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Home My WebLink About10.06.86 Council Packet AGENDA COUNCIL MEETING REGULAR OCTOBER 6, 1986 1. CALL TO ORDER 2. APPROVE AGENDA 3. APPROVE MINUTES a. September 15, 1986 - Regular b. September 29, 1986 - Special 4. CITIZENS COMMENTS a. Sewer Back Up on 7th Street b. Bridges on Flagstaff 5. PUBLIC HEARINGS a. 7:15 P.M. - Proposed Use of 1987 General Revenue Sharing Funds b. Set Public Hearing/Accept Assessment Roll - Projects 86-1 thru 86-4 c. Set Public Hearing/Accept Assessment Roll - Projects 86-5 thru 86-8 6. PETITIONS, REQUESTS AND COMMUNICATIONS 7. ORDINANCES AND RESOLUTIONS a. Resolution Approving Election Judges for November 4, 1986 General Election b. Resolution Approving MWCC Payback Proposal c. Resolution Requesting Landfill Abatement Assistance from Dakota County d. Resolution Declaring Costs to be Assessed & Ordering Preparation of Assessment Roll - Project 82-5 e. Resolution Declaring Costs to be Assessed & Ordering Preparation of Assessment Roll - Project 86-12 8. UNFINISHED BUSINESS a. PERA Enrollment for Elected Officials b. Shade Tree Planting c. Request to Lease Copy Equipment d. 1987 Operating Budget 9. NEW BUSINESS a. Proposed Sewer Rate - Restaurants and Clubs b. Approve New Fire Department Members 10. MISCELLANEOUS a. Approve Final Ambulance Contract Payment 11. CONSENT AGENDA a. Capital Outlay Request - Arena b. Resolution for Snow Removal on TH 50 c. Accept Donation from Ken Carey Family - Arena d. 1986 Audit - Pannell, Kerr, Forster e. Final Payment - Projects 86-1 thru 86-4 f. Contract Payment #1 - Terra Utility Improvements g. Use of Donations for Purchases - Rescue Squad h. Capital Outlay Request - Fire Department i. Approve Payment of the Bills as Submitted 12. ADJOURN 13. ADD ONS a. Request to Attend Seminar - John Manke b. New Rescue/Equipment Truck - Fire Department c. Highway 50 Water Main Project - Change Order d. Discuss City Position Relating to County Offices THE AGENDA IS CLOSED OUT AT NOON ON THE TUESDAY PRECEDING THE MEETING. MEMO TO: MAYOR AND COUNCIL SUBJECT: AGENDA ITEMS - OCTOBER 6, 1986 DATE: OCTOBER 3, 1986 4a. Memo enclosed. b. Jerry Zimmer has requested to be placed on the agenda to discuss this matter. 5a. Memo enclosed. b. Memo, notice, assessment roll enclosed. c. Memo, notice, assessment roll enclosed. 7a. Resolution enclosed. b. Memo, resolution enclosed. c. Application, resolution enclosed. d. Memo, resolution enclosed. e. Memo, resolution enclosed. 8a. Memo enclosed. b. Memo enclosed. c. Memo enclosed. d. Memo enclosed. As you may recall, the possibility of constructing a stormwater system for the Henderson area, and including it in the 1987 Budget was discussed. Per request, the City Engineer has estimated costs for a system which would serve only the Henderson area. The system would be designed so that it could be expanded at a future time to include all areas within the S.E. Stormwater Drainage Area. The system would discharge into the ditch in Henderson's field. This could be shifted when storm sewer is directed north to the river along the east City line. Methods of funding such a project could come from Ad Valorem, Storm Sewer Trunk fund, Sanitary Sewer fund via estimated flow savings, or establishment of an enterprise fund. Tom Kaldunski will be at the meeting to discuss the matter. 9a. Memo enclosed. I have not fully discussed this matter with the Finance Director at this time. I will offer a recommendation at the meeting. b. Members listed on agenda request. 10a. Request from Apple Valley, recommendation enclosed. lla. Request enclosed. b. Resolution enclosed. c. Request enclosed. d. Request enclosed. e. Request enclosed. f. Request enclosed. g. Request enclosed. h. Request enclosed. i. Copy enclosed. 