. A review of all fee structures is
    completed with the preparation of the budget to ensure that rates are reasonable.

    Revenue estimation is a key component in preparing the City’s annual budget. The general
    intent is to make conservative and objective projections. The City’s approach to estimating
    revenues is to consider each individual revenue source’s history of predictability, stability or
    volatility. The estimation methods used are a combination of trend analysis and forecasting from
    department heads.

    The following is a summary of major revenue sources, trends and assumptions for fiscal year
    2010.
                                 Governmental Fund Revenues

    The 2010 proposed budget revenue of $34,402,962 is a $910,567 increase over 2009 estimate.

    General property taxes - The City
                                                             General Property Taxes
    relies on property taxes to support
    such      functions     as    general
    government, public safely, public          $25,000,000
    works and debt service. The 2010
    tax levy is $24,214,743 of which           $20,000,000
    $16,884,970 is appropriated to
    General Fund, $6,071,085 to Debt           $15,000,000
    Service Funds, and $1,258,688 to the
    Capital       Projects      Pavement       $10,000,000
    Management Fund.           The levy
    includes the 2009 Market Value              $5,000,000
    Homestead        Credit    loss    of
                                                        $0
    ($630,561).      A further detailed                      2007      2008    2009     2010
    discussion follows in the section                        Actual    Actual Estimate Budget
    entitled “Property Tax Levies.”

             Licenses and Permits                  Licenses and permits - Liquor licenses, building,
                                                   heating, plumbing and other building permits, and
                                                   cable TV license franchise fees are examples of
$2,500,000                                         revenue collected by the City for this category.
                                                   Building permits are the largest category and account
$2,000,000                                         for $738,851 (3.7%) of the 2010 General Fund
$1,500,000                                         revenues. Residential construction is at a 25 year low
                                                   due to economic conditions in the housing and
$1,000,000                                         financial sectors. Building permit revenues for 2010
                                                   are estimated to remain fairly constant with 2009
 $500,000
                                                   estimates. Commercial and industrial construction is
        $0                                         expected to decrease significantly compared to 2009.
             2007     2008    2009     2010
             Actual   Actual Estimate Budget

                                                   33
                   REVENUE SOURCES, TRENDS AND ASSUMPTIONS
                                                (continued)

                                 2006            2007           2008          2009         2010
                                Actual          Actual         Actual       Estimate     Estimate
    Residential building
    construction (dwelling units)
       Single family                  221             183           137           100          100
       Town-homes                     223             119            37            10           20
       Multifamily (R.E.U.)             -              76           242            87            -
                Total                 444             378           416           197          120
    Commercial and industrial
       valuation            $ 40,823,500 $ 43,118,100 $ 33,999,900 $ 5,000,000 $ 5,000,000



Intergovernmental revenues - The                              Intergovernmental Revenue
intergovernmental revenue classifications
consist of grants and aids from the
Federal, County and State governments.              $10,000,000
In 2007, the City received $5.8 million in
State aid for the County Road 70/I-35                $8,000,000
interchange construction project.         As
directed by City Council, the State aid              $6,000,000
street maintenance account is appropriated
to the General Fund to offset the transit tax        $4,000,000
levy implemented in 2009. The 2010
estimated State aid street maintenance               $2,000,000
allotment is $374,962 as compared to the
2009 estimated allotment of $235,069.                         $0
Other major 2010 intergovernmental                                 2007     2008    2009     2010
revenues include a Federal Economic                                Actual   Actual Estimate Budget
Stimulus Grant ($276,174), State aid for
debt service ($884,839), police ($335,887)
and fire relief pension aid ($190,209).


Charges for services - This classification includes user charges or reimbursements received
from those who benefited from services provided such as park and recreation programs, general
government services, public safety fees and public works related revenues. Revenues which are
highly sensitive to construction and development (i.e. planning and engineering fees) are
estimated to continue declining in the coming year.




                                                    34
                               REVENUE SOURCES, TRENDS AND ASSUMPTIONS
                                                              (continued)

                                                     2006         2007         2008         2009     2010
                                                    Actual       Actual       Actual      Estimate Estimate
                 Platting activities
                 (dwelling units platted)
                     Single family                     173              83         41           30        50
                     Town-homes                         77             155          -            -         -
                     Multifamily (R.E.U.)               76               -        242            -         -
                             Total                     326             238        283           30        50

       General government charges for services are anticipated to be $451,558 for 2010 which is an
       increase of $292,768 over the 2009 estimate, primarily the result of a new utility provider
       franchise fee of $262,500. Public safety charges for services are estimated to be $289,311 for
       2010, which is a ($9,137) decrease from 2009 estimate. The largest public safety revenue is
                                                Independent School District #194 reimbursement for
            Charges for Services                the School Resource Officer ($150,804).
                                                             Public works charges for services are estimated to be
$7,000,000                                                   $2,255,943 for 2010, which is a net increase of
                                                             $107,318 over 2009 estimate. The net increase is the
$6,000,000                                                   result of engineering development related activities
$5,000,000                                                   decreasing ($86,517), utility connection/surface water
                                                             charges increasing $739,927, and City street lighting
$4,000,000
                                                             revenue decreasing ($546,092) due to program
$3,000,000                                                   activity being accounted for in the Enterprise Utility
$2,000,000
                                                             Fund beginning in 2010.

$1,000,000                                                   Parks, recreation and arts center charges for
                                                             services for 2010 are estimated to be $1,235,370,
       $0                                                    which is an increase of $211,938 over 2009 estimate.
             2007     2008       2009       2010
             Actual   Actual    Estimate   Budget            The increase is primarily due to park dedication fees.


       The City endeavors to generate non-                                            Court Fines
       property tax revenues. As such, new
       charges for services will continue to be
       explored as existing charges will be                    $280,000
       examined          periodically       for                $275,000
       comparability with other communities
       for appropriate levels of cost recovery.                $270,000
       Court fines for 2010 are anticipated to                 $265,000
       remain fairly constant ($273,055) with
       2009 estimate ($272,394). The City                      $260,000
       receives a portion of the fines and
       penalties for traffic violations. The                   $255,000
       distribution of the fines depends upon                                2007       2008    2009     2010
       what violation, fines or forfeiture                                   Actual     Actual Estimate Estimate
       occurred and if the arresting officer

                                                                  35
                      REVENUE SOURCES, TRENDS AND ASSUMPTIONS
                                                   (continued)

    was a Lakeville Police Officer or a                              Special Assessments
    Minnesota State Patrol Officer.

    Special assessments are estimated at
    $543,805, which is a decrease of                 $800,000
    ($46,782) from 2009 estimate.       A
    portion of the costs for public                  $600,000
    improvements     are     recovered by
    assessment charges to the benefiting             $400,000
    property owners. These collections are
    primarily appropriated towards the               $200,000
    payment of debt service.
                                                               $0
                                                                    2007     2008    2009     2010
               Investment Income
                                                                    Actual   Actual Estimate Estimate


$2,000,000
$1,800,000                                                  Investment income is estimated to be
$1,600,000                                                  $270,801 in 2010, which is a slight increase
$1,400,000                                                  over 2009 estimate. Interest rates dropped
$1,200,000                                                  significantly starting in mid-2008 as a result of
$1,000,000                                                  investor “flight to quality.” Interest earnings
 $800,000                                                   are allocated to various funds on the basis of
 $600,000                                                   average cash balances; there are no anticipated
 $400,000                                                   changes in interest rates for the coming year.
 $200,000
        $0
             2007     2008      2009     2010
             Actual   Actual   Estimate Estimate
                                                                             Donations

    Donations are estimated to be
                                                   $1,000,000
    $143,411 in 2010, which is a
    ($29,296) decrease from 2009
    estimate. The largest single donation           $750,000
    represents pull-tab revenue from the
    Lakeville      Hockey        Boosters           $500,000
    ($95,000) that is pledged towards
    debt service payments of the                    $250,000
    Lakeville Ames Arena.
                                                              $0
                                                                    2007      2008    2009     2010
                                                                    Actual    Actual Estimate Estimate




                                                       36
                       REVENUE SOURCES, TRENDS AND ASSUMPTIONS
                                              (continued)




                  Miscellaneous                         Miscellaneous revenue is estimated to be
                                                        $955,662 in 2010, which is an increase over
                                                        2009 estimate of $84,198. The largest
$1,000,000                                              miscellaneous items represent a scheduled
                                                        payment from Life Time Fitness ($590,067)
  $750,000                                              for land sold in 2006, and an asset
                                                        distribution   from    ALF      Ambulance
  $500,000                                              ($117,032). Antenna site leases by wireless
                                                        communications companies ($220,923) are
  $250,000                                              accounted for in the General Fund and the
                                                        Capital Projects Water Fund.           The
        $0                                              remaining miscellaneous revenue items
              2007      2008    2009     2010
                                                        include disposal of assets ($13,439) and
              Actual    Actual Estimate Estimate
                                                        other ($14,201).


                                                                  Transfers to General Fund


 Transfers to the General Fund ($668,238)           $900,000
 typically represent a reimbursement for            $750,000
 cost of services such as human relations,          $600,000
 information technology, and financial
                                                    $450,000
 activities provided to the benefiting fund
 as shown in the graph.                             $300,000
                                                    $150,000
                                                             $0
                                                                  2007      2008      2009     2010
                                                                  Actual    Actual   Estimate Budget


                             Proprietary - Enterprise Fund Revenues

 The 2010 proposed budget revenue of $12,991,443 is a $23,252 increase over 2009 estimate.

             Liquor Fund Gross Profit                       Liquor fund gross profit consists of sales
                                                            less the cost of sales (or) suppliers cost of
                                                            products sold. Gross profit in 2010 is
$3,900,000
                                                            estimated to be approximately $3.69
                                                            million based on sales of $14.69 million
$3,600,000                                                  less cost of sales of $11.0 million. Sales in
                                                            2010 are expected to increase by 1.0%
$3,300,000                                                  over 2009 while costs of sales remain at a
                                                            fairly constant level of approximately 25%
$3,000,000                                                  of sales.
             2007      2008    2009     2010
             Actual    Actual Estimate Budget

                                                   37
                      REVENUE SOURCES, TRENDS AND ASSUMPTIONS
                                             (continued)

 Utility fund charges for services are primarily comprised of providing Lakeville residents and
 businesses with water and sanitary sewer treatment services. Beginning in 2010 the City street
 lighting program will be moved from the General Fund and accounted for in the Utility Fund.
 The utility fund charges separately for water usage and sanitary sewer treatment services based
 on individual consumption; street lighting is based on a single charge per quarter per residential
 dwelling unit, and a front foot charge per quarter for commercial/industrial and institutional
 entities. The following graphs illustrate the revenue trends for water usage and sanitary sewer
 treatment for the years 2007 through 2010.

                                                                Utility Fund - Water Charges

 Water charges in 2010 are expected to be
                                                   $4,000,000
 approximately $4.0 million, which is a
 1.4% increase over the 2009 estimate. The
 increase is based on usage as the 2010            $3,000,000
 projected revenue does not propose any
 customer rate increase.                           $2,000,000

                                                   $1,000,000
                                                                   2007      2008    2009     2010
     Utility Fund - Sanitary Sewer Charges                         Actual    Actual Estimate Budget


$4,000,000
                                                           Sanitary sewer charges in 2010 are
$3,000,000                                                 expected to be approximately $3.9 million,
                                                           which is a 1.2% increase over the 2009
$2,000,000                                                 estimate of $3.8 million. The 2010
                                                           projected revenue is based on increased
                                                           usage and no proposed customer rate
$1,000,000
             2007     2008    2009     2010
                                                           increase.
             Actual   Actual Estimate Budget
                                                               Utility Fund - Street Light Charges


 Street light charges are expected to be               $750,000
 approximately $637,000, which is a $91,000
                                                       $600,000
 increase over 2009 estimate. As noted
 above, the street lighting program was                $450,000
 accounted for in the General Fund prior to            $300,000
 2010.      The 2010 revenue projection
                                                       $150,000
 proposes a rate increase as previously
 discussed to offset rate increases anticipated               $0
 by electricity providers in 2010.                                  2007     2008    2009     2010
                                                                    Actual   Actual Estimate Budget




                                                  38
                 REVENUE SOURCES, TRENDS AND ASSUMPTIONS
                                          (continued)

Investment income is estimated to be $167,532 in 2010, which is a slight increase over 2009
estimate. As similar to governmental funds, interest earnings are allocated to various funds on
the basis of average cash balances; there are no anticipated changes in interest rates.

Donations represent water and sanitary sewer infrastructure that is installed by private
developers, ownership of the infrastructure is retained by the City’s Utility Fund. Water and
sanitary sewer infrastructure installed by
the City is generally financed through the                   Utility Fund - Donations
Capital Projects Water Fund or Sanitary
Sewer Fund; these infrastructure assets are
contributed to the Utility Fund as an
                                                 $3,750,000
interfund transfer in the year of
completion.     Donations for 2010 are           $3,000,000
estimated to be approximately $237,000;          $2,250,000
this is a decrease of approximately              $1,500,000
($712,000) or (75.0%) from 2009
                                                   $750,000
estimate.        Infrastructure donations
obtained through new development has                     $0
                                                             2007      2008    2009   2010
decreased significantly as shown in the
                                                             Actual Actual Estimate Budget
following chart.




                                              39
                                                             CITY OF LAKEVILLE, MINNESOTA
                                                              Combined Budgetary Funds Summary
                                                                   All Appropriated Fund Types
                                                             For the Year Ending December 31, 2010
                                                                                                                                      (continued on following page)


                                                                                               2010 Proposed Budget
                                                                   Governmental Funds
                                                                                                                                 Proprietary Funds
                                                   General         Special          Debt           Capital                   Enterprise          Internal Service
                                                    Fund           Revenue         Service         Projects            Liquor         Utility     Municipal Res.
Revenues
 General property taxes                        $ 16,157,882 $         - $ 6,071,085 $ 1,231,594                    $           - $             - $              -
 Tax increment                                            -           -     666,079     221,515                                -               -                -
 Licenses and permits                               902,341     550,654           -           -                                -               -                -
 Intergovernmental                                1,005,025         808     884,839     292,224                            3,900           3,264                -
 Charges for services                             1,539,919     611,003     319,897   1,761,363                                -       8,484,859          411,068
 Court Fines                                        273,055           -           -           -                                -               -                -
 Special assessments                                      -           -     490,465      53,340                                -               -                -
 Investment income                                  104,096      25,311      98,035      43,359                           53,121         108,422            5,989
 Donations                                           48,411           -      95,000           -                                -         237,333                -
 Miscellaneous                                       48,358           -      50,000     857,304                                -               -                -
 Gross profit                                             -           -           -           -                        3,683,987               -                -
               Total revenues                    20,079,087   1,187,776   8,675,400   4,460,699                        3,741,008       8,833,878          417,057

Expenditures and expenses
 General government                                 4,606,350         421,965              -                   -               -               -                -
 Public safety                                      9,684,543           6,833              -                   -               -               -                -
 Public works                                       3,126,904         505,079              -                   -               -               -                -
 Parks and recreation                               3,302,120               -              -                   -               -               -                -
 Debt service                                               -               -     11,237,920                   -         189,314               -                -
 Capital outlay                                        27,408          25,207              -           6,400,673               -               -                -
 Operating expenses                                         -               -              -                   -       2,330,857      10,829,672          364,927
      Total expenditures and expenses              20,747,325         959,084     11,237,920           6,400,673       2,520,171      10,829,672          364,927

Other financing sources (uses)
 Transfer from other funds                            668,238           8,572       2,048,000          69,672                  -          39,703                 -
 Transfer to other funds                                    -        (210,049)        (60,300)     (1,798,730)          (441,505)       (280,461)          (43,140)
 Disposal of assets                                         -               -               -               -                  -               -                 -
 Issuance of debt                                           -               -               -         603,945                  -               -                 -
 Refunding bonds issued                                     -               -               -               -                  -               -                 -
 Payment on refunded bonds called                           -               -               -               -                  -               -                 -
 Premium on bonds issued                                    -               -               -               -                  -               -                 -
 Discount on bonds issued                                   -               -               -               -                  -               -                 -
     Total other financing sources (uses)             668,238        (201,477)      1,987,700      (1,125,113)          (441,505)       (240,758)          (43,140)

Net change in fund balance and net assets                   -      27,215    (574,820) (3,065,087)    779,332    (2,236,552)                                8,990
Fund balance and net assets, January 1              9,864,615   2,006,326 10,490,119    6,466,172   6,107,591   112,567,268                               600,131
Fund balance and net assets, December 31       $    9,864,615 $ 2,033,541 $ 9,915,299 $ 3,401,085 $ 6,886,923 $ 110,330,716 $                             609,121

For a complete discussion of changes in fund balances and percentages, see individual fund sections.


                                                                                 40
                                               CITY OF LAKEVILLE, MINNESOTA
                                                Combined Budgetary Funds Summary
                                                     All Appropriated Fund Types
                                               For the Year Ending December 31, 2010
(continued from previous page)


                                                     Total

                                                      2010              2009
                                                    Proposed          Amended              2009           2008           2007
                                                     Budget            Budget            Estimate        Actual         Actual
Revenues
 General property taxes                         $    23,460,561 $      22,835,697 $       22,853,493 $   22,017,331 $   19,335,887
 Tax increment                                          887,594           820,082            888,600        884,306        835,144
 Licenses and permits                                 1,452,995         1,651,364          1,397,639      1,936,532      2,182,253
 Intergovernmental                                    2,190,060         1,930,150          2,576,367      2,257,358      8,428,011
 Charges for services                                13,128,109        13,078,679         11,791,439     14,340,602     13,861,201
 Court Fines                                            273,055           272,394            273,055        264,512        275,635
 Special assessments                                    543,805           590,587            578,125        777,153        826,452
 Investment income                                      438,333           746,436            391,756      1,840,702      2,445,997
 Donations                                              380,744         1,095,202          1,116,739      4,833,986      2,459,462
 Miscellaneous                                          955,662           299,141            871,464        224,541        202,205
 Gross profit                                         3,683,987         3,613,066          3,722,409      3,603,240      3,314,721
               Total revenues                        47,394,905        46,932,798         46,461,086     52,980,263     54,166,968

Expenditures and expenses
 General government                                   5,028,315         5,070,442          5,009,991      5,141,325      3,910,887
 Public safety                                        9,691,376         9,362,232          9,133,218      8,911,017      9,346,490
 Public works                                         3,631,983         4,156,100          3,930,165      4,535,118      3,970,680
 Parks and recreation                                 3,302,120         3,174,454          3,106,475      3,233,422      2,968,924
 Debt service                                        11,427,234        10,806,308         10,808,143      9,936,211     10,756,165
 Capital outlay                                       6,453,288         9,355,112         14,524,252     18,133,199     29,913,271
 Operating expenses                                  13,525,456        12,383,071         11,937,737     10,866,362     10,387,203
      Total expenditures and expenses                53,059,772        54,307,719         58,449,981     60,756,654     71,253,620

Other financing sources (uses)
 Transfer from other funds                            2,834,185           5,019,405         7,919,985     7,699,193      4,337,531
 Transfer to other funds                             (2,834,185)         (5,019,405)       (7,919,985)   (7,699,193)    (4,337,531)
 Disposal of assets                                           -                   -                 -         2,610        809,451
 Issuance of debt                                       603,945           3,391,205         6,865,000     1,505,000     24,600,000
 Refunding bonds issued                                       -                   -                 -       775,000      6,250,000
 Payment on refunded bonds                                    -                   -                 -    (2,975,000)    (3,945,000)
 Premium on bonds issued                                      -                   -                 -             -        610,404
 Discount on bonds issued                                     -                   -                 -             -         (3,242)
     Total other financing sources (uses)               603,945           3,391,205         6,865,000      (692,390)    28,321,613

Net change in fund balance and net assets         (5,060,922)   (3,983,716)   (5,123,895)   (8,468,781)   11,234,961
Fund balance and net assets, January 1           148,102,222   143,899,649   153,226,117   161,694,898   150,459,937
Fund balance and net assets, December 31       $ 143,041,300 $ 139,915,933 $ 148,102,222 $ 153,226,117 $ 161,694,898

For a complete discussion of changes in fund balances and percentages, see individual fund sections.


                                                                    41
                                     PROPERTY TAXES


State Aid: Property Tax Relief – Market Value Homestead Credit

The state legislature created the Market Value Homestead Credit (MVHC) program in 2001 to
provide state-paid property tax relief to owner’s homesteaded residential property. The credit is
equal to .4 percent of the homestead’s market value up to a maximum credit of $304. The
maximum credit of $304 occurs at a market value of $76,000. For homesteads with market
values over $76,000, the credit is reduced by .09% of the excess market value. Homesteads with
a market value of $413,788 and higher do not receive any credit. Non-residential properties are
also not eligible to receive the credit.

Property Tax: Levy limits

The 2008 State Governor and Legislature re-imposed levy limits for the budget years 2009, 2010
and 2011. Tax increases are limited to 3.9% or the increase in the implicit price deflator –
whichever is less. The tax levy can also be increased by ½ the increase in growth. As the
residential construction industry recovers, this levy limit constraint could be an ominous factor
for financing future operating costs.

The levy limit base – payable 2009 is $10,814,888. The base can be adjusted by the following
factors, which result in a payable 2010 base of $10,996,412.

   o Inflation adjustment.
     The Implicit Price Deflator increased by .83%, which results in a $90,164 increase in the
     levy limit base.

   o Growth residential
     Based on City residential permits for new construction, the City grew by 1.1%. Law
     enables the City to levy for half the growth (0.5%), which results in a $60,498 increase of
     the levy limit base.

   o Growth non-residential
     Based on County records for new non-residential construction, the City grew by .5%.
     Law enables the City to levy for ½ the growth (.2%), which results in a $30,846 increase
     in the levy limit base.

Property Tax: Special Levy - Market Value Homestead Credit loss

Minnesota Statutes allows cities the discretion as to whether they wish to levy – taxes payable
2010 - for the loss of Market Value Homestead Credit in 2009 and December 2008. The City of
Lakeville lost $630,561 and $305,846 in 2009 and 2008 respectively. The 2010 proposed tax
levy only includes the 2009 loss of Market Value Homestead Credit ($630,561); it does not
include the 2008 loss of ($305,846).

Were it not for the loss of market value homestead credit to finance the State of Minnesota’s
budget crisis, the City of Lakeville tax levy would have been on three-tenths of one percent
increase. In other words the tax levy increase would have been less than the growth in new
residential homes.
                                              42
                                         PROPERTY TAXES
                                              (continued)

Tax Reduction – Transit Levy

The City Council at its May 5, 2008 meeting approved a Resolution Authorizing the Execution
of an Agreement with Regard to a Transit Service Expansion Plan for the City of Lakeville. As a
result, Metropolitan Council would levy $370,000 to Lakeville properties in 2009 and
approximately $743,000 in 2010. The City Council resolved that the additional cost of the
Metropolitan Council Transit Tax Levy will be offset by budget reductions for property taxes
payable in 2009-2010.

Total Maximum Tax Levy

Based on these parameters as discussed above, the 2010 proposed tax levy is as follows:

                                          2009                    2010                Increase/
                                         Adopted                Proposed             (Decrease)
    Debt related tax levy
     Bonded indebtedness             $     4,204,750        $    4,687,503      $ 482,753     11.5%
     Certificates of indebtedness          1,593,769               966,063        (627,706)   -39.4%
     Market value debt levy                  414,256               417,519           3,263      0.8%
         Total debt related levy           6,212,775             6,071,085        (141,690)    -2.3%
    Other levies
     PERA (pensions)                        101,417                101,070            (347)    -0.3%
     Market Value Homestead Credit                                 630,561         630,561
     Police and fire personnel             6,862,617             7,062,144         199,527        2.9%
         Total special levies             13,176,809            13,864,860         688,051        5.2%
    Tax levy adjustment                      (94,534)               96,471         191,005
    Transit levy                            (370,000)             (743,000)       (373,000)
    Levy limit base                       10,814,888            10,996,412         181,524        1.7%

         Total tax levy              $    23,527,163        $ 24,214,743        $ 687,580         2.9%

The City of Lakeville is below levy limits and therefore has a 2010 net tax levy capacity of
$951,529. For calculating the levy limit - maximum, the 2010 special levy includes the 2008
Market Value Homestead Credit loss of ($305,846).

                                                         2009                  2010
                   Levy limit base               $      10,814,888     $      10,996,412
                   Special levies                       13,176,809            14,169,860
                     Levy Limit - maximum               23,991,697            25,166,272
                   Actual tax levy                      23,527,163            24,214,743
                     Net tax levy capacity       $         464,534 $             951,529

                                                  43
                                      PROPERTY TAXES
                                            (continued)

The following is a comparison of the 2009 and 2010 tax levy distribution:

                                              2009           2010              Increase/
                                             Adopted       Proposed           (Decrease)
      Operations                           $ 16,118,666 $ 16,884,970 $ 766,304             4.8%
      Street Improvement Bonds                2,196,538      2,641,187      444,649    20.2%
      Equipment Certif. of Indebtedness       1,593,769        966,063      (627,706) -39.4%
      Pavement Management                     1,195,722      1,258,688       62,966        5.3%
      Capital Improvement Bonds - Police        861,028        868,863        7,835        0.9%
      Capital Improvement Bonds - CMF           810,219        831,175       20,956        2.6%
      Park Bonds                                414,256        417,519        3,263        0.8%
      Ice Arena Bonds                           261,976        271,289        9,313        3.6%
      Arts Center Bonds                          74,989         74,989          -          0.0%

         Total tax levy                    $ 23,527,163 $ 24,214,743 $ 687,580             2.9%


The largest tax levy is for operations in the amount of $16,884,970. The 2010 proposed tax levy
for operations will increase by $766,304 to support the various programs as described in the
General Fund section of this document. A graphic representation of the tax increase by
department is shown on the following page. The increase is derived from the levy for loss of
Market Value Homestead Credit, increase in public safety wages and benefits, inflation
adjustment (based on implicit price deflator), half the growth in population and
commercial/industrial properties less the transit levy.

The 2010 proposed tax levy for street improvement bonds is $2,641,187, which is a $444,649
increase from the prior year. The increase is primarily attributable to the debt service for the
Interstate Highway 35/County Road 70 interchange project.

The 2010 proposed tax levy for the equipment certificates of indebtedness is $966,063, which is
a ($627,706) decrease from the 2009 tax levy. This tax levy is primarily the result of a $1.2
million transfer from the General Fund and appropriation of the ALF asset disposition to the
Equipment Fund for public safety equipment acquisitions.

The tax levy for the Capital Improvement Bonds – Police is $868,863, which is a $7,835 increase
when compared to the prior year. The tax levy takes into consideration the $125,000
appropriation from the Capital Projects Police Station Construction Fund for debt service
reduction.




                                                44
                                                       PROPERTY TAXES
                                                                  (continued)

Tax Levy Analysis

The following is a graphic representation comparing the various programs that are financed in
2009 and 2010 by tax levies.


                                         TAX LEVY COMPARISON 2009-2010
                                                                                                                                           7,124,306
                        Police                                                                                                           6,896,205
                                                                                                                                6,196,085
                Debt Service                                                                                                    6,212,774
                                                                            2,220,655
                        Parks                                              2,112,455
                                                                        1,897,700
                      Streets                                           1,895,669
                                                               1,258,688
      Pavement Management                                      1,195,722
                                                              1,155,074
                          Fire                               1,050,553
                                                     425,854
         Gen Gov't Buildings                         436,321
                                                     425,405
                     Finance                         433,470
                                                    397,255
          Planning/Recycling                        412,574
                                                    367,556
     Information Technology                         403,253
                                                    345,938
             Engineering/GIS                        347,052
                                                   330,530
                  Recreation
                                                   340,979
                                                   316,772
          City Administration
                                                   300,705
                                                  313,540
                Contingency
                                                 143,341
                                                   282,730
                   Insurance
                                                   285,070
                                                   269,770
  Comm & Econ Development
                                                   273,190
                                                  233,808
    Lakeville Area Art Center
                                                  226,595
                                                  224,107
          Human Resources
                                                  218,503
                                                 170,565
          City Clerk/Elections
                                                 114,024
                                                 150,845
                 Inspections
                                   (20,668)
                                                 117,735
          Mayor and Council
                                                 114,374
                                                66,074
               Legal Counsel
                                                85,174
                                                48,749
    Committees/Commissions
                                                49,827
                               )




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                    (1




                                                                                      2009        2010


                                                                         45
                                                    PROPERTY TAXES
                                                             (continued)

  The following is a graphic representation of the changes in the 2010 tax levy by function.


                                                    CHANGES IN TAX LEVY


                   Police                                                                                  228,101

             Inspections                                                                    171,514

            Contingency                                                                     170,199

                    Parks                                                      108,200

                      Fire                                                     104,521

  Pavement Management                                                 62,966

      City Clerk/Elections                                         56,541

      City Administration                              16,067

Lakeville Area Art Center                            7,213

      Human Resources                                5,604

      Mayor and Council                             3,361

                  Streets                           2,032

Committees/Commissions                    (1,077)

         Engineering/GIS                  (1,114)

               Insurance                 (2,340)

  Comm & Economic Dev                    (3,420)

                 Finance                (8,065)

              Recreation            (10,450)

     Gen Gov't Buildings            (10,467)

      Planning/Recycling          (15,318)

            Debt Service          (16,689)

           Legal Counsel          (19,100)

 Information Technology      (35,698)

                       (75,000)         (25,000)     25,000        75,000      125,000   175,000      225,000    275,000


                                                                        $ Changes


                                                                 46
                                      PROPERTY TAXES
                                             (continued)

Tax Base

Property taxes are derived from the property assessment, the local government levies and any
voter approved referenda. The estimated market value is determined by the Dakota County
Assessor assuming if it were sold on the open market. Property market values will vary from
parcel to parcel depending on characteristics, condition, location and other factors.

A property class is ascribed to each parcel of property based on the use of the property.
Generally, properties that are associated with income production have a higher classification than
other properties. The property classification system defines the tax capacity of each parcel as the
percentage of each parcel’s market value.

The largest property classes are residential, commercial and industrial with each comprising
74.4%, 16.7% and 4.7% of the tax base, respectively.

                                  2009         2010
                               Estimated    Estimated
                              Tax Capacity Tax Capacity            % of         Increase/
      Property Class             Value        Value                Total       (Decrease)
       Residential              51,916,328   48,437,314             74.4%        (3,479,014)
       Commercial               10,626,757   10,863,408             16.7%           236,651
       Industrial                2,629,623    3,035,129              4.7%           405,506
       Apartment                 1,082,546    1,122,317              1.7%            39,771
       Agricultural                649,536      700,924              1.1%            51,388
       Utility                     138,259      138,616              0.2%               357
       Railroads                    67,576       67,576              0.1%                 -
       Cabins                       13,241       11,285              0.0%            (1,956)
       Personal property           763,590      769,060              1.2%             5,470
              Total           $ 67,887,456 $ 65,145,629            100.0%     $ (2,741,827)

According to the Dakota County Assessors Office, the assessed market value on median value
residential properties decreased by 7.75% for taxes payable 2010. General speaking, the
majority of commercial and industrial properties will not have an increase in market value for the
coming year. The affect of static or increasing property values in one class of property while
another class is decreasing results in a shift in the property tax burden from one class to another.




                                                 47
                                      PROPERTY TAXES
                                             (continued)

The tax capacity value is adjusted for tax increment and the fiscal disparities contribution shown
as follows.
                                                 2009             2010             %
                                                Actual          Estimate         Change
           Tax Capacity Value                $ 67,887,456 $ 65,145,629             -4.0%
           Tax Increment                        (2,128,144)      (2,042,193)       -4.0%
           Fiscal Disparaties Contribution      (4,888,029)      (5,623,626)       15.0%
                  Net Tax Capacity           $ 60,871,283 $ 57,479,810             -5.6%



Tax Capacity Rate

The tax capacity rate is a function of the tax levy and the total tax base. Even though the tax levy
is increasing by 3.0%, the tax capacity rate is projected to increase 8.9% (from .33973 to .37010)
due to the decrease in Net Tax Capacity (property values) and the increase in the fiscal
disparities.

                                           2009                2010               %
                                          Actual             Estimate           Change
          Tax Levy                    $   23,112,907       $ 23,797,224           3.0%
          Fiscal Disparities              (2,433,106)         (2,524,151)         3.7%
          Net Tax Levy                     20,679,801             21,273,073        2.9%
          Net Tax Capacity                 60,871,283             57,479,810       -5.6%
          Tax Capacity Rate                   0.33973               0.37010         8.9%


Tax levies for bond issues approved by referendum after August 1, 1994, are based on market
value rather than tax capacity value. The City of Lakeville levy based on market value for Park
Bonds is shown as follows:

                                                                      2010
                                                                    Estimate
                          Market Value                        $ 5,653,143,817
                          Tax Levy for Park Bonds             $          417,519
                          Tax rate based on Market Value              0.00007386




                                                 48
                                      PROPERTY TAXES
                                              (continued)

Tax Impact on Residential Properties

Assuming there are no changes in the tax rates for the other taxing jurisdictions and assuming an
average 7.75% decrease in residential market values, the City taxes on the “average” residential
property will decrease by approximately -0.4% for the coming year.

                     Taxes on the Median-Value Residential Homestead

                                                     2007       2008      2009      2010
 Market Value on Median Value Home                  278,100    280,900   271,500   250,460
 Multiplied by the property class rate                  0.01       0.01      0.01      0.01
             Tax Capacity Value                        2,781     2,809     2,715     2,505
 Multiplied by the City Tax Capacity Rate           0.31583    0.34195   0.33973   0.37010
 Taxes based on Tax Capacity Value                $      878 $     960 $     922 $     927
 Market Value Homestead Credit                           (45)       (46)      (48)      (57)
 Net taxes based on Tax Capacity Value            $      833 $     914 $     874 $     870
 Taxes based on Market Value                              21         21        19        19

   Total taxes payable to City of Lakeville       $         854   $      935 $          893   $    889

    Percentage increase/(decrease)                      7.0%             9.5%         -4.5%       -0.4%


Tax Impact on Commercial and Industrial Properties

The values of commercial and industrial properties are much more diverse than those of
residential properties. The following table illustrates the composition of the dispersion of
commercial and industrial properties and the estimated tax impact on those respective properties.

                                     Increase/(Decrease)
                                          Assessors                          City
               Number of                   Market                          Property
                Parcels                    Value                            Taxes
                    44         Great than 10%                         Greater than 19%
                    37         Increase 5 - 10%                       14 - 19% increase
                    57         Increase 0 - 5%                        8 - 14% increase
                   290         No increase                            9% increase
                    30         Decrease 0-9%                          0 - 9% increase
                     5         Decrease more than 9%                  Net decrease




                                                  49
                                     PROPERTY TAXES
                                            (continued)

The increase in property taxes for commercial and industrial properties is primarily due to a shift
in tax burden from residential to commercial and industrial as a result of real estate market
conditions. The State of Minnesota has sole responsibility for the tax structure of the various
property classes. The tax structure for commercial and industrial properties is significantly
different than that of homesteaded residential properties for the following reasons.

       Commercial and industrial properties are not entitled to the property tax relief which is
       granted to residential properties through the Market Value Homestead Credit.

       Commercial and industrial properties pay a State Property tax. This tax now represents
       the largest share of commercial and industrial taxes.

       Commercial and industrial properties are subject to the fiscal disparities pool and tax
       distribution.

       Commercial and industrial properties are subject to a higher property class rates than that
       of residential property as shown in the following table.


                                                             Local      Local
                                                              Tax        Tax
                                                            Payable    Payable
                  Property Type                              2009       2010
                  Residential Homestead
                             Up to $500,000                  1.00%      1.00%
                             Over $500,000                   1.25%      1.25%
                  Residential Non-homestead
                   Single Unit
                             Up to $500,000                  1.00%      1.00%
                             Over $500,000                   1.25%      1.25%
                   1-3 unit and undeveloped land             1.25%      1.25%
                  Market Rate Apartments
                             Regular                         1.25%      1.25%
                  Commercial/Industrial/Public
                  Utility
                             Up to $150,000                  1.50%      1.50%
                             Over $150,000                   2.00%      2.00%
                             Electric Generation
                             Machinery                       2.00%      2.00%
                  Agricultural Land & Buildings
                   Homestead
                             Up to $500,000                  1.00%      1.00%
                             Over $500,000                   1.00%      1.00%
                   Remainder of Farm
                             Up to $790,000                  0.55%      0.55%
                             Over $790,000                   1.00%      1.00%
                   Non-homestead                             1.00%      1.00%



                                                50
                                         PROPERTY TAXES
                                                    (continued)

As such, the taxes paid to the various taxing jurisdictions for commercial and industrial
properties are different than those paid by residential properties as is shown by the following
chart.


                       PERCENT OF TOTAL PROPERTY TAXES
                     RESIDENTIAL COMPARED TO COMMERCIAL

                          RESIDENTIAL                                    COMMERCIAL
        50%                                               50%

                    41%
        40%                                               40%

              31%
        30%
                                                                                                    29%
                                                          30%
                          24%                                                                 26%

        20%                                               20%
                                                                  15% 17%
                                                                            11%
        10%                                               10%
                                   4%
                                         0%     0%                                       2%
         0%                                                  0%
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                                         Truth in Taxation
Minnesota Statutes require cities to certify the proposed property tax levy to the County
Treasurer/Auditor and adopt a proposed budget on or before September 15.

The County Treasurer/Auditor will mail the parcel specific Truth in Taxation notices in mid-
November. These notices inform property owners of the time and place of the budget hearings
and the impact of the proposed property tax levy.

Lakeville’s Truth in Taxation meeting will be conducted on Monday December 14.




The Council has the ability to adopt a final tax levy in December that is equal to or less than
the preliminary tax levy approved in September. It may not, however, adopt a final tax levy
that is greater than the preliminary tax levy.


                                                        51
                  General Fund
The General Fund accounts for all revenues and expenditures necessary to provide a full range of
services, including general government administration, community and economic development,
public safety, public works, and parks and recreation.
                           CITY OF LAKEVILLE, MINNESOTA
                                      General Fund
                                 Fund Balance Discussion

The Fund Balance Policy states “The City’s unreserved fund balance – designated for working
capital as of the end of the year – should equal 40% to 50% of the next year’s budgeted
expenditures.

The fund balance represents the amount of funds required to operate during the first six months
of the year. The City’s most significant revenue sources–taxes and intergovernmental revenue–
do not provide appreciable revenues until the second half of the year. A healthy financial
position also allows the City to avoid volatility in tax rates; helps minimize the impact of state
funding changes; allows for the adequate consistent funding of services, repairs and unexpected
costs; and can be a factor in determining the City’s bond rating and resulting interest costs.

The adopted 2010 General Fund budget is in balance with revenues equaling expenditures. The
2010 proposed budget expenditures total $20,747,325 with a $9,864,615 fund balance. The ratio
of fund balance to expenditures is 47.5%.


                                                                2010
                                                      Proposed          Increase
                                                       Budget          (Decrease)
            Revenues and other                      $ 20,747,325     $      (63,292)
            Expenditures                               20,747,325           (97,297)
            Net increase/(decrease)                              -          34,005
            Transfer to Capital Projects:
              Equipment Fund                                    -        1,263,647
            Fund Balance, January 1                     9,864,615         (811,542)
            Fund Balance, December 31               $   9,864,615    $     486,110

            Ratio: Fund balance to expenditures             47.5%



The 2010 proposed fund balance is consistent with the City’s Fund Balance Policy and the
Minnesota State Auditors Statement of Position regarding fund balances.

In light of current economic conditions, levy limits and uncertainty with respect to the State
budget issues, the fund balance is adequate and sufficient but not excessive.




