HomeMy WebLinkAboutSP July 30, 1991
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CITY of ANDOVER
special city council Meeting
July 30, 1991
7:30 P.M. 1. Call to Order
2. Award Sealcoat Bid
3. Budget Discussion
4.
5. Adjournment
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CITY OF ANDOVER
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REQUEST FOR COUNCIL ACTION
DATE
July 30, 1991
AGENDA SECTION
NO.
ORIGINATING DEPARTMENT
APPROVED FOR
AGENDA
ITEM 2. Award Sealcoat Bid
NO.
Engineering ~
Todd Haas ./)1
BY:
BY:
The city Council is requested to approve the resolution accepting
bids and awarding contract for the improvement of project No.
91-8 for seal coating construction in the area of 161st Avenue,
157th Avenue, South Coon Creek Drive and prairie Road.
The bids received are as follows:
1. Bituminous Roadways
2. Allied Blacktop
3. ASTECH Corp.
$26,896.50
$30,440.94
$30,532.44
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Staff recommends awarding the contract to Bituminous Roadways in
the amount of $26,896.5~
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MOTION BY
TO
COUNCIL ACTION
SECOND BY
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CITY OF ANDOVER
COUNTY OF ANOKA
STATE OF MINNESOTA
RES. NO.
MOTION by Councilman
to adopt the following:
A RESOLUTION ACCEPTING BIDS AND AWARDING CONTRACT FOR THE
IMPROVEMENT OF PROJECT NO. 91-8 FOR Sealcoating
CONSTRUCTION IN THE AREA OF 161st Avenue, 157th Avenue, South
Coon Creek Drive, prairie Road
WHEREAS, pursuant to advertisement for
Council Motion dated April 16
received, opened and tabulated according to
follows:
bids as set out in
, 19 91 , bids were
law w~results as
1. Bituminous Roadways, Inc.
2. Allied Blacktop Inc.
3. AS TECH Corp.
$26,896.50
$30,440.94
$30,532.44
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City
of Andover to hereby accept the bids as shown to indicate
Bituminous Roadways, Inc. as being the apparent low bidder.
BE IT FURTHER RESOLVED TO HEREBY direct the Mayor and City Clerk
to enter into a contract with Bituminous Roadways, Inc. in the
amount of $26,896.50 for construction of the
improvements; and direct the City Clerk to return to all bidders the
deposits made with their bids, except that the deposit of the
successful bidder and the next lowest bidder shall be retained until
the contract has been executed and bond requirements met.
MOTION seconded by Councilman
City Council at a
and adopted by the
meeting this
day of
, 19 , with Councilmen
voting in favor of
voting
the resolution, and Councilmen
against, whereupon said resolution was declared passed.
CITY OF ANDOVER
Kenneth D. Orttel - Mayor
ATTEST:
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Victoria Volk - City Clerk
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CITY OF ANDOVER
REQUEST FOR COUNCIL ACTION
DATE July 30, 1991
AGENDA SECTION
NO.
ORIGINATING DEPARTMENT
Finance
APPROVED FOR
AGENDA
ITEM
NO.
2.
Budget Discussion
BY:
Howard D. Koolick
Finance Director
BY:
REQUEST
The Andover City Council is requested to review, discuss and
provide direction regarding the attached budget information.
BACKGROUND
Included with this memo is the following information:
1. List of Goals and Objectives represented by the three
budgets being discussed.
2. Computer printouts of General Fund revenue and
expenditure budgets and explanations of significant
revenues and expenditures of the General Fund.
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3. Debt Service Budgets.
4. PIR Fund Budget.
5. List of capital requested by the Public Works Department.
I would recommend discussing the items in the order presented.
This order is a logical progression in dealing with budget issues.
COUNCIL ACTION
MOTION BY
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LIST OF GOALS AND OBJECTIVES
The budget is more than just numbers, it is a document that
communicates policies, financial plans and describes operations.
In the past, City Councils have implicitly adopted policies,
financial plans and operational plans by adopting budgets.
However, as the City grows and resources become more limited, the
need to formally recognize the policies within the budget becomes
more important.
The goals and objectives listed on the following pages were
generated from the budgets submitted by department heads. They
are by no means all-inclusive or necessarily the goals City
Council should adopt. The are meant as a starting point for
discussion. The City Council should discuss, amend, add to or
subtract from this list and move adoption of the policies once
agreement is reached.