13a. Request enclosed. b. A presentation will be given at the meeting. c. Request enclosed. I do not have a copy of the change order nor the amount at this time. I will present one at the meeting. d. Memo enclosed. 111° Lar', ompson Ci Administrat r AGENDA REQUEST FORM ITEM NO. NAME: Larry Thompson DEPARTMENT: Administration f DATE: September 16, 1986 . j/` v MEETING DATE: October 6, 1986 CATEGORY: Unfinished Business SUBJECT: PERA Enrollment for Elected Officials EXPLANATION: Per Council directive • REFERENCE MATERIALS/RESPONSIBILITY: REFERRED TO: (NAME) DEPARTMENT: Administration Larry Thompson c'i SI AUR MEMO TO: MAYOR AND COUNCIL SUBJECT: PERA - ELECTED OFFICIALS DATE: OCTOBER 2, 1986 The Finance Department has researched and had discussions with the administrative staff of PERA regarding PERA membership of elected officials since August, 1986. It has just been discovered by staff that Farmington's city officials are not eligible for PERA membership because the minimum monthly salary for membership is $325/month. ttati rl-Car141-12)-2Q--- Wayne Henneke Finance Director WH/mh AGENDA REQUEST FORM ITEM NO._S1.2 NAME: Larry Thompson DEPARTMENT: Administration DATE: September 3, 1986 MEETING DATE: September 15, 1986 CATEGORY: Unfinished Business SUBJECT: PERA Enrollment for Elected Officials EXPLANATION: Tabled from September 2, 1986 REFERENCE MATERIALS/RESPONSIBILITY: Attorney's opinion relating to salaries - David Grannis REFERRED TO: (NAME) DEPARTMENT: Larry Thompson Administration David Grannis Attorney Wayne Henneke Finance SIGNATU AGENDA REQUEST FORM ITEM NO. NAME: Larry Thompson DEPARTMENT: Administration DATE: August 25, 1986 MEETING DATE: September 2, 1986 CATEGORY: Miscellaneous SUBJECT: PERA Enrollment for Elected Officials EXPLANATION: New law allows elected officials to enroll in PERA REFERENCE MATERIALS/RESPONSIBILITY: Explanation/Recommendation - Larry Thompson REFERRED TO: (NAME) DEPARTMENT: Larry Thompson Administration Wayne Henneke Finance SIGNATU. . MEMO TO: MAYOR AND COUNCIL SUBJECT: PERA ENROLLMENT - PUBLIC OFFICIALS DATE: AUGUST 28, 1986 Public officials are eligible to belong to the PERA. If you are not a member and would like to join, membership cards can be filled out in the Finance Department. A PERA member can buy back prior service by making application for the buy back and paying: 1) the employee contribution at the rate in effect at the time the public service was rendered plus 6% interest compounded annually; and 2) the employer's total contribution in effect at the time the service was rendered. The employer's total contribution may be funded by the City if so authorized by Council. The buy back option is only available within one year of becoming a member. Questions may be directed towards the Finance Department or James Hacking, Executive Director of PERA at 296-7489. CIA-1 QT1'111) Wayne Henneke Finance Director WH/mh AGENDA REQUEST FORM ITEM NO. NAME: Tom Kaldunski T DEPARTMENT: General Services J(f�/ DATE: September 22, 1986 MEETING DATE: October 6, 1986 CATEGORY: Unfinished Business SUBJECT: Shade Tree Planting EXPLANATION: See memo REFERENCE MATERIALS/RESPONSIBILITY: Memo - Tom Kaldunski REFERRED TO: (NAME) DEPARTMENT: Larry Thompson Administration Jerry Bauer General Services Tom Kaldunski General Services Wayne Henneke Finance 4,e)/2/ , , SIGNATURE MEMO TO: MAYOR AND COUNCIL SUBJECT: SHADE TREE PLANTING DATE: OCTOBER 1, 1986 After further research into a shade tree planting program, I have reached new conclusions as to methods which should be utilized by the City. I feel that we can transplant the trees from the City nursery more cost effectively by renting a machine that bare-roots the trees and then planting them into the boulevards with General Service crews. We have to wait until a