CC PACKET 01051999 - Laserfiche WebLink

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. . . . 1 The Finance Director reported in answer to Councilmember Cavanaugh, that non-operating 2 revenues do not subsidize water and sewer rates. He indicated that he will recommend to the 3 auditor that his report be clearer on this issue. Councilmember Cavanaugh disagreed stating 4 that the sewer fund is loosing $107,000, that the audit sheet does not report this fact clearly. ' 5 Mayor Ranallo asked if Councilmember Cavanaugh feels the audit report is not correct. 6 Councilmember Cavanaugh stated that it is correct, but it is not stated like other professional 7 audits. Mayor Ranallo responded that if the sewer fund is in deficit of$100,000, than the City 8 will need to raise sewer rates. Council directed the Finance Director to review rates and 9 report to the Council in February. 10 11 VI. DISCUSSION OF WATER FILTRATION FUNDS. 12 The Finance Director reported on the annual review of water filtration funds. He indicated 13 that the City is in its eighth year of its 10-year agreement with the MPCA. He reported that 14 upon completion of this agreement, the City will be totally responsible for the maintenance of 15 the water filtration facility. The Finance Director reviewed the history of these funds. He 16 stated that in 1990, the Council implemented a financial plan to build funds sufficient enough 17 to provide annual interest earnings adequate to provide funding for the water filtration facility 18 and building capital improvements without reducing the principal. The Finance Director 19 reported that the present financial plan in place is accomplishing that. He also reported that in 20 recent discussions with the MPCA, they indicated that the projected life to clean up the water 21 could take as long as 100 years. He recommended to Council that they designate interest 22 earnings, which exceed the funds needed to cover the current operation and maintenance costs, 23 into a building replacement improvement fund, minimizing the tax impact on the residents 24 when the facility may need to be replaced. 25 26 Councilmember Cavanaugh disagreed with the Finance Director's recommendation. He 27 indicated that the $4.8 million is a reward to the citizens for drinking rotten water. He 28 indicated that it is his suggestion to put this money into a financial plan that would allow for its 29 best use now throughout the community. He stated that he will not be around in 30 - 40 years 30 when the facility may or may not need reconstruction. There was Council discussion 31 regarding the appropriate use of this money. The Council was of the opinion that the money 32 should stay in the water filtration fund to insure that future generations will not be exposed to 33 large financial outlays associated with water treatment. 34 35 VII. REVIEW OF ESTIMATED EXPENDITURES AND REVENUES FOR 1998 GENERAL 36 FUND. 37 The City Manager reported that this was an item brought back from the October 6, 1998 38 Council worksession meeting and the summary provided in tonight's meeting packet is a 39 projection of revenues over expenses. He indicated that the proposed 1999 budget shows an 40 estimated surplus of$180,984.00. 41 42 Councilmember Cavanaugh suggested that there are discrepancies between the 1997 budget and 43 the estimated 1998 budget. Because the Council did not have the 1997 budget to review, there 44 was no discussion. 45 46 VIII. REVIEW ORDINANCE ON POLITICAL SIGNS. 2