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Mounds View City Council March 10, 2003 Regular Meeting Page 12 Finance Director Hansen explained that one fund acts as a savings account and the money is transferred to that savings account and then back the other way to pay for vehicle purchases. Council Member Quick asked for clarification on the purchase of one squad car. Finance Director Hansen indicated the City had budgeted for three vehicles, two marked and one unmarked squad and only one marked squad was purchased. Council Member Quick asked why only one marked squad was purchased. Finance Director Hansen indicated the decision was made well over a year ago but as he recalls the acting Chief at the time determined that, in the interest of saving the City money, the Police Department could make it a little longer with the one marked squad that was scheduled to be replaced. MOTION/SECOND: Quick/Marty. To Waive the Reading and Approve Resolution 5967, a Resolution Approving Transfers Between Funds for the Year 2002. Ayes - 5 Nays - 0 Motion carried. B. Resolution 5968 Approving Interfund Loans for the Year 2002 and Setting an Interest Rate on Loans for the Year 2003 Finance Director Hansen explained the interfund loans that needed to be made noting that these are loans with the assumption that the moneys will be paid back to the lending fund with interest. Finance Director Hansen indicated the Resolution lists the amounts of the loans Staff is asking Council to approve for December 31, 2002. He then listed the amounts. Finance Director Hansen indicated that the total amount of loans to the golf course is $1,017,887.00 as a result of an operating loss in 2002 due to difficult weather and the strike. Council Member Quick asked if some of that loan happened because money was transferred without Council approval to operate the golf course. Finance Director Hansen explained that there are bond covenants requiring the City to maintain a cash balance of $309,000. He then said that there was a year or two where the City lost site of that requirement and allowed the cash value to drop below the amount called for and, when Staff became aware of that, a loan was required to bring the account back into compliance. Council Member Stigney clarified that the total loans are $1,017,887.00. Finance Director Hansen indicated that language was added to the Resolution that additional loans may be made as needed to cover operating deficits in 2003 to meet the state law requirement that Council approve, in advance, any loans made to the TIF district.