hard frost when the trees go dormant prior to trans- planting them. Using this method, 90 to 95% of the trees will survive transplanting. We would be able to plant more boulevard trees using this method rather than hiring a tree spade to move about 100 trees. I also recommend that the remaining funds be used for Linden trees from the Nicollet Nursery in Farmington. This is proposed in order to replace the trees which have been removed in the downtown vicinity. In the past, many Linden trees have been established in this area and we would like to continue using this type of tree. There are no Linden trees in the City nursery, therefore this type of tree must be purchased from a nursery. The nursery will provide these trees after they have gone dormant. This would be used as a signal for crews to begin transplanting the City's nursery stock. After reviewing the City's nursery, I feel that there are not enough trees to have a give away program. The large trees at the old treatment plant could be planted in the boulevard by City crews as previously discussed. As for the small trees at the site, they could also be planted in the boulevards after 1 or 2 more years of growth. The City's respon- sibility is to reforest the boulevards and, therefore, we should concen- trate on boulevard plantings. s 121ali )711 / Tom Kaldunski City Engineer TK/mh I AGENDA REQUEST FORM ITEM NO. C.) NAME: Karen Finstuen kW4-/ DEPARTMENT: Administration `, , 1,„ , ;, ,,/ ,i) fr4 DATE: September 30, 1986 u47, 4.4- MEETING DATE: October 6, 1986 CATEGORY: Unfinished Business SUBJECT: Request to Lease Copy Equipment EXPLANATION: Xerox vs Savin REFERENCE MATERIALS/RESPONSIBILITY: Memo - attached REFERRED TO: (NAME) DEPARTMENT: Larry Thompson Administration i (i.4"'SIGNA URE MEMO TO: MAYOR AND COUNCIL SUBJECT: COPIER LEASE DATE: OCTOBER 2, 1986 Per Council request, the City has had demonstrations by Xerox, Savin and Toshiba copiers in order to compare quality, features, operation, cost and so on. Based on quality and design features, it was a unanimous decision by staff that Toshiba be eliminated. The following are 5 year costs of the copiers based on a 60 month lease: XEROX $13,223.49 SAVIN $14,520.00 There was no clear preference over either machine. The Savin appeared to be easier and faster to operate. The Xerox is less expensive, and the City has had good experience with Xerox. Staff has indicated that either machine would be acceptable. This matter will be on the October 6, 1986 agenda for discussion. Larry ompson City dministrator LT/mh cc: Karen Finstuen MEMO TO: MAYOR AND COUNCIL SUBJECT: CAPITAL OUTLAY REQUEST/LEASE — COPIER DATE: AUGUST 14, 1986 The City's copier demand has increased to a point where, due to the age and limited options of the present machine, demand has exceeded the capacity. The City is experiencing more frequent breakdowns. Staff has looked into obtaining a new copier and has selected a Xerox. The monthly lease/purchase payment would be $125.00/month which is approximately the cost of the old machine. Because the City would receive 4 months free maintenance agreement, the lease would not require a budget adjustment. The only purchase required would be for a stand (see attached). Since the City would only receive a $350.00 trade in allowance on the old machine, it is recommended that it be transferred to the Police Department. The City would then have a back up machine and the 18"x24" option, which is not available on new machines. The Police Department would be required to assume the maintenance agreement. It is therefore recommended that the lease and capital outlay request be approved. It should be noted that the lease can be cancelled at any time. L y Thompson/ C ty Administrator LT/mh cc: Stan Whittingham file P6CATyv,-,t-r,t 153.11/ r vim) /51t 9 014 gziQ,Qoin-•o_- 6O,na • 3. (1(///1-4 Q 5/nom, ly,Voo:0o 4Q. 00 ;tvLd.i,a,s ata4AL. acut LID S /44 0cottLAZ ,Oo / 3, a 3,49 immimminimr . AGENDA REQUEST FORM 6(1/ ITEM NO. NAME: Karen Finstuen DEPARTMENT: Administration DATE: August 14, 1986 MEETING DATE: August 18, 1986 CATEGORY: Add On SUBJECT: Capital Outlay Request - Administration EXPLANATION: See attached memo. REFERENCE MATERIALS/RESPONSIBILITY: Memo/Capital Outlay Request REFERRED TO: (NAME) DEPARTMENT: Larry Thompson Administration ! 