HomeMy WebLinkAbout09-22-2014 Council Budget Work Session Minutes1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
CITY COUNCIL WORK SESSION
APPROVED
DATE
TIME STARTED
TIME ENDED
MEMBERS PRESENT
1VIEMBERS ABSENT
CITY OF LINO LAKES
MINUTES
September 22, 2014
: September 22, 2014
. 8:30 p.m.
. 9:30 p.m.
: Council Member Stoesz, Kusterman,
Rafferty, Roeser and Mayor Reinert
: None
Staff members present: City Administrator Jeff Karlson; Finance Director Al Rolek;
Public Services Director Rick DeGardner; Community Development Director Michael
Grochala; Public Safety Director John Swenson; City Clerk Julie Bartell
1. Review of Fund Reserves — Terri Heaton, Springsted, Inc., the City's financial
advisor was present.
Mayor Reinert noted that the staff report on this matter was submitted to council
members very late so discussion at this point will be limited to allow future discussion
after more time for review of the information.
Finance Director Rolek explained that the staff report includes infouuation on all city
funds including their purpose and reserve balance. He has also provided information on
interest income by fund since 2008. He reviewed the different types of overall funds —
general, special revenue, debt service, enterprise and agency and fudiciary funds. It was
noted that state law does include some restrictions on the investment of city reserve
funds.
Mayor Reinert noted an overall increase of $3 million in last three years and Mr. Rolek
responded that the city has received an advance of Municipal State Aid (MSA) funds
from the State in the amount of $3.5 million. Mayor Reinert said he is interested in
having a better understanding of the increase in reserve funds over the past few years,
including the interest that is yielded from the funds. He understands that the state limits
the type of investments for the city but he is also concerned about the possibility of losing
money by simply holding it in account. He feels it is an important discussion for the
council.
Council Member Roeser noted the road fund reserves and asked why the city isn't
spending that money down when road projects are needed. Community Development
Director Grochala responded that staff is always working on planning for future road
improvements that will utilize those funds.
CITY COUNCIL WORK SESSION September 22, 2014
DRAFT
44 Mayor Reinert asked that the council review the statutory language for a better
45 understanding of the restrictions on city use of reserve funds. Finance Director Rolek
46 concurred that it is very important to understand those restrictions.
47
48 Council Member Kusterman wondered about the possibility of borrowing against
49 dedicated funds and the council discussed funds that are discretionary for borrowing.
50 Staff discussed with the council the possible ramifications of borrowing.
51
52 Ms. Heaton added that one of the biggest considerations for the city's bond rating is cash
53 on hand. She recommends that the council decide what the "savings account" will be and
54 move from there. She also recommends that the council look ahead at a period such as
55 five years to determine what funds will actually still be in reserve. A lack of cash on
56 hand can lead to the need to borrow and that is not recommended.
57
58 The mayor noted that there should be more analytical ability with the new financial
59 system coming on line.
60
61 The council concurred that they will receive additional infoiniation on the reserve fund
62 and continue their discussion at a future meeting.
63
64 The meeting was adjourned at 9:30 p.m.
65
66 These minutes were considered, corrected and approved at the regular Council meeting held on
67 October 27, 2014.
68
69
70
1
anne Bartell, City, ler
73
2