CITY OF ANDOVER
1992 CITY COUNCIL GOALS AND OBJECTIVES
Goal #1 - Maintain the Financial Health of the City of Andover.
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Objectives
1. Maintain General Fund fund balance, as well as all other
fund balances, as required by the Fund Balance policy
adopted by City Council on February 19, 1991.
2. Promote the use of tax increment and special assessment
debt financing to encourage commercial and residential
development.
3. Determine a funding source for the severance fund to
cover future costs of employee resignations and
retirements and begin funding these costs in 1993.
Goal #2 - Provide efficient and high quality maintenance of public
infrastructure.
Objectives
1. Provide cracksealing, pot hole repair and grading of
roadways to prevent deterioration and extend the street's
life as a part of normal maintenance.
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2. Provide sealcoating, which is mostly cosmetic in nature,
to those roads where residents request this service and
are willing to be assessed for the cost.
3. Remove snow and clear ice, with the use of city staff and
equipment only to ensure the roadways are properly
maintained and driveable.
Goal #3 - Provide for the health and safety of the citizens of the
City of Andover.
Objectives
1. Provide 32 hours of police coverage through the Anoka
County Sheriffs Office.
2. Provide fire protection and rescue service through the
Andover volunteer fire department and rescue squad and
encourage residents to become volunteers by providing
training, a stipend and contributions to a pension plan.
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3. Restore funding to the DARE program which has been
eliminated by Anoka County.
4. Provide building inspections and plan review for all
construction in the City of Andover ensuring all
residents and businesses a safe environment in which to
live and work.
Goal #5 - Provide and maintain a variety of park and recreational
) areas for the enjoyment of City of Andover residents.
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Objectives
1. Continue development of Kelsey Park as a regional passive
park.
2. Maintain and improve neighborhood parks in accordance
with the Park and Recreation Commission's five year plan.
Goal #6 - Operate the City of Andover in accordance with all
applicable state and federal legislation.
Objectives
1. Implement and maintain comparable worth relationships
amongst employees.
2. Conduct improvement projects in accordance state statute
section 429.
3. Provide the resources necessary to comply with a variety
of reporting and operational laws.
Goal #7 - Provide the residents of Andover with high quality
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Objectives
1. Hire, develop and retain competent and professional
staff.
2. Use tax dollars to support only those operations
benefitting the City as a whole. Any services or
expenditures incurred that do not benefit the entire city
should be funded through user fees.
3. Provide information of interest to residents through the
use of the newsletter, cable television, the official
newspaper and other means available.
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GENERAL FUND INFORMATION
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The general fund is used to account for all services and revenues
not specifically accounted for in another fund. Its main revenue
sources are ad valorem taxes, revenue from other governments and
licenses and permits. Services provide included police and fire
protection, street maintenance and general government activities.
GENERAL FUND REVENUE
1991 Proposed
1990 Actual 1991 1992
Actual Thru 6/30 Budget Budget
Ad Valorem Taxes $ 911,255 $ 35,802 $1,072,643 $1,113,714
Licenses and Permits 212,793 119,074 223,710 239,298
Intergovernmental 616,722 49,221 592,199 640,528
Charges for Services 75,962 27,975 72,350 80,200
Fines 46,650 14,876 59,000 40,000
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Interest 28,147 8,071 30,000 46,600
Miscellaneous 41,913 6,957 34,300 29,100
Transfers from
Other Funds 188,318 -0- 120,000 53,300
$2,121,760 $261,976 $2,204,202 $2,242,740
) The following is a summary of the more significant revenue items
,_c' and the increase or decrease compared to the 1991 budget.
AD VALOREM TAXES AND INTERGOVERNMENTAL REVENUE
Ad Valorem Taxes and State Aids
The 1991 state legislature limited the City's 1992 levy authority
at the level of our 1991 revenue base prior to the 1991 aid cuts.