                                               52
                                       CITY OF LAKEVILLE, MINNESOTA
                                                    General Fund
                          Statement of Revenues, Expenditures and Changes in Fund Balances
                                       For the Year Ending December 31, 2010

                                                                               2009                        2010
                                               2007              2008        Amended         2009        Proposed
                                              Actual            Actual        Budget       Estimate       Budget
Revenues
 General property taxes                    $ 13,648,318 $ 15,449,682 $ 15,427,200 $ 15,444,996 $ 16,157,882
 Licenses and permits                         1,711,691    1,417,487    1,142,405      863,023      902,341
 Intergovernmental                              799,133      794,720    1,060,283      862,932    1,005,025
 Charges for services                         2,530,877    1,941,630    1,889,405    1,863,917    1,539,919
 Court fines                                    275,635      264,512      272,394      273,055      273,055
 Investment income                              517,131      345,425       83,826       83,277      104,096
 Miscellaneous                                  112,490      109,854      238,451      226,780       96,769
              Total revenues                 19,595,275        20,323,310    20,113,964    19,617,980    20,079,087
Expenditures
 Mayor and Council                              119,704           105,053       112,369       110,723       116,056
 Committees and Commissions                      93,068            80,726        75,153        77,663        79,254
 City administration                            336,057           347,342       346,483       349,188       361,844
 Public communications                          184,783           194,982             -             -             -
 City Clerk                                     122,566           179,219       112,025       110,661       168,133
 Legal counsel                                   57,180            60,818        83,681        65,132        65,132
 Planning                                       561,253           511,292       507,175       525,163       472,141
 Community and econ. development                266,836           269,334       268,400       264,940       275,923
 Inspections                                  1,161,227         1,112,641       980,371       971,241       895,224
 General government facilities                  432,078           483,536       547,107       528,979       534,914
 Finance                                        537,527           559,564       546,833       548,849       564,675
 Information systems                            433,135           511,964       498,017       496,407       447,026
 Human resources                                306,031           288,118       294,363       287,556       294,487
 Insurance                                      243,630           275,513       280,072       280,072       278,698
 Police                                       6,940,979         7,489,018     7,890,449     7,832,206     8,173,420
 Fire                                         1,215,484         1,384,268     1,402,109     1,287,404     1,376,026
 Ambulance                                       25,242            26,719             -             -             -
 Engineering                                    930,976           994,674       718,559       745,893       738,172
 Streets                                      2,623,835         2,945,015     2,882,077     2,819,183     2,342,151
 Parks                                        2,087,476         2,235,618     2,110,177     2,052,692     2,223,590
 Recreation                                     547,999           621,921       642,127       604,019       600,576
 Arts Center                                    346,904           373,078       406,247       419,981       430,814
 Other                                                -                 -       140,828             -       309,069
            Total expenditures               19,573,970        21,050,413    20,844,622    20,377,952    20,747,325
Other financing sources (uses)
 Transfer from other funds                      666,805           797,282       696,653       642,721      668,238
 Transfer to other funds                              -          (531,440)   (1,263,647)   (1,263,647)           -
    Total other financing sources (uses)        666,805          265,842       (566,994)     (620,926)     668,238
Net change in fund balance                      688,110          (461,261)   (1,297,652)   (1,380,898)            -
Fund balance, January 1                      11,018,664        11,706,774    10,676,157    11,245,513     9,864,615
Fund balance, December 31                  $ 11,706,774 $ 11,245,513 $ 9,378,505 $ 9,864,615 $ 9,864,615

2010 Net change in fund balance percentage                                                                    0.0%
Ratio: Fund balance to expenditures               59.8%             53.4%         45.0%         48.4%        47.5%

                                                          53
                                                 General Fund
                             Schedule of Revenues and Other Financing Sources (Uses)

                                                                            2009                      2010
                                             2007              2008       Amended        2009       Proposed
                                            Actual            Actual       Budget      Estimate      Budget
General property taxes
 Ad valorem taxes - current               $ 11,893,034 $ 13,769,871 $ 13,619,545 $ 13,572,699 $ 14,173,759
 Ad valorem taxes - delinquent                 160,843      190,882       80,163      149,300      155,909
 Market value homestead credit                 237,158        4,638
 Fiscal disparities                          1,261,245    1,396,095    1,651,798    1,648,844    1,760,094
 Penalties and interest                          9,166        7,550        4,000        7,550        7,550
 Mobile home tax                                45,108       41,531       47,364       41,535       41,500
 Mobile home tax credit                         18,728       19,341       18,330       19,068       19,070
 Gravel tax                                     23,036       19,774        6,000        6,000            -
       Total general property taxes        13,648,318        15,449,682   15,427,200   15,444,996   16,157,882




                                                        54
                                                   General Fund
                               Schedule of Revenues and Other Financing Sources (Uses)

                                                                               2009                        2010
                                                 2007             2008       Amended         2009        Proposed
                                                Actual           Actual       Budget       Estimate       Budget
Licenses and permits
Licenses
  Cigarette                                 $      4,550 $         18,175 $      4,800 $           - $      16,800
  Trash removal                                      450              500        2,800         3,150         3,150
  Dog                                             11,326           20,036        9,688        16,697        20,000
  Signs                                            7,675            7,525        6,000         3,550         3,550
  Dances(cabaret) outdoor entertain.                                               500
  On-sale liquor                                  85,350          101,300      103,000       107,000       107,000
  Sunday liquor                                    3,000            3,000        3,400         3,800         3,800
  Club license                                     1,150            1,300        1,150           500           500
  Non-intoxicating liquor on                       1,400            1,400        1,750         1,200         1,200
  Non-intoxicating liquor off                        900              975        1,200           900           900
  Wine                                             1,750            1,300        3,000         1,000         1,000
  Tree removal                                       777              725          675           700           700
  Arcade                                           2,025            2,538        1,650         2,490         2,490
  Tattoo/Piercing                                  3,725              900
  Fireworks                                          450              600        3,950           600           900
  Message                                          1,875            1,775        1,890         1,500         1,500
  Miscellaneous                                      100            2,900          225             -             -
              Total licenses                     126,503          164,949      145,678       143,087       163,490

Permits
 Plan review fees                                335,125          278,620      269,758       176,335       160,862
 Building                                        886,878          659,373      518,298       358,662       384,840
 Plumbing                                         88,557           78,968       61,268        50,640        55,671
 Water/sewer                                      33,530           19,543       14,007         9,174         9,174
 Mechanical                                       80,022           73,240       38,530        43,652        43,257
 Grading/filling                                     472              675          250           250           250
 Excavating/gravel                                   750              750          750           750
 Driveway                                          1,200              500          600           500          600
 Zoning                                            4,340            4,240        3,000
 Right-of-way                                     20,360           19,373       16,000        16,000        18,000
 Fire burning                                      1,372              725          550           550           550
 Electrical                                      132,184          115,786       73,416        63,225        65,347
 Miscellaneous                                       398              745          300           198           300
               Total permits                    1,585,188        1,252,538     996,727       719,936       738,851

        Total licenses and permits              1,711,691        1,417,487    1,142,405      863,023       902,341




                                                            55
                                                    General Fund
                                Schedule of Revenues and Other Financing Sources (Uses)

                                                                              2009                         2010
                                                  2007            2008      Amended          2009        Proposed
                                                 Actual          Actual      Budget        Estimate       Budget
Intergovernmental
  State aid police                           $    347,499 $       335,887 $    335,887 $     335,887 $     335,887
  State aid fire relief                           267,923         228,674      257,313       190,209       190,209
  State aid streets                                84,972          84,949      379,127       235,069       374,962
  State aid pensions                               21,303          21,303       21,303        21,303        21,303
  State POST Board grant                           19,295          20,427       20,253        19,864        19,864
  State Drug Task Force grant                      11,284          11,700       12,000        11,700        12,000
  State, Cnty. Operation Nite Cap                   1,819             734
  State local grants                                3,750
  Fed., State, Cnty. traffic safety grants          7,553          49,863
  State snowmobile trail maint. grant                 200             200          200           200           200
  Police protective vests grant                     5,297           3,093        1,400         1,400         2,100
  CDBG - Affordable housing                        12,500
  CDBG - Darts grant                                3,252
  CDBG - Community development                        486                                                    5,000
  Police domestic preparedness grant               12,000
  Federal Emergency Management                                      9,057
  Federal energy grant                                                                                        1,600
  County recycling grant                                -          28,833        32,800       47,300         41,900
          Total intergovernmental                 799,133         794,720     1,060,283      862,932      1,005,025




                                                            56
                                                 General Fund
                             Schedule of Revenues and Other Financing Sources (Uses)

                                                                           2009                        2010
                                               2007            2008      Amended         2009        Proposed
                                              Actual          Actual      Budget       Estimate       Budget
Charges for services
General government
 Rezoning fees                            $          - $         1,500 $     2,250 $           - $         750
 Platting fees                                   8,985           6,020       3,860         1,350         1,850
 Variance fees                                   1,200           1,800       1,200           500           750
 PUD application fees                              750           2,250       2,100
 CUP fees                                        2,400           3,800       2,050         2,050         2,400
 Home occupation fees                               90           1,430         550           350           450
 Planner fees                                   57,760          55,250      56,005        30,468        32,001
 Inspection department fees                     12,822          12,066       3,950         5,613         7,679
 Franchise fee - utility providers                                                                     262,500
 General government service charge              31,910          10,514       8,155        15,346        15,057
 Tree escrow fund administration                27,278           6,030      20,000         5,000         8,000
 Lodging tax fee                                 7,427           7,902       9,179         7,400         7,474
 Fiscal Agent - DCC                             42,750          35,670      36,283        35,670        59,400
 Fiscal Agent - Arena's                                                     16,000        16,000        16,000
 Investment management fees                     25,070          25,070      26,597        25,822        26,597
 Sale of maps/copies                               621             350         920           350           400
 Sale of history/guidebook fees                 10,200
 Sale of printed materials                         153              47         100            47            50
 Finance charges                                 1,819           1,574         200         1,574           200
         Total general government              231,235         171,273     189,399       147,540       441,558

Public safety
 Police department charges                      87,978          63,112      72,184        64,139        70,122
 Police dispatching                             26,742
 SRO - ISD 194 contributions                   151,589         147,901     150,804       150,804       150,804
 Animal pickup                                   4,638           3,872       3,130         3,872         3,910
 Animal storage                                  8,779           8,238       6,553         8,238         8,320
 Animal rabies                                   3,957           2,601       2,202         2,463         2,540
 Restitution                                     5,516           2,163       3,000         3,000         3,000
 Forfeiture - sale of assets                     2,553          14,136       5,000        22,909         5,000
 Fire contracts                                 27,880          29,270      30,730        30,730        32,265
 Fire department charges                        22,211           1,648      30,750         1,750         1,750
 ALF - Administrative charge                    42,511          44,477      51,182        10,543        11,600
            Total public safety                384,354         317,418     355,535       298,448       289,311




                                                         57
                                                  General Fund
                              Schedule of Revenues and Other Financing Sources (Uses)

                                                                             2009                        2010
                                                2007             2008      Amended         2009        Proposed
                                               Actual           Actual      Budget       Estimate       Budget
Charges for services (continued)
Public works
 Engineering platting - preliminary        $     14,973 $          8,794 $     9,000 $       1,500 $       1,500
 Engineering platting - final                     6,281            5,471       5,000         1,140         1,200
 Engineering plan review                          5,892           11,196      10,000         2,280         5,000
 Engineering developer insp fees                  1,821
 Engineering develop. contract admin            131,320          118,782      55,000         6,000         6,000
 Engineering Imp proj design variable           354,290           93,874      40,000       124,000        81,900
 Engineering Imp proj const inspect             398,576          109,501      45,000       152,500       102,700
 Engineering G.I.S fees                          11,550            7,350      10,000         1,200         1,200
 Special assessment admin charge                 80,105           88,669      77,707        82,364        79,252
 Special assessment searches                        300              220         520           220           220
 Document/map sales                                 937              885         800           885           910
 Bid plan/spec deposits                           2,357            2,075       1,500         2,075         1,500
 Street department charges                        4,522            4,267       1,000         4,395         4,530
 Street lights                                  482,307          492,466     549,500       546,092
 Credit River - Judicial Road maint               2,095            8,039       7,133         6,505         6,635
 Developer street signs installation             11,673           24,710       7,000         1,000         7,000
            Total public works                 1,508,999         976,299     819,160       932,156       299,547
Parks, recreation and arts center
   Non-resident fees                                                           5,000
   Brochure advertising                                                                      5,000         5,000
   Youth activities                              92,462          142,130     139,743       122,160       124,445
   Youth special events                           9,483           14,908      13,320        12,730        13,391
   Youth special events donations                 1,800            1,975         200         1,400         1,400
   Adult activities                              69,137           69,240      77,502        72,180        70,450
   Puppet wagon donations                         3,660            2,000       3,870         3,870         3,870
   Safety Camp                                    3,246            2,348       3,000         3,000         3,000
   Safety Camp donations                          1,100            1,100       1,100         1,100         1,100
   Sr. Center newsletter cost reimb.              1,954            2,598
   Senior Center donations                          808            1,315         470           470           470
   Senior Center excursions                      16,543           19,131      25,000        20,000        20,000
   Ritter Farm Park ELC                           8,129            6,074       7,844         6,421         6,682
   Excursions                                     6,784            7,053       7,920         7,920         7,920
   Tennis lessons                                15,740           13,559      17,708        12,582        12,582
         Total recreation programs              230,846          283,431     302,677       268,833       270,310




                                                           58
                                                    General Fund
                                Schedule of Revenues and Other Financing Sources (Uses)

                                                                                  2009                        2010
                                                   2007             2008        Amended         2009        Proposed
                                                  Actual           Actual        Budget       Estimate       Budget
Charges for services (continued)

Parks, recreation and arts center (continued)
 Park rental / maint / tournament fees        $     29,540 $         29,032 $      34,559 $      29,032 $      29,903
 Tree Sales (net)                                                     2,728                       4,500         4,500
 Senior Center membership surcharge                                                 4,010         4,010         4,010
 Senior Center rentals                                 605              550           440           440           440
         Total parks and recreation                260,991          315,741       341,686       306,815       309,163

 Arts center program fees                           75,360           62,825        79,725        72,900        73,500
 Arts center donations                                                2,050
 Arts center rental/event admissions                69,938           96,024       103,900       106,058       126,840
               Total arts center                   145,298          160,899       183,625       178,958       200,340

   Total parks, recreation and arts center         406,289          476,640       525,311       485,773       509,503

         Total charges for services               2,530,877        1,941,630    1,889,405     1,863,917      1,539,919


Court fines                                        275,635          264,512       272,394       273,055       273,055
Investment income                                  517,131          345,425        83,826        83,277       104,096
Miscellaneous
 Disposal of assets                                 35,884           32,183       169,342       157,700         2,939
 Park rental farming (Berres)                          400              400           400           400           400
 Donations                                          34,933           29,896        25,000        25,000        48,411
 Antenna site leases                                41,268           47,375        43,679        43,680        44,990
 Other                                                   5                -            30             -            29
              Total miscellaneous                  112,490          109,854       238,451       226,780        96,769
Other financing sources (uses) - Transfers from (to)
 Special Revenue:
   Communications Fund                           118,143            119,155        47,927        47,267        48,177
   Recycling Fund                                   5,134
   Oak Wilt Suppression Grant Fund                  2,423
   Surface Water Management Fund                  69,737             90,607       110,842       108,566       113,597
 Debt Service - Property Taxes Fund                                (305,479)
 Capital Projects:
   Equipment Fund                                                  (225,961)    (1,263,647)   (1,263,647)
   Storm Sewer Fund                               28,088             36,441         37,136        36,230       40,827
 Internal Service - Muni. Res.Fund                39,478             40,663         41,883        40,663       43,140
 Enterprise:
   Liquor Fund                                   139,183            226,913       151,403       139,170       142,036
   Utility Fund                                  264,619            283,503       307,462       270,825       280,461
         Total other financing (net)             666,805            265,842      (566,994)     (620,926)      668,238



                                                              59
                                    MAYOR AND COUNCIL



Department: Mayor and Council

Program Manager: Mayor and Council

Program Description:

The City of Lakeville is governed by a Mayor and four City Council Members that are elected
at-large. The Mayor is elected to a two year term and each council member is elected to a four
year term. Council member elections are staggered so that two council members are elected
every two years. The Mayor and City Council Members represent the entire community and
they are empowered by law to legislate City-wide policy. This includes the authority to pass and
enforce ordinances, establish public and administrative policies, create advisory boards and
commissions, and manage the City's financial operations including preparing a budget, auditing
expenditures, and transacting other City business as required by law. The City Council also
serves as the Housing and Redevelopment Authority (HRA) for the City. The City Council
appoints a City Administrator who directs City staff on implementation of Council decisions and
providing day-to-day City operations.

Services:
 •   Represents the people of Lakeville.
 •   The Council has the full authority over the City’s financial affairs, including but not limited
     to levying taxes, adopting a budget, disbursement of public monies, and issuance of debt.
 •   Enacts ordinances, policies, and resolutions.
 •   Directs the enforcement of City ordinances by determining the level of law enforcement,
     setting qualifications for the police chief and police officers.
 •   Directs all departments and employees responsible for the administration of its policies and
     ordinances in the general administration of their duties.
 •   Creates department and advisory boards and appoints officers, employees, and agents for the
     City as deemed necessary for the proper management and operation of the City.
 •   Conducts City business with state and federal agencies, and participates in intergovernmental
     programs and the work of municipal associations.
 •   Formulates policies that will help the City solve future problems and adjust to social and
     economic trends which require long-range planning regarding City facilities and needs.
 •   In addition to participating in civic events, City officials provide leadership by promoting
     new ideas and suggesting new programs to improve the community and its surrounding
     areas.




                                                 60
                                        MAYOR AND COUNCIL
                                                  (continued)



Activity Measures:

Lakeville Community Survey Results                                    2001 (%)         2005 (%)           2007 (%)

Quality of life in Lakeville? Excellent/Good                                92                   95             97

Residents that call Lakeville “home”.                                       77                   75             84

Quality of these city services?
     Police protection? Excellent/Good                                      91                   90             91
     Fire protection? Excellent/Good                                        87                   86             90
     Park maintenance? Excellent/Good                                       90                   93             89
     Street maintenance? Excellent/Good                                     80                   79             74
     Liquor Store – Excellent/Good                                          n/a                  93             n/a

Feel safe in your neighborhood walking alone at night? Yes                  92                   88             n/a

General condition and appearance of properties in your
neighborhood? Excellent/Good                                                93                   91             94

Strongly or Somewhat approve of the job the Mayor and City
Council are doing?                                                          72                   80             n/a

Job performance of the Lakeville City staff? Excellent/Good                 72                   76             n/a

Adequate mix of Lakeville’s current housing supply? Yes                     n/a                  78             83


Goals and Objectives:
 • Strategic Plan.


Budget Summary:
                                                                    2009                                2010
                                      2007              2008      Amended               2009          Proposed
                                     Actual            Actual      Budget             Estimate         Budget
Expenditures
Personnel services               $       48,796    $     48,807   $    50,222     $      50,220       $     50,224
Commodities                                   -               -            50                50                 50
Other charges and services               70,908          56,246        62,097            60,453             65,782
             Total               $      119,704    $    105,053   $   112,369     $     110,723       $    116,056

Revenues
Taxes and other public funds     $      119,704    $    105,053   $   112,369     $     110,723       $    116,056




                                                       61
                                   MAYOR AND COUNCIL
                                            (continued)



Budget Factors:

 •   Historically, the City has conducted a biennial community survey to obtain citizen feedback
     on current and future services. The last survey was conducted in 2007 with the results noted
     above as Activity Measures. Funding for a 2010 survey is provided in the Communications
     Special Revenue Fund.
 •   It has been the practice of the City to provide funding for the Mayor and Council to receive
     training on goal setting in off-election years. This funding was not provided in the 2009
     adopted budget. The 2010 proposed budget includes $5,330 to reestablish this funding.
 •   The City of Lakeville is members of those organizations which provide administrative and
     legislative guidance including the League of Minnesota Cities, the Association of
     Metropolitan Municipalities, Municipal Legislative Commission and the I-35 Alliance.




                                                62
                             COMMITTEES AND COMMISSIONS

Department: Committees and Commissions

Program Manager: City Administrator

Program Description:
The City has a number of committees which provide recommendations to the City Council
relating primarily to policy issues. Committees include Planning, Economic Development,
Lakeville Area Arts, Parks Recreation and Natural Resources, Warrior to Citizen, and the
community celebration (Pan-O-Prog).

Services:
 •   Advise City Council relative to policy issues.
 •   Staff support for the community celebration (Pan-O-Prog).

Goals and Objectives:
 •   Recognition of contributions of committee members.
 •   The annual Pan-O-Prog Fourth of July fireworks display continues to be financed with
     donations from the community businesses. Support functions such as traffic control are
     financed by the City of Lakeville.
 •   Orderly support of Pan-O-Prog community celebration.

Budget Summary:
                                                                 2009                         2010
                                      2007           2008      Amended            2009      Proposed
                                     Actual         Actual      Budget          Estimate     Budget
Expenditures
Personnel services               $     47,948   $     34,628   $   34,797   $      39,263   $   40,441
Commodities                             3,098          2,247        1,671             891          908
Other charges and services             42,022         43,851       38,685          37,509       37,905
             Total               $     93,068   $     80,726   $   75,153   $      77,663   $   79,254

Revenues and other financing
sources
Miscellaneous                    $     22,795   $     19,250   $   25,000   $      20,000   $   30,000
Other financing sources                   970          1,362        1,200           1,200        1,200
Taxes and other public funds           69,303         60,114       48,953          56,463       48,054
             Total               $     93,068   $     80,726   $   75,153   $      77,663   $   79,254

Budget Factors:
 •   The series of events that encompass the Pan-O-Prog community celebration are heavily
     attended. This popularity utilizes many of the City’s resources at a significant cost. While
     many costs are covered by private and corporate donations, the 2010 proposed budget does
     not provide enough funding to continue supporting services consistent with prior years. The
     city will endeavor to obtain additional donations to continue the Pan-O-Prog celebration as
     enjoyed by the citizens in previous years.
                                                    63
                                   CITY ADMINISTRATION



Department: City Administration

Program Manager: City Administrator

Program Description:

The City Administration Department, under the direction of the City Administrator, is charged
with implementing policy and direction established by the City Council. The City Administrator
also supervises the administration of all departments, offices and divisions of the City except as
otherwise provided by law and carry out any other responsibilities placed under his/her
jurisdiction or by subsequent Council action. This leadership helps to ensure that Lakeville
operates within the boundaries of prudence and ethics as set forth in the Lakeville Policy Manual
and City Code of Ordinances.

Services:
 •   Prepares and submits of the adopted annual budget to Council and keeps Council advised of
     the financial condition of the City and makes financial recommendations from time to time.
 •   Is responsible for the recruitment and selection of prospective City Employees as permitted
     by law. Makes recommendations to the Council for appointment of personnel. Makes
     recommendations to Council for terminations and suspension of employees.
 •   Ensures all laws and ordinances of the City are duly enforced.
 •   Represents the City at official functions as directed by the City Council and maintains good
     public relations with the citizens of the community.
 •   Attends and participates in discussions at all meetings of the City Council and other official
     bodies as directed by the Council. Responsible for the preparation of the City Council
     agenda.
 •   Handles personnel matters for the City in conjunction with policy established by the City
     Council. Negotiates or delegates the negotiation of terms and conditions of employee labor
     contracts for presentation to the City Council. Conducts annual evaluations and review of
     work performance for all department heads.
 •   Recommends from time to time the adoption of such measures as deemed necessary for the
     health, safety and welfare of the community or for the improvement of the administration.
 •   Monitors consultant and contract work performed for the City. Coordinates the activities of
     the City Attorney.




                                                64
                                     CITY ADMINISTRATION
                                                (continued)



Staffing:
                                               2007        2008          2009             2009              2010
           Position (FTE)                     Actual      Actual        Budget          Estimate           Budget
City Administrator                                1.0         1.0           1.0               1.0               1.0
Assistant to City Administrator                   1.0         1.0           1.0               0.8               1.0
Executive Administrative Assistant/
Deputy Clerk                                      1.0           1.0             1.0              1.0            1.0
                 Total                            3.0           3.0             3.0              2.8            3.0

Strategic Plan:
  • Maintain and communicate the core level of services expected by Lakeville residents.
  • Continue to develop collaborations/ partnerships with private interests and other governments
    on key projects.
  • Prepare Lakeville for transit services.

Budget Summary:
                                                                   2009                                  2010
                                      2007            2008       Amended                2009           Proposed
                                     Actual          Actual       Budget              Estimate          Budget
Expenditures
Personnel services               $    317,836    $    332,473   $     331,935    $      335,949        $   345,807
Commodities                             1,807             690             850               850                850
Other charges and services             12,626          11,837          13,698            12,389             15,187
Capital outlay                          3,788           2,342               -                 -                  -
             Total               $    336,057    $    347,342   $     346,483    $      349,188        $   361,844

Revenues and other financing
sources
Other financing sources          $     22,769    $     23,410   $      51,050    $       47,623        $    49,589
Taxes and other public funds          313,288         323,932         295,433           301,565            312,255
             Total               $    336,057    $    347,342   $     346,483    $      349,188        $   361,844


 Budget Factors:
 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
 •   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
     officers).
 •   Funding to attend out of state national conferences will not be provided.

                                                     65
                                PUBLIC COMMUNICATIONS



Department: Public Communications

Program Manager: Communications Manager

Program Description:

The Communications Department is responsible for all three of the City’s main communication
avenues: City newsletter, City website, and Government Television (cable services). Our mission
is to support the Council’s vision and mission by providing information about municipal
programs and services in a quality and cost-effective manner that engages the community and
enhances the City’s image locally, regionally, and nationally. The department is currently
completing a Strategic Communications Plan that will play a leading role in developing
consistent, creative, and accurate printed documents, verbal messages, and visual displays for all
City communications pieces.

Effective January 2009, the Public Communications budget will be funded and integrated into
the Special Revenue Communications Fund.


Staffing:
                                          2007       2008        2009     2009            2010
        Position (FTE)                   Actual     Actual      Budget Estimate          Budget
Communications Manager                        ---       0.3           ---      ---            ---
Communications Coordinator                   1.0        0.7           ---      ---            ---
Communications Specialist                    1.0        1.0           ---      ---            ---
               Total                          2.0         2.0          ---         ---         ---


Activity Measures:
                                                      2007        2008    2009     2010
                     Activity                        Actual      Actual Estimate Estimate
Listserv Subscribers                                   6,108       7,800      ---      ---
Web Visitors (avg./month)                             30,500      37,800      ---      ---
Messages Issues                                           52          52      ---      ---
Other Publications                                        39          50      ---      ---
Speech/Press Releases                                     26          29      ---      ---
Special Events                                              6          8      ---      ---




                                               66
                               PUBLIC COMMUNICATIONS
                                              (continued)



Budget Summary:
                                                                2009                             2010
                                    2007            2008      Amended             2009         Proposed
                                   Actual          Actual      Budget           Estimate        Budget
Expenditures
Personnel services             $    130,158    $    144,505   $         -   $              -   $          -
Commodities                             106             180             -                  -              -
Other charges and services           52,259          45,073             -                  -              -
Capital outlay                        2,260           5,224             -                  -              -
             Total             $    184,783    $    194,982   $         -   $              -   $          -

Revenues and other financing
sources
Charges for services           $     10,200    $          -   $         -   $              -   $          -
Other financing sources              97,697          98,889             -                  -              -
Taxes and other public funds         76,886          96,093             -                  -              -
             Total             $    184,783    $    194,982   $         -   $              -   $          -




                                                   67
                                           CITY CLERK



Department: City Clerk

Program Manager: City Clerk

Program Description:

The City Clerk is a statutory office that is responsible for City records management, election
administration, and legal notification to the public, the issuance of licenses and permits and the
preparation and retention of official minutes. The office is also the primary source of information
for citizen questions and public records requests. The City Clerk is responsible for election
administration including staffing and adherence to all election laws of the State of Minnesota and
the Federal government. The duties and responsibilities of the City Clerk are described in
Minnesota Statute 412.591.


Duties of the City Clerk (Minn. Statute 412.591, subd. 1)
 •   Give notice of each regular and special meeting.
 •   Record the proceedings of each regular and special meeting.
 •   Notify officials of their election or appointment to office.
 •   Certify to county auditor all appointments and results of city elections.
 •   Keep a minute book.
 •   Keep an ordinance book.
 •   Be custodian of city’s seal and records.
 •   Sign official city papers.
 •   Post and publish such notices, ordinances and resolutions as may be required.
 •   Perform such other duties as may be imposed by the council.
 •   Provide information to residents and answer inquiries regarding the city.

Services:
 •   Preparation of council meeting agendas.
 •   Attend all council meetings and record meeting minutes.
 •   Ordinance codification.
 •   Records management.
 •   Elections administration.
 •   Issuance and renewal of liquor and other city licenses.




                                                  68
                                            CITY CLERK
                                              (continued)



Staffing:
                                             2007        2008         2009    2009                    2010
             Position (FTE)                 Actual      Actual       Budget Estimate                 Budget
City Clerk                                      1.0         1.0          1.0     1.0                      1.0
                 Total                          1.0           1.0             1.0          1.0            1.0


Activity Measures:
                                                         2007          2008    2009     2010
                    Activity                            Actual        Actual Estimate Estimate
Meeting Agenda Packets                                       25            27      26        27
Meeting Hours                                                29            31      30        30
Ordinances Processed                                         17            18      15        15
Resolutions Processed                                       243           191     190       190
Liquor Licenses                                              37            34      34        34
Massage Therapy Licenses                                     67            70      72        72
Tree Service Licenses                                        28            27      27        27
Registered Voters                                          N/A         31,024     N/A   32,000
Absentee Ballots Processed                                 N/A          3,300     N/A     2,000
Election Judges Trained                                    N/A            200     N/A       150

Budget Summary:
                                                                 2009                              2010
                                    2007            2008       Amended                2009       Proposed
                                   Actual          Actual       Budget              Estimate      Budget
Expenditures
Personnel services             $     90,893    $    103,537   $      97,325     $      95,744    $   105,525
Commodities                              36           1,472             300               300          1,700
Other charges and services           29,743          64,253          14,400            14,617         60,458
Capital outlay                        1,894           9,957               -                 -            450
             Total             $    122,566    $    179,219   $     112,025     $     110,661    $   168,133

Revenues
Taxes and other public funds   $    122,566    $    179,219   $     112,025     $     110,661    $   168,133

Budget Factors:

 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.

                                                   69
                                           CITY CLERK
                                              (continued)



•   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
    officers).
•   Funding to attend out of state national conferences will not be provided.
•   There were no elections being held in 2009 and therefore the costs are significantly lower.
    For comparison purposes, the Elections budget for 2008 was $65,027.
•   In past election years the City provided lunches for the election judges. Funding for lunches
    will not be provided in 2010 as in previous election years.
•   The 2010 proposed budget provides funding for election judges to receive a wage increase of
    20% or $2.00 per hour.
•   Capital outlay includes the acquisition of a label printer for elections.
•   Funding for the replacement of a laptop computer is provided in the Capital Projects
    Equipment Fund.




                                                  70
                                           LEGAL COUNSEL



Department: Legal Counsel

Program Description:

The City Attorney’s office has the statutory responsibility for the administration of all legal
services for the City of Lakeville. The work involves serving as the legal advisor and providing
legal services to the Council, the committees, commissions and boards of the city, and all city
departments. The responsibilities of the office also include substantial involvement in city
projects, liability issues, and contractual agreements.

Services:
 •   Acts as legal counsel at meetings of the City Council and Planning Commission.
 •   Drafts and revises local ordinances and resolutions.
 •   Researches and writes legal opinions and memoranda for elected officials and city
     departments.
 •   Represents the city, its boards and officers, in civil claims and litigation.
 •   Drafts and reviews development agreements.
 •   Negotiates and drafts city contracts, leases and indemnification agreements.
 •   Oversees all real estate activity.

Budget Summary:
                                                                    2009                         2010
                                       2007             2008      Amended            2009      Proposed
                                      Actual           Actual      Budget          Estimate     Budget
Expenditures
Other charges and services        $       57,180   $     60,818   $   83,681   $      65,132   $   65,132

Revenues
Taxes and other public funds      $       57,180   $     60,818   $   83,681   $      65,132   $   65,132


Budget Factors:
     •   The City of Lakeville retains the services of Campbell Knutson, P.A., to handle the City’s
         legal affairs including questions of law, court actions and prosecutions. Funding for
         prosecution is provided for in the Police Department budget.




                                                       71
                                           PLANNING



Department: Planning

Program Manager: Planning Director

Program Description:

Planning
The Planning Department offers a variety of services to preserve and enhance the quality of life
for those who live and work in the community. The department guides the physical development
of Lakeville in a manner that promotes sustained and managed growth and protects the health,
safety and general welfare of its residents. The department oversees all the short and long term
land use, zoning and development activities as required by state statute. The Planning
Department provides technical support to the Planning Commission and City Council.

Environmental Recycling
The Planning Department is responsible for developing programs that promote and expand the
community’s environmental awareness. These programs are designed to encourage landfill
abatement and proper waste disposal through education and opportunities. Current programs
include recycling activities, an organized community clean up day and a hazardous waste
disposal day. The recycling programs that promote educating, reducing, reusing, and recycling
are funded with a grant from Dakota County.


Services:

Planning
 •   Review, research, analyze, and evaluate adopted land use planning actions, including
     residential, commercial, and industrial subdivisions, site plans, conditional use permits,
     variances, rezoning, home occupations, administrative permits, and sign permit applications.
 •   Prepare detailed planning reports and recommendations based on careful research and
     analysis which address planning issues and ensure conformance with City codes, ordinances,
     and policy goals and objectives. Present reports and recommendations to the City Council,
     Planning Commission, Economic Development Commission, Parks, Recreation and Natural
     Resources Committee, and other committees and citizen groups.
 •   Responsible for the coordination of the residential, commercial, office and industrial
     development agreement process.
 •   Coordinate the functions of and act as staff liaison to the Planning Commission.
 •   Provide on-going staff assistance and support to the Planning Commission and City Council.
 •   Prepare Planning Commission meeting agendas, public hearing notices, and meeting and
     work session minutes.
 •   Present the findings and recommendations of the Planning Commission to the City Council.



                                                72
                                           PLANNING
                                            (continued)



 •   Work closely with the Economic Development Department, Building Inspections,
     Engineering, and Parks and Recreation staff to facilitate a consistent and smooth plan review
     process for adopted developments.
 •   Prepare the update and implement the City's Comprehensive Plan.
 •   Manage the orderly development and growth of the community by overseeing the
     implementation of the Comprehensive Plan and Staged MUSA Expansion Areas.
 •   Perform a variety of research duties on matters related to the Comprehensive Plan, Zoning
     and Subdivision Ordinance updates, special studies, and the public review process.
 •   Prepare and implement Zoning and Subdivision Ordinance amendments and amendments to
     the City Code as recommended and approved by the Planning Commission and City Council.
 •   Complete landscape and site inspections to insure projects are completed as approved by the
     Planning Commission and City Council.
 •   Respond to requests for zoning information and interpretation of City codes and ordinances,
     including shoreland overlay district regulations and the Comprehensive Land Use Plan.
 •   Provide residents and the general public with assistance regarding planning, zoning and
     subdivision issues and inquiries.
 •   Administer and oversee commercial, industrial, office and residential sign applications and
     sign installation.
 •   Other integral duties include zoning administration, code enforcement, site inspections,
     assistance in capital improvement planning, and development capacity analysis.
 •   Coordinate land use planning with adjacent jurisdictions, school districts, and state and
     federal government entities.
 •   Prepare public information, including development of graphics and materials, for the City’s
     web page and Cable Channel 16.
 •   Prepare and maintain various maps and databases for the City including the Zoning Map and
     Land Use Map.


Environmental Recycling
 •   Administers all environmental recycling activities associated with and financed by the
     Dakota County Recycling Grant.
 •   Annual Drop Off Day provides City residents the opportunity to dispose of hazardous waste,
     appliances, auto batteries, electronics, used oil, oil filters, scrap metal, and tires.
 •   Annual Road Side Cleanup event where the City organizes a large volunteer effort working
     with citizens to collect reuse along side City streets.
 •   Promotes recycling through the distribution of the Dakota County Green Guide and along
     with other programs.




                                                73
                                                PLANNING
                                                  (continued)



Staffing:
                                                2007         2008         2009          2009          2010
          Position (FTE)                       Actual       Actual       Budget       Estimate       Budget
Planning Director                                  1.0          1.0          1.0            1.0           1.0
Associate Planners                                 3.0          3.0          2.3            2.3           2.0
Planning Assistant                                 1.0           ---          ---            ---           ---
Administrative Assistant                           0.5          0.5          0.5            0.5           0.5
                  Total                              5.5          4.5           3.8           3.8           3.5


Activity Measures:
Planning
In 2008 the Planning Department completed a continuous flow of work including the completion
of the 2008 Comprehensive Land Use Plan for review by the Metropolitan Council, review and
processing of several residential, commercial, industrial, office, and institutional, development
applications. The following lists the various residential, commercial, office, industrial, and
institutional platting and permit activity:

                                                              2007         2008    2009     2010
                       Activity                              Actual       Actual Estimate Estimate
Preliminary Plats                                                 18           11      10       14
Final Plats                                                       14           10       8       12
Administrative Permits                                            49          19*      25       28
Sketch Plans                                                      10            7       8       10
Conditional Use Permits                                             6          17      16       20
Administrative Subdivision                                          1           3       4        5
Temporary Sign Permits                                            34           17      19       22
Permanent Sign Permits                                            98           73      80       83
Rezoning                                                            2           2       4        5
Variances                                                           0           3       3        3
Special Home Occupation Permits                                     0           6       7        8
Comprehensive Plan Reviews                                          0           0       0        0
*significant reduction due to a 2008 Zoning Ordinance amendment concerning residential fence permit requirements
and a decrease in the number of model home permits due to the depressed housing market.

In addition, the Planning Department staff attended four neighborhood meetings for specific
projects proposed by developers and participated in 42 public hearings for various City projects
and projects proposed by developers. Planning Department staff also responded to countless e-
mails and phone calls from residents, developers and property owners and responded to walk-in
requests for information.




                                                      74
                                          PLANNING
                                            (continued)



Environmental Recycling

                                                       2007         2008      2009         2010
                     Activity                         Actual       Actual    Actual      Estimate
Drop Off Day
   Appliances                                                n/a       139        164         150
   Auto Batteries                                           307        310        242         250
   Electronics (tons)                                     12.54      34.36      13.91       13.00
   Used Oil (gallons)                                     1,270      1,225        950       1,000
   Oil Filters (55-gallon barrels)                             6         6         4.5           5
   Scrap Metal (tons)                                        n/a         8         n/a         n/a
   Number of Staff                                           13         12           7           8
   Number of visitors (vehicles)                            968      1,306        833         825
Road Side Cleanup Volunteers                                400        750        900         950
Reusable bags sold at the liquor stores                      n/a


Strategic Plan:
  • Plan for balance of housing types, including workforce and life-cycle housing that reflect the
    changes in Lakeville’s population.
  • Facilitate development of new housing types without cost to the City.
  • Continue orderly development of Lakeville.
  • Plan and prepare for office park development in Lakeville.
  • Continue to encourage quality development and private investments within the City,
    recognizing the current economic conditions may delay some projects.
  • Plan for a balance of industrial, office, corporate and commercial development to provide
    opportunities for residents to live work in the community.
  • Foster a strong sense of identity and quality of character for Lakeville and its individual
    neighborhoods, business districts, office developments and industrial parks.
  • Promote the economic vitality of Lakeville businesses and industries to provide for needed
    services, employment opportunities and a diversified tax base in support of the growth that is
    to occur.

Goals and Objectives:
Planning
 •   The Planning Department will continue to provide prompt and responsive service to
     contractors, developers, property owners, residents, and the general public while working
     toward the goal of improving the quality of life of residents and implementing the
     community’s goals and objectives outlined in the City’s Comprehensive Land Use Plan and
     as directed by the Planning Commission and City Council.
 •   Provide quality and efficient response to the needs of the public, City Council and Planning
     Commission and continue to work with developers to insure quality development and
     positive outcomes. Specific projects that the Planning Department will manage include
     completing the updates to the Zoning and Subdivision Ordinances, the Argonne Farms East
                                                75
                                              PLANNING
                                                (continued)



     Special Study, the on-going Southwest Industrial Area Enforcement Study, a study to review
     small lot subdivision designs, and continued coordination with GIS staff to increase the
     technological capabilities of the department’s databases.
 •   Continue to work with the Planning Commission to improve their efficiency and
     effectiveness.
 •   The Planning Department will continue to provide efficient customer service and completion
     of reports and projects while recognizing the current financial status of the City and the
     national economy.
Environmental Recycling
 •   Promote annual Drop-Off Day and Road Side Cleanup programs.
 •   Produce more recycling containers in City parks.
 •   Improve City’s recycling web page.
 •   Continue to increase and promote recycling activities throughout the City.


Budget Summary:
                                                                  2009                          2010
                                      2007            2008      Amended             2009      Proposed
                                     Actual          Actual      Budget           Estimate     Budget
Expenditures
Personnel services               $    465,680    $    447,936   $   417,545   $     422,342   $   391,179
Commodities                             4,157          18,494        22,651          27,998        27,571
Other charges and services             86,595          44,685        66,979          74,823        53,391
Capital outlay                          4,821             177             -               -             -
             Total               $    561,253    $    511,292   $   507,175   $     525,163   $   472,141

Revenues and other financing
sources
Intergovernmental                $        -      $     28,833   $    32,800   $      47,300   $    41,900
Charges for services                   71,959          72,447        69,035          35,115        38,651
Other financing sources                 5,134               -             -               -             -
Taxes and other public funds          484,160         410,012       405,340         442,748       391,590
             Total               $    561,253    $    511,292   $   507,175   $     525,163   $   472,141

Budget Factors: - Planning
 •   The 2009 budget amendment process resulted in the elimination of one Associate Planner
     staff position. This is in addition to one Planning Assistant staff position eliminated in 2008.
     The City is responsible for its share of any future unemployment compensation. The City
     also provides for outplacement services subject to established maximum limits.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.

                                                     76
                                           PLANNING
                                             (continued)



 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
     officers).
 •   Funding to attend out of state national conferences will not be provided.
 •   A significant decrease in contractual planner fees is recognized in the 2009 adopted budget
     because of the completion of the comprehensive plan update. However, this reduction will
     be somewhat offset with the update to the zoning ordinance.
 •   Public information has been increased to cover the costs to prepare a citizens guide to the
     updated comprehensive plan.


Budget Factors: - Environmental Recycling
 •   The mandate requiring manufactures to accept a percentage of recycled electronics at no
     charge, the city did not charge citizens in 2008 for electronics disposal on drop-off-day;
     however, due to manufacturers meeting their mandated quota for receiving recycled
     electronics the City reinstated the recycling charge to citizens.
 •   Recycling grant revenue is expected to decrease by 11% or $5,400 in 2010 which will result
     in reduced recycling promotion.




                                                 77
                     COMMUNITY AND ECONOMIC DEVELOPMENT



Department: Community and Economic Development

Program Manager: Director of Community of Economic Development

Program Description:

The Community & Economic Development Department is responsible for services that promote
business and development and that support the overall economic vitality of the community.
Department services include business development, redevelopment, promotion and retention;
real estate sale and acquisitions, economic development strategic planning, and transportation
advocacy.

Services:
 •   Respond to business inquiries.
 •   Serve as a liaison to the business community.
 •   Provide high-level City development strategies.
 •   Coordinate special projects, studies, and development projects related to economic
     development.
 •   Staff and coordinate the Economic Development Commission.
 •   Assist developers and businesses navigate through the City’s development process.
 •   Administer federally granted Community Development Block Grant dollars.
 •   Provide development updates, statistics, and demographics to multiple departments to
     facilitate development.
 •   Coordinate with State and local agencies to provide assistance to new and expanding
     businesses.
 •   Compile and analyze development feedback surveys.
 •   Coordinate Manufacturers Week Luncheon.
 •   Conduct Spotlight on Business program (produce 6 annually).
 •   Produce “Focus on Business” cable channel 16 segment (produce 6 annually).
 •   Coordinate Lakeville Business Newsletter (produce 4 annually).

Staffing:
                                           2007         2008      2009    2009            2010
          Position (FTE)                  Actual       Actual    Budget Estimate         Budget
Community and Econ. Dev. Director             1.0          1.0       1.0     1.0              1.0
Economic Development Specialist               1.0          1.0       1.0     1.0              1.0
Administrative Assistant                      0.5          0.5       0.5     0.5              0.5
                 Total                         2.5         2.5        2.5         2.5         2.5

                                                78
                       COMMUNITY AND ECONOMIC DEVELOPMENT
                                                (continued)



Activity Measures:
                                                           2007       2008        2009        2010
                         Activity                         Actual     Actual     Estimate    Estimate
Commercial/Industrial Development
  Permit valuation (millions)                            $    44.1   $   33.9   $     6.0   $   15.0
     Number of Permits                                         103         64          50          40

 •   Completion of a Broadband Feasibility Study
 •   Participate in County-wide public awareness initiatives on the benefits of broadband
 •   Completed construction of the Market Plaza Project and Completion of a Planning Study for
     Pioneer Plaza in Downtown Lakeville
 •   Preparation of 2011-13 Strategic Plan for Economic Development.
 •   Participated in joint marketing efforts with Burnsville and Rosemount at national trade show
     held in the Twin Cities.
 •   Continued participation in Positively Minnesota marketing efforts coordinated by the
     Minnesota Department of Employment and Economic Development
 •   Increased City marketing and advertising efforts by purchasing ad space on several statewide
     web sites and publications
 •   Continuously update Community & Economic Development website.

2008-2010 Strategic Plan for Economic Development:

Goals and Objectives:

 •   Transportation
     o   Complete the County Road 70 Interchange.
     o   Participate in the development of transit in Lakeville.
     o   Promote continued planning of the East/West Corridors.
     o   Provide assistance to the City Council on the efforts to secure additional highway funding.
     o   Monitor the Airlake Airport and Metropolitan Airport Commission’s Comprehensive Plan.
     o   Investigate options for the use of the Urban Partnership Agreement (UPA) Grant for I-35
         and Cedar Avenue transit facility development.

 •   Life-Cycle Housing
     Help the City create a workforce housing approach that reflects the needs of business.
     o   Help the City achieve reasonable and realistic housing goals that balance the need for
         different housing types for residents.


                                                    79
                       COMMUNITY AND ECONOMIC DEVELOPMENT
                                                   (continued)



 •   Technology
     o   Advocate for Lakeville to become a leader in telecommunications services.

 •   Growth Management
     o   Advocate in maintaining balanced growth.
     o   Continue to define and provide the information future businesses and developers need in
         order to decide to locate in Lakeville.
     o   Provide input on the Comprehensive Land Use Plan.
     o   Analyze the viability of additional office park locations in Lakeville.

 •   Communication
     o   Create a single, effective message/platform about economic development.
     o   Create a marketing plan.

