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<br />NOTICE OF SPECIAL MEETING <br /> <br />A SPECIAL MEETING OF THE CHARLOTTESVILLE CITY COUNCIL WILL BE <br />HELD ON Wednesday, March 29, 2006 AT 4:00 p.m. IN THE Basement Conference <br />Room. <br /> <br />THE PROPOSED AGENDA IS AS FOLLOWS: <br /> <br /> Budget Work Session <br /> <br />BY ORDER OF THE MAYOR BY Jeanne Cox <br /> <br />BASEMENT CONFERENCE ROOM – March 29, 2006 <br /> <br /> Council met in special session on this date with the following members present: <br />Dr. Brown, Mr. Caravati, Ms. Hamilton, Mr. Lynch, Mr. Schilling. <br /> <br /> Mr. O’Connell presented answers to questions posed by Councilors. <br /> <br /> Mr. Lynch said that more was put in the fund balance in 2005 than needed for the <br />target of 12%, and he questioned whether we really need to put an additional $200,000 <br />into this fund. <br /> <br /> Mr. O’Connell said there is a concern about the cost of gas and utilities this year <br />and it was felt that the surplus funds should be reserved for the current year to cover this <br />cost. <br /> <br />Capital Improvement Budget <br /> <br /> Mr. O’Connell said that rating agencies look pretty closely at the percentage of <br />funding that goes to the CIP. He said the funding recommended is 3.6%, but Council <br />could reduce it by $300,000 and stay within the policy of 3%. Mr. O’Connell said if <br />projects are reduced, they need to be reduced for the next five years. He said that a $10 <br />million bond issuance is recommended, but the Finance Director feels that the debt <br />service contribution can be reduced by $200,000. <br /> <br /> Mr. Schilling asked about the ramifications in the shift in policy to rely more <br />heavily on bond issuances with the proposed $10 million bond. <br /> <br /> Mr. O’Connell said that traditionally the City has issued $7.5 million in bonds. <br />He said the needs are great, but we are trying to balance the needs with what we can <br />afford. He said staff feel we can work with a $10 million bond issuance. He <br />acknowledged that it is a major policy shift. <br /> <br /> Mr. Schilling asked what the reluctance has been to do so in the past. <br /> <br /> Mr. Aubrey Watts, Chief Financial Officer, said that there used to be a significant <br />interest rate increase for bond issuances over $10 million. <br /> <br /> Mr. Schilling asked about the cost, and Mr. Watts said he will have to provide that <br />information. <br /> <br /> Mr. Lynch asked if that is still the case, and Mr. Watts said the cost has come <br />down some. <br /> <br /> Responding to a question from Mr. Schilling about the proposed reduction in the <br />debt service contribution, Mr. Bernard Wray, Director of Finance, said that the rate had <br />been assumed to be 5.5%, but after talking with the rate adjuster, it was felt the rate <br />would be 5%. In addition, Mr. Wray said the issuance will occur later in the year. <br /> <br /> Mr. Schilling asked why the CIP starts out with a deficit and what is the time lag. <br /> <br /> <br />