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City Council Regular Meeting Minutes 06 July 13, 2004 Page 5 1 the City on an ongoing basis. He added that it is"critically"important to know what the City's 2 fund balances are. 3 4 Councilmember Stille questioned as to whether tracking the City's"leverage"of certain financial 5 ratios, compared to industry standards, and to cities of similar size can be done? Mr. Bonniwell 6 suggested that in the future when all cities have converted to GASB34 it might be possible. 7 8 Councilmember Stille inquired as to what the City can do to improve their moody's financial 9 rating. Mr. Bonniwell assured him that since the City converted to GASB34 their rating should 10 improve. 11 12 Councilmember Thuesen suggested the difficulty in accounting for assets with depreciation and 13 the fact that the aggressive improvements the City has made to improve their road conditions are 14 not included in the reports. Mr. Bonniwell responded in stating the City had three options 15 available, adding where costs were available is what was used. He indicated that costs for the 16 road improvements dating back to 1993 were capitalized, along with.depreciation, indicating 17 what is on the books is a net of this cost. He added the City made the recommendation not to 18 include the remainder of the roads declaring them either suitable of fully depreciated, therefore 19 of no value to the City. 20 21 Councilmember Thuesen suggested that GASB34 would a positive for a City that is aggressive 22 in maintaining its assets, noting it would reflect their re-investments. Mr. Bonniwell stated that 23 is correct. 24 25 Councilmember Faust questioned the Water Filtration Fund that was built up from the receipt of 26 money for water contamination. He noted that some of the money was used for collateral and 27 inquired as to if the City is using the money too quickly to have funds available for replacing the 28 Water Filtration Plant when needed. 29 30 Mr. Bonniwell responded in pointing out the section in the Audit Report noting that$5.2 M 31 worth of assets are still available in the fund and that the City received a surplus in 2003. He 32 added that the funds that are available would not be enough to replace the plant. 33 34 City Manager Mornson interjected in stating that the City has received estimates that the current 35 plant has twenty to thirty years of operation left. He added that some of the money taken from 36 the fund went to Central Park and the construction of the new liquor store. He noted that 37 improvements made to bring the Water Filtration Plant up to OSHA standards were paid out of 38 the Water Sewer Fund and not taken from the Water Filtration Fund. 39 40 Councilmember Faust continued in questioning whether the City should be concerned and look 41 to allocate funds from other sources to build the Water Filtration Fund back up to the amount 42 received for water contamination. 43 44 Mr. Bonniwell noted that the current facility has over twenty years of operation left, as Mr. 45 Momson stated,therefore, it should not be a concern for the City at this time. 46