01-12-94 Council Workshop Minutes

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MIN[PPES CITY COUNCIL JANUARY 12, 1994 maintenance costs. In the Public Works area this may be especially evident when capital improvements are being recommended due to unrealistic maintenance costs. These are not included in the budget until numbers are a certainty. Scalze reported that when Pioneer Park was being planned, the City did a study projecting future operating and maintenance costs of the park. The Administrator reported that there is similar wording in both the New Brighton and Eagan policies. For improvement of major facilities that require more maintenance dollars, there is definitely a need for operating and maintenance costs to be accounted for. However, Little Canada's program is set up on a much smaller scale. The City's program requires review of items up to a few hundred dollars in cost, while Maplewood, for example, considers anything over $50,000 as a capital improvement item. The Administrator indicated that he would prefer one-time expenditures or items having a multiple-year impact to be included in the Capital Improvement Budqet. The Administrator suggested that review including lower cost items be done as part of this process until the City qets a good feel for how the system will work. The Administrator reviewed Eagan's statement on the relationship of its capital improvement program to debt pointing out that in the future the Capital Improvement Fund may be a means used to largely avoid general obligation debt. In response to a recent article in The Little Canada Press regarding Council action to reallocate approximately $84,000 savings per year for the next four years from the refunding of the 1978 bond issue rather than using that reduction to reduce the levy as Maplewood recently did, the Administrator pointed out that Little Canada has reduced its levy as well. The Administrator distributed an analysis of the effect of debt restructuring on the City's levy over the next several years. In 1991 the City's debt issues were significantly restructured which resulted in a savings of $341,000 in levy costs between the years 1992 through 1999. The 1978 bond issue was refunded, resultinq in a savings of $345,000 over the life of the issue, or $84,000 per year for the next four years, and that savings was allocated to the Capital Improvement Fund. The City also refunded the EDA issue on the new fire station resulting in a savings of $111,000 over the life of that issue. That savings will result in a debt levy savings. Therefore, the City is passing on approximately $450,000 of savings to the taxpayers due to debt restructuring. Paae 3