04-11-2005 CC MIN - Laserfiche WebLink

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. . . City Council Minutes April 11, 2005 Page 5 . New debt is issued for equipment; new or upgraded municipal buildings and potential referenda/lease projects for library and parks; bi-annually for streets. Cash Balance Assumptions · Maintain sufficient reserves to cash flow projects. · Use cash instead of debt if above levels necessary for cash flow. · Begin to establish a longer-term reserve for replacement. · No one-time revenues are anticipated. Preliminary Results · City is well positioned for future growth. · Assuming no major changes in the projections: -Tax rate will stay constant or decline slightly over next several years. -Can continue existing service levels and add staff to maintain the baseline employment. -City will have flexibility to deal with changes in state aids, growth, and the economy. Next Steps · Consider policy on "debt affordability". · Establish goals for maintaining fund balances for equipment replacement, street reconstruction, and facilities and use of debt. · Review potential for extending special revenues (landfill fees and RDF fees) or replacing those resources. · Allocate resources for capital improvement particularly in facilities and land. Ms. Johnson stated, "what does it really mean." This Financial Management Plan is a tool to help us accomplish what we wish to accomplish with CIP and also helps with the city's bond rating. This Financial Management Plan gives us information on where our tax rate is going and can answer questions such as "can we afford our street reconstruction projects." Council can really see what the impact of their decisions will be. Mayor Klinzing asked if it is taken into consideration at the time of bond rating if a city is looking at future industrial sites. Mr. Ruff stated that balance in city growth is important and a lot of times the rating agencies want to know about the city's Comprehensive Plan. Ms. Johnson stated that she could come back with a Debt Affordability Policy. In 2004 the percentage was at 17%; when a proposed policy is brought back to the Council, she will provide historical data and policies from other cities to help the Council determine the percentage with which they are most comfortable. Mr. Ruff stated that part of the reason Ehlers recommends doing this and not look at statutory bond rate is to be able to demonstrate both to the bond people and the citizens that here is what we need to live within our means. Councilmember Motin asked if we set out the difference between 16% and 20% dollar wise, do we need to carry a larger cash reserve. Mayor Klinzing recessed the meeting at 8 p.m. and reconvened the meeting at 8:11 p.m. City Administrator Klaers reviewed the updated 10-year CIP detail and summary pages, asking Council to remember that this is only a plan and that the Council gets fInal approval