Revenue base is defined as levy subject to levy limits plus local
government aid. This amount is allocated to four different budget
lines. Below is a comparison between the 1991 and 1992 budgets:
1991 Budget 1992 Budget Difference
Ad Valorem Taxes $ 1,026,643 $ 1,074,214 $ 47,571
Local Gov. Aid 45,455 38,841 (6,614)
Home. & Agri. Credit 285,000 314,552 29,552
Equalization Aid 52,572 39,437 (13,135)
1,409,670 1,467,044 57,374
1991 Aid Cut 58,674 (58,674)
1,468,344 1,467,044 1,300
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Ad Valorem Taxes - Increase $47,571
Intergovernmental Revenue - Increase $ 9,803
Community Development Block Grant
For several years the City has participated in this program
without budgeting revenue or expenditures. The 1991 budget
includes $47,723 of revenues and expenditures.
Increase $47,723
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Land and Water Conservation Grant
During 1992 the City anticipates receiving a Land and Water
Conservation (LAWCON) Grant to develop Kelsey Park. This grant is
a matching grant, meaning the City supplies 50% of the cost and
the grant matches the amount. The 1992 budget includes revenue
from this grant of $20,000.
Increase $20,000
LICENSES AND PERMITS
Building Permits
With the recession still in progress, the budget assumes 275 new
homes as compared to 300 in the 1990 budget. However the budget
shows a $16,863 increase due to a projected increase in the fee
schedule.
Increase $16,863
other Licenses and Permits
Attached is a schedule showing how Andover compares to neighboring
communities for a variety of licenses and permits. Included on
the schedule is a a listing of proposed changes in fees. The
budget has been prepared assuming these increases, although they
generate an immaterial amount of additional revenues.
Increase $ 1,200
FINES
The anticipated increases in 1990 and 1991 have not occurred. The
1992 budget of $40,000 represents a $19,000 decrease which brings
the budget more in line with past trends.
Decrease $19,000
OTHER REVENUE
Interest Earnings
While interest rates are lower than in past years, the 1992 budget
includes an increase of $16,600. This increase results from
charging all other City funds 1.5% of their interest earnings to
reimburse the General Fund for providing the following services
which benefit all funds but are paid primarily by the General
Fund: Investing, auditing, assessing, disbursement and receipt
processing, and data processing.
Increase $16,600
TRANSFERS FROM OTHER FUNDS
Transfer from Administrative Trust Fund
In 1990 and 1991, the City changed the method of accounting for
this item from a straight-line method to a percentage of
assessments paid method. The 1992 budget amount of $23,300
represents a $66,700 decrease, primarily due to the end of the two
year phase-in of the accounting change.
Decrease $23,300
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GENERAL FUND EXPENDITURES
1991 Proposed
1990 Actual 1991 1992
Actual thru ~uly Budget Budget
General Government $ 497,399 $ 277,782 $ 495,963 $ 496,479
Government Buildings 96,379 51,996 86,851 119,358
Public Safety 754,914 371,228 811,658 857,871
Public Works 336,214 192,944 456,043 471,462
Park and Recreation 261,449 118,800 219,897 248,919
Recycling 39,567 17,771 37,129 36,811
Other 143,878 53,919 53,117 95,667
Contingency -0- -0- 43,544 56,072
$2,129,800 $1,084,440 $2,204,202 $2,382,639
The above amounts were arrived at by comparing department head
requests with prior years actual expenditures and the 1991 revised
budget. Department heads were asked to explain major variances
and in many cases the budget request was changed to match previous
trends.
The following items have been removed from the general fund budget
in attempts to balance the budget.
Elections
2 Accu-votes with
Ballot Boxes
6 Voting Booths
Administration - File Cabinet
$10,248
$1,050
$200
$5,500
Engineering - GIS Software
Fi re Proto
2 Flags and poles $1,570
6 Turnout Coats with
pants and helmets
and boots $4,926
600 ft. Hose
$1,122
$2,600
2 Hand held radios
Rescue
2 fiberglass backboards $752
1 Hand held radio $1,300
\ The following is a summary of the major changes in departments and
,~ the increase or decrease compared to the 1991 budget caused by
these changes.
GENERAL GOVERNMENT
Elections
Since elections are held in even years only, the 1991 budget
included no appropriation for elections. During 1992, the City
will be holding three elections; a presidential primary in
April, the state primary in September and the general election in
November.
Increase $13,586
Financial Administration
As a normal part of the budget process, the allocation of each
employee is reviewed to ensure that the all departments which
benefit from the employee contribute to their salary. As a result
of this review, a portion of salaries for the Finance Department
were reallocated to the Water and Sewer Funds.
