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HomeMy WebLinkAbout2008 03-18 CCPCITY OF GEM LAKE, MN City Council Agenda March 18, 2008 CALL TO ORDER - By Mayor .Emeott at PM CALL. OF ROLL. Emeott, Artig-Swomley, Rasmussen, Schilling, Watson OTHERS IN. ATTENDANCE (Attach list) APPROVAL OF CITY COUNCIL MINUTES AND AGENDA A) Minutes of City Council meeting of February 19, 2007 B) Minutes of City Council workshop on March 3, 2008 C) City Council. Agenda for this meeting: PUBLIC NOTICES City of Gem Lake data for community showcase —Ramsey County Fair PRESENTATIONS FROM THE.FLOOR Others- 10 minutes maximum allowed for.this part of meeting COMMITTEE REPORTS Planning Commission March meeting report — (Accept report) OLD BUSINESS A) City MS4 report for 2006 — Chuck Watson B) Grand opening of Heritage. Hall- results C) City Newsletter NEW BUSINESS A) Approval of payment.. of claims for Feb 08— Mar 08 B) IPA with Roseville for data services C) Permits and inspection. software — purchase software D) Approve licenses for: 1) Resolution No. 2008-04 On -Sale Liquor License for Gem Lake. Hills LLC Sunday On -Sale. License for Gem Lake Hills LLC 2) Resolution No. 2008-05 On -sale Liquor License for Country Lounge Sunday On -Sale License for Country Lounge 3) Resolution No. 2008-06 - Wine license for Cafe Cravings. 4) Resolution No. 2008-07 - Retail Tobacco License for Country Lounge E). Costs for use of Heritage. Hall meeting room PRESENTATIONS FROM THE FLOOR 5 minutes Maximum allowed for this part of meeting. FUTURE CITY COUNCIL. MEETINGS' Next City Council workshop Monday April 5, 2008 7 PM - City Hall meeting room Other time Next City Council meeting —Tuesday, April 15, 2008 7 PM - City Hall meeting room Other time ADJORNMENT CITY OF GEM LAKE, MN 4182 Otter Lake Road Gem Lake, MN 55110-3227 Telephone 651-747-2790 Planning Commission Minutes, 3-4-2008 Planning Commission Chair Jim Lindner opened the March meeting at 7:0OPM in the. Gem Lake City Hall. Commissioners Lindner and alternate commission Beth Herzog. were present. Also present were Bob Uzpen, Hutch Schilling, Tom Rasmussen, Faith Vadnais, Trevor Oliver, Steve Herzog, Tom Hansen, and Rob Hansen. Moratorium Area Jim Lindner stated there is some movement in the moratorium area with regards to potential opportunities. Don Waldoch is tentatively planning to close his store and put his properties up for sale. Per Mayor Emeott's request, we discussed certain types of . businesses we would like to see in this area. Marc Putman has drawn up guidelines for this area but how best to put substance to those drawings is the Planning Commission's task. Lindner opened the discussion to those present to see what types of ideas people might have. One suggestion was to keep opportunities for small businesses available. Another suggestion included apartments and condos which is in line with the mixed use intention of this planning area. Another suggestion was for larger anchor type stores that would be a primary reason for people to come to this area then stay for other reasons. Anchor stores for consideration are grocery stores of a more specialized nature. CUB or Rainbow do not fit this definition, but Byerlys is a possibility. Somebody suggested a drug store such as Walgreens or CVS. A hardware store is another idea. We discussed parking and how it must be arranged to allow people to circulate between the several types of stores the area might include. Lindner offered Tamarack Village in Woodbury as an example. Parking in that development is not dedicated to one store, but allows people to park and shop at several locations.. A medical facility with urgent care might be another possible tenant. The whole idea of general office space such as an office park could also fit in. In any event we would consider structures up to three stories in height. This is a departure from current zoning, but for mixed use to work best, higher buildings might be in order. Form -Based Zoning Challenges City Attorney Trevor Oliver then spoke to the Marc Putman concept of form -based zoning. While this style of zoning has its advantages, Trevor warned it also has some challenges. Specifically Gem Lake would need to write its code so that anyone, both current and future property owners, can develop their property. Trevor compared form based zoning to our typical Euclidian zoning with setbacks and PUD, and review boards, etc. Form -based zoning emphasizes how things will look and said it works best with developer -driven concepts. But any code must work for all property owners and not just. those developers with large amounts of investment capital. Trevor's firm, Kelly and. Fawcett, has draft ordinances to help facilitate the process. Look for uson the World Wide Web at getnlakemn.org. Trevor went on to describe how the placement of streets will determine building location. The size of the street will determine what type of building is placed on a site. For example, anchor stores with high volumes of traffic will require a larger street than an. office complex. He added that form -base zoning is not just for new structures. There must be a way for an existing structure to comply with any new standards be it from remodeling or other construction. Form -base zoning also gives the impression of the city micro managing a project and a city must have the resources, financial and human, to dedicate to working through all of the many details. An independent review of plans is a good idea. Comprehensive Plan Update Lindner brought along some water management plans from VLAMO and Ramsey - Washington and explained how SEH will work to incorporate those plans into the Gem Lake plan. These watershed organizations manage surface water runoff from storms. Gem Lake is responsible for the water it generates, water that my flow across impervious surfaces before it enters the water system. SEH is on target to have a draft plan available for review at our April meeting. Presentations from the floor Faith Vadnais is a Mahtomedi resident whose family is considering purchasing property in the South Road area of the former Daniels' estate. She spoke of the natural beauty of the area and how it is convenient via road networks to other sections of the metro area. She cautioned us about intensive development. Lindner attempted to review the recent. litigation by other landowners who struggled with Gem Lake's previous administration for years. Others in the audience also discussed the current processes in place that will allow familiessuch as the Hansens to realize the potential of their lands. There will need to be a balance that attempts to preserve our past yet allow for development in the future. There being no further business, Lindner adjourned the meeting at 8:50. He invited everyone back to the April meeting to review our draft comprehensive plan. Jim Lindner Planning Commission chair Look for us on the World Wide Web atgemlakemn.org MEMORANDUM Date: March 18, 2008 To: City Council From: Jessie Hart, Treasurer Re: Permits and Inspections Software/Data Conversion The building and inspection activities for the City of Gem Lake, which are performed through contract with the. Township, are currently maintained on basic Excel spreadsheets and permits are prepared by hand. White Bear Township currently utilizes a computer program called PermitWorksTM for tracking all permits and inspections from the issuance of the permit to the final certificate of occupancy. This program maintains parcel data for all properties in the. Township as well as the building related information. TR Computer. Sales is the vendor for this program. Building Official Mike Johnson made an inquiry as to the cost to convert parcel data and set- up the permits and inspections module through the same software as the Township uses. The software vendor would set-up a data base separate from the Township that would run from the same software that the Township currently uses. We received a not -to -exceed price of $1,495.00 from TR Computer Sales which would include the conversion of the parcel data and module set-up for the permits and inspections activities. Gem Lake currently uses the same fee structure as the Township so set-up should be minimal. This price does not include the cost of purchasing the raw data from Ramsey County, which is expected to be Tess than $100. The use of this software for Gem Lake would provide a better tracking system on permits and should provide efficiency and time savings in the permitting process. Council is being requested to authorize acceptance of the quote provided by TR Computer Sales to convert parcel data and set-up the permits and inspections module for a price not -to - exceed $1,450.00 and to authorize the purchase of parcel data from Ramsey County. The costs could be taken from the Planning and Zoning Professional Services budget for 2008. Claims For Payment CITY OF GEM LAKE Paul Emeott, Mayor Chuck Watson, Council Hutch Schilling, Council Gretchen Artig-Swornley, Council Torn Rasmussen, Council Jessie Hart, Treasurer Period Ending: Signatures Approving: Claims. 