7/26/2013 10:18:00 AM CF aims to spend $800K of reserve
by Ken Haggerty
The Cannon Falls City Council gave city administrator Aaron Reeves the go-ahead at its July 16 work session to develop the 2013 budget with a plan to lower the general fund reserve to a level of 50%, a target that will involve $800,000 in reserve spending.
The 2012 audit showed the reserve at $1,855,121. A payment of $270,000 from MnDOT for land the city owned near the new Hwy. 52 overpass and a $60,000 payment from Mediacom for back payments of tower leases has the reserve at $2,191,847, which is 78.5% of the 2013 general fund budget. The State recommends a 40 to 50 percent reserve.
Reeves said the State budget and Local Government Aid apparently have stabilized and the local economy seems to be strengthening as well with some commercial and residential projects completed or underway, He said he is comfortable with a 50% reserve under the current conditions, after four years of cuts in LGA and unallotment of State funding as well as a 14% devaluation of residential housing assessments in CF.
Reeves said the Council has already agreed to use reserve funds to cover the $260,000 overrun of the new library estimate. The Council also previously agreed to use $60,000 from reserves to buy out the lease on the Police Chief's car, and purchase a new squad car outright rather than lease. Another $20,000 of the reserve has been approved to cover part of the cost of the new road by the new Molenaar Clinic.
In new spending, Reeves recommended paying off the $248,982 city share of the library project bonding.
Another $60,000 should be spent to upgrade the HVAC system in city hall, said Reeves. The project should qualify for rebates and should save money in utility costs, he said.
Paving the pool parking lot for an estimated $50,000 was identified by public works as a safety issue and a project recommended to be moved forward with reserve money.
Other reserve spending recommendations: $37,000 in costs for a new flashing crosswalk installation on Hwy. 19 near the bandshell; a new warning siren for an estimated $25,000 on the south end of town near the new hospital and the new interchange; a cost share payment of $16,000 for a new Three Rivers bus; $12,000 for new squad car computers; $11,000 for new .223 carbine rifles for the police.
Council member LeRoy McCusker said he would like to see the reserve go down to 45% and have the city apply some money to sewer and water funds to offer relief on those bills.
Council member Bill Duncan and Mayor Robby Robinson said to keep the reserve target at 50%. Robinson said interest rates, fuel costs and the general cost of doing business are on the way up and other things can quickly change the situation (like a tornado). It was also noted that reserve levels help keep the city's credit rating strong and in turn keep the city's cost of borrowing for big projects down.
Reeves said to see how the year goes and if the city runs a surplus, that money could be applied toward sewer and water bill relief.
McCusker also said he would like to see the storm pond that is subject to flooding located by Amesbury moved up on the repair list.