Decrease $ 9,680
Assessing
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An increase is required to bring the budget in line with past
expenditures, current rates and the increased number of parcels.
Current rates are set by contract and the number of parcels was
provided by the Assessor's Office.
Increase $ 6,789
Attorney - Prosecutions
The amount budgeted was decreased from prior years to reflect the
drop in prosecutions which has occurred.
Decrease $ 8,800
GOVERNMENT BUILDINGS
City Hall Building
During 1991, the City exercised its option to purchase land from
Walter and Rosemary Laptuta. The contract calls for semi-annual
payments. In 1992 these payments will be approximately $13,500.
The 1991 budget included a payment to exercise the option of
$6,120.
Increase $ 7,380
Fire Stations
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During 1991, the City will complete construction of two new fire
stations. The projected costs to operate one and three stations
are $40,230 and $14,190, respectively.
Increase $26,040
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PUBLIC SAFETY
Police Protection
The contract with the Anoka County Sheriffs Office increased by
$15,150 to $409,528. In addition, the County is not funding the
DARE program. An additional $3,000 was budgeted for this program.
The other
program.
District,
$1,554.
major item in this department is the crime watch
Based on information from Anoka-Hennepin School
the costs associated with crime watch will decrease to
Increase $10,659
Fire Protection
The City Council in 1990 and 1991 authorized additional
equipment and increased the number of firefighters from 35 to 50.
These changes result in higher operating costs.
Increase $36,233
PUBLIC WORKS
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Streets and Highways
Increases in this department result from anticipated increases in
maintenance costs resulting from aging of vehicles.
Increase $ 3,800
Traffic Signals
During the last several years, the number of traffic signals
within the City has grown from one or two to six or seven. The
City is responsible for the electricity for these signals.
Increase $ 7,680
Street Lights - Billed
Over the last several years, the City has added street lights to
more residential developments resulting in increased electric
charges which are passed on to residents.
Increase $ 4,264
PARK AND RECREATION
Capital improvements in the 1992 budget have increased from
$45,700 to $65,520, although $40,000 of this amount is planned to
Kelsey Park and supported by a $20,000 matching grant. In
addition, the amount payable in 1992 for assessments levied by the
City against park property has increased by $3,589 to $21,389.
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The other major expenditure showing an increase is the community
and summer school programs. Based on information provided by
Anoka-Hennepin school district, it is anticipated the costs for
these programs will increase by $3,150.
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Increase $26,559
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OTHER EXPENDITURES
Unallocated
Worker's Compensation insurance premiums have risen continuously
over the years. A $4,000 increase is budgeted to bring the budget
in line with prior years expenditures.
Offsetting a part of the increase in worker's compensation is a
decrease in the 1972 deferral payments to Metropolitan Waste
Control Commission since the 1991 payment of $2,873 was the final
payment.
Increase $ 1,127
Other Financing Uses
Within this department is the budget for the Community Development
Block Grant. As was discussed under revenues, this program has
not been budgeted in past years. The 1992 budget, which is fully
offset by revenue, totals $47,723.
This department also contains the the budget and costs for
studying Site Q, which is a potential sanitary landfill site
within the City. Legislation passed in 1991 abolished the
landfill siting process. Therefore, the 1992 budget includes no
funding for Site Q. The 1991 budget included $10,000 for this
item.
Increase $37,723
CONTINGENCY
In past years, this line item has represented unappropriated funds
designed to be used for unforeseen or emergency expenditures. A
portion of the 1991 budgeted amount was earmarked for implementing
a comparable worth program as required by state law.
The 1992 budget of $56,072 is totally earmarked for comparable
worth and cost of living salary increases. Salary increases have
been left out of each department pending Council's implementing of
comparable worth.
There are no funds in this budget line for unforeseen or emergency
expenditures.
Increase $12,528
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ANALYSIS OF GENERAL FUND
The following is a summary of the General Fund 1992 budget as it
currently stands.
Revenues
Expenditures
$ 2,242,740
$ 2,382,639
Expenditures Currently
Unfinanced
$
139,899
This deficit needs to be addressed by City Council. Below are
some potential areas where either revenues could be increased or
expenditures decreased along with the goal and objective impacted.
