08-23-84 Agenda & Packet - Laserfiche WebLink

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A f . Page 2 January 12, 1984 1111 equipment and/or capital improvements which are contained in the Long Term Financial Plan. Requiring that items be included in the Long Term Financial Plan will ensure that items financed by the fund will have been subjected to a careful review by both staff and Council. Further items so financed will be those which are necessary to achieve the long range goals and objectives of the City as contained in the Plan. In summary, the proposed ordinance provides that a Special Projects Fund be established with the cash balance remaining in the Improvement Bond Redemption Fund after the bonds in that Fund have been defeased. Monies in the Fund may be used for the following purposes : 1) interest bearing loans to finance public improvement projects or to finance purchases of equipment and/or capital improvements of the Water, Sewer and Recreation Activity Funds 2) to purchase equipment and/or finance capital improvements of any City funds except special assessment and enterprise funds 3) to make permanent transfers to the fund balance of the General Fund 4) to make emergency repairs The proposed ordinance requires a resolution of 4/5 of all the members of the Council to authorize use of the monies in the Fund. During past discussions of possible uses of the monies that will be available to the City after the defeasance, a transfer to the fund balance of the General Fund and an interest bearing loan to the Improve- ment Bonds of 1981 Bond Fund were mentioned. Pursuant to terms of the proposed ordinance such uses would have to be authorized by resolution. Therefore, I am proposing a resolution be adopted immediately after the ordinance is adopted authorizing the first uses of some of the monies of , the Special Projects Fund. The first use proposed is a permanent transfer to the fund balance of the General Fund. Our auditors have recommended that, for cash flow requirements , our fund balance be one-half the sum of the budgeted tax levy and local government aid. For 1984 that is approximately $630 , 000 . Presently the fund balance is $392,000; this is $238,000 short of the minimum amount recommended. In their management report dated December 31, 1982 (p. 22) our auditor' s stated that cash flow requirements are only one of several reasons for maintaining General Fund revenues. Other reasons are unanticipated or emergency expend- itures and reductions in shared intergovernmental aids received from 111 the Federal and State Governments. During 1982 the City experienced a reduction of aid received from the State of Minnesota of approxima, ) ly $80, 000. While the timing of those aid reductions were such that _/