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MINUTES OF THE <br />ORONO CITY COUNCIL MEETING <br />Monday, October 28, 2013 <br />7:00 o’clock p.m. <br />_____________________________________________________________________________________ <br />  <br />    Page 11 of 14   <br />(10. YEAR-TO-DATE GENERAL FUND BUDGET INFORMATION, Continued) <br /> <br />Olson stated the line items that are under budget include miscellaneous. The golf course is also going to <br />be under budget for revenues due to the poor weather experienced this spring. Olson stated the third <br />quarter is basically following the previous year’s revenues but are slightly higher due to the Mound police <br />contract. Olson stated he is estimating by the end of the year the City will be at 100 percent of revenues. <br /> <br />As it relates to expenditures, three departments are over budget, and they include assessing, elections, and <br />law and legal services. Olson noted jail charges from Hennepin County are very high this year from <br />Hennepin County, which has resulted in that line item increasing for next year. Olson stated the other <br />departments look good and the administration department is way under budget due to the elimination of <br />one position. <br /> <br />Olson stated in his view by the end of the year expenditures will be under 100 percent and that revenues <br />will be at 100 percent. <br /> <br />Olson stated as it relates to the City’s investments, the City is allowed to invest in treasury bills and <br />agency bonds, state and local securities, money market funds, commercial paper issued by corporations <br />and time deposits such as CDs. Currently interest rates are at historically low numbers and it is necessary <br />to go out almost five years before you get a one percent return. Olson noted the City does not own any <br />treasuries at the current time. The current CD rates pays one percent at three years and a one year CD is <br />.04 percent. <br /> <br />As of the end of the third quarter, the City had the majority of their money invested in CDs followed by <br />agency bonds and then money market accounts. To date this year the City has made $129,000 in interest, <br />which is approximately $4,000 more than last year. Total interest earned in 2012 was $188,000. In <br />comparison to other cities, Orono has done better than the other local cities. Olson stated in his opinion <br />Orono is still doing pretty good with their investments even though the yields are down from a few years <br />ago. <br /> <br />McMillan asked whether the City is limited to five years on their investments. <br /> <br />Olson stated a few years ago that was expanded to eight years. Olson noted the City does relatively few <br />investments going out eight years since the interest rates could change and you do not want to be locked <br />into a long-term investment that pays a lower rate of interest. <br /> <br />Printup asked what Orono’s bond rating is currently at and what the importance of that bond rating is. <br /> <br />Olson indicated Orono has the highest bond rating at AAA, which is the high rating and allows the City to <br />obtain better interest rates on the sale of bonds. The average rate paid by the City was just under three <br />percent, which is approximately a half-percent better than a number of other cities in Minnesota. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />Item #03 - CC Agenda - *11/12/2013 <br />Approval of Council Minutes 10/28/2013 <br />[Page 11 of 14]