THE ITEMS LISTED ARE NOT RECOMMENDATIONS BUT POTENTIAL AREAS FOR
CITY COUNCIL DISCUSSION.
Amount
of Item
Goal(s)
Impacted
Objectives
Impacted
Eliminate for one year the City's
contribution to the Fire Relief
Association. Association would $ 17,500
still get $22,000 of state aid.
Eliminate all Park capital outlay
except for Kelsey park. $ 25,520
3
2
5
2
Eliminate all crack sealing from
streets and highways budget.
$ 50,000
2
1
Reduce Police coverage.
Dependent
on amt. of
Reduction
3
1
Reduce staffing levels. Will
need to pay severance for those
employees laid-off.
Dependent
1
2
5
7
6
6
7
1,3
1,3
2
3
1
1
1
Determine minimum needed to
comply with comparable worth.
Provide no additional salary
increases.
Dependent
Either abate one year or
go delinquent one year on
assessments on park prop.
$ 21,389
1
2
Eliminate newsletter
$ 4,771
7
3
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Eliminate purchase of copier
at end of lease leaving City
with only one copier.
Increase revenue estimates by
changing assumptions (for example
number of new homes, timing of
street light installation etc.)
Do not balance budget, using
a portion of fund balance
to finance operations.
Amount
of Item
Goal(s)
Impacted
Objectives
Impacted
$ 1,600
7
3
variable
1
1
Up to
Council's
Discretion
1
1
This is by no means a comprehensive list. City Council is
encouraged to recommend other items and if need be amend the goals
and objectives accordingly.
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DEBT SERVICE FUND INFORMATION
Debt Service Funds are used to account for the resources pledged
for paying bonded debt and the debt payments. The City currently
has the following types of bonded debt outstanding:
1. Certificates of Indebtedness which are used to purchase
major equipment and are fully supported by ad valorem
taxes.
2. General Obligation Bonds which were used to finance the
construction of the fire stations and equipment and are
fully supported by ad valorem taxes.
3. Special Assessment General Obligation Bonds which are
used to finance construction of street, water and sewer
improvements and are fully supported by assessments
levied against the benefited property owners.
4. Tax Increment Bonds which are used to finance land
acquisition and redevelopment and are fully supported by
the increase in taxes generated (tax increment) from the
development of the property.
State Aid Revenue Bonds which are used to finance street
improvements eligible for state aid funding. These bonds
are fully supported by start aid funds.
5.
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Revenues
Ad Valorem Taxes
Tax Increments
Special Assessments
Intergovernmental
Other
Interest
Miscellaneous
Transfers from Other
Funds
Bond Proceeds
Expenditures
Bond Principal
Bond Interest
Other
Transfers to Other
Funds
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1990
Actual
$ 80,687
449,064
3,169,799
326,058
1,092,470
29.808
860,218
4,031,476
$10,037,874
$9,399,400
1,818,555
313,253
815,634
$12,346,842
1991
Budget
$ 94,855
227,000
1,783,651
224,400
496,536
37,630
3,125,000
$5,989,072
$7,151,000
1,578,235
15,000
175,000
$8,919,235
Proposed
1992
Budget
$ 390,449
508,500
1,667,570
254,797
581,650
37,630
1,500,000
$4,940,596
$1,556,000
1,462,958
12,090
-0-
$3,031,048
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,~ When comparing the budgets to the 1990 actual, it should be noted
that several debt service funds are not budgeted since they have
no recurring revenue or expenditure streams. These funds,
primarily the Water and Sewer Trunk funds, can range from no
activity to expenditures in excess of $750,000.
The following is a summary of the more significant revenue and
expenditure items.
AD VALOREM TAXES AND INTERGOVERNMENTAL REVENUE
The 1992 budget includes the first year of levying taxes to pay
the fire bonds. The following is a breakdown of the tax levies
for the certificates of indebtedness and the fire bonds.
Certificates
of Indebtedness Fire Bonds Total
Ad Valorem Taxes $ 71,800 $ 318,242 $ 390,042
HACA and Equalization
Aid 29,239 96,758 125,997
$ 102,039 $ 415,000 $ 516,039
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The other component of intergovernmental revenue is state aid
street payments which are used to retire the state aid street
bonds.
TAX INCREMENTS
The large increase between the 1991 and proposed 1992 budgets
for tax increment revenue results from not budgeting tax
increments for one of the two tax increment districts in 1991.
