Res 2019-10 Comm. Investment Fund PolicyRESOLUTION NO. 2019 - 10
RESOLUTION APPROVING THE COMMUNITY INVESTMENT FUND POLICY FOR
THE CITY OF FRIDLEY, AND APPROVING A TRANSFER FROM THE GENERAL
FUND TO THE COMMUNITY INVESTMENT FUND
WHEREAS, the City of Fridley (City) acknowledges the limited financial resources available to support
the cost of capital improvements throughout the community;
WHEREAS, similar to other municipalities, the City maintains a Closed Bond Fund (Fund);
WHEREAS, the City recently ended the practice of utilizing the Fund to support operating budget
shortfalls, which makes its available for other activities and uses; and
WHEREAS, the City will convert the Fund into a Community Investment Fund to account for the current
balance of the Fund, effective December 31, 2018, and various revenues identified by the attached
Community Investment Fund Policy (Policy); and
WHEREAS, the City will transfer $900,000 from the General Fund to the Community Investment Fund
to support activities outlined in the Policy; and
WHEREAS, the Community Investment Fund will issue interfund loans to support the cost of long—term
improvements to utilities owned and operated by the City; and
WHEREAS, the interest income generated upon repayment of those interfund loans will be used to
support park and recreation improvement projects; and
WHEREAS, the Community Investment Fund shall provide cost savings to the City and a reliable
funding source for park and recreation projects for the foreseeable future.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Fridley hereby adopts
the Community Investment Fund Policy attached as Exhibit A.
BE IT FURTHER RESOLVED, that the City Council authorizes the following transfer:
Fund
General Fund
Community Investment Fund
Total
Account Debit Credit
Transfer Out $900,000
Transfer In $900,000
$900,000 $900,000
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS
25TH DAY OF FEBRUARY, 2019.
ATTEST:
DEBRA A. SKOGEN — CITY CLERK
SCOTT J. LUND — MAYOR
Community Investment Fund Policy
City of Fridley, Minnesota
Exhibit A
Purpose
The City of Fridley, Minnesota (City) acknowledges the limited financial resources available to support
various capital projects throughout the community, such as improvements to park and recreation
facilities, and public utilities. As such, the Community Investment Fund Policy (Policy) shall create and
provide guidance regarding the use of a Community Investment Fund (Fund) to support capital project
costs.
Generally, the Fund shall be used to issue interfund loans to support the cost of long—term
improvements to utilities owned and operated by the City, specifically the Water, Sanitary Sewer and
Storm Water Utilities. Upon repayment, the interest income earned on those interfund loans will used
to support the cost of park and recreation improvements throughout the City.
Through this Policy, the Fund shall provide meaningful cost savings for the City, and a funding source for
park and recreation projects for the foreseeable future.
General Guidelines and Requirements
For the purposes of this Policy, the following guidelines and requirements shall control the operation
and use of the Fund.
Fund Created
The City shall create a Capital Project Fund called the "Community Investment Fund," effective
December 31, 2018.
Eligible Revenues and Funding Sources
The following funding sources shall be deposited or transferred into the Fund:
• All assets of the "Closed Bond" Fund as of December 31, 2018;
• Any repayments as the result of interfund loans issued by the Fund;
• All interest and investment earnings of the Fund;
• Any unassigned fund balance of the General Fund in excess of upper threshold (i.e., 50%)
established by the Fund/Cash Balance Policies for the City as determined by June 30 annually;
• Any fees, excluding reimbursements for City staff time, obtained through the issuance of Private
Activity Bonds (i.e., Conduit Bonds);
• Any unanticipated proceeds or payments to the City, except for those controlled by Section
12.06 of the City Charter; and
• Any other monies appropriated by the City Council and/or donated to the Fund.
Eligible Costs and Expenditures
The Fund shall be used exclusively to support the capital and debt service expenditures related to public
utilities, pursuant to Section 11.01 of the City Charter. Additionally, the Fund may be used to support
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capital costs, but not debt service or interfund loans, associated with park and recreation
improvements, including, but not limited to: cultural or civic improvements; natural resources
restoration. park and trail construction; and deferred maintenance related to any of these activities.
Generally, the projects shall provide a community—wide benefit for the City. The Fund may not be used
to support any operating costs of the City.
The City may only expend Fund assets pursuant to the following procedure:
• The Finance Director submits a "Request for Community Investment Fund Support" to the City
Manager, which must include the estimated capital and projected operating costs of the project,
for their approval;
• Any such project must also be authorized as part of the Capital Investment Program (CIP) as
adopted by the City Council annually, or from time to time;
• The City Council adopts a resolution stipulating the structure and terms of any interfund loan,
pursuant to Section 7.10 of the City Charter, originating from the Fund; and
• The project meets or exceeds the requirements of other sections of this Policy.
The Finance Director may authorize any transfers from the Fund to support park and recreation
improvements provided the amount does not exceed the amount authorized in the CIP and the Fund's
Cash Flow Projection or violate other sections of the Policy.
The limitations imposed in the sections above do not apply to reasonable expenditures necessary for the
administration of the Fund. Additionally, the Fund may be used for emergency and disaster purchases
consistent with the Procurement Policy as adopted by the City Council, and Section 6.06 of the City
Charter.
Debt Service
The Fund may be used to support the payment of debt service (i.e., bonds) for qualifying capital costs,
subject to the following limitations:
• The total annual debt service payments do not exceed more than 50% of the ensuing years'
eligible and available revenues as defined below; and
• Available revenue consists of total revenue derived from the aforementioned eligible revenues
and funding sources, less any amount allocated for the accumulation of a Minimum Fund
Balance.
Minimum Fund Balance
The Minimum Fund Balance must be estimated on a 10—year horizon. In order to accumulate a
minimum fund balance and maintain the long—term solvency of the Fund, the Minimum Fund Balance
will be as follows:
• During Fiscal Year 2019 through 2022, the Fund shall maintain a Minimum Fund Balance of
$300,000;
• During Fiscal Year 2023 through 2025, the Fund shall maintain a Minimum Fund Balance of
$500,000; and
• Beginning in Fiscal Year 2026, and for all years thereafter, the Fund shall maintain a Minimum
Fund Balance of $1,000,000.
Administrative Considerations
PA
All agreements, applications, permits or other documents required under this Policy shall be provided in
a form or forms as determined by the City Manager.
The City Manager, or their designee, may waive any sections of this Policy, if doing so would not violate
any applicable sections of the City Charter or ordinances, State or Federal laws, or resolutions adopted
by the City Council. Wavier of any particular section does not constitute a wavier for the entire policy
and the City Manager, or their designee, may end such waivers in their sole discretion.
Last Updated
DT,02-22-2019