4.7. SR 01-19-1999 - Laserfiche WebLink

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rll ---'\) ( )j !Ii{ Item #4.7. MEMORANDUM FROM: Mayor & City Council Pat Klaers, City Administr~ January 19, 1999 DATE: SUBJECT: Utilities Commission Update Councilmember John Dietz is our city representative on the Elk River Municipal Utilities Commission. At this January 19, 1999, City Council meeting, John is scheduled to provide the Council with an update on December and January Utilities activities. Attached for your review are the draft January 12, 1999, Utilities Commission minutes. . The next regular Commission meeting is scheduled for 4:00, Tuesday, February 16, 1999, at the Utilities office. The Council should note that this is on the same evening as their City Council meeting as Monday, February 15, 1999, is a holiday. . A major discussion item at the January 12 Utilities meeting was the east Elk River utility expansion project. As the Council has been advised, the cost of the water component of the project exceeds the available revenues. The gap is approximately $800,000 and this does not take into consideration possible cash flow problems with assessment payments being delayed due to the green acre law. The wording in the motion on this topic is a little "fuzzy," and it may need clarification at the next commission meeting. I was in attendance at the meeting and, as I understand the situation, the Commission agreed that if the Springsted water utility study proved to be accurate, then they would have sufficient funds to pay the entire shortage. The commission then agreed to fund all $800.000 of the shortage, but asked that the city include up to $300,000 in the TIF proposal so that if for some reason the water department couldn't make the bond payments, then other funds would be available. It should be noted that a recession is built into the Springsted study, so under a normal growth and development pattern like what we have experienced for the past ten years, there should be no problems with the water utility funding this entire shortage. In addition, the commission indicated that at a bare minimum it would guarantee the city $500,000 of the shortage. This minimum amount commitment from the utility was necessary in order to start eliminating some of the project financial shortages. 13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330. TDD & Phone: (612) 441-7420. Fax: (612) 441-7425