Loading...
06/18/1991 - City Council Special _"N 1.- ij~, y MINUTES OF A SPECIAL MEETING OF THE EAGAN CITY COUNCIL Eagan, Minnesota June 18, 1991 A special meeting of the Eagan City Council was held in Conference Rooms A and B of the Eagan Municipal Center Building on Tuesday, June 18, 1991 beginning at 5:00 p.m. Present were Mayor Egan, City Councilmembers Gustafson, McCrea, Pawlenty and Wachter. Also present were Chief of Police Geagan, Fire Chief Southom, Director of Parks & Recreation Vraa, Director of Community Development Runkle, Director of Public Works Colbert, Director of Finance VanOverbeke, and City Administrator Hedges. The purpose of the meeting was to review recommendations for a second adjustment to the 1991 general fund budget and revise numbers for the 1992-1996 capital improvements program. 1991 GENERAL FUND BUDGET REVISION City Administrator Hedges stated that results of the Omnibus Tax Bill adopted during the 1991 Minnesota Legislative Session called for further reduction in HACA aid distribution to municipalities. He stated that the net effect on the general fund is a reduction of approximately $130,000 for the December aid payment. He further stated that this compares with an earlier adjustment that reduced HACA aid by $160,000 for the July HACA payment for which expenditures were adjusted in official action by the City Council in February of 1991. City Councilmembers reviewed three (3) alternatives for amending the 1991 general fund and agreed on a proposal by the City Administrator to establish an investment management fee equal to 2 percent of all City-wide investment earnings as a revenue source for the general fund. The Director of Finance and City Administrator further reported that many communities nationwide either contract with an outside firm to handle all investments of idle funds at a prescribed management fee or establish an internal fee in consideration of time allocated to the investment of City funds by City staff. After further discussion and consideration of the various alternatives for adjusting the 1991 budget in consideration of approximately $130,000 less in HACA funding, the City Council gave direction to the City Administrator and Director of Finance to charge a 2% management investment fee against all interest earnings generated by the City for 1991. Director of Finance VanOverbeke estimated this additional revenue would generate approximately $100,000 for the general fund. Mayor Egan summarized the consensus of the City Council that the City Administrator be directed to reduce an additional $30,000 in the 1991 general fund budget by spreading this obligation throughout all City departments. City Administrator Hedges stated that once the adjustments are finalized, he would report each budgetary adjustment to the City Council for their information. Mayor Egan stated that formal action to ratify the general fund budget revision by adding a 2% investment fee as a new revenue source and additional reductions to be determined by the City Administrator will be a formal action at the regular City Council meeting held later on this same date. CIP City Administrator Hedges stated that the draft CIP was changed from 1991 through 1995 to a five (5) year program 1992 through 1996. He further reported that certain CIP expenditures are financed through the public enterprise user connection fees and other projects receive financing from dedicated funds, such as special assessments. The City Administrator further reviewed in detail projects that require funding through the sale of general obligation bonds, community investment and equipment certificates. He explained that instead of considering $16,018,500 of capital expenditures that would require $7,858,500 to be financed by a bond referendum or referendums with the remaining capital financed by Page 2/EAGAN SPECIAL CITY COUNCIL MINUTES June 18, 1991 from the community investment fund, the five (5) year CIP was reduced. Mayor Egan stated that the new and revised CIP totals $7,300,000 which Is far more practical to fund during the next five (5) years than the original $16,018,500 total. City Councilmembers expressed their desire to reduce reliance on GO bonds, which requires an Increase in property tax to fund the capital, and place more reliance on the community Investment fund for funding essential government services. Director of Finance VanOverbeke stated that the recently passed Omnibus Tax Bill requires referendum levies to be spread against market value and not tax capacity which could make the passage of bond referendums more difficult. Mayor Egan thanked City staff for the redraft of the five (5) year CIP and noted that approximately $8,718,500 has been postponed as a CIP expenditure for the five (5) year CIP as presented. He further stated that no action is required on the CIP and that further review will occur during July when the Ice arena/outdoor swimming pod Issue is more carefully reviewed. OTHER BUSINESS There were no additional items presented for City Council review. ADJOURNMENT The meeting was adjourned at approximately 6:15 p.m. TLH June 18, 1991 Date City Clerk