03/18/2008 Date of Approval Fund Totals $ Amount General: Fund Parks & Playgrounds 2004 Debt Service Fund 2005 Debt Service Fund 2007.Debt Service Fund City Hall Construction Fund Sewer Fund 28,325:47 0 00 0. 00 0.00 0,00 2,472. 72 1,552 03 Total. All. Funds 32,350 22 City of Gem Lake Claims List for Approval 0311412008 Date range: 0311812008 to 03/18/2008 Date Vendor Description Claim # Total Account# Detail 0311812008 Gretvhen Artig-Swornley Marc( 2008.Newsletter 576 $328.40 03118/2008 Paul R Emeott Materials for Building 577 $1,768.93 03/18/2008 Innovative Office Solutions, LLC Heritage Hail Furniture 578 03/18/2008 internal Revenue Service 1st 4tr.Payroll Taxes. 579 03/1812008 Kelly & Fawcett, PA 0311812008 Todd.IGrchhammer Legal Services - Feb:2006 580 Cleaning & Supplies - Heritage Hall 581 $7,863.97 $204.88. $696.20 $615.44. 03/18/2008 Metropolitan Council April Sewer 582 $1,436.63 03/18/2006 One Call Concepts .Feb Locates '583 $2.90 03/18/2008 Press Publications Legal Notice - Ordinances 5.84 .$122.40 03/18/2008 Putman Planning & Design Retainer .NE Sector"Hwy..611Cty.Rd E 585 $4,985.42 03/18/2006 QWEST Phone Chgs 2113-3112108:. 586 $91.95 03/18/2008 Lily ofRoseviIle Metro .I -Net Charges 2008 587 $1,247.00 03/18/2008 Ramsey. County. Shariff1Dispatch 588 $2,060.18 03/18/2008 T. A. Shifsky & Sons, Inc 0311812008 Teresa Tice December 2007 Snow Plowing 589 Feb Minutes/SCORE Grant 590 $487.50 $300.00 03/1812008 US Office Furniture Inc. Panels - Heritage Hail 591 $2,678.00 03/18/2008 Waste Management Recycling - March 2008 592 $345.03 03/10/2008 .bid Weigel Signs Heritage Hail Sign (112) 593 $418.00. 03/18/2008 West Lake Sales Keyboard Arm 594 $181.05 Page 1 100- 1900-352 100-41400 200 $212,40 $11 6.00 402-48000-308 $1,124.72 100-41400.560 $487.99 100-41400-200 $63.34 100-41940-210 $91.02 100-41940-210 $1.86 100-41940-580 $7,863.97 100-41400-130 $102.44 100-41400-100 $102.44 100-41600 304 $696,20 100-41940-520 5244:34. i00=41940.210 $191.10. 100-41940.300 8180,00. 600-4100-318 $1,436:63 60044100-319 52.90 100-41900-351 5122.40. 100-41910-300 $4.985.42 100-41940-321 591.95.. 100-41900-220 81,247.00 100-42100-307 $205.50 100-42100-305 $1,649.18 100-42100-307 $205.50 100-43125-404 $487.50 100-41400-332 $150.00 100-41900-384 5150A0. 100-41940-580 82,678.00. 100-41900-384 $345.03 402-48000-520 48416.00 City of Gem Lake Claims List for Approval Date Vendor Description Claim # Total 03/18/2005 City of White. Bear Lake Fire services - March 2008 595 $1 402.83 03118/2008 Xcel Energy St Lights/Electric) gas •-. Feh:2008 596 $620.03 03/1812008 White Bear Township Contracted Services 597 $3,162.50 03/18/.2008 White•BearTownship Wtr/Swr-12/110T-2129108 5.98 $94.42 Total For Selected Claims Approved Date • Page 2 03/14/2008 Account# Petail 100-41940-580 5181.05 100-42000-311 .81, 0 75.58 100-42000-312 $327.25 100.43122-382 577.74 100-41940-381 $220.13 100-41840-383 $322.16 100-41400-308 $273.00 100-41500-329 $1.,400.00 100-42401-313 $247,50 100-42401-316 576.00 100-42401-316 $107.50 100-41400-200 $16.00 40248000-308 $546.00 402-48000-520 $384.00 600-44100-329 $112.50 100-41940-385 594.42 $31,113.66 $31,113.66 City of Gem Lake Payroll Register - Landscape Payroll Period Ending: 0313/12008 Employee ------- ID Name 1 Arhg_Swornley, Gretchen 4 Emeott, Paul R 5 Rasmussen, Torn. 2 Schilling, Jr., Hugh K 3 Watson, Charles W TOTALS Employee -..� ID Name 1 .Artig-Swomley, Gretchen 4 Emeott,. Paul R 5 Rasmussen; Tom 2 Schilling; Jr., Hugh K. 3 Watson. Charles W 'TOTALS. .. -- Havrs Earnings --•--------- Deferred Taxable Federal Regular Overtime Regular Overtime Tips Gross PERA Income Cafeteria Wages WH Tax FICA Medicare 1 0 $206.00 $0.00 3000 $206.00 $.0.00 $0.00 $0.00 3206.00. 30.00. $12.77 $2.99 1 0 5515.00 50.00 30.00 3515.00 30.00 30.00 $0:00 5515,00 50.00 $31.93 $7.47 1 0 $206.a4 $0.00 30.00 $206.00 54.00. 34.00 30.00 $206.00$0,00 $12.77 $2.99 1 0 $$206.00 50.00 30.00 $206.60 $.0.00 $0.00 $0.00 $206.00 $0.00 $12.77 $2.99 1 0 S206.00 $0.00 30.00 $206.00 $0.00 $0.00 $0.00 $206.00 $0.00 $12.77 $2.99 5 0 $1,339.00 30.00 $0.00 $1,339.00 $0,00 $0.00 $0.00 3.1,339.00 $0.04 383.01. $19.43 03/1412008. State WM Tax $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 -.Insurance -•--- -. Union Health Dental Life Dues Other 1 Other:2 Other 3 Net Pay EIC.. $0.00 30.00 30.00 $0.00 $0.00 $0.00 $0.00 $190.24 $0.00 30.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $475.60 $0.00 $0.00 $0.00 $100 30.00 50.00 $0.00 $0.00 3190.24 $0,00 30.00 $0.00: S0.00 $0.00 30,00 $0.00 $0.00 $190.24 30,00: $0.00 $0.00 30.00 30.00 $0.00 $0.00 $0.00 8190.24 30.00. $0.00 30.00 $0.00 $0.00 $0.00 $0.00 $0.00 31,736.56 30.00 Page 1 Net Pay & EIC Check # $190,24 7312 S475.60 7313 $190.24 7314 $190.24 7315 $3190.24 7316 31,236.3E City of Gem Lake Disbursements Register 03/14/2008. Fund Name: Date Range: All Funds 03/18/2008 to 03/18/2008 Bate Vendor Name 0311812008 Payroll Period Ending 03/31/2008 03/1812008. Payrdli.Period Ending 03/31/2006 03/18/2008 Payroll Period Ending 03131/2008 03/18/2008 Payroll Period Ending 03/3112008 03/18/2008 Payroll Period Ending 03/31/2008 03118/2006 :Gretchen Ar€ig•Swvmiey 03/18/2008 Paul R Emeott 03/.18/2008 Innovative. Office Solutions, LLC 03/18/2008 internal Revenue Service 03/18/2008 Kelly & Fawcett, PA 03/18/2008 Todd Kirchhammer • 0311812008 031:1812008. 03/18/2008 Metropolitan Council One Call.Concepts Press. Publications, 03/1812008 Putman Planning & Resign 03/18/2008 QWEST 03/18/2008 City of Roseville 03/18/2008. Ramsey County 03/18/2008 T A Shifsky & Sons, Inc. 03/18/2008 Teresa Tice Description March 2008 Newsletter Check # Total Account 7312 $190 24 100-41100-100 7313 $475 60 100-41.100-100 7314 7315 7316 7317 Materials for Building 7318 Heritage Hall. Furniture. 7319 1st Qtr Payroll Taxes Legal Services - Feb 2008. .5180 24 100 4110Q-100 819.0 2.4 100.41100.1.00 8190 24 100-41100-100 $328 40. 100-41400-200 100.41900-352 .51.768:93 10Q-41400-200 100-41400-560 100-41940-210 100.41940-210 402-48000-308 $7,663 97 100-41940-5580 7320 5204 88 100-41400-100. 100-41.400.130 7321 5696: 20 100-41600-304 Cleaning:& Supplles - 7322 Heritage• Hall April Sewer Feb Locates Legal Notice - Orcfinances 7323 7324. 7325 Retainer NE Sector 7326 Hwy 611C1y Rd E Phone Chgs 2/13- 7327 3112/08 Metro 1-Net Charges 7328 2008 Sheriff1Dispatch 7329 December 2007 7330 Snow Plowing Feb Minutes/SCORE 7331 Grant Page 1 $615 44 100-41940-210 $1,436 63 $2:90 8122 40 100-41940-300 100-41.940.520 600-44100-318 600-44100-319 100-41900-351 $4,985 42 190-01910-300 591.95: 100-41940-321 $1.247 00 100-41900-320 $2,060 18 100-42100-305 100.42100-307 100-42100-307 $487 50 10 0-4 3125-4 04 $300 00 100-41400-332 100-41900-384 Amount $190 24 $475 60 $190 24 $190 24 $190'24 $116 00 $21.2 40 353 34 $487 99 $91 02 $1 86 $1 124 72 $7,863 97 $102 44 $102 44 5695 2Q $191 10 $180 00 5244 34 51,436 63 $2.90 $12240 $1,985 42 $91 95. $1.2.47.00 $1,649 18. $205 50 $205 50 $487 50 $150 00 $150 00 City of Gem Lake Disbursements Register Rate Vendor Name Description . Check 03/1812008 US Office Furnilure Inc Panels - Herilage Hall 7332 03/18/2008 Waste Management Recycling - March 7333 2008. 0311.812008 Bill Weigel Signs Heritage Hall Sign 7334 (1/2) 03/1012008 West fake. Sales Keyboard Arm 7335 03118/2008 City of White Bear Lake Fire services - March 7338 2008 03/18/2008 xcel Energy St Lights/Electric/Gas 7337 Feb 2008 03/18/2008 White Bear Township Contracted Services 7338. 03/18/2008 White. Sear Township WtrdSwr-121.1107- 7339 2129/08 Total For Period Total Year To !]ate.. Page 2 Total Account# $2 678 00 1.00.4 1940.580 $345 03 100-41900-384 3418.00. 