HomeMy WebLinkAbout9B - Transfer to Collector Fund
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IIVNESO
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
JUNE 7,1999
~PH TESCHNER, FINANCE DIRECTOR <of)
CONSIDER APPROVAL OF RESOLUTION 99~APPROVING
GENERAL FUND TRANSFERS TO THE COLLECTOR STREET
FUND AND THE REVOL VlNG EQUIPMENT FUND
The General Fund balance for the City increased by $439,431 from
$1,815,122 to $2,254,553 during the past year as indicated within
the 1998 City of Prior Lake Financial Report. In accordance with the
City's Council's previous direction, we are requesting specific
designation of these funds.
History
The City Council approved Resolution 94-27 on June 6,1994 which
authorized a working capital designation or General Fund reserve of
30% of the current year's Operating Budget, based upon the
availability of sufficient funds. Any remaining portion is to be
allocated by the Council as unreserved fund balance. Each year the
Council is to review these amounts for the purpose of allocating
them on an as needed basis. The existing audited General Fund
balance represents a reserve of 31.6% of the City's 1999 operating
budget.
During the course of a work session that was conducted on April 5,
1999 the City Council endorsed four steps that would result in
property tax relief. Among the various elements was the utilization
of the City's General Fund balance to payoff the outstanding
principal on two general obligation park bonds and to allocate
various amounts to the Revolving Equipment and Collector Street
Funds. Subsequently on April 19, 1999 the Council approved
Resolutions 99-24 and 99-25 which called for the redemption of
these two bond issues. This action required $75,000 of the City's
General Fund balance. These were the first two steps of the four step
action plan.
Current Circumstances
There are two remaining steps in the process which the Council
should address:
1.) The idea of considering a transfer of $100,000 of the federal
FEMA disaster aid that was received to the Revolving Equipment
Fund. These funds were earmarked for the accelerated depreciation
of city equipment used in the 1998 storm cleanup efforts and should
be designated as such.
16200 Eagle Creek Ave. S.E.. Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
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AN EQUAL OPPORTUNITY EMPLOYER
2.) In order to begin upgrading key intersections along Trunk
Highway 13 a transfer of $150,000 from the General Fund balance
to the Collector Street Fund would be necessary.
Also discussed was that in order to upgrade those key intersections
along Trunk Highway 13, the City would need to establish a
financing plan. Due to the substantial costs for these access
improvements the Council agreed that it would be prudent to begin
supplementing the Collector Street Fund with annual appropriations
to minimize the impact upon future property taxes. The initial
allocation that was recommended was a transfer from the General
Fund balance of$150,000 to the Collector Street Fund.
A synopsis of the proposed utilization of the City's General Fund
balance would look like this:
General Fund Balance 1/1/99
less G.o. Bond Redemptions...
less Equipment Fund Transfer...
less Collector Fund Transfer...
Remaining General Fund Balance
$2,254,553.00
<$75,000.00>
<$100,000.00>
<$150.00000>
$1,929,553.00
As indicated above, the City's General Fund balance wouid be
reduced by an overall amount of $325,000.00 This would leave our
General Fund balance at $1.9 million dollars. This amount would
represent a reserve of 27% compared to the present City Council
annual objective of30%.
ALTERNATIVES:
The following alternatives are available to the City Council:
1. Approve Resolution 99-xx Approving General Fund Transfers
To The Collector Street Fund And The Revolving Equipment Fund.
2. Appropriate only that arnount (approximately $116,000) that is
available above the 30% reserve standard.
3. Approve a portion or all of the available $439,000 to specific
expenditures or fund reserves as identified by the Council.
4. Maintain 100% of the excess reserves within the existing
General Fund balance.
RECOMMENDATION: Staff would recommend Alternative #1. While the fund balance
would dip below the established 30% threshold, Staff believes the
uses are consistent with the City's overall strategic plan and does not
cornpromise our financial strength to an extent that our A2 credit
rating would be jeopardized.
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RECOMMENDED
MOTION:
REVIEWED BY:
Attachments:
H:\AUDlliAGENTRAN.DOC
Motion to approve Resolution 99-xx Approving General Fund
Transfers To The Col1ec r Street Fund And The Revolving
Equipment Fund.
Ap roving Fund Transfers To The Collector
e Revolving Equipment Fund.
RESOLUTION 99-~ 6()
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llVNESo RESOLUTION APPROVING GENERAL FUND TRANSFERS TO THE
COLLECTOR STREET FUND AND THE REVOLVING EQillPMENT FUND
MOTION BY: SECOND BY:
WHEREAS, The City of Prior Lake's General Fund balance on December 31,1998 increased by
$439,431.00 to an amount of $2,254,553.00; and
WHEREAS, The General Fund balance represents a reserve of31.6% of the City of Prior Lake's
current 1999 operating budget; and
WHEREAS, It is the decision ofthe City Council to review, on an annual basis, the availability of
such reserves and to allocate these funds in a manner that would best serve the
community on a long term basis; and
WHEREAS, It is recognized by the City Council that it is in the best interest of the City to
rnaintain a strong General Fund reserve as financial protection for unexpected
emergencies and expenditures that would require contingency funding.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, that the
following appropriation transfers from the General Fund balance are hereby authorized as follows:
Purpose
Fund Transfer
Amount
1. Offset Accelerated Equipment Depreciation Revolving Equipment Fund $100,000.00
as a Result of 1998 Storm Damage Activities
2. Initial Funding for Future Trunk Highway 13 Collector Street Fund $150,000.00
Intersection Improvements
Passed and adopted this 7th day of June, 1999.
YES
NO
Mader
Kedrowski
Petersen
Schenck
Wuellner
Mader
Kedrowski
Petersen
Schenck
Wuellner
{Seal}
City Manager
City of Prior Lake
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
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