6.6. SR 10-25-1993
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( )j
Ilk
ITEM 6.6.
TO:
DATE:
MAYOR & CITY COUNCIL
PAT KLAERS. CITY ADMI~~~TOR
OCTOBER 21, 1993 )/'
SUBJECT: DESIGNATION OF FUNDS
FROM:
e
As the Council is aware, the City obtained $15,000 from a local
developer when it sold its property north of the MnDOT site.
The City has something less than $15,000 from this transaction
after expenses. These funds could be designated toward any use
desired by the City Council. One of our biggest annual budget
concerns is major equipment repair issues. These major
equipment repairs could be in the Fire Department or
Street/Parks Department. These major repairs could run
anywhere from $5-$20,000 or more. In the past, these major
equipment repairs have not come out of departmental budgets,
but have come out of the City Council Contingency Fund. These
repair items are incredibly difficult to plan into an annual
budget. Currently the City has an Equipment Reserve fund and
it seems appropriate to begin reserving monies for major
equipment repairs that are not planned in the annual budget.
In this regard, it is recommended that the City Council begin
this fund within the Equipment Reserves with the money
available from the selling of this City land.
Early in 1993, the City defeased a public improvement bond. In
the past, monies from these type of bond defeasements have gone
into the Capital Projects fund in order to offset the costs
associated with the City subsidizing street improvement
projects. As the Council knows, the City assesses out
approximately $22.00 a running foot for street improvements.
The actual cost is typically twice this amount. When the City
subsidized these street projects, the source of funds has been
the Capital Projects fund. After the Fresno Street project,
this fund is approaching zero. Bond defeasement money comes
from public improvement projects and it is recommended that
these monies be designated into the Capital Projects fund in
order to allow the City to continue to subsidize street
redevelopment and improvement projects. At this time, there is
something less than $300,000 that needs to be designated along
with some additional future revenue from this bond
defeasement. This may seem like a great deal of money, but we
spent almost this amount in 1992 alone with just the Westwood
and the 4th and Holt projects. The Capital Projects fund also
gets some limited revenue through the assessment process
associated with MSA projects, so therefore, bond defeasement is
not the only source of monies for the Capital Projects fund.
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