402-46000-520 $181 05 1.00.41940.580 $1,402 83 100-42000-311 100-42000-312 $620 03 100-41940-381 100-41940-383 1 00-43122-382 33,.162 50 100-41400-200 1 00-41 400-308 100-41500-329 100-42401-313 100-42401-316 100-42401-316 402-48000-308 402-4500D-520 600-44100.329 $94 42 10011940-385 $32,350.22 $194,332.22 03!14/200.8 Amount 82,678 00 $345 03 $418 00 $181 05 $.1,975 58 $327 25 $220 13 $322.16 $77 74 $16 00 $273 00 $1,400 00 $247 50 $10750 $76 OD $545 00 $384 00 $112 5D $94 42 City of•Gem Lake Cash Control Statement For the Period 0311812008 to 03118/2008 03/14/2008 Less Plus Total Beginning Total Total. Ending Deposits Outstanding Per Bank Name. of Fund Balance Receipts. Disbursed Balance In Transit. Checks Statement General Fund $192,272..55 $0.00 $28,325,47 $163.947.08 Parks and Playgrounds $0.00 $0.00 $0.00 $0.00 2004 Debt Service Fund $71,817,22 $0.00 $0.00 $71,817.22 2006 Debt Service Fund $66,101.99 $0.00 $0.00 $66,101.99 2007 Capital lmpr. Bonds $1,237,49 $0.00 $0.00 $1,237.49 Street Improvement $0.00. $0.00 $0.00 $0.00 City Hall Construction ($53,718.29) $0.00 $2,472.72. ($56.191.01) Sewer Enterprise Fund $39,998 56 $0.00 $1,552.03 $38,446.53 Total $317,709.52 $0.00 T32.350.22 $285=359.30 $0.00 $36,567.38 $321 ,926.68 Page I As of 02/29/08 Fiscal Year, 2008 Name of Fund Genera! Fund Parks and Playgrounds 2004 Debi Service Fund 2006 Debt Service Fund 2007 Capilal ]rnprovemenl Bonds Street. Improvement City Hall Conslruptien. Sewer: Enterprise Fund CASH AND. INVESTMENT BALANCE STATEMENT Premier Checking Investments Total Balance • Balance Promie.r. Walls Fargo Cash. and 02/01/2008 Reoalpts Disbursements: 0212912008 CDs Mny Mkt Investments $216.796 81 $4,674.67 $29.198 93. $1921272 55 526,593 23 $0.00 $218.565 78. $0 00 $0 00 $0 00 $0 00 $34,363 41 50 00 $34;363 41 $71.656 87 5160 35. $0 06 871.8..17 22 530,000 00 50. 00 $101.817 22 565.954 41 5147. 58 $0 00 $56.101 99 540.000:09 pop 51 as:1019s 51.234 77 $2 72 . $0.00 $1,23749. ..$0.00 $0 00 51,237 49. $0 00 $0:00 $0 00 $0 00 $0.00 $0 0D $0 09 (818,525.22)• (577 19) .535,115 88 ($53,718 29) 565,133 09 511,714 80 $36,466.84 85,556:25 $2,034.53 S39,998.56 898,754;54 .$0.00 5138.753.10 . $373,584.48 $10,474.38 $66,349.34 531.7.709.52 5229,71.1.18 $55,433.09 $612,853.79 City of Gem Lake Cash Balance Statement: 03103/2008 As of 03/03/2008 Fiscal Year:2008. Beginning Name .of. Fund Balance. :General Fund $208,823.23 Parks: and Playgrounds $0.00. 2004 Debt Service Fund $106,066.45 2006 Debt Service Fund $91,004,93 2007 Capital lmpr Bands $23,903.29 Street Improvement $0.00 City Hall Construction ($15,783.25) Sewer Enterprise Fund $32,097.68 Total $446012.33 Total• Total Receipts Disbursements $20,743 82 637,29450 $0 00 $0 0.0 61, 0 71 94 635, 32117 $364.56 $25,267 50 $40 74 $22,706 54. ($77.19) $0.00 ($41.97) $37,815 88 611,477:29.. $3,576 41 $33,579.19 $161,982.00 Page 1 Ending Balance $192,272.55 $0.00 $71,817.22 $66,101.99 $1,237.49 ($77 19) ($53,641.1.0) $39,998.56. $317,709.52 City of Gem Lake interim Financial Report by Object Code (YTD) 03/03/2008 As of 02(29(2008 General Fund Budget Actual Variance Receipts: Current. Property Taxes $384,148 00 $13,300.67 ($370,847 33) Delinquent Propert Taxes $0 00 $1,040.04 $1,040.04 Fiscal Disparity Taxes $11,207.00 $0. O0 ($11.,207 00) On -Sale Liquor Licenses $5,.100 00 $2,900.00 ($2,200 00). Off -Sale Liquor Licenses $100 00 $0 00 ($ € 00:00) Other Permits $1,000 00 $0 00 ($1,000 00) Tobacco License $700 00 $0 00: ($700 00) Charitable Gambling-l.icense $100.00 $0 00 ($100 00) Contractor Licenses $450 00 $75:00 ($375 00). Building. Permits $2,000..00 $18i 25. ($1,818 75) Plumbing Permits $1,500.00 $0 00 ($1,500 00) Mechanical Permits $1,200:.00 $125.00. ($1,075,00) Electrical Permit $.1,000 00 $141 00 ($859.00) Fire Marshall inspection $4,050 00 $0 00 ($4,050 00) Septic. Inspection Fee $.1,500.00 $0 OD ($1,600.00) State Permit Charge $0 00 $7 00 $7.00 Local Government and Aids $2,808 00 $0 00 ($2,808 00) Cable TV Franchise Fees $2,500 00 $0 00 ($2,500.00) Police State Aid $4,029 p0 $0 00 Variance Fee $500 00. $0 00 ($500 00) Plan Review $476.00 $0.00; ($476 00) Sale of Supplies $25.00 $0 00 ($25 00) Engineering Charges $500.00 $0 00 ($500:00) Charges for Legal Fees $500 00 $0 00 ($500 00) Fines $3,000..00 $87.50 ($2,912 50) Interest Earnings $4,236.00 $1,154.56 ($3,081.44) Charitable Gambling Contributi $3,000.00 $792:00 ($2,208.00) Refunds and Reimbursements. $0 00 $939 80 $939.80 Insurance Policy Dividends $150 00 $0 00 ($150 00) Total Revenues $435,77.9.00 $20,743.82 ($415,035.18) Other Financing Sources:. Sale. of Investments $0 00 Transfers from other Funds $000 Disbursements: City Council Wagesand Salaries $4,946 00 $0 00 $4,946.00 Employer Paid insurance $2,172 00 $0 00 $2,172.00 Liability Ins - Employees $200 00 $0 00 $200.00 Administration $0 00 $400 00. ($400.00). Conference Registrations $450.00 $0 00 $450; 00 Meeting Preparation $2,400.00 $450 00 $1,950 00 Other Insurance $0.00 $200.00 ($200.00) Council Contingency $5,000.00 $0 00 $5,000.00 Clerk Wages and Salaries. $22,730 00 $0 00 $22,.730 00 Employer Cant -Retirement $3,215. 00 $0.00 $3,215.00 Workers Compensation $125.00 $0 00 $125 00 Office Supplies $2,500 00. $494.66 $2,005.34 Postage $0.00 $2 87 ($2:87) Professional Services $5,000.0D $0 00 $5,000.00 Page 1 City of Gem Lake Interim Financial Report by Object Code {YTS) 03/03/2008 Budget Actual Variance Administration 50 00 $390.00 f$390 00J Conference Registrations $500.00. $0.00 $500. 00 Zoning Administration $0 00 $75 00 (575.00) Mileage $300 00. $55 56 $294..44 Recording: Secretary $3,000,00 $150.00 $2,850.00 Furniture. and l fixtures $2,500.00 $1,953.45: $546.54 Elections. Temporary Employees $5,000.00 $0.00 $5,000 00 Operating Supplies $200 00 $0 00 $200 00 Mileage $25.00 $0.00 $25.00 Printing and Binding $250.00 $a 00 $250. 00 Repair/Malnt Contractual $525 00 $0 00. $525 00 Financial Administration Auditing Services $10,000.:00. $0.00 $10,000:00 Financial Services $12,000 {]. $2,445 00 $9,555 00 Legal Services Prosecution $7,000.00 $3,145 00 $3;855.00 Legal $35,000:.00 $2,240 33 $32,759 67 Legal -:Annexation $35,000 00 $957 66 $34,042 34 Operating Transfers $25,000.00 $0 00 $25,000 00 Other General Government Office Supplies $200.00 $43:47 $156 53 Miscellaneous $1Oa..00 $p00 $100 00 Internet Connection $200 00 $0.00 $200 00 Web Site. $5,000 00 $0.00 $5,000 00 Computer Services $1,000 00 $0.00 $1,000 00 Legal Notice Publication $2,000, 00 $107.20 $1,892.80 Newsletter/Public Relate $3,500,00 $396:3.5 $3,103:65 General Liability Ins. $1,800.00 $102.00 $1,698.00 Property Insurance $1,000.00 $0.00 $1.,000 00 Public Officials Liebi! $100.00 $[].00 $100.00 Recycling Collection $4,5.00:00 $590.06 $3,809.94 VLAWMO $ 0.00 $3,259..50 ($3,259 50) LMC $600.0Q $0.00 $600.00 RCLLG $150.00 $0 00 $150 00 Subscriptions $25...00 $0.00. $25.00 Gambling Distributions $3,000.00 $0 00 $3,000:00 Planning and Zoning Professional Services $35,000 00 $500..00 $34,500..00 Engineering $.10,000..00 $0 00 $10,000_00 Building inspections $5,000 07 $0;00 $5,000 00 Zoning Administration $2,200.:00 $0.00 $2,200.00 Building Secretary $250.00 $0.00 $ 2.50 00 NPDt=S Training $250.00 $0 00 $25Q.00 NFDES Education $250.00 $DAO $250 00 NPDES Administration $2,000.00 $0 00 $2,000.00 Code Enforcement $1,000 00 $0 00 $1,000 00 Recording Secretary $1;800 00 $0 p0 $1,800 00 Comp Plan Update $10;Q00 00 $842 52 $9,15.7 48 Heritage Hall. Operating Supplies $500.00 $370 04 $.129:96 Sales Tax $0:00 519 48 t$19.48j Professional Services $5 000 00 $0 00 $5,000 00 Internet Connection $0.00 $40 00 ($40 00) Telephone $1,500.00 $313 26 $1,186 74 V1leb Site. $0.00 $.160.00 ($150.00} Electric Service $2,273:00. $75.84 $2,1.97 16 Gas - Heating Oil $7,667 00 $3 f6.12 $7,350 88 Water/Sewer Utilities $20p:00 $0.00 $200 00 Repair/Maim Contractual $0 00 $299 40 ($299 40) Page 2 City of Gem Lake interim Financial Report by Object Code (YTD) 03/03/2008 Budget Actual Variance. Repair/Maintenance Bldg $1,000.00 $96.00 $904 00 Buildings & Structures $3,000 00 $0.00 $3,000.00 Other Equipment $4,500 00 $0.00 $4,500,00, PUBLIC SAFETY Fire Service $0 00 $1,075.58 ($1,075 58) Fire Marshall Service $0 00 $327 25 ($327 25) Police Regular Law Enforcement $85,825.00 $12,318..36 $53,507 64 Special Law Enforcement $100.00 $0 00 $100 00 Dispatch Costs $2,500.00 $0 00 $2,500.00. Administration $700 CO $0 00 $700 00 Miscellaneous $125: 00 $0 00 $125 00 Fire Fire Service $`13,00000 $1,0.75,58 $11,924-42 Fire Marshall Service $4,000:00 $327 25 $3,672,75 Animal Control Aniamal Removal $500..00 $0 00 $500 00 Animal Enforcement $175.00 $0 00 $175 00 Building inspection Building Inspections $0.00 $330 00 ($330.00) Building Secretary. $0 00 $152 00 ($152: 00) Road Maintenance Gravel $1,000 00 $0 00 $1.,000:00 Engineering $8,000 00 $939 80 $7,060.20 Administration $4,000 00 $0 00 $4,000.00 NPDES Administration $650 00 $0 00. $650 CO Street Lights $1,000 00 $157 90 $842 10 Street Repairs $13,500.00 $0 00 $13,500.00 Dues & Subscriptions $50.00 $0 00. $50:00 Ice and Snow Removal Salt Sand $4,800.00 $0 00 $4,800 00 Sales Tax $250:00 $0 00 $250 00 Snow Plowing $14,000: 00 $0.00 $14,000 00 Total Disbursements $435,779.00 $37,294.50.. $398,484.50 Other Financing Uses: Purchase of Investments $0,00 Transfers to other. Funds $0 00 Beginning Cash Balance $205,478.23 Cash Balance as of 0212912008 $1.88,.927.55 Page 3 City of Gem Lake Interim