06-17-96 SCCCITY OF OTSEGO
WRIGHT COUNTY, MINNESOTA
CITY COUNCIL WORKSHOP
JUNE 10, 1996
5:30 PM
1 Mayor Norman F. Freske will call meeting to order,
MayorFreske called the Workshop to order at 5:30 PM.
Roll Call: Mayor Norman F. Freske: Councilmembers: CM Black, CM Fournier, CM
Heidner. CM Ackerman arrived at 6:21 PM.
Staff: Elaine Beatty, City Clerk/Zoning Administrator, Phyllis Cokley, Business/Finance
Director; Judy Hudson, Deputy Clerk.
Phyllis Cokley introduced Steve McDonald, representing Abdo, Abdo & Eick. Gary
Groen arrived later in the meeting. Mr. McDonald passed out the 1995 Year Ended
Annual Financial Report.
Phyllis Cokley went over the City's Bonded Debt Schedule. She indicated that the Bond
for the well is a GO Revenue Bond issued under Statute 444, therefore, the bond debt is
to be paid by revenues from connection charges and user fees. The water revenue is not
generating enough money to meet the debt. Revenues from the school are not even
paying for the electricity. Ms. Cokley indicated there is a need to expand the use. There
will be a need to levy $30,000 for principal and interest due in 1997.
CM Heidner asked about the agreement with the School. Phyllis said the user fees can be
raised and went over the contract agreement.
The Council would like to see the School pay enough to at least cover the electric bill.
CM Black talked about rate structures with two or more customers and certain classes
paying more.
Ms. Cokley reported the other Funds look good.
Gary Groen, Abdo, Abdo & Eick arrived and went through the Report with the City
Council. A copy of this Report is filed at the City Clerk' Office. He reviewed the Debt
Service with Pages 2 through 8 providing an overview and information. Page 9 are notes
to the financial statements. The long term debt is spelled out on Page 14. Page 19 spells
out the capital lease arrangement. Page 21 outlines the individual funds. The Road and
Bridge was separate and now it is combined with the General Fund. For cash flow
purposes, he recommended the General Fund Reserves should be maintained at about
$400,00 to $450,000 to make sure it is sufficient for working capital.
City Workshop of June 10, 1996, cont'd. Page 2.
On Page 22 through 25 gives detail of Revenue. He pointed out there was a positive of
$28,743 more revenue than expected. Everything else pretty much lines up on the
expenditure side on Page 23.
CM Heidner suggested using "salaries and benefits" as a category in the Financial Report
rather than "personal services." Both Phyllis Cokley and Gary Groen said the majority of
cities use personal services as this category is always used in governmental financial
reporting.
Mr. Groen went through The Special Revenue Funds on Page 26 through 29. He also
highlighted Capital Projects Funds, pages 30 through 34.
City Council Workshop ended at 6:22 PM.
Mayor Norman F. Freske Elaine Beatty, City Clerk/Zoning Adm.
Recorded by: Judy Hudson, Deputy Clerk