03-26-07 Item7F, Bldg Restoration for City Hall

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~ ~~HILLS MEMORANDUM DATE: March 21,2007 TO: Dave Scherbel, Building Official FROM: Sue Iverson, Finance Director~ SUBJECT: Finance Options for City Hall Chimney Recladding Project In response to your inquiry, I have looked at the various options to finance the City Hall chimney recladding. In the past, monies have been authorized and expended from the general fund for the City Hall arbitration costs. Since this is a repair to a capital structure, I feel we should seek authorization to charge this to the PIR Fund. The City currently has no Capital Equipment and Building Fund, but all of the former capital fund reserves have been consolidated into the PIR Fund with the exception of the Public Safety Capital Equipment Fund. Per City policy, any excess revenues over expenditures, in anyone year, are transferred from the General Fund to the PIR Fund. The balance in this fund as of March 7, 2007 was $5,616,543. Assessment revenues are deposited into this fund to replenish it as are excess revenues from the General Fund. Since excess fund balances in the past have been transferred to this fund, and the nature of this repair is to a capital asset, I think the proper classification would be to charge this expenditure to the PIR Fund. On a side note, we will probably need to reevaluate our fund structure; we should look at setting up Capital Equipment, Building, and Park Improvement Reserves. These are just preliminary numbers, unaudited numbers as we are not done with all the closing entries from 2006. If you have any other questions, I would be happy to assist you.