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Attachment C 47 Finance Commission - Excerpt of July 12, 2022 Minutes 48 49 Review Capital Investment Policy 50 Finance Director Pietrick stated the Capital Investment Policy was last reviewed in May 2019. 51 She reviewed the Capital Investment Policy with the Commission. She noted staff was 52 recommending under the Street Infrastructure Replacement Fund, the section categorizing this as 53 a permanent fund should be removed. Staff further recommends replacing the sentence Ðinterest 54 proceeds for at least 10 years based on needed street replacements.Ñ with Ðmaintain 5-10 years of 55 construction projects in reservesÑ. 56 57 Chair Davies indicated for clarification the words Ðpermanent fundÑ should be removed. 58 Commissioner Sagisser preferred ten years for the reserves but was open to other comments. 59 Chair Davies thought 5-10 years was a very big range. 60 61 Ms. Pietrick explained the 5-10 years was staffÓs way of trying to come up with a non-dollar 62 amount. Currently the street fund has a positive balance for seventeen years and does not go 63 negative until 2040. Looking at outlying years, which staff cannot commit the Council to 64 increasing the tax revenues in 2024 and beyond, one of the things staff does internally is look at 65 the funds and if the funds are going to go negative staff starts looking at ways to incrementally 66 increase taxes and this fund will need an incremental increase starting in 2024. She noted this 67 could be delayed a little bit but ten years of projects is approximately seventeen million dollars. 68 69 Chair Davies agreed that it is better to put a number of years of projects into the policy. 70 71 Chair Davies asked why Commissioner Sagisser thought five years was too short. 72 Commissioner Sagisser thought that longer is better. It is important to him that he does not want 73 to end up like St. Paul, with assessments all of the time. 74 75 Chair Davies personally thought five years is adequate and having a large range actually gives 76 the opportunity for economic changes. 77 78 Ms. Pietrick indicated the second update is under definitions, the capital asset threshold should 79 be increased to $10,000 to correspond with the increased purchasing threshold. The third update 80 is under higher-cost capital additions. She recommended removal of the highlighted section and 81 replace with Ðas separate Council actions with detail fiscal analysisÑ. 82 83 Ms. Pietrick suggested the final update would be that the Enterprise fund definition should 84 replace the Ð100%Ñ fee supported with ÐprimarilyÑ fee supported. She stated the capital asset 85 needs of the Golf Course are covered by transfers from the Parks Equipment and Parks 86 Improvement funds. She noted she would also recommend removing Exhibit A and B as these 87 are more regularly found in a procedures document, not a policy document. 88 89 Commissioner Bester moved, seconded by Commissioner Sagisser to recommend the City 90 Council make the recommended changes to the Capital Investment Policy. The motion carried 91 unanimously. 92