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MINUTES OF THE ORONO CITY COUNCIL MEETING Monday, August 23, 2010 7:00 o’clock p.m. _____________________________________________________________________________________ Page 17 of 18 (7. STREET CIP, Continued) Bremer indicated she agrees with Council Member Franchot and that it would be more fiscally conservative to go ahead with the project rather than delay it until 2016. McMillan noted in 2015 the fire station bonds are paid off and that by delaying this project, the City will not have to raise taxes. McMillan noted the City has done road projects in a staggered fashion for a number of years and that she has a concern about attempting too many projects at one time given the poor economic climate. Bremer asked whether they need unanimous approval to take it to the next level. Olson stated they do not need unanimous consensus to proceed forward to the next step and that if the City decides to leave it in, they can make the final decision down the road, but that once it is removed, they will not be able to elect to do it in 2011. Olson stated the Council may have a better idea of what is happening with the economy in another couple months. White stated if the City is able to find savings somewhere, they should be able to move forward with the project. McMillan stated she is more concerned about 2012 to 2014. It was the consensus of the City Council to schedule Willow Drive for improvements in 2013 and to review this item in a couple of months. CITY ADMINISTRATOR’S REPORT 11. COMPENSATED ABSENCES FUND – RESOLUTION NO. 5956 Olson stated currently $375,000 is shown as a designation of fund balance, which means that the City intends to use this fund balance to pay the liability that is shown on the books. By creating a compensated absences fund, the City can fund this liability. The City does have a significant fund balance at the moment so this is an ideal time to create it. The City, at the end of the year, was at 59 percent fund balance as compared to the operating budget. The state auditor prefers cities’ fund balances to be no greater than 50 percent. The City’s overall operating budget will be decreasing by approximately $300,000 based on the decision by Long Lake as it relates to the police department. Olson stated the City should move some money out of the fund balance to bring it down closer to the 50 percent. McMillan moved, Franchot seconded, to adopt RESOLUTION NO. 5956, a Resolution to Create the Compensated Absences Fund, an Internal Service Fund. VOTE: Ayes 4, Nays 0. *12. POLICE SERVICE CONTRACT Franchot moved, McMillan seconded, to approve the new police service contract with the Cities of Minnetonka Beach and Spring Park. VOTE: Ayes 4, Nays 0. Item #02 - CC Agenda - 09/13/2010 Approval of Council Minutes 08/23/2010 [Page 17 of 18]