11-29-94 Council Workshop Minutes

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MINUTES CITY COUNCIL NOVII'4BER 29, 1994 establishing designated'funds, it use specific authority already granted under State Statute to shelter money in the future and to protect the State from passing its problems on to the City. Morelan felt that combining the Closed Bond, MSA, and Street Overlay Funds into a Capital Infrastructure Fund and using some of this money to buy down the City's levy contradicted themselves. Fifield pointed out that the amount of dollars held in reserves to meet City objectives is a balancing act with holding off levy increases in future years. Fifield pointed out that the City Administrator's memo explains that reducing the levy for debt service is beinq achieved with future fund balances. The City is reducing the amount of dollars that will go into the Closed Bond Fund. The net effect is the same, but different. Morelan asked how the $637,000 figure was arrived at. The Administrator explained that they began with a $20,000 annual impact and equalized it over the course of five years. Fifield stated that by fixing the $637,000 figure over five years it was easier to track. Morelan asked where the $20,000 figure came from. The Administrator reported that the Closed Bond Fund was looked at to determine what number would work without bankrupting that fund. The Administrator reported that the $20,000 leaves a cushion for the City at the end of 1999. The Administrator stated he would be uncomfortable using a figure larger than $20,000 at this time. Morelan pointed out that the effect is actually on the Closed Bond, MSA, and Street Overlay Funds since the recommendation is to combine those funds. Morelan stated that he was nervous buying down the levy with existing funds on hand, even though it appears it will work. Morelan pointed out that the City could have unallocated expenses, and should have fund balances on hand to cover unexpected items. 8