10-22-1990 Council Packet - Laserfiche WebLink

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maintenance costs for a larger facilities and possible position increases over the next 3 to 5 years together with other things the City could undertake to fund revenues to make up any difference. The balance from scenerio C is placed as one of those additional revenues. Even with adding positions and differencial between what the City is able to levy together with inflation rate differential the City has more options chrougn 1995 to levy the appropriate amount. In addition the City will have approximately $250,000 available to it in 1996. Parks/Permanent Improvement Revo lv ing/Water Operating/Sewer Operating - The projection over the next 5 years for each of these 4 looks healthy. The condition of the parks will be dependent unon the amount of income from subdivisions together with any capital program for expenditures of those monies. The City's permanent improvement revolving fund which apart from $120,000 set aside for vacation and sick leave liabilities is essentially a rainy day/working capital fund apart from the general working capital fund of over $800,000. From one operating funu reflects the increasing rates which is needed but should continue to grow in strength. The sewer will also continue to grow in strength, this being financed primarily for future improvements to the future. There has been a question raised as to how the City generated the "surplus" over the years. This is a result of conservative budgeting of revenues and conservative budgeting of expenditures on the "high side". These surpluses have been generated after cash flow problems the City experienced in the late '70s and given the budget cycle where this budget has to be set several months in advance of knowing the current year results has resulted in this ever increasing surplus. As noted in Attachment H the City did not levy the maximum :ax possible between the '82 and '87 and only did so in 1988 when the Legislature cut them back to a small increase over the previous actual levy. Since then the City ..as levied the maximum, however, this has been at a level that was previously levied and lost approximately $185,000 in levying authority because of under levying in previous years. Additionally not included are an equipment outlay fund of $150,000 and the various bonding funds. These are projections only and as we have done before they have to be modified with each years budget, however, decisions can be made fairly comfortably in the future in any position additions within a framework that would not negatively impact the City. There are a number of economic variables that may not make the projection realized however, for the most part taxes are eventually paid including penalties and interest and it is just a matter of cash flow and if interest rates drop substantially the City could refinance the bonds to accommodate that. Scenarios B and C end with a fairly healthy cash position at the end of the 15 years being 2% levy would be reduced and the City would still have the investment income on the cash should it choose to use