4 a , SIG A URE MEMO TO: MAYOR AND COUNCIL SUBJECT: CAPITAL OUTLAY REQUEST/LEASE - COPIER DATE: AUGUST 14, 1986 The City's copier demand has increased to a point where, due to the age and limited options of the present machine, demand has exceeded the capacity. The City is experiencing more frequent breakdowns. Staff has looked into obtaining a new copier and has selected a Xerox. The monthly lease/purchase payment would be $125.00/month which is approximately the cost of the old machine. Because the City would receive 4 months free maintenance agreement, the lease would not require a budget adjustment. The only purchase required would be for a stand (see attached) . Since the City would only receive a $350.00 trade in allowance on the old machine, it is recommended that it be transferred to the Police Department. The City would then have a back up machine and the 18"x24" option, which is not available on new machines. The Police Department would be required to assume the maintenance agreement. It is therefore recommended that the lease and capital outlay request be approved. It should be noted that the lease can be cancelled at any time. r L y Thompson City Administrator LT/mh cc: Stan Whittingham file REQUEST FORM CAPITAL OUTLAY PURCHASES DEPARTMENTDATE OF REQUEST I TEM(S) TO BE PURCHASED (i( i 7".lh.0-S6 AMOUNT PROVIDED IN ORIGINAL/ADJUSTED 19BUDGET : $ 000.00 AMOUNT REMAINING AS OF DATE OF REQUEST: $ :43.00 QUOTATIONS RECEIVED : x 1 . VENDOR L,QhO-4.. DATE p /ta AMOUNT $ oV q.o 2 . VENDOR DATE AMOUNT $ =ATTACH QUOTATIONS, IF VERBAL QUOTES, EXPLAIN BELOW COMMENTS : - gig/� ri/sc DEP RTMENT HEAD SIGNATURE DATE FINANNC DIRE TOR SIGNATURE - TO : THE MAYOR AND COUNCIL I RECOMMEND THE ABOVE REQUEST BE APPROVED. SIGNATURE OF CITY ADMINISTRATOR DATE ACTION TAKEN BY THE COUNCIL ON THE DAY OF 19 (APPROVED) (NOT APPROVED) FILE : CC : 1 r ' ' , AGENDA REQUEST FORM ITEM NO. IOCIL-- NAME: Larry Thompson /,; - i. -; (> : r DEPARTMENT: Administration J(%��7 '1 f DATE: September 19, 1986 Da '�� 1)-'(-A1-4-..c 7 MEETING DATE: October 6, 1986A A U ,q G CATEGORY: Miscellaneous u^^- SUBJECT: Approve Final Ambulance Contract Payment to Divine Redeemer I�ospital Piold(1)6 EXPLANATION: Self Explanatory 1 REFERENCE MATERIALS/RESPONSIBILITY: Recommendation - Larry Thompson REFERRED TO: (NAME) DEPARTMENT: Larry Thompson Administration *"...-'" .. SIGNATUR ••• •••• ••••• SEP 1 5 ••I• 1986 City of apple!! 14200 Cedar Avenue S. Telephone612-432-0750 va ey Apple Valley, Minnesota 55124 September 9, 1986 Mr. Pat McGarvey Mr. Larry Thompson City of Lakeville City of Farmington 8747 208th Street 325 Oak Street Lakeville, Minnesota 55044 Farmington, Minnesota 55024 Re: Final Subsidy Payment to Divine Redeemer Dear Pat and Larry: Enclosed please find information relative to the final subsidy payment due Divine Redeemer Memorial Hospital (DR) for 1985 ambulance service. At our August 27, 1986 meeting on this subject we agreed that DR's July bill of $51,237.49 was unacceptable and that an offer of $12,294.70 (the January bill amount) should be made to DR to settle this matter. On August 29, 1986 we received a telephone call from Alec Williams, the Controller for DR, inquiring as to the status of our payment. It was indicated that the