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LAKE ELMO CITY COUNCIL MINUTES April 02, 2013 Page 5 of 7 6. The City will pay back debt within a period not to exceed the expected useful life of the projects, typically at or below 20 years; 7. Direct net debt not to exceed 3% of total market value of taxable property in the City; 8. The City will manage debt issuance plans and structuring of debt service to strive to maintain a total debt service levy that is less than 25% the City’s total combined certified property tax levies; 9. The City will maintain good communications with bond rating agencies regarding its financial condition, including full disclosure in every report; 10. When feasible the City will use refunding mechanisms to reduce interest cost; 11. During the annual budget process, a debt study will be prepared in conjunction with the CIP to provide information about the City’s planned debt structuring; 12. Refunding and advance refunding savings opportunities will be monitored, and action will be taken when determined to be financially advantageous. Prepayment of debt was explained. Council Member Nelson asked about total current debt. Mr. Zuleger stated it is currently under 15%= 14.3-4. Street/sewer/water (enterprise) debt does not impact property tax levy. The target of 25% was discussed. Mr. Zuleger explained that 25% was industry standard. It was explained that bond raters like to see no more than 25%. Recoverable charges were discussed. Alternative Urban Areawide Review (AUAR) will require us to pass an ordinance. There will be an amount of AUAR that will not be recovered. Council Member Smith stated that the council may have been under the impression that the AUAR was going to be 100% recoverable. Mr. Griffin said the original design of the forcemain might be part of $1 million figure Council remembers. Mayor Pearson asked about the practice of saving and taxing for future benefits that may not be realized. Mr. Zuleger said it typically is not a common practice. GFOA Industry moved from sinking fund to $25,000 threshold and 10-year useful life. MOTION: Council Member Smith moved TO APPROVE THE DEBT MANAGEMENT POLICY AS PRESENTED. Council Member Nelson seconded the motion. MOTION PASSED 4-0. ITEM 13: ADOPT I-94 COMPREHENSIVE PLAN UPDATE Planning Director Klatt explained this was a request for Council to formally adopt the I-94 comp plan. Mr. Klatt explained the history of the development of the comp plan. The Metropolitan Council had very positive reaction. The Met Council agreed to amend the Memorandum of Understanding. Amendment will provide an additional 5 years for planning and build-out. New target date is 2015 with penalties beginning in 2016. Amendment also gave Met Council Regional Administrator authority to negotiate with city. Mr. Klatt noted that the Village Plan will be coming back to Council soon for formal adoption as well. In order to not cause any confusion, the other portions were not included. Mr. Klatt outlined the next steps will mainly involve changes to zoning map, including several holding zones. These are