CCP 05-22-2012 - Laserfiche WebLink

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May 8,2012 Page 5 of 7 Council Business Council Business 11. Approve a Resolution amendingthe Long-Term Financing Plan for the Capital Asset amending. Approve a Resolutionng l� g g p the Long-Term Replacement Plans. Report No. 12- 118. Resolution No. 12-043. Financing Plan for the Capital Asset Replacement Plans.ReportNo.12-118. City Manager Lotter reported that the fleet non-fleet/pavement management plan has been Resolution No.12-043 being worked on for the past several years. Fleet was described as any rolling asset the City has. Non-fleet was described as assets that are immobile: roofs, desks, HVAC units, etc. Council has indicated that they would like a strong long-term financial plan. It was reported that staff has been working on this plan for over five years. An overview was presented showing the revenue getting close to the trending line of the expenditures. In August 2010 council took action in identifying the revenue sources for funding the plan; including adding an installment from the annual budget, fund balance target surplus, redirecting a component of debt services,use of available resources from fund 422 and issuance of equipment certificates. It was explained that altering any of the five components would affect the entire funding process. The council adopted a levy in December 2011, directing staff to remove $ 400,000 form the fleet non fleet budget, and$172,000 be allocated into fleet non fleet on an annual basis. The $400,000 will be used towards a future project at the Community Center. It was stated that the $172,000 would not fully fund the fleet non-fleet account. An updated chart was displayed; showing the annual inclusion of the $172,000. It was noted that in the long term the proposed expenditures are met and surpassed. City Manager Lotter reported that the proposed resolution would amend the 2010 council position on financing the fleet non fleet, pavement management plan as follows: • Keeping annual installments • Redirecting the Public Safety debt in 2016 • Continue to contribute $172,000 • Acknowledge the transfer of$1.1 million • Council authorized use MSA fund for pavement management. Councilmember Bauman stated that she cannot support taking the Public Safety debt payment of$393,000 and adding it to the fleet non-fleet fund. She stated that she is concerned with redirecting debt because in the future it may be difficult to find funding sources. Councilmember Samuelson asked for an explanation of equipment certificates. Manager Lotter described them as short-term debt; noting there are additional costs when debt is issued. Councilmember Samuelson stated that she is comfortable with the resolution. Councilmember Burg asked Councilmember Bauman what her ideas are to fund the plan. Councilmember Bauman stated that she is uncomfortable with the portion that redirects the debt payment into fleet non-fleet, and would suggest addressing financial issues as they occur. Councilmember Burg stated that in the past there was not a very balanced approach to maintaining assets. Mayor Jacobsen stated that the plan meets the council objective of maintaining a cash plan for replacing assets. Councilmember Bauman said she calculates about a 10.875% tax levy equivalent to the public, by not putting the debt payment of the Community Center and the Public Safety Center back into the City's budget; decreasing the levy. Mayor Jacobsen noted that in order to meet the anticipated expenses a funding source needs to be established. Councilmember Bauman stated that the city could reduce spending by 10%. City Manager Lotter clarified that the redirection of the debt service levy of the Public Safety Center in 2016 is a reallocation of existing resources. Also noted was that this type of long term financial planning has proved favorable in the City's bond rating over the years. Councilmember Jacobsen asked if the plan will be re-evaluated to assess progress. Manager