 •   Partnerships
     o   Develop and enhance partnerships, whenever possible, to achieve EDC goals.
     o   Explore opportunities to build relationships.

Budget Summary:
                                                                     2009                          2010
                                         2007            2008      Amended             2009      Proposed
                                        Actual          Actual      Budget           Estimate     Budget
Expenditures
Personnel services                  $    224,347    $    241,126   $   249,098   $     244,789   $   251,085
Commodities                                  289             469           350             350           350
Other charges and services                42,200          25,514        18,952          19,801        24,488
Capital outlay                                 -           2,225             -               -             -
             Total                  $    266,836    $    269,334   $   268,400   $     264,940   $   275,923

Revenues
Intergovernmental                   $     16,238    $        -     $       -     $         -     $     5,000
Miscellaneous                                -             3,186           -             5,000         5,000
Taxes and other public funds             250,598         266,148       268,400         259,940       265,923
            Total                   $    266,836    $    269,334   $   268,400   $     264,940   $   275,923


Budget Factors:
 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
                                            80
                    COMMUNITY AND ECONOMIC DEVELOPMENT
                                            (continued)



•   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
    officers).
•   Funding to attend out of state national conferences will not be provided.
•   The 2010 proposed budget includes $5,000 for an EDC strategic planning session consultant.
    These costs are eligible for CDBG grant reimbursement.
•   Dakota Electric donates $5,000 for a manufacturer’s luncheon and other economic
    development activities.




                                                81
                                          INSPECTIONS



Department: Inspections

Department Director: Community and Economic Development Director

Program Manager: Building Official

Program Description:

The Inspections Department provides a public safety function by insuring that all buildings and
structures in the city are constructed safely and maintained in accordance with required state and
local building and fire codes. The city currently enforces the International residential code,
International building code, International fire code, national electrical code, state plumbing,
mechanical and fuel gas codes, state accessibility code, state energy code, city code, city zoning
ordinance and city property maintenance code. The purpose of the various codes are to establish
minimum requirements to safeguard the public health, safety, and general welfare through
structural strength, means of egress facilities, stability, sanitation, adequate light and ventilation,
energy conservation and safety to life and property from fire and other hazards attributed to the
built environment and to provide safety to fire fighters and emergency responders during
emergency operations.

Services:
 •   Perform plan review of residential and commercial projects
 •   Assist design professionals, contractors and homeowners with interpretations on code related
     questions.
 •   Perform building related inspections.
 •   Issue Certificates of Occupancy for permits which meet or exceed permit requirements.
 •   Coordinate records consolidates plans and archives.
 •   Update informational handouts to reflect new code requirements.
 •   Respond to customer complaints concerning construction sites, code enforcement, refuse
     storage, and other zoning and housing maintenance.
 •   Respond to complaints of vacant homes and inspect homes condition prior to occupancy.
 •   Conduct annual informational seminars to homeowners on new deck construction and
     basement remodel projects.
 •   Perform code compliance inspections.
 •   Participate in the development and amendments to state and local code requirements both
     nationally and locally.




                                                  82
                                                               INSPECTIONS
                                                                    (continued)



Staffing:

                                                                 2007               2008            2009    2009                   2010
            Position (FTE)                                      Actual             Actual          Budget Estimate                Budget
Building Official                                                   1.0                1.0             1.0     1.0                    1.0
Senior Administrative Assistant                                     1.0                1.0             1.0     1.0                    1.0
Administrative Assistant                                            2.0                1.8             1.0     1.0                    1.0
Sr. Electrical Inspector                                            1.0                1.0             1.0     1.0                    1.0
Sr. PL/ME Inspector                                                 1.0                1.0             1.0     1.0                    1.0
Sr. Plan Reviewer                                                   1.0                0.8              ---     ---                    ---
Sr. Building Inspector                                              1.0                1.0             1.0     1.0                    1.0
Building Inspectors                                                 4.0                3.8             2.7     2.7                    2.0
                        Total                                         12.0               11.4           8.7              8.7              8.0


Activity Measures:

•    New housing units, total permits issued, total number of inspections and total valuation of
     construction

                            New Single                                                         Number of
                         Family/Townhome                           Permits                     Inspections             Construction
     Year                  Dwelling Units                          Issued                      Conducted                Valuation
      1998                      634                                 5,775                        19,018            $      153,821,520
      1999                      717                                 6,766                        20,270            $      148,100,907
     2000(a)                    607                                 4,591                        22,347            $      152,565,347
      2001                      537                                 4,012                        25,772            $      154,933,126
      2002                      690                                 4,776                        23,478            $      166,871,359
      2003                      789                                 4,913                        24,262            $      250,107,515
     2004(b)                    906                                 8,192                        31,080            $      240,054,385
      2005                      665                                 6,617                        29,286            $      195,256,366
     2006(c)                    444                                 7,500                        27,165            $      173,001,635
      2007                      301                                 6,988                        23,648            $      138,903,036
      2008                      174                                 4,691                        18,143            $      125,746,812
     2009(d)                    110                                 4,500                        16,500            $       80,000,000
     2010(d)                    125                                 4,750                        17,000            $      100,000,000
     2011(d)                    175                                 5,000                        17,500            $      120,000,000
(a) 5/1/2000: All-inclusive permit process implemented that combined four separate permits (i.e. plumbing, mechanical, sewer/water and
building) into one building permit for new dwellings and townhouses. Therefore number of actual permits issued was reduced.

(b) 1/1/2004: City Electrical program initiated resulting in addition of electrical permits.

(c) 1/1/2006 All-inclusive permit process implemented that combined five separate permits (i.e. plumbing, mechanical, sewer/water, building and
electrical) into one building permit for new dwellings, townhouses and remodels. Therefore number of actual permits issued was reduced.

(d) Forecast




                                                                          83
                                            INSPECTIONS
                                                 (continued)



Goals and Objectives:
•       Continue to work on aging permits issued in 2007 and older. Aging permits are those permits
        that are more than two years old, have not requested any inspections and/or have not received
        final inspection and approvals.

•       Continue implementation of the document imaging system and records retention schedule.

•       Review the new June 2009 State energy code and implement changes.

•       Evaluate current policies and procedures. Address uniformity of standardized inspections.
        Implement changes which increase efficiency and improve customer service.

•       Establish a tracking process for commercial/industrial projects and issuance of temporary
        certificate of occupancy (TCO) and full certificate of occupancy (CO).

•       Update all project information and make available on the web site.

•       Update all project handouts and make available on the web site.

•       Process zoning complaints regarding housing maintenance, exterior storage, long grass and
        weeds and refuse.


Budget Summary:
                                                                  2009                          2010
                                       2007          2008       Amended             2009      Proposed
                                      Actual        Actual       Budget           Estimate     Budget
Expenditures
Personnel services                 $ 1,014,276    $ 1,018,206   $   872,292   $     868,541   $   795,285
Commodities                             22,841         20,539        21,600          19,811        20,464
Other charges and services              68,094         70,973        82,888          82,889        76,703
Capital outlay                          56,016          2,923         3,591               -         2,772
                 Total             $ 1,161,227    $ 1,112,641   $   980,371   $     971,241   $   895,224

Revenues
Permits                            $ 1,585,188 $ 1,252,539 $        996,727 $       719,936   $   738,851
Charges for services                    12,822      12,066            3,950           5,613         7,679
Taxes and other public funds          (436,783)   (151,964)         (20,306)        245,692       148,694
                 Total             $ 1,161,227    $ 1,112,641   $   980,371   $     971,241   $   895,224

Budget Factors:

    •   The economic recession which commenced in mid-2008 has resulted in a significant
        degradation of revenues. As such one Building Inspectors and one Administrative Assistant
        positions were eliminated in the fall of 2008. The budget was reduced again in April 2009

                                                     84
                                         INSPECTIONS
                                            (continued)



    with the elimination of a two additional Inspector positions. The City is responsible for its
    share of any future unemployment compensation. The City also provides for outplacement
    services subject to established maximum limits.
•   The 2010 proposed budget reflects an expected increase in employee health insurance
    premiums of 10%.
•   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
    officers).
•   Funding to attend out of state national conferences will not be provided.
•   The 2009 budget amendment process mandated a three day furlough for all full time
    employees and a five day furlough for all directors and City Administrator. The 2010
    proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
    living adjustment.
•   Revenues are anticipated to continue to decrease in 2010 due to continuing economic
    conditions in the financial construction sectors.




                                                85
                           GENERAL GOVERNMENT FACILITIES



Department: General Government Facilities

Program Description:

The General Government Facilities Department is responsible for the maintenance and operating
costs of City Hall, a storage facility, the former police station building (vacated August 2008),
the historical society building, and a radio communications building. This department is also
responsible for the landscape maintenance and snowplowing of the Heritage Library.
This department provides staffing for the planning, implementing, coordinating and evaluating a
comprehensive program of improvements including project management for the following
buildings that are budgeted within their respective departments.
                                                                                      Square
     Facility                                    Location                             Footage

     General Government Facilities Budget
     City Hall                                   20195 Holyoke Avenue                 32,600
     Storage Facility                            7773 214th Street                    25,000
     Former Police Station                       2110 Holyoke Avenue                  16,406
     Historical Society                          8700 210th Street                     2,428
     Radio Communications Building               17900 Jacquard Avenue                   800

     Other Budgets
     Police Station                              18300 Dodd Boulevard                 68,569
     Fire Station #1                             20190 Holyoke Avenue                  8,700
     Fire Station #2                             16720 Dodd Boulevard                  5,724
     Fire Station #3                             17490 Kenrick Avenue                  5,500
     Fire Station #4                             9465 185th Street                    13,830
     Water Treatment Facility                    18400 Ipava Avenue                   47,125
     Liquor Store Kenrick                        16179 Kenrick Avenue                  9,714
                     Galaxie                     16000 Galaxie Avenue                 11,300
                     Heritage                    20164 Heritage Avenue                 8,960
     Central Maintenance Facility                7570 179th Street West              110,000
     Senior Center                               20732 Holt Avenue                     4,959
     Arts Center                                 20965 Holyoke Avenue                  8,200

Services:
 •   Plan, organize and evaluate overall facilities maintenance operations to meet established
     goals based on the needs of the community and within budgetary constraints.
 •   Plan for and procure services, equipment, tools and supplies necessary for effective and
     efficient operations.
 •   Plan, organize, coordinate, assign, and monitor work of facilities maintenance and cleaning
     staff necessary to perform required job functions.
 •   Manage facilities maintenance and repair projects.
 •   Protect the investment the City and the Community has made in its facilities by developing
     and implementing long term facility maintenance programs to keep life cycle costs of the
     facilities as low as possible.
                                               86
                           GENERAL GOVERNMENT FACILITIES
                                               (continued)

 •   Provide high quality facility services to our customers (residents, tenants and co-workers).
 •   Assure that City facilities are attractive, well maintained, and look and feel new, regardless
     of their age, by insisting on high quality standards for maintenance, operations, repairs,
     remodeling and construction.
 •   Administer contracts and direct contractors for landscaping, HVAC, interior plants,
     generator maintenance, snow removal, electrical, plumbing, janitorial, food services, etc.
 •   Continue preventive maintenance programs.

Staffing:

                                            2007          2008       2009        2009        2010
           Position (FTE)                  Actual        Actual     Budget     Estimate     Budget
City Hall Receptionist (PT)                    1.0           1.0        1.0         1.0         1.0
City Hall Administrative Assistant             1.0           1.0        1.0         1.0         1.0
Facility Maintenance Coordinator               1.0           1.0        1.0         1.0         1.0
Historical Society Liaison                     0.1           0.1        0.1           ---         ---
                 Total                           3.1         3.1        3.1          3.0            3.0

Goals and Objectives:
To successfully provide customer focused service and maintain the buildings and operating
systems in the best possible condition. Manage renovation and construction projects assuring the
most effective use of governmental funds. Projects will be developed which will improve
working and citizens environments. We will strive to respond in a timely, courteous manner to
all work requests and minimize callbacks. We will keep the facilities clean, safe, and
comfortable


Activity Measures:

                                                          2007       2008        2009         2010
                     Facility                            Actual     Actual     Estimate     Estimate
City Hall (32,600 sq. ft.)
 Energy costs per sq. ft.                               $    1.79   $   2.09   $    2.15    $   2.31
 Contracted repairs/maintenance per sq. ft.             $    1.43   $   0.61   $    1.38    $   1.44

Storage Facility (25,000 sq. ft.)
  Energy costs per sq. ft.                                    ---   $   0.30   $    0.11    $   0.12
  Contracted repairs/maintenance per sq. ft.                  ---   $   0.03   $    0.13    $   0.06

Vacant Police Station (16,406 sq. ft.)
 Energy costs per sq. ft.                                     ---   $   0.36   $    0.96    $   1.02
 Contracted repairs/maintenance per sq. ft.                   ---   $   0.26   $    0.75    $   0.27


                                                   87
                             GENERAL GOVERNMENT FACILITIES
                                                (continued)

                                                           2007           2008            2009          2010
                    Facility                              Actual         Actual         Estimate      Estimate
Historical Society Building (2,428 sq. ft.)
 Energy costs per sq. ft.                                        ---             ---    $    1.43     $   1.51
 Contracted repairs/maintenance per sq. ft.                      ---             ---    $    0.79     $   0.72

Radio Communications Building (800 sq. ft.)
 Energy costs per sq. ft.                                $      1.43    $    1.35       $    1.55     $   1.46



Budget Summary:
                                                                   2009                               2010
                                      2007            2008       Amended                2009        Proposed
                                     Actual          Actual       Budget              Estimate       Budget
Expenditures
Personnel services               $    176,451    $    188,505    $     201,366   $      194,080   $   201,473
Commodities                            33,837          34,955           45,080           44,122        43,406
Other charges and services            221,790         248,123          300,661          290,777       287,263
Capital outlay                              -          11,953                -                -         2,772
              Total              $    432,078    $    483,536    $     547,107    $     528,979   $   534,914

Revenues and other financing
sources
Miscellaneous                    $     41,268    $     47,375    $      43,679   $       43,680   $    44,990
Other financing sources                59,278          57,454           74,757           66,202        70,143
Taxes and other public funds          331,532         378,707          428,671          419,097       419,781
              Total              $    432,078    $    483,536    $     547,107    $     528,979   $   534,914


Budget Factors:
 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
 •   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
     officers).
 •   Personnel services will decrease due to the resignation of the historical society liaison. These
     duties will be assumed up by existing City staff reducing total payroll hours by 10 hours per
     month.
 •   Funding to attend out of state national conferences will not be provided.
 •   Electric and natural gas services are budgeted to increase 10% and 3%, respectively. 2009
     repairs to gas lines and thermostats at the storage facility have reduced natural gas service
     costs at the facility.
                                                 88
                           GENERAL GOVERNMENT FACILITIES
                                           (continued)

•   Postage costs are budgeted to increase 3% for growth and rate increases.
•   Capital outlay includes funding the replacement of two computers.
•   The 2010 proposed Capital Projects Building Fund budget provides funding for an energy
    conservation initiative that includes City Hall improvements as follows:
    o   HVAC upgrade                 $180,000
    o   Electrical upgrade           $ 60,000
    o   Professional engineering     $ 60,000
•   The 2010 proposed Capital Projects Building Fund budget also provides funding for (a) the
    replacement of City Halls north wing roof and roof top units for $292,000, and (b) the
    replacement of the roof and interior renovations to the vacant former police station of
    $377,000.




                                                89
                                           FINANCE



Department: Finance

Program Manager: Finance Director

Program Description:

The City Finance Department is responsible for the accounting and financial reporting of all City
operations and is entrusted with collecting, depositing, and investing all City funds. This
includes the maintenance of all financial transactions records for the City including billing and
collections, accounts payable, investment and cash management. The Finance Department
coordinates the annual operating and capital budget process for all city operations. Long-term
department goals include continued improvement of efficiency of services to other City
departments and the public, and improving timeliness, quality and usefulness of financial
information provided to City officials and citizens.
Services:
 •   Financial services include financial reporting. Coordinate and prepare the annual audit and
     comprehensive annual financial report (CAFR) by May 31st. Maintain a high quality audit
     results and minimize audit costs. Preparation of required state, federal and other government
     agency reports. Maintain general ledger and fixed asset systems and perform various
     accounting functions such as reconciliation of various accounts.
 •   Treasury management including investment of City funds, accounts payable function, debt
     management and reporting and manage bank agreements and transactions to minimize costs
     and maximize efficiency.
 •   Billing and collection for City services including but not limited to development related
     services, licenses, public safety activities and quarterly water and sanitary sewer services.
     Manage utility billings to provide high quality customer service and timely deposit of
     collections.
 •   Fiscal agent for ALF Ambulance, Dakota Communications Center, Lakeville Arenas.
     Services include preparation of Comprehensive Annual Financial Report, interim financial
     reports, accounts payable functions, treasury management, budgeting, and debt management.
 •   Budget administration including the Capital Improvement Plan.
 •   Supervision of City risk management program.
Staffing:
                                           2007        2008       2009    2009            2010
          Position (FTE)                  Actual      Actual     Budget Estimate         Budget
Finance Director                              1.0         1.0        1.0     1.0             1.0
Administrative Assistant                      1.0         1.0        1.0     1.0             1.0
Senior Accountants                            2.6         2.6        2.6     2.6             2.6
Accountant II                                 1.0         1.0        0.9     0.9             0.8
Accounts Payable Technician                   1.0         1.0        1.0     1.0             1.0
                 Total                         6.6         6.6         6.5         6.5        6.4

                                                90
                                            FINANCE
                                            (continued)



Activity Measures:
                                                       2007        2008      2009    2010
                     Activity                         Actual      Actual Estimate Estimate
Bond rating                                             Aa2         Aa2      Aa2     Aa2
Outstanding Debt (millions)                          $ 108.9     $ 102.8 $ 103.0    $ 95.7
New debt issues (millions)                           $ 34.8      $     1.5 $    6.9 $     .6
Total Expenses (millions)                            $ 71.4      $ 49.7 $ 51.2 $ 52.7
                                                     $ 36.3 –    $ 36.0 - $ 35.4 – $ 37.0 –
Investment portfolio (millions)
                                                     $ 59.5      $ 54.0 $ 55.6 $ 57.2
Date audit completed – City                           June 12     June 10   May 31  May 31
GFOA Award: Certificate of Achievement for
Excellence in Financial Reporting                      Yes         Yes          Yes       Yes
Unqualified audit opinion                              Yes         Yes          Yes       Yes
Material weaknesses                                    None          2          None      None
                                                       Not         Not
GFOA Award: Distinguished Budget                      Applied     Applied                Applied
Presentation Award                                      for         for         Yes       For

Strategic Plan:
 • Identify and evaluate alternatives to the property tax for paying for services.
 • Reduce reliance on City property taxes for regional/county road improvements.


Goals and Objectives:
 •   GFOA Certificate of Achievement for Financial Reporting.
 •   GFOA Distinguished Budget Presentation Award
 •   Issue debt for Certificates of Indebtedness and Street Improvements.
 •   Work with Information Technology and user departments to complete e-payment and credit
     card capabilities to receive payments for various City services, in particular utility bills.
 •   Conversion of fixed asset system.




                                                91
                                                FINANCE
                                                (continued)



Budget Summary:
                                                                  2009                          2010
                                      2007            2008      Amended             2009      Proposed
                                     Actual          Actual      Budget           Estimate     Budget
Expenditures
Personnel services               $    467,783    $    479,128   $   482,877   $     486,340   $   498,950
Commodities                             3,989           2,921         3,345           3,297         3,750
Other charges and services             62,714          62,465        60,181          58,782        61,422
Capital outlay                          3,041          15,050           430             430           553
             Total               $    537,527    $    559,564   $   546,833   $     548,849   $   564,675

Revenues and other financing
sources
Charges for services             $     69,639    $     62,314   $    79,080   $      79,066   $   102,197
Other financing sources                39,478          40,663        41,883          40,663        43,140
Taxes and other public funds          428,410         456,587       425,870         429,120       419,338
             Total               $    537,527    $    559,564   $   546,833   $     548,849   $   564,675


Budget Factors:
 •   The 2009 budget amendment process resulted in the reduction in hours of an Accountant II
     from full time status to 32 hours a week.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
     officers).
 •   Funding to attend out-state or in-state conferences will not be provided.




                                                     92
                                   INFORMATION SYSTEMS



Department: Information Systems

Program Manager: Information Systems Manager

Program Description:

City-wide computing needs are administered by this division. This includes the wide area
network (WAN), that connects the server farm located at City Hall to the Central Maintenance
Facility, Fire stations, #1,2,3 & 4, Ice Arena-Ames, Ice Arena-Hasse, Liquor Heritage, Liquor
Galaxie, Liquor Kenrick, Performing Arts Center, Senior Citizen Center, Water Treatment
Facility and the Police Station, which is the “Hot Failover” site for the server farm. In addition,
the local area networks (LAN) inside each of these locations.

Services:
 •   Maintain and support the Cities local area networks.
 •   Assist with the maintenance and development of the Cities wide area network.
 •   Perform maintenance and repair work on city-owned computing equipment.
 •   Perform installation, maintenance, and upgrades of city-owned computer software.
 •   Perform installation, maintenance, and upgrades of city-owned VoIP telephones.
 •   Provide training and software support to City personnel.
 •   Maintain and assist in development of the City’s World Wide Web and Intranet sites.
 •   Coordinate and monitor Internet access for city employees.
 •   Coordinate with city staff and LOGIS on the deployment and operation of applications.
 •   Provide desktop support to city staff.
 •   Provide maintenance and support for document imaging solution
 •   Development and implementation of City data security plan and disaster recovery.
 •   Provide End user training for all installed applications.

Staffing:
                                               2007      2008       2009       2009        2010
          Position (FTE)                      Actual    Actual     Budget    Estimate     Budget
Information Systems (IS) Manager                  1.0       1.0        1.0        1.0         1.0
IS Network Specialist                             1.0       1.0        1.0        1.0         1.0
IS Technician                                     2.0       2.0        1.3        1.3         1.0
                 Total                            4.0        4.0       3.3         3.3         3.0




                                                   93
                                  INFORMATION SYSTEMS
                                             (continued)



Activity Measures:

                                                        2007         2008       2009        2010
                      Activity                         Actual        Actual    Estimate   Estimate
Data switches                                                  24         24         28         28
Desktop VoIP telephones                                       260        270        270        270
Laptops                                                        47         42         42         42
Laser Printers                                                 30         28         28         26
Mobile Computers - Fire                                          6         6          6          6
Mobile Computers - Police                                       21        27         27         28
Servers – Data/Storage/VoIP                                     21        21         21         10
Software applications                                          200       200        200        200
Telephone calls – system wide                              128,354   324,995    360,000    360,000
Wireless Access Points                                          13        24         24         28
Workstations on LAN                                            165       188        177        177

Goals and Objectives

 •   Begin contract negotiations with Charter Business Link for continued lease and operation of
     Wide Area Network fiber, prior to the 2011 expiration of the existing lease agreement.
 •   Finalize implementation of 4.9 GHz network between City Hall and Police station for use as
     a fail over data network in the event of service interruption of the existing fiber connection.
 •   Install wireless access point within the Fire stations to allow data downloads from the
     network to update applications in mobile computer units.
 •   Continue to develop and implement the Information Technology Disaster Recovery Plan.
 •   Implementation of Microsoft Office 2007 Upgrade to all workstations, conduct end user
     training of application and support for users after conversion.
 •   Upgrade of e-mail server application to Exchange 2007 and implementation of new features
     to ensure continued availability of City e-mail communications.
 •   Work with LOGIS to complete the annual security audit of network architecture.
 •   Continue to design, implement and train staff on the Laserfiche document storage and
     retrieval system.
 •   Complete research and begin implementation of Virtual Server farm to replace the existing
     hardware with the two server farm locations.




                                                 94
                                     INFORMATION SYSTEMS
                                                (continued)



Budget Summary:
                                                                  2009                          2010
                                      2007            2008      Amended             2009      Proposed
                                     Actual          Actual      Budget           Estimate     Budget
Expenditures
Personnel services               $    292,307    $    343,096   $   311,961   $     309,968   $   288,451
Commodities                             5,187           3,971         8,954           8,954         8,954
Other charges and services            109,001         117,649       142,764         140,807       140,153
Capital outlay                         26,640          47,248        34,338          36,678         9,468
              Total              $    433,135    $    511,964   $   498,017   $     496,407   $   447,026

Revenues and other financing
sources
Other financing sources          $     84,936    $    177,993   $   101,834   $      86,426   $    84,712
Taxes and other public funds          348,199         333,971       396,183         409,981       362,314
              Total              $    433,135    $    511,964   $   498,017   $     496,407   $   447,026


Budget Factors:
 •   The 2009 budget amendment process resulted in the elimination of one Information Systems
     Technician staff position. These duties will be divided by remaining staff. The City is
     responsible for its share of any future unemployment compensation. The City also provides
     for outplacement services subject to established maximum limits.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
     officers).
 •   Funding to attend out of state national conferences will not be provided.
 •   The capital outlay budget provides funding for the replacement of a computer and the
     acquisition of a color scanner.
 •   The 2009 Capital Projects Equipment Fund amended budget provides funding for the
     replacement of four servers with a virtual server farm for $188,116.




                                                     95
                                     HUMAN RESOURCES



Department: Human Resources

Program Manager: Human Resources Manager

Program Description:

The City Human Resources Department is responsible for development, recommendation and
implementation of policies on human resources related issues. The Department provides
guidance and assistance to City leadership and employees regarding recruitment, employee
satisfaction and development. The Human Resources function strives to retain and support a
workforce committed to high quality, efficient services and respectful working relationships.

Services:
 •   Union negotiations and labor contract administration.
 •   Payroll processing.
 •   Employee benefits administration.
 •   Workers compensation processing.
 •   Recruitment.
 •   Compensation and classification administration.
 •   Personnel records management.
 •   Policy administration.
 •   Training and development services.
 •   Coordination of employee recognition and wellness events.

Staffing:
                                           2007         2008        2009       2009       2010
          Position (FTE)                  Actual       Actual      Budget    Estimate    Budget
Human Resources Manager                       1.0          1.0         1.0         1.0        1.0
Benefits Specialist                           1.0          1.0         1.0         1.0        1.0
Payroll Technician                            1.0          1.0         0.9         0.9        0.8
                 Total                        3.0            3.0       2.9         2.9        2.8




                                                96
                                      HUMAN RESOURCES
                                                (continued)



Activity Measures
                                                           2007        2008           2009          2010
                      Activity                            Actual      Actual        Estimate      Estimate
Vacancies Filled*                                            34          15              15            15
Full-time Employees                                         201         185             176           176
Part-time Employees                                          42          43              44            44
Seasonal Employees                                          115         115             115           115
Work Comp Claims                                             45          23              25            25
W-2’s generated                                             478         442             460           460
    *Does not include seasonal recruitment

Goals and Objectives:
 •   Competitive compensation through regular market analysis.
 •   Cost-effective insurance options by assisting participants in becoming smarter consumers.
 •   Effective cost-saving partnerships with other entities.
 •   Conversion to electronic time card system.


Budget Summary:
                                                                  2009                           2010
                                      2007            2008      Amended             2009       Proposed
                                     Actual          Actual      Budget           Estimate      Budget
Expenditures
Personnel services               $    219,048    $    239,090   $   244,863   $     238,962   $   245,900
Commodities                             1,888             653         2,010           2,010         2,010
Other charges and services             72,380          46,310        47,490          46,584        46,577
Capital outlay                         12,715           2,065             -               -             -
             Total               $    306,031    $    288,118   $   294,363   $     287,556   $   294,487

Revenues and other financing
sources
Other financing sources          $     68,668    $     69,780   $    79,691   $      70,095   $    73,576
Taxes and other public funds          237,363         218,338       214,672         217,461       220,911
             Total               $    306,031    $    288,118   $   294,363   $     287,556   $   294,487


Budget Factors:
 •   The 2009 budget amendment process resulted in the reduction in hours for a Payroll
     Technician from full time status to 32 hours a week.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
                                                     97
                                    HUMAN RESOURCES
                                            (continued)



•   The 2010 proposed budget reflects an expected increase in employee health insurance
    premiums of 10%.
•   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
    officers).
•   Funding to attend out of state national conferences will not be provided.




                                                98
                                               INSURANCE

Department: Insurance

Program Description:
The Insurance Department is responsible for property and liability insurance, workers
compensation, the Employee/Management Safety Committee, and related health and safety
programs (OSHA, DOT, and EPA).

The City uses the Internal Service Municipal reserves Fund for accounting, reporting and
allocation of related insurance costs. Under this model, operating departments in the various
City funds receive a charge from the Municipal Reserves Fund, and all costs (premiums, claims,
and related) are reflected in a single fund. The Insurance program represents the General Funds
share of the risk management activities.

Services:
Manage potential risk and loss from unforeseen events. Tactics include aggressive case
management, promoting safe behaviors, and ensuring safe environments.

Activity Measures:
                                                           2007           2008            2009          2010
                      Activity                            Actual         Actual         Estimate      Estimate
Experience Modification Ratio
   General Liability                                          .734         .731            .752         .763

Goals and Objectives:
 •   Facilitate safety committee meeting and safety incentive program on a monthly basis.
 •   Coordinate workers compensation and property/casualty insurance coverage renewal
     processes by the required due date of each year.
 •   Conduct safety audits for all major City facilities.
 •   Respond to manager, employee, or citizen questions or claims related to the City’s risk
     management plans within one business day.

Budget Summary:
                                                                       2009                          2010
                                       2007           2008           Amended            2009       Proposed
                                      Actual         Actual           Budget          Estimate      Budget
Expenditures
Other charges and services        $    243,630   $    275,513    $     280,072    $     280,072   $   278,698

Revenues
Taxes and other public funds      $    243,630   $    275,513    $     280,072    $     280,072   $   278,698


Budget Factors:
 •   The budget for risk management is slightly lower due to claims experience and LMCIT cost
     containment initiatives.
                                               99
                                             POLICE



Department: Police

Program Manager: Chief of Police

Program Description:

The mission of the Lakeville Police Department states that “in partnership with the community,
we are dedicated to reducing crime, problem solving, and ensuring the quality of life in
Lakeville”.

The Department includes a wide array of public safety functions including emergency response,
investigations, patrol, proactive drug enforcement, K-9 unit, Police Reserves, Chaplaincy
services, Crime Prevention, Park Rangers, School Resource Officers, Animal Control, and
Emergency Management Preparedness. Dispatching is provided by the Dakota Communication
Center.

The Lakeville Police Department is a very professional organization with a long history of
running lean and doing more with less as it serves the community. The department currently has
an authorized strength of 53 sworn officers, 9 full-time and 9 part-time non-sworn employees, as
well as a 20 member reserve force that work as a team to provide 24 hour service and protection.
The department is currently operating with a sworn staff of 51 sworn officers, 7 full-time and 4
part-time and 3 seasonal employees.

Services:
 •   24 hour a day, 7 day a week emergency            •   Conflict Resolution Team.
     response Patrol Services.                        •   School Resource Liaisons.
 •   Canine Patrol.                                   •   Drug task Force.
 •   Criminal Investigations.                         •   MAAG Team.
 •   Crime Scene Investigations.                      •   Special Operations Team.
 •   Apprehension and Prosecution of                  •   Animal Control.
     Criminals.
                                                      •   Community Service.
 •   Traffic Safety Enforcement and
                                                      •   Park Patrol.
     Accident Investigation.
                                                      •   National Night Out.
 •   Code Enforcement.
                                                      •   Safety Camps.
 •   Crime Prevention.
                                                      •   Police Cable Show.
 •   Child Safety Programs.
                                                      •   Deliver Meals on Wheels.
 •   Citizens Academy.
                                                      •   Toy for Tots.
 •   Licensing and Permitting.
                                                      •   Special Event Security and Mgmt.
 •   Alcohol and Tobacco Server Training.
                                                      •   City Council Public Safety Consultation.
 •   Compliance Enforcement.
 •   Emergency Management.



                                              100
                                      POLICE
                                      (continued)


Staffing:
                                     2007        2008       2009        2009       2010
          Position (FTE)            Actual      Actual     Budget     Estimate    Budget
Sworn Officers
  Chief                                 1.0          1.0       1.0         1.0         1.0
  Captains                              2.0          2.0       2.0         2.0         2.0
  Sergeants                             9.0         10.0      10.0        10.0        10.0
  Investigators                         6.0          6.0       6.0         6.0         6.0
  Narcotics Task Force Officer          1.0          1.0       1.0         1.0         1.0
  Patrol Officers                      32.2         32.8      31.0        31.0        31.5
       Total Sworn Officers            51.2         52.8      51.0        51.0        51.5
Crime Prevention Coordinator            1.0          1.0       1.0         1.0         1.0
Community Public Safety Officers        2.0          1.0       0.3         0.3          ---
Community Service Officers              2.5          3.8       3.8         3.8         3.8
Animal Control Officer                  1.0          1.0       1.0         1.0         1.0
Criminal Analyst                        1.0          0.1        ---         ---         ---
Records Supervisor                      1.0          1.0       1.0         1.0         1.0
Records Administrative Assistants       4.4          4.5       4.0         4.0         4.0
               Total                   64.1         65.2      62.1        62.1        62.3

Activity Measures:
                                                 2007       2008        2009        2010
                     Activity                   Actual     Actual     Estimate    Estimate
Incidents
   Arson                                              2         3           5           5
   Burglary – Residential                           123        92         163         163
   Burglary – Commercial                             31        29          36          36
   Rape                                               9         3           9           9
   Robbery                                            4         7           6           6
   Aggravated assault                                 9        18          20          20
   Theft/Larceny                                    762       892         847         847
   Auto Theft                                        35        15          33          33
   Assault                                          116       109         135         135
   Forgery/Counterfeiting                            85        58          80          80
   Fraud                                            130       168         124         124
   Possess Stolen Property                           10         7          12          12
   Theft – Other                                     29        20          24          24
   Weapons                                           14        12          14          14
   Prostitution                                       4        18           4           4
   Criminal Sexual Conduct                           26        18          24          24
   Damage to Property                               361       328         371         371
   Drugs                                            140       120         166         166
                                         101
                                                POLICE
                                                (continued)


                                                           2007        2008    2009     2010
                         Activity                         Actual      Actual Estimate Estimate
    Family/Children                                            14          13       12       12
    DUI                                                       188         184      231      231
    Indecent Exposure/Obscenity                                10           4        8        8
    Disorderly Conduct                                         45          27       66       66
    Harassment                                                 63          56       88       88
    Liquor                                                    133         110      146      146
    Tobacco                                                    11           7       24       24
    All Other Offenses                                        159         106      133      133
                      Total Incidents                       2,513        2424    2,781    2,781
Citizen Responsiveness
    Arrests                                            1,042     1,384         950               1,001
    Traffic Citations                                  6,086     6,139       7,493               7,493
    Traffic Accidents                                    517       682         551                 551
    Medical Emergencies                                1,069     1,110       1,134               1,134
    Animal related calls                               2,113     2,047       2,241               2,241
    Alarms                                             1,933     1,638       2,051               2,051
    Other Public Service Calls                       10,513     10,828      11,152              11,152
    Suspicion                                          2,046     2,092       2,170               2,170
    Phone calls                                      87,036     11,189      11,500              11,900
    Lobby Walk-Ins                                     5,527     5,376       5,664               5,864
    Police CAD Incidents                             50,740     42,510      43,830              43,830
* Police CAD calls were lower due to a modification in use of CAD system in 2008
Strategic Plan:
    •   Be a regional leader in disaster preparedness.
    •   Prioritize police officer time on core law enforcement – patrol and investigative functions.

Goals and Objectives:
•       Maintain and enhance the programs and strategies that have given the police department the
        ability to prevent and reduce crime in our community, as well as investigate crimes that have
        already occurred culminating in a very high clearance rate.
•       Develop strategies that help to identify and manage the community and criminal issues that
        come with a growing community. Foreseeing the needs of the public and possible
        enforcement issue in advance will be very important in meeting those needs in the future.
•       Using state of the art technology and tactics to keep up with a changing community and
        changing demographics. Using the internet and other communication tools to better
        communicate and keep our citizens informed of community happenings.
•       Hiring and developing employees to better meet the needs of an ever changing citizenry. The
        objective includes keeping employees healthy and balanced is a big part of being better
        prepared to meet the needs of the citizens we serve.


                                                   102
                                               POLICE
                                               (continued)


 •   Crime prevention and traffic enforcement – The Department will create a full-time traffic
     unit and a full-time crime prevention unit with existing personnel.

Budget Summary:
                                                                2009                          2010
                                      2007           2008     Amended             2009      Proposed
                                     Actual         Actual     Budget           Estimate     Budget
Expenditures
Personnel services               $ 5,237,460    $ 5,713,183   $ 5,888,548   $ 5,830,784    $ 6,099,343
Commodities                          336,144        355,158       342,874       329,963        347,810
Other charges and services         1,366,004      1,416,662     1,659,027     1,671,459      1,716,956
Capital outlay                         1,371          4,015             -             -          9,311
             Total               $ 6,940,979    $ 7,489,018   $ 7,890,449   $ 7,832,206    $ 8,173,420

Revenues and other financing
sources
Licenses                         $   126,503    $   164,948   $   145,678   $   143,087    $   163,490
Intergovernmental                    395,375        380,898       369,540       368,851        369,851
Charges for services                 291,752        242,023       242,874       255,425        243,696
Court fines                          275,635        264,512       272,394       273,055        273,055
Miscellaneous                          6,888          7,460             -             -         13,411
Other financing sources               71,254         74,034        84,668        84,668         87,208
Taxes and other public funds       5,773,572      6,355,143     6,775,295     6,707,120      7,022,709
             Total               $ 6,940,979    $ 7,489,018   $ 7,890,449   $ 7,832,206    $ 8,173,420


Budget Factors:
 •   The 2009 budget amendment process resulted in the elimination of one vacant Patrol Officer
     position, one Community Public Safety Officer (CPSO) position, and one seasonal Park
     Ranger. This was in addition to the 2008 elimination of the Criminal Analyst position and
     part-time Records Administrative Assistant. The CPSO duties were assumed by Community
     Service Officers. The City is responsible for its share of any future unemployment
     compensation. The City also provides for outplacement services subject to established
     maximum limits.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
 •   The 2010 proposed budget provides for the return of a patrol officer from military service on
     July 1, 2010. During 2009 the City aggressively pursued federal economic stimulus money
     to fund three new patrol officers; however funding was denied.
 •    The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
     officers).
 •   Funding to attend out of state national conferences will not be provided.
                                                    103
                                           POLICE
                                           (continued)


•   The Dakota Communication Center (DCC) provides dispatching services for several south
    metro communities, including the City of Lakeville. The DCC will be going into its fourth
    year of operation and has increased the City’s fees by $15,773 or 1.9% over the 2009
    estimate.
•   The new police building was officially occupied August 8, 2008; the new building is twice
    the office space and four times the square footage and size of the previous police station.
    The budget provides electric and gas service rate increases of 10% and 3%, respectively.
•   The 2010 Capital Projects Equipment Fund capital outlay budget request is actually $50,065
    (21%) less than 2009 amended budget.
•   The 2010 proposed capital outlay budget provides funding for the replacement of a K-9
    service dog; funding is anticipated to be provided by private donations.




                                              104
                                                  FIRE


Department: Fire

Program Manager: Fire Chief

Program Description:

The Fire Department provides a variety of emergency services, proactive educational activities
and actively promotes fire prevention. The Department strives for timely professional, caring,
safe and cost-effective services. An array of services related to building and fire code educations
and enforcement as well as planning for and responding to a wide variety of emergency
situations. Services are focused at fire emergency response, prevention and public education. The
City also maintains mutual aid agreements with neighboring communities which provide
Lakeville with additional personnel and equipment capabilities of fighting major fires and
meeting the demands of a large scale emergency.
Services:
 •   Emergency Response
      o   Fire suppression.
      o   First Responder medical response (EMS).
      o   Vehicle extrication – rescue.
      o   Ice & water rescue.
      o   Domestic security, emergency management.
      o   Hazardous condition and disaster mitigation.
 •   Prevention
      o   Alarm and suppression system acceptance testing.
      o   Fire prevention inspections.
      o   Occupancy inspections.
      o   Plan review.
      o   Fire cause determination.
 •   Education
      o   Firefighter basic training for new recruits.
      o   Safety Camp.
      o   Citizen’s Safety Academy.
      o   National Night Out.
      o   Fire prevention visits to schools.
      o   “On Call” cable TV program.
      o   Station tours.
      o   Fire extinguisher training.

                                                   105
                                              FIRE
                                            (continued)



Staffing:
                                          2007          2008           2009         2009        2010
            Position (FTE)               Actual        Actual         Budget      Estimate     Budget
Fire Chief                                 1.0           1.0            1.0          1.0         1.0
Fire Marshal                               1.0           1.0            1.0          1.0         1.0
Fire Inspector                             1.0           1.0            1.0          1.0         1.0
Senior Administrative Assistant            1.0           1.0            1.0          1.0         1.0
Administrative Assistant                   0.6           0.6            0.6          0.6         0.6
                Total                      4.6            4.6          4.6          4.6         4.6

Activity Measures:
                                                        2007            2008        2009     2010
                     Activity                          Actual          Actual     Estimate Estimate
# Paid-on-call Fire Fighters                                     73          88           78          85
Calls
  Fire-Related Calls                                          127          137         140         147
  Medical Calls                                               413          441         289         303
  Rescue Calls                                                115          125         127         133
  Fire Alarms                                                 288          306         317         334
  Good Intent/Other                                           206          221         227         238
                   Total Calls                              1,149        1,230       1,100       1,155
Commercial Fire Inspections                                   202          300         330         435
Plan Reviews                                                   92           75          80          70
Fire Education Visits (outside)                               191          200         205         210
Fire Education Tours (in-house)                                66           66          75          75
Response Times
   Less than six minutes                                        36%       32%         33%         35%
   6 – 10 minutes                                               54%       54%         55%         55%
   More than ten minutes                                        10%       14%         12%         10%

Goals and Objectives:
 •   Transition of newly developed fire records management system including integration with
     fire pre-plan and commercial property inspection program.
 •   Department training improvements for firefighters and officers. Offer additional training to
     meet department needs.
 •   Commercial property inspections every other year. Complete one half of the commercial
     property inspections in 2010.
 •   Lakeville Fire Department leadership, communication and training work plan for short and
     long term goals.

                                                 106
                                                    FIRE
                                                  (continued)



 •   Continued integration of Lakeville Fire Department dispatch operations with Dakota
     Communications Center (DCC).
 •   Partner with Police Department on development of emergency operations plan for the City,
     including training for City employees.
 •   Improve response time to emergency calls; respond when needed with appropriate resources.
 •   Maintain adequate number of paid on call firefighters.
 •   Continue long-term needs analysis for full build-out of fire department facilities.
 •   Maintaining 4 fire stations.
 •   Fire department records management and retention project.

