After Audit Fund Transfers

Each year the city of Breezy Point does an audit.  This displays a snap shot of the financial affairs of the city at the end of the year.  The audit looks at all things financial but really focuses on beginning and ending balances for each fund.  The city has four types of funds dealing with various components of our operation. 

The largest fund and the one used most often is the general fund.  Most of the city’s operations go through this fund.  An off shout to the general fund is the debt service fund.  This fund is obvious in its intention as it receives funds intended for debt service and also makes payments to settle debt service obligations.  The city currently has one debt service fund.   This will change in the future with the issuance of a bond incurring debt.  If additional debt is issued, each bond will become its own debt service fund.  The city has special revenue funds which include the Cemetery and EDA funds.  Funds associated with the maintenance of the cemetery and the sale of lots and services are one special revenue fund.  The EDA (Economic Development Authority) is also a special revenue fund, carries a small balance but is used very little at this time.  The final fund type is an enterprise fund, the Sewer Fund.  This fund manages the finances of the sewer system, taking in revenues for its service and expenditures for these operations.  

The city has a Comprehensive Fund Balance Policy.  This policy, among other things, sets a limit on the amount of unrestricted fund balance carried by the general fund.  The limit that was set was 40-45% of the general fund expenditure budget for the following year.  Amounts in excess of that limit would be transferred to a line item designated for future improvements.   This year the transfer to future improvements was $104,484. 

With the sewer fund we designated two funds, one is the operating fund and the other is the capital improvement fund.  The same principle applies to these funds in that the sewer operating fund ended with a balance in excess of 45% so $50,468 was transferred to the sewer capital fund. 

Having these funds reserved for use as needed improves the ability of the city to manage in a responsibly fiscal manner, reduces the need to borrow and earns investment income in the process.  With the segregation of funds it lends itself to transparency and identifies where resources are available.  Without segregation it becomes sometimes difficult to understand the finances as a whole.  Recognizing the resources annually with a fund balance policy also becomes a sort of benchmark.  Funds generated are the result of unspent budgeted funds and/or revenues that exceed the budget.  With a policy such as this the city can grow and prosper making improvements without forcing the bottom line.

Breezy Point Drive

The city is seeking quotes for a mill and overlay of Breezy Point Drive.  The project would provide a new pavement surface from the gate at County Road 11 to the parking lot at the resort.  The milling of the roadway will remove the top 2 inches of the asphalt.  This would then be replaced with 2 inches of fresh asphalt.  

It is anticipated the disruption would be limited.  The process can take a couple of days to complete but given coordination, weather and other logistics it could take a few more days.  During construction the roadway will be limited to one lane, so traffic will continue to flow with moderate delay. 

 

With council approval of quotes at their June 2^nd meeting the project is anticipated for mid-June. 

Public Improvements

The first Public Improvement Project in many years will be starting soon after road restrictions are lifted.  The project includes the installation of sanitary sewer and paving of Creek Circle and portions of Whitebirch Drive.  The project will serve a total of 33 residential lots.  18 of these lots are part of Whitebirch Village and the remaining 15 lots are in Creek Circle. 

The project was ordered at the April 7^th meeting and an award was made to Pratts Affordable Excavating, a construction firm from Merrifield, MN.  The total project cost is $374,217.54.  Of this amount the city, using sewer funds, will be picking up $104,166.50 of the costs making the amounts to be assessed $270,051.04. Each lot will be assessed $8,183.36.  This amount is to be spread over a 20 year period at 4.25%. 

The project should take about 2 months to complete.  Prior to construction the roadway will be stripped of class 5 gravel and used elsewhere.  Installation of the sewer mains will occur with both trenching and directional boring.  The boring will occur in the areas of the golf course.  It will both parallel the fairway and also cross it to connect to the lift station north of Antlers and Whitebirch Estates, along County Road 11.  Some of the trenching will be rather deep, approaching 20 feet.  Paving will occur after all sewer lines and services have been installed.  It will consist of a 20 foot wide roadway with 3 foot wide class 1 aggregate shoulders.  Drainage will consist of a minimum of 2 foot ditches on each side.  Driveways and culvert control structures along Creek Circle to minimize erosion and maximize soil absorption will also be constructed.  Restoration of the area with seeding will be accomplished and may occur after the 2 month construction period. 

Prior to the start of the project the contractor needs to provide the city with a certificate of insurance, a payment bond and a performance bond.  The payment bond is required to assure that his subcontractors get paid. The performance bond guarantees the project gets completed to city specifications in the case the contractor doesn’t perform, for any reason.  These are required by state law.  Also prior to the start will be a preconstruction meeting.  The meeting agenda will be to focus on timelines, who will do what, other utility concerns such as power or phone, and address coordination. 

We hope to have a successful project with things going well.  Sometimes unanticipated issues arise that need to be addressed.  Staying on top of things helps to minimize these types of issues.   As the project commences weekly construction meetings will be held to address any concerns or issues that develop.  Notes from these weekly meetings will be posted to the website to allow people to stay current with construction activities.  It will be good to see some construction activity and progress in the city.    

Fire Service for 2014

Last year the city discussed having Pequot Lakes Fire Department serve the entire city.  The city had been served by both Pequot Lakes and Ideal Fire Departments.   With a change in approach, Ideal Fire Department had proposed some significant increases in the cost to contract with them.    The city wanted to see if there was a more cost effective way to provide service.

Pequot Lakes Fire Department was contacted and the proposal to serve the city as a whole was developed using the fair share formula.  Having a station in Breezy Point also factored into the decision.  Service to the areas served by Ideal Fire Department could be served, in most situations, quicker with response out of this station.  The change was made and took place this spring. 

 

The fire contract amount from Pequot Lakes FD for 2014 is $74,335.18.  In 2013 Pequot Lakes Fire service contract amount was $71,251.82.  The increase for 2014 is $3,083.36. When looking at this change last year it was estimated our total cost increase would be about $2,600.  The increase is approximately $500 more than projected.  Most of this is explained with an increase in the overall fire department budget.  The projections done last year used the 2013 budget and parameters.  The 2013 fire service costs with both Ideal and Pequot Lakes was $79,151.82.  Our cost savings from 2013 to 2014 shows an overall decrease of $4,816.64.  

The change is favorable from two perspectives.  Service to areas previously served by Ideal Fire Department will see response times that are equal to or better.  Pequot Lakes Fire Department serves that area out of the Breezy Point station.  We also save approximately $5,000.