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City Council Regular Meeting Minutes August 14, 2007 Page 8 1 staff; review existing debt and future debt payments to determine ability to pay off early or 2 refinance at a lower rate to assure the City could continue the road improvement plan; review the 3 fund balance policy to determine adequacy; and keep the General Fund Levy at or below a 5.12 4 percent increase. 6 Ms. Stacie Kvilvang reported the City is financially well positioned. She stated the City has a 7 declining tax rate trend with prudent reserves set aside, a plan for capital expenditures, built in 8 flexibility for future needs and good financial and management policies in place. 9 10 Ms. Stacie Kvilvang reported on the capital improvements and equipment for 2008 -2012. She 11 stated the long -term goal is to fund equipment. She indicated the estimated annual expenses are 12 approximately $450,000 and funding sources include Liquor Store transfers, MSA revolving 13 funds, the Water Filtration Fund, and miscellaneous funds. She stated future needs are addressed 14 with the annual set aside identified and the ability to issue an equipment certificate for major 15 capital equipment expenditures in the future if needed. 16 17 Ms. Stacie Kvilvang reported the goal for the Street Construction/Reconstruction Projects is to 18 keep the debt levy at the existing level of about $1.3 million. She indicated the 30 -year plan that 19 was started inl993 would be completed in 2022 with the ability to maintain the annual 20 appropriation. 21 22 Ms. Stacie Kvilvang summarized the existing debt analysis. She stated the City currently has 23 cash available in the bond fund to payoff bonds. She stated the 2007 payoff of the 1997A Road 24 Reconstruction Bond for portions of 35t' Avenue and Roosevelt Street could reduce the levy by 25 $54,000 in 2008. She explained that paying off the 1997A Bonds in 2008 would allow the City 26 to continue to levy this without negative impact to the community. She stated the funds would 27 be used to continue to fund Salo Park Maintenance from the HRA fund at $25,000 and to 28 increase the HRA Levy to $30,000 to cover administrative costs. 29 30 Ms. Stacie Kvilvang reported the City has cash available in the bond fund to pay off the 1999A 31 Road Reconstruction Bond and the 2003D Bond in 2008. She explained that after paying these 32 off, the oldest outstanding debt would be from 2000. 33 34 Ms. Stacie Kvilvang stated the repayment of special assessments history over the past six years 35 shows an average of $125,000 in prepayment. 36 37 Ms. Stacie Kvilvang explained the current policy is to have a fund balance between 30 and 35 38 percent. She stated the current fund balance of $1.3 million is 33 percent of the 2008 Operating 39 Budget. She indicated this is adequate for the City and provides flexibility for unforeseen 40 expenditures. She stated the Liquor Store revenues provide additional flexibility in cash flow for 41 the City. 42 43 Ms. Stacie Kvilvang reported future levy decisions include the Chandler TIF District 44 decertification that expires in 2010. She commented that an additional $87,000 in taxes would 45 be available. She stated Council could wait until 2010 to decide what to do with the increased