08/09/2006 Council Minutes - Laserfiche WebLink

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COUNCIL FINANCIAL RETREAT AUGUST 9, 2006 APPROVED The Council directed staff to further investigate options for repayment of the loan including increased Park Dedication fees, valuation of the land and possibly selling a portion of it and other revenue sources. Finance Director Rolek provided the background of the Storm Management Fund noting it is clear that the use of storm water development fees for maintenance purposes is not an appropriate or intended use of these funds. It is also clear that there are ever-increasing regulations relative to surface water standards and the clean water act. These are unfunded mandates, which the City will need to find a way to fund. Finance Director Rolek advised staff is recommending that a permanent funding source be established to pay for ongoing maintenance of this storm water system. Because there is equity to the system where those who have the most impervious surfaces have the most runoff and should pay the most, and vice -versa, staff is recommending continuing to pursue a storm water utility. It is the most equitable — though not perfectly equitable — method to finance maintenance of this system. If the utility is not implemented, property taxes will need to be levied to maintain the system. The costs are there and they are real; the only question is how to pay them. Staff feels a storm water utility is the best way at this time. The Council agreed staff should continue exploring the possibility of a storm water utility that includes an educational plan for residents as well as more equitable ways to implement the plan such as assessments. Council also requested staff look into possible grants as a way to offset those costs. Finance Director Rolek referred to the Area and Unit Fund noting the sharp decline in fund balance over the last five years. It is clear that this fund no longer has the capacity to carry capital improvement projects until an event occurs that triggers payment of hook-up and trunk fees. In the absence of a large infusion of capital from a future development, the full cost of projects, less oversizing and City -borne costs, must be assessed to benefited properties. Finance Director Rolek stated staff is in the process of collecting policies used in other communities to model a new policy for consideration by the City Council. This is an important issue that needs to be addressed and changed in order to maintain the integrity of this fund and to continue to service debt attributable to this fund. The Council directed staff to continue collecting other city policies and bring forward a recommendation. The Council also requested information regarding the amount of deferred assessments and a timetable relating to those assessments. Finance Director Rolek advised staff would like Springsted to conduct a Utility Rate Study. •