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D. Closure of Fund 305 — Closed Bond Fund <br />Finance Director Berg reported that Fund 305 — Closed Bond Fund had been closed to the <br />Water Fund for utility system improvements as noted in the year end audit. At an earlier <br />staff meeting, Berg was directed that 15th Street improvements should be paid out of the <br />Infrastructure Reserve Fund. It was later researched that the City Council had discussed <br />that the 15th Street improvements were to be paid from the Closed Bond Fund. The result <br />is that the stormwater funds have been temporarily spent for 15`h Street. <br />E. LMCIT Renewal — Tort Liability <br />In the past, the City has chosen not to waive the monetary limits on municipal tort <br />liability established by Minnesota Statutes 466.04. Staff recommended the City continue <br />this practice. <br />M/S/P Siedow/Dunn - that the City does not waive monetary limits on municipal tort <br />liability. (Motion passed 5-0). <br />F. Report on Audit <br />Finance Director Berg introduced discussions with the auditors, regarding social security <br />tax and withholding tax not being withheld or paid impacting 35 employees. The Fire <br />Department, seasonal staff, one City hall staff member are affected. The City has not <br />issued 1099's to independent contractors in the past. <br />Attorney Filla explained the auditor has requested Council authorize him to make <br />adjustments to the 2000 and 2001 W2's and tax returns and make the required payments. <br />The Finance Director will notify the employees involved. Employees would pay back <br />their share not withheld. The City could receive penalties for every 1099 not issued. <br />M/S/P Siedow/DeLapp - <br />1 . Authorize auditor to amend W-2's and tax returns for 2000 and 2001. <br />2. Authorize the Finance Director to make requested payments to IRS. <br />3. Authorize the Finance Director to notify affected employees that the City has <br />taken action as recommended by auditor <br />4. The amount of taxable income will be increased for social security contribution <br />and reported on their W-2. (Motion passed 5-0). <br />4. OLD BUSINESS: <br />A. Lot Line Adjustment Ordinance <br />M/S/P Armstrong/DeLapp — to adopt Ordinance No. 9796, as amended, An Ordinance <br />Amending the lake Elmo Municipal Code, Section 400.10 Exceptions to Platting. <br />(Motion passed 5-0). <br />LAKE ELMO CITY COUNCIL MINUTES DECEMBER 18, 2001 <br />