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CITY COUNCIL - MAY 28, 1991 . Page 9 01 Council Member Marks asked whether the H.R.A. funds will be adequate to 2 carry on in the future. Mr. Bonniwell replied that the financial statements of the 3 H.R.A. show in detail where the interest that has been earned has been 4 allocated to the various projects. Other financial planners consulted by Mr. 5 Bonniwell have indicated that nothing in the bond document requires that 6 allocation. There are interest funds available which have been allocated to the 7 various projects that could be freed up and put into a pool which the H.R.A. 8 could use-to generate some low-income housing or other types of activities. 9 Mr. Bonniwell offered the opinion that a portion of those funds could probably 10 be used once the City has proven that it has enough incoming revenue to pay 11 the debt service, although the terms of the bond document would have to be 12 researched to determine whether that would be a suitable use. 13 14 City Manager Burt indicated that the interest income could possibly be used to 15 fund small redevelopment districts or to offer low-income loans for rehabilitation 16 of buildings in blighted areas. Mayor Ranallo suggested that low.-income home 17 loans might be offered to first-time buyers to attract younger residents to the 18 community. City Manager Burt stated that the funds are left over from the 19 Kenzington project because the META triangle has never been developed, 20 although plans are being considered for a medical complex. 21 Council Member Marks asked whether the dedicated H.R.A. funds should be �L3 pooled or should remain project-oriented. Mr. Bonniwell replied that the funds 24 should be kept general so that the City has enough latitude. to react to 25 emergencies with no adverse effect on the City's financial position. 26 27 Mr. Bonniwell drew the Council's attention to the deficit balance in the General 28 Fund under Undesignated, which was derived only because the funding-from 29 the Community Development Block Grant Fund had not been received as of the 30 end of the year. 31 32 B. Renewal of City's Insurance and Approval of Payment to the League of 33 Minnesota Cities Insurance Trust of $79,365. 34 35 Mayor Ranallo invited Mark Flaten to outline the issues relevant to the insurance 36 policy renewal. Mr. Flaten distributed to the Council copies of tables outlining 37 the available options and the City's current position. He stated that one of the 38 City's option was to go from a $10,000 deductible to a $25,000 deductible 39 policy, thereby saving $17,000 in premiums. He noted that the LMC had 40 mistakenly rated last year's premium $14,000 lower than it should have been. It 41 has been rated correctly this year, which.accounts for the noticeable increase in 42 costs from 1990 to 1991,. •