administrators would recommend to their respective City Council's that the following amounts be approved in final payment of the 1985 ambulance contract: Apple Valley $ 6,684.99 Lakeville 4,392.53 Farmington 1,217.18 $12,294.70 Mr. Williams indicted that these payments would be acceptable to DR in settling the contract. Please include this item on your next City Council agenda, so we may settle this issue once and for all. Should your Council approve the payment, please deliver your check to Apple Valley City Hall so we may remit our final payment to DR en masse. If you have questions regarding any of the above, please let me know. Sincerely, CITY OF APPLE VALLEY Cpl( �� Tom Lawell Assistant City Administrator Home of the Minnesota Zoological Garden , MEMO TO: City Councils of Apple Valley, Lakeville and Farmington FROM: Tom Lawell, Assistant City Administrator DATE: September 2, 1986 SUBJECT: Final Subsidy Payment Due to Divine Redeemer Hospital for 1985 Ambulance Service Prior to the formation of A.L.F. Ambulance, the Cities of Apple Valley, Lakeville, and Farmington were provided with ambulance service by Divine Redeemer Memorial Hospital (DR) . Although A.L.F. has been operational for eight months, the final subsidy payment due to DR has not yet been made. It is the intent of this memo to explain why this payment has not been made and to recommend how this matter can be finally resolved. DR provided ambulance coverage, under contract to the cities, from January 2, 1980 to December 31, 1985. The final contract between the cities and DR ran from October 1, 1984 to December 31, 1985. This contract was unique from previous DR contracts in that it provided for a variable rate subsidy to be paid by the cities. This variable rate subsidy was to reimburse DR for its costs of provid- ing ambulance service to the cities, plus a seven percent return on investment. At the time of contract approval the subsidy rate was $3.32 per capita. On May 7, 1985 a meeting was held between the cities and DR for the purpose of adjusting the variable subsidy rate. According to the data provided by DR, both revenues and expenses were up significantly from the original estimates, with the net effect being that a decrease in the subsidy rate to $2.83 per capita was justified. No further adjustment meetings were held during 1985 and in January of 1986 the cities received a bill from DR stating that the year end subsidy rate had increased to $3.10 per capita and that the cities now owed a total of $12,294.70 in additional subsidy. Support data provided by DR indicated astronomical increases in certain expense catagories such as "Administration and General" which increased from $2,622 to $48,000. Discussions with DR resulted in an agreement to hold off paying the final subsidy payment until DR completed its year-end Medicare Cost Report. In July of 1986 DR forwarded to the cities a copy of the above described report indicating that the cities now owed a final subsidy payment of $51,237.49, representing a total subsidy of $3.94 per capita. This July bill represented a 317% increase over the amount due in January 1986. The major increases in the July bill are largely attributable to categories identified as "Allocated Costs" and "Other" . Further investigation into these categories revealed questionable cost allocations to the ambulance which provided service to the three cities, such as a $29,000 charge for the provision of cafeteria service to the para- medics. Further discussions with DR produced the following available options: 1. Undertake an audit of DR's books at the cities expense, as permitted by the contract. 2. Resolve the dispute via the Uniform Arbitration Act, as permitted by the contract. 