HomeMy WebLinkAbout1997 01-09 FCA•
AGENDA
BROOKLYN CENTER FINANCIAL COMMISSION
January 9, 1997
City Hall
Conference Room B
1. Call to Order: 7:00 P.M.
2. Roll call.
3. Approval of Minutes: November 14, 1996.
4. Discussion of status and role of the Financial Commission.
5. Annual meeting / election of Chair and appointment of Vice Chair.
6. Update on Fire & Police building needs planning.
• 7. Review of Capital Improvements Fund Expenditure Policy.
8. Discussion of standard meeting date for 1997.
9. Set Date of Next Meeting.
10. Adjournment: 9:00 P.M.
•
MINUTES OF THE PROCEEDINGS OF THE FINANCIAL COMMISSION
OF THE CITY OF BROOKLYN CENTER
NOVEMBER 14, 1996
CITY HALL, CONFERENCE ROOM B
CALL TO ORDER
Acting Chair Ron Christensen called the meeting to order at 7:13 P.M. in Conference Room B.
ROLL CALL
Present at roll call were Commissioners: Ron Christensen, Lee Anderson, Jay Hruska, and Larry
Peterson. Also present were Council Member Kathleen Carmody, City Manager Michael
McCauley, and Finance Director Charlie Hansen. Chair Donn Escher was excused.
Commissioner Ned Storla was unexcused.
Annroval of Minutes
A motion was made by Commissioner Jay Hruska to approve the minutes of the September 19,
1996 meeting. Commissioner Lee Anderson seconded the motion and all members voted in its
favor except for Commissioner Larry Peterson who abstained from voting.
Review of Canital Imnrovements Fund Expenditure Policv
Mike McCauley reported that the existing policy ties up about $3,200,000 with various
• restrictions. It may be preferable to make some of that money available to meet the City's current
needs for buildings. He suggested splitting it into two funds as follows:
a. Reserve fund for emergencies.
b. Capital improvements fund to meet city needs.
These include the current need for fire stations, the police station, and the city hall, and an
ongoing need to make improvements each year to the parks. The ongoing needs should scheduled
over a longer time period and an acceptable level of annual effort identified.
Ron Christensen asked if the capital improvement fund would be subdivided and dedicated by
parks, roads, etc. Mike McCauley responded that the only dedication would be in the budget.
Ron Christensen explained the existing policy to members who have come on the Financial
Commission since it was adopted and answered questions. The value of the policy as a guide to
City Council actions was discussed.
Larry Peterson expressed concern for the immediate use of any money that is freed up by
removing restrictions in the existing policy and asked about the rational behind the beginning
January 1, 1993 balance of $3,000,000.
Ron Christensen asked for more specific for the proposed policy changes and building plans.
• Kathleen Carmody asked for minutes from 1993 to understand the deliberations that went into the
existing policy. Jay Hruska asked that the Financial Commission receive copies of interim
2
0 financial statements.
Next Meeting
The next meeting will be Thursday, January 9, 1997 at 7:00 P.M.
ADJOURNMENT
Acting Chair Ron Christensen declared the meeting adjourned at 8:20 P.M.
•
•
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• DRAFT
CAPITAL EXPENDITURE RESERVE FUND
POLICY OBJECTIVE
The objective of this policy is to provide funds to meet emergency needs for capital expenditures
that may arise from time to time. While the City carries property and casualty insurance, the City
may need additional funds beyond insurance proceeds in the event of natural or other disaster
impacting its buildings and their contents., as well as other improvements to real property. Also,
unanticipated failure of buildings or improvements to buildings may require immediate
expenditure of funds for repair or replacement that are not covered by insurance. The funds
placed in the Capital Expenditure Reserve Fund are not to be considered a source for planned or
recurring capital needs, but only to deal with emergency needs as described due to damage, loss
or failure of existing buildings and other improvements to real property.
USE OF FUNDS
Funds may be expended from the Capital Expenditure Reserve Fund for:
. A.) Repair or replacement of buildings or other improvements to real property and their contents
where the repair or replacement is necessitated by damage to such buildings or other
improvements to real property and their contents due to:
1) natural disaster such as a tornado, storm, flood, earthquake, or fire
2) fire, vandalism, terrorism, explosion, building or component collapse
AUTHORITY TO SPEND:
Expenditures meeting the criteria for the use of funds may be funded through the Capital
Expenditure Reserve Fund upon Resolution of the City Council finding that the criteria for
expenditure have been met and that the use of funds would not otherwise be covered by
insurance proceeds, except that the Council may authorize the use of Capital Expenditure
Reserve Funds in anticipation of the receipt of insurance proceeds providing that such funds used
in anticipation of insurance proceeds are repaid to the Capital Expenditure Reserve Fund from
such insurance proceeds.
FUND BALANCE
The Capital Expenditure Reserve Fund shall be established at $1,000,000. Such fund balance
shall increase each year by the interest earned on the fund balance.
y
0 fmcomm\draft Draft dated 1-7-97
CITY OF BROOKLYN CENTER
CAPITAL IMPROVEMENTS FUND EXPENDITURE POLICY
POLICY OBJECTIVE:
The City of Brooklyn Center makes unrestricted capital expenditures through one of two funds.
