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<br />-.I, <br /> <br />\, <br /> <br />RESOLurION N0.86-143 <br /> <br />STATE OF MINNESorA <br />COUNI'Y OF RAMSEY <br />CITY OF NEW' BRIGHI'ON <br /> <br />RESOLurION ESTABLISHING A POLICY FOR THE USE OF THE CLOSED OOND FUND <br /> <br />Whereas, the City has maintained a Closed Bond Fund to accotlllt for the <br />residuals fran matured bond issues; <br /> <br />Whereas, the City Council directed the Financial Policy Advisory Board to <br />recanrrend a policy for the managerrent of the Closed Bond Fund; <br /> <br />Whereas, in developing such a policy the Advisory Board attempted to match <br />the benefits of the Closed Bond Fund with the oost of bonded debt since debt <br />was the origin of the Fund; <br /> <br />Whereas, in developing such a policy' the Advisory Board also attempted to <br />preserve the City's credit rating; <br /> <br />Now, therefore be it resolved that: <br /> <br />1. The City shall review the requirerrents of each open bond fund armuall y <br />and only levy against taxpayers an arIDunt equal to the arrount required to <br />maintain the solvency of each bond on an annual basis. At no time in the <br />future shall newly issued open bonds generate excess cash on an annual basis <br />or at term, and the levies for existing bonds shall be adjusted to accotlllt <br />for the revenue provided by existing cash balances. <br />2. The City shall treat each open bond fund. separately and indi vidual 1 y , <br />adjusting levies appropriately for each individual open bond fund. <br />3. The City shall maintain the Closed Bond Fund at the amount equal to <br />not rrore than 20 percent of total principal of outstanding open bond principal <br />arrounts. This maintenance of the Closed Bond Fund at this maxinum level <br />is to provide a cushion against future debt contingencies as well as to meet <br />the stated objective of not harming the City's credit rating. <br />4 . The City shall use existing cash balances in the Closed Bond Fund to <br />reduce annual debt service tax levies by amounts designed. to set the Closed <br />Bond Fund to such level as is equal to a maxinum of 20 percent of total <br />principal of outstanding open bond principal. The maximum balance in the Closed <br />Bond Fund shall be arrived at within a period of ten years from the adoption <br />of this policy. <br />5. The City should collect revenues only for spec if ic purposes and in adhering <br />to this premise, reserves should exist only for specific purposes. Where <br />the City finds itself in the desirable predicament of past collections being <br />in excess of need then the benefits should be awarded to the payers through <br />reduced costs for similar type prD::Jrams. This premise is intended to apply <br />to all rrumicipal programs. <br />6. In administering the benefits from the Closed Bond Fund, in no way shall <br />the proceeds be used to provide selective or special property tax relief for <br />limited or targeted groups. The purpose of this provision is to ensure that <br />the Bond Fund benefits the entire tax base fran which it was derived. <br /> <br />Adopted this 23rd day of December, 1986. <br /> <br /> <br />ATI'EST: <br /> <br />