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---___ .. ---_.. __ _ __ _ _. _---.. . <br /> __ - _ . __ __ --- _ <br /> MEMORANDUM <br /> _ _ _ __ ._ - _ __ _ <br /> _ ._. <br /> _ _ __ _ .__ _ _ _ <br /> TO: MAYOR AND COUNCIL MEMBERS <br /> FROM: ORONO MANAGEMENT TEAM <br /> SUBJECT: 1NFORMATION UPDATE <br /> DATE: NLY 16, 2010 <br /> Information Update—7/16/10 <br /> • Attached is the Long Lake Special Meeting Agenda for Police Service Candidate Interviews to be <br /> held on Monday, July 19, 2010. <br /> • The LMCD has invited LMCD Member City Mayors and Council Members to attend either of two <br /> public meetings on Wednesday, July 21 at 8:00 a.m. or 6:00 p.m. State legislation was introduced to <br /> abolish the LMCD and the White Bear Lake Conservation District. Although the legislation did not <br /> pass, it prompted the LMCD to schedule an informational meeting. The invitation is attached. <br /> • A new management letter from the auditors is attached. The original letter included a statement that <br /> the City had invested in mortgage backed securities in violation of the City's investment policy. The <br /> investments in question are bonds issued by the Federal National Mortgage Association(Fannie Mae) <br /> and the Federal Home Loan Mortgage Corporation (Freddie Mac). While these are mortgage backed <br /> securities,they are not prohibited by the investment policy. In fact,investments in Federal Agencies <br /> are specifically identified as acceptable in the policy. Copies of the investment policy and state <br /> statute 118A.04 are also included for your review. <br /> A current listing of investments will be provided as part of the next quarterly financial update. (RO) <br /> • A question was raised about the unfunded OPEB liability during the auditor's presentation on <br /> Monday night. The liability is the result of an"Implicit Rate Subsidy"created by the requirement <br /> that retirees can continue on our health insurance plan at the same rate as active employees. A copy <br /> of an article, written for counties but applying to cities as well, is attached. The first part of the <br /> article does a nice job of explaining the subsidy in plain English. <br /> The City could choose to fund the liability by creating an irrevocable trust fund. The catch is, <br /> because retirees pay the entire portion of their insurance, the funds in the trust would never be spent. <br /> Because it is irrevocable, the City would never be able to use the funds for anything else. In effect, <br /> we would have $1,000,000 in a fund that would never be able to be used. Please contact me if you <br /> would like a more detailed explanation of the OPEB liability and the Implicit Rate Subsidy. (RO) <br /> • Attached is the quarterly report of permit data from 2007 through June 31, 2010. The information <br /> compares the number of permits, valuation of projects, and city revenue for all types of permits. A <br /> second page lists new structure information separately. Note: Not all permits are based on valuation. <br /> Pass Through Fees include SAC, escrow fees, and Long Lake and Wayzata sewer and water <br /> connections. <br /> • Staff has been in contact with Van Erickson, son-in-law of Bill Lurton,regarding planning for a <br /> dedication ceremony for Lurton Park this fall. I asked whether he and Bill are interested in also being <br /> involved in planning for future improvements to the park such as a small parking area, a park sign, <br /> and perhaps establishing a walking trail. Van is excited about the prospect and has indicated he and <br />