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Alternatively, the City could use reserves from other programs such as the Street Replacement <br />Fund. This too however produces an undesirable effect — an eventual reduction in monies <br />available for streets. If these monies were used for the Arena,, the Council will have effectively <br />placed added emphasis on the Arena at the expense of well maintained streets. <br />Discussion Items <br />On a general note, the Council is cautioned in the use of reserve funds. Reserve funds serve <br />multiple purposes and as such, their decline or absence can have multiple impacts. The purpose <br />of reserves includes.- <br />1) Provide cash flow to support current operations in between revenue collection periods <br />2) To address unforeseen circumstances <br />3) To provide interest earnings to support current operations <br />4) To provide for future expenditures <br />5) Strengthen overall financial condition <br />In making a decision on how to finance the replacement of the Arena refrigeration system the <br />Council is advised to weigh the public policy reasons for choosing a more environmentally- <br />friendly system against the added up-front cost that may accompany it. In addition, the Council <br />should determine whether placing added emphasis on the Arena should come at the expense of <br />other park system assets or even non-recreational programs or services. <br />If the City were to use reserves, a secondary consideration should be made on whether to <br />replenish those reserves through some future funding mechanism, such as a dedicated property <br />tax levy. <br />Staff Recommendation <br />The City has a long-standing commitment to providing the community with an Ice Arena. In <br />addition,, the citizens have demonstrated support for the Arena and general park system and have <br />consistently expressed a willingness to pay more for it. In recognition of these items, Staff <br />recommends the following for the replacement of the Arena refrigeration system.- <br />4) As a primary funding source, the City should use all available funds in the Building <br />Replacement Fund <br />5) As a secondary funding source, the City should temporarily borrow monies from the <br />Street Replacement Fund sufficient to pay for the remaining costs <br />6) Beginning in 2009, the City Council should establish a dedicated property tax levy to.* <br />a) Repay all borrowed monies to the Street Replacement Fund within a 3-year period <br />b) Upon full repayment of all borrowed monies, either; eliminate the new levy, or <br />redirect the newly established levy to the Parks Improvement Program <br />5 <br />