12/04/2006 Council Minutes - Laserfiche WebLink

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• • • CITY COUNCIL WORK SESSION DECEMBER 4, 2006 APPROVED 1 that failed in 2001. The auditors have strongly recommended that the City cure this 2 deficit to the Dedicated Parks fund. 3 4 Finance Director Rolek stated staff is recommends establishing a repayment plan for the 5 interfund loan. An outright transfer of the funds would not be an appropriate use of the 6 Area and Unit funds, which were collected to implement trunk sewer and water facilities. 7 The loan can be repaid in installments of $100,000 per year over a 12 year period with a 8 moderate rate of interest of 3% per annum. The source of the repayments would be 50% 9 from park dedication fees and 50% from the General Fund. The General Fund has run a 10 budget surplus over the last several years. Staff recommends that $50,000 of any budget 11 surplus be dedicated to the repayment of the interfund loan until the loan is satisfied. In 12 most years, should the budget contingency not be used during the year, a surplus would 13 result. If in any year there is no budget surplus the term of the payment plan would be 14 extended accordingly. As a result of this plan, there may be an impact on the rate of park 15 development over this repayment period; however, given the projections included in the 16 draft Five Year Plan, this does not appear to be a significant concern. 17 18 Finance Director Rolek stated if, at some point in the future, it is determined that the City 19 should divest itself oft his property, the proceeds would flow into the Dedicated Parks 20 fund to be used toward repaying any unpaid loan balance and/or completing development 21 in any of the remaining City parks. 22 23 The Council directed staff to move forward with the repayment plan formulizing a 24 resolution to be included on the December 18 City Council agenda. 25 26 Mayor Bergeson called for a short break at 7:55 p.m. 27 28 Mayor Bergeson reconvened the meeting at 8:00 p.m. 29 30 FIVE YEAR FINANCIAL PLAN 31 32 Finance Director Rolek referred to a draft 2007-2011 Five Year Financial Plan. The Plan 33 was developed with the underlying values of meeting the City's obligations to the citizens 34 of Lino Lakes, maintaining service levels, and holding the line on costs and taxes in a 35 growth environment. 36 37 Finance Director Rolek reviewed the Plan in detail noting it must be recognized and 38 reiterated that this is a financial plan, not a budget, and it does not constitute authorization 39 for future spending. The City budget will continue to be prepared annually, and current 40 needs will continue to be presented to the Council on an annual basis. While it is 41 Council's, and staffs intention to be fiscally responsible, it is possible that future 42 budgetary needs may differ from what is outlined in the Five Year Plan, resulting in a tax 43 rate higher or lower than anticipated in the plan. Likewise, the Five Year Plan will be 44 updated each year and City needs reassessed at the time of renewal. 45