The 1992 proposed budget corrects this oversight.
SPECIAL ASSESSMENTS
,
The budgets for special assessments include an estimation of
prepayments based on previous trends. Due to the City policy
requiring assessments to be paid within 30 days of issuing a
certificate of occupancy, prepayments can vary significantly from
year to year. The budget for 1992 has been prepared assuming
prepayments similar to 1991.
TRANSFERS TO OTHER FUNDS
The transfers in 1990 were a result of the maturing and
refinancing of two bond issues where the amount of reissued bonds
exceed the amount needed to redeem the maturing bonds. This is an
uncommon occurence and hence, has not been included in the budget.
, \ The budgeted transfer of $37,630 represents the Sewer Fund's
,~) portion of the 1990 equipment certificates. The Sewer Fund pays
its share of the debt service through user fees collected.
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BOND PROCEEDS
The 1992 proposed budget amount for bond proceeds represents an
estimate of the bonded debt that will need to be issued in 1992 to
finance various improvement projects from 1989 thru 1991.
BOND PRINCIPAL
During 1987 and 1988, the City issued three year temporary bonds
of $6,550,000 and $5,800,000 respectively. These bonds matured in
1990 and 1991, resulting in principal payments significantly
higher than most years. The amount shown in the 1992 proposed
budget includes all scheduled payments as scheduled by a variety
of bond issues.
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PERMANENT IMPROVEMENT REVOLVING FUND
The city established the Permanent Improvement Revolving Fund in
1990 in conjunction with the early redemption of four bond issues.
The PIR fund contains a public improvement account, which can be
used to finance assessable projects, and capital improvement
account which can be used for the acquisition of equipment.
The funds major revenue sources are special assessments, interest
earnings and transfers from debt service fund upon redemption of
all outstanding bonds.
The 1992 proposed equipment acquisition includes most of the
equipment requested by department heads as part of the General
Fund Budget. Specifically, the equipment is as follows:
Equipment
2 Accu-votes with Ballot
Boxes
6 Voting Booths
2 Flags and poles
6 Turnout Coats with pants
and helmets and boots
600 ft. Hose
3 Hand held radios
2 fiberglass backboards
Department
Elections
Elections
Fire
Cost
Fire
Fire
Fire/Rescue
Rescue
$10,248
$1,050
$1,570
$4,926
$1,122
$3,900
$752
These items were included in the budget since according to the
department heads they were necessary to conduct business. The
election equipment was required since the City will need to
expand from four to six precincts in 1992. The fire and rescue
equipment is designed to replace aging and failing equipment.
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PUBLIC WORKS DEPARTMENT CAPITAL
Frank stone, Public Works Superintendent has provided to the
following list of capital requests. The are listed in his order
of preference.
1. Truck with plow wing and sander - This vehicle would
replace a 1980 truck which has reached the end of its
useful life as a plow. It could still be used in street
patching and repair work.
2. Hot Box for patching streets - This machine heats tar to
prevent waste from cooling tar. It would be mounted on
the 1980 truck mentioned above.
3. Parks tandem trailer - The trailer is needed to replace
the current trailer which has worn out.
4. Toro mower - The mower is needed to replace the current
mower which has worn out.
5. Tractor with rear and side mower and front mounted
sweeping broom - This tractor would be used to sweep
streets, plow sidewalks and hockey rinks. We would be
trading in a similar type tractor.
: )
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6. Four-wheel drive pick-up with plow - This pick-up would
be replacing a older pick-up.
7. Bobcat - This machine would be used all around.
8. Motor grader - This grader would replace the old grader
that is getting very costly to maintain.
The estimated costs of the equipment is as follows:
Truck with plow wing and sander
Hot Box for patching streets
Parks tandem trailer
Toro mower
Tractor with mower and broom
Four-wheel drive pick-up with plow
Bobcat
Motor grader
$ 64,000
50,000
3,500
12,000
30,000
14,000
16,000
145,000
$ 334,500
While Frank considers the grader a high priority item, he feels
the City could be better served by purchasing the other equipment
and looking at the grader in 1993.
Available funding could come from the PIR Fund, although it can
not fund all of the above, from the issuance of equipment
/ , certificates or inclusion in the 1992 General Fund Budget.
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