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MINUTES <br />CITY COUNCIL <br />NOVEMBER 30, 1993 <br />The Administrator reviewed the Cable TV budget pointing <br />out that it is not dependent on property taxes, but <br />rather supported with Cable TV franchise fees. <br />The Administrator reviewed 1994 Bonded Indebtedness <br />pointing out that the main change is the refunding of <br />the 1978 issue reduced the levy. It was the <br />Administrator's recommendation that this reduction be <br />transferred to the Capital Improvement Fund, thus <br />retaining the total net levy at the 1993 level. <br />With regard to the proposed Water Budget, the <br />Administrator reported that he attended a hearing of <br />the St. Paul City Council with regard to water rate <br />increases. It appears that there will be a 3 to 3 1/2 <br />percent increase. The Administrator reported that the <br />Water Budget is a difficult one to project given the <br />uncertainty in the amount of water consumption. The <br />Administrator felt that a 3 to 4 percent increase in <br />this Budget will leave the utility in good shape. The <br />Water Budget will be fine-tuned and brought back to the <br />Council at a later date for adoption. <br />Morelan asked why the City does not fully fund <br />depreciation. <br />The City Administrator felt that to build up too much <br />money for this type of replacement penalizes today's <br />users for the benefit of future users. <br />Morelan asked if property owners would be assessed in <br />the future when the time comes for system replacement, <br />noting that such replacement may be 50 years from now. <br />The Administrator felt that replacement could be <br />addressed with user fees, although a portion could be <br />assessed. The Administrator felt that fully funding <br />depreciation was a valid approach depending on needs. <br />In this instance , our replacement needs are a long way <br />out and the issue becomes one of reasonableness. <br />Morelan asked if the depreciation expense show in the <br />budget was the cost of depreciation. <br />The Administrator replied that he would have to check <br />this with the auditor, feeling that the figure shown <br />may not include all depreciation but was pretty close. <br />The Administrator pointed out that this depreciation <br />expense was based on past costs and not on projected <br />future costs. This money is invested, and hopefully <br />the interest earnings will cover future cost increases. <br />The Administrator reported that there are schedules for <br />these types of improvements for cities, and the dollars <br />Page 10 <br />