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Regular City Council Meeting Monday, October 19, 2015 Page 4 General Facilities Replacement Fund Mayor Roe noted the revised graphs including proposed recommendations cer- tainly served to bring those fiinds closer to financial sustainability and put them on much inore solid ground, while challenges reinained. As an example, Mayor Roe noted the OVAL refrigeration systeins, which may require seelcing outside funding for sharing those costs, and depending on the success of those efforts, would also impact sustainability. With the OVAL refrigeration system currently scheduled for 2020, Mayor Roe noted bonding through legislative action may be one source of alternate funding. Mr. Miller responded that this would be one of the policy decisions for the City Council, and even though its replacement was 20 years out, it was good to plan ahead and be prudent in proactively addressing that needed replacement. Specific to transfers on page 1 of the RCA, Councilmember Willmus asked if those were coining about as a result of freeing up equipment not neecled in the fu- ture. Mr. Miller confinned that was the result as reflected; and as an example noted the $100,000 savings in specialized equipment no longer needed with the City Coun- cil's discontinuation of the annual curbside leaf picic-up program. Pavement Mana�ement Fund (PMP� Finance Director Miller advised that the graphs presented from "current" to "re- vised" status repurposing of the 2016 debt levy that had been incorporated in the City Manager recoinmended budget as preliminarily adopted by the City Council in September. Even with that adjustment in the PMP, Mr. Miller noted that there reinained long- tenn deficit needs requiring management by future City Councils to address fii- ture funding needs. Mr. Miller noted that while work remained to be done, the recoininendations of staff would go a long way toward financial sustainability. For the benefit of the listening audience, Mayor Roe reviewed past City Council action and original intent in establishing an endowment for PMP purposes with approximately $10 to $12 million maintained at that level, using interest earnings and Minnesota State Aid (MSA) inonies for annual street projects and mainte- nance. Mayor Roe asked Finance Director Miller to explain what had occurred in that fund over the years. - Finance Director Miller advised that in the past, between $700,000 to $800,000 in' annual interest earnings had been sufficient from this large endowment to fund needed annual projects and maintenance for the PMP. However, with current in- terest rates, which he didn't see changing anytime soon based on economic reali- ties the nation was facing, had been reduced to approxiinately $200,000 in annual