Financial Report by Object Code (YID) 03/03/2008 As of 02/29/2008 Parks and Playgrounds Budget Actual Variance. Receipts: Park. Dedication Fees $2,000 00 $0 00 ($2,000..00) Interest. Earnings $1,880 00 $0 00 ($1,8$0.00) Total Revenues $3,880.00 $0.00 ($3,880.00) Other Financing Sources: Sale of Investments $0 00 Transfers from other Funds $0 00 Disbursements: Total Disbursements $0.00 $0.00 $0.00 Other Financing Uses: Purchase of Investments Transfers to other Funds. Beginning Cash Balance Cash Balance as of 02/29/2008 Page 1 $000 $0.00 so.a© $0.00 City of Gem Lake Interim Financial Report by Object Code (YTD) 03/03/2008. As of 021291200E 2004.Debt Service Fund Budget Actual Variance Receipts: Current SpecialAssessments $72,000,00 $591.79 ($71,30821) Interest Earnings $6,669 00 $3B0 15 ($6,288.85). Total Revenues $7.8,669.00 $1,071.94 ($77,597.06) Other Financing Sources: Sale of Investments Transfers from other Funds $0 00 $0 00 Disbursements: DEBT SERVICE Principal $52,207 00 $25,864 00 interest $18,436'00 $9,457..17 Fiscal Agents Fees $50 00 $0 00 Total Disbursements $70,693.00 $36,321.17 Other Financing Uses: Purchase. of Investments $0 00 Transfers to other Funds $0 00 Beginning Cash Balance $100,066:45. Cash Balance as of 02/29/2008 $71,817.22 Page 1. $26,343 00 $8,978 83 $50 00 $35,371.83 City of Gem Lake Interim Financial Report by Object Code (YTD) 03103/2008 As of 02/29/2008 2006 Debt Service Fund Budget Actual Variance Receipts:. Current Special Assessments $28,000 00 $0 00 {$2$,400 t30} interest Earnings. $2,973 00 $3$4 56 ($2,60 8 4 4} Total Revenues $30.,973.00 $364.56 ($30,608,44) Other Financing Sources: .Sale. of investments Transfers: from other Funds $0:00 $0 00 Disbursements: DEBT SERVICE Principal $20,000 00 $20,000.00 $0.00 Interest $10, € 05 00 $5,267.50 $4,837.50 Fiscal Agents Fees $50 00 $0.00 $50.00 Total.Dlsbursements $30,155.00. $25,267.50 $4,887.50 Other Financing Uses: Purchase of Investments $0 00 Transfers to other Funds $0 00 Beginning Cash Balance $91,004.93 Cash Balance as of 02/29/2008 $66,'t01.99 Page 1 City of Gem. Lake Interim Financial Report by Object Code (YTD) 03/0312008 As of 02/2912008: 2007 Capital }rripr: Bonds Budget Actual Variance Receipts: Current Property Taxes $53,900.00 $0.00. ($53,900 00) Interest: Earnings $1,000 00 $40 74 ($959.26) Total Revenues $64,900.00 $40.74 ($64,859.26) Other Financing Sources: Sale of Investments $0 00 Transfers from other Funds $0 00 Disbursements: DEBT SERVICE Interest. $40,384.00. $22,256 54 $#8,12746 Fiscal Agents Fees $4.50..00 $450.00 $0 00 Total Disbursements $40,834.00 $22,706.54 $18,127.46 Other Financing Uses: Purchase of Investments $0 00 Transfers to other Funds $0 00 Beginning Cash Balance $23,903.29 Cash Balance as of 02/29/2008 $1,237.49 Page 1 City of Gem Lake interim Financial Report by Object Code (YTb) 03(0312001 As of 02/2912008 City Hall Construction Budget Actual Variance Receipts: Interest Earnings $3,000.00 ($119.16) ($3,119 16) Total. Revenues $3,000.00 ($11916) ($3,119.16) Other Financing Sources; Sale of lnvestrnents Transfers from other Funds $0 00 $0 00 Disbursements: Construction Administration $0 00 $1,164 00 ($1,164.00) Electric Service. $0 00 $1,477 88 ($1,477 88) Buildings & Structures $3,000 00 $2,840 00 $180.00 Construction $0 00 $32,334.DO ($32,334 00) Total Disbursements 53,000,00 $37,815.88 ($34,818.88) Other Financing Uses: Purchase of investments $0 00 Transfers to other Funds $0 00 Beginning Cash. Balance ($12,5.37.07) Cash Balanceas of 02/29/2008 ($50,472.11) Page 1 City of Gem Lake Interim Financial Report by Object Code {YID) 03103/2008 As of 02/29/2008 Sewer Enterprise Fund Budget Actuai Variance Receipts: Local SAC $1,200.00 $0 00 ($1,200 00) Residential Sewer Revenues $60,000.00 $1,823 93 ($58,1.76.07) Commeciat Sewer Revenues $0 00 $9,464.00 $9,464 00 interest: Earnings $10,000.00 $189 36 ($9,810 64). Total Revenues $71,200.00 $11,477.29 ($59,722.71). Other: Financing Sources: Sale of investments $0 00. Transfers from other Funds $0 00 Disbursements: Sewer Fund Wages and Salaries $2,520.00 $0.00 $2,520 00 Employer Cont -Retirement $.360.00 $0.00 $360 00. Office Supplies $500.00 $0 00 $500 00 Postage $0 00 $34:85 ($34 85) Auditing Services $2,500 00 $0 00 $2,500,00. Engineering $10,000.00 $0 00 $10,000 00 Legal $200.00 $0. 00 $200.00 Administration $7,500:00 $0.00 $7,500.00 MCES Charges $17,300 00 $2,873.26 $14,426.74 Locates $800 00 $105 80 $69.4.20 Financial Services $8,000 00 $562.50 $7,437.50 Repair/Maint-Contractual $1.0.,000 00 $0.00: $10,000,00 Total. Disbursements $59,680.00 $.3,576.41 $56,103.59 Other Financing Uses:. Purchase of Investments $0.00 Transfers to other Funds $0.00 Beginning Cash Balance $32,097.58 Cash Balance as. of 02/29/2008 $39.,998.56 CITY OF GEM LAKE RESOLUTION NO. 2008-04 18 MARCH 2008. WHEREAS, Gem Lake. Hills LLC has applied for renewal of their On -Sale and Special Sunday On -Sale Liquor Licenses for the period 4/1/08 thru 411/09, and, WHEREAS, said applicant has been similarly licensed in prior years in the City of Gem Lake, and WHEREAS, the applicant has operated the establishment without incident during 2007, NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Gem Lake, Ramsey County, Minnesota hereby approves renewal of the On -Sale Liquor License and the Special Sunday On -Sale Liquor License for the period 01 April 2008 thru 01 April 2009 The foregoing Resolution was offered by Council Member xxxxxxxxxxxxx and was supported by Council Member xxxxxxxxxxxxxx and was declared adopted upon the following vote: NAME Erneott Watson Rasmussen Schilling Artig-Sswomley VOTE ATTEST 1, William Short, the duly qualified City Clerk of the City of Gem Lake, County of Ramsey, State of Minnesota, do hereby certify that the foregoing resolution is a true and accurate representation of action taken by the City Council ❑f the City of Gem Lake on the date first written.: William Short, City Clerk Date CITY OF GEM LAKE RESOLUTION NO. 2008-05 18 MARCH 2008 WHEREAS, Gem Lake Hills LLC has applied for renewal of their On -Sale and Special Sunday On -Sale Liquor Licenses for the period 1/1/08 thru 1/1109, and, WHEREAS, said applicant has been similarly licensed in prior years in the City of Gem Lake, and WHEREAS, the applicant has operated the establishment without incident during 2007, NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Gem Lake, Ramsey County, Minnesota hereby approves renewal of the On -Sale Liquor License and the Special Sunday On -Sale Liquor License for the period 01 January 2008 thru 01 January 2009 The foregoing Resolution was offered by Council Member Hutch Schilling and was supported by Council Member Gretchen Artig-Swomley and was declared adopted upon the following vote: NAME Emeott Watson Rasmussen Schiifing Artig-Sswomley VOTE Aye Not present Not present Aye Aye ATTEST I, William Short, the duly qualified City Clerk of the City of Gem Lake, County of Ramsey, State of Minnesota, do hereby certify that the foregoing resolution is a true and accurate representation of action taken by the City Council of the City of Gem Lake on the date first written. William Short, City Clerk Date CITY OF GEM LAKE RESOLUTION NO. 2008-06 18 MARCH 2O08 WHEREAS, the Country Lounge has applied for renewal of their On -Sale and Special Sunday On -Sale Liquor Licenses for the period 1/1108 thru 1/1/09, and, WHEREAS, said applicant has been similarly licensed in prior years in the City of Gem Lake, and WHEREAS, the applicant has operated the establishment without incident during 2007, NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Gem Lake, Ramsey County, Minnesota hereby approves renewal of the On -Sale Liquor License and the Special Sunday On -Sale Liquor License for the period 01 January 2008 thru 01 January 2009 The foregoing Resolution was offered by Council Member Hutch Schilling and was supported by Council Member Gretchen Artig-Swomley and was declared adopted upon the following vote: NAME Emeott Watson Rasmussen Schilling Artig-Sswomley VOTE ATTEST Aye Not present Not present Aye Aye I, William Short, the duly qualified City Clerk of the City of Gem Lake, County of Ramsey, State of Minnesota, do hereby certify that the foregoing resolution is a true and accurate representation of action taken by the City Council of the City of Gem Lake on the date first written. OPlav 1O* I r awl? William Short, City Clerk Date CITY OF GEM LAKE RESOLUTION NO. 2008-07 18 MARCH 2008 WHEREAS, the Cafe Cravings has applied for renewal of their On -Sale Non -Intoxicating (Wine and Beer) License for the period 1/1/08 thru 1/1/09, and, WHEREAS, said applicant has been similarly licensed in prior years in the City of Gem Lake, and