Budget Summary:
                                                                   2009                          2010
                                         2007           2008     Amended             2009      Proposed
                                        Actual         Actual     Budget           Estimate     Budget
Expenditures
Personnel services                  $   896,693    $   956,019   $ 1,025,496   $   920,590    $   943,969
Commodities                             113,686        152,175       127,064       123,920        144,324
Other charges and services              196,420        276,074       249,549       242,894        287,733
Capital outlay                            8,685              -             -             -              -
             Total                  $ 1,215,484    $ 1,384,268   $ 1,402,109   $ 1,287,404    $ 1,376,026

Revenues
Intergovernmental                   $   267,923    $   228,674   $   257,313   $   190,209    $   191,809
Charges for services                     50,091         30,918       112,662        43,023         45,615
Miscellaneous                             5,250              -             -             -              -
Taxes and other public funds            892,220      1,124,676     1,032,134     1,054,172      1,138,602
             Total                  $ 1,215,484    $ 1,384,268   $ 1,402,109   $ 1,287,404    $ 1,376,026


Budget Factors:
 •   The 2010 proposed budget provides funding for replacement of four volunteer fire fighters
     due to retirements and attrition, as such funding is provided for training, clothing and
     physicals.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
     officers).
 •   The Lakeville Volunteer Fire Relief Association 2010 pension liability will increase by
     $178,331 due to current market conditions; pension benefits will not change.
                                                       107
                                              FIRE
                                            (continued)



•   Firefighters are required to have routine physicals on a biennium basis, the budget provides
    for one-half of these firefighters in 2010 and the remaining firefighters in 2011.
•   The clothing expense in the commodities budget increased $22,024 or 44%, which is mainly
    attributable to the 2010 purchase of firefighter uniform jackets, jumpsuits, and protective
    bunker gear for the four new rookie firefighters. Jumpsuits will be used in place of full
    firefighter gear for non-fire related calls such as medical calls.
•   Electric and natural gas services are budgeted to increase 10% and 3%, respectively. 2009
    repairs to gas lines and thermostats at the storage facility have reduced natural gas service
    costs at the facility.
•   The 2010 Capital Projects Building Fund budget provides funding ($20,603) for several fire
    station buildings energy improvements, these improvements will be funded by Federal
    Economic Stimulus Energy Grant. The budget also provides $18,400 for Fire Station #1
    overhead door glass replacement. This improvement will result in significant energy savings.
•   The Capital Projects Equipment Fund 2010 proposed budget provides for the replacement of
    all firefighter self contained breathing apparatus’s (SCBA) for $275,000.
•   Funding to attend out of state national conferences will not be provided




                                               108
                                             AMBULANCE


Department: Ambulance

Program Manager: City Administrator

Program Description:

Effective February 2009, ALF Ambulance operations will be transferred to Allina Medical
Transportation. The ALF Ambulance joint powers agreement was dissolved and the City of
Lakeville will receive distributions valued at $292,579 in 2009 and $117,032 in 2010. These
funds will be applied to the Capital Projects Equipment Fund to be used towards the financing of
the self contained breathing apparatus (SCBA).

The City of Lakeville, along with the Cities of Apple Valley and Farmington, jointly manage and
operate ALF Ambulance. ALF Ambulance (ALF) is a municipal based advanced life support
ambulance service operating under a Joint Powers Agreement – pursuant to Minnesota Statutes
§§ 471.476 and 471.59 - serving the cities of Apple Valley, Lakeville and Farmington in Dakota
County, Minnesota. In addition to the three cities, ALF provides ambulance service on a
contractual basis to the surrounding townships of Castle Rock, Empire and Eureka. The total
service area is approximately 160 square miles with a population over 125,000.

Services:

ALF currently deploys two ambulances with paramedics scheduled to serve on 24 hour shift
rotations and one ambulance staffed on 10 hour shift rotations.

Activity Measures:

                                                          2007        2008           2009            2010
                     Activity                            Actual      Actual        Estimate         Budget
Response time (minutes)                                       8:00       7:50           7:50           7:50

Goals and Objectives:
 • “Provide and promote the highest quality compassionate emergency care.”

Budget Summary:
                                                                 2009                             2010
                                     2007           2008       Amended             2009         Proposed
                                    Actual         Actual       Budget           Estimate        Budget
Expenditures
Other charges and services      $     25,242   $     26,719    $         -   $              -   $          -

Revenues
Charges for services            $     42,511 $       44,477 $            -   $              -   $          -
Taxes and other public funds         (17,269)       (17,758)             -                  -              -
             Total              $     25,242 $       26,719 $            -   $              -   $          -


                                                   109
                                          ENGINEERING



Department: Engineering

Program Manager: City Engineer

Program Description:

The Engineering Department provides the resources to plan, design, construct, inspect and
rehabilitate the public infrastructure, which includes such items as the city street system,
wastewater collection system (e.g. sanitary sewers and pump stations), water supply, storage and
distribution system, storm water management system (e.g. storm sewers, retention ponds and
ditches), bike and pedestrian pathways, street signs, street lighting, and traffic signals. In
addition, surveying and public works inspection services monitor installation of all public and
private infrastructure. The Engineering Department staff provides design engineering services
for improvements to the public infrastructure.

In addition, the Engineering Department works as an integrated team with other departments in
the review of development and private construction such as sketch plans for conformance to
overall City Comprehensive Plans, Preliminary and Final Plats for conformance to all City
ordinances, development construction plans for conformance to City of Lakeville Standard
Specifications, surveys for all residential building permits, construction plans (Site, Grading,
Erosion Control, Street and Utility) for all Commercial, Industrial, and Institutional building
permits. The Department is also responsible for the management of the property data relating to
special assessments.

The Engineering Department also prepares and provides technical oversight and review of the
Comprehensive Plans for Surface Water Management, Sanitary Sewer, Water Distribution
System, and Transportation. The Department assists residents and provides technical assistance
for drainage problems, grading issues, and draintile. They also respond to resident complaints
for drainage alteration. The Department also manages the public rights of way of all City streets.

The Engineering Department also includes the Geographic Information System (GIS) program.
The role of GIS services is to provide and expand the application of data within the overall
information technology infrastructure. The GIS program is responsible for the management of
data relating to parcels, parcel boundaries, utilities, streets, and other infrastructure.     The
division maintains the official base maps of the City including the streets and utilities. The data
is entered into an accessible model of the City allowing access to utility as-builts, wetland
boundaries, building locations, elevations, and parcel information from one visual source.

Services:
 •   Provide engineering related support services to the public and other City departments.
 •   Provide staff support to Planning Commission, Parks & Natural Resources Commission.
 •   Provide design services for streets, sanitary sewers, drainage and water projects, to include
     wetland mitigation plans.
 •   Prepare feasibility studies for public projects that are assessed.

                                                  110
                                          ENGINEERING
                                               (continued)



•   Provide management of the public assessments and other property data.
•   Provide project oversight and design review services provided for public infrastructure
    improvements, all public construction projects, private developments and subdivisions.
•   Respond to citizen inquiries and concerns regarding flood zones, development construction
    and public construction.
•   Respond to citizen complaints or concerns regarding drainage, tall grass, and weeds.
•   Maintain official maps and records, including water, sanitary sewer and storm sewer system
    plans, as-built drawings, and other official maps.
•   Prepare and provide technical oversight of the following Comprehensive Plans: Surface
    Water Management, Sanitary Sewer, Water System, Transportation, and Wetland
    Management.
•   Manage the City rights of way.
•   Obtain traffic counts for studies and for the required MNDOT documentation.
•   Provide review of the surveys for residential building permits for compliance with the
    approved subdivision plans.
•   Provide final grade inspections of all single family residential homes for general compliance
    to the approved survey and subdivision plans.
•   Provide plan review of all site, grading, erosion control and utilities for all industrial,
    commercial, and institutional building permits.
•   Inspect tree preservation of all new developments.
•   Develop and maintain the City’s enterprise GIS database.
•   Coordinate the maintenance, development, and application of GIS throughout the City.
•   Manage the comprehensive inventory of City utilities (water, sanitary & storm sewer).
•   GIS training and technology transfer for all departments and Teams.
•   Manage the information conduit between Dakota County GIS and the City.




                                                  111
                                            ENGINEERING
                                                (continued)



Staffing:
                                               2007        2008          2009         2009       2010
              Position (FTE)                  Actual      Actual        Budget      Estimate    Budget
Engineering
  City Engineer                                   1.0            1.0         1.0         1.0         1.0
  Assistant City Engineer                         1.0            0.9         1.0         1.0         1.0
  Development Design Engineer                     1.0            1.0         1.0         1.0         1.0
  Civil Engineer                                  1.0            0.7          ---         ---         ---
  Sr. Project Coordinator                         1.0            0.5          ---         ---         ---
  Sr. Construction Representative                 1.0            1.0         1.0         1.0         1.0
  Engineering Technician                          1.0            0.8          ---         ---         ---
  Special Assessment/Property Data
  Technician                                      1.0            1.0         0.3         0.3          ---
  Administrative Assistant                        1.0            1.0         1.0         1.0         1.0
Graphic Information System
(GIS)
  GIS Coordinator                                 0.4            0.4         1.0         1.0         1.0
  GIS Technician                                  1.0            1.0         1.0         1.0         1.0
                   Total                         10.4            9.3         7.3         7.3         7.0


Activity Measures:

                                                              2007       2008         2009     2010
                        Activity                             Actual     Actual      Estimate Estimate
Final & Preliminary Plat Reviews – Projects                       14          10           8          12
Final & Preliminary Plat Reviews                         $     27,146   $ 25,460    $   4,920   $   7,700
Private Construction Fees/Grading Permits                $ 133,141      $ 122,675   $   6,500   $   6,500
Street Reconstruction                                    $ 752,866      $ 199,482   $ 276,000   $ 207,000
G.I.S Fees                                               $     11,550   $   7,350   $   1,200   $   1,200
Special Assessment Admin. Fees                           $     80,405   $ 88,889    $ 82,584    $ 79,472

                           Total                         $1,005,108     $443,856     $371,204   $301,872

Strategic Plan:
 •   Continue needed improvements to local, county and regional transportation network:
     o   East - West corridors.
     o   I-35 interchanges.
     o   Dodd Boulevard as a major artery linking Lakeville residents to the East-West corridor
         routes.


                                                   112
                                            ENGINEERING
                                                  (continued)



 •   Provide for framework for long-term maintenance, replacement and financing of aging
     infrastructure.

Goals and Objectives:
 •   Perform inspection on the 175th Street/Kenrick Avenue Round-About and the utilities and
     street construction that are installed on the Elko/New Market interceptor project.
 •   Department staff to design, bid, manage, and inspect the new Holyoke Avenue/Highview
     Avenue reclamation project.
 •   Oversee the yearly pavement management project to include estimating, bidding, managing,
     and inspecting the project by Department staff.
 •   The Department will assist in the preparation of the plans and specifications for the following
     City Projects:
     o   Well #7 (20585 Kenrick Ave.) and Well #13 (9471-176th St.) rehabilitation.
     o   Lift Station #3 (Italy Avenue/201st Street) repair.
     o   Design, bid, manage and inspect Safe Routes to School project.
     o   Construction of Fieldstone Creek Park facilities.
     o   Development of a trail head facility at the Murphy Hanrehan Park.

Budget Summary:
                                                                    2009                          2010
                                        2007            2008      Amended             2009      Proposed
                                       Actual          Actual      Budget           Estimate     Budget
Expenditures
Personnel services                 $    820,103    $    807,017   $   658,629   $     674,036   $   665,789
Commodities                              12,339          14,424        11,800          13,903        15,292
Other charges and services               87,685         136,805        48,130          57,954        57,091
Capital outlay                           10,849          36,428             -               -             -
             Total                 $    930,976    $    994,674   $   718,559   $     745,893   $   738,172

Revenues and other financing
sources
Intergovernmental                  $   13,122 $          49,863   $       -     $         -     $       -
Charges for services                1,008,402           446,817       254,527         374,164       281,382
Other financing sources               100,253           119,360       123,065         106,162       115,785
Taxes and other public funds         (190,801)          378,634       340,967         265,567       341,005
             Total                 $ 930,976 $          994,674   $   718,559   $     745,893   $   738,172


Budget Factors:
 •   The economic recession which commenced in mid-2008 has resulted in a significant
     degradation of revenues. As such full-time Civil Engineer, Senior Project Coordinator, and
     an Engineering Technician positions were eliminated in the fall of 2008. The budget was

                                                       113
                                        ENGINEERING
                                            (continued)



    reduced again in April 2009 with the elimination of a Special Assessment/Property Data
    Technician position. The City is responsible for its share of any future unemployment
    compensation. The City also provides for outplacement services subject to established
    maximum limits.
•   The 2009 budget amendment process mandated a three day furlough for all full time
    employees and a five day furlough for all directors and City Administrator. The 2010
    proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
    living adjustment.
•   The 2010 proposed budget reflects an expected increase in employee health insurance
    premiums of 10%.
•   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
    officers).
•   Funding to attend out of state national conferences will not be provided.
•   Due to the economic conditions and anticipated slow growth development, the budget for
    contractual engineering fees decreased $89,120 or 31% from 2009 estimated levels.
•   The Capital Project Equipment Fund proposed budget provides for a GIS server upgrade
    ($10,000)




                                               114
                                              STREETS



Department: Streets
Program Manager: Director of Operations and Maintenance
                        Street Superintendent
Program Description:
The Streets Division is responsible for the maintenance and repair of Lakeville’s streets, storm
sewers, and vehicle and equipment fleet. Activities include asphalt patching and pothole repair,
street sweeping, snow and ice control and removal, grading and applying gravel to gravel roads
and shoulders, roadside and pond mowing, storm sewer system maintenance and inspection, sign
installation and replacement, and preventive maintenance inspections, servicing, and repair of
City vehicles and equipment.

Services:
Street Maintenance
 •   Maintain and repair 257 centerline miles of City streets.
 •   Maintain boulevard trees to include trimming, removal, and replacement as needed.
 •   Inspect 20 percent of the City’s storm sewer outfalls each year to control water pollution by
     locating and correcting point sources that discharge pollutants.
 •   Manage contractors in the seal coating and crack sealing of streets within Lakeville’s
     pavement management districts.
 •   Rate road surfaces and sidewalks for patching and other repairs.
 •   Apply deicer to City streets during snow and ice events to maintain a safe driving surface.
 •   Inventory, manage, and install regulatory and informational street signs throughout the City.
 •   Inspect signs annually for damage and to ensure proper reflectivity and repair and replace
     signs as necessary.
 •   Develop maps for and complete annual projects to include crack sealing, seal coating,
     striping and painting, and broadleaf weed control.
 •   Establish snow removal and deicing routes annually based on centerline miles and level of
     service.
Fleet Maintenance
 •   Provide maintenance and repair services for 188 pieces of rolling stock (trucks, cars, mowers,
     and trailers) and 173 items or equipment (generators, pumps, chain saws, weed ships, etc.).
 •   Schedule and complete preventive maintenance inspections and regular servicing for the
     vehicle and equipment fleet.
 •   Transition equipment for seasonal use.
 •   Conduct vehicle safety inspections in accordance with Department of Transportation
     requirements.


                                                 115
                                              STREETS
                                               (continued)



Staffing:
                                             2007         2008        2009    2009            2010
           Position (FTE)                   Actual       Actual      Budget Estimate         Budget
Street Superintendent                           1.0          1.0         1.0      1.0            1.0
Street Supervisor                               0.8          1.0         1.0      1.0            1.0
Street Lead                                     1.0          1.0         1.0      1.0            1.0
Service Technician Lead                         1.0          1.0         1.0      1.0            1.0
Street Maintenance II                          11.0         11.0        10.4     10.4           10.0
Fleet Service Technicians                       4.0          4.0         4.0      4.0            4.0
Administrative Assistant                        1.0          1.0         1.0      1.0            1.0

                 Total                          19.8          20.0      19.4        19.4         19.0

Activity Measures:
                                                          2007        2008       2009          2010
Activity                                                 Actual      Actual    Estimate      Estimate
Labor Hours For:
   Pothole repairs                                           2,263     2,641      2,400         2,400
   Ditch mowing                                                294       300        300           300
   Gravel road maintenance                                   1,087     1,075      1,100         1,100
   Storm sewer maintenance                                     707       797        700           700
   Boulevard tree trimming                                     327       616        300           300
   Tree – storm damage cleanup                                           613
   Boulevard weed control                                     104        161        150           150
Number Of:
   Centerline miles                                            255       257        261           267
   Street signs (new & repairs)                              1,328     1,216      1,350         1,350
   Fleet preventive maintenance                              1,192     1,210      1,225         1,225

Goals and Objectives:
 •   Locate the inlet and outlet of storm sewer outfalls using the Global Positioning System to
     improve inspections.
 •   Establish a data base of sign information for inventory control to include the global
     positioning system locations for all city signs.
 •   Complete the cleaning and maintenance of 450 storm sewer sedimentation sumps.
 •   Provide additional training for staff in snowplow operations through the Dakota County
     Technical College.
 •   Continue the inspection of signs in the next sign district.
 •   Complete NPDES inspections of 100 storm sewer outfalls.
 •   Complete the cleaning and maintenance of 20 storm sewer outfalls.

                                                  116
                                               STREETS
                                               (continued)



Budget Summary:
                                                                2009                          2010
                                      2007           2008     Amended             2009      Proposed
                                     Actual         Actual     Budget           Estimate     Budget
Expenditures
Personnel services               $ 1,244,570    $ 1,414,329   $ 1,401,227   $ 1,374,359    $ 1,405,589
Commodities                          604,940        787,126       654,916       643,609        691,445
Other charges and services           773,994        743,560       825,934       801,215        245,117
Capital outlay                           331              -             -             -              -
             Total               $ 2,623,835    $ 2,945,015   $ 2,882,077   $ 2,819,183    $ 2,342,151

Revenues and other financing
sources
Intergovernmental                $    84,972    $    84,949   $   379,127   $   235,069    $   374,962
Charges for services                 500,597        529,483       564,633       557,992         18,165
Other financing sources               54,919         73,541        75,885        77,062         78,386
Taxes and other public funds       1,983,347      2,257,042     1,862,432     1,949,060      1,870,638
             Total               $ 2,623,835    $ 2,945,015   $ 2,882,077   $ 2,819,183    $ 2,342,151


Budget Factors:
 •   The 2009 budget amendment process resulted in the elimination of one Street Maintenance II
     position. The City is responsible for its share of any future unemployment compensation.
     The City also provides for outplacement services subject to established maximum limits.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
     officers).
 •   Funding to attend out of state national conferences will not be provided.
 •   The increase in commodities is mainly attributable to two items—salt for ice control and
     motor fuels. Salt is budgeted for a 10% cost increase and motor fuels is budgeted for a cost
     and usage increase of 16%.
 •   Electric and natural gas services are budgeted to increase 10% and 3%, respectively.
 •   The entire street lighting budget has been removed from the Street Department budget and
     will be accounted for as an Enterprise Utility Fund effective January 1, 2010; this program
     change represents a reduction to the 2010 Street Department expenditures and offsetting
     revenues of $612,274.
 •   The 2010 Capital Projects Building Fund budget provides funding of $54,170 for the Central
     Maintenance Facility energy improvements and street lighting improvements for downtown


                                                    117
                                        STREETS
                                         (continued)



    Lakeville of $11,151, these improvements will be funded by Federal Economic Stimulus
    Energy Grant.
•   The 2010 Capital Projects Equipment Fund budget provides funding of $93,712 for various
    new and replacement equipment including a brush chipper and box for $46,221.




                                            118
                                             PARKS



Department: Parks

Program Manager: Parks and Recreation Director
                 Parks Maintenance & Operations Manager

Program Description:

Administration
The City of Lakeville provides a comprehensive park and trail system, recreational services and
programming, visual and performing arts, as well as a senior center through the Parks and
Recreation Department. Parks Administration oversees these various divisions, which include
Park Maintenance, Recreation, the Lakeville Area Arts Center, and the Lakeville Senior Center.
Additionally, parks administration manages the day-to-day operations of the entire department.

Maintenance
The Parks Maintenance Department is responsible for 58 park sites, 18 conservation areas and
five greenways totaling 1,663 acres; 465 acres receive weekly mowing and other associated care
to accommodate a multitude of community recreation activities. The department is also
responsible for approximately 90 miles of asphalt trails and 10 miles of nature/grass trails, city
boulevard mowing, 21 permanent buildings, 13 picnic shelters, three beaches, 39 playgrounds,
approximately 48 soccer fields, 13 baseball fields, 57 softball fields, four football fields, 10
Lacrosse fields, six paved and six unpaved hockey rinks, 11 pleasure rinks, four fishing piers,
and over 60 flower beds.

Major responsibilities include routine maintenance and upkeep of all recreation areas, athletic
fields and facilities (including Central Maintenance Facility, Senior Center, Arts Center and
Historical Society Building) as well as providing support services for recreation programs,
special events and assisting with park improvements and development.

Services:
Administration
 •   Ensure the development, care, and upkeep of park amenities.
 •   Provide resources and support for park maintenance, improvements, and development.
 •   Oversee the organization and implementation of community-centered special events:
     Household Hazardous Waste Drop-off Day, Annual Tree Sale, Family Fun Fest, Taste of
     Lakeville, Fourth of July Celebration, Pan-O-Prog, Lakeville Art Festival, and numerous
     youth athletic tournaments.
 •   Year-round recreation programs/activities/events.
 •   Lakeville Area Arts Center programs/activities/events.
 •   Senior Center programs/activities/events.



                                                 119
                                              PARKS
                                              (continued)



 •   Collaborate with and assist various community groups and civic organizations as well as
     three school districts to promote and enhance other activities and opportunities within the
     City of Lakeville.
Maintenance
 •   Provide routine maintenance and upkeep of all athletic fields and facilities including Central
     Maintenance Facility, Senior Center, Arts Center and Historical Society Building.
 •   Provide the removal of snow at City Hall and other designated routes during snowfall events.
 •   Ensure the trailway lighting is properly installed and operating to standards.
 •   Annually manage and maintain the hockey and pleasure skating areas December through
     February, seasonal employees, operating and safety supplies as well as gas, telephone, and
     electric services.
 •   Maintain park equipment including costs associated with salaries, seasonal employees’
     salaries, motor fuels, lubricants, equipment parts, tires as well as contract repairs for auto,
     equipment, and radios.
 •   Share operating costs of the Central Maintenance Facility with the Street Department.
     Includes some building and equipment repair as well as some landscaping, cleaning, and pest
     control.
 •   Major repairs to various trails, buildings, parking lots, hard-court surfaces and playing fields
     in the park system.

Staffing:
                                            2007         2008        2009        2009         2010
            Position (FTE)                 Actual       Actual      Budget     Estimate      Budget
Administration
  Parks and Recreation Director                 1.0          1.0         1.0           1.0       1.0
  Sr. Administrative Assistant                  1.0          1.0         1.0           1.0       1.0
Maintenance
  Park Maint. & Operations Mgr                  1.0          1.0         1.0           1.0       1.0
  Parks Superintendent                          1.0          1.0         0.2           0.2        ---
  Parks Supervisor                               ---          ---        0.3           0.3       1.0
  Parks Lead                                    1.0          1.0         1.0           1.0       1.0
  Park Maintenance II/Forester                  9.0          9.0         9.0           9.0       9.0
  Administrative Assistant                      1.0          1.0         1.0           1.0       1.0
                 Total                         15.0         15.0       14.5           14.5      15.0




                                                 120
                                            PARKS
                                            (continued)



Activity Measures:
                                                       2007         2008     2009     2010
                    Activity                          Actual       Actual Estimate Estimate
Park Rental and Tournament Fees                      $ 29,540     $ 27,598 $ 25,809 $ 25,809
Tree Sales                                                          $2,728   $4,968   $5,000
Number of Parks                                             55          56       58       58
Number of Recreation Facilities (a)                        333         340      344      344
Total Acres of Parks, Conservation Areas,
Greenways                                                 1,610     1,623        1,663       1,663
Turf/Active Acres                                           442       455          480         480
Miles of Asphalt Trails                                      88        91           92          92
Miles of Grass/Wood Chip Trails                              10        10           10          10

(a) Includes City owned/maintained permanent buildings, temporary portable warming houses,
    ball diamonds/play fields, soccer fields, play equipment, tennis and basketball courts, picnic
    shelters, skating rinks, beaches, pedestrian bridges/boardwalk fishing piers, paved and gravel
    parking lots.

Strategic Plan:
 • Provide parks and open space for a fully developed city prior to the loss of available and
   desired land to develop.

Goals and Objectives:
Administration
   •   Continue efforts to assist the Miracle Field development.
   •   Manage 2009 Park Dedication Fund projects.
   •   Manage 2009 approved General Fund and Capital Improvement Fund activities.
   •   Assist and act as resource to all civic groups and associated major special events.
   •   Manage general operations of Park Maintenance and Recreation divisions as well as the
       Lakeville Area Arts Center.
   •   Continue fundraising activities for all major special events and programs.
   •   Finalize Chadwick Trail from park to Idaho as part of South Creek Tail Corridor.
   •   Design and construct Fieldstone Park, a 10-acre neighborhood park in northeast
       Lakeville.
   •   Design and construct irrigation system at North Park.
   •   Complete installation of Casperson Park Memorial Playground.




                                               121
                                               PARKS
                                               (continued)



Maintenance
     •   Continue to maintain and enhance all turf areas, playfields, hard courts, hockey rinks and
         recreation facilities in the park system.
     •   Continue emphasis on maintenance, renovation, and upgrades of parks and infrastructure.
     •   Continue to update and purchase equipment as part of capital outlay/equipment
         replacement schedule.
     •   Develop system to rate condition of trails to determine scheduled replacement or overlay.
     •   Work with Lakeville Soccer Club regarding executing a cost share program for
         installation of an in-ground irrigation system at North Park.
     •   Commence process of designing and constructing Fieldstone Creek Park.
     •   Commence process of designing and constructing Casperson Park Memorial Playground.

Budget Summary:
                                                                2009                          2010
                                      2007           2008     Amended             2009      Proposed
                                     Actual         Actual     Budget           Estimate     Budget
Expenditures
Personnel services               $ 1,358,512    $ 1,408,611   $ 1,409,254   $ 1,418,595    $ 1,482,083
Commodities                          241,480        264,552       264,207       265,957        270,730
Other charges and services           481,802        561,105       432,519       368,140        470,777
Capital outlay                         5,682          1,350         4,197             -              -
             Total               $ 2,087,476    $ 2,235,618   $ 2,110,177   $ 2,052,692    $ 2,223,590

Revenues and other financing
sources
Intergovernmental                $       200    $       200   $       200   $       200    $       200
Charges for services                     -           31,760        34,559        33,532         34,403
Other financing sources                2,423              -             -             -              -
Taxes and other public funds       2,084,853      2,203,658     2,075,418     2,018,960      2,188,987
             Total               $ 2,087,476    $ 2,235,618   $ 2,110,177   $ 2,052,692    $ 2,223,590


Budget Factors:
 •   The 2009 budget amendment process resulted in the elimination of seasonal warming house
     attendants for Village Creek Park ice rinks, in addition to a seasonal gardener. The 2010
     budget proposes to reduce the number of skating rinks from eleven to six.
 •   During 2009 the Park Superintendent retired, this position will be replaced by a Parks
     Supervisor at a cost savings to the City.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.

                                                    122
                                             PARKS
                                            (continued)



•   The 2010 proposed budget reflects an expected increase in employee health insurance
    premiums of 10%.
•   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
    officers).
•   Funding to attend out of state national conferences will not be provided.
•   Other charges and services were for the most part held consistent with 2009.
•   The 2010 proposed budget provides for annual trail seal coating ($57,084), seal coating and
    striping at Antlers and Aronson Parks ($26,807), and resurfacing two basketball courts and
    one tennis court ($11,235). Due to budget constraints seal coat and striping will be financed
    from the pavement management program.
•   The 2010 Capital Projects Equipment Fund budget provides funding for the replacement of a
    color copier that will be shared with the Recreation Department.
•   The 2010 Capital Projects Equipment Fund budget provides funding of $93,712 for various
    new and replacement equipment including a brush chipper and box for $46,221.




                                               123
                                          RECREATION



Department: Recreation

Program Manager: Parks and Recreation Director
                 Recreation Supervisor

Program Description:

The Recreation Department is responsible for providing year round recreational programs and
activities for all age groups. The Recreation Department is accounted for using two program
types. Self-Supporting Recreation Programs: Programs for which fees are charged to cover the
direct costs. Subsidized Programs: Programs that are subsidized by the city, along with the
management cost for all recreation programs. Programs include community special events
(Arbor Day, fishing contests, Pan-O-Prog Music Melee, Pan-O-Prog Youth Play Day, Santa
Calls) and senior center activities. In addition, this department collaborates with and assists
numerous (114) Lakeville groups, organizations, and clubs to provide recreation services
throughout the community.

Services:
 •   Youth activity programs that include Summer Camps, Firearms Safety, Golf, Kamp Kermit,
     Learn to Skate, Sports Unlimited, and Youth Enrichment.
 •   Youth special events programs that include Arbor Day, Egg Hunts, Fishing Contests,
     Haunted Forest, Once Upon a Star, Pan-O-Prog programs, Santa Calls, Holiday Lights, and
     Santa Store.
 •   Adult activity leagues that include basketball, softball, volleyball, broomball, dodge ball, as
     well as the Ground Pounders Running Series and golf lessons.
 •   A mobile Puppet Wagon show: currently funded 100% by the Lakeville Lions.
 •   A safety camp program that is offered exclusively to 3rd and 4th graders, with the support of
     Lakeville Police, Fire, ALF Ambulance, Dakota Electric, and National Guard.
 •   Senior Center: adult center operation as well as activities and programs.
 •   Programs supporting environmental awareness at Ritter Farm Park.
 •   Trips: Outing for youth/families.
 •   Tennis lessons and camps with the support of United States Tennis Association (USTA).




                                                124
                                        RECREATION
                                            (continued)



Staffing:
                                          2007         2008      2009    2009           2010
          Position (FTE)                 Actual       Actual    Budget Estimate        Budget
Recreation Supervisor                        1.0          1.0       1.0     1.0             1.0
Recreation Program Supervisor                1.0          1.0       1.0     1.0             1.0
Recreation Program Assistant                 0.6          0.6       0.2     0.2              ---
Administrative Assistant                     1.0          1.0       1.0     1.0             1.0
Senior Center Coordinator                    1.0          1.0       1.0     1.0             1.0
Senior Center Admin. Assistant               0.7          0.7       0.7     0.7             0.7
                Total                         5.3         5.3        4.9         4.9        4.7


Activity Measures:
                                                       2007       2008     2009     2010
                    Activity                          Actual     Actual Estimate Estimate
Recreation Revenues                                  $231,451   $283,981 $273,283 $274,760
Program Registrations – participants                    6,836      9,629    9,629    9,629
Youth Activities – participants                         1,612      2,407    2,407    2,407
Puppet Wagon – attendance                               2,510      2,194    2,194    2,194
Ritter Farm Park – participants                           264        656      656      656
Youth Safety Camp – participants                          194         78       78       78
Adult League - teams                                      246        243      243      243
Adult League – team participants                        3,630      3,645    3,645    3,645
Senior Center - members                                 1,071      1,135    1,135    1,135

Goals and Objectives:
 •   Continue to expand level of programming (quantity and quality) with no direct impact on
     City subsidy through the use of the self-supporting recreation programs and increased
     revenue generation. Specific areas of focus include: community events, family activities,
     healthy initiatives, nature based/environmental education, and cooperative programming with
     other public or private agencies.
 •   Enhance customer service to residents through marketing and office automation
     improvements to include web site development and on-line program registration.
 •   Provide continuing emphasis on expanding/enhancing alliances and partnerships with
     community groups, organizations, and businesses to effectively enhance the provision of
     recreation programs and activities.




                                               125
                                          RECREATION
                                                (continued)



Budget Summary:
                                                                  2009                          2010
                                      2007            2008      Amended             2009      Proposed
                                     Actual          Actual      Budget           Estimate     Budget
Expenditures
Personnel services               $    322,014    $    344,844   $   347,373   $     333,289   $   326,315
Commodities                            18,092          18,180        27,892          25,460        25,700
Other charges and services            195,135         251,307       265,477         243,884       246,479
Capital outlay                         12,758           7,590         1,385           1,386         2,082
             Total               $    547,999    $    621,921   $   642,127   $     604,019   $   600,576

Revenues
Charges for services             $    260,991    $    283,980   $   307,126   $     273,283   $   274,760
Taxes and other public funds          287,008         337,941       335,001         330,736       325,816
             Total               $    547,999    $    621,921   $   642,127   $     604,019   $   600,576


Budget Factors:
 •   The 2009 budget amendment process resulted in the elimination of one part-time Recreation
     Program Assistant position.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
     officers).
 •   Funding to attend out of state national conferences will not be provided.
 •   Other charges and services were held consistent with the 2009 estimate.
 •   Capital outlay includes the acquisition of one desktop computer.
 •   The 2010 Capital Projects Building Fund budget provides funding of $3,650 for the Senior
     Center energy management systems improvements that will be funded by Federal Economic
     Stimulus Energy Grant. In addition funding is provided in the 2010 Capital Projects
     Equipment Fund for the replacement of a color copier that will be shared with the Parks
     Department.
 •   Of the 2010 proposed total budget of $600,576, $274,760 (46%) is provided by revenues
     from recreation programming activities. In addition, $191,561 (32%) is related to the
     operations and maintenance costs of the Lakeville Senior Center building.




                                                     126
                                          ARTS CENTER



Department: Arts Center

Program Manager: Parks and Recreation Director
                 Arts Center Coordinator

Program Description:

The Lakeville Area Arts Center is a community facility that provides educational and
recreational programs for visual and performing artists as well as general public who experience
and enjoy the various artistic opportunities. Two children’s theater companies and two
community theater companies produced twelve plays with a total of seventy performances, a
community symphony and a community chorale presented a total of eleven concerts, and the
LAAC entertainment series offered a variety of eleven shows including comedians, bands,
singers, and drama. There were 336 events booked in the theater including concerts, plays,
rehearsals, and rentals. The facility is available for rental events such as weddings, anniversaries,
music recitals, graduations, educational and business seminars, and meetings. There were 139 art
education classes and workshops including pottery, painting, glass work, silversmithing,
photography, and acting. Gallery space is provided to local artists to exhibit their work. Outdoor
events on the LAAC grounds include the Lakeville Art Festival, Taste of Lakeville, Pan-O-Prog
activities, a Raku workshop, and theater-in-the-park.

Services:
 •   The art center offers a series of performing art classes where stage entertainment offers a
     diverse variety of talent appealing to a wide range of audience members. Professional
     singers, instrumentalists, comedians, and actors are scheduled as part of the season series.
     Contracts are offered with the intent of generating revenue for the program with successful
     ticket sales. Amateur groups are also booked at a percent split of the ticket revenue.
 •   The art center operates art camps that offer activities in visual arts and acting are offered with
     the intent of exposing youth to artistic opportunities. Participant fees generate revenue in
     excess of staffing and materials.
 •   The Lakeville Area Arts Center started the “Expressions! Community Theater” which is an
     in-house, adult community theater. The theater offers three comedies per year and is
     successful in generating ticket sale revenue in excess of royalties, production costs,
     marketing, and staffing.
 •   A pottery program offers classes for adults, youth, and special programs during the school
     day for home schooled youth. A quarter-time employee keeps the inventory organized,
     maintains all equipment, fires the kilns, recycles waste clay and organizes pottery sales. The
     class fees generate revenue in excess of instructor salary and materials.
 •   Painting classes are offered in acrylics, oils, or watercolors based on instructor availability
     and registration numbers. Registration fees generate revenue in excess of instructor salary
     and materials.
 •   Many miscellaneous art classes have been offered by the art center including silversmithing,
     batik, glass lampworking, seasonal ornaments, dolls, purses, and jewelry. Offerings for all

                                                  127
                                          ARTS CENTER
                                                (continued)



     ages are based on instructor availability and registration numbers. Registration fees generate
     revenue in excess of instructor salary and materials.
 •   The art center building is also available to the public as a space to rent to host family
     gatherings or conduct business.

Staffing:
                                               2007        2008      2009       2009        2010
           Position (FTE)                     Actual      Actual    Budget    Estimate     Budget
Art Center Coordinator                            1.0         1.0       1.0        1.0         1.0
Administrative Assistant                          1.0         1.0       1.0        1.0         1.0
Facility Attendant (Part-time)                    1.0         1.4       1.5        1.5         1.5
Pottery Manager                                   0.2         0.2       0.2        0.2         0.2
                 Total                            3.2         3.6       3.7          3.7       3.7


Activity Measures:
                                                           2007       2008     2009     2010
                    Activity                              Actual     Actual Estimate Estimate
Arts Center Revenues                                     $145,513   $160,898 $179,927 $201,625
Class Attendance                                            1,013      2,510    2,850    2,850
LAAC Series Attendance                                      5,509     11,686   10,000   11,000
Rental Events Attendance                                   15,051     19,408   18,000   18,000
Other Events Attendance*                                    5,609      5,932    7,000    7,000
*Oktoberfest, Ripples and Waves, Elections


Goals and Objectives:
 •   Maintain and improve the building’s physical appearance.
 •   Improve and develop storage areas for stage equipment, scenery, and lighting.
 •   Develop a varied offering of art classes in many mediums for all ages of students.
 •   Schedule interesting gallery exhibits.
 •   Research entertaining acts for the performance season and negotiate contracts that result in
     the generation of revenue.
 •   Support and encourage community groups using the facility for large events such as the Art
     Festival, the Taste of Lakeville, and Pan-O-Prog.
 •   Market open times for rental opportunities.
 •   Support the outreach efforts of Expressions! Community Theater and Giant Step Theatre.
 •   Seek grants to support entertainment and the expansion of fine arts programs and studio
     space.

                                                   128
                                          ARTS CENTER
                                                (continued)



 •   Market our facility as neighboring communities open new art centers.
 •   Expand the audience base through an enlarged playbill circulation.
 •   Continue to work cooperatively with the Friends of the Lakeville Area Arts Center.

Budget Summary:
                                                                  2009                          2010
                                      2007            2008      Amended             2009      Proposed
                                     Actual          Actual      Budget           Estimate     Budget
Expenditures
Personnel services               $    183,625    $    203,660   $   214,760   $     210,885   $   216,435
Commodities                            11,762          15,307        17,499          18,825        23,425
Other charges and services            151,517         149,291       173,988         190,271       190,954
Capital outlay                              -           4,820             -               -             -
             Total               $    346,904    $    373,078   $   406,247   $     419,981   $   430,814

Revenues
Charges for services             $    145,298    $    160,899   $   183,625   $     178,958   $   200,340
Taxes and other public funds          201,606         212,179       222,622         241,023       230,474
             Total               $    346,904    $    373,078   $   406,247   $     419,981   $   430,814


Budget Factors:
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
     officers).
 •   Funding to attend out of state national conferences will not be provided.
 •   Other charges and services were held consistent with the 2009 estimate.
 •   Electric and natural gas services are budgeted to increase 10% and 3%, respectively.
 •   The 2010 Capital Projects Building Fund budget provides funding of $186,600 for HVAC
     improvements at the Art Center Facility that will be funded by Federal Economic Stimulus
     Energy Grant.
 •   Of the 2010 proposed total budget of $430,814, $200,340 (47%) is provided by revenues
     from art center programming activities. In addition, $130,854 (30%) is related to the facility
     and operations costs of the Lakeville Senior Center building.




                                                     129
 Special Revenue Funds
Special Revenue Funds are used to account for the proceeds from specific revenue sources that
are legally restricted to expenditures of specific purposes. Establishment of such funds also
enables the City to more effectively manage its resources and minimize tax levies.
     Communications Fund
     This fund accounts for franchise fees from cable TV operations. Expenditures and
     other financing uses are used to finance the City’s Cable TV and Public
     Communications budgets, including long-term replacement of equipment.

     Benefit Accrual Fund
     This fund accounts for the accrued liability of employee benefits attributed to
     severance compensation. Funding is provided by property taxes and interest earnings
     on investments.

     Surface Water Management Fund
     This fund accounts for those expenditures that are directly related to storm water
     maintenance, education, lake/stream monitoring, and treatment.

     Economic Development Fund
     This fund accounts for a $125,000 Economic Recovery Grant received from the State
     of Minnesota Department of Trade and Economic Development in 1995. The grant
     purpose is to provide loans to businesses expanding in or locating to Lakeville. The
     fund also accounts for administrative fees received from the issuance of conduit debt.
                                        CITY OF LAKEVILLE, MINNESOTA
                        Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances
                                                 Special Revenue Funds
                                         For the Year Ending December 31, 2010
                                                                                                         (continued on following page)


                                                                                    2010 Proposed Budget
                                                                                            Surface
                                                                             Benefit         Water       Economic
                                                    Communications           Accrual     Management Development             Total
Revenues
 General property taxes                             $               - $               - $          - $              - $         -
 Licenses                                                     550,654                 -            -                -     550,654
 Intergovernmental                                                516                 -          292                -         808
 Charges for services                                               -                 -      601,003           10,000     611,003
 Investment income                                              9,017             9,200        6,316              778      25,311
 Miscellaneous                                                      -                 -            -                -           -
               Total revenues                                 560,187             9,200      607,611           10,778   1,187,776

Expenditures
 General government                                           411,292            10,673            -                 -       421,965
 Public safety                                                      -             6,833            -                 -         6,833
 Public works                                                       -             2,498      502,581                 -       505,079
 Parks and recreation                                               -                 -            -                 -             -
 Capital outlay                                                22,205                 -        3,002                 -        25,207
             Total expenditures                               433,497            20,004      505,583                 -       959,084

        Excess (deficiency) of revenues
              over expenditures                               126,690            (10,804)    102,028           10,778        228,692

Other financing sources (uses)
 Transfer from other funds                                           -            8,572             -                -         8,572
 Transfer to other funds                                       (55,983)               -      (154,066)               -      (210,049)
     Total other financing sources (uses)                      (55,983)           8,572      (154,066)               -      (201,477)

Net changes in fund balances                                   70,707             (2,232)    (52,038)          10,778      27,215
Fund balance, January 1                                       552,039            899,434     497,048           57,805   2,006,326
Fund balance, December 31                           $         622,746 $          897,202 $   445,010 $         68,583 $ 2,033,541

2010 Net percentage change in fund balance                        12.8%           (0.2%)      (10.5%)           18.6%            1.4%
For a complete discussion of changes in fund balances,
see the fund balance discussion on the page following this combining schedule.




                                                                          130
                         CITY OF LAKEVILLE, MINNESOTA
         Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances
                                  Special Revenue Funds
                          For the Year Ending December 31, 2010
(continued from previous page)



                                                      2009
                                                    Amended            2009            2008            2007
                                                     Budget          Estimate         Actual          Actual
Revenues
 General property taxes                         $            -   $            -   $      70,000   $      85,958
 Licenses                                              508,959          534,616         486,684         470,562
 Intergovernmental                                         808              808          70,863          39,407
 Charges for services                                  604,939          578,795         560,107         489,104
 Investment income                                      54,768           26,003          84,124         106,315
 Miscellaneous                                              84                -               -             190
             Total revenues                          1,169,558        1,140,222       1,271,778       1,191,536

Expenditures
 General government                                    425,109          430,525        260,387         272,198
 Public safety                                           6,466           13,608         15,027          69,630
 Public works                                          530,972          365,089        631,857         427,049
 Parks and recreation                                        -           31,169          1,822           4,985
 Capital outlay                                        169,523          178,027         42,389          32,349
           Total expenditures                        1,132,070        1,018,418        951,482         806,211

      Excess (deficiency) of revenues
            over expenditures                          37,488          121,804         320,296         385,325

Other financing sources (uses)
 Transfer from other funds                             10,839           10,839           3,291           1,294
 Transfer to other funds                             (190,092)        (187,156)       (223,931)       (207,237)
   Total other financing sources (uses)              (179,253)        (176,317)       (220,640)       (205,943)

Net changes in fund balances                       (141,765)    (54,513)     99,656                   179,382
Fund balance, January 1                           1,845,274   2,060,839   1,961,183                 1,781,801
Fund balance, December 31                       $ 1,703,509 $ 2,006,326 $ 2,060,839               $ 1,961,183


For a complete discussion of changes in fund balances,
see the fund balance discussion on the page following this combining schedule.




