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<br />rll -\.) <br />( )j <br />Ilk <br /> <br />ITEM 6.6. <br /> <br /> <br />TO: <br /> <br />DATE: <br /> <br />MAYOR & CITY COUNCIL <br />PAT KLAERS. CITY ADMI~~~TOR <br />OCTOBER 21, 1993 )/' <br />SUBJECT: DESIGNATION OF FUNDS <br /> <br />FROM: <br /> <br />e <br /> <br />As the Council is aware, the City obtained $15,000 from a local <br />developer when it sold its property north of the MnDOT site. <br />The City has something less than $15,000 from this transaction <br />after expenses. These funds could be designated toward any use <br />desired by the City Council. One of our biggest annual budget <br />concerns is major equipment repair issues. These major <br />equipment repairs could be in the Fire Department or <br />Street/Parks Department. These major repairs could run <br />anywhere from $5-$20,000 or more. In the past, these major <br />equipment repairs have not come out of departmental budgets, <br />but have come out of the City Council Contingency Fund. These <br />repair items are incredibly difficult to plan into an annual <br />budget. Currently the City has an Equipment Reserve fund and <br />it seems appropriate to begin reserving monies for major <br />equipment repairs that are not planned in the annual budget. <br />In this regard, it is recommended that the City Council begin <br />this fund within the Equipment Reserves with the money <br />available from the selling of this City land. <br /> <br />Early in 1993, the City defeased a public improvement bond. In <br />the past, monies from these type of bond defeasements have gone <br />into the Capital Projects fund in order to offset the costs <br />associated with the City subsidizing street improvement <br />projects. As the Council knows, the City assesses out <br />approximately $22.00 a running foot for street improvements. <br />The actual cost is typically twice this amount. When the City <br />subsidized these street projects, the source of funds has been <br />the Capital Projects fund. After the Fresno Street project, <br />this fund is approaching zero. Bond defeasement money comes <br />from public improvement projects and it is recommended that <br />these monies be designated into the Capital Projects fund in <br />order to allow the City to continue to subsidize street <br />redevelopment and improvement projects. At this time, there is <br />something less than $300,000 that needs to be designated along <br />with some additional future revenue from this bond <br />defeasement. This may seem like a great deal of money, but we <br />spent almost this amount in 1992 alone with just the Westwood <br />and the 4th and Holt projects. The Capital Projects fund also <br />gets some limited revenue through the assessment process <br />associated with MSA projects, so therefore, bond defeasement is <br />not the only source of monies for the Capital Projects fund. <br /> <br />. <br /> <br />P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 <br />