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levy is approved the City would not receive the funds until May and October of 2003. The levy would be set up to pay back the City over three years. Councilmember Hendriksen stated that if the plan is to repay the loan over three years he did not see a reason that they needed to make a decision tonight. Councilmember Anderson stated that they did need to make a decision otherwise they would need to take funds from the general fund and the general fund is already so tight and there does not seem to be anyway to come up with the excess money. She thought that it seemed sensible to approve the HRA levy since they intend on using the Alloy Recovery site for City purposes. Councilmember Zimmerman noted that the vote at the EDA meeting was a split vote because it is an increase in taxes. Councilmember Hendriksen replied that that was his opposition. He stated that there is a reason for levy limits and the City keeps trying to find ways around the levy limits but the fact is that the funds still come from the pockets of the residents. He stated that they need to find another possibility especially when the City has pockets of money. City Administrator Norman explained that the vote at the EDA meeting was divided but the motion that did prevail was done by the majority approving a reduced levy to forward to the Council. He also stated that he would not characterize the funds as pockets of money, but rather fiscal management. Cities are supposed to keep a certain amount of reserves for sound fiscal management of funds. Councilmember Anderson noted that one of the EDA members voted in favor of the motion with the intent of the funds being used specifically for the Alloy Recovery site. Councilmember Kurak stated that she researched the issue and the original amount staff was requesting was $176,121. There were two EDA meetings held to discuss the issue and it was at the second meeting that the HRA levy passed after the amount was reduced significantly. Her understanding is the $70,448 would be used to clean up a very blighted part of Ramsey and that would be the only reason she would vote for it and it is good fiscal government to keep their funds in a sound matter. If the funds had not been reduced she would not have voted for it. Councilmember Hendriksen stated that in the past the City has borrowed from the Landfill Trust Fund and paid it back. He inquired as to what the total indebtedness is currently to the Landfill Trust Fund today as compared to the time the funds were borrowed. Finance Officer Lund explained that in 1995, a loan in the amount of $310,000 was used for Public Works and at the end of year 2002, the balance of the loan was $117,563. In 1996, a loan in the amount of $600,000 was used to construct the Police Building and at the end of year 2002, the balance of the loan was $483,004. Councilmember Hendriksen stated that the loans have been reduced by $300,000 and the Alloy Recovery site is being purchased to increase the Public Works facility so why are they not able to use the Landfill Trust Funds. City Administrator Norman explained that the City does not have the ability to make payments from the general fund. Councilmember Hendriksen inquired if they could include the payback in the next year's budget. City Administrator Norman replied that the City would be exposing themselves to criticism and negative financial letters because they would be borrowing money with an uncertainty of when it would be paid back. Mayor Gamec stated that if they did not have levy limits they could loan from the Landfill Trust Fund and pay it back, but they do have levy limits. Councilmember Hendriksen stated that the City has borrowed from the Landfill Trust Fund in the past and he did not see why they could not do the same and then pay back the loan in the future. He stated that he did not like the fact they are using the loophole to add another tax to the citizens. Mayor Gamec inquired if Councilmember Hendriksen was in favor of opposing levy limits. Councilmember Hendriksen replied that he was opposed to over taxing citizens. Councilmember Finance Committee/September 11, 2002 Page 4 of 7