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City Council Minutes Page 9 <br /> November 19,2012 <br /> 9. Announcements <br /> • Councilmember Motin requested the Quiet Zone item scheduled for the December <br /> worksession agenda be moved to the on-camera meeting scheduled December 17. He noted <br /> a lot of interest in this item and felt it should be televised. <br /> Council debated whether to move this item but consensus was to keep it on the December <br /> worksession for general discussion. It was noted this topic will be on camera for various <br /> follow-up meetings. <br /> The Council recessed at 8:00 p.m.in order to move into worksession.The Council <br /> reconvened at 8:05 p.m. <br /> 10.1 Excess Fund Balance <br /> Mr. Simon presented the staff report.He further explained how fund balance is calculated <br /> and illustrated two examples with excess fund balance being utilized immediately versus over <br /> time.He stated the city needs to take into consideration how to operate its cash flow over 6 <br /> month timeframes due to the timing of tax levy funds coming to the city twice a year. <br /> Mr. Simon stated, based on rough data,that expenditures may be approximately 2%under <br /> budget and that the tax collections from Sherburne County are about 95%. <br /> Mr. Portner referred to the illustrations in the staff report and stated what is important to <br /> note with the use of the fund balance to replace revenue, the tax levy goes down temporarily, <br /> but will eventually require a levy increase or service cuts to replace the temporary revenue. <br /> • He stated historically(within the city) the excess fund balance has been used for other <br /> various projects;but due to the tough economy in the last few years,staff's recommendation <br /> has been to save more of the excess balance.He further outlined the federal government's <br /> current fiscal cliff issues and how this similar scenario creates a structural imbalance. <br /> Mayor Dietz stated it is much easier to transfer excess funds into various projects when <br /> times are good,but times are currently not good and the money should be refunded back to <br /> taxpayers. He stated we should use it to help with the tax rate this year and if we don't have <br /> excess next year,we will work on it in the budget process. <br /> Councilmember Westgaard stated the city should draw down the excess funds per the Fund <br /> Balance Policy and agreed with the option of drawing it down over the course of 3 years. <br /> Councilmember Zerwas stated Option 2 (outlined in the staff report)reminds him of what <br /> the Council decided to do with the YMCA special levy and the funds received from <br /> Sherburne County;whereby the city had the option to use a bulk of the funds up front and <br /> having no tax levy increase for taxpayers for a year or two.But then the big tax levy hit and <br /> the Council had decided to take the$2 million grant from Sherburne County and spread it <br /> over several years to help keep the tax levy stable with the hope that as the money ran out, <br /> the net tax capacity would increase and there wouldn't be a large jump in the YMCA special <br /> levy. <br /> Councilmember Zerwas stated having a long-term plan for the excess funds is the best <br /> option as it allows for more stable financing. <br /> t <br />