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LAKE ELMO CITY COUNCIL MINUTES April 02, 2013 <br /> <br />Page 4 of 7 <br /> <br />ITEM 10: STATE HIGHWAY 36 SOUTH FRONTAGE ROAD STUDY – AUTHORIZE MAYOR AND <br />ADMINISTRATOR TO EXECUTE TASK ORDER NO. 1 FOR SRF CONSULTING SERVICES, INC. FOR <br />TRANSPORTATION PLANNING SERVICES City Engineer Griffin explained that this was the task order for the previous item authorizing the Highway 36 Frontage Road Study. The amount of the expenses and the responsible portions was discussed and clarified. <br /> <br />MOTION: Council Member Smith moved TO APPROVE TASK ORDER NO. 1 TO SRF CONSULTING <br />SERVICES, INC. FOR TRANSPORTATION PLANNING SERVICES FOR THE STATE HIGHWAY 36 <br />SOUTH FRONTAGE ROAD STUDY IN AN AMOUNT NOT TO EXCEED $64,500. Council Member <br />Bloyer seconded the motion. MOTION PASSED 4-0. <br />ITEM 11: APPROVE FUND BALANCE/NET ASSETS POLICY City Administrator Zuleger explained the policy and the reasoning for establishing it. It is standard for municipalities to adopt a fund balance use policy. Mr. Zuleger highlighted major sections. Driving factors for adoption include affecting bond rating and having a disciplined policy as the City moves into a stage of growth. Adoption will strengthen the internal controls surrounding the use of these funds and provide clear direction to staff on the monitoring and reporting surrounding those funds. Finance Director Bendel noted Enterprise Fund item #3(periodic rate review) as an item that Council will appreciate. <br />MOTION: Council Member Smith moved TO APPROVE THE FUND BALANCE/NET ASSETS POLICY AS <br />PRESENTED. Council Member Bloyer seconded the motion. MOTION PASSED 4-0. <br /> <br />ITEM 12: APPROVE DEBT MANAGEMENT POLICY City Administrator Zuleger explained the policy and the reasoning for establishing it. Having a policy in place is important during accelerated periods of growth, as it prevents the City from over-extending itself. Mr. Zuleger highlighted the 12 policy statements emphasizing that several of the policies will have a beneficial impact on City’s bond rating. 1. The City will maintain a Five-Year Capital Improvement Plan (CIP). It will be need based, not wants based; 2. The City will restrict long-term borrowing to planned capital improvements, as included in the CIP, and a limited use of short-term debt for capital outlay and acquisition. On all projects, at least 50% of the principal will be retired within 10 years; 3. The City will not use long-term debt for current operations; 4. The City will strive to maintain a “pay-as-you-go” capital funding policy, supporting capital spending without use of debt whenever feasible; 5. The City recognizes that for certain projects that the use of debt may be of overall financial benefit to the City and that all projects should be evaluated to determine whether debt financing is the appropriate choice at the time of authorization;