WHEREAS, the applicant has operated the establishment without incident during 2007, NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Gem Lake, Ramsey County, Minnesota hereby approves renewal of the On -Sale Non -Intoxicating (Wine and Beer) License for the period 01 January 2008 thru 01 January 2009 The foregoing Resolution was offered by Council Member Hutch Schilling and was supported by Council Member Gretchen Artig-Swomley and was declared adopted upon the following vote: NAME Emeott Watson Rasmussen Schilling Artig-Swomley VOTE Aye Not present Not present Aye Aye ATTEST I, William Short, the duly qualified City Clerk of the City of Gem Lake, County of Ramsey, State of Minnesota, do hereby certify that the foregoing resolution is a true and accurate representation of action taken by the City Council of the City of Gem Lake on the date first written. It**iv IVA** j ' A4'vf' William Short, City Clerk Date CITY OF GEM LAKE RESOLUTION NO. 2008-08 18 MARCH 2008 WHEREAS, the Country Lounge has applied for renewal of their Retail Tobacco Products Resellers License for the period 1/1/08 thru 1/1/09, and, WHEREAS, said applicant has been similarly licensed in prior years in the City of Gem Lake, and WHEREAS, the applicant has operated the establishment without incident during 2007,and WHEREAS, the State of Minnesota has enacted legislation, reference Chapter 227IHF117 requiring Iocal units of government to establish or update local ordinances regulating retail tobacco sales and providing for compliance checks, the cost of which shall be borne by the licensee, and WHEREAS, the City has a Tobacco Compliance Ordinance No. 68 which became effective 28 February 1998, NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Gem Lake, Ramsey County, Minnesota hereby approves renewal of the Retail Tobacco Products resellers License for the period 01 January 2008 thru 01 January 2009, and BE IT FURTHER RESOLVED that the City retains the right of revocation at any time in the event of violation of State Laws or City Ordinances regarding the retail sale of tobacco products. The foregoing Resolution was offered by Council Member Hutch Schilling and was supported by Council Member Gretchen Artig-Swomley and was declared adopted upon the following vote: NAME Emeott Watson Rasmussen Schilling Artig-5swomley VOTE Aye Not present Not present Aye Aye ATTEST I, William Short, the duly qualified City Clerk of the City of Gem Lake, County of Ramsey, State of Minnesota, do hereby certify that the foregoing resolution is a true and accurate representation of action taken by the City Council of the City of Gem Lake on the date first written. OP", William Short, City Clerk Date r`7 Ehlers Advisor • March 2008 Ehlers Advisor • March 2008 Facility Maintenance Funding (continued from page 1) The result is that - for every district in the state - the list of needs to be funded from operating capital each year costs many times the available revenue. There are some other sources of revenue available annually to districts for capital projects, but the uses are much more restrictive. • Health and safety revenue provides additional tax levy authority to pay for state -approved projects related to health and safety (e.g., hazardous substance removal, fire safety, indoor air quality improvements). • A small number of larger districts (23 of 430 school districts) qualify for "alternative facilities revenue." These districts have the option to issue bonds or increase tax levies, without voter approval, to fund state -approved projects related to maintenance and health and safety. • Smaller districts qualify for a new deferred maintenance revenue beginning this fiscal year. Unfortunately, the state total of revenue is only $26 million. • The 2007 Legislature established a non -recurring formula for additional capital and technology aid, totaling $38 million for the current fiscal year and $52 million for next year. All these revenue sources combined still fall far short of funding the costs of school districts' capital needs. As a result, many maintenance projects (roof repair and replacement, flooring replacement, pavement repair and replacement, replacement of HVAC equipment, and others) are put off year after year, until emergencies occur and facilities begin to deteriorate significantly. Solutions The best long-term solutions to this problem would require legislative action, such as a substantial increase in the operating capital allowance, an expansion of the alternative facilities program to all school districts, or both. With the state's projected deficit and continued pressure to limit property taxes, however, such changes seem unlikely in the next year or two. In the meantime, the only option for districts to access significant additional revenue is through voter -approved referendums. It is often politically difficult for school districts to gain voter support for tax increases to fund maintenance projects. Unfortunately, it is often the only choice. There are three different types of referendums that allow school districts to increase their revenues, and all three can be used for capital expenses. • Bond referendums allow districts to issue bonds to finance capital projects. While primarily used for new school buildings and major additions and renovations, bonds can also be used to finance maintenance projects and equipment. • Operating referendums provide an annual source of revenue - a specified amount per pupil - to use for expenses of the district's general fund. While most often used for typical operating expenses (salaries, benefits, supplies), they can also be used to fund capital projects. • Capital project levies also provide an annual source of revenue, but the revenue must be spent on capital projects and is based on a specified tax rate. It is often used to fund technology expenses, but also can be used for maintenance and other facility projects. There are major differences among these three financing tools, in terms of how the revenue is received, whether they will qualify for state equalization aid, how the taxes are spread, and the impact on different types of taxpayers. Because of these differences, the solution that fits best varies considerably, depending on characteristics of the district and the types of projects being funded. Ehlers encourages school districts to take a long-term comprehensive approach to planning the funding of capital projects. We can assist districts with exploring all available options to access additional funds, designing the ideal financing plan to meet the district's goals, determining the impact on taxpayers, and presenting information to the public in a way that will help to gain voter support. For more information on these services, contact any of the financial advisors on the Ehlers Education Team. Mark Your Calendars for Ehlers 2008 School Finance Seminar! Ehlers' annual one -day school finance seminar, scheduled for March 20, 2008, is especially geared for school business officials, superintendents, and school board members. This year's theme is `STRATEGY.. The Name of the Game."A distinguished panel of experts will discuss school finance reform efforts in Minnesota. Additional sessions will focus on: • Capital funding options and approaches; • Budgeting and financial projections; • Group decision making; • Rules and regulations affecting bonds; and, • Use of comparative data for effective decision making. The seminar will be held at the Radisson Hotel in Roseville. For more information, to receive a brochure, or to register, please visit our Web site at www.ehlers-inc.com or call Lorraine Swenson at (651) 697-8500. What's All the Fuss About Bond Insurance? }; here have been numerous stories in the financial news in recent months about liquidity problems and rating downgrades affecting bond insurance companies. When municipal bonds are insured, it means that an insurance company has agreed to guarantee the timely payment of principal and interest on the bonds. The insurance company receives a fee for this service, usually paid by either the issuer of the bonds or the underwriter of the bonds at the time the bonds are initially sold. The insurance policy results in a higher rating on the bonds (usually a AAA rating) and therefore makes the bonds more attractive and marketable to investors. Some of the municipal bond insurance companies have also insured credit derivatives contracts and subprime mortgage - backed securities. There have been defaults in some of these derivatives and subprime securities, creating financial pressure on the insurance companies that insured them. This, in turn, has caused the rating companies (Moody's, Standard and Poor's, and Fitch) to downgrade the ratings on some of the insurance companies. Impact on Local Governments It will probably take some period of time before all the implications of these changes are sorted out. We are continuing to monitor trends in the markets, and will keep our clients informed of new developments. For now, we can summarize the impact in a few key points. 