Generally, small capital expenditures are funded through the general fund and planned for as part
of the annual budgeted process for the general fund. Large unrestricted capital expenditures are
funded through the capital improvements fund based on resolution 68-246, which was approved
in 1968. Capital expenditures are also made through other funds such as the M.S.A. construction
fund, the special assessment construction fund, the water fund, the sanitary sewer fund, and the
storm drainage fund. These funds each have restrictions in place to guide their expenditures.
The objective of this policy is to clarify funding for all unrestricted capital expenditures by
specifically defining which capital expenditures are eligible for funding through the capital
improvements fund. Unrestricted capital expenditures not meeting the criteria for the capital
improvements fund must be made from the general fund operating budget.
Specifically excluded from this policy are capital expenditures that are to be reimbursed by
insurance proceeds. These may be accounted for through the capital improvements fund at the
discretion of the Director of Finance.
SOURCE OF FT. MS:
The sources are ad-valorem taxes, issuance of bonds, state and federal grants, transfers of
unrestricted balances from other funds and investment earnings.
USE OF FUNDS:
The following defines general expenditure criteria for the utilization of the capital improvements
fund balance.
A.) Major: Any capital expenditure that exceeds $25,000 $50,000. Capital expenditures of
less than $25,000 $50,000 are to be made through the general fund operating budget.
B.) Permanent: Any capital expenditure that has an estimated useful life of 10 years or
longer.
C.) Facility: Buildings, improvements to real estate, the acquisition of land for city purposes.
This definition excludes the acquisition of land for development or resale and excludes
vehicles.
S
Additionally, the'; capital improvements fund may be used to provide loans to other funds
maintained by the',City. However, loans from the capital improvement fund may only be made
to proprietary funds which have the ability to generate revenue and repay the loan within 10 years
at prevailing interest rates.
,41 TTHORITY TO SPEND:
Expenditures meeting the above criteria may be funded through the capital improvements fund
based on the following authority limits:
A.) Expenditures from $0 to $25,000 $50,000: Not eligible for funding from the
capital improvements fund. Funding is required through the general fund operating
budget.
B.) Expenditures from $25,001 to $M,000 $50,001 to $250,000: The City Council
may, through simple majority, approve these expenditures.
C.) Expenditures over $200,000 $250,000: Following a public hearing on the
expenditure of the capital outlay, the City Council may ,
ntajorit~; approve expenditures in this category.
18 SPENDING LIMITATIONJFIJND BALANCE REOUIREMENT:
The objective as described above and previously defined in Resolution 68-246 requires the capital
improvements fund to be a permanent source of funding for planned major expenditures. As such,
the following criteria is established to comply with that intent:
A.) Planned Expenditures: If the proposed capital expenditure is in excess of
$.200,0A9 $250,000 it must have been included in the five year capital
improvements plan for at least two years.
Additionally, the five year capital improvements plan must be approved by the City
Council at a public hearing on an annual basis.
with
E~j
$3,000,000 as of ifffluftrY 1-,4993
POLICY AMENDMENT:
Amendments to this policy require a 4/5th's majority by City Council vote.
•
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• ROLE OF THE FINANCE COMMISSION:
If a review of an expenditure is requested by the City Council from the Finance Commission, the
Finance Commission will respond on the basis of the following questions:
A) Does the expenditure comply with the Capital Improvements Fund Expenditure
Policy?
B.) Is the expenditure appropriate considering the financial condition of the City?
•
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CITY OF BROOKLYN CENTER
CAPITAL IMPROVEMENTS FUND EXPENDITURE POLICY
ESTIMATE OF AVAILABLE RESOURCES
Golf Course Liquor
Fiscal Begining Estimated Loan Loan Estimated Ending
Year Balance Interest W Repayment Repavment Expend. (2) Balance
1996
$3,721,775
$219,585
$57,500
$24,828
$383,753
$3,639,935
1997
$3,639,935
$214,756
$57,500
$27,023
$1,800,000
$2,139,214
1998
$2,139,214
$126,214
$57,500
$29,412
$1,800,000
$552,339
1999
$552,339
$32,588
$57,500
$32,011
$200,000
$474,439
2000
$474,439
$27,992
$57,500
$22,898
$200,000
$382,828
2001
$382,828
$22,587
$57,500
$200,000
$262,915
00
$4,583,753
(1) Assumes average yield on portfolio continues at 5.9%.
(2) Assumes $3,400,000 will be spent on buildings in 1997 and 1998.
Other miscellanoues projects such as playground equipment will continue.
CAPFUND.XLS newpolicy 1/7/97
CITY OF BROOKLYN CENTER
CAPITAL EXPENDITURE RESERVE FUND
ESTIMATE OF AVAILABLE RESOURCES
•
Fiscal
Beginning
Estimated
Ending
Year
Balance
Revenues (1)
Balance
1997
$1,000,000
$59,000
$1,059,000
1998
$1,059,000
$62,481
$1,121,481
1999
$1,121,481
$66,167
$1,187,648
2000
$1,187,648
$70,071
$1,257,720
2001
$1,257,720
$74,205
$1,331,925
2002
$1,331,925
$78,584
$1,410,509
2003
$1,410,509
$83,220
$1,493,729
2004
$1,493,729
$88,130
$1,581,859
2005
$1,581,859
$93,330
$1,675,188
2006
$1,675,188
$98,836
$1,774,024
2007
$1,774,024
$104,667
$1,878,692
(1)
Assumes average yield on portfolio continues
at 5.9%.
CAPFUND.XLS reservefund 1/7/97
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