                                                        131
                         CITY OF LAKEVILLE, MINNESOTA
                                Special Revenue Funds
                               Fund Balance Discussion


The Communications Fund 2010 proposed fund balance is expected to increase by $77,707 or
12.8%. This increase is mainly due completing the transition to digital broadcasting in 2009
resulting in a $150,000 decrease in capital outlay.

The Benefit Accrual Fund 2010 proposed fund balance is expected to decrease by ($2,232) or
(0.2%). There are no significant factors effecting the change the fund balance.

The Surface Water Management Fund 2010 proposed fund balance is expected to decrease by
($52,038) or (10.5%). This decrease is mainly due to obtaining a storm water (MPCA) MS4
Permit for $40,000.

The Economic Development Fund 2010 proposed fund balance is expected to increase by
$10,778 or 18.6%. Beginning in 2008 and continuing through 2017 the City will collect a
conduit debt fee from a private activity revenue bond issue.




                                            132
                                    COMMUNICATIONS FUND



Department: Communications: Lakeville Government Television, printed communications,
public access television

Program Manager: Communications Manager

Program Description:

The department is responsible for the City’s main communication avenues: City newsletter, City
website, and Lakeville Government Television (Channel 16). Beginning in 2009, the
Communications Department will also manage the Lakeville Access Television (Channel 12).
Our mission is to support the Council’s vision and mission by providing information regarding
municipal programs and services in a quality and cost-effective manner that engages the
community and enhances the City’s image locally, regionally, and nationally. The department is
currently completing a Strategic Communications Plan that will enhance consistent, creative, and
accurate printed documents, verbal messages, and visual displays for all communications and
marketing pieces.

Services:
 •   Publications
     o   Work with other departments to prepare their communications pieces.
     o   Prepare Messages, the City’s weekly newsletter.
     o   Writing, layout, and production of special publications such as the new resident guidebook,
         utility brochure, welcome packet flyers, information, and ads.
     o   Prepare communications plans for special projects or programs such as Comprehensive
         Land Use Plan, water conservation, new Police Station, etc.
     o   Write and distribute press releases., respond to inquiries from the press
     o   Write speeches for Council Members and Department Heads.
     o   Special event planning and implementation such as groundbreakings and grand openings.
     o   Develop style image standards for communications pieces.
 •   Website
     o   Work with departments to prepare their sections of the City website.
     o   Place photos, text, and events on website.
     o   Maintain City calendar of events.
     o   Maintain City Listservs.
     o   Develop, maintain, and promote employee intranet.
 •   Lakeville Government Television (LGTV) Channel 16
     o   Create government television programs for cable channel 16 and the website.


                                                   133
                                    COMMUNICATIONS FUND
                                               (continued)



     o   Produce and direct broadcasts of live meetings and prepare for rebroadcast on cable
         channel 16 and the website.
     o   Update electronic message board on channel 16.
     o   Work with other departments to create and produce special video projects such as the comp
         plan program, new police station program, etc.
     o   Oversee Cable Franchise issues
     o   Monitor complaints concerning Charter, Inc.
     o   Facilitate Telecommunications Commission.
     o   Monitor MACTA legislative information.
 •   Lakeville Access Television Channel 12
     o   Facilitate and manage public access television, cable channel 12
     o   Update electronic message board on channel 12.
     o   Place public access videos and maintain records.

Staffing:
                                             2007         2008        2009          2009         2010
          Position (FTE)                    Actual       Actual      Budget       Estimate      Budget
Communications Manager                           ---           ---       1.0           1.0          1.0
Communications Specialist                        ---           ---       1.0           1.0          1.0
Cable Coordinator                               1.0           0.2          ---           ---          ---
Video Production Specialist                     1.9           1.9        1.9           1.9          1.9
                   Total                         2.9          2.1           3.9         3.9          3.9

Activity Measures:
                                                          2007        2008    2009     2010
                       Activity                          Actual      Actual Estimate Estimate
Listserv Subscribers                                          ---      7,000    7,600    7,600
Web Visitors (avg./month)                                     ---         --- 27,000   30,000
Messages Issues                                               52          52       52       52
Other Publications                                            ---         ---      15       18
Speech/Press Releases                                         ---         ---      20       20
Special Events                                                ---          4        3        4

Cable TV Revenues                                       $470,562     $519,045     $534,616     $550,654
Cable TV Regular Program Episodes                             50           68           56           56
Cable TV Special Programs                                      8            6            6            6
City Council Meetings                                         48           48           48           48
Cable TV Public Service Announcements                          8            6           10           12

                                                  134
                                  COMMUNICATIONS FUND
                                              (continued)



Goals and Objectives:
 •   To improve the public’s ability to obtain and comment on information about the City.
 •   To market the City’s strengths effectively.
 •   To use consistent style and image standards developed for City communications.
 •   To make residents aware of well-managed government services.
 •   To facilitate and encourage citizen participation in local government.
 •   To enhance Lakeville’s sense of community.
 •   To promote a distinct quality of life unique to Lakeville.




                                                   135
                                     COMMUNICATIONS FUND
                                             (continued)



Budget Summary:
                              CITY OF LAKEVILLE, MINNESOTA
                              Special Revenue - Communications Fund
                 Statement of Revenues, Expenditures and Changes in Fund Balances
                              For the Year Ending December 31, 2010


                                                                     2009                     2010
                                         2007           2008       Amended       2009       Proposed
                                        Actual         Actual       Budget     Estimate      Budget
Revenues
 Licenses franchise fee                $ 470,562       $519,045    $508,959    $ 534,616    $ 550,654
 Intergovernmental State-aid                 516            516         516          516          516
 Charges for services                                                10,200
 Investment income                        23,139         21,508      19,381       8,841        9,017
 Miscellaneous                               190            510          84           -            -
            Total revenues               494,407        541,579     539,140     543,973      560,187

Expenditures - General government
 Personnel services                      210,180        153,766     292,150     295,782      314,113
 Commodities                               6,189          7,262      10,585       8,710       10,337
 Other charges and services               45,414         83,808     112,499      81,437       86,842
 Capital outlay                           29,025         35,472     167,500     177,854       22,205
          Total expenditures             290,808        280,308     582,734     563,783      433,497

Excess (deficiency) of revenues
         over expenditures               203,599        261,271     (43,594)     (19,810)    126,690

Other financing (uses) - Transfers
 To General Fund                        (118,143)      (119,155)    (47,927)     (47,267)    (48,177)
 To Sp. Rev. - Benefit Acc.Fund             (350)        (1,508)     (9,483)      (9,483)     (7,806)
      Total other financing (uses)      (118,493)      (120,663)    (57,410)     (56,750)    (55,983)

Net change in fund balance                85,106      140,608       (101,004)  (76,560)   70,707
Fund balance, January 1                  402,885      487,991        473,866   628,599   552,039
Fund balance, December 31              $ 487,991    $ 628,599      $ 372,862 $ 552,039 $ 622,746
2010 Net change in fund balance percentage                                                     12.8%
 Budget Factors:
 •   The 2010 budget proposes to increase the hours of the Video Production Specialists from 36
     hours to full-time status dependent upon the demands and success of the City of Lakeville
     Channel 12.
 •   The Cable Coordinator position was eliminated in 2008; the duties were divided to the
     Assistant to the City Administrator and the Communication Manager.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010

                                                 136
                                 COMMUNICATIONS FUND
                                            (continued)



    proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
    living adjustment.
•   The 2010 proposed budget reflects an expected increase in employee health insurance
    premiums of 10%.
•   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
    officers).
•   The 2010 budget proposed funding for a community survey ($15,000).
•   Funding to attend out of state national conferences will not be provided.
•   The Messages publication is printed in the Lakeville Life & Times.          This publication
    converted from tabloid size print to full newspaper size in 2009.
•   New residents to the City are provided with a Resident Guide Book. These books are
    scheduled to be published on a biennial basis. Resident Guide Books are budgeted to be
    published in 2011.
•   A 3% increase in franchise fee revenues is based on modest growth in subscribers.
•   The 2010 other services and charges is consistent with the 2009 estimate.
•   Capital outlay budget provides funding for the council chamber video projector ($21,375).
•   The 2010 Capital Projects Building Fund provides funding for $150,000 for the Cable TV
    production room upgrades.




                                               137
                                           BENEFIT ACCRUAL FUND
Program Description:
The Benefit Accrual Fund accounts for expenditures attributable to severance and paid time
benefits disbursed at the time of termination including annual paid time off cash outs. The
primary revenue source is property taxes and transfers from special revenue funds. Benefits paid
to Enterprise Fund employees are accounted for in their respective funds.
Activity Measures:
                                                                  2007          2008              2009           2010
                         Activity                                Actual        Actual           Estimate       Estimate
Accrued severance liability                                    $ 963,616      $1,041,349       $1,124,385      $1,233,056
Accrued time off liability                                     $ 275,378      $ 380,086        $ 467,474       $ 530,359
   Total Accrued liabilities                                   $1,238,994     $1,421,435       $1,591,859      $1,763,415
Total assets                                                   $ 915,124      $ 950,918        $ 919,703       $ 917,471
   Net liabilities                                             ($323,870)     ($470,517)       ($672,156)      ($845,944)
Ratio of net liabilities to total assets                             74%           67%               58%            52%

Budget Summary:
                                 CITY OF LAKEVILLE, MINNESOTA
                                  Special Revenue - Benefit Accrual Fund
                    Statement of Revenues, Expenditures and Changes in Fund Balances
                                 For the Year Ending December 31, 2010

                                                                            2009                              2010
                                               2007         2008          Amended            2009           Proposed
                                              Actual       Actual          Budget          Estimate          Budget
 Revenues
  General property taxes                      $ 85,958    $ 70,000        $        -       $        -      $         -
  Investment income                             49,947      38,464            29,550            9,710            9,200
              Total revenues                   135,905     108,464            29,550            9,710            9,200
 Expenditures - Personnel services
  General government                            10,415         22,873          9,875           24,596           10,673
  Public safety                                 69,630          7,707          6,466           13,608            6,833
  Public works                                  14,870         43,559          3,779            2,660            2,498
  Parks and recreation                             375          1,822              -           31,169                -
           Total expenditures                   95,290         75,961         20,120           72,033           20,004
 Excess (deficiency) of revenues
          over expenditures                     40,615         32,503          9,430           (62,323)        (10,804)
 Other financing sources
  Transfer from Special Revenue:
    Communications Fund                           350           1,508          9,483            9,483            7,806
    Surface Wtr. Mgmt. Fund                       944           1,783          1,356            1,356              766
     Total other financing sources               1,294          3,291         10,839           10,839            8,572
 Net change in fund balance                     41,909       35,794            20,269     (51,484)   (2,232)
 Fund balance, January 1                       873,215      915,124           984,944     950,918   899,434
 Fund balance, December 31                   $ 915,124    $ 950,918       $ 1,005,213   $ 899,434 $ 897,202
 2010 Net change in fund balance percentage                                                                      (0.2%)

                                                         138
                                BENEFIT ACCRUAL FUND
                                           (continued)
Budget Factors:

•   The 11% increase in the accrued liability is mainly attributable to the conversion to a Paid
    Time-Off (PTO) severance package. The PTO plan allows for cash payouts of 40 hours per
    year, an option not available under the vacation/sick leave policy. Also, the PTO plan
    created a higher accrual limit for grandfathered employees with existing sick leave balances
    over 480 hours and 5 or more years of service. The limit for new non-police employees will
    be slightly lower under the PTO plan. Thus, the liability should continue to increase at an
    accelerated rate until the grandfathered employees achieve the PTO accrual limit.




                                              139
                         SURFACE WATER MANAGEMENT FUND



Department: Surface Water Management Fund
Program Manager: Environmental Resource Manager
Program Description:
The Environmental Resource Division administers the environmental compliance needs of the
City of Lakeville, reviews adopted developments, and obtains rain, stream, and lake data. Scope
of duties encompasses oversight responsibilities for all major water bodies throughout the City.
This includes curly leaf pondweed and Eurasian water milfoil control, fish surveys, vegetation
surveys, coordination of the Citizen Assisted Monitoring Program, education materials and
meetings. Public education and outreach required by state and federal regulations are carried out
with the Wetland Health Evaluation Project, the Vermillion River Watch program, and through
presentations to various age groups.
The Environmental Resources Division ensures that all construction plans meet NPDES Permit
requirements. They assist in preparing wetland alteration permits and mitigation plans, and in
obtaining leases from the DNR for utility crossing of public waters for city projects. The
Environmental Resources Team performs many of the duties required by local, state and federal
rules and regulations by being either the Responsible Governmental Unit (RGU) or the Local
Governmental Unit (LGU). Environmental staff review and process wetland fill or alteration
applications and review the associated mitigation plans. The Environmental Resources Team
works as an integrated team member in the review of adopted developments, they ensure that the
wetland delineations are correct, that tree preservation plans are accurate and that a developer
takes feasible measures to save significant trees.
In the management of the storm water treatment basins, the Environmental Resources Division
works closely with the Engineering and Operations and Maintenance Departments to either bid
or obtain quotes for the removal of the sediments and restoration of the area disturbed. They
determine which storm water basins must be cleaned of sediment and which storm sewer outlets
need cleaning.
Environmental Resources Department was delegated the duties of the Environmental Recycling
function commencing in mid-2009. Responsibilities include managing the City of Lakeville’s
recycling program, organizing the Annual Roadside/Watershed Cleanup Day as well as
preparing the applications and securing the grant funding to finance the programs.

Services:
 •   Provide environmental related support services to the public and other City departments.
 •   Provide staff support to the Parks, Recreation & Natural Resources Commission, Black Dog
     WMO and Vermillion River Watershed JPO.
 •   Provides wetland delineation, mitigation and monitoring plans for in house public projects.
 •   Respond to citizen inquiries and concerns regarding environmental issues.
 •   Assist in preparing and providing technical oversight of the Comprehensive Water Resources
     Management Plan, Wetland Management Plan, South Creek Management Plan and the City
     of Lakeville’s Storm Water Pollution Prevention Program (SWPPP).

                                                140
                         SURFACE WATER MANAGEMENT FUND
                                            (continued)

 •   Provide plan review of all erosion control for all industrial, commercial, and institutional
     building permits.
 •   Provide onsite erosion and sediment control inspections for developments and individual lots.
 •   Review tree preservation plans and inspect tree preservation of all developments and
     individual lots.
 •   Manage the requirements of the Surface Water Management Fund, to include educational
     requirements, coordinating stormwater basin cleaning, and coordinating storm sewer outlet
     cleaning.
 •   Coordinate and manage a variety of water quality improvement projects including aquatic
     plant control and fish management on City water bodies.
 •   Coordinate and manage the Adopt a Pond program and the Citizen Assisted Monitoring
     Program on the larger water bodies.
 •   Coordinate and manage the annual Roadside/Watershed Clean-Up Day.
 •   Coordinate and host Blue Thumb workshops with Dakota County Soil and Water
     Conservation District to educate and promote water quality stewardship among residents.
 •   Review Wetland Delineations and perform a majority of the requirements for being the RGU
     and LGU in relationship to environmental permitting.

Staffing:
                                           2007        2008       2009         2009        2010
         Position (FTE)                   Actual      Actual     Budget      Estimate     Budget
Environmental Resources Manager               1.0         1.0        1.0          1.0         1.0
Environmental Resources Specialist            1.0         1.0        1.0          1.0         1.0
Environmental Resources Technician            1.0         0.6          ---          ---         ---
                 Total                         3.0         2.6         2.0         2.0         2.0

Activity Measures:
                                                      2007       2008        2009       2010
                    Activity                         Actual     Actual Estimate Estimate
Preliminary and Final Plat Reviews                        32          21          18         26
Lot Tree Preservation Reviews                             55          71          60         80
Erosion Control Inspection Sites                          55          43          36         48
Erosion Control Inspections                              153         120         100       125
Wetland Reviews*                                          45          28          35         41
* Estimate based on site visits, wetland delineations, monitoring reports and replacement plans
  submitted




                                               141
                         SURFACE WATER MANAGEMENT FUND
                                             (continued)

Goals and Objectives:
 •   Ensure that the City of Lakeville meets all the requirements of the Phase III NPDES Permit
     requirements.
 •   Update the City of Lakeville’s Storm Water Pollution Prevention Program as required by the
     MPCA.
 •   Continue to offer a variety of educational and volunteer opportunities for all ages with our
     Adopt a Pond and Blue Thumb programs, as well as through various workshops, events,
     presentations, and restorations.
 •   Work with the Vermillion River Watershed and the Black Dog Watershed Management
     Organization on the Total Maximum Daily Load assessments for lakes and streams that are
     listed as impaired in the City of Lakeville.
 •   Continue to manage exotic curly leaf pondweed at Orchard Lake.
 •   Assess the potential for the spread of exotic species (Zebra mussel) in Lake Marion and
     Orchard Lake.
 •   Work with the Fire Department to develop a spill response and get training for proper staff to
     meet the requirements of the MPCA and the City of Lakeville’s SWPPP.
 •   Assess East Community Park Wetland and work towards improving water quality within the
     water body.




                                                142
                          SURFACE WATER MANAGEMENT FUND
                                               (continued)

Budget Summary:
                                CITY OF LAKEVILLE, MINNESOTA
                          Special Revenue - Surface Water Management Fund
                   Statement of Revenues, Expenditures and Changes in Fund Balances
                                For the Year Ending December 31, 2010


                                                                         2009                           2010
                                             2007             2008      Adopted          2009         Proposed
                                            Actual           Actual     Budget         Estimate        Budget
  Revenues
   Intergovernmental State aid          $       292      $       292    $      292     $      292     $       292
   Intergovernmental grants                   7,042           70,055
   Charges for services                     475,694          514,737        583,489        567,545        601,003
   Investment income                         29,374           21,689          3,888          6,793          6,316
              Total revenues                512,402          606,773        587,669        574,630        607,611

  Expenditures - Public works
   Personnel services                       211,681          218,560        198,868        182,617        190,599
   Commodities                                5,342            9,500         10,361          9,361          9,407
   Other charges and services               158,868          360,237        317,964        170,451        302,575
   Capital outlay                             3,324            6,917          2,023            173          3,002
            Total expenditures              379,215          595,214        529,216        362,602        505,583

  Excess (deficiency) of revenues
            over expenditures               133,187           11,559         58,453        212,028        102,028

  Other financing (uses) - Transfers
   To General Fund                           (69,737)        (90,607)   (110,842)      (108,566)          (113,597)
   To Sp. Rev. - Benefit Acc. Fund              (944)         (1,783)     (1,356)        (1,356)              (766)
   To Enterprise- Utility Fund:
     Water operations                          (4,123)        (4,247)        (9,014)        (9,014)        (11,009)
     Street light operations                                                                                (1,835)
     Sanitary sewer operations                 (6,383)        (6,631)       (11,470)       (11,470)        (26,859)
        Total other financing (uses)         (81,187)    (103,268)      (132,682)      (130,406)          (154,066)

  Net change in fund balance               52,000          (91,709)  (74,229)   81,622                  (52,038)
  Fund balance, January 1                 455,135          507,135   335,531   415,426                  497,048
  Fund balance, December 31             $ 507,135        $ 415,426 $ 261,302 $ 497,048                $ 445,010
  2010 Net change in fund balance percentage                                                               (10.5%)
Budget Factors:

 •   The Environmental Resources Technician position was eliminated in 2008.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.

                                                  143
                        SURFACE WATER MANAGEMENT FUND
                                            (continued)

•   The 2010 proposed budget reflects an expected increase in employee health insurance
    premiums of 10%.
•   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
    officers).
•   Funding to attend out of state national conferences will not be provided.
•   The 2010 proposed budget provides funding for storm water (MPCA) MS4 Permit ($40,000).
•   The 2010 proposed budget provides funding for curlyleaf pondweed treatment ($35,000) and
    aquatic plant survey/exotic species assessment ($10,000) at Orchard Lake.
•   The 2010 proposed budget provides funding for curlyleaf pondweed treatment and milfoil
    control and water quality projects at Valley Lake ($9,500).
•   The budget provides funding for the new East Wetland & Natural Area which includes
    shoreline and upland management, water quality improvements, and vegetation and water
    quality assessment ($40,000).
•   The 2010 proposed budget also provides funding for water quality programs that includes
    pond cleaning, erosion cleanup, outfall cleaning ($60,000), porous paver maintenance and
    rain garden maintenance ($9,000), and blue thumb adopt-a-pond program ($5,000).
•   Water quality projects are proposed at Lake Marion ($21,800) and Lee Lake ($11,000).
•   Continued funding provided for Black Dog Watershed Management Organization ($27,161).
•   The department will continue its water quality maintenance efforts at a cost of $60,000 for
    pond cleaning as well as continue to provide support of the Black Dog Water Management
    Organization.
•   The 2010 budget provides a transfer to the Utility Fund Sanitary Sewer Operation for the
    shared use of a new vactor ($13,500).
•   Capital outlay budget provides $3,002 for a new handheld GPS to replace the existing unit.
•   Transfers made to the General Fund relate to personnel costs for street sweeping, information
    systems support, and administrative services.           Transfers to the Utility Fund are
    reimbursements for utility billing costs and costs incurred for the sump cleaning program.
•   Due to costs associated with the needs to update the City of Lakeville’s NPDES Permit and
    conduct hydrologic modeling of the Vermillion River Watershed in 2011, the budget
    proposes a $.50 per quarter increase in surface water management fees from $6.00 to $6.50.




                                               144
                      ECONOMIC DEVELOPMENT FUND
Department: Economic Development Fund

Program Manager: Community and Economic Development Director

Program Description:
The Economic Development Fund was created to account for the $125,000 Economic Recovery
Grant received from the State of Minnesota Department of Trade and Economic Development
(DTED) in 1995. The grant purpose is to provide loans to businesses that are either expanding or
building within the City of Lakeville. Currently the city has no outstanding or pending loan
commitments. The funds are restricted to the certain uses pursuant to the terms and conditions of
the Grant.
A Private Activity Revenue Bond Financing Policy was adopted by the City Council March 3,
2008 with All Saints School. The City receives an annual administrative fee (1/8 of 1%) from
All Saints School based on the debt issuance until 2017. The fees are unrestricted for
community and economic development purposes.
Services:
 •   Promote economic development activities.
Goals and Objectives:
 •   Provide financial incentives to business which are considering locating to or expanding in the
     City of Lakeville.
Budget Summary:
                            CITY OF LAKEVILLE, MINNESOTA
                        Special Revenue - Economic Development Fund
               Statement of Revenues, Expenditures and Changes in Fund Balances
                            For the Year Ending December 31, 2010


                                                                  2009                   2010
                                            2007       2008      Adopted  2009         Proposed
                                           Actual     Actual     Budget Estimate        Budget
 Revenues
  Charges for services                    $       -   $ 12,500   $ 11,250   $ 11,250   $ 10,000
  Investment income                           2,790      2,463      1,949        659        778
              Total revenues                  2,790    14,963     13,199     11,909       10,778

 Expenditures - General Government
  Other charges and services                      -          -          -    20,000             -

 Net change in fund balance                  2,790      14,963     13,199     (8,091)  10,778
 Fund balance, January 1                    48,143      50,933     50,933     65,896   57,805
 Fund balance, December 31                $ 50,933    $ 65,896   $ 64,132   $ 57,805 $ 68,583
 2010 Net change in fund balance percentage                                                18.6%

Budget Factors:
 • The 2009 estimate included improvement to the Downtown Lakeville Market Plaza
   ($20,000).
                                                145
      Debt Service Funds
These funds account for the accumulation of resources for the payment of long-term debt
principal and interest, but excluding debt issued for and serviced by an Enterprise Fund.

     Debt Supported Primarily by Special Assessments
     Debt issued to finance construction of public improvements. The special assessments
     levied against benefited property owners are pledged toward the repayment of the
     principal and interest on these bonds.
     Debt Supported Primarily by Property Taxes
     Debt approved by voter referendum, certificates of indebtedness, and capital
     improvement bonds. Revenues are provided primarily from general property taxes.
     Debt Supported Primarily by State-aid Street Revenue
     Debt issued to finance construction of State-aid street projects within the City. The
     primary revenue source is municipal state aid allotments from the Minnesota
     Department of Transportation.
     Debt Supported Primarily by Tax Increment
     Debt issued to finance construction of public improvements in accordance with
     approved tax increment plans. Property taxes received from designated tax increment
     financing districts are pledged to the payment of the bonds.
     Debt Supported Primarily by Water Revenue
     Debt issued to finance the construction of wells, pump houses, towers, and a water
     treatment facility. Water connection fees are pledged toward the repayment of the
     principal and interest on these bonds.
     Debt Supported Primarily by Ice Arena Revenue
     Debt issued for the construction of the Lakeville Ames Ice Arena first and second
     sheets of ice, spectator seating/locker rooms. Resources include donations from arena
     revenues and other sources pledged to the payment of the bonds. The Ice Arena
     Revenue Refunding Bonds of 2008 A and the 2005 Capital Dehumidification Lease-
     Purchase Agreement are general obligations backed by the full-faith and credit of the
     City. The Gross Revenue Recreation Facility Bonds of 1999 are not a general
     obligation bond and accordingly not backed by the full-faith and credit of the City.
     Debt Supported Primarily by HRA Lease Revenue
     The Lakeville Housing and Redevelopment Authority (HRA) issued the Public
     Facility Lease Revenue Bonds, Series 2002 A for the construction of Lakeville’s
     fourth fire station and the acquisition of a new fire truck. Debt service will be payable
     solely from lease payments to be made by the City pursuant to the lease agreement
     between the Authority and the City. The HRA issued the Ice Arena Lease Revenue
     Bonds of 2006 for the construction of the Hasse single sheet ice arena facility. Debt
     service will be payable solely from lease payments to be made by the City and I.S.D
     194 pursuant to the lease agreement between the Authority, the City and the school
     district. These bonds are not general obligation bonds and, accordingly, are not
     backed by the full-faith and credit of the City.
                                                    CITY OF LAKEVILLE, MINNESOTA
                                    Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances
                                                               Debt Service Funds
                                                     For the Year Ending December 31, 2010
                                                                                                                               (continued on following page)


                                                                                              2010 Proposed Budget
                                                                                          Debt Supported Primarily by
                                                 Special            Property                        Tax         Water           Arena         HRA Lease
                                               Assessments           Taxes           State-aid Increment       Revenue         Revenue         Revenue
Revenues
 General property taxes                        $     912,756 $        4,812,051 $       - $ 74,989 $                     - $            - $        271,289
 Tax increment                                             -                  -         -   666,079                      -              -                -
 Intergovernmental                                         -                  -   884,839         -                      -              -                -
 Charges for services                                      -                  -         -         -                      -         48,608          271,289
 Special assessments                                 320,588            169,877         -         -                      -              -                -
 Investment income                                    11,890             37,988       106     6,324                      -          1,496           40,231
 Donations                                                 -                  -         -         -                      -         95,000                -
 Miscellaneous                                             -             50,000         -         -                      -              -                -
            Total revenues                         1,245,234          5,069,916   884,945   747,392                      -        145,104          582,809

Expenditures - debt service
 Principal maturities                              1,795,000          3,195,000          575,000   375,000     1,020,000          122,338          255,000
 Interest on debt                                    340,629          2,253,315          309,839   170,806       249,000           67,414          503,008
 Fiscal charges                                            -                  -                -     6,571             -                -                -
           Total expenditures                      2,135,629          5,448,315          884,839   552,377     1,269,000          189,752          758,008
     Excess (deficiency) of revenues
           over expenditures                        (890,395)          (378,399)            106    195,015    (1,269,000)          (44,648)       (175,199)

Other financing sources (uses)
 Transfer from other funds                           488,903            100,000                -         -     1,269,000                 -         190,097
 Transfer to other funds                                   -                  -                -   (60,300)            -                 -               -
 Issuance of debt                                          -                  -                -         -             -                 -               -
 Refunding bonds issued                                    -                  -                -         -             -                 -               -
 Payment on refunded bonds called                          -                  -                -         -             -                 -               -
 Premium on bonds issued                                   -                  -                -         -             -                 -               -
 Discount on bonds issued                                  -                  -                -         -             -                 -               -
  Total other financing sources (uses)               488,903            100,000                -   (60,300)    1,269,000                 -         190,097

Net changes in fund balances                        (401,492)          (278,399)     106   134,715                     -          (44,648)          14,898
Fund balance, January 1                            2,146,139          5,727,755   10,556   774,335                 4,217          241,789        1,585,328
Fund balance, December 31                      $   1,744,647 $        5,449,356 $ 10,662 $ 909,050 $               4,217 $        197,141 $      1,600,226

2010 Net change in fund balance percentage             -18.7%              -4.9%            1.0%     17.4%          0.0%            -18.5%             0.9%
For a complete discussion of changes in fund balances, see following individual funds.




                                                                                  146
                                    CITY OF LAKEVILLE, MINNESOTA
                    Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances
                                               Debt Service Funds
                                     For the Year Ending December 31, 2010
(continued from previous page)


                                                   Total
                                                   2010             2009
                                                 Proposed          Adopted              2009              2008              2007
                                                  Budget           Budget             Estimate           Actual            Actual
Revenues
 General property taxes                      $    6,071,085    $    6,212,775     $     6,212,775    $   5,385,722     $    4,604,920
 Tax increment                                      666,079           600,001             666,079          620,738            581,216
 Intergovernmental                                  884,839           843,252             832,949          850,336            428,201
 Charges for services                               319,897           350,082             349,959          254,739            250,441
 Special assessments                                490,465           507,760             495,298          553,313            519,928
 Investment income                                   98,035           177,016             103,268          187,382            325,309
 Donations                                           95,000            95,000              95,000          196,699            202,909
 Miscellaneous                                       50,000                 -             205,815                -                  -
            Total revenues                        8,675,400         8,785,886           8,961,143        8,048,929          6,912,924

Expenditures - debt service
 Principal maturities                             7,337,338         6,436,971           6,436,971        5,301,622          7,021,291
 Interest on debt                                 3,894,011         4,155,159           4,157,100        4,367,257          3,449,720
 Fiscal charges                                       6,571             6,677               6,571           46,136            123,438
           Total expenditures                    11,237,920        10,598,807          10,600,642        9,715,015         10,594,449
     Excess (deficiency) of revenues
           over expenditures                     (2,562,520)        (1,812,921)        (1,639,499)       (1,666,086)       (3,681,525)

Other financing sources (uses)
 Transfer from other funds                        2,048,000         2,604,422           3,150,231         3,272,441         3,040,752
 Transfer to other funds                            (60,300)          (57,700)            (57,700)          (96,625)          (62,065)
 Issuance of debt                                         -                 -                   -                 -           416,137
 Refunding bonds issued                                   -                 -                   -           775,000         6,250,000
 Payment on refunded bonds called                         -                 -                   -        (2,975,000)       (3,945,000)
 Premium on bonds issued                                  -                 -                   -                 -           510,944
 Discount on bonds issued                                 -                 -                   -                 -            (2,818)
  Total other financing sources (uses)            1,987,700         2,546,722           3,092,531           975,816         6,207,950

Net changes in fund balances                     (574,820)            733,801           1,453,032         (690,270)         2,526,425
Fund balance, January 1                        10,490,119           8,901,509           9,037,087        9,727,357          7,200,932
Fund balance, December 31                    $ 9,915,299 $          9,635,310     $    10,490,119    $   9,037,087 $        9,727,357

2010 Net change in fund balance percentage            -5.5%

The City is in compliance with all bond covenants. The 2010 proposed fund balances are consistent with
the City’s Fund Balance Policy and the Minnesota State Auditors Statement of Position regarding fund
balances. For a complete discussion of changes in fund balances, see following individual funds.




                                                                   147
                                             CITY OF LAKEVILLE, MINNESOTA
                                                Debt Service - Special Assessments Fund
                                   Statement of Revenues, Expenditures, and Changes in Fund Balances
                                                 For the Year Ending December 31, 2010


                                                                                         2009                            2010
                                                           2007           2008          Adopted           2009         Proposed
                                                          Actual         Actual         Budget          Estimate        Budget
Revenues
 General property taxes                               $     403,907 $       663,336 $       765,110 $      765,110 $      912,756
 Special assessments                                        319,354         398,711         333,832        303,265        320,588
 Investment income                                           73,913          29,238          30,540         15,266         11,890
                  Total revenues                            797,174       1,091,285       1,129,482      1,083,641      1,245,234
Expenditures - debt service
 Principal maturities                                     1,370,000       1,350,000       1,890,000      1,890,000      1,795,000
 Interest on debt                                           518,331         469,940         414,659        414,659        340,629
 Fiscal charges                                              45,959           5,762               -              -              -
                  Total expenditures                      1,934,290       1,825,702       2,304,659      2,304,659      2,135,629
           Excess (deficiency) of revenues
                 over expenditures                        (1,137,116)      (734,417)     (1,175,177)     (1,221,018)     (890,395)
Other financing sources (uses)
 Transfer from:
   Debt Service - Tax Increment Fund                         40,165          41,825
   Capital Projects:
      Tax Increment Fund                                      21,809         21,809          21,810         21,810         21,810
      Storm Sewer Fund                                       697,439        697,438         697,439        331,000        331,000
      Water Fund                                             199,351        199,352         199,352        496,093        136,093
      Sanitary Sewer Fund                                    106,761        106,761         106,761        463,647
      Improvement Construction Fund                           77,603                                        20,621
 Issuance of debt                                             25,235
 Refunding bonds issued                                    3,165,000
 Payment on refunded bonds called                         (3,145,000)
 Premium on bonds issued                                      21,531              -               -              -              -
         Total other financing sources (uses)              1,209,894      1,067,185       1,025,362      1,333,171        488,903
Net changes in fund balances                                 72,778         332,768        (149,815)       112,153       (401,492)
Fund balance, January 1                                   1,628,440       1,701,218       1,974,551      2,033,986      2,146,139
Fund balance, December 31                             $   1,701,218 $     2,033,986 $     1,824,736 $    2,146,139 $    1,744,647

2010 Net change in fund balance percentage                                                                                 -18.7%


   The Special Assessments Fund 2010 proposed fund balance is expected to decrease by
   ($401,492) or (18.7%). The city utilized $401,492 of the 2009 fund balance carryforward in
   addition to revenues and other sources of $1,734,137 to provide for the 2010 debt service
   requirements of $2,135,629.




                                                                 148
                                         CITY OF LAKEVILLE, MINNESOTA
                                                Debt Service - Property Taxes Fund
                                Statement of Revenues, Expenditures, and Changes in Fund Balances
                                              For the Year Ending December 31, 2010


                                                                                        2009                               2010
                                                    2007                2008           Adopted            2009           Proposed
                                                   Actual              Actual          Budget           Estimate          Budget
Revenues
 General property taxes                        $   3,954,617     $     4,121,086   $    5,110,700   $    5,110,700   $    4,812,051
 Intergovernmental - MVHC                                                305,479
 Special assessments                                 200,574             154,602          173,928          192,033          169,877
 Investment income                                   111,769              84,308           99,127           40,456           37,988
 Miscellaneous                                             -                   -                -                -           50,000
               Total revenues                      4,266,960           4,665,475        5,383,755        5,343,189        5,069,916

Expenditures - debt service
 Principal maturities                              3,885,000           2,130,000        2,385,000        2,385,000        3,195,000
 Interest on debt                                  1,561,486           2,363,525        2,347,384        2,349,325        2,253,315
 Fiscal charges                                        4,645               4,776                -                -                -
             Total expenditures                    5,451,131           4,498,301        4,732,384        4,734,325        5,448,315
       Excess (deficiency) of revenues
             over expenditures                     (1,184,171)           167,174         651,371           608,864         (378,399)
Other financing sources (uses)
 Transfer from:
   General Fund                                                          305,479
   Capital Projects:
      Building Fund                                   50,000                                               238,000
      Improvement Construction Fund                  280,741
   Enterprise - Liquor Fund                                              100,000         100,000           100,000          100,000
 Issuance of debt                                    390,902
 Premium on bonds issued                             486,221                   -               -                 -                -
    Total other financing sources (uses)           1,207,864             405,479         100,000           338,000          100,000
Net changes in fund balances                          23,693             572,653          751,371          946,864         (278,399)
Fund balance, January 1                            4,184,545           4,208,238        4,826,952        4,780,891        5,727,755
Fund balance, December 31                      $   4,208,238     $     4,780,891   $    5,578,323   $    5,727,755   $    5,449,356

2010 Net change in fund balance percentage                                                                                    -4.9%


     The Property Taxes Fund 2010 proposed fund balance is expected to decrease by ($278,399) or
     4.9%. The city utilized $278,399 of the 2009 fund balance carryforward in addition to revenues
     and other sources of $5,169,916 to provide for the 2010 debt service requirements of $5,448,315.




                                                                 149
                                        CITY OF LAKEVILLE, MINNESOTA
                                                 Debt Service - State-aid Fund
                             Statement of Revenues, Expenditures, and Changes in Fund Balances
                                           For the Year Ending December 31, 2010


                                                                                    2009                              2010
                                                  2007              2008           Adopted           2009           Proposed
                                                 Actual            Actual          Budget          Estimate          Budget
Revenues
 Intergovernmental - State aid               $     428,201    $      544,857   $     843,252   $      832,949   $      884,839
 Investment income                                   5,331                 -             308              104              106
              Total revenues                       433,532           544,857         843,560          833,053          884,945
Expenditures - debt service
 Principal maturities                              215,000           225,000         500,000          500,000          575,000
 Interest on debt                                  212,042           318,691         332,949          332,949          309,839
 Fiscal charges                                      1,159             2,733               -                -                -
             Total expenditures                    428,201           546,424         832,949          832,949          884,839
      Excess (deficiency) of revenues
             over expenditures                       5,331            (1,567)         10,611              104              106
Fund balance, January 1                              6,688            12,019          12,320           10,452           10,556
Fund balance, December 31                    $      12,019    $       10,452 $        22,931   $       10,556   $       10,662

2010 Net change in fund balance percentage                                                                                1.0%


     The State-aid Fund 2010 proposed fund balance is expected to increase by $106 or 1.0%. This
     increase is due to investment income earned on the cash balance in the fund. State aid revenues
     were equal to the debt service requirement of $884,839.




                                                             150
                                         CITY OF LAKEVILLE, MINNESOTA
                                               Debt Service - Tax Increment Fund
                               Statement of Revenues, Expenditures, and Changes in Fund Balances
                                             For the Year Ending December 31, 2010


                                                                                    2009                                2010
                                                   2007               2008         Adopted            2009            Proposed
                                                  Actual             Actual        Budget           Estimate           Budget
Revenues
 General property taxes                       $           - $          348,588 $      74,989 $          74,989    $       74,989
 Tax increment                                      581,216            620,738       600,001           666,079           666,079
 Investment income                                   68,218                713            95             5,110             6,324
 Miscellaneous                                            -                  -             -           205,815                 -
              Total revenues                        649,434            970,039       675,085           951,993           747,392

Expenditures - debt service
 Principal maturities                               345,000            335,000       360,000           360,000           375,000
 Interest on debt                                   301,591            261,175       188,582           188,582           170,806
 Fiscal charges                                      68,002              9,266         6,677             6,571             6,571
             Total expenditures                     714,593            605,441       555,259           555,153           552,377
       Excess (deficiency) of revenues
             over expenditures                      (65,159)           364,598       119,826           396,840           195,015
Other financing sources (uses)
 Transfer from Capital Projects:
      Tax Increment Fund                                               152,010
 Transfer to:
   Debt Service - Special Assess. Fund              (40,165)           (41,825)
   Capital Projects - Storm Sewer Fund              (21,900)           (54,800)      (57,700)          (57,700)          (60,300)
 Refunding bonds issued                           3,085,000
 Payment on refunded bonds called                  (800,000)         (2,220,000)
 Premium on bonds issued                              3,192
 Discount on bonds issued                            (2,818)                  -            -                 -                 -
    Total other financing sources (uses)          2,223,309          (2,164,615)     (57,700)          (57,700)          (60,300)
Net changes in fund balances                      2,158,150      (1,800,017)          62,126           339,140           134,715
Fund balance, January 1                              77,062       2,235,212          439,969           435,195           774,335
Fund balance, December 31                     $   2,235,212    $    435,195 $        502,095    $      774,335    $      909,050

2010 Net change in fund balance percentage                                                                                 17.4%

    The Tax Increment Fund 2010 proposed fund balance is expected to increase by $134,715 or
    17.4%. In 2007, the City issued 2007 A and 2007 C Tax Increment Refunding Bonds as a means
    of lowering debt service requirements by taking advantage of lower interest rates in the
    prevailing municipal bond markets. These refunding issues provided the needed restructuring
    within the debt service funds so as to accumulate adequate resources to meet future debt service
    requirements.




                                                               151
                                        CITY OF LAKEVILLE, MINNESOTA
                                               Debt Service - Water Revenue Fund
                               Statement of Revenues, Expenditures, and Changes in Fund Balances
                                             For the Year Ending December 31, 2010


                                                                                         2009                                  2010
                                                   2007                2008             Adopted             2009             Proposed
                                                  Actual              Actual            Budget            Estimate            Budget
Revenues
 Investment income                            $       4,715      $             -    $             -   $              -   $              -
Expenditures - debt service
 Principal maturities                             1,000,000           1,000,000          1,000,000         1,000,000          1,020,000
 Interest on debt                                   369,400             329,400            289,400           289,400            249,000
 Fiscal charges                                         494                 498                  -                 -                  -
             Total expenditures                   1,369,894           1,329,898          1,289,400         1,289,400          1,269,000
      Excess (deficiency) of revenues
            over expenditures                     (1,365,179)         (1,329,898)       (1,289,400)        (1,289,400)        (1,269,000)
Other financing sources (uses)
 Transfer from:
   Capital Projects - Water Fund                  1,369,894           1,329,400          1,289,400         1,289,400          1,269,000
Net changes in fund balances                          4,715                (498)                -                  -                  -
Fund balance, January 1                                   -               4,715             9,430              4,217              4,217
Fund balance, December 31                     $       4,715 $             4,217 $           9,430 $            4,217 $            4,217

2010 Net change in fund balance percentage                                                                                          0.0%

    The Water Revenue Fund 2010 adopted fund balance is not expected to change from 2009. The
    City makes an annual transfer from the Capital Projects Water Fund to this fund equal to the
    amount necessary to provide for annual debt service requirements of the water revenue bonds.




