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Every year there is a minor negative adjustment to our allotment because we have a large <br /> balance relative to our annual allotment. The unencumbered balance in our account is <br /> subtracted from our needs total before our pro-rata needs amount is calculated. As stated <br /> above, each $1,000 of needs results in an annual allotment of $13.27 in 2011. So if <br /> $1,165,000 were deducted from our needs it would result in reduction of our annual <br /> allotment of$15,459.55 ($t,165,000/$1,000 X$13.27). <br /> Once a city reaches an unencumbered fund balance of three times their January <br /> construction allotment and $1,500,000, the negative adjustments become much more <br /> severe. Arden Hills is approaching this level but will not be hit by this negative <br /> adjustment in 2012. <br /> The MSA system also has positive incentives built in for cities that use their MSA funds. <br /> The negative needs adjustment described above is redistributed to cities with less than <br /> one times their January construction allotment. <br /> Also, the MSA system allows cities that have spent all their Construction Funds to ask for <br /> an interest free loan from the General Construction Fund pool. Cities can ask for five <br /> times their annual construction allotment or $4,000,000, whichever is less. This would <br /> allow Arden Hills to apply for approximately a $1,000,000 interest free loan should we <br /> have MSA eligible projects and not enough funds. These loans are paid back <br /> automatically from future year's allotments. <br /> Old Snelling Avenue Project <br /> The reclaiming of Old Snelling Avenue from County Road E to TH 51 is in the 2012 <br /> CIP. If the City Council wants this project undertaken in 2012 it is important that the <br /> Feasibility Study/Public Hearing process be started now. Since we have all the <br /> preliminary topography and geotechnical information from the December 2010 Scoping <br /> Document the preparation of plans can wait. The other option would be to wait until <br /> 2014 (after the grade separation project at US 10/Hwy 96) and do the road and bridge at <br /> the same time. <br /> Council Action Requested <br /> Staff is looking for direction on the Old Snelling Avenue project. Staff is also available <br /> to answer any questions regarding the MSA system. <br /> City Council Meeting <br /> C:\Users\sonj a.klingberg\Desktop\12-19-11 MSAUpdate.doc <br /> Page 3 of 3 <br />