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City Council Minutes Page 16 <br />December 19, 2005 <br />----------------------------- <br />Jerry Takle, Utilities Commissioner-Stated the Commission wished to support the new <br />MCMU bond pool because they specifically support utility companies, funds can be drawn <br />from quickly, the cost would be minimal, and the Commission would like to promote the <br />credibility of this new tool. <br /> <br />Jack Hagle, Executive Director of MMUA-Stated this is the third MCMU bond pool <br />issued and provided examples of other cities using the pool. <br /> <br />Terry Heaton, Springsted-Stated Springsted supports the MCMU bond pool. She reviewed <br />the variable rate pool and the risks associated with it. <br /> <br />Ms. Johnson stated the savings would be very minimal and not worth taking due to the <br />fluctuating interest rates in the current market. She stated the debt would reflect on the city’s <br />books. <br /> <br />Councilmember Dietz stated the city shouldn’t be involved with using variable rates. <br /> <br />Councilmember Farber expressed concerns with rising interest rates and he would like the <br />city to maintain its bond rating. <br /> <br />Councilmember Motin stated the city has worked very hard to get great bond rating and was <br />concerned with affecting the rating. <br /> <br />MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY <br />COUNCILMEMBER FARBER TO REQUIRE ELK RIVER UTILITIES USE A <br />FIXED RATE DEBT THROUGH THE CITY AS A STAND ALONE ISSUE. <br />MOTION CARRIED 5-0. <br /> <br />Mayor Klinzing stated she supports the motion but she understands the Utilities <br />Commission and Mr. Adams desire to support the MCMU Utility Bond Pool. <br /> <br />8.3. Consider 2005 Budget Amendments <br /> <br /> Ms. Johnson reviewed the budget amendments as outlined in her staff report. <br /> <br />Mayor Klinzing questioned if the 2006 levy could be lowered due to the $536,600 increased <br />revenues. <br /> <br />Ms. Johnson stated that extra expenditures that weren’t in the budget (but already approved <br />by Council during the year) increased by $231,000. She further stated that the fuel costs for <br />the city during 2005 will be over what is budgeted. <br /> <br />Mayor Klinzing questioned if the city could take what is left over and put it into reducing <br />the levy rather than putting it into a specific fund. <br /> <br />Ms. Johnson stated if the Council would like to use the leftover revenues toward property <br />taxes, it would be best to do it in 2006 when the 2005 reserves are designated, then the city <br />would have the exact amount set. <br /> <br /> <br />