06-01-2020 Council Work Session Minutes

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CITY COUNCIL WORK SESSION APPROVED 1 CITY OF LINO LAKES 2 MINUTES 4 DATE June 1, 2020 5 TIME STARTED 6:00 p.m. 6 TIME ENDED : 9:00 P.M. 7 MEMBERS PRESENT Council Member Stoesz, Lyden, Ruhland, 8 Cavegn and Mayor Rafferty 9 MEMBERS ABSENT None 10 Staff members present: City Administrator Jeff Karlson; Community Development 11 Director Michael Grochala; City Engineer Diane Hankee; Human Resources Manager 12 Karissa Bartholomew; Director of Public Safety John Swenson; Public Services Director 13 Rick DeGardner; Finance Director Sarah Cotton; Utilities Supervisor Justin Williams 14 1. Review 2019 Annual Audit —Finance Director Cotton introduced Andy Hering, 15 of Redpath and Company to present the results of the 2019 internal audit. Mr. Hering 16 reviewed a PowerPoint presentation that is on file. Overall it is a clean audit with good 17 results. 18 19 The council discussed investment earnings. Ms. Cotton noted that investment earnings 20 were up in 2019 but unrealized. She has provided the exact amount to the council. 21 There is no change planned in the City's investment strategy but it should be understood 22 that earnings are varied based on the economy and the market. 23 24 When Mayor Rafferty noted the ebb and flow of the budget reserve balance, Ms. Cotton. 25 took the opportunity to overview her recent discussion with a rating agency. It was noted 26 that the City has used general fund reserve for budgetary purposes for several years, 27 including in the 2020 budget, and that is seen somewhat negatively by the rating agencies 28 especially due to the economy. Mayor Rafferty noted that those funds are surplus and the 29 council has viewed their use as a return to the taxpayers. Councilmember Stoesz asked if 30 there is guidance from the rating agencies on a good use of reserve. Ms. Cotton said it's 31 important to follow established policy and the City is doing that; the agencies want to see 32 the City in a flexible position because of the current pandemic. Ms. Cotton added that 33 she has spoken with Anoka County and has been informed that property tax collection 34 remains strong. 35 36 Councilmember Ruhland questioned the drop in the Sewer Fund and Ms. Cotton 37 suggested that would probably be related to an increase in sewer access charged by the 38 Metropolitan Council. Councilmember Ruhland also asked if there are savings 39 anticipated in this year's budget and Ms. Cotton reviewed some possibilities but 40 suggested that she anticipates the City meeting forecasts but probably not exceeding 41 them. 42 43 The council thanked staff for their work in bringing forward the report. Ms. Cotton gave 44 a shout out to the Finance Department staff for their work preparing for the audit.