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1 <br />1 <br />1 <br />COUNCIL WORK SESSION JUNE 27, 1994 <br />meet the scheduled debt payments. <br />Page eight (8), is a breakdown of funding sources for 1993. <br />Property taxes as a percent of total revenue has consistently <br />been approximately 45%. As income from state aids has dropped, <br />the City has made up the difference from income other than taxes. <br />Mr. Schumacher explained that it is important to note that the <br />City has held property taxes at a constant level and not allowed <br />any "peaks or valleys" to occur. <br />Council Member Kuether noted that income from licenses and <br />permits increased considerably during 1993. Mr. Espe explained <br />that the increase in the number of building permits accounted for <br />a large portion of the increase. <br />Page 11, Fund Balance, indicates that $350,363.00 was added to <br />the fund balance in 1993. Mr. Espe presented a detailed analysis <br />of the increase. The total General Fund balance is now <br />$1,756,659.00. <br />Page 12, shows how the City's cash flow reserve requirement is <br />calculated. He also noted that the City adopted a reserve policy <br />that addresses three (3) areas: 1) cash flow requirements; 2) <br />contingent employee benefits, and 3) general contingencies. The <br />cash flow requirements and the general contingencies have been <br />met, however, the contingency for employee benefits is short by <br />about $172,000.00. Mr. Espe did not feel that this is critical <br />since it is highly unlikely that all employees would retire or <br />quit work and demand all their accrued vacation and sick leave <br />benefits. <br />Mr. Schumacher said he felt that this is the time to contact <br />Moody's and try to get them to raise the City's bond rating. <br />Page 13, is a discussion regarding the reasons for reserves. <br />Council Member Kuether asked if the City had to provide the <br />additional $172,000.00 for employee benefit reserves. Mr. Espe <br />said no, however, this is a target that should be met at some <br />time. <br />Page 19, Capital Projects Funds is a schedule of all fund <br />balances. Mr. Espe noted that the Area and Unit Charge Fund is <br />very positive. He felt that it is important to keep this Fund <br />healthy since it is used to pay off bond issues instead of <br />soliciting refinancing at possible higher interest rates. <br />Page 21, explains the purpose of the Area and Unit Charge Fund. <br />Page 23, shows a schedule of actual sewer and water connections <br />PAGE 2 <br />24 <br />