1. You may have an obligation to disclose a downgrade of the rating on your bonds. All municipal bonds sold since 1995 are subject to the "continuing disclosure" regulations of the SEC. One of the requirements of those regulations is the timely notification by the issuer of certain "material events," including any bond rating change. If any of your bonds were insured by an insurance company, and if the rating company that rated the bonds downgrades their rating for that insurance company, that is a material event that must be disclosed. If Ehlers already provides you with continuing disclosure services, we will file a material events notice on your behalf if one is required. If you are not an Ehlers continuing disclosure client, feel free to call us with questions. 2. If you issued "fixed rate" debt, the payments on your existing debt will not change. Almost all debt issued by local governments in Minnesota is fixed rate debt. If you have any variable rate debt or swaps, your payments could change; if this happens, feel free to call us to help determine your exposure and your options. 3. So far, the downgrades of the insurance companies have not impaired the ability of our clients to issue debt, and have had very little impact on interest rates or other costs of issuing debt. There is still strong demand for municipal bonds, with or without bond insurance. Several stable insurance companies have maintained their AAA ratings, and are still selling insurance, and new insurance companies are emerging (including a new company created by Warren Buffet and his Berkshire Hathaway company). It appears that investors are doing more research on the underlying credit ratings of bond issuers. This may lead to lower interest rates for highly rated bond issues, and slightly higher rates on lower rated issues. The table below summarizes the current ratings on the bond insurance companies, as of February 28, 2008. 1 i i ACA Financial Guaranty (ACM CCC Ambac Assurance Curp. Aaa AAA AA Assured Guaranty Corp. Aaa AAA AM CIFG Assurance North America Aaa AAA AM Capital Guaranty Insurance Company Aaa AAA AAA Capital Markets Assurance Corp. (CapMAC) Aaa AAA AM Financial Guaranty Insurance Company (FDIC) t3 . AA Financial Security Assurance Inc. (FSA) Aaa AAA AM MBIA Insurance Corp. Aaa AAA AAA ) Radian Asset Assurance Inc. Aa3 AA A+ XL Capital Assurance Inc. A3 A • 2 • "Ratings shown in red above were downgraded since October 2007 •5• INSIDE THE l I Ehlers 2008 School Finance Seminar Mark Your Calendars! Page 2 Transportation Infrastructure Project Matches How do Municipalities Fund them? —Page 3 I FOA Recommended Practices for Selecting and Managing the Method of Sate for Local Government Bonds — Page 4 What's All the Fuss About Bond Insurance? — Page 5 Ehlers Ranks in TOP TEN as Financial Advisor of Competitive Sales — Page 6 MARKET UPDATE Ensuring the Health of ) the Insurers — Page 6 H RS ISOR Ehlers & Associates. Inc, — Leaders in Public Finance Since 1955 By Joel Sutter and Tom Berge, Financial Advisors, Ehlers Education Team The 1-35 bridge collapse on August 1, 2007, reinforced the need for all levels of government to develop financial plans to adequately maintain public facilities and infrastructure. While public education may not be faced with a dramatic consequence such as a bridge collapse, access to adequate funding for maintenance of school facilities is a major problem for Minnesota school districts. Minnesota taxpayers have a huge investment in their school facilities. According to the Minnesota Department of Education, public school districts operate over 164 million square feet of building space. With an average replacement cost estimated at $180 per square foot, the total replacement cost for those facilities is at nearly $30 billion. When school districts are able to keep up with routine maintenance on their facilities, it protects the public's investment. It also can help to maintain a healthier and more habitable learning environment, and improve the quality of education. Yet most school districts struggle to find resources to keep up with the significant costs of facility maintenance. What Should it Cost? The National Research Council, a private, nonprofit institution that provides science, technology and health policy advice under a congressional charter, states: "An appropriate budget allocation for routine Maintenance and Repair (M&R) for a substan- tial inventory of facilities will typically be in the range of 2 to 4 percent of the aggregate current replacement value of those facilities " If we apply even the low estimate of 2 percent to the estimated replacement value mentioned above, it would suggest that Minnesota school districts should be spending nearly $600 million a year on facility maintenance. The Minnesota Department of Education, in a study completed in the late 1990s, projected that $2.4 billion in district facility repair and replacement work was needed by the year 2009. Given that state capital funding formulas have changed little since the time of the study and that maintenance costs have increased substantially, that number has undoubtedly grown. What Funds are Available? Unlike cities and counties, school districts do not generally have authority to raise taxes to fund capital improvements without voter approval. Most districts rely tIt♦MI=IliUNIMMO IIII � MEM= MEM WM In aim im dm-ft i primarily on MIMEO gi i categoricaI mi funding (state aid and tax MI levies) that is ill NI tft� determined by ....111.111.1...11.1 state -set Eno wiIsm t• formulas. "IMI The primary MB EMI MI MIMI NM up • ongoing source M IIIII• • aim wa of funding for - mi im • om Isai • ■ os ammo El En school 0.111 maimjai maintenance for many years has been operating capital revenue. Each district's revenue is determined primarily by enrollment, with a weighted facility component based on average building age. Statewide, this formula provides $194 million in revenue for the current fiscal year. This obviously falls far short of the funding needed for adequate facility maintenance. Furthermore, this is also the primary source of funding for all forms of equipment - including technology, furniture, instructional equipment, and maintenance equipment - and even for textbooks. Unfortunately, the revenue formula has remained essentially unchanged since 1992. Since then, the costs for most routine maintenance projects have at least doubled. For example, from 1992 to today the cost to replace a roof has grown from under $4 to over $10 per square foot; the cost to replace a single classroom unit ventilation system has grown from $12,000 to $25,000. At the same time, needs and expectations for computers and other technology have increased dramatically, as has the cost of textbooks. (FAC}LfTY MAINTENANCE FUNDING {continued on page 2) Ehlers Advisor • March 2008 GFOA Recommended Practices for Selecting and Managing the Method of Sale for Local Government Bonds The Government Finance Officers Association (GFOA), an independent representative of local government finance professionals, has published an update to its recommended practices for selection of the method of sale for local government bonds. Debate among financial advisors, underwriters, and issuers as to the appropriateness of competitive vs. negotiated sales will undoubtedly continue. However, the GFOA, through this latest update to its recommended practices, has provided definitive guidance as to what is in the best interests of local governments and the taxpayers they serve. As noted in their Recommended Practice document: "There is a lack of understanding among many debt issuers about the appropriate roles of underwriters and financial advisors in the fiduciary relationship that each has or does not have with respect to local government issuers. The relationship between the issuer and financial advisor is one of "trust and confidence" which is in the "nature of a fiduciary relationship." This is in contrast to the relationship between the issuer and an underwriter where the relationship is one of some common purposes but also some competing objectives, especially at the time of bond pricing." Guidelines for a Negotiated Sale The GFOA recognizes there may be appropriate conditions when a negotiated sale would be in the best interests of a local government. However, they