10-28-2013 Council Minutes - Laserfiche WebLink

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� MINUTES OF THE ' ORONO CITY COUNCIL MEETING Monday,October 28,2013 7:00 o'clock p.m. (I0. YEAR-TO-DATE GENERAL FUND BUDGET INFORMATION, Continued) Olson stated the line items that are under budget include miscellaneous. The golf course is also going to be under budget for revenues due to the poor weather experienced this spring. Olson stated the third quarter is basically following the previous year's revenues but are slightly higher due to the Mound police contract. Olson stated he is estimating by the end of the year the City will be at 100 percent of revenues. As it relates to expenditures,three departments are over budget, and they include assessing,elections, and law and legal services. Olson noted jail charges from Hennepin County are very high this year from Hennepin County,which has resulted in that line item increasing for next year. Olson stated the other departments look good and the administration department is way under budget due to the elimination of one position. Olson stated in his view by the end of the year expenditures will be under 100 percent and that revenues will be at 100 percent. Olson stated as it relates to the City's investments,the City is allowed to invest in treasury bills and agency bonds, state and local securities, money market funds,commercial paper issued by corporations and time deposits such as CDs. Currently interest rates are at historically low numbers and it is necessary to go out almost five years before you get a one percent return. Olson noted the City does not own any treasuries at the current time. The current CD rates pays one percent at three years and a one year CD is .04 percent. As of the end of the third quarter,the City had the majority of their money invested in CDs followed by agency bonds and then money market accounts. To date this year the City has made $129,000 in interest, which is approximately$4,000 more than last year. Total interest earned in 2012 was$188,000. In comparison to other cities,Orono has done better than the other local cities. Olson stated in his opinion Orono is still doing pretty good with their investments even though the yields are down from a few years ago. McMillan asked whether the City is limited to five years on their investments. Olson stated a few years ago that was expanded to eight years. Olson noted the City does relatively few investments going out eight years since the interest rates could change and you do not want to be locked into a long-term investment that pays a lower rate of interest. Printup asked what Orono's bond rating is currently at and what the importance of that bond rating is. Olson indicated Orono has the highest bond rating at AAA,which is the high rating and allows the City to obtain better interest rates on the sale of bonds. The average rate paid by the City was just under three percent,which is approximately a half-percent better than a number of other cities in Minnesota. Page 11 of 14