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CITY COUNCIL - MAY 28, 1991 Page 8 1 surpluses. • 2 3 The General Fund shows a fund balance of approximately $668,000. City staff 4 and Council have designated approximately $450,000 for working capital needs 5 for the first six months of the year because tax settlements and state aids are 6 received only at mid-year and year-end. The $500,000 in the Special Revenue 7 Fund has been designated for municipal buildings. Additionally, the H.R.A has 8 $50,000 available to spend for other redevelopment projects. He pointed out 9 that the designation of all fund balances is listed under Note 10 on page 24 of 10 the report. 11 12 Mr. Bonniwell stated that under debt service there is a fund called Improvement 13 Bond Fund for which no more debt exists. The $618,000 in that fund is now -14 available for other uses. Two hundred thousand dollars is available for further 15 capital expenditures. The Capital Projects Fund has a large fund balance left 16 over from the KR.A, which was derived from the bond issue for the Kenzington 17 project. 18 19 The Liquor and Utility Funds have been combined in the front section of the 20 report, but are broken out in the supporting statements beginning on page 52 21 of the report. The Utility Fund appears to have $300,000 of investment income, 22 but those funds actually are earmarked for expenditures such as bond • 23 payments. Proceeds from the water purification lawsuit have been designated 24 for maintenance and operation costs. 25 26 Note 2 on page 18 summarizes the City's investments. Mr. Bonniwell noted 27 that the City's funds for 1990 are well-diversified and invested about as well as 28 can be done in today's market. Funds which were invested in 1989 at five or 29 six percent were reinvested in 1990 at yields of eight to eight-and a half 30 percent. Funds in a local bank which were not protected by collateral last year 31 have been properly collateralized and secured by other investments pledged by 32 the bank. 33 34 Mayor Ranallo asked what the chances were that the City's bond rating might 35 improve beyond the A-1 rating which it achieved approximately 18 months ago. 36 Mr. Bonniwell replied that, although he is not familiar with the mechanics of 37 bond ratings, he-saw nothing in the financial statements which would preclude 38 that possibility. He said that the City will, however, be losing $135,000 in state 39 funds this year and approximately $60,000 in 1992, and should guard their 40 reserves carefully. The City has very little debt -- only the $300,000 certificates 41 of indebtedness -- and the tax increments being generated from the tax finance 42 districts will be more than adequate to cover future debt service payments.