provide ten guidelines that should be considered and followed when the negotiated method of sale is chosen. A complete copy of the Recommended Practices is available on the GFOA website at www.gfoa.org. Key recommendations related to use of the negotiated sale method are: • Issuers should engage a financial advisor to counsel them as to whether a competitive or negotiated sale is most appropriate based on their specific circumstances. It is also recommended that the issuer enter into a written contractual relationship with a financial advisor (a firm unrelated to underwriters), to advise the issuer on all aspects of the sale, including selection of the underwriter, structuring, disclosure preparation and bond pricing. • Due to inherent conflicts of interest, the firm acting as a financial advisor for an issuer should NOT be allowed to resign and serve as underwriter for the transaction being considered. • Due to potential conflicts of interest, the issuer should enact a policy regarding whether and under what circumstances it will permit the use of a single firm to serve as an underwriter on one transaction and a financial advisor on another transaction. When Underwriters Must Resign as Financial Advisors The Municipal Securities Rulemaking Board (MSRB) has had a rule in place for many years (Rule G-23) that requires underwriters to resign their role as the financial advisor when underwriting a negotiated sale for an issuer. This rule has been loosely followed by the underwriting community such that it has been common practice for underwriters to serve as a financial advisor in the preparation and planning for a new borrowing followed by their resignation just prior to the execution of the negotiated sale, followed by their inunediate "rehire" as the financial advisor after the sale. Many local government officials may not even be fully aware that this resignation and reengagement has occurred (even though it is supposed to be executed in writing). the latest update to its ommended practices, the GFOA ommends AGAINST allowing an underwriter to engage in the practice of resigning for the one-time deal, only to be "rehired" immediately thereafter. In fact, it calls into question the practice of having a firm serve as underwriter on one transaction and financial advisor on another transaction. Should Issuers be Their Own Financial Advisors? The GFOA also cautions issuers from serving as their own financial advisor unless they have at least the following skills and information: • Access to real-time market information (e.g. Bloomberg) to assess market conditions and proposed bond prices; • Experience in the pricing and sale of bonds, including historical pricing data for their own bonds and/or a set of comparable bonds of other issuers in order to assist in determining a fair price for their bonds; and • Dedicated full time staff to manage the bond issuance process with the training, expertise and access to debt management tools necessary to successfully negotiate the pricing of their bonds. Ehlers is an independent financial advisory firm with over 50 years experience representing public issuers. Ehlers is NOT an underwriter and has never served as an underwriter on any public finance transaction. Ehlers has the independence and all of the capabilities set forth above to ensure that our client issuers avoid transactions and bond terms that may principally benefit the underwriter. Our experience allows our clients to receive the best pricing available in the market at the time of sale for both negotiated and competitive sales. • 4 • Ehlers Advisor • March 2008 Ehlers Advisor • March 2008 What's All the Fuss About Bond Insurance? "here have been numerous stories in the financial news in recent months about Iiquidity problems and rating downgrades affecting bond insurance companies. When municipal bonds are insured, it means that an insurance company has agreed to guarantee the timely payment of principal and interest on the bonds. The insurance company receives a fee for this service, usually paid by either the issuer of the bonds or the underwriter of the bonds at the time the bonds are initially sold. The insurance policy results in a higher rating on the bonds (usually a AAA rating) and therefore makes the bonds more attractive and marketable to investors. Some of the municipal bond insurance companies have also insured credit derivatives contracts and subprime mortgage - backed securities. There have been defaults in some of these derivatives and subprime securities, creating financial pressure on the insurance companies that insured them. This, in turn, has caused the rating companies (Moody's, Standard and Poor's, and Fitch) to downgrade the ratings on some of the insurance companies. Impact on Local Governments It will probably take some period of time before all the implications of these changes are sorted out. We are continuing to monitor trends in the markets, and will keep our clients informed of new developments. For now, we can summarize the impact in a few key points. 1. You may have an obligation to disclose a downgrade of the rating on your bonds. All municipal bonds sold since 1995 are subject to the "continuing disclosure" regulations of the SEC. One of the requirements of those regulations is the timely notification by the issuer of certain "material events," including any bond rating change. If any of your bonds were insured by an insurance company, and if the rating company that rated the bonds downgrades their rating for that insurance company, that is a material event that must be disclosed. If Ehlers already provides you with continuing disclosure services, we will file a material events notice on your behalf if one is required. If you are not an Ehlers continuing disclosure client, feel free to call us with questions. 2. If you issued "fixed rate" debt, the payments on your existing debt will not change. Almost all debt issued by local governments in Minnesota is fixed rate debt. If you have any variable rate debt or swaps, your payments could change; if this happens, feel free to call us to help determine your exposure and your options. 3. So far, the downgrades of the insurance companies have not impaired the ability of our clients to issue debt, and have had very little impact on interest rates or other costs of issuing debt. There is still strong demand for municipal bonds, with or without bond insurance. Several stable insurance companies have maintained their AAA ratings, and are still selling insurance, and new insurance companies are emerging (including a new company created by Warren Buffet and his Berkshire Hathaway company). It appears that investors are doing more research on the underlying credit ratings of bond issuers. This may lead to lower interest rates for highly rated bond issues, and slightly higher rates on lower rated issues. The table below summarizes the current ratings on the bond insurance companies, as of February 28, 2008. _du, ACA Financial Guaranty (ACA) CCC Ambac Assurance Corp. Aaa AAA AA Assured Guaranty Corp. Aaa AAA AAA CIFG Assurance North America Aaa AAA AAA Capital Guaranty Insurance Company Aaa AM AAA Capital Markets Assurance Corp. (CapMAC) Aaa AAA AAA Financial Guaranty Insurance Company (FGIC A3 A AA Financial Security Assurance Inc. (FSA) Aaa AAA AAA MBIA Insurance Corp. Aaa MA AAA Radian Asset Assurance Inc. Aa3 AA A+ { XL Capital Assurance Inc. A3 A A *Ratings shown in red above were downgraded since October 2007 Ehlers Ranks in the NATION'S TOP TEN as Financial Advisor of Competitive Sales Thomson Financial tracks and compiles national statistics regarding municipal finance debt issues. The January 3, 2008 issue of The Bond Buyer, "the daily newspaper of public finance," published the following list of the top ten financial advisors in the nation in total principal amount of competitive issues. Ehlers is No.1 in the number of sales and No. 8 in total principal volume. Our growth is a testimony to our continued mission to serve as an advocate for our government clients in order to help provide financial solutions at the lowest cost and the best financing terms possible. Top Financial Advisors Nationally: CompetQthie Sales January 1, 2007 • December 31, 2007 Rank by No. No. of Principal Financial Advisor of Issues Issues (in millions) Public Finance Management Inc. 2 265 9,181.3 Public Resources Advisory Group 6 41 7,558.9 First Southwest Co. 3 252 4,133.1 Seattle -Northwest Securities Corp. 7 29 2,490.1 RBC Capital Markets 5 98 2,022.8 Davenport & Co. 8 29 1,656.8 Spri ngsted Inc. 4 190 1,680.4 Ehlers & Associates 1 330 1,413.1 Public FA Inc. 10 3 1,408.2 Montague DeRose & Assoociates LLC 9 10 