12-18-2013 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL DECEMBER 18, 2013 asked if the Public Works portion of the project could be financed with sewer and water bonds while the parks portion would have to be paid for with cash. Ruff replied that that was correct. The City Administrator reported that if the G.O. Capital Improvement Plan Bonds are sold, the plan is to pay debt service on these bonds for 2014 with levied dollars. However, future debt service could be paid from water and sewer depreciation funds. The Administrator indicated that the City funds $300,000 in water and sewer depreciation each year, and would utilize $190,000 of those funds for debt service on the bonds leaving $110,000 for other purposes. The Administrator pointed out that the sale of the bonds allows the City to maintain its cash balances. He pointed out that interest rates are currently low and would likely rise over the next 20 years which would allow the City to invest its cash at a higher rate. The Administrator pointed out that while the estimated interest rate on the bonds is 3% and it is uncommon to find an investment that will earn that rate of return, the City typically does earn more through interfund loans related to its infrastructure program or through Tax Increment Financing arrangements. The Administrator again noted that because of levy limits, the City is planning to utilize levy dollars for 2014 debt service on these bonds, but future debt service payments would be made with depreciation dollars. Blesener pointed out that the City would not increase sewer and water rates in order to make debt service payments on these bonds. The Administrator replied that that was correct. The debt service would be paid with depreciation dollars. The Administrator indicated that sewer and water rates would be increased in the event that St. Paul Regional Water Service or Metropolitan Sewer Environment Services increases its rates to the City. The Administrator described the need for the new public works /parks facility. He pointed out that in 2000 the City had a facilities study done relative to the existing public works garage. That study identified a number of building deficiencies and space limitations with the existing building. Given these deficiencies, the fact that there is inadequate room to add onto the existing building, the need to store equipment indoors, the decision was made to move forward with a new facility. At this point in the meeting, the Mayor asked if there was anyone from the general public present wishing to comment on this matter. There was not. Upon motion by Keis, seconded by McGraw, the public hearing was closed. 3