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CITY COUNCIL AGENDA REPORT
MEETING DATE: JULY 14, 2014
AGENDA#: 5E
PREPARED BY: JERILYN ERICKSON, FINANCE DIRECTOR
PRESENTED BY: JERILYN ERICKSON
AGENDA ITEM: CONSIDER APPROVAL OF RESOLUTION TO CLOSE DEBT SERVICE FUND
547
DISCUSSION: Introduction
The purpose of this agenda item is to seek approval for closing Debt Service Fund
#547 and transfer all residual balances.
History
Debt Service Fund 547 was established in 2003 in conjunction with the issuance
of$1,975,000 of General Obligation Improvement Bonds, Series 2003. These
bonds were issued for the improvement project in the 150th/Mitchell/Condons
neighborhood.
The G.O. Improvement Bond, Series 2003 bond was refunded in with the G.O. Im-
provement Refunding Bonds, Series 2009B.
Current Circumstances
The final debt service payment was made on December 1, 2013. The debt service
fund can now be closed. There are residual balances in cash, market value ad-
justment for investments, receivables for special assessments and taxes, accounts
payable, etc.
Minnesota State Statute 475.61, subd (4a) addresses surplus funds arising from
taxes levied to pay municipal debt:
Subd. 4.Surplus funds.
(a) All such taxes shall be collected and remitted to the munici-
pality by the county treasurer as other taxes are collected and remit-
ted, and shall be used only for payment of the obligations on account
of which levied or to repay advances from other funds used for such
payments, except that any surplus remaining in the debt service fund
when the obligations and interest thereon are paid may be appropri-
ated to any other general purpose by the municipality.
Staff is recommending that that these balances be transferred to the General Fund
for purposes of funding the acquisition of the property located at 4577 Colorado
Street, Prior Lake, MN (Agenda Item 9B)
Conclusion
The Council should approve the resolution to close the debt service fund and
transfer all residual balances.
ISSUES: The City Council has adopted a Comprehensive Financial Management Policy
(CFMP). An element not presently addressed in this policy is the treatment of
closed debt service funds. At the December 8 work session the staff has sched-
uled a policy discussion on this topic to add to the transparency and comprehen-
siveness of the CFMP as well as provide future direction.
FINANCIAL Fund 547 has approximately $114k in net assets, including cash, market value ad-
IMPACT: justment for investments, receivables for special assessments and taxes. Cur-
rently, Fund 547 has approximately $99k in cash.
Staff is recommending that all residual balances be transferred as of 07/14/2014 to
the General Fund.
ALTERNATIVES: 1. Motion and second as part of the consent agenda to approve a resolution to
close Debt Service Fund 547 and transfer all residual balances as set forth in
the attached resolution.
2. Deny this agenda item for a specific reason and provide staff with direction.
3. Table this item to a certain date in the future.
RECOMMENDED Alternative#1.
MOTION:
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4646 Dakota Street SE
4'NNEso�P Prior Lake,MN 55372
RESOLUTION 14-xxx
A RESOLUTION TO CLOSE DEBT SERVICE FUND 547
Motion By: Second By:
WHEREAS, Debt Service Fund 547 was established in 2003 in conjunction with the
issuance of$1,975,000 of General Obligation Improvement Bonds, Series
2003. These bonds were issued for the improvement project in the
150th/Mitchell/Condons neighborhood; and
WHEREAS, The G.O. Improvement Bond, Series 2003 bond was refunded in with the G.O.
Improvement Refunding Bonds, Series 2009B; and
WHEREAS, The final debt service payment was made on December 1, 2013; and
WHEREAS, There are residual balances in cash, market value adjustment for investments,
receivables for special assessments and taxes, etc.; and
WHEREAS, Minnesota State Statute 475.61, subd (4a) provides that any surplus
remaining in a debt service fund when the obligations and interest
thereon are paid may be appropriated to any other general purpose by
the municipality.
NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE,
MINNESOTA as follows:
1. The recitals set forth above are incorporated herein.
2. Debt Service Fund 547 is closed and all residual balances transferred to the General Fund
for purposes of property acquisition, effective July 14, 2014.
PASSED AND ADOPTED THIS 14th DAY OF JULY 2014.
VOTE Hedberg Keeney McGuire Morton Soukup
Aye ❑ ❑ ❑ ❑ ❑
Nay 0 ❑ ❑ ❑ 0
Absent 0 ❑ ❑ ❑ ❑
Abstain 0 0 ❑ ❑ ❑
Frank Boyles, City Manager
http://splash/teams/am/October 4 2010/07 14 2014/Close Debt Service Fund 547-Resolution-2014.07.14.docx