1,309.1 Source: Thomson Financial But we do more than provide debt issuance related services. The challenges our clients face today are increasingly more difficult and diverse than those faced by our clients over fifty years ago. To help decision makers confidently select the best financial solutions at the lowest cost for their community, we have developed a broad array of additional services related to Financial Planning; Economic Development, Redevelopment and Housing; as well as a host of unique Special Services. le EHLERS LEADERS IN PUBLIC FINANCE www.ehlers-inc.com MARKET UPDATE: Eiring the Health of the Insurers By Brian Reilly, Ehlers Financial Advisor, CIPFA, CFA Global credit markets wrapped up 2007 with quite a bang. Large money center banks wrote down hundred of billions of dollars in permanent capital, the world's central banks worked feverishly to inject liquidity into overnight lending markets, and bond insurers saw their "AAA" preeminence threatened at every turn. The primary culprits in ail of these instances are real estate related financial engineering (mainly of a sub -prime nature) and the unwinding of 6.00% mounds of leverage used by financial institutions and investors to gear up otherwise substandard investment returns. The beginning of 4.00% 2008 appears to be following suit. The mono -line financial guarantors (a.k.a. "bond insurers") have seen their stock prices and capital bases deteriorate due to their involvement in offering insurance against structured fixed -income products with underlying real estate collateral. The unfolding of the housing bear market has put their business models al risk, and, concurrently their treasured "AAA" ratings. It is estimated that roughly 52 percent of total municipal bonds outstanding carry an "AAA" insured rating. This insurance helps to provide a level of credit enhancement by conveying the "AAA" rating of the insurance company on the underlying bonds and brings additional liquidity to an otherwise buy -and -hold market. This gives bond investors the warm -fuzzy feeling they so love. They know that their principal and interest will be repaid in a timely manner and that they can trade these bonds based upon market knowledge of the insurer's credit profile rather than that of Smalltown, USA, population 1,500. The most troubled bond insurers have witnessed downgrades to "AA" financial strength ratings by at least one of the three major rating organizations (whose own credibility has been called into question). This in turn leads to further weakness in the bonds they insure, and the cycle continues its downward spiral. There have been a number of insurers that have remained relatively unscathed, and we have certainly seen underwriting desks flock to them for credit enhancement. The end result to issuers will likely be higher insurance premiums as the herd is thinned and slightly higher interest cost for insured bonds until the market feels the bad news has surfaced. Needless to say, we are likely not quite there yet. 0111111111111111111111111111111 11I I IIIIIIIIIIIII I II I I II IIIIII 11I��,!11II!II!II I I I I II II IIII. Yields on Municipal Bonds Have Risen Significantly in Recent Weeks BOND BUYER INDEX, 2000 TO PRESENT— FEB. 20, 2000 6.50% 5.50% 5.00% 4.50% 00 01 02 03 04 05 06 07 08 NOTE: The Bond Buyer 20 Band Index is a weekly index of average interest rates on AA -rated municipal bonds maturing in 20 years. Source: The Bard Buyer. 5.11%an 2I2g108 4.03%on 1218N6 - lowest since 6.57 A Fond Farewell... to a Retiring Veteran of Public Finance After almost 32 years in the public finance advisory business, Jerry Shannon has announced his retirement. Jerry will be saying goodbye to a long list of county, city, township, public utility, and special district relationships he has established over his career. Communities all over the Midwest can point to streets, jails, hospitals, water and sewer systems and other public projects too numerous to list that Jerry has helped finance over his career. Ehlers is committed to Roseville, MN Office: 3060 Centre Pointe Drive • Roseville, MN 55113-1105.651-697.8500 designing customs ed financial solutions Brookfield, WI Office: 375 Bishops Way, Suite 225 • Brookfield, WI 53005-6202.262-785-1520 for outstanding communities Lisle, IL Office: 550 Warrenville Road, Suite 220 • Lisle, IL 60532-4311.630-271-3330 • 5 • • 6 • Ehlers & Associates, Inc. — Leaders in Public Finance Since 1955 Ehlers 2008 School Finance Seminar Mark Your Calendars! — Page 2 Transportation Infrastructure Project Matches How do Municipalities Fund them? — Page 3 GFOA Recommended Practices for Selecting and Managing the Method of Sale for Local Government Bonds — Page 4 What's All the Fuss About Bond Insurance? — Page 5 Ehlers Ranks in TOP TEN as Financial Advisor of Competitive Sales — Page 6 MARKET UPDATE Ensuring the Health of the Insurers — Page 6 By Joel Sutter and Tom Berge, Financial Advisors, Ehlers Education Team The I-35 bridge collapse on August 1, 2007, reinforced the need for all levels of government to develop financial plans to adequately maintain public facilities and infrastructure. While public education may not be faced with a dramatic consequence such as a bridge collapse, access to adequate funding for maintenance of school facilities is a major problem for Minnesota school districts. Minnesota taxpayers have a huge investment in their school facilities. According to the Minnesota Department of Education, public school districts operate over 164 million square feet of building space. With an average tl♦ replacement cost estimated at $180 per square foot, the total $600 million a year on facility maintenance. The Minnesota Department of Education, in a study completed in the late 1990s, projected that $2.4 billion in district facility repair and replacement work was needed by the year 2009. Given that state capital funding formulas have changed little since the time of the study and that maintenance costs have increased substantially, that number has undoubtedly grown. What Funds are Available? Unlike cities and counties, school districts do not generally have authority to raise taxes to fund capital improvements without voter approval. Most districts rely primarily on categorical funding (state aid and tax IN levies) that is aim In NM determined by state -set 1111.15.11....i formulas. NIP 1111.1 in No MUM 1111/1111•INNININ /EMI/ INS! M - -- Elmil /MIMI MEM/ aintaiffirrarise= Hit am in I♦ ENI Ili OM' Mr MI 1111.0I♦. �w�! ■N MN�i it ii . = IN in replacement cost for those facilities is at nearly $30 billion. When school districts are able to keep up with routine maintenance on their facilities, it protects the public's investment. It also can help to maintain a healthier and more habitable learning environment, and improve the quality of education. Yet most school districts struggle to find resources to keep up with the significant costs of facility maintenance. What Should it Cost? The Narional Research Council, a private, nonprofit institution that provides science, technology and health policy advice under a congressional charter, states: An appropriate budget allocation for routine Maintenance and Repair (M&R) for a substan- tial inventory of facilities will typically be in the range of 2 to 4 percent of the aggregate current replacement value of those facilities." If we apply even the low estimate of 2 percent to the estimated replacement value mentioned above, it would suggest that Minnesota school districts should be spending nearly The primary ongoing source of funding for school maintenance for many years has • been operating capital revenue. Each district's revenue is determined primarily by enrolment, with a weighted facility component based on average building age. Statewide, this formula provides $194 million in revenue for the current fiscal year. This obviously falls far short of the funding needed for adequate facility maintenance. Furthermore, this is also the primary source of funding for all forms of equipment - including technology, furniture, instructional equipment, and maintenance equipment - and even for textbooks. Unfortunately, the revenue formula has remained essentially unchanged since 1992. Since then, the costs for most routine maintenance projects have at least doubled. For example, from 1992 to today the cost to replace a roof has grown from under $4 to over $10 per square foot; the cost to replace a single classroom unit ventilation system has grown from $12,000 to $25,000. At the same time, needs and expectations for computers and other technology have increased dramatically, as has the cost of textbooks. {FACILITY MAINTENANCE FUNDING (continued on page 2)