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N <br />MINUTES OF THE.ORONO 199$ BUDGET HEARING — DECEMBER 49 1991 <br />Bruce Fike asked what are the interest payments on the bond issue <br />which were proposed to be accelerated last year. He asked what <br />were the normal interest payments last year. <br />Kuehn noted that they are in the water and sewer operating funds, <br />and have not been accelerated this year. <br />Callahan noted that $103,000 of the money allocated for fire <br />protection goes to the Long Lake fire department. <br />Weed asked if the Long Lake fire budget is solely funded by <br />contracts. <br />Moorse stated the Long Lake Fire Department is supported by <br />contract cities plus tax levies. . <br />Jabbour pointed out the City does have a mutual aid agreement <br />with the fire departments. <br />Moorse explained that in regards to the tax levy, the general <br />fund has increased only .4 %, which is basically frozen. Sewer <br />and water bonds has increased to retire the Crystal Bay sewer <br />bond. The new item is the bonds for the new City facility. The <br />total increase in tax levy for 1992 is 14.46 %. <br />Weed reiterated that amount is the payment on the building bonds. <br />He asked how much the City bonded for, and how much was in the <br />building fund. <br />Callahan noted the budget for the building is $4,050,000 on the <br />assumption that the decommissioned sewer plant property would be <br />sold for an additional $150,000. He stated the City paid <br />$300,000 for the land. They borrowed $4,000,000 and are putting <br />$400,000 into an escrow account against the bonds. He noted the <br />building fund balance is about $2,000,565. <br />Goetten noted they are using the interest to buy down the bonds. <br />Jabbour stated they essentially were able to borrow money at a <br />lower rate than the City could get on its investments because of <br />the City's excellent credit rating. He noted if the building <br />fund were used, the rating could change for additional bond <br />sales. He noted that only 10% of the bond amount can be put <br />aside to service the bonds. <br />Goetten stated that they were concerned about the future of <br />Minnesota Legislation and they wanted to be well prepared if the <br />State were to further reduce revenues available to cities. <br />Fike asked if these numbers are contingent upon both the sale of <br />the sewer plant site and the Crystal Bay site this year. <br />Callahan noted that if the properties were retained for park <br />land, money would be used from the building fund to offset the <br />difference. <br />2 <br />