04-27-1994 Council Agenda - Laserfiche WebLink

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Mayor & City Council Page 2 April 22, 1994 Purchase of this truck poses a cash flow problem for the General Capital Improvement Fund. Due to the fact that payment for this purchase was not contemplated until early 1995, the General Capital Improvement Fund will not have sufficient cash in 1994 for this purpose. (1994 payments assume some prepayment mechanism is utilized.) Also, with approximately $30,000 remaining on the repayment for the aerial ladder truck, the City would also have to finance this amount. Lastly, if the purchase price were to be paid upon order of the truck, we would also have to finance the costs over $250,000 that the Fire Department has agreed to repay through future gambling proceeds. To address these concerns, we would have to first determine if it was most advantageous to pay the purchase price at the time of order. This decision can only be made at the time the truck has been bid and advance pay discounts are known. It is my recommendation that we include in the bidding documents the requirements that various payment options be provided by the vendors in order that we can determine what method is most beneficial to us. Based on this information, other City funds would have to cash flow the General Capital Improvement Fund for any amounts paid prior to 1995. The City has sufficient resources to accomplish this task through utilization of our Closed Bond Fund. If the Closed Bond Fund were to be used, it would need to be repaid in 1995 with accrued interest at a predetermined rate to make it whole once again. Enclosed for your review is a diagram of the truck which indicates some of the features discussed in my notes. The Fire Chief will be present at Wednesday's meeting to review this matter in greater detail. Should you have any comments or questions in the meantime, please let me know. JRH:kpv cc: Dick Boss, Fire Chief Tom DuCharme, Truck Committee Chair Enclosure Page 129