CC MINUTES 04282009 - Laserfiche WebLink

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City Council Regular Meeting Minutes April 28, 2009 Page 6 1 Mr. Larson provided an overview of interest earnings on cash and investments, and stated the 2 average rate of return in 2008 was 4.7 %, down approximately one percentage point from the 3 previous year. He discussed the water /sewer fund and stated in 2009, the DNR has mandated 4 tiered water rates to promote conservation by placing a premium on high usage; the City must 5 implement the new rates by 2010. He stated in 2008, metropolitan waste costs were $467,267 6 and costs have stabilized over the last three years primarily due to the I &I (inflow and 7 infiltration) program. He stated that Met Council will assess penalties for improper drainage into 8 the sanitary disposal system and the City has been removed from the surcharge list. 9 10 Mr. Larson discussed key financial management planning and stated improvements will be 11 funded with no increase in taxes; in addition, the Emerald Park funding plan calls for no increase 12 in taxes and the impact will be offset by a reduction of debt and decertification of the Chandler 13 TIF. 14 15 Mr. Larson stated the City received a Certificate of Excellence in 2006 and 2007 for financial 16 reporting excellence presented by the Government Finance Officers Association. He discussed 17 the City's credit rating by Moody's and the A -1 rating is the highest rating for a city the size of 18 St. Anthony. He added the recent bond rating from Standard & Poor's for the 2009 street project 19 was AA, representing an upgrade of two ratings. 20 21 Mr. Larson provided an overview for 2009, including the Chandler/Foss Road improvement 22 project, renovation of Emerald Park, refinancing of two improvement bonds for a savings of 23 $53,000 on the 2000A storm sewer bonds and $23,500 on the 2000B MSA street improvement 24 bonds. He added with the anticipated loss of $135,000 in Market Value Credit from the State, 25 the City is in the planning stages of restructuring the 2009 and 2010 budgets. He stated the City 26 is planning for the fixture by looking at resources needed for environmental considerations, 27 technology improvements, infrastructure improvements, and the decertification of the Chandler 28 TIF District by September 30, 2011. 29 30 Mayor Faust stated it is important to remember that when the City talks about refinancing, the 31 debt term timeline was not extended and the interest rate is the lowest rate the City has ever had. 32 33 Mr. Larson explained that city governments are not allowed to invest in the regular stock market, 34 and the City has been inclined to only invest in instruments such as CDs, Fannie Mae and 35 Freddie Macs, and zero coupon bonds, which, if kept until maturity, you get 100% of your 36 principal back. He added the City has been able to time investments accordingly and the money 37 is safe. 38 39 Councilmember Stille stated it is important to make sure the City does not have any positive 40 arbitrage. 41 42 Mr. Larson stated staff has examined all investments and every issue the City owns has been 43 arbitrage compliant. 44 45 Mayor Faust stated the fund balance is 30 -35% funded, even though the State auditor says the 46 City can have up to 50 %, which means that the extra 15 -20% is kept in investments rather than