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<br /> I" \.' <br /> I CITY OF ARDEN HILLS <br /> It MEMORANDUM <br /> I DATE: October 10, 1996 <br /> TO: Brian Fritsinger, City Administrator <br /> I FROM: Terrance Post, City Accountant @) <br /> I SUBJECT: Utilization ofMSAS Construction Funds <br /> I Background <br /> Yesterday we met with the City Engineer to discuss the City's utilization strategy for Municipal <br /> I State Aid System (MSAS) construction funds. Prior to the previous 1996 partial $344,303 <br /> disbursement for County Road F and Stowe Avenue projects, the construction aceount status was <br /> $682,488 (12/31/95 unexpended balance -$503,768; plus the 1996 allotment $178,720). The current <br /> I balance available is $319,488. There remain significant qualifYing eosts on the County Road F and <br /> Stowe Avenue projeets. <br /> Ie Another facet of this subject is the State's policy liberalization of qualifYing costs and advance <br /> encumber rules in an effort to reduce the Highway Trust Fund balance. <br /> I ~ <br /> 1. The City has identified in excess of $750,000 of county initiated project costs (Highway 96, <br /> County Road I, County Road D, etc.), for the 1999-2001 time period. The vast majority of <br /> I these costs may not be assessable. MSAS construction funds will be the major city funding <br /> source for these projects. <br /> I 2. When funds remain in the Highway Trust Fund as unexpended balances they do not generate <br /> interest ineome. If the funds were released to the City and usage dedieated to future projeets, <br /> I the funds would generate investment income. <br /> Discussion <br /> I 1. The City's 1997 and 1998 construction allotments are estimated to be $330,000. Adding <br /> these to the eurrent aecount balance of $319,488 would result in a potential disbursement <br /> draw of approximately $650,000. <br /> I 2. The general philosophy of the Permanent Improvement Revolving Fund (PIR) has been to <br /> not draw the PIR Fund balance down as specific projeets are funded and for borrowing Funds <br /> I to pay back the PIR Fund. In the case of the County Road F and Stowe Avenue projects, the <br /> PIR Fund has absorbed non-assessable project costs not allocated to the Pavement <br /> ~ Management Program (PMP) portion of the General Fund. <br /> I <br /> -- ----.- <br />