                                                                152
                                         CITY OF LAKEVILLE, MINNESOTA
                                               Debt Service - Arena Revenue Fund
                               Statement of Revenues, Expenditures, and Changes in Fund Balances
                                             For the Year Ending December 31, 2010


                                                                                     2009                           2010
                                                   2007                2008         Adopted          2009         Proposed
                                                  Actual              Actual        Budget         Estimate        Budget
Revenues
 Charges for services                         $           - $                 - $      88,106 $        87,983 $       48,608
 Investment income                                    5,796               5,038         2,650           1,747          1,496
 Donations                                          202,909             196,699        95,000          95,000         95,000
              Total revenues                        208,705             201,737       185,756         184,730        145,104
Expenditures - debt service
 Principal maturities                               111,291             116,622        71,971          71,971        122,338
 Interest on debt                                    98,907             102,985        68,664          68,664         67,414
 Fiscal charges                                         988              19,309             -               -              -
             Total expenditures                     211,186             238,916       140,635         140,635        189,752
       Excess (deficiency) of revenues
             over expenditures                        (2,481)           (37,179)       45,121          44,095        (44,648)
Other financing sources (uses)
 Transfer from Capital Projects:
   Ice Arena Const. Fund                              4,216              16,149
 Refunding bonds issued                                                 775,000
 Payment on refunded bonds called                         -            (755,000)              -               -              -
    Total other financing sources (uses)              4,216              36,149               -               -              -
Net changes in fund balances                          1,735              (1,030)       45,121          44,095        (44,648)
Fund balance, January 1                             196,989             198,724       198,880         197,694        241,789
Fund balance, December 31                     $     198,724 $           197,694 $     244,001 $       241,789 $      197,141

2010 Net change in fund balance percentage                                                                            -18.5%


   The Arena Revenue Fund 2010 proposed fund balance is expected to decrease by ($44,648) or
   (18.5%). This decrease is due to debt service requirements of $189,752 exceeding revenues of
   $145,104.




                                                                153
                                           CITY OF LAKEVILLE, MINNESOTA
                                               Debt Service - HRA Lease Revenue Fund
                                  Statement of Revenues, Expenditures, and Changes in Fund Balances
                                                For the Year Ending December 31, 2010


                                                                                       2009                            2010
                                                         2007           2008          Adopted           2009         Proposed
                                                        Actual         Actual         Budget          Estimate        Budget
Revenues
 General property taxes                             $     246,396 $      252,712 $       261,976 $       261,976 $      271,289
 Charges for services                                     250,441        254,739         261,976         261,976        271,289
 Investment income                                         55,567         68,085          44,296          40,585         40,231
                 Total revenues                           552,404        575,536         568,248         564,537        582,809
Expenditures - debt service
 Principal maturities                                      95,000        145,000         230,000         230,000        255,000
 Interest on debt                                         387,963        521,541         513,521         513,521        503,008
 Fiscal charges                                             2,191          3,792               -               -              -
                Total expenditures                        485,154        670,333         743,521         743,521        758,008
         Excess (deficiency) of revenues
               over expenditures                           67,250         (94,797)      (175,273)       (178,984)      (175,199)
Other financing sources (uses)
 Transfer from:
   Capital Projects - Ice Arena Const. Fund                              113,362
   Enterprise - Liquor Fund                               192,773        188,855         189,660         189,660        190,097
        Total other financing sources (uses)              192,773        302,217         189,660         189,660        190,097
Net changes in fund balances                              260,023         207,420         14,387          10,676         14,898
Fund balance, January 1                                 1,107,208       1,367,231      1,704,145       1,574,652      1,585,328
Fund balance, December 31                           $   1,367,231 $     1,574,651 $    1,718,532 $     1,585,328 $    1,600,226

2010 Net change in fund balance percentage                                                                                 0.9%

    The HRA Lease Revenue Fund 2010 proposed fund balance is expected to increase by $14,898
    or 0.9%. Taxes of $271,289 and charges for services of $271,289 represent the amounts pledged
    to the debt service requirements of the HRA Ice Arena Lease Revenue Bonds of 2006. The
    transfer from the Liquor Fund combined with investment income will provide debt service
    requirements of the HRA Public Facility Lease Revenue Bonds of 2002 A.




                                                                 154
                             CITY OF LAKEVILLE, MINNESOTA
                                     Legal Debt Margin
                                     As of June 30, 2008


Legal Debt Limit*

       Legal debt limit (3% of Taxable market value $5,951,954,023)         $178,558,621

       Less: G.O. Debt subject to limit                                      (53,160,000)
             HRA lease obligation subject to limit                            (9,050,000)

       Add:    Available debt service monies                                   7,049,582


       Legal debt Margin as of December 31, 2009                            $123,398,203


*   Beginning with issues having a settlement date after June 30, 2008, State of Minnesota
    statutes have increased the legal debt limit from 2% to 3% of the City’s taxable market value.
    The legal debt margin is statutorily referred to as the “net debt limit” and permits debt to be
    offset by debt service funds and current revenues which are applicable to the payment of debt
    in the current fiscal year. To conservatively state the legal debt margin, no such offset has
    been used to increase the margin as shown above.




                                               155
                                                           CITY OF LAKEVILLE, MINNESOTA
                                                 Combined Schedule of Governmental Debt Service Requirements
                                                                  As of December 31, 2009


                                                              Interest      Maturity             Authorized                                   Due in 2010
Debt (1)                                                      Rates %        Date                and Issued   Retired     Outstanding   Principal      Interest
G.O. Equipment Certificates of 2006 A                         3.80-3.85     Feb-01-11 $ 1,585,000 $ 755,000 $    830,000 $ 405,000 $ 25,100
G.O. Equipment Certificates of 2007 E                            4.25       Feb-01-12    1,690,000    395,000  1,295,000    415,000    46,219
G.O. Equipment Certificates of 2008 A                         2.20-2.50     Feb-01-11      885,000          -    885,000    615,000    13,515
G.O. Park Refunding Bonds of 2003 B                           3.25-3.75     Feb-01-15    3,225,000    965,000  2,260,000    340,000    74,256
G.O. Street Reconstruction Bonds of 2003 A                    3.25-4.50     Feb-01-26   14,890,000  1,550,000 13,340,000    625,000   531,839
G.O. Capital Improvement Bonds of 2004 A                      3.00-4.75     Feb-01-30   14,445,000    380,000 14,065,000    185,000   622,444
G.O. Street Reconstruction Bonds of 2005 A                    3.85-4.20     Feb-01-26    5,430,000  2,500,000  2,930,000    125,000   113,509
G.O. Capital Improvement Bonds of 2007 D                     5.00-4.625     Feb-01-32   15,115,000    370,000 14,745,000    385,000   713,488
G.O. Street Reconstruction Bonds of 2007 H                    3.50-4.50     Feb-01-28    2,810,000          -  2,810,000    100,000   112,945
   Total debt supported primarily by property taxes                                     60,075,000  6,915,000 53,160,000  3,195,000 2,253,315

G.O. Improvement Bonds of 2000 A                             4.75-5.125     Feb-01-20             9,460,000   4,910,000    4,550,000       605,000       211,171
G.O. Improvement Bonds of 2001 A                             4.125-4.625    Feb-01-13             1,040,000     585,000      455,000       115,000        17,738
G.O. Improvement Refunding Bonds of 2007 B                      3.875       Feb-01-16             3,165,000   1,255,000    1,910,000       575,000        62,872
G.O. Improvement Bonds of 2007 F                             4.00-4.125     Feb-01-18             1,310,000     310,000    1,000,000       315,000        33,813
G.O. Improvement Bonds of 2008 A                              2.20-3.75     Feb-01-19               620,000           -      620,000       185,000        15,035
   Total debt supported primarily by special assessments                                         15,595,000   7,060,000    8,535,000     1,795,000       340,629

G.O. State-aid Street Bonds of 2000 C                        4.75-5.375     Apr-01-20             4,290,000   1,360,000    2,930,000      200,000        145,896
G.O. State-aid Street Bonds of 2001 C                         4.35-4.95     Apr-01-21             1,080,000     340,000      740,000       50,000         34,243
G.O. State-aid Street Bonds of 2007 G                            4.00       Apr-01-18             3,675,000     270,000    3,405,000      325,000        129,700
     Total debt supported by state-aid street revenue                                             9,045,000   1,970,000    7,075,000      575,000        309,839

G.O. Tax Increment Bonds of 1999 B                            5.00-5.30     Feb-01-14             2,575,000   1,430,000    1,145,000      205,000         53,715
G.O. Tax Increment Refunding Bonds of 2007 A                  4.00-4.20     Feb-01-22             2,265,000      55,000    2,210,000       55,000         88,461
G.O. Taxable Tax Increment Refund Bonds of 2007 C             5.00-5.10     Feb-01-14               820,000     200,000      620,000      115,000         28,630
   Total debt supported primarily by tax increment                                                5,660,000   1,685,000    3,975,000      375,000        170,806

G.O. Water Revenue Refunding Bonds of 2004 B                     4.00       Feb-01-16             9,735,000   3,000,000    6,735,000     1,020,000       249,000

G.O. Ice Arena Revenue Refunding Bonds of 2008 A              2.20-3.25     Feb-01-15               775,000           -      775,000      115,000         20,535
Gross Revenue Recreation Facility Bonds of 1999               5.00-5.40     Aug-01-19             1,250,000     480,000      770,000                      41,145
Ice Arena Capital Equipment Lease of 2005                        5.20       Feb-01-21               134,000      21,910      112,090        7,338          5,734
    Total debt supported primarily by ice arena revenue                                           2,159,000     501,910    1,657,090      122,338         67,414

HRA Public Facility Lease Revenue Bonds of 2002 A             4.50-5.35     Feb-01-23             2,535,000     550,000    1,985,000      105,000         98,170
HRA Ice Arena Lease Revenue Bonds of 2006                    4.25-4.625     Feb-01-32             9,230,000     180,000    9,050,000      150,000        404,838
  Total debt supported primarily by lease revenue                                                11,765,000     730,000   11,035,000      255,000        503,008

                Total Governmental Debt                                                  $ 114,034,000 $ 21,861,910 $ 92,172,090 $ 7,337,338 $ 3,894,011



(1) General Obligation (G.O.) debt issues are backed by the full-faith and credit of the City.




                                                                                   156
 Capital Project Funds
Capital Project Funds account for financial resources appropriated to the acquisition of capital
facilities and equipment, except those financed by Enterprise Funds.

     Municipal State Aid Fund
     This fund accounts for an annual allotment from the State of Minnesota Municipal
     State Aid Street Construction account.

     Pavement Management Fund
     The Pavement Management Fund’s primary purpose is to account for pavement
     management activities relating to cracksealing, patching, seal coating and overlays.
     These major maintenance projects are financed with property taxes. Accounting for
     pavement management activities in a designated account enables the City Council to
     establish a relatively stable tax levy.

     Improvement Construction Fund
     This fund accounts for the construction of certain public improvements, such as
     streets, storm sewers, water and sanitary sewer trunk lines. Construction contracts
     involve multiple financing resources from the City and other government entities.
     Construction projects usually extend over several years before completion.

     Building Fund
     This fund accounts for the accumulation and disbursement of funds for the
     construction or improvement of public buildings.

     Tax Increment Fund
     This fund accounts for revenue received from tax increment property that does not
     require debt financing. The expenditures are for current and future development of
     tax increment property.

     Equipment Fund
     This fund accounts for the purchase of public safety, street and park maintenance
     equipment. The most significant capital acquisitions are related to replacing vehicles,
     heavy machinery, and technology. The primary revenue source is the issuance of
     debt certificates.

     Park Dedication Fund
     This fund accounts for park development fees received from land developers. The
     expenditures consist of acquiring and developing City parks and trails.



     (Continued)
Capital Project Funds
Storm Sewer Fund
This fund accounts for fees and area charges to land developers for construction of
trunk storm sewer systems.

Water Fund
This fund accounts for revenues derived primarily from connection charges collected
at the time building permits are issued. Funds are appropriated towards the
construction costs of water supply lines, wells and water storage facilities, and
provide the debt service to bonds issued to finance the construction of the City’s
water treatment facility and other trunk infrastructure improvements.

Sanitary Sewer Fund
This fund accounts for sewer connection and area fees charged to land developers for
connecting to the City’s sanitary sewer system. Appropriations are applied to the
construction of sanitary sewer trunk systems.

Police Station and Central Maintenance Facility Construction Fund
During 2004, the City issued $14,445,000 in Capital Improvement Bonds, Series
2004 A, to finance the construction of a new central maintenance facility; the facility
was completed in the fall of 2005. During 2007, the City issued $15,115,000 in
Capital Improvement Bonds, Series 2007 D, to finance the construction of a new
police station; the police station was completed in 2008.

Ice Arena Construction Fund
This fund accounts for the construction activities related to a new single sheet ice
arena facility. During 2007, the City substantially completed the construction of the
new Hasse ice arena. The arena was financed by the HRA issuance of $9,230,000 in
Ice Arena Lease Revenue Bonds, Series 2006.
                                   CITY OF LAKEVILLE, MINNESOTA
                   Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances
                                             Capital Projects Funds
                                    For the Year Ending December 31, 2010
                                                                                                (continued on following page)



                                                                             2010 Proposed Budget
                                                      Municipal        Pavement    Improvement                       Tax
                                                      State Aid       Management Construction     Building        Increment
Revenues
 General property taxes                           $               - $    1,231,594 $            - $       - $       -
 Tax increment                                                    -              -              -         -   221,515
 Intergovernmental                                                -              -              -   276,174    16,050
 Charges for services                                             -              -              -         -         -
 Special assessments                                              -              -              -         -         -
 Investment income                                                -         10,202              -     6,116       209
 Donations                                                        -              -              -         -         -
 Miscellaneous                                                    -              -              -   553,839         -
              Total revenues                                      -      1,241,796              -   836,129   237,774

Expenditures - Capital outlay
 General government                                               -                 -           -    1,119,000      195,797
 Public safety
   Police                                                         -              -             -             -            -
   Fire                                                           -              -             -        39,003            -
 Public works                                                     -      2,535,832       603,945        65,321            -
 Parks and recreation                                             -              -             -       248,250            -
            Total expenditures                                    -      2,535,832       603,945     1,471,574      195,797

       Excess (deficiency) of revenues
             over expenditures                                    -      (1,294,036)     (603,945)    (635,445)      41,977

Other financing sources (uses)
 Transfer from other funds                                        -                 -          -              -            -
 Transfer to other funds                                          -                 -          -              -      (21,810)
 Issuance of debt                                                 -                 -    603,945              -            -
 Premium on bonds issued                                          -                 -          -              -            -
 Discount on bonds issued                                         -                 -          -              -            -
    Total other financing sources (uses)                          -                 -    603,945              -      (21,810)

Net changes in fund balances                                   -   (1,294,036)                  -   (635,445)        20,167
Fund balance, January 1                                  455,067    1,672,313                   -    638,434         11,753
Fund balance, December 31                         $      455,067 $    378,277 $                 - $    2,989 $       31,920

2010 Net change in fund balance percentage                     0.0%            -77.4%        0.0%       -99.5%       171.6%
For a complete discussion of changes in fund balances, see following individual funds.




                                                                  157
                                 CITY OF LAKEVILLE, MINNESOTA
                 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances
                                           Capital Projects Funds
                                  For the Year Ending December 31, 2010
(continued from previous page)                                                                       (continued on following page)



                                                                             2010 Proposed Budget
                                                                       Park         Storm                             Sanitary
                                                    Equipment        Dedication     Sewer       Water                  Sewer
Revenues
 General property taxes                            $          - $       - $       - $         - $                              -
 Tax increment                                                -         -         -           -                                -
 Intergovernmental                                            -         -         -           -                                -
 Charges for services                                         -   405,970   150,937   1,104,675                           99,781
 Special assessments                                          -         -    15,000      14,104                           24,236
 Investment income                                            -         -     2,844       4,591                           19,397
 Donations                                                    -         -         -           -                                -
 Miscellaneous                                          127,532         -         -     175,933                                -
              Total revenues                            127,532   405,970   168,781   1,299,303                          143,414

Expenditures - Capital outlay
 General government                                        1,422                -               -                -               -
 Public safety
   Police                                               190,838               -                -                -              -
   Fire                                                 386,908               -                -                -              -
 Public works                                          102,457                -           72,376          206,200        450,836
 Parks and recreation                                    38,488         144,000                -                -              -
            Total expenditures                          720,113         144,000           72,376          206,200        450,836

       Excess (deficiency) of revenues
             over expenditures                         (592,581)        261,970           96,405        1,093,103       (307,422)

Other financing sources (uses)
 Transfer from other funds                                 9,372                -          60,300               -                -
 Transfer to other funds                                       -                -        (371,827)     (1,405,093)               -
 Issuance of debt                                              -                -               -               -                -
 Premium on bonds issued                                       -                -               -               -                -
 Discount on bonds issued                                      -                -               -               -                -
    Total other financing sources (uses)                   9,372                -        (311,527)     (1,405,093)               -

Net changes in fund balances                           (583,209)  261,970   (215,122)                    (311,990)   (307,422)
Fund balance, January 1                                 650,056   194,741    393,325                      347,388   2,103,095
Fund balance, December 31                          $     66,847 $ 456,711 $ 178,203 $                      35,398 $ 1,795,673

2010 Net change in fund balance percentage                -89.7%          134.5%           -54.7%           -89.8%         -14.6%
For a complete discussion of changes in fund balances, see following individual funds.




                                                               158
                                     CITY OF LAKEVILLE, MINNESOTA
                     Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances
                                               Capital Projects Funds
                                      For the Year Ending December 31, 2010
(continued from previous page)


                                                       Total
                                                       2010             2009
                                                     Proposed          Adopted             2009           2008           2007
                                                      Budget           Budget            Estimate        Actual         Actual
Revenues
 General property taxes                            $ 1,231,594 $ 1,195,722 $              1,195,722 $    1,135,906 $ 1,252,577
 Tax increment                                         221,515     220,081                  222,521        263,568      253,928
 Intergovernmental                                     292,224      18,643                  872,514        506,634    6,898,358
 Charges for services                                1,761,363   2,342,348                  836,624      3,804,646    3,672,845
 Special assessments                                    53,340      82,827                   82,827        223,840      306,524
 Investment income                                      43,359     141,520                   51,266        762,384    1,118,635
 Donations                                                   -           -                   47,707        773,777      228,916
 Miscellaneous                                         857,304      85,606                  463,869        171,469      159,579
              Total revenues                         4,460,699   4,086,747                3,773,050      7,642,224   13,891,362

Expenditures - Capital outlay
 General government                                    1,316,219          314,381           427,231        760,826        637,602
 Public safety
   Police                                                190,838          240,903           495,243      6,830,861      7,320,764
   Fire                                                  425,911          492,863           266,007        200,358      1,037,718
 Public works                                          4,036,967        7,170,338        11,861,648      8,355,683     11,610,221
 Parks and recreation                                    430,738          923,163         1,257,602      1,789,715      9,240,405
            Total expenditures                         6,400,673        9,141,648        14,307,731     17,937,443     29,846,710

       Excess (deficiency) of revenues
             over expenditures                        (1,939,974)      (5,054,901)       (10,534,681)   (10,295,219)   (15,955,348)

Other financing sources (uses)
 Transfer from other funds                                69,672        1,687,007          1,966,007      3,842,539       713,220
 Transfer to other funds                              (1,798,730)      (2,351,898)        (3,339,801)    (6,232,473)   (3,425,902)
 Issuance of debt                                        603,945        3,391,205          6,865,000      1,505,000    24,183,863
 Premium on bonds issued                                       -                -                  -              -        99,460
 Discount on bonds issued                                      -                -                  -              -          (424)
    Total other financing sources (uses)              (1,125,113)       2,726,314          5,491,206       (884,934)   21,570,217

Net changes in fund balances                         (3,065,087) (2,328,587) (5,043,475) (11,180,153)  5,614,869
Fund balance, January 1                               6,466,172   6,852,798  11,509,647   22,689,800  17,074,931
Fund balance, December 31                          $ 3,401,085 $ 4,524,211 $ 6,466,172 $ 11,509,647 $ 22,689,800

2010 Net change in fund balance percentage                 -47.4%
For a complete discussion of changes in fund balances, see following individual funds.




                                                                    159
                                   CITY OF LAKEVILLE, MINNESOTA
                                  Capital Projects - Municipal State Aid Fund
                      Statement of Revenues, Expenditures, and Changes in Fund Balances
                                    For the Year Ending December 31, 2010


                                                                             2009                            2010
                                                2007           2008         Adopted           2009         Proposed
                                               Actual         Actual        Budget          Estimate        Budget
Revenues
 Intergovernmental
   State aid                                 $ 3,432,115 $            - $             - $              - $        -
   County aid                                  2,375,947          2,321
 Investment income                               187,903        263,783               -                -          -
              Total revenues                   5,995,965        266,104               -                -          -

Expenditures - Capital outlay
 Public works                                           -       156,885     1,165,332       2,129,703             -
      Excess (deficiency) of revenues
            over expenditures                  5,995,965        109,219     (1,165,332)     (2,129,703)           -
Other financing sources (uses)
 Transfer to Capital Projects:
   Pavement Management Fund                   (2,898,446)
   Improvement Const. Fund                                    (3,332,512)
 Issuance of debt                                      -               -      760,000                  -          -
    Total other financing sources (uses)      (2,898,446)     (3,332,512)     760,000                  -          -

Net change in fund balance                     3,097,519   (3,223,293)       (405,332) (2,129,703)       -
Fund balance, January 1                        2,710,544    5,808,063         405,332   2,584,770  455,067
Fund balance, December 31                    $ 5,808,063 $ 2,584,770 $              - $ 455,067 $ 455,067

2010 Net change in fund balance percentage                                                                     0.0%

The Municipal State Aid Fund 2010 proposed fund balance is expected to remain unchanged.
The carryforward fund balance will be appropriated in 2012 for signal lights on Cedar Avenue.

The 2010 proposed fund balance is consistent with the City’s Fund Balance Policy and the
Minnesota State Auditors Statement of Position regarding fund balances.




                                                        160
                                  CITY OF LAKEVILLE, MINNESOTA
                                 Capital Projects - Municipal State Aid Fund
                                         Schedule of Capital Outlay


 Projects                                    2010          2011          2012        2013         2014
 Signals: Cedar/Glacier Avenue           $          - $           - $    250,000 $          - $          -
 Signals: Cedar/Griffon Trail                       -             -      250,000            -            -
                    Total                $          - $           - $    500,000 $          - $          -



The signal lights projected to be installed in 2012 at Cedar Avenue and Glacier Avenue as well
as Cedar Avenue and Griffon Trial will permanently impact operating expenses in the form of
additional electric and maintenance costs.




                                                    161
                                    CITY OF LAKEVILLE, MINNESOTA
                                 Capital Projects - Pavement Management Fund
                       Statement of Revenues, Expenditures, and Changes in Fund Balances
                                     For the Year Ending December 31, 2010


                                                                                 2009                          2010
                                                  2007              2008        Adopted         2009         Proposed
                                                 Actual            Actual       Budget        Estimate        Budget
Revenues
 General property taxes                      $    814,698 $ 1,135,906 $ 1,195,722 $ 1,195,722 $ 1,231,594
 Intergovernmental - Federal grant                                                    853,200
 Charges for services                                           6,648
 Special assessments                                1,751       2,914
 Investment income                                      -      30,344       6,304       7,736      10,202
              Total revenues                      816,449   1,175,812   1,202,026   2,056,658   1,241,796

Expenditures - Capital outlay
 Public works                                    1,148,467          997,031     1,418,794      1,120,219      2,535,832

      Excess (deficiency) of revenues
            over expenditures                    (332,018)          178,781      (216,768)      936,439      (1,294,036)
Other financing sources (uses)
 Transfer from Capital Projects:
   Municipal State Aid Fund                      2,898,446                  -             -              -              -

Net change in fund balance                     2,566,428            178,781      (216,768)    936,439  (1,294,036)
Fund balance, January 1                       (2,009,335)           557,093       630,356     735,874   1,672,313
Fund balance, December 31                    $ 557,093 $            735,874 $     413,588 $ 1,672,313 $ 378,277

2010 Net change in fund balance percentage                                                                       -77.4%

The Pavement Management Fund remaining 2009 fund balance of $1,672,213, in addition to
the 2010 tax levy of $1,231,594 and investment income of $10,202, will be appropriated to the
2010 pavement management program totaling $2,535,832. As such, the 2010 fund balance will
decrease by ($1,294,036) or (77.4%). The remaining 2010 fund balance of $378,277 will be
appropriated to 2011 projects. Also impacting the change in fund balance is the reconstruction
of Holyoke and Highview avenues.

The 2010 proposed fund balance is consistent with the City’s Fund Balance Policy and the
Minnesota State Auditors Statement of Position regarding fund balances.




                                                             162
                                   CITY OF LAKEVILLE, MINNESOTA
                                 Capital Projects - Pavement Management Fund
                                           Schedule of Capital Outlay


Projects                                      2010         2011        2012        2013        2014
Crack seal                                $    73,012 $     67,010 $    93,588 $   146,206 $    86,018
Concrete curb                                  10,000       10,000      15,000      15,000      10,000
Draintile                                      30,000       30,000      30,000      30,000      30,000
Patching                                      393,199      471,839     566,207     566,207     600,689
Seal coat                                     508,429      505,587     459,589     717,900     406,967
Pavement management analysis                   20,000       20,000      20,000      20,000      20,000
Overlays on collector roads:
 Griffon Trail: Harwell Ave.-Cedar Ave.       243,887
 165th St.: Ipava Ave.-Highview Ave.          245,020
  Holyoke/Highview: 205th-209th Street        948,000
  Kenrick Ave: 205th-209th Street              64,285           -           -           -           -
                   Total                  $ 2,535,832 $ 1,104,436 $ 1,184,384 $ 1,495,313 $ 1,153,674




                                                     163
                                      CITY OF LAKEVILLE, MINNESOTA
                                 Capital Projects - Improvement Construction Fund
                         Statement of Revenues, Expenditures, and Changes in Fund Balances
                                       For the Year Ending December 31, 2010


                                                                               2009                              2010
                                                 2007           2008          Adopted           2009           Proposed
                                                Actual         Actual         Budget          Estimate          Budget
Revenues
 General property taxes                     $     321,207 $             - $             - $              - $              -
 Intergovernmental
   Federal grant                                                  28,087
   State aid                                       14,130
   County aid                                     660,787          1,549
   County grant                                                  238,898
   Local grant                                                   181,139
 Charges for services                             315,173
 Investment income                                 59,152         10,741                -                -                -
               Total revenues                   1,370,449        460,414                -                -                -

Expenditures - Capital outlay
 General government                               122,755        180,196
 Public works                                   8,363,122      4,891,255      2,631,205        6,891,121         603,945
             Total expenditures                 8,485,877      5,071,451      2,631,205        6,891,121         603,945
       Excess (deficiency) of revenues
             over expenditures                  (7,115,428)    (4,611,037)    (2,631,205)     (6,891,121)        (603,945)
Other financing sources (uses)
 Transfer from Capital Projects:
   Municipal State Aid Fund                                    3,332,512
 Transfer to Debt Service:
   Special Assessments Fund                       (77,603)                                       (20,621)
   Property Taxes Fund                           (280,741)
 Issuance of debt                               7,769,765        620,000      2,631,205        6,865,000         603,945
 Premium on bonds issued                           81,086
 Discount on bonds issued                            (424)             -              -                -               -
     Total other financing sources (uses)       7,492,083      3,952,512      2,631,205        6,844,379         603,945

Net change in fund balance                        376,655       (658,525)               -        (46,742)                 -
Fund balance, January 1                           328,612        705,267                -         46,742                  -
Fund balance, December 31                   $     705,267 $       46,742 $              - $            - $                -



The 2010 proposed Improvement Construction Fund will account for the City’s share (45%)
of a multiyear Dodd Boulevard street reconstruction project costing $5,199,600. The City’s
share of the project will be financed entirely by the issuance of general obligation improvement
bonds. As such, there is no anticipated change in the 2010 fund balance.

The 2010 proposed fund balance is consistent with the City’s Fund Balance Policy and the
Minnesota State Auditors Statement of Position regarding fund balances.


                                                         164
                                 CITY OF LAKEVILLE, MINNESOTA
                              Capital Projects - Improvement Construction Fund
                                          Schedule of Capital Outlay


Projects                                    2010          2011          2012     2013         2014
Dodd Blvd: 185th St - Hayes             $     603,945 $ 1,623,375 $         - $         - $         -
Reclamations                                        -   2,631,205   1,881,330   1,845,260   2,003,716
                   Total                $     603,945 $ 4,254,580 $ 1,881,330 $ 1,845,260 $ 2,003,716




                                                   165
                                   CITY OF LAKEVILLE, MINNESOTA
                                       Capital Projects - Building Fund
                      Statement of Revenues, Expenditures and Changes in Fund Balances
                                   For the Year Ending December 31, 2010


                                                                               2009                          2010
                                                  2007           2008         Adopted           2009       Proposed
                                                 Actual         Actual        Budget          Estimate      Budget
Revenues
 Intergovernmental - Federal grant           $          - $             - $             - $           - $ 276,174
 Investment income                                 19,661          19,631                         1,472     6,116
 Donations                                        120,000         100,000
 Miscellaneous                                          -               -         2,400             481      553,839
             Total revenues                       139,661         119,631         2,400           1,953      836,129

Expenditures - Capital outlay
 General government                               100,202         362,899       92,749          109,316    1,119,000
 Public safety
   Police                                          19,220
   Fire                                           114,162         109,337       50,000           56,566       39,003
 Public works                                      10,574          61,743        7,000           42,835       65,321
 Parks and recreation                               3,235          13,510      182,523           19,053      248,250
            Total expenditures                    247,393         547,489      332,272          227,770    1,471,574

      Excess (deficiency) of revenues
            over expenditures                    (107,732)       (427,858)     (329,872)       (225,817)    (635,445)

Other financing sources
 Transfer from:
   Capital Projects:
      Police Stn. and CMF Const. Fund              95,046         227,238                       443,000
   Enterprise - Liquor Fund                       100,000               -      364,000          200,000            -
   Total other financing sources                  195,046         227,238      364,000          643,000            -

Net change in fund balance                         87,314        (200,620)      34,128          417,183   (635,445)
Fund balance, January 1                           334,557         421,871       13,857          221,251    638,434
Fund balance, December 31                    $    421,871 $       221,251 $     47,985 $        638,434 $    2,989

2010 Net change in fund balance percentage                                                                    -99.5%

The Building Fund 2010 proposed fund balance is expected to decrease by ($635,445) or
(99.5%). The 2010 expenditures are mainly directed to improving energy efficiency in several
municipal buildings as well as downtown Lakeville. The fund will also provide resources for
HVAC upgrades at City Hall and the Lakeville Area Art Center. These projects are proposed to
be funded with federal grants and a $540,067 installment payment from a 2006 land sale.

The 2010 proposed fund balance is consistent with the City’s Fund Balance Policy and the
Minnesota State Auditors Statement of Position regarding fund balances.



                                                          166
                                        CITY OF LAKEVILLE, MINNESOTA
                                           Capital Projects - Building Fund
                                             Schedule of Capital Outlay


Capital outlay                                    2010         2011         2012         2013         2014

City Hall HVAC upgrade                        $   180,000
City Hall electrical improvements                  60,000
City Hall energy analysis                          60,000
City Hall north wing reroof                       152,000
City Hall roof top units replacements             140,000
City Hall cable TV room upgrade                   150,000
Police Station (former) reroof                    252,000
Police Station (former) renovation                125,000
Fire Station #1 overhead door upgrade              18,400
Fire Station #2 energy mgmt. system                 4,246
Fire Station #3 energy mgmt. system                 2,108
Fire Station #4 energy mgmt. system                14,249
Central Maint. Facility lighting retrofits         54,170
Downtown Lakeville lighting retrofits              11,151
Senior Center reroof                               58,000
Senior Center energy mgmt. system                   3,650
Arts Center HVAC upgrade                          186,600             -            -            -            -
                     Total                    $ 1,471,574 $           - $          - $          - $          -

The City anticipates the aforementioned projects will reduce operating expenses for utilities and
maintenance in varying degrees. The new roof top units at City Hall are estimated to be 30%
more efficient than the replaced units saving $8,000 a year. Other improvements to the City Hall
electrical system are estimated to save $12,000 a year. The energy management system
improvements to the other buildings are estimated to save $35,000 a year.




                                                         167
                                CITY OF LAKEVILLE, MINNESOTA
                                 Capital Projects - Tax Increment Fund
                   Statement of Revenues, Expenditures and Changes in Fund Balances
                                For the Year Ending December 31, 2010


                                                                         2009                      2010
                                             2007            2008       Adopted       2009       Proposed
                                            Actual          Actual      Budget      Estimate      Budget
   Revenues
    Tax increment                          $ 253,928 $ 263,568           220,081     222,521      221,515
    Intergovernmental
      Market value homestead credit              15,379      15,653       15,379      16,050       16,050
    Investment income                             3,436          84           49           -          209
              Total revenues                    272,743     279,305      235,509     238,571      237,774

   Expenditures - Capital outlay
    General government                          287,703     198,988      196,026     195,799      195,797

   Excess (deficiency) of revenues
              over expenditures                 (14,960)     80,317       39,483      42,772       41,977

   Other financing sources (uses)
    Transfer to Debt Service:
      Special Assessments Fund                  (21,809)     (21,809)    (21,810)     (21,810)     (21,810)
      Tax Increment Fund                              -     (152,010)          -            -            -
    Total other financing sources (uses)        (21,809)    (173,819)    (21,810)     (21,810)     (21,810)

   Net change in fund balance                (36,769) (93,502)            17,673      20,962       20,167
   Fund balance, January 1                   121,062   84,293             (6,909)     (9,209)      11,753
   Fund balance, December 31               $ 84,293 $ (9,209) $           10,764 $    11,753 $     31,920

   2010 Net change in fund balance percentage                                                      171.6%

The Tax Increment Fund 2010 proposed fund balance is expected to increase by $20,167 or
171.6%. The 2010 expenditures consist mainly of a tax increment rebate to the DKM Tax
Increment District of approximately $196,000. While the 2009 ending fund balance has a slight
deficit of ($9,209) due to the Argonne Plaza Tax Increment District, the fund is expected to
return to a positive fund balance in 2010.




                                                      168
                                CITY OF LAKEVILLE, MINNESOTA
                                 Capital Projects - Tax Increment Fund
                                      Schedule of Capital Outlay


   Capital outlay                          2010         2011      2012        2013        2014

   DKM District tax increment rebate    $ 191,667   $ 191,667   $ 191,667   $ 191,667   $ 191,667
   State of Minnesota/Dakota County
     administration fees                    4,130       4,130       4,130       4,130       4,130
                     Total              $ 195,797   $ 195,797   $ 195,797   $ 195,797   $ 195,797




The projects accounted for in the Tax Increment Capital Project Fund do not have any significant
impact on City’s operating expenses.




                                                  169
                                    CITY OF LAKEVILLE, MINNESOTA
                                       Capital Projects - Equipment Fund
                       Statement of Revenues, Expenditures and Changes in Fund Balances
                                    For the Year Ending December 31, 2010


                                                                                 2009                               2010
                                               2007              2008          Amended           2009             Proposed
                                              Actual            Actual          Budget         Estimate            Budget
Revenues
 General property taxes                   $     116,672     $            - $             - $              -   $              -
 Intergovernmental
   Market value homestead credit                350,000
   Local grant                                                                     3,264           3,264
 Investment income                               15,364             7,987
 Donations                                                          2,050
 Miscellaneous                                        -            19,200              -         292,579            127,532
            Total revenues                      482,036            29,237          3,264         295,843            127,532

Expenditures - Capital outlay
 General government                              20,437            18,456         25,606         188,116               1,422
 Public safety
   Police                                       687,864           171,776         240,903        384,369            190,838
   Fire                                         923,556            91,021         442,863        209,441            386,908
 Public works                                   998,311           419,608         838,807        825,751            102,457
 Parks and recreation                           128,289           124,647          36,776          8,913             38,488
           Total expenditures                 2,758,457           825,508       1,584,955      1,616,590            720,113

Excess (deficiency) of revenues
            over expenditures                 (2,276,421)         (796,271)    (1,581,691)     (1,320,747)          (592,581)

Other financing sources (uses)
 Transfer from:
    General Fund                                                  225,961       1,263,647      1,263,647
    Enterprise - Liquor Fund                      1,320                             1,660          1,660               9,372
 Issuance of debt                             1,655,484           885,000
 Premium on bonds issued                         18,374                 -               -              -                   -
   Total other financing sources (uses)       1,675,178         1,110,961       1,265,307      1,265,307               9,372

Net change in fund balance                     (601,243)          314,690       (316,384)        (55,440)           (583,209)
Fund balance, January 1                         992,049           390,806        610,241         705,496             650,056
Fund balance, December 31                 $     390,806 $         705,496 $      293,857 $       650,056 $            66,847

2010 Net change in fund balance percentage                                                                            -89.7%

The Equipment Fund 2009 fund balance carryforward of $650,056 as well as the proceeds from
the ALF Ambulance distribution of assets will be appropriated towards the 2010 acquisition of
equipment in the amount of $720,113. As such, the 2010 fund balance is expected to decrease by
($583,209) or (89.7%).

The 2010 proposed fund balance is consistent with the City’s Fund Balance Policy and the
Minnesota State Auditors Statement of Position regarding fund balances.
                                                            170
                                    CITY OF LAKEVILLE, MINNESOTA
                                       Capital Projects - Equipment Fund
                                          Schedule of Capital Outlay


Capital outlay                                 2010            2011        2012        2013        2014

General government                       $       1,422 $       359,288 $   274,454 $   234,501 $   234,501
Public safety
  Police                                       190,838     411,908     764,987     533,810     663,505
  Fire                                         386,908     240,000           -     150,000     250,000
Public works                                   102,457     381,721     715,914     621,977   1,046,835
Parks and recreation                            38,488     175,110     514,645     418,646     529,012
                  Total                  $     720,113 $ 1,568,027 $ 2,270,000 $ 1,958,934 $ 2,723,853

General government
 1 Laptop                                $       1,422

Public safety police
   4 Squad cars (incl conversions)        $     90,884
      Graphics                                   1,597
      Conversions                               12,940
   1 Radar unit                                  3,000
   1 Outdoor warning siren                      19,678
   3 Portable breath toximeters                    891
   3 Automatic external defibrillators (AED)     5,097
   7 Investigations cameras                      3,123
   1 MAAG AR-15 rifle                            2,070
   2 Light bars                                  6,910
   2 Glock handguns                              1,198
  10 Tasers                                     10,490
   2 Desktop computers                           2,772
   1 Sweeper/scrubber                           14,910
   1 Sweeper broom                              10,557
   Other                                         4,721
                   Total                  $    190,838

Public safety fire
   1 Laptop computer                     $       1,422
   1 Portable projector                          2,300
   4 Printers                                    1,700
   3 Copiers (stations 2, 3, and 4)                798
   1 SCBA to meet NFPA standards               275,000
   2 Thermal imaging cameras                    24,000
   1 Assistant Chief vehicle/equip.             31,372
   1 District Chief vehicle/equip.              31,372
   1 Digital Fire Extinguisher Trainer           9,372
   Other                                         9,572
                   Total                 $     386,908




                                                         171
                                    CITY OF LAKEVILLE, MINNESOTA
                                       Capital Projects - Equipment Fund
                                          Schedule of Capital Outlay
                                                    (continued)


Capital outlay                               2010           2011    2012   2013   2014

Public works
   1 ArcGIS server upgrade               $    10,000
   1 Brush chipper                            43,026
   1 Chipper box                               3,195
   1 Electronic message board                 24,328
   2 Desktop computers                         5,544
   2 Chainsaws, 1 weed trimmer, 1 pole saw     2,556
   1 Color copier                                997
   1 Portable pressure washer                  3,277
   1 Sod cutter                                5,000
   1 Fleet bar coding system                   2,247
   Other                                       2,287
                 Total                   $   102,457

Parks and recreation
   1 Riding mower, blower and cab       $     28,636
   1 Color copier                              9,125
   Other                                         727
                  Total                 $     38,488




                                                    172
                                     CITY OF LAKEVILLE, MINNESOTA
                                      Capital Projects - Park Dedication Fund
                        Statement of Revenues, Expenditures and Changes in Fund Balances
                                     For the Year Ending December 31, 2010


                                                                             2009                              2010
                                                  2007           2008       Adopted           2009           Proposed
                                                 Actual         Actual      Budget          Estimate          Budget
Revenues
 Intergovernmental
   State grant                               $     10,000 $         - $               - $              - $              -
   County grant                                    40,000      38,987
 Charges for services                             789,901   1,204,961         600,000         187,700          405,970
 Special assessments                                   85          82
 Investment income                                 37,777      40,369
 Donations                                         82,881     671,727               -          47,707                -
               Total revenues                     960,644   1,956,126         600,000         235,407          405,970

Expenditures - Capital outlay
 Parks and recreation                            1,418,790      1,412,715     703,864        1,229,636         144,000
       Excess (deficiency) of revenues
             over expenditures                   (458,146)       543,411     (103,864)       (994,229)         261,970
Other financing sources (uses)
 Transfer from:
   Capital Projects:
      Police Stn. and CMF Const. Fund             433,754
   Enterprise - Liquor Fund                             -          2,028              -                -                -
     Total other financing sources (uses)         433,754          2,028              -                -                -

Net changes in fund balances                      (24,392)    545,439    (103,864)  (994,229)                  261,970
Fund balance, January 1                           667,923     643,531   1,085,598  1,188,970                   194,741
Fund balance, December 31                    $    643,531 $ 1,188,970 $ 981,734 $ 194,741 $                    456,711

2010 Net change in fund balance percentage                                                                      134.5%

The Park Dedication Fund 2010 proposed fund balance is expected to increase by $261,970 or
134.5%. The 2010 park projects totaling $144,000 will be funded by the 2009 fund balance
carryforward of $194,741, park dedication fees paid by land developers of $405,970.

The 2010 adopted fund balance is consistent with the City’s Fund Balance Policy and the
Minnesota State Auditors Statement of Position regarding fund balances.




                                                          173
2010 Net change in fund balance percentage                                                            134.5%
                                       CITY OF LAKEVILLE, MINNESOTA
                                        Capital Projects - Park Dedication Fund
                                              Schedule of Capital Outlay


Projects                                            2010         2011        2012        2013        2014
Planning and design - general                   $     5,000 $      5,000 $     5,000 $    10,000 $    20,000
Signage program                                       5,000        5,000       5,000      10,000      10,000
STS project materials and labor                      23,000       23,000      23,000      30,000      30,000
Tree trust (labor)                                    2,000        2,000       3,000       5,000       5,000
Tree plantings (system wide)                          5,000        5,000      10,000      15,000      20,000
Picnic tables                                         2,000        2,000       2,000       2,000       5,000
Taxes (property acquisitions)                         2,000        2,000       2,000       4,000       4,000
Developer credits                                                             80,000      90,000     150,000
Playground upgrades:
  Dodd Trail Park                                                             60,000
  Highview Heights Park                                                       65,000
  Hypointe Park                                                               45,000
  Independence Park                                                           60,000
  Jensen Park                                                                 45,000
  Bracketts Crossing Park                                                                 45,000
  Cherryview Park                                                                         65,000
  Dodd Pointe                                                                             55,000
  North Park                                                                             120,000
  Oak Shores Park                                                                         50,000
  Orchard Lake Beach                                                                      65,000
  King Park                                                                                           80,000
Park acquisition:
  Appraisal of Bury and City property               100,000       94,851
Park construction:
  King Park -
    Pave parking lot                                                                     380,000
    Irrigate field #'s 1 & 2                                                              65,000
    Relocate infield #1                                                                   36,000
  Stoneborough Park                                              290,000
  Cherryview Park (pave hockey rink)                                                                   55000
  Foxborough Park (pave parking lot)                                                                   76000
  Meadows Park (pave parking lot)                                                                      36000
  Ritter Farm Park - Berres cabin upgrade                                                              35000
Trail construction:
  Dodd Trail: 208th to CSAH 50                                               151,278
  Dodd Trail: 185th to north of 195th (west side)                                        208,845
  185th: Jamacia to Ipava (north side)                     -            -           -          -     200,944

The aforementioned Park Dedication Fund projects are not anticipated to have a significant
impact on the City’s operating activities.




