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July 26, 2016 Page 4 of 7 Councilmember Bauman feared how the loss of access at County Road I would impact New Brighton residents. She stated she was not a fan of MnPASS lanes and suggested MnDOT open the new lanes to all traffic. Councilmember Strub shared his thoughts on the project. He respected Councilmember Bauman’s thoughts, but he believed MnPASS lanes were effective. He welcomed the MnPASS lane and looked forward to it being connected from Forest Lake to Burnsville. He understood that without the MnPASS lane, the project would not move forward. Community Assets and Development Director Schlichting understood that MnPASS was the best option for moving the highest volume of traffic through the corridor. He provided further comment on how freeway sections were selected for noise walls along with the voting process that would be used for the noise walls. Councilmember Jacobsen thanked staff for the thorough presentation. He appreciated the proposed improvements and believed the new sound walls would benefit the community. Mayor Johnson saw the MnPASS lane as an enhancement to the community as it would assist in moving traffic to and from New Brighton in a more efficient manner. 5 Ayes, 0 Nays-Motion Carried Council Business 1. Consideration of Acceptance of Interim Financial Statements for the Second Quarter of 2016. Motion by Councilmember Jacobsen, seconded by Councilmember Bauman to accept the Second Quarter 2016 Interim Financial Statements. City Manager Lotter indicated Finance Director Davitt would be presenting this item to the Council. Finance Director Davitt explained in an effort to keep the Council informed on the City’s fiscal condition, a comparison of the 2016 revenues and expenditures for the period ending June 30th, 2016 (unaudited) was reviewed with the Council. The comparison shown includes those programs and services that constitute the City’s core functions for which changes in financial trends can have a near- term impact on the ability to maintain current service levels. Programs such as debt service and tax increment financing which are governed by pre-existing obligations and restricted revenues are not shown. In addition, expenditures in the City’s Fleet and Non-Fleet programs are not shown as these expenditures are specifically tied to pre-funded asset replacement funds. These replacement funds are not susceptible to year-to-year fluctuations and therefore annual reviews are considered sufficient. The information is presented strictly on a cash basis which measures only the actual revenues that have been deposited and the actual expenditures that have been paid. This is in contrast with the City’s audited year-end financial report which attempts to measure revenues earned but not collected, as well as costs incurred but not yet paid. It should be noted that many of the City’s revenue streams such as property taxes, are non-recurring or are received intermittently throughout the year. This can result in wide revenue fluctuations from month to month. In addition, some of the City’s expenditures such as new capital purchases are also non-recurring and subject to wide fluctuations. To accommodate these differences, a comparison is made to historical results to identify whether any new trends exist. Staff reviewed the balances of the general fund and other capital funds for the second quarter in further detail and recommended the Council accept the interim financials. Councilmember Burg asked what caused the franchise fee to be delayed from January to March. City Manager Lotter believed there was a minor delay in implementing the new bill. Councilmember Burg requested further information on the miscellaneous category. Finance Director Davitt provided further information on this fund to the City Council. Councilmember Burg was pleased that the water revenue had not been impacted in a negative way given the fact there was a watering ban and drought this spring. Councilmember Jacobsen was pleased there were no surprises in the interim financials. Mayor Johnson appreciated the fact that the City was right on track with its finances through the second quarter. Council Business 1. Consideration of Acceptance of Interim Financial Statements for the Second Quarter of 2016.