3. Pay the amounts outstanding. Given the costs involved with options #1 and #2, they were deemed impractical at the present time. Discussions between the administrators indicated a reluctance to pay any amount greater than the January bill of $12,294.70 and in a telephone conversation with DR on August 29, 1986 DR consented to accepting that amount as payment in full. It is staff's recommendation that each city remit to DR as final payments due under the 1985 contract the following amounts: Apple Valley $ 6,684.99 Lakeville 4,392.53 Farmington 1,217.18 $12,294.70 This amount equates to a total annual subsidy rate of $3.10 per capita, a rate somewhat less than the $3.32 per capita initially called for in the 1985 agree- ment. In making this payment, the cities contractual relationship with DR will be wholly concluded. If you have any questions related to the above, or if you desire additional information, please let me know. r Ailk IMF _ 411 D.R.M.H.-AMBULANCE-SOUTHERN DIVISION INCOME STATEMENT JAN 1, 1985 THRO DEC 31, 1985 REVENUE- _ Y-T-D DEC-'85 - --- - - POPULATION INPATIENT 11,970.85 OUTPATIENT 275,774.35 APPLE VALLEY 24,990 54.371 LAKEVILLE 16,420 35.731 TOTAL GROSS REVENUE 287,745.20 FARMINGTON 4,550 9.901 REVENUE DEDUCTIONS TOTAL 45,960 CONTRACTUALS (53,103.25) BAD DEBT (28,774.52) 1935 F'AID OWED ---- SUBSIDY Y-T-D '85 1985 TOTAL REVENUE DEDUCTIONS (31,877.77) APPLE VALLEY 77,406.74 70,721.76 6,684.98 . TOTAL NET REVENUE 205,867.43 LAKEVILLE 50,861.09 46,468.56 4,392.53 - ------- FARMINGTON 14,093.66 12,876.43 1,217.18 EXPENSES TOTALS 142,361.50 130,066.80 12,294.70 PAYROLL I BEPCFITS 232,881.42 PHONE ,c.�cuu26L 23 GAS 11202.42 REPAIRS S NA:NT 6,879.57 POPULATION 45,960 SUPPLIES I DTHER 7,640.57 SUBSIDY 142.:,1.50 TOTAL DIRECT EXPENSES 260,370.21 PER-CAPITA SUBSIDY 3.10 R.O.E.(7: OF NET REV.. 14,410.:2 IEPREC1;TION 15,600,00 FENSIUH 7.9;'.00 - E RANO a 35 00 ��.�'>L V. 1.JJV1' J 77 0� r��]#'i CENERAL 48,OV��.�'1 �' U1AAL ALOnTED EX E SE 37,.5B.72 TOT(A� EXPEN Er 22p 93 :�Iii� L:11 � `LJ J�I�SYr.U.?J� NET T CDME(IOSS) (142,361,50) J 1 / AGENDA REQUEST FORM ITEM NO. 1 1 (4 NAME: Wayne Henneke ,, , L DEPARTMENT: Finance � DATE: September 23, 1986 P MEETING DATE: October 6, 1986 IIJ CATEGORY: Consent Agenda SUBJECT: 1986 Audit - Pannell, Kerr, Forster EXPLANATION: See attached memo. REFERENCE MATERIALS/RESPONSIBILITY: Wayne Henneke - Finance REFERRED TO: (NAME) DEPARTMENT: Larry Thompson Administration Wayne Henneke Finance SIGNATU MEMO TO: MAYOR AND COUNCIL SUBJECT: 1986 AUDIT DATE: SEPTEMBER 25, 1986 Pannell, Kerr, Forster has submitted the attached audit engagement letter and rate schedule for the 1986 audit. The audit agreement is the same as it has been in past years. The audit will be done in accordance with generally accepted auditing standards. Auditing fees are based upon hours worked in performing the audit. Pannell, Kerr, Forster is one of the two CPA firms that perform most of the city audits in the metropolitan area. Ken Malloy is the partner in charge of the Farmington audit. He has been with the firm for nine years and has conducted the City's audit each year. He has extensive knowledge of our books and procedures. He knows where to find the records he needs to work with, without interrupting a member of staff. The audit is conducted quickly and professionally. It is the recommendation of the Finance Department to authorize the firm of Pannell, Kerr, Forster to conduct the 1986 audit and to accept the terms of the audit engagement letter. 