                                                           174
                                   CITY OF LAKEVILLE, MINNESOTA
                                     Capital Projects - Storm Sewer Fund
                      Statement of Revenues, Expenditures and Changes in Fund Balances
                                   For the Year Ending December 31, 2010


                                                                          2009                      2010
                                                  2007        2008       Adopted        2009      Proposed
                                                 Actual      Actual      Budget       Estimate     Budget
Revenues
 Charges for services                        $    516,256 $ 550,691 $      534,503 $ 87,924 $ 150,937
 Special assessments                               88,543    84,593         21,290    21,290   15,000
 Investment income                                 45,057    35,441         14,708     5,033    2,844
               Total revenues                     649,856   670,725        570,501   114,247  168,781

Expenditures - Capital outlay
 Public works                                     331,003     228,085      350,000       29,713     72,376
       Excess (deficiency) of revenues
             over expenditures                    318,853     442,640      220,501       84,534     96,405
Other financing sources (uses)
 Transfer from Debt Service:
   Tax Increment Fund                              21,900      54,800       57,700       57,700     60,300
 Transfer to:
   General Fund                                   (28,088)    (36,441)     (37,136)    (36,230)     (40,827)
   Debt Service - Special Assess. Fund           (697,439)   (697,438)    (697,439)   (331,000)    (331,000)
     Total other financing sources (uses)        (703,627)   (679,079)    (676,875)   (309,530)    (311,527)
Net changes in fund balances                    (384,774)  (236,439)      (456,374)  (224,996) (215,122)
Fund balance, January 1                        1,239,534    854,760        507,359    618,321   393,325
Fund balance, December 31                    $   854,760 $ 618,321 $        50,985 $ 393,325 $ 178,203

2010 Net change in fund balance percentage                                                           -54.7%

The Storm Sewer Fund 2010 proposed fund balance is expected to decrease by ($215,122) or
(54.7%). The 2010 primary revenue source of $150,937 is provided by storm sewer connection
charges paid by land developers and new storm sewer system users. The 2010 storm sewer
expenditures of $72,376 consist mainly of acquiring storm sewer improvements constructed by
land developers in the form of developer credits. The 2010 transfer to debt service funds of
$331,000 represents various City storm sewer improvement projects whereby the user
connection service charges are pledged towards the special assessment improvement bonds debt
service requirements.

The 2010 proposed fund balance is consistent with the City’s Fund Balance Policy and the
Minnesota State Auditors Statement of Position regarding fund balances.




                                                      175
                            CITY OF LAKEVILLE, MINNESOTA
                              Capital Projects - Storm Sewer Fund
                                  Schedule of Capital Outlay


Projects                                2010         2011       2012      2013      2014

Developer credits                   $    72,376 $ 386,948 $     638,751 $ 905,312 $ 932,472
                    Total           $    72,376 $ 386,948 $     638,751 $ 905,312 $ 932,472




                                               176
                                     CITY OF LAKEVILLE, MINNESOTA
                                          Capital Projects - Water Fund
                        Statement of Revenues, Expenditures and Changes in Fund Balances
                                     For the Year Ending December 31, 2010


                                                                             2009                         2010
                                                2007           2008         Adopted         2009        Proposed
                                               Actual         Actual        Budget        Estimate       Budget
Revenues
 Charges for services                        $ 1,584,457 $ 1,509,925 $ 940,127 $            468,000 $    1,104,675
 Special assessments                              65,061      52,128      20,512             20,512         14,104
 Investment income                                99,225      59,422      25,047             12,384          4,591
 Miscellaneous                                   159,579     152,269      83,206            170,809        175,933
             Total revenues                    1,908,322   1,773,744   1,068,892            671,705      1,299,303

Expenditures - Capital outlay
 Public works                                   641,983           453,966     146,700       380,581        206,200
      Excess (deficiency) of revenues
            over expenditures                  1,266,339      1,319,778       922,192       291,124      1,093,103
Other financing sources (uses)
 Transfer from Capital Projects:
   Police Stn. and CMF Const. Fund               61,200
 Transfer to Debt Service:
   Special Assessments Fund                     (199,351)       (199,352)     (199,352)     (496,093)      (136,093)
   Water Revenue Fund                         (1,369,894)     (1,329,400)   (1,289,400)   (1,289,400)    (1,269,000)
   Total other financing sources (uses)       (1,508,045)     (1,528,752)   (1,488,752)   (1,785,493)    (1,405,093)
Net changes in fund balances                    (241,706)   (208,974)   (566,560) (1,494,369)             (311,990)
Fund balance, January 1                        2,292,437   2,050,731   1,186,895   1,841,757               347,388
Fund balance, December 31                    $ 2,050,731 $ 1,841,757 $ 620,335 $ 347,388 $                  35,398

2010 Net change in fund balance percentage                                                                   -89.8%

The Water Fund 2010 proposed fund balance is expected to decrease by ($311,990) or (89.8%).
The 2010 primary revenue source of $1,104,675 is provided by watermain connection charges
paid by land developers and new water system users. Miscellaneous revenues include antenna
site leases by wireless communications companies ($175,933). The 2010 water expenditures of
$206,200 consist mainly of acquiring watermain system improvements constructed by land
developers in the form of developer credits. The 2010 transfer to debt service funds of
$1,405,093 represents water user connection service charges pledged to special assessment and
water revenue bonds debt service requirements. The revenue bonds originally financed the
construction of the City’s water treatment facility, subsequent expansion, and various other water
system improvement projects.

The 2010 proposed fund balance is consistent with the City’s Fund Balance Policy and the
Minnesota State Auditors Statement of Position regarding fund balances.




                                                            177
                                  CITY OF LAKEVILLE, MINNESOTA
                                      Capital Projects - Water Fund
                                       Schedule of Capital Outlay


Projects                                  2010          2011         2012        2013        2014
Well #20 Construction                 $          - $           - $   600,600 $         - $          -
Water treatment plant expansion                                                  600,000   14,000,000
Trunk water main extensions               206,200       216,500      227,400     227,400      227,400
                   Total              $   206,200 $     216,500 $    828,000 $   827,400 $ 14,227,400




                                                  178
                                    CITY OF LAKEVILLE, MINNESOTA
                                     Capital Projects - Sanitary Sewer Fund
                       Statement of Revenues, Expenditures and Changes in Fund Balances
                                    For the Year Ending December 31, 2010


                                                                                2009                         2010
                                                  2007             2008        Adopted         2009        Proposed
                                                 Actual           Actual       Budget        Estimate       Budget
Revenues
 Charges for services                        $    447,397 $        532,421 $     267,718 $      93,000 $      99,781
 Special assessments                              151,084           84,123        41,025        41,025        24,236
 Investment income                                176,164          137,154        95,412        24,641        19,397
             Total revenues                       774,645          753,698       404,155       158,666       143,414

Expenditures - Capital outlay
 Public works                                     109,198         1,138,915      612,500       441,725       450,836
      Excess (deficiency) of revenues
            over expenditures                     665,447         (385,217)     (208,345)     (283,059)      (307,422)
Other financing sources (uses)
 Transfer to Debt Service:
   Special Assessments Fund                      (106,761)        (106,761)     (106,761)     (463,647)               -
Net changes in fund balances                     558,686    (491,978)   (315,106)   (746,706)   (307,422)
Fund balance, January 1                        2,783,093   3,341,779   2,420,069   2,849,801   2,103,095
Fund balance, December 31                    $ 3,341,779 $ 2,849,801 $ 2,104,963 $ 2,103,095 $ 1,795,673

2010 Net change in fund balance percentage                                                                     -14.6%

The Sanitary Sewer Fund 2010 proposed fund balance is expected to decrease by ($307,422) or
(14.6%). The 2010 primary revenue source of this fund is provided by sanitary sewer connection
charges paid by land developers and special assessments paid by new sanitary sewer system
users. The 2010 sanitary sewer expenditures include $450,836 for acquiring sanitary sewer
system improvements constructed by land developers in the form of developer trunk oversizing
credits.

The 2010 proposed fund balance is consistent with the City’s Fund Balance Policy and the
Minnesota State Auditors Statement of Position regarding fund balances.




                                                            179
                                    CITY OF LAKEVILLE, MINNESOTA
                                     Capital Projects - Sanitary Sewer Fund
                                          Schedule of Capital Outlay


Projects                                       2010         2011         2012         2013         2014
Trunk oversizing NC127a to NC127           $   168,000 $           - $          - $          - $          -
Trunk oversizing upstream of LM07               23,000
Trunk oversizing ML07 to ML08                   11,500
Trunk oversizing SC135 to SC134                127,500
Trunk oversizing NC05 to NC06                   46,000
Trunk oversizing NC127a to NC127b                            27,000
Trunk oversizing SC22 to SC20                                22,500
Trunk oversizing SC12 to SC12a                               82,500
Trunk oversizing NC129 to NC127b                                         189,000
Trunk oversizing SC22 to SC22a                                            55,200
Trunk oversizing SC43 to SC44                                             31,500
Sanitary Swr. Recon. (near McGuire Jr. High)                              91,200
Trunk oversizing upstream of NC74                                                      39,100
Trunk oversizing NC132 to NC129                                                        90,000
Trunk oversizing SC44 to SC43                                                          36,800
Trunk oversizing                                                                                   260,200
Developer credits                               74,836      138,746      174,666      196,261      196,261
                  Total                    $   450,836 $    270,746 $    541,566 $    362,161 $    456,461




                                                      180
                                   CITY OF LAKEVILLE, MINNESOTA
             Capital Projects - Police Station and Central Maintenance Facility Construction Fund
                     Statement of Revenues, Expenditures and Changes in Fund Balances
                                    For the Year Ending December 31, 2010


                                                                            2009                          2010
                                              2007            2008         Adopted           2009       Proposed
                                             Actual          Actual        Budget          Estimate      Budget
Revenues
 Investment income                       $     241,789 $       156,788 $             - $              - $      -

Expenditures - Capital outlay
 General government                            106,505             287
 Public safety
   Police                                     6,613,680      6,659,085                        44,874
 Public works                                     7,563          8,195
 Parks and recreation                                 -          8,195               -             -           -
           Total expenditures                 6,727,748      6,675,762               -        44,874           -

     Excess (deficiency) of revenues
           over expenditures                 (6,485,959)     (6,518,974)             -       (44,874)          -

Other financing sources (uses)
 Transfer to Debt Service:
   Property Taxes Fund                          (50,000)                                    (238,000)
 Transfer to Capital Projects:
   Building Fund                                (95,046)      (227,238)                     (443,000)
   Park Dedication Fund                        (433,754)
   Water Fund                                   (61,200)
 Issuance of debt                            14,758,614              -               -             -           -
 Total other financing sources (uses)        14,118,614       (227,238)              -      (681,000)          -

Net change in fund balance                7,632,655   (6,746,212)                    -      (725,874)          -
Fund balance, January 1                    (160,569)   7,472,086                     -       725,874           -
Fund balance, December 31               $ 7,472,086 $    725,874 $                   - $           - $         -

The Police Station and Central Maintenance Facility Construction Fund has no anticipated
financial activity or fund balance in 2010. The new central maintenance facility construction was
completed in October 2005 and the new police station construction was completed in August
2008.




                                                       181
                                 CITY OF LAKEVILLE, MINNESOTA
                              Capital Projects - Ice Arena Construction Fund
                    Statement of Revenues, Expenditures and Changes in Fund Balances
                                 For the Year Ending December 31, 2010


                                                                         2009                          2010
                                             2007           2008        Adopted         2009         Proposed
                                            Actual         Actual       Budget        Estimate        Budget
Revenues
 Investment income                      $     252,768 $         640     $         -   $          - $        -
 Donations                                     26,035             -               -              -          -
             Total revenues                   278,803           640               -              -          -

Expenditures - Capital outlay
 Parks and recreation                       7,690,091       230,648               -              -          -
           Total expenditures               7,690,091       230,648               -              -          -

     Excess (deficiency) of revenues
           over expenditures                (7,411,288)     (230,008)             -              -          -

Other financing sources (uses)
 Transfer to Debt Service:
   Arena Revenue Fund                           (4,216)      (16,149)
   HRA Lease Revenue Fund                            -      (113,363)             -              -          -
 Total other financing sources (uses)           (4,216)     (129,512)             -              -          -

Net change in fund balance                (7,415,504)       (359,520)             -              -          -
Fund balance, January 1                    7,775,024         359,520              -              -          -
Fund balance, December 31               $    359,520 $             - $            -   $          -   $      -


The Ice Arena Construction Fund has no anticipated financial activity or fund balance in 2010.
The new Hasse ice arena construction was completed in August 2007.




                                                     182
           Enterprise Funds
Enterprise Funds account for liquor, water and sanitary sewer operations for the City; they are
self-supporting from retail sales and user charges. Operations are managed in much the same
way as private enterprises.

       Liquor Fund
       This fund accounts for revenues and expenses related to the operation of Lakeville’s
       municipal off-sale liquor stores.


       Utility Fund
       This fund accounts for revenues and expenses related to water, sanitary sewer service,
       and street lighting provided to the community.
                                            LIQUOR FUND

Department: Liquor Fund

Program Manager: Director of Liquor Operations

Program Description:
The Liquor Fund is responsible for controlling the sale of alcoholic beverages while generating
revenue for the community. This includes abiding by all state statutes regarding the legal sale of
alcohol, offering competitive pricing, while providing superior product selection and customer
service.
Of the 220 Cities operating municipal liquor stores in Minnesota, Lakeville continues to have the
largest and most profitable operation. The revenue generated from the operations has financed,
at least in part, numerous projects in recent years including:

 •   Dakota County Heritage Library Land                  •   Police Station expansion projects.
     Acquisition.
                                                          •   Civil defense sirens.
 •   Quarter of a million dollars to Ames
                                                          •   Central        Maintenance       Facility
     Arena.
                                                              architectural services.
 •   City Hall expansion projects.
                                                          •   The Liquor Fund also finances 25% of
 •   Fire Station remodeling, repairs and debt                the Chemical Awareness Coordinator
     services.                                                position associated with Independent
                                                              School District 194.


Services:
     •   Control the sale of alcoholic beverages. The City is committed to restricting youth access
         to alcohol. Employees are also trained in how to observe and decline sales to obviously
         intoxicated individuals.

     •   Lakeville is committed to quality customer service. Product selection is continually
         evolving and is the lifeblood that drives our industry. Wine specifically is a hallmark for
         Lakeville. Store ambiance, strategic location of stores and customer satisfaction are
         deemed a high priority.

     •   Profits are dedicated to the reduction of taxes. Liquor Fund net proceeds are committed to
         financing capital improvements which would otherwise be financed with property taxes.

     •   Asset management and inventory integrity plays an essential role in our profitability. The
         retail liquor industry is highly competitive. Inventory controls as well as policies that
         include well defined checks and balances ensure our assets are controlled, while the
         management team and our point of sale operations enable to Lakeville to maintain a high
         rate of return on investment through effective marketing strategies.




                                                   183
                                          LIQUOR FUND
                                              (continued)

Activity Measures:
                                                        2007       2008         2009         2010
                     Activity                          Actual     Actual      Estimate     Estimate
Sales Revenue (in million)                               $13.0      $14.4      $14.8      $14.7
Operating Income (before transfers)                 $1,311,396 $1,407,090 $1,488,019 $1,321,262
Operating Income as a Percent of Sales                  10.1%       9.7%      10.0%       9.2%

Customer Transactions
  Heritage                                              154,110    176,253      182,545      188,021
  Cedar/Galaxie                                         193,959    204,010      192,585      196,244
  Kenrick                                               211,938    215,162      229,018      212,987
    Total Customer Transactions                         560,007    595,425      604,148      597,252

ISD #194 Chemical Awareness Program                     $14,511    $17,948      $18,507      $19,062

Liquor Fund Contributions:
   Fire Station Debt Service                           $192,773   $188,855     $189,660     $190,097
   Police Station Debt Service                         $100,000   $100,000     $100,000     $100,000
   General Fund HR/IT Services                          $80,158    $83,432      $76,550      $77,537
   Payment in Lieu of Taxes                             $59,025    $60,796      $62,620      $64,499
   Equipment, Major Maintenance, & Technology            $1,320    $84,713     $201,660       $9,372

Capital Outlay                                      $2,569,120     $24,245      $21,030 $1,985,069


Strategic Plan:
  • Land acquisition for future store at Interstate Highway 35 and County Road 70 Interchange
    vicinity.
Goals and Objectives:
 •   Obtain City owned site for the Heritage (leased) location to maintain or increase profitability.
 •   Improve community awareness on the benefits of the municipal liquor operation.
 •   Continue to improve employee knowledge, customer service and profitability of the
     operation.
 •   Sale of alcoholic beverages in compliance with applicable state statutes and enforcement.
 •   Servicing customers needs quickly and professionally.
 •   Controlling inventory levels, while ensuring proper level of stock that provides good
     customer service and selection.
 •   Ensuring inventory accuracy by maintaining checks and balances within the system and by
     completing inventories on a routine basis.
 •   Promote the wine club. Includes conducting four wine club tastings annually and providing
     education materials to the members.
 •   Maintain all contracts applicable to the operations of the business.
                                                 184
                                         LIQUOR FUND
                                             (continued)

•   Responsible for all marketing, advertisement and promotion of the business.
•   Conduct Silent Auctions in order to build community relationships while providing
    additional revenue for other City Departments or programs.
•   Develop relationships and provide service to other businesses within the community.
•   Maintain proper operational policies and procedures in order to ensure the safety and security
    of the business.
•   Educate and mentor employees. Employee meetings conducted five times annually.
•   Provide funding for Chemical Awareness Coordinator in the schools.
•   Work closely with fellow associations as well as MADD, SADD and other organizations
    regarding alcohol control.
•   Educate the community on the benefits of a municipal liquor operation.
•   Monitor legislative issues related to liquor stores that could negatively impact the operation




                                                185
                                                LIQUOR FUND
                                                     (continued)


Budget Summary:
                                  CITY OF LAKEVILLE, MINNESOTA
                                           Enterprise - Liquor Fund
                          Statement of Revenues, Expenses and Changes in Net Assets
                                   For the Year Ending December 31, 2010

                                                                       2009                             2010
                                        2007             2008         Adopted           2009          Proposed
                                       Actual           Actual        Budget          Estimate         Budget
Sales and cost of sales
  Sales                             $ 13,022,120     $ 14,438,064    $ 14,531,803    $ 14,836,345    $ 14,693,942
  Cost of sales                        9,707,399       10,840,115      10,918,737      11,113,936      11,009,955
           Gross profit                3,314,721        3,597,949       3,613,066       3,722,409       3,683,987

Operating expenses
 Personnel services                    1,128,931        1,218,214      1,245,461       1,234,839       1,280,507
 Commodities                              46,512           42,376         53,195          52,477          56,880
 Other charges and services              758,579          805,797        823,816         825,428         852,058
 Depreciation                             69,303          124,472        125,500         126,140         141,412
   Total operating expenses            2,003,325        2,190,859      2,247,972       2,238,884       2,330,857

        Operating income               1,311,396        1,407,090      1,365,094       1,483,525       1,353,130

Non-operating revenue (expense)
 Intergovernmental grants                 3,762             8,490          3,900           3,900           3,900
 Investment income                      145,300           176,716        136,512          46,635          53,121
 Disposal of assets                     798,429
 Interest and bond expense             (161,716)         (221,188)      (207,501)       (207,501)       (189,314)
 Transfers in (out)
   General Fund                        (139,183)         (226,913)      (151,403)       (139,170)       (142,036)
   Debt Service:
     HRA Lease Rev. Fund               (192,773)         (188,855)      (189,660)       (189,660)       (190,097)
     Property Taxes Fund               (100,000)         (100,000)      (100,000)       (100,000)       (100,000)
   Capital Projects:
     Equipment Fund                        (1,320)                         (1,660)         (1,660)         (9,372)
     Park Dedication Fund                                  (2,028)
     Building Fund                            -                 -       (364,000)       (200,000)              -
   Total non-operating (net)            352,499          (553,778)      (873,812)       (787,456)       (573,798)

Change in net assets                   1,663,895          853,312        491,282         696,069         779,332
Net assets, January 1                  2,894,315        4,558,210      5,315,446       5,411,522       6,107,591
Net assets, December 31             $ 4,558,210      $ 5,411,522     $ 5,806,728     $ 6,107,591     $ 6,886,923

2010 Net change in net assets percentage                                                                   12.8%


The Liquor Fund 2010 proposed net assets are expected to increase by $779,332 or 12.8%.
This increase is primarily attributed to gross profit revenue of $3,683,987 exceeding operating
expenses of $2,330,857.

The 2010 proposed capital outlay is shown as follows:
                                                        186
                                       LIQUOR FUND
                                              (continued)

                Item                                                        2010
                Microsoft Office upgrade                    Replacement $ 11,088
                Registers                                   Replacement      36,556
                Reach in refrigerator                       Replacement       5,217
                Cooler door racking                         Replacement      19,316
                Land for new store expansion                 Addition     1,923,980
                               Total                                    $ 1,996,157

Liquor Fund
Schedule of Working Capital
For the Year Ending December 31, 2010


                                                                    2009                         2010
                                   2007            2008            Adopted          2009       Proposed
                                  Actual          Actual           Budget         Estimate      Budget
                                                             Working Capital
Current assets
 Cash and investments           $ 3,380,510    $ 5,092,528     $ 3,630,085       $ 5,575,065   $ 4,225,147
 Receivables                      1,113,569         38,649          18,240            38,649        38,088
 Inventory                          821,999      1,199,795         872,059         1,250,186     1,287,692
 Prepaid expenses                   111,938        105,560          21,961            98,015        93,662
      Total current assets        5,428,016      6,436,532       4,542,345         6,961,915     5,644,589
Current liabilities
 Salaries payable                  172,851         191,245           183,378        196,982       202,892
 Accrued interest payable          170,860         116,808           181,265        115,275       116,414
 Accounts payable                  929,339       1,164,974           985,936      1,164,974     1,199,924
 Current bonds payable             145,000         280,000           295,000        295,000       145,000
    Total current liabilities    1,418,050       1,753,027         1,645,579      1,772,231     1,664,230
Working capital, December 31    $ 4,009,966    $ 4,683,505     $ 2,896,766       $ 5,189,684   $ 3,980,359

                                                    Changes in Working Capital
Funds provided
  Change in net assets          $ 1,663,895    $ 853,312       $     491,282     $ 696,069     $ 779,332
  Depreciation                       69,303      124,472             125,500       126,140       141,412
  Bond issuance cost                 56,645
  Disposal of capital assets        237,005
  Issuance of debt                3,955,000              -                 -              -             -
      Total funds provided        5,981,848        977,784           616,782        822,209       920,744
Funds applied
  Additions to capital assets    2,361,392          24,245         1,945,750         21,030     1,985,069
  Bonds payable                    145,000         280,000           295,000        295,000       145,000
      Total funds applied        2,506,392         304,245         2,240,750        316,030     2,130,069

Net increase (decrease)          3,475,456         673,539         (1,623,968)      506,179    (1,209,325)
Working capital, January 1         534,510       4,009,966          4,520,734     4,683,505     5,189,684
Working capital, December 31    $ 4,009,966    $ 4,683,505     $ 2,896,766       $ 5,189,684   $ 3,980,359

                                                 187
                                               LIQUOR FUND
                                                    (continued)

The 2009 revenue estimate exceeds budget by 2.1%, and 2008 revenue by 2.8%. As expected,
this increase is significantly below the 2008 increase of 8% but above expectations. New traffic
levels from the opening of Cub Foods near the Heritage store and the opening of the new Galaxie
store have not slowed as much as expected. The 2010 proposed budget is based on the premise
that traffic levels will continue to increase at the Heritage store, slightly increase at the Galaxie
store due to the novelty of the new Apple Valley liquor store ending, and significantly decrease
at the Kenrick store due to the proposed opening of a large liquor store in Burnsville near the
Kenrick location.
 •   Liquor revenue bonds in the amount of $1.4 million were issued in 1997 to finance the
     construction of the Kenrick Avenue store. Liquor revenue bonds in the amount of $3.9
     million were issued in 2007 to finance the construction of the Galaxie Avenue store. These
     liquor revenue bonds are not general obligation debt issues; therefore, they are not backed by
     the full-faith and credit of the City. The debt service requirements of these bond are shown as
     follows:
                                    Interest Maturity    Authorized                               Due in 2010
                                    Rates %   Date       and Issued    Retired    Outstanding Principal Interest
     Liquor Revenue Bonds of 1997    5.20    Feb-01-10 $ 1,400,000 $ 1,240,000 $ 160,000 $ 160,000 $ 4,160
     Liquor Revenue Bonds of 2007    5.0     Feb-01-27 3,955,000       130,000 3,825,000   135,000  187,875
         Total debt supported by
             liquor revenue                              $ 5,355,000 $ 1,370,000 $3,985,000 $ 295,000 $ 192,035


 • The Heritage store operates in a leased facility. A 15 year lease was executed with Heritage
   Commons LLC in 2000. The balance of the minimum lease payments for base rent as of
   December 31, 2008 is $1,128,000. The lease terminates in 2015.
 •   The 2010 proposed capital outlay includes $1.9 million to acquire property for a new store at
     the vicinity of Interstate Highway 35 and County Road 70.

Staffing:
                                                  2007           2008             2009    2009             2010
           Position (FTE)                        Actual         Actual           Budget Estimate          Budget
Operations Director                                  1.0            1.0              1.0     1.0               1.0
Assistant Director                                   0.5            1.0              1.0     1.0               1.0
Store Manager                                        3.0            3.0              3.0     3.0               3.0
Inventory Control Technician                         1.0            1.0              1.0     1.0               1.0
Assistant Store Manager                              5.0            5.0              5.0     5.0               5.0
Accounting Technician                                1.0             ---              ---     ---               ---
Lead Sales Associate                                 3.0            3.0              2.5     2.5               2.5
Sales Associate                                     11.9           11.9             12.4    12.4              12.4
                   Total                                25.9          26.4          25.9         25.9          25.9




                                                         188
                                         LIQUOR FUND
                                             (continued)

Budget Factors:
 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
 •   Funding to attend out of state national conferences will not be provided.




                                                189
                                          UTILITY FUND
                                             Overall
Department: Utility Fund

Program Manager: Operations and Maintenance Director
                 Utility Superintendent

Program Description:
 •   The Utility Fund is responsible for the operation of a 20 million gallon per day water
     treatment facility and the associated water collection and distribution system to provide
     potable water to Lakeville residents and businesses, and the collection and transmission of
     sewage to wastewater treatment plants run by the Metropolitan Council Environmental
     Services (MCES). Beginning January 1, 2010, City street lighting activity will be accounted
     for as an enterprise utility fund; this activity was previously accounted for in the general fund
     street department.

      •   For the water system, staff maintains a collection, treatment, storage, and distribution
          system that delivers potable water to over 17,275 residential, commercial, institutional,
          and industrial properties. The system also accounts for all costs related to the operation
          and maintenance of 16 wells, 6 towers, 2 reservoirs, water treatment plant, and 310 miles
          of water distribution system.
      •   For the sanitary sewer system, staff maintains a collection and forwarding system that
          removes wastewater from over 17,258 residential, commercial, institutional, and
          industrial properties. The system also accounts for all costs associated with the operation
          and maintenance of 20 lift stations and 255 miles of sanitary sewer main.
      •   For the street lighting system, City staff (on an annual basis) provides an inspection of
          street lights to determine whether any are in need of maintenance such as routine light
          bulb replacement; maintenance is provided by either Xcel Energy or Dakota Electric
          depending on the location of the street light. The City is also responsible for billing
          Lakeville customers on a quarterly basis for lighting as well as making all monthly
          payments to Xcel Energy or Dakota Electric Association for street light electricity
          consumption for approximately 4,230 street lights within the City.
      •   The Utility Fund budget is effectively managed by budgeting water, sanitary sewer, and
          street lighting as separate operations; for this reason individual schedules for revenues,
          expenses, changes in net assets, and working capital are provided in addition to a
          combining schedule.

The Utility Fund continues to reimburse the General Fund for its respective share of
administrative costs that include support for human resources, IT, engineering and G.I.S. The
Surface Water Management Fund reimburses the Utility Fund for its fair share of processing
surface water fees charged within the utility bills.




                                                 190
                                          UTILITY FUND
                                             Overall
                                              (continued)

There are no proposed staffing changes in 2010.

Staffing:
                                            2007         2008           2009    2009         2010
            Position (FTE)                 Actual       Actual         Budget Estimate      Budget
Operations and Maint. Director                 1.0          1.0            1.0     1.0           1.0
Utilities Superintendent                       1.0          1.0            1.0     1.0           1.0
Utilities Supervisor                            ---         1.0            1.0     1.0           1.0
Op. and Maint./Safety Specialist               1.0          1.0            1.0     1.0           1.0
Utility Maintenance II                        11.5         11.0           11.0    11.0          11.0
Utility Billing Technician                     2.0          2.0            2.0     2.0           2.0
Administrative Assistant                       1.0          1.0            1.0     1.0           1.0
                 Total                          17.5        18.0          18.0    18.0          18.0


Budget Factors:
 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
     officers).
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
 •   Electric and natural gas services are budgeted to increase 10% and 3%, respectively.
 •   A major impact to the 2009 budget from 2008 was the increase in the cost of potassium
     orthophosphate from $0.27 per pound to $1.14 per pound. The water treatment plant uses
     potassium orthophosphate (an inhibitor) in the treatment process to prevent the corrosion of
     soft metals, like copper from home systems from entering into the treated water distribution
     system. The Utility Fund is currently purchasing this chemical based on prevailing market
     prices to reduce overall costs as opposed to purchasing under a contract pricing agreement.
     Market prices are currently $0.70 per pound.
 •   For the coming year, MCES sanitary sewer treatment costs are anticipated to increase by 3%.
 •   Street lighting electricity rates are expected to increase 10%.
 •   The City currently allows utility customers to pay their utility bill via automated
     clearinghouse (ACH); the 2010 budget proposes to implement a new program whereby
     allowing utility customers to pay their quarterly utility bill on-line using a personal credit
     card.
 •   The proposed budget provides funding for a direct postcard mailing campaign inviting
     Lakeville utility customers to their own personal website (PURL) to learn valuable


                                                 191
                                           UTILITY FUND
                                              Overall
                                               (continued)

     information about water conservation, regulations, and general information including
     contacts for any water service questions.
 •   Funding to attend out of state national conferences will not be provided.

The 2010 proposed Utility Fund budget does not propose increases for water or sanitary sewer
rates; the street lighting rate is proposed to increase by $1.10 from $6.75 to 7.85. The following
are the current and proposed rates:

                                                                            2010
                   Quarterly rates                               Basis    Proposed

                   Water base                                 Account     $     6.25
                   Water tier 1 (<30 thousand gallons)       Gallonage    $     1.00
                   Water tier 2 (30 - 49 thousand gallons)   Gallonage    $     1.45
                   Water tier 3 (>49 thousand gallons)       Gallonage    $     2.00

                   Sanitary sewer base                       Account $          3.60
                   Sanitary sewer usage                      Gallonage $        2.78
                   Sanitary sewer non metered accounts        Account $        53.65

                   Street lighting                           Account      $     7.85


Capital outlay is allocated to the water and sanitary sewer operations based on benefit to the
respective operation. The 2010 proposed capital outlay is as follows:

                                                                          Sanitary
         Item                                                 Water        Sewer        Total
         Sewer vactor                          Replacement   $        -   $ 334,926 $ 334,926
         Modular cabinets                      Replacement        1,563       1,563     3,126
         Portable generator                    Replacement          839         839     1,678
         Laptop computer                          New               711         711     1,422
         Snow thrower                             New               326         326       651
         Manhole cover lifter                     New                         6,023     6,023
         Mutimedia projector                      New               800         800     1,600
         Multifunction color copier            Replacement        5,148       5,148    10,296
         Glass doors with side lights             New             4,380           -     4,380

                        Total                                $ 13,767     $ 350,336    $ 364,102




                                                  192
                                                UTILITY FUND
                                                   Overall
                                                     (continued)

Budget Summary – Utility Fund:

                                  CITY OF LAKEVILLE, MINNESOTA
                                           Enterprise - Utility Fund
                          Statement of Revenues, Expenses and Changes in Net Assets
                                   For the Year Ending December 31, 2010


                                                                           2009                                 2010
                                        2007              2008            Adopted             2009            Proposed
                                       Actual            Actual           Budget            Estimate           Budget
Operating revenues
 User charges for services         $   6,413,077     $   7,185,225    $    7,335,217    $    7,562,771    $    8,309,740
 Other                                   140,734           169,982           149,305           172,532           175,119
    Total operating revenue            6,553,811         7,355,207         7,484,522         7,735,303         8,484,859

Operating expenses
 Personnel services                    1,286,608         1,346,648         1,484,992         1,420,834         1,502,423
 Commodities                             279,576           320,442           505,203           453,512           435,138
 Other charges and services            1,437,442         1,278,988         2,177,574         1,854,238         3,140,032
 Disposal charges                      2,194,936         2,471,638         2,645,442         2,645,442         2,712,127
 Depreciation                          2,843,715         2,921,907         2,958,601         2,980,345         3,039,952
    Total operating expenses           8,042,277         8,339,623         9,771,812         9,354,371        10,829,672

       Operating income                (1,488,466)        (984,416)       (2,287,290)       (1,619,068)       (2,344,813)

Non-operating revenue (expense)
 Intergovernmental grants                  3,264             3,264            3,264             3,264             3,264
 Investment income                       320,383           279,223          139,969            75,778           108,422
 Infrastructure contributed            1,950,403         3,795,764          975,202           949,032           237,333
 Disposal of assets                       11,022             2,610
 Transfers in (out)
   General Fund                         (264,619)         (283,503)        (307,462)          (270,825)         (280,461)
   Special Revenue:
     Surface Wtr. Mgmt. Fund              10,506            10,878           20,484            20,484            39,703
    Total non-operating (net)          2,030,959         3,808,236          831,457           777,733           108,261

Change in net assets                     542,493         2,823,820       (1,455,833)     (841,335)   (2,236,552)
Net assets, January 1                110,042,290       110,584,783      109,795,477   113,408,603   112,567,268
Net assets, December 31            $ 110,584,783     $ 113,408,603    $ 108,339,644 $ 112,567,268 $ 110,330,716
2010 Net change in net assets percentage                                                                           -2.0%

The Utility Fund 2010 proposed net assets are expected to decrease by ($2,236,552) or (2.0%).
This decrease is primarily attributed to operating/other expenses of $11,110,133 exceeding
operating/other revenues of $8,873,581. The largest expense increases are related to the water
operations major maintenance for painting of the Dakota Heights water reservoir, water meter
replacement program, and an emergency backup generator and rehabilitation of well #14. User
charges for services provide sufficient working capital and revenue sources to finance operations
in the near term and foreseeable future.


                                                         193
                                        UTILITY FUND
                                        Water Operation
Services - Water Operation:
 • Collect, treat, and distribute potable water to meet the needs of residential, commercial,
   institutional, and industrial customers. (2.3 billion gallons in 2008).
 • Operate and maintain 17 ground water well stations.
 • Maintain 310 miles of water main.
 • Exercise 3,374 fire hydrants annually.
 • Locate underground utility structures, water main, and residential curb stops. (8,439 locate
   requests in 2008).
 • Operate a 20 million gallon per day water treatment plant.
 • Monitor and ensure water quality and compliance with Environmental Protection Agency
   and Minnesota Department of Health requirements.
 • Repair water main breaks.
 • Treat ground water with chemicals to remove iron and manganese to improve the taste.
 • Inspect and approve new water main construction.
 • Enforce water restrictions pursuant to approved operations policy.


Activity Measures - Water Operation:
                                           2007            2008              2009         2010
              Activity                    Actual          Actual           Estimate     Estimate
Revenue                                  $3,167,319     $,3,859,316        $3,943,140   $3,997,624
Expense                                  $3,801,939      $3,871,151        $4,422,676   $5,384,264
Operating Income (Loss)                  ($634,620)       ($11,835)        ($479,536) ($1,386,640)
Non-operating Revenue (Expense)
    Investment Income (Expense)            $156,067        $165,713           $48,243      $77,090
    Other                                    $7,143          $2,937            $1,632       $1,632
    Transfers to General Fund            ($132,309)      ($141,751)        ($135,413)   ($140,231)
    Transfer from Surface Water
    Mgmt. Fund                               $4,123         $4,246            $9,014      $11,009
Infrastructure Contributed               $1,395,885     $3,193,722          $798,431     $199,683
Capital Outlay                              $31,855       $198,268           $29,350      $13,767

Strategic Plan:
  • Provide a sustainable source of water supply for Lakeville’s future.

Goals and Objectives - Water Operation:
 • Rehabilitation of well #14.
 • Installation of an emergency backup generator at well #14.


                                               194
                                           UTILITY FUND
                                           Water Operation
                                                 (continued)

 • Contract the replacing the interior and exterior coatings of the Dakota Heights water tower.
 • Continue the change out of numeric readout water meters with newer automated digital
   meters.


Budget Summary - Water Operation:

                             CITY OF LAKEVILLE, MINNESOTA
                             Enterprise - Utility Fund Water Operation
                     Schedule of Revenues, Expenses and Changes in Net Assets
                              For the Year Ending December 31, 2010


                                                                    2009                           2010
                                     2007            2008          Adopted          2009         Proposed
                                    Actual          Actual         Budget         Estimate        Budget
Operating revenues
 User charges for services        $ 3,026,585    $ 3,689,334      $ 3,552,653    $ 3,770,608    $ 3,822,505
 Other                                140,734        169,982          149,305        172,532        175,119
    Total operating revenue         3,167,319      3,859,316        3,701,958      3,943,140      3,997,624

Operating expenses
 Personnel services                   804,503         817,082         895,491        865,232        890,706
 Commodities                          205,660         237,000         426,112        364,656        353,994
 Other charges and services           998,263         967,769       1,438,073      1,306,502      2,215,552
 Depreciation                       1,793,513       1,849,300       1,865,971      1,886,286      1,924,012
   Total operating expenses         3,801,939       3,871,151       4,625,647      4,422,676      5,384,264

       Operating income              (634,620)         (11,835)      (923,689)      (479,536)     (1,386,640)

Non-operating revenue (expense)
 Intergovernmental grants               1,632           1,632           1,632          1,632          1,632
 Investment income                    156,067         165,713          88,509         48,243         77,090
 Infrastructure contributed         1,395,885       3,193,722         697,943        798,431        199,683
 Disposal of assets                     5,511           1,305
 Transfers in (out)
   General Fund                      (132,309)       (141,751)       (153,731)      (135,413)      (140,231)
   Special Revenue:
     Surface Wtr. Mgmt. Fund            4,123           4,246           9,014          9,014         11,009
   Total non-operating (net)        1,430,909       3,224,867         643,367        721,907        149,183

Change in net assets                   796,289      3,213,032         (280,322)     242,371       (1,237,457)
Net assets, January 1               69,687,521     70,483,810       70,758,850   73,696,842       73,939,213
Net assets, December 31           $ 70,483,810   $ 73,696,842     $ 70,478,528 $ 73,939,213     $ 72,701,756




                                                    195
                                          UTILITY FUND
                                          Water Operation
                                                (continued)

Water Operation
Schedule of Working Capital
For the Year Ending December 31, 2010


                                                                 2009                            2010
                                     2007           2008        Adopted         2009           Proposed
                                    Actual         Actual       Budget        Estimate          Budget

                                                              Working Capital
Current assets
 Cash and investments           $ 3,291,661     $ 4,824,340    $ 5,258,727   $ 6,167,185   $    6,668,403
 Receivables                      1,962,432       2,203,033      2,197,305     2,220,985        2,258,286
 Inventory                           30,465          20,809         32,320        21,121           21,438
 Prepaid expenses                     1,750           1,750          1,857         1,776            1,803
      Total current assets        5,286,308       7,049,932      7,490,209     8,411,067        8,949,930

Current liabilities
 Salaries payable                    131,403        123,669       178,759       141,345          163,775
 Accounts payable                    125,486        226,502       152,678       269,085          312,413
    Total current liabilities        256,889        350,171       331,437       410,430          476,188

Working capital, December 31    $ 5,029,419     $ 6,699,761    $ 7,158,772   $ 8,000,637   $    8,473,742

                                                       Changes in Working Capital
Funds provided
  Change in net assets          $     796,289   $ 3,213,032    $ (280,322) $ 242,371       $ (1,237,457)
  Depreciation                      1,793,513     1,849,300     1,865,971   1,886,286         1,924,012
     Total funds provided           2,589,802     5,062,332     1,585,649   2,128,657           686,555

Funds applied
  Infrastructure contributed        1,395,885     3,193,722       697,943       798,431          199,683
  Additions to capital assets          31,855       198,268        46,610        29,350           13,767
       Total funds applied          1,427,740     3,391,990       744,553       827,781          213,450

Net increase (decrease)             1,162,062     1,670,342        841,096    1,300,876           473,105
Working capital, January 1          3,867,357     5,029,419      6,317,676    6,699,761         8,000,637

Working capital, December 31    $ 5,029,419     $ 6,699,761    $ 7,158,772   $ 8,000,637   $    8,473,742


The water operation budget provides $1,188,836 for major maintenance projects including
repainting of the Dakota Heights water reservoir ($614,000), an emergency backup generator for
well #14 ($155,500), replacement of 2,257 residential water meters ($341,236), and North Park
water tower maintenance ($23,500). Capital outlay includes new and other equipment
replacements ($13,767).

There are no water user charges for services rate adjustments for the coming year.




                                                   196
                                         UTILITY FUND
                                         Water Operation
                                             (continued)

Budget Factors:
 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
     officers).
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
 •   Electric and natural gas services are budgeted to increase 10% and 3%, respectively.
 •   A major impact to the 2009 budget from 2008 was the increase in the cost of potassium
     orthophosphate from $0.27 per pound to $1.14 per pound. The water treatment plant uses
     potassium orthophosphate (an inhibitor) in the treatment process to prevent the corrosion of
     soft metals, like copper from home systems from entering into the treated water distribution
     system. The Utility Fund is currently purchasing this chemical based on prevailing market
     prices to reduce overall costs as opposed to purchasing under a contract pricing agreement.
     Market prices are currently $0.70 per pound.
 •   The City currently allows utility customers to pay their utility bill via automated
     clearinghouse (ACH); the 2010 budget proposes to implement a new program whereby
     allowing utility customers to pay their quarterly utility bill on-line using a personal credit
     card.
 •   The proposed budget provides funding for a direct postcard mailing campaign inviting
     Lakeville utility customers to their own personal website (PURL) to learn valuable
     information about water conservation, regulations, and general information including
     contacts for any water service questions.
 •   Funding to attend out of state national conferences will not be provided.




                                                197
                                        UTILITY FUND
                                    Sanitary Sewer Operation


Services - Sanitary Sewer Operation:
 • Operate and maintain 20 lift stations.
 • Maintain 255 miles of sanitary sewer main.
 • Clean, televise, and evaluate approximately 64 miles of sanitary sewer main each year and
   make repairs as necessary.
 • Inspect manholes for groundwater infiltration and seal the structures to eliminate the
   problem.
 • Evaluate portions of the sewer system for surface water inflow and groundwater infiltration
   (I&I) problems and make the necessary repairs to eliminate the problem.

