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. . . ARDEN HI!,T ,S CITY cm )NCTT, - AUGUST 31 1998 2 Mr. Post explained that, historically, the Community Services Fund has not been used for this type of use and typically the PIR Fund has been used to internally finance capital improvement projects. In this situation with respect to the PIR Fund, there is no certainty that any outlay of planning funds would be repaid. Mr. Post eXplained that the repayment would not follow historical use of the funds since there is no certainty the funds would be repaid to the PIR. He requested Council input on this issue. Councilmember Malone noted the balance of $4.2 million to $4.3 million within the PIR Fund. Mr. Post stated it is almost $4.6 million. Councilmember Malone asked several questions related to fund balances which were answered by Mr. Post. Councilmember Malone asked if the Advanced Refunding Bond Fund is still contingently liable for original issue bonds. Mr. Post explained assessments will be received this year and next and then tail off. It was contemplated the use of those funds would partially pay for the City Hall. Mr. Post stated the underlying bonds will be paid off in 1998 and the contingency then disappears. Councilmember Malone asked about the 409 Fund. Mr. Post stated there is a residue ofMSA construction funds which were encumbered for the Lake Valentine Road Project and anticipated for use with the City outlay for the Highway 96 improvement project. The City will be in a break- even position at the end of next year and could then advance encumber ifthere is a project of approximately $750,000. Council member Malone reviewed fund balances and noted the recommendation is to use the PIR Fund. Mr. Post eXplained the recommendation is to take $205,000 from the PIR Fund and $200,000 from the Community Services Fund to cover the $405,000 shortfall. Councilmember Malone stated this seems to be a reasonable recommendation. Councilmember Malone inquired regarding the payback of the water tower. Mr. Post stated there is a balance of about $180,000 with three years to pay those obligations back. Mr. Post stated the Community Services Fund has been used consistently to subsidize the operating deficits for the recreation programs. Councilmember Malone stated when that fund was enacted, the Council made it a point to indicate it would not be used for operating revenues. Councilmember Larson asked if one of the choices is to not use either of these funds and asked where the budget could be cut if those funds are not used. Mr. Post stated if the Council desires to fund this expenditure solely from the General Fund he would suggest a combination of an unbalanced budget and to utilize some of the General Fund reserves/equity. He noted the remainder of funds would result in a difficult choice on which services to curtail. Councilmember Larson asked if there are other funds to consider besides the General Fund. Mr. Post reviewed the funds available and explained he believes it would be inappropriate to use the Enterprise Fund and, other than the PIR Fund, the fund balances are somewhat dedicated. He eXplained the uses for which they are earmarked and noted the Community Services Fund is an option. Mr. Post advised the Council is left to consider the General Fund or programs within the General Fund.