04-08-2002 Council Packet - Laserfiche WebLink

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i APR 0 8 2002 011» or UHUnO REQUEST FOR COUNCIL ACTION DATE: ApriI4,2002 ITEM NO: Department Approval: Name Ron Moorse Title City Administrator Administrator Reviewed:Agenda Section: City Administrator’s Report Item Description: Park Commission Projects and Funding At the March 25 joint work session with the Park Commission, several projects were discussed as well as the need to prov ide a higher level of funding, fhe three main projects discussed were as follows: 1 . Hackberry Park play equipment replacement 2. Layout of a potential satellite fire station and an ice rink on the Larson/Sohns property in Navarre 3. Survey of the property comers of one-third of the City's lake access lanes There was discussion regarding the use of the Community Investment Fund as a funding source for park projects. I have attached a copy of the C.-^mmunity Investment Fund ordinance which describes the purpose of the fund and how the fund is to ae used. The fund is to be an endowment-type fund such that over the long term the principal amount in the fund is to be preserved and increased, and 90% of the interest earned in the fund is to be available for priority projects that do not have alternative funding sources. To this point, the Council has used the fund as the source of loans to other funds to be repaid with interest. The outstanding loans are as follows: 1 . Water Fund - $475,000 to be repaid over 1 5 years at 5.5% interest 2. Park Fund - $120,000 to be repaid over 3 years at 5.5% interest 3. Joint Fire Station Account - $680,000 to be repaid over 10 years at 5.5% interest The balance in the Community Investment Fund as of December 31, 2001 was $1,220,000. The annual interest earned on the fund balance in 2001 was $ 109,820. The annual interest earned on the outstanding loans in 2001 was $22,210. Although the combined interest earned on the fund balance and on the outstanding loans is appro.ximately $130,000, this interest is committed to the payment of the debt service on the city facilities HRA bonds. This commitment runs through 2007. At that time, assuming the principal amount in the Fund has been preserved, and preferably increased, there would be a substantial amount of interest earnings available for special projects, which could include park projects. In the meantime, staffs recommendation is that the Council take a conservative approach to the use of the Community Investment Fund.