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COl INCIL MSETINQ <br />FEB 25 2000 <br />TO:Mayor and City Council <br />Department Heads <br />ClTYOFORONO <br />FROM: <br />DATE: <br />Ron Moorse, City Administrator <br />February 17,2000 <br />SUBJECT:Information Regarding “Endowment ” Fund <br />Attached is information regarding the City of Minnetonka Community Investment Fund, which is <br />an “endowment ” type of fund. In general, the annual expenditures from this fund are limited to 90% <br />of the annual interest earned in the fund. <br />In the late 1980 ’s, the City of Miimetonka had accumulated large surpluses in its Improvement Bond <br />funds due to very large inver.tment returns on special assessment prepayments. The City wanted to <br />determine how best to use these funds for the long-term benefit of the conununity. The City brought <br />together a number of conununity leaders to develop a plan and guidelines for the long-term use of <br />these funds. They developed the Community Investment Fund. The attached materials set out how <br />the fund works. <br />As indicated above, the key element of the fund is that expenditures from the fund are limited to an <br />amount that will ensure the principal amount in the fund remains or grows over the long-term. This <br />ensures the City will always have the benefit of this fund as a funding source for capital projects of <br />benefit to the City that would not be possible without this fund. <br />f I