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Motion carried. Voting Yes: Chairperson Strommen, Councilmembers Elvig and Mayor Gamec. Voting No: None. Absent: Councilmember Olson. Case #3: Review and Adopt 2006 HRA Levy Finance Officer Lund explained as 2006 will be the first complete year of the City having an HRA, a funding soume needs to be established that would offset the expenditures of staff time, consultants, and the purchase of redevelopment property/properties. The HRA is allowed to pass a levy on the taxable market value in the City. For year 2006, the HRA would be allowed to pass a total levy of $271,339, which represents .0144% (Statutory Maximum Levy Rate) of the City's total taxable market value of $1,844,300. Ms. Lund explained unlike the EDA levy, the HRA levy falls outside of levy limits. Thus, if levy limits were imposed in 2007, the HRA would not be included in the overall total that the City may levy. Motion by Mayor Gamec, seconded by Councilmember Elvig, to recommend that the City Council adopt the resolution adopting the 2005, payable 2006 HRA tax levy in the amount of $271,339. Motion carried. Voting Yes: Chairperson Strommen, Mayor Gamec and Councilmember Elvig. Voting No: None. Absent: Councilmember Olson. Case #4: Authorization of the Issuance and Awarding the Sale of $760,000 General Obligation Equipment Certificates of 2005 Finance Officer Lund explained at the Council meeting tonight the Council will likely authorize as part of the 2006 levy and budget, that capital equipment would be funded partially through the issuance of capital equipment certificates. The amount of the certificates to be issued is $745,000. The debt service levy will be funded over a five-year period at an average interest rate of 3.94%. She advised staff recommends adoption of the resolution authorizing the issuance and awarding the sale of $745,000 General Obligation Equipment Certificates of 2005. Paul Donna, Northland Securities, advised the total bond issuance of General Obligation Equipment Certificates is in the amount of $745,000. This amount falls outside of any levy limits and is scheduled to be paid back over a five year period. The overall payback thxough the term will be $848,300. Mr. Donna indicated the City received a credit rating of A1 with a sound financial position. Councilmember Elvig asked what portion of the $848,000 is included the general levy. Finance Officer Lund replied $102,000 of the general levy applies to this levy. Councilmember Elvig stated this is the cheapest money that can be spent as a City. Most of these funds will be used for Public Works and better equipment is needed. Only 8% of the cost will be passed along as part of the general budget. Finance Committee / December 13, 2005 Page 3 of 6