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Regular City Council Meeting <br />June 9,2003 <br />Page 15 <br /> <br />workshops. It is a growing problem, but it is two-fold. He said that on any given <br />year the city has to at least break even and the city has to catch up what was lost <br />in the last three years. Mr. Anderson advised that even if you make a significant <br />cut, how the city could avoid a reasonable increase in order to start catching back <br />up to where the city needs to be, because the city's bond covenants on the debt <br />issues they have done, require a certain amount of reserve? One of those <br />requirements is that the operating fund of the water and sewer fund has to have <br />an amount equal to one-sixth of the operating budget of that particular year. That <br />is, if you took the total budget and backed out the capital and debt payment, one- <br />sixth of what is left should be the cash balance in the water and sewer operating <br />account as a minimum. Mr. Anderson said the city has to make up the deficit <br />by getting up to that point or the city will be in violation of the bond covenant, <br />which the city is. <br /> <br />Mayor Fendley asked Mr. Anderson how much longer they have on the bond <br />issues and if the issues are staggered. Mr. Anderson said they were staggered. <br />He said for some months they have been monitoring the possibility of refunding <br />two of the current outstanding issues. One is water and sewer related and the <br />other is tax supported. They think they are at a point where they can have <br />significant enough refunding savings to bring that recommendation to the City <br />Council. Mr. Anderson introduced Dan Almond from Southwest Securities to <br />give the City Council a brief presentation that will summarize the savings. In <br />answer to Mr. Fendley's question, Mr. Anderson stated that most of the city's <br />debt is level funding 20 year debt and the city has had issues as recent as the year <br />2000. <br /> <br />Councilman Guest asked Councilwoman Neeley whether she and the other <br />committee member agreed with what Councilman Bell referred to as Councilman <br />Plata recommendations. Councilman Weekly said he agreed in a way and <br />Councilwoman Neeley stated that she had mixed feelings. Councilwoman <br />Neeley advised that Councilman Plata did 99% of the work. She felt there are <br />cuts that can be made to save money, but she did not know if she would be <br />comfortable going that far and that deep. The doubt comes from a lot of the <br />water background that she had and she is afraid of something that the city could <br /> <br /> <br />