Activity Measures - Sanitary Sewer Operation:
                                           2007            2008         2009            2010
              Activity                    Actual          Actual      Estimate        Estimate
Revenue                                  $3,386,492      $3,495,891   $3,792,163      $3,850,075
Expense                                  $4,240,338      $4,468,472   $4,931,695      $4,806,235
Operating Income (Loss)                  ($853,846)      ($972,581) ($1,139,532)      ($956,160)
Non-operating Revenue (Expense)
    Investment Income (Expense)               $164,316     $113,510       $27,535        $31,132
    Other                                       $7,143       $2,937        $1,632         $1,632
    Transfers to General Fund               ($132,309)   ($141,752)    ($135,412)     ($140,230)
    Transfer from Surface Water
    Mgmt. Fund                                 $6,383       $6,632        $11,470        $26,859
Infrastructure Contributed                   $554,518     $602,042       $150,601        $37,650
Capital Outlay                               $959,637     $325,464       $166,275       $350,336

Goals and Objectives - Sanitary Sewer Operation:
 • Televise all cleaned sewer lines to verify pipe integrity and document pipe condition.
 • Rehabilitation of lift station #4.
 • Abandon and decommission lift station #1 (Airlake Industrial Park).




                                                 198
                                         UTILITY FUND
                                     Sanitary Sewer Operation
                                                 (continued)

Budget Summary - Sanitary Sewer Operation:

                             CITY OF LAKEVILLE, MINNESOTA
                         Enterprise - Utility Fund Sanitary Sewer Operation
                     Schedule of Revenues, Expenses and Changes in Net Assets
                              For the Year Ending December 31, 2010


                                                                   2009                           2010
                                     2007            2008         Adopted          2009         Proposed
                                    Actual          Actual        Budget         Estimate        Budget
Operating revenues
 User charges for services        $ 3,386,492     $ 3,495,891    $ 3,782,564    $ 3,792,163    $ 3,850,075

Operating expenses
 Personnel services                   482,105         529,566        589,501        555,602        579,796
 Commodities                           73,916          83,442         79,091         88,856         80,144
 Other charges and services           439,179         311,219        739,501        547,736        318,228
 Disposal charges                   2,194,936       2,471,638      2,645,442      2,645,442      2,712,127
 Depreciation                       1,050,202       1,072,607      1,092,630      1,094,059      1,115,940
   Total operating expenses         4,240,338       4,468,472      5,146,165      4,931,695      4,806,235

       Operating income              (853,846)       (972,581)    (1,363,601)    (1,139,532)      (956,160)

Non-operating revenue (expense)
 Intergovernmental grants               1,632           1,632         1,632          1,632          1,632
 Investment income                    164,316         113,510        51,460         27,535         31,132
 Infrastructure contributed           554,518         602,042       277,259        150,601         37,650
 Disposal of assets                     5,511           1,305
 Transfers in (out)
   General Fund                      (132,310)       (141,752)      (153,731)      (135,412)      (140,230)
   Special Revenue:
     Surface Wtr. Mgmt. Fund            6,383           6,632        11,470         11,470          26,859
   Total non-operating (net)          600,050         583,369       188,090         55,826         (42,957)

Change in net assets                  (253,796)    (389,212)  (1,175,511)  (1,083,706)    (999,117)
Net assets, January 1               40,354,769   40,100,973   39,036,627   39,711,761   38,628,055
Net assets, December 31           $ 40,100,973 $ 39,711,761 $ 37,861,116 $ 38,628,055 $ 37,628,938




                                                    199
                                       UTILITY FUND
                                   Sanitary Sewer Operation
                                              (continued)



Sanitary Sewer Operation
Schedule of Working Capital
For the Year Ending December 31, 2010


                                                                2009                           2010
                                   2007           2008         Adopted          2009         Proposed
                                  Actual         Actual        Budget         Estimate        Budget

                                                            Working Capital
Current assets
 Cash and investments           $ 2,971,684    $ 2,753,477    $ 2,153,331    $ 2,490,591    $ 2,246,286
 Receivables                         18,192         22,402          5,697          5,346          6,043
 Prepaid expenses                     1,750          1,750          1,858          1,776          1,803
      Total current assets        2,991,626      2,777,629      2,160,886      2,497,713      2,254,132

Current liabilities
 Salaries payable                   77,661          77,778       102,398         88,666        102,225
 Accounts payable                   49,731          78,763        59,216         94,482        108,505
    Total current liabilities      127,392         156,541       161,614        183,148        210,730

Working capital, December 31    $ 2,864,234    $ 2,621,088    $ 1,999,272    $ 2,314,565    $ 2,043,402

                                                     Changes in Working Capital
Funds provided
  Change in net assets          $ (253,796) $ (387,887) $ (1,175,511) $ (1,083,706) $ (999,117)
  Depreciation                    1,793,513   1,072,607    1,092,630     1,094,059    1,115,940
     Total funds provided         1,539,717     684,720      (82,881)       10,353      116,823

Funds applied
  Infrastructure contributed        554,518        602,402       277,259        150,601         37,650
  Additions to capital assets       959,637        325,464        78,453        166,275        350,336
       Total funds applied        1,514,155        927,866       355,712        316,876        387,986

Net increase (decrease)              25,562       (243,146)      (438,593)      (306,523)      (271,163)
Working capital, January 1        2,838,672      2,864,234      2,437,865      2,621,088      2,314,565

Working capital, December 31    $ 2,864,234    $ 2,621,088    $ 1,999,272    $ 2,314,565    $ 2,043,402



The sanitary sewer operation budget provides $105,000 for major maintenance projects that
include rehabilitation of lift station #4 ($55,000) and inflow and infiltration mitigation repairs
($50,000). Capital outlay includes the replacement of a sewer vactor ($334,926, after trade), and
other equipment replacements ($15,410).

Sanitary sewer user charges for services may need to be adjusted in order to compensate for
MCES rate increases for the coming year.



                                                 200
                                        UTILITY FUND
                                    Sanitary Sewer Operation
                                             (continued)

Budget Factors:
 •   The 2010 proposed budget reflects an expected increase in employee health insurance
     premiums of 10%.
 •   A 2010 PERA rate increase of 0.25% is mandated for all city employees (excluding police
     officers).
 •   The 2009 budget amendment process mandated a three day furlough for all full time
     employees and a five day furlough for all directors and City Administrator. The 2010
     proposed budget removes the 2009 furloughs, however it does not provide for a cost-of-
     living adjustment.
 •   Electric and natural gas services are budgeted to increase 10% and 3%, respectively.
 •   For the coming year, Metropolitan Council Environmental Services (MCES) sanitary sewer
     treatment costs are anticipated to increase by 3%. The MCES is responsible for treatment of
     system effluent. MCES charges represent 65% of the sanitary sewer operating budget.
     MCES is contemplating a cost adjustment for the coming year; the extent of which is
     unknown at this time.
 •   The City currently allows utility customers to pay their utility bill via automated
     clearinghouse (ACH); the 2010 budget proposes to implement a new program whereby
     allowing utility customers to pay their quarterly utility bill on-line using a personal credit
     card.
 •   Funding to attend out of state national conferences will not be provided.




                                                201
                                       UTILITY FUND
                                    Street Light Operation

Services – Street Light Operation:
 • Beginning January 1, 2010, the City’s street lighting program will be accounted for as an
   enterprise utility fund; this activity was previously accounted for in the General Fund street
   department.
 • Perform annual inspections of approximately 4,230 street lights and report any maintenance
   requirements to responsible electric companies.
 • Perform seasonal banner and flag changes on downtown street lights.


Activity Measures – Street Light Operation:
                                           2007           2008           2009          2010
             Activity                     Actual         Actual        Estimate      Estimate
Revenue                                            $0             $0          $0      $637,160
Expense                                            $0             $0          $0      $639,173
Operating Income (Loss)                            $0             $0          $0       ($2,013)
Non-operating Revenue (Expense)
   Investment Income (Expense)                     $0             $0           $0           $200
   Transfer from Surface Water
   Mgmt. Fund                                      $0             $0           $0         $1,835

Goals and Objectives – Street Light Operation:
 • Monitor the proper working order of all City street lights.




                                               202
                                           UTILITY FUND
                                        Street Light Operation
                                                   (continued)


Budget Summary – Street Light Operation:

                             CITY OF LAKEVILLE, MINNESOTA
                          Enterprise - Utility Fund Street Light Operation
                     Schedule of Revenues, Expenses and Changes in Net Assets
                              For the Year Ending December 31, 2010


                                                                          2009                                  2010
                                       2007             2008             Adopted             2009             Proposed
                                      Actual           Actual            Budget            Estimate            Budget
Operating revenues
 User charges for services        $            -   $             -   $             -   $              -   $     637,160

Operating expenses
 Personnel services                                                                                              31,921
 Commodities                                                                                                      1,000
 Other charges and services                    -                 -                 -                  -         606,252
   Total operating expenses                    -                 -                 -                  -         639,173

    Operating income (loss)                    -                 -                 -                  -          (2,013)

Non-operating revenue (expense)
 Investment income                                                                                                  200
 Transfers in (out)
   Special Revenue:
     Surface Wtr. Mgmt. Fund                   -                 -                 -                  -           1,835
   Total non-operating (net)                   -                 -                 -                  -           2,035

Change in net assets                           -                 -                 -                  -              22
Net assets, January 1                          -                 -                 -                  -               -
Net assets, December 31           $            -   $             -   $             -   $              -   $          22




                                                       203
                                         UTILITY FUND
                                      Street Light Operation
                                                 (continued)


Street Light Operation
Schedule of Working Capital
For the Year Ending December 31, 2010


                                                                        2009                                  2010
                                     2007              2008            Adopted             2009             Proposed
                                    Actual            Actual           Budget            Estimate            Budget

                                                               Working Capital
Current assets
 Cash and investments           $            -    $            -   $             -   $              -   $      60,806
 Receivables                                 -                 -                 -                  -              17
      Total current assets                   -                 -                 -                  -          60,823

Current liabilities
 Salaries payable                                                                                                 197
 Accounts payable                            -                 -                 -                  -          60,604
    Total current liabilities                -                 -                 -                  -          60,801

Working capital, December 31    $            -    $            -   $             -   $              -   $         22

                                                        Changes in Working Capital
Funds provided
  Change in net assets          $            -    $            -   $             -   $              -   $         22

Working capital, January 1                   -                 -                 -                  -                  -

Working capital, December 31    $            -    $            -   $             -   $              -   $         22



Residential street light fees are proposed to increase by $1.10 per quarter from $6.75 to $7.85;
non-residential fees are proposed to increase $0.03088 per quarter per front foot from $0.18869
to $0.21957. These proposed increases are required to finance anticipated rate adjustments by
Dakota Electric Association and Xcel Energy.

Budget Factors:
 •   Street lighting electricity consumption rates are expected to increase 10%.
 •   The City currently allows utility customers to pay their utility bill via automated
     clearinghouse (ACH); the 2010 budget proposes to implement a new program whereby
     allowing utility customers to pay their quarterly utility bill on-line using a personal credit
     card.




                                                      204
 Internal Service Fund
The Internal Service Fund is used to account for services provided by one City department to
other City departments on a cost reimbursement basis.
                                   MUNICIPAL RESERVES FUND



Program Description:
Under GASB Statement No. 10, risk management activities of a government entity can be
accounted for in either the General Fund or an Internal Service Fund, if one fund is used. The
City uses the Internal Service Municipal Reserves Fund to budget such costs. Under this model,
operating departments in the various City funds receive a charge from the Municipal Reserves
Fund, and all costs (premiums, claims, and related) are reflected in a single fund. This allows for
better accounting and monitoring of the City’s risk management costs.

Services:
 •   General liability insurance.
 •   Excess liability insurance.
 •   Property/casualty insurance.
 •   Auto physical damage insurance.
 •   Employment practices liability insurance.
 •   Workers compensation insurance.
The general liability insurance is provided through the League of Minnesota Cities Insurance
Trust, a municipal insurance pool, in which the City retains exposure to losses for liability claims
up to $50,000 per occurrence, with a $100,000 yearly claims payment maximum; a $1,000 per
claim deductible applies if the City exceeds the $100,000 maximum.
Risk management charges to operating departments are based on factors such as number of
automobiles used, stated value of buildings and contents, and employee salaries. A portion of
the City’s liability insurance premium is attributable to vehicles and is allocated along with the
physical damage premium. The remainder of the liability insurance premium is combined with
an estimate of claims costs (including legal and administration) and allocated accordingly to
individual funds.

Activity Measures:
                                          2006          2007      2008        2009         2010
               Activity                  Actual        Actual    Budget     Estimate     Estimate
Experience Modification Ratio
   General Liability                         .814         .734       .731         .730         .730
   Workers Compensation                      .750         .730       .720         .720         .720




                                                 205
                                  MUNICIPAL RESERVES FUND
                                                  (continued)



Budget Summary:
                              CITY OF LAKEVILLE, MINNESOTA
                             Internal Service - Municipal Reserves Fund
                     Statement of Revenues, Expenses and Changes in Net Assets
                               For the Year Ending December 31, 2010


                                                                             2009                      2010
                                                2007            2008        Adopted       2009       Proposed
                                               Actual          Actual       Budget      Estimate      Budget
Operating revenues
 Charges for services                      $    339,478       $ 382,789    $ 375,381    $ 375,381    $ 359,608
 Other                                           51,485          73,866       32,002       51,460       51,460
       Total operating revenues                 390,963         456,655      407,383      426,841      411,068

Operating expenses
 Other charges and services                     341,601        335,325       363,287      344,482      364,927

           Operating income                      49,362        121,330        44,096       82,359       46,141

Non-operating revenue (expense)
 Investment income                                9,903           5,448       12,825        5,529        5,989
 Transfer to General Fund                       (39,478)        (40,663)     (41,883)     (40,663)     (43,140)
      Total non-operating (net)                 (29,575)        (35,215)     (29,058)     (35,134)     (37,151)

Change in net assets                             19,787         86,115        15,038       47,225        8,990
Net assets, January 1                           447,004        466,791       512,988      552,906      600,131
Net assets, December 31                    $    466,791       $ 552,906    $ 528,026    $ 600,131    $ 609,121

2010 Net change in net assets percentage                                                                  1.5%

The Municipal Reserves Fund 2010 Proposed net assets are expected to increase by $8,990 or
1.5%. This increase is attributed to routine revenues of $411,068 exceeding expenses ($364,927)
and non-operating net expenses of ($37,151).




                                                        206
Appendices
                            CITY OF LAKEVILLE, MINNESOTA
                                    Community Profile


Description:

The City of Lakeville is a suburban community located approximately 20 minutes south of the
Minneapolis–Saint Paul metropolitan area within Dakota County. The City has a land area of 38
square miles and serves a community with a Metropolitan Council estimated 2008 population of
54,731. The population of 54,731 is 11,603 or 26.9% over the 2000 Federal Census of 43,128.


History:

The Village of Lakeville was incorporated in 1878. The Village of Lakeville and Lakeville
Township merged in 1967. Lakeville became a statutory City on January 1, 1974.


Organization:

The City’s governing body consists of a Mayor and four Council members, all elected at large.
The Mayor serves a two-year term of office and Council members serve overlapping four-year
terms. The present Mayor and Council members are:
                                                                             Expiration of Term
Holly Dahl                                 Mayor                             December 31, 2010
Mark Bellows                               Member                            December 31, 2010
Kevin Miller                               Member                            December 31, 2010
Kerrin Swecker                             Member                            December 31, 2012
Laurie Rieb                                Member                            December 31, 2012

The City Administrator is responsible for the daily management of City business and the
administration of policy as directed by the Council. Mr. Steven C. Mielke is the City
Administrator and has served in this capacity since June 2004. Mr. Mielke has 23 years of
experience in local government.


Services:

Lakeville provides a full range of services. City functions include general government
administration, police and fire protection, street maintenance, engineering, planning and zoning,
parks and recreation, and community and economic development services. The City also
operates two Enterprise Funds for 3 off-sale liquor stores and a water, sanitary sewer, and street
light utility. The three liquor stores strategically located adjacent to major highways collectively
represent the largest municipal liquor operation in Minnesota.

The City’s Police Department consists of 52 full-time officers and 15 police reservists. The Fire
Department has four stations and is served by 90 trained volunteers. The City has a fire rating of
4 for insurance purposes. This results in a significant reduction of fire insurance premiums for
commercial and industrial buildings and apartments.

                                                207
                           CITY OF LAKEVILLE, MINNESOTA
                                   Community Profile
                                           (continued)



Additional City facilities include 56 public parks (which include 39 playgrounds), and
18 conservation areas, three municipal swimming beaches, 12 outdoor ice rinks (fully boarded),
3 indoor ice rinks, and approximately 91 miles of trails.

The City provides water and sanitary sewer facilities to a majority of its residential areas. The
City’s present water system includes 16 wells and seven water storage facilities with a total
capacity of 8.0 million gallons. The City’s water treatment plant has a production capacity of
20 million gallons of water per day. The Metropolitan Council Environmental Service (MCES)
is responsible for treatment and disposal of sanitary sewer effluent.


Growth Management:

The City has been and is expected to continue to be one of the fastest growing cities in
Minnesota.

The Lakeville City Council created a Strategic Growth Management Task Force in 1992. Its
goal was to develop strategies regarding the rate, location and types of development that would
generate fiscal stability while preserving and enhancing the City’s quality of life and services.

The City Council reconvened the Strategic Growth Task Force in 1998 for the purpose of
making both short and long-term recommendations or suggestions on strategies relating to how
the rate, location and type of residential and commercial/industrial growth can generate fiscal
stability and preserve or enhance the quality of services, while minimizing any adverse impacts
on City systems and taxpayers.
In December 2007, the City Council approved the 2008-2010 Strategic Plans for
Economic Development. The Plan serves as a guide for the work of the Economic Development
Commission (EDC) and Economic Development staff to achieve Lakeville’s economic
development objectives.  The EDC developed information into seven categories with
corresponding goals and outcomes. The seven categories are Transportation, Life-Cycle
Housing, Technology, Growth Management, Communication, Partnerships and Fiscal
Management.
The 2008-2010 Strategic Plan for Economic Development is the sixth plan prepared by the EDC
since 1995, when the first strategic plan was completed. The previous strategic plan was from
2005-2007 and featured six strategic areas of focus. Progress was made in all categories, with
work being done to improve the City’s roads, create life-cycle housing, improve the Downtown
area, create and strengthen partnerships, and communicate with residents and the business
community about the benefits of a strong commercial/industrial base.




                                              208
                              CITY OF LAKEVILLE, MINNESOTA
                                      Community Profile
                                             (continued)



By the year 2020, Lakeville is anticipated to have the following land uses composition:

                          •    Single family residential       30.3%
                          •    Townhomes, condominiums         13.1%
                          •    Rural agriculture/residential   13.1%
                          •    Commercial/industrial           13.0%
                          •    Parks and open space            11.8%
                          •    Public right-of-ways            10.5%
                          •    Public and semi-public           4.9%
                          •    Multifamily residential          2.4%
                          •    Manufactured housing             0.9%




                                                209
210
                                CITY OF LAKEVILLE, MINNESOTA
                             Number of City Employees (Full Time Equivalent)


                                                              2007       2008       2009        2010
Position Title                                               Actual     Actual    Estimate    Proposed
General government
   City Administrator                                             1.0       1.0         1.0         1.0
   Assistant to City Administrator                                1.0       1.0         1.0         1.0
   Executive Administrative Assistant/Deputy Clerk                1.0       1.0         1.0         1.0
    Communications Manager                                        1.0       1.0         1.0         1.0
    Communications Specialist                                     1.0       1.0         1.0         1.0
    Cable Coordinator                                             1.0       0.2
    Video Production Specialists                                  1.9       1.9         1.9         2.0
    City Clerk                                                    1.0       1.0         1.0         1.0
    Planning Director                                             1.0       1.0         1.0         1.0
    Associate Planners                                            3.0       3.0         2.3         2.0
    Planning Assistant                                            1.0
    Planning Admin. Assistant                                     0.5       0.5         0.5         0.5
    Community and Economic Development Director                   1.0       1.0         1.0         1.0
    Economic Development Specialist                               1.0       1.0         1.0         1.0
    Community and Economic Dev. Admin. Assistant                  0.5       0.5         0.5         0.5
    Building Official                                             1.0       1.0         1.0         1.0
    Senior Inspectors                                             3.0       2.8         2.0         2.0
    Building Inspectors                                           5.0       4.8         3.7         3.0
    Senior Building Administrative Assistant                      1.0       1.0         1.0         1.0
    Building Administrative Assistants                            2.0       1.8         1.0         1.0
    Facility Maintenance Coordinator                              1.0       1.0         1.0         1.0
    City Hall Receptionist                                        1.0       1.0         1.0         1.0
    City Hall Administrative Assistant                            1.0       1.0         1.0         1.0
    Historical Society Liaison                                    0.1       0.1
    Finance Director                                              1.0       1.0         1.0         1.0
    Senior Accountants                                            2.6       2.6         2.6         2.6
    Accountant II                                                 1.0       1.0         0.9         0.8
    Accounts Receivable Technician
    Accounts Payable Technician                                   1.0       1.0         1.0         1.0
    Finance Senior Administrative Assistant                       1.0       1.0         1.0         1.0

    Information Systems Manager                                   1.0       1.0         1.0         1.0
    Employee Relations Coordinator
    Network Specialist                                            1.0       1.0         1.0         1.0
    Information Systems Technician                                2.0       2.0         1.3         1.0

    Human Resources Manager                                       1.0       1.0         1.0         1.0
    Benefits Specialist                                           1.0       1.0         1.0         1.0
    Payroll Technician                                            1.0       1.0         0.9         0.8

                     Total general government                   45.6       43.2        38.6        37.2




                                                     211
                               CITY OF LAKEVILLE, MINNESOTA
                            Number of City Employees (Full Time Equivalent)
                                                 (continued)

                                                                2007      2008       2009        2010
Position Title                                                 Actual    Actual    Estimate    Proposed
Public safety
  Police
      Sworn officers
         Chief                                                     1.0       1.0         1.0         1.0
         Captains                                                  2.0       2.0         2.0         2.0
         Sergeants                                                 9.0      10.0        10.0        10.0
         Investigators                                             6.0       6.0         6.0         6.0
         Narcotics Task Force Officer                              1.0       1.0         1.0         1.0
         Patrol Officers                                          32.2      32.8        31.0        31.5
          Total sworn officers                                    51.2      52.8        51.0        51.5
      Crime Prevention Coordinator                                 1.0       1.0         1.0         1.0
      Community Public Safety Officers                             2.0       1.0         0.3
      Community Service Officers                                   2.5       3.8         3.8         3.8
      Animal Control Officer                                       1.0       1.0         1.0         1.0
      Criminal Analyst                                             1.0       0.1
      Records Supervisor                                           1.0       1.0         1.0         1.0
      Police Records Administrative Assistants                     4.4       4.5         4.0         4.0
                            Total police                          64.1      65.2        62.1        62.3
  Fire
      Fire Chief                                                   1.0       1.0         1.0         1.0
      Fire Marshal                                                 1.0       1.0         1.0         1.0
      Fire Inspector                                               1.0       1.0         1.0         1.0
      Senior Fire Administrative Assistant                         1.0       1.0         1.0         1.0
      Fire Administrative Assistant                                0.6       0.6         0.6         0.6
                              Total fire                           4.6       4.6         4.6         4.6
                        Total public safety                       68.7      69.8        66.7        66.9


  Engineering
     City Engineer                                                 1.0       1.0         1.0         1.0
     Assistant City Engineer                                       1.0       0.9         1.0         1.0
     Development / Design Engineer                                 1.0       1.0         1.0         1.0
     Civil Engineer                                                1.0       0.7
     Senior Project Coordinator                                    1.0       0.5
     Senior Construction Representative                            1.0       1.0         1.0         1.0
     Engineering Technician                                        1.0       0.8
     Special Assessment/Property Data Technician                   1.0       1.0         0.3
     Engineering Administrative Assistant                          1.0       1.0         1.0         1.0
     GIS Coordinator                                               0.4       0.4         1.0         1.0
     GIS Technician                                                1.0       1.0         1.0         1.0
     Environmental Resources Manager                               1.0       1.0         1.0         1.0
     Environmental Resource Specialist                             1.0       1.0         1.0         1.0
     Environmental Resource Technician                             1.0       0.6         0.0         0.0
                        Total engineering                         13.4      11.9         9.3         9.0



                                                    212
                                CITY OF LAKEVILLE, MINNESOTA
                             Number of City Employees (Full Time Equivalent)
                                                   (continued)

                                                                  2007      2008       2009        2010
Position Title                                                   Actual    Actual    Estimate    Proposed
Public works (continued)

  Streets
      Street Superintendent                                          1.0       1.0         1.0         1.0
      Street Supervisor                                              0.8       1.0         1.0         1.0
      Street Lead                                                    1.0       1.0         1.0         1.0
      Street Maintenance II                                         11.0      11.0        10.4        10.0
      Service Technician Lead                                        1.0       1.0         1.0         1.0
      Service Technicians                                            4.0       4.0         4.0         4.0
      Streets Administrative Assistant                               1.0       1.0         1.0         1.0
                             Total streets                          19.8      20.0        19.4        19.0

                         Total public works                         33.2      31.9        28.7        28.0

Parks and recreation
  Parks
     Parks and Recreation Director                                   1.0       1.0         1.0         1.0
     Senior Park and Recreation Admin. Assistant                     1.0       1.0         1.0         1.0
     Park Operations and Maintenance Manager                         1.0       1.0         1.0         1.0
     Parks Superintendent                                            1.0       1.0         0.2
     Parks Supervisor                                                                      0.3         1.0
     Parks Lead                                                      1.0       1.0         1.0         1.0
     Park Maintenance II                                             9.0       9.0         9.0         9.0
     Parks Administrative Assistant                                  1.0       1.0         1.0         1.0
                           Total parks                              15.0      15.0        14.5        15.0
  Recreation
     Recreation Supervisor                                           1.0       1.0         1.0         1.0
     Recreation Program Supervisor                                   1.0       1.0         1.0         1.0
     Recreation Program Assistant                                    0.6       0.6         0.2
     Recreation Administrative Assistant                             1.0       1.0         1.0         1.0
     Senior Center Coordinator                                       1.0       1.0         1.0         1.0
     Senior Center Administrative Assistant                          0.7       0.7         0.7         0.7
                         Total recreation                            5.3       5.3         4.9         4.7
  Arts Center
     Arts Center Coordinator                                         1.0       1.0         1.0         1.0
     Arts Center Administrative Assistant                            1.0       1.0         1.0         1.0
     Facility Attendant                                              1.0       1.4         1.5         1.5
     Pottery Manager                                                 0.2       0.2         0.2         0.2
                        Total arts center                            3.2       3.6         3.7         3.7
                     Total parks and recreation                     23.5      23.9        23.1        23.4

    Total general fund/special revenue fund employees              170.9     168.8       157.1       155.5




                                                      213
                               CITY OF LAKEVILLE, MINNESOTA
                            Number of City Employees (Full Time Equivalent)
                                                    (continued)

                                                                   2007      2008       2009       2010
Position Title                                                    Actual    Actual    Estimate    Budget
Liquor fund
    Operations Director                                               1.0       1.0         1.0        1.0
    Assistant Director                                                0.5       1.0         1.0        1.0
    Store Manager                                                     3.0       3.0         3.0        3.0
    Inventory Control Technician                                      1.0       1.0         1.0        1.0
    Assistant Store Manager                                           5.0       5.0         5.0        5.0
    Accounting Technician                                             1.0
    Lead Sales Associate                                              3.0       2.5         2.7        2.7
    Sales Associate                                                  11.9      12.4        12.0       12.0
                     Total liquor fund employees                     26.4      25.9        25.7       25.7
Utility fund
    Operations and Maintenance Director                               1.0       1.0         1.0        1.0
    Utilities Superintendent                                          1.0       1.0         1.0        1.0
    Utilities Supervisor                                                        1.0         1.0        1.0
    Operations and Maintenance/Safety Specialist                      1.0       1.0         1.0        1.0
    Utility Maintenance II                                           11.5      11.0        11.0       11.0
    Utility Billing Technician                                        2.0       2.0         2.0        2.0
    Utility Administrative Assistant                                  1.0       1.0         1.0        1.0
                     Total utility fund employees                    17.5      18.0        18.0       18.0

    Total general fund/special revenue fund employees              170.9     168.8        157.1     155.5
     Total liquor fund employees                                    26.4      25.9         25.7      25.7
       Total utility fund employees                                 17.5      18.0         18.0      18.0
          Total City employees                                     214.8     212.7        200.8     199.2




                                                       214
                          CITY OF LAKEVILLE, MINNESOTA
                              Listing of Principal Employers


As a part of the Minneapolis-Saint Paul metropolitan area, Lakeville’s labor market is drawn
from many of the surrounding communities; and, conversely, many City residents commute to
other areas of the Minneapolis-Saint Paul metropolitan area for work. Major employers located
in the City of Lakeville are listed below:
                                                                                   Approximate
                                                                                        Number
Employer                                   Product/Service                         of Employees
Independent School District No. 194
  (Lakeville)                           Public education                             1,400
Ryt-Way Industries, Inc.                Food service contractors                       600
ConAgra Store Brands                    Breakfast cereal manufacturing                 500
Despatch Industries, Inc.               Industrial furnace and oven manufacturing      250
City of Lakeville                       City government                                214
Imperial Plastics, Inc.                 Plastics material and resin manufacturing      200
Hearth & Home Technologies, Inc.        Fireplaces/metal work                          192
Menasha Corporation                     Corrugated box manufacturing                   185
Carquest Distribution Center            General warehousing and storage                162
Jeff Belzers Chevy-Dodge-Kia            Auto dealership                                150

Source: Telephone survey of individual employers, August 2008.




                                             215
                          CITY OF LAKEVILLE, MINNESOTA
                              Listing of Principal Tax Payers


Ten of the Largest Taxpayers in the City


Taxpayer                              Type of Business          2008 Tax Capacity

Argonne Investments LLC               Retail                         $ 389,099
Lakeville 2004 LLC                    Commercial                       354,010
Dakota Electric Association           Utility                          306,868
Target Corporation                    Retail                           297,592
CRW Lakeville LLC                     Retail                           246,320
Southfork Apts. Ltd Partnership       Apartments                       210,395
Muller Family Theatres of Lakeville   Commercial                       196,328
Cobblestone Lake LLC                  Industrial                       186,056
Heritage Commons LLC                  Retail                           182,280
Mills Property Incorporated           Commercial                       179,876
Total                                                                 $2,548,824




                                           216
                             CITY OF LAKEVILLE, MINNESOTA
                          Commercial and Industrial Building Permits Issued
                                       Years 2008 and 2007

                        NEW BUILDING PERMITS 2008 AND 2007 (in excess of $500,000)

BUSINESS                                             PRODUCT/SERVICE                      VALUATION (1)
Uponor                                               Distribution facility                $    8,225,000
First Industrial                                     Speculative warehouse/distribution        7,998,000
Cub Foods                                            Retail grocery                            5,570,000
Brunswick Zone XL                                    Bowling/family entertainment              4,300,000
Train America                                        Sports training facility                  4,221,000
Family Health Medical Clinic - Lakeville             Medical                                   3,030,000
Best Buy                                             Retail store                              2,664,600
Kent 46 Office Bldg                                  Office building                           2,500,000
Airlake South Creek Business Park                    Multi-tenant office/warehouse             1,709,000
Buffalo Wild Wings                                   Restaurant                                1,625,000
Primrose School of North Lakeville                   Daycare                                   1,400,000
Bremer Bank                                          Banking                                   1,400,000
Lakeville Collision & Retail                         Multi-tenant retail                       1,158,000
Heritage Commons 3rd                                 Multi-tenant retail                       1,100,000
Hewitt Investments                                   Multi-tenant retail                         937,000
Kinder Care                                          Daycare                                     900,000
Double E Crossing 3rd Addition                       Multi-tenant retail                         810,000
Fairview Lakeville Clinic                            Multi-tenant medical building               738,000
Porterhouse Steak & Seafood                          Restaurant                                  678,000
Platt Dentistry and New Market Bank                  Dentist/Bank                                535,000


           EXPANSION OR REMODEL BUILDING PERMITS 2008 AND 2007 (in excess of $250,000)

BUSINESS                                             PRODUCT/SERVICE                      VALUATION (1)
Brackett's Crossing                                  Private country club/golf course     $    2,800,000
Minnesota Department of Transportation               Truck maintenance station                   900,000
Mendell Mfg.                                         Medical technology manufacturer             690,000
Berry Plastics                                       Plastics manufacturer                       520,000
Hearth & Home Corporate Office                       Hearth products producer                    425,000
Fusion Culinary Center                               Frozen food specialties                     421,000
Holyoke Crossing                                     Multi-tenant retail                         385,400
Hockey Development Center                            Hockey training facility                    385,000
Just Kidding Around Daycare                          Daycare                                     350,000
Mindel Investments                                   Warehousing                                 302,000
Leo's South                                          Motorsports dealership                      250,000


Notes:

(1) Valuation excludes land and personal property.

Source: City of Lakeville Inspections Department.




                                                     217
                                  Glossary of Budget Terms

Accrual Accounting Method Transactions are recognized at the time they are incurred, as
opposed to when cash is received or spent.

Advertising Income Earnings derived from advertising.

Ad Valorem Tax Money collected from all the real property within the City based upon the
value of the property.

Allocated Expenditures Expenses not directly determined by the departments, such as Internal
Service Charges and General Fund Charges.

Annual Budget The budget authorized by resolution of the City Council for the fiscal year.

Appropriation The authorization by City Council to incur obligations and spend City funds.
Appropriations are usually made for fixed amounts and are typically granted for one year.

Appropriation of Fund Balance Using the existing fund balance for current operations.

Assessed Valuation The value of all real and personal property that is used as a basis for ad
valorem taxes.

Balanced Budget A budget in which expenditures are equal to revenue.

Bond Proceeds Funds received from the sale of any bond issue.

Budget The financial plan for a specific period of time that identifies adopted expenditures and
the sources of revenue to pay for them.

Budget Message The opening section of the budget which provides the City Council and the
public with a general summary of the most important aspects of the budget, changes from the
current and previous fiscal years, as well as the views and recommendations of the City
Manager.

CDBG Abbreviation for Community Development Block Grant – This fund receives and
expends the City’s allocation of the Federal Community Development Block Grant Program
money.

Capital Improvement Program (CIP) A five-year schedule of capital improvement projects
and items in excess of $25,000. This is a flexible budget document that is used as a planning
tool for needed improvements. Amounts approved in the CIP are considered guidelines and are
not officially adopted as budgeted amounts until they are incorporated in the operating budget of
one of the City’s Funds.

Capital Projects Funds The funds that account for all resources used for the acquisition or
construction of capital facilities, except those financed by Proprietary Funds.

Capital Outlay Expenditures that result in the acquisition of fixed assets that has a value over
$2,000 and a useful life of greater than one year.
                                               218
                                     Glossary of Budget Terms
                                             (continued)

Certified Tax Levy The ad valorem tax levy that is recorded with Dakota County.

Circuit Breaker A state-paid property tax refund program for homeowners who have property
taxes out of proportion with their income. A similar program is also available to renters.

Class Rates The percent of market value set by state law that establishes the property’s tax
capacity subject to the property tax. See Table A for a sample list of class rates.

Table A: class rates
                                              Taxes           Local Taxes       State Tax Payable
             Property Class                Payable 2008       Payable 2009             2009
Residential Homestead:
<$76,000                                              1.0%            1.0%
                                                                                   No state tax
$76,000-$500,000                                        1.0             1.0
>$500,000                                              1.25            1.25
Non-homestead Residential:
Single unit:
<$76,000                                               1.0              1.0
                                                                                   No state tax
$76,000-$500,000                                       1.0              1.0
>$500,000                                             1.25             1.25
2-3 unit buildings                                    1.25             1.25
Market-rate Apartments:                               1.25             1.25        No state tax
Commercial/Industrial:
                                                                            Subject to state
<$100,000                                              1.5              1.5
                                                                            levy (Commercial-
$100,000 - $150,000                                    1.5              1.5
                                                                            industrial rate)
>$150,000                                              2.0              2.0
Seasonal Recreational Residential:
                                                                            Subject to state
<$76,000                                               1.0              1.0
                                                                            levy (seasonal-
$76,000 - $500,000                                     1.0              1.0
                                                                            recreational rate)
>$500,000                                             1.25             1.25

Classification of Expenditures A group of object codes that have the same functional
characteristics. The City uses four classifications of expenditures: Personnel Services,
Commodities, Other Charges and Services, and Capital Outlay.

Contingency A budgetary reserve set aside for emergencies or unforeseen expenditures.

Contractual Services The cost of items related to a contractual agreement. Examples would
be: professional services, insurance, utilities or rentals.

Contributions Under certain conditions, people who subdivide land must make a contribution
to the City for park purposes of either cash or land. Cash received for this purpose is collected in
this account.

Court Fines and Forfeits Fines imposed on individuals by the courts for various illegal acts
performed within the City.

                                                219
                                   Glossary of Budget Terms
                                            (continued)

Current Service Level A description of the current services and level of service provided by a
program or department.

CSAH County State Aid Highway.

Debt Service Funds The funds that account for the payment of principal and interest on
outstanding debt for the city.

Department An organizational unit of the City for the purposes of administration and
accounting.

Depreciation Expenditures incurred when spreading the cost of an asset over its estimated
useful life rather than deducting the entire cost in the year the asset is purchased.

Enterprise Funds The funds that account for the financing of self-supporting activities of
governmental units and render services to the general public based on user charges. Records are
maintained on the accrual basis of accounting.

Fiscal Disparities Program Local units of government in the Twin Cities metropolitan area
and on the iron range participate in property tax base sharing programs. Under these two
programs, a portion of the growth in commercial and industrial property value of each city and
township is contributed to a tax base sharing pool. Each city and township then receives a
distribution of property value from the pool based on market value and population in each city.

FT     Abbreviation for full-time staff position.

FTE Abbreviation for full-time equivalent. Full-time equivalent is designated to working 40
hours per week or 2,080 per year.

Fiscal Year For budgeting purposes the City’s fiscal year is the calendar year.

Fixed Asset Purchases of a long-term nature which are to be held and used. Examples would
be: land, buildings, machinery, furniture, and equipment.

Fund A separate accounting entity, with a set of self-balancing accounts for recording the
collection of revenues and the payment of expenditures to carry out a specific function.

Fund Balance The excess of a governmental fund’s assets over its liabilities. The term “fund
balance” is used in governmental fund types. The term “net assets” is used in enterprise funds.

GAAP Abbreviation for Generally Accepted Accounting Principles.

General Fund The general operating fund of the City, the General Fund accounts for most of
the City’s financial resources. General Fund revenues include: property taxes, licenses and
permits, intergovernmental revenues, charges for services, and other types of revenue. The
general fund accounts for the revenues and expenditures necessary to deliver basic operating
services: police, fire, finance, parks, public works, etc.

                                               220
                                   Glossary of Budget Terms
                                            (continued)

Governmental Funds The General Fund, Special Revenue Funds, Debt Service Funds, and
Capital Project Funds.

HRA Abbreviation for Housing and Redevelopment Authority.

Investment Income Interest received from the investment of cash in a fund.

Intergovernmental Revenue Money received from the State, County, or Federal government
in the form of grants or shared revenues for various activities.

Internal Service Funds The funds within the Proprietary Fund types that account for the
financing of goods or services provided by one department or agency to other departments or
agencies of a government.

Internal Service Charge Charges from an Internal Service Fund to another fund for the goods
or services provided to the fund.

Licenses Revenues received by the issuance of various licenses that are granted to various
businesses in the City.

Line Item Budget A budget format that summarizes the object codes of expenditures for goods
and services that the City intends to purchase during the fiscal year.

Market Value An assessor’s estimate of what property would be worth on the open market if
sold. The market value is set on January 2 of the year before taxes are payable.

Market Value Homestead Credit This credit offsets a portion of each homestead’s property
tax burden equal to .4 percent of the homestead’s market value up to a maximum credit of $304.

MSA Abbreviation for Municipal State Aid for Highway Construction Fund.

MCES Abbreviation for Metropolitan Council Environmental Services who provides the City
with wastewater service.

Miscellaneous Revenue Money collected from various sources generally on a non-recurring
basis.

Modified Accrual Accounting Method Transactions are recognized in the accounting period
when they become susceptible to accrual, that is, when they become measurable and available.

Municipal State Aid (MSA) Maintenance Money received from the State of Minnesota for
the maintenance of certain streets within the city that are designated State Aid Streets.

Net Assets The excess of a proprietary fund’s assets over its liabilities. The term “net assets” is
used in proprietary funds types. The term “fund balance” is used in governmental funds.

Objective The accomplishments by a program if operating properly.

                                               221
                                  Glossary of Budget Terms
                                           (continued)

Other Charges The cost of miscellaneous items such as conferences and schools, dues and
subscriptions, depreciation and merchandise for resale.

Penalties Charges to utility customers caused by late payment of their water, sewer and
recycling charges.

Penalties and Interest Fines and interest charges on taxes not paid in a timely manner.

PERA Abbreviation for Public Employees Retirement Association.

Permits Revenue derived from various permits, as defined by the City or State Code, for the
performance of a specific action. For example, building a house.

Personnel Services The cost of salaries and wages paid to employees as well as the fringe
benefits associated with employment (i.e. Social Security, PERA, health insurance, life
insurance, etc.)

PILT Abbreviation for payment-in-lieu-of-taxes. The City’s owned liquor store locations do
not pay property taxes; therefore, the Liquor Fund pays a determined amount to the General
Fund.

Property Class The classification assigned to each parcel of property based on the use of the
property. For example, owner-occupied residential property is classified as homestead.

Property Tax Levy The tax imposed by a local unit of government. The tax is established on
or around December 28 of the year preceding the year the levy will be paid by taxpayers.

Proprietary Funds The funds that account for government operations financed and operated in
a manner similar to a private business.

Rental Income Fees collected for the rental of equipment and the use of certain facilities.

R.E.U. Residential equivalent unit.

SCBA Self-Contained Breathing Apparatus.

Special Assessment Receipts from assessment placed on a property, within the City, for public
improvements that have benefited that property.

Special Revenue Fund A fund that accounts for revenues derived from specific taxes or other
earmarked revenue sources.

Supplies Items that are not permanent in nature.

Tax Capacity The valuation of property based on market value and statutory class rates. The
Tax Capacity is measured by applying tax capacity percentages established by the Legislature.
The property tax for each parcel is based on its tax capacity.

                                              222
                                  Glossary of Budget Terms
                                            (continued)

Tax Capacity Rate The replaced the term “Mill Rate” and was adopted by the Legislature in
1988. This rate is expressed as a percentage.

TIF Abbreviation for Tax Increment Financing.

Total Tax Capacity The amount computed by first totaling the tax capacities of all parcels of
property within a city. Adjustments for fiscal disparities, tax increment and a portion of the
powerline value are made to this total since not all tax capacity is available for general tax
purposes.

Transfers Money transferred between funds.

Truth-in-Taxation The “taxation and notification law” which requires local governments to set
estimated levies, inform taxpayers about the impacts, and hold a separate hearing to take
taxpayer input.

User charges for Services Revenue incurred from the sale of water or sanitary sewer service to
customers of the utility.

User Fee A payment for the direct receipt of a public service by the user of the service.

Water Sales Revenue earned from the sale of water to customers of the utility.




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