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9.d) Amendments of 2011 Equipment Replacement Fund and Capital Improvement Fund Budgets Meeting Date: 4/19/2011 Agenda Item: � �/� City Council Agenda Report City of Scandia 14727 209�' St. North Scandia, MN 55073 (651) 433-2274 Action Requested: Approve amendments to the 2011 Equipment Replacement Fund and Capital Improvement Fund budgets relating to financing the replacement of the 1997 Ford Dump Truck with Plow. Deadline/Timeline: The amendments should be approved at the April 19 meeting in order to meet the schedule for issuance of an equipment certificate by the end of May. Background: • At the Apri112 work session, the Council decided to proceed with the replacement of the 1997 Ford Dump Truck with a new heavy- duty tandem Mack truck. Rather than making a cash purchase, as anticipated by the 2011 budget, the Council decided to issue an equipment certificate in the amount of$150,000 with the balance of the estimated $199,000 purchase price to come from funds on hand. The goal is to issue the certificate by May 31 in order to avoid a potential restriction on new debt, which is under discussion at the state legislature. • The 2011 budget needs to be amended to reflect the change in the truck financing. Most of the changes needed are in the Equipment Replacement Fund (406) budgets. A proposed $10,000 operating transfer from the Capital Improvement Fund (401) expense budget to the Equipment Replacement Fund may also be eliminated as it is no longer needed to avoid a deficit in that fund. The recommended changes are shown on the attached draft resolution. • A forecast of the income and expenses to the Equipment Replacment Fund, assuming the budget amendments are approved, is attached. Recommendation: The Council should adopt the attached resolution. Attachments/ • Draft Resolution 04-19-11-06 Materials provided: Contact(s): Prepared by: Anne Hurlburt, Administrator (budget amendments truck replacement) Page 1 of 2 04/14/11 Equipment Replacement Fund Forecast,4/14/11 Balance, 3/31/11 $ 89,216 Revenue Interest 391 Sale of GMC Pickup 500 Sale or Trade Ford Dump Truck 15,000 Operating Transfers 110,000 Certificate of Indebtedness 150,000 $ 275,500 Expense Legal Fees 2,500 Heavy Machinery Capital (Mower) 5,566 Motor Vehicles Capital (Pickup, Plow Truck) 230,410 $ 238,476 Projected Balance, 12/31/11 $ 126,240 Page 2 of 2 04/14/11 _ � CITY OF SCANDIA RESOLUTION NO.: 04-19-11-06 RESOLUTION AMENDING ZO11 EQUIPMENT REPLACEMENT FUND AND CAPITAL IMPROVEMENT FUND BUDGETS WHEREAS,the City of Scandia 2011 Budget was adopted on December 21, 2010 and WHEREAS, the City Council has determined that the city should finance the planned purchase of a replacement dump truck/ snow plow by issuing a Certificate of Indebtedness rather than depleting the balance of the Equipment Replacement Fund; and WHEREAS, the City Council has determined that a transfer of cash from the Capital Improvement Fund to the Equipment Replacement Fund will not be necessary to provide sufficient funds for the truck purchase; NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCANDIA, WASHINGTON COUNTY, MINNESOTA, that it should and hereby does amend the 2011 Budget as follows: Adopted Amended Fund/Budget Account Budget Budget Difference Equipment Replacement, Revenue 36260 Sale of Equipment $0 $15,500 +$15,500 Equipment Replacement,Revenue 39350 Certif. of Indebtedness $0 $150,000 +$150,000 Equipment Replacement, Revenue 39200 Interfund Transfer $120,000 $110,000 -$10,000 Equipment Replacement,Expense 304 Legal Services $0 $2,500 +$2,500 Equipment Replacement, Expense 540 Heavy Machinery Capital $0 $5,566 +5,566 Equipment Replacement, Expense 540 Motor Vehicles Capital $234,500 $230,410 -$8,365 Capital Improvement,Expense 720 Operating Transfer $10,000 $0 -$10,000 Adopted by the Scandia City Council this 19th day of April, 2011. Randall Simonson, Mayor ATTEST: Anne Hurlburt, Administrator/ Clerk