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City Council Regular Meeting Minutes May 27, 1997 • Page 5 1 repaired but there is significantly less storm sewer and less water main. In 1999 the area 2 would be finished by repairing Edward Street between 34th and 33rd Avenues. 3 There was Council direction for Mr. Moberg to work with Staff to develop a long range 4 Street Project Plan. 5 C. 1996 Audits for the City and the Housing and Redevelopment Authority. 6 Stuart Bonniwell, City's auditor, explained the results of the City's audit. He noted all funds 7 have a positive fund balance. This reflects well of the City. Mr. Bonniwell noted the special 8 assessments were significant enough to pay all the debt services. 9 Faust asked if there were any areas where the City should be paying off debt to reduce their 10 interest expense. 11 Mr. Bonniwell and Finance Director Larson stated Springsted watches this closely and 12 refinances when the opportunity is available. 13 Mayor Ranallo suggested the Housing and Redevelopment Authority audit report be discussed 14 and noted that the 1997 HRA audit will be considered for approval by the HRA at a future 5 HRA meeting. 6 Mornson reported he had met with Jerry Gilligan and there are two law changes that the 17 Council should be aware of. Previously, the City has been transferring interest earned in tax 18 increment financing (TIF) accounts to the HRA account. This has allowed a greater 19 flexibility in the use of those funds. As of July 31, 1997, this will no longer be allowed. 20 Interest earned in TIF accounts will be required to remain in TIF accounts. 21 Mornson also reported that commercial rates are dropping. He noted CUB Foods and First 22 Bank have signed a shortfall agreement which will provide assistance in that district. 23 Mr. Bonniwell explained the results of the Housing and Redevelopment Authority audit. He 24 noted the Kenzington Economic District has a cash balance of$240,000. This was a TIF 25 district for a shopping center. None of the funds were used for rehabilitation, it was a short- 26 term district and it has been decertified. The Council directed the City Manager to work with 27 Jerry Gilligan of Dorsey & Whitney to determine the appropriate action the City should take 28 regarding the fund balance of the Kenzie Economic District. 29 Mornson reported he had discussed the possibility of transferring the funds to another district 30 with Jerry Gilligan and he has suggested the funds be paid to Hennepin County. The City 31 will then get their percentage back from Hennepin County. 2 The Council then considered the suggestions in Mr. Bonniwell's letter of April 15, 1997. 33 Faust agreed that the expense reimbursements should be reviewed before they are placed on 34 the verified claim list.