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Regular City Council Meeting Monday,August 27,2012 Page 18 Mr. Miller responded that either situation could impact the City's credit rating; however, he noted that the credit rating industry concerns were mainly based on how much debt load a city carried compared to its ability to pay it back. Mr. Miller noted that the low tax rate in this area of the City's financial picture bod- ed well for its ability to increase the levy to pay for its debt service; with the credit rating industry looking at how well the City managed its debt over time. Mr. Miller advised that they were fully cognizant of the City's issuing a lot of debt in a short period of time (e.g. $27 million), but noted that they also were cognizant that the City of Roseville was in a better position to handle that debt load, with a clear plan in place to do so. Mr. Miller advised that they would consider the City's CIP program, community initiatives, projected debt load in the next 5-10 years, and its long term plan; with review of annual and long-term plans. Regarding the portion of staff's debt service memo specific to reserve funds, Councilmember Willmus asked that future columns include whether or not ac- counts had an overage, an underage, or were on target; and how funds were al- located for any accounts showing an overage (Table on page 2 of RCA). Coun- cilmember Willmus noted that the General Fund showed just over $900,000 over the target of 45% for reserve funds. Mr. Miller advised that those reserves were earmarked for General Fund pro- grams (e.g. Police, Fire, Streets and General Government) and this was how much available to provide for unforeseen circumstances of contingencies and to cover the City in between revenue collections. Mr. Miller reminded all that the General Fund was largely funded through property tax collections, with those payments received from Ramsey County annually in June and December. Mr. Miller noted that, come January 1 of the next year, the City needed 40-45% of that reserve level to get through until the next tax levy collection was received. At the request of Councilmember Willmus, Mr. Miller clarified that the City was at 40-45% of its target for reserve funds; and at the moment were sitting quite well in relationship to the City Council adopted policy. However, Mr. Miller noted that General Fund budgets generally increase, so the reserve level needed to increase correspondingly as well. Councilmember McGehee referenced several items brought up during public comment; and opined that she personally shared the comments of one speaker encouraging a broader view by the City Council, rather in their current myopic way. While the City continues to talk about sustainability, it was also looking at a decrease in its tax base of 10% with no plan on how to reach that sustainabil- ity without increasing its tax base. As a newer Councilmember, Councilmem- ber McGehee opined that she found it puzzling to see the number of initiatives for amenities and the "wish list," but no initiatives for how to improve the City's tax base. Councilmember McGehee stated that this was an important