11 / O kI, 1 Wayne Henneke Finance Director WH/mh f PANNELL • 19 10 KERR ss? FORSTER Certified Public Accountants 410 Park National Bank Bldg. 5353 Wayzata Boulevard Minneapolis,MN 55416 September 18, 1986 Telephone(612)545-0421 Mr. Larry Thompson, City Administrator City of Farmington _ 325 Oak Street Farmington, Minnesota 55024 Dear Mr. Thompson: This letter is to explain our understanding of the arrangements for the services we are to perform for the city of Farmington for the year ending December 31, 1986. We ask that you either confirm or amend that understanding. As in the past, we will perform an examination of the City's financial statements. The purpose of our examination is to express an unqualified opinion on the fairness of the presentation of the City's financial statements for the year ending December 31 , 1986, in conformity with generally accepted accounting principles applied on a consistent basis. If we discover that we cannot issue an unqualified opinion, we will discuss the reasons with you before submitting a different kind of report. General fixed assets testing will be excluded from our examination because ade- quate detailed property records at cost are not maintained. Due to this, we will disclaim an opinion on those fixed assets. As you know, management has the primary responsibility for properly recording transactions in the records, for safeguarding assets, and for preparing accurate financial statements. Our basic audit function is to add reliability to those financial statements. Our examination will be conducted in accordance with generally accepted auditing standards. It will include a review of the system of internal accounting control, analytical reviews, and tests of the transactions and/or balances to the extent we believe necessary. It will not include a detailed audit of all transactions and is not designed to discover defalcations or other irregulari- ties, should any exist. If the City desires that we expand the scope of our services in this regard, this letter of understanding will require revision. As a result of our review of your system of internal accounting control, we will report to you any major observed weaknesses. We will also perform a single audit covering federal financial assistance programs if required under the Single Audit Act. In addition, we will perform the required state legal compliance audit covering five main categories of compliance with Minnesota laws to be tested. Our testing procedures will comply with provisions of the Legal Compliance Audit Guide pursuant to Minnesota Statutes Sec. 6.65. Mr. Larry Thompson - 2 - September 18, 1986 We will try to initiate ideas or observations that we believe will help achieve the objectives of the City. We will also be pleased to respond to inquiries you might have about financial or other business matters. The assistance to be supplied by your personnel, including the preparation of schedules and analyses of accounts, will be discussed and coordinated with you. The timely completion of this work will help us complete our job on a timely basis. Our fees are based on the time required by the individuals assigned to the engagement. Individual hourly rates vary according to the degree of respon- sibility involved and the skill required. Interim billings will be submitted as the work progresses and as expenses are incurred. I will be in charge of the work we are to perform for you. I will call upon others in the firm for help and counsel, as necessary. If you intend to publish or otherwise reproduce the financial statements and make reference to our firm name, you agree to provide us with printers' proofs or masters for our review and approval before printing. You also agree to pro- vide us with a copy of the final reproduced material for our approval before it is distributed. If this letter defines the arrangements as you understand them, please sign and date the enclosed copy and return it to us. If not, please let us know what changes are needed. Very truly yours, PANNELL KERR FORSTER Kenneth W. Malloy, Partner Confirmed By: , 19