2003-042 Council Resolution - Laserfiche WebLink

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• • • AGENDA ITEM 3A STAFF ORIGINATOR Al Rolek MEETING DATE March 24, 2003 TOPIC Authorizing the Issuance of the 2003 Certificates of Indebtedness, Series B Simple Majority (3/5) VOTE REQUIRED BACKGROUND 2003 budget includes $330,000 for equipment replacement, $130,000 of which would be funded through the sale of certificates of indebtedness. The City Council has adopted Resolution 03 -10 authorizing the issuance of $130,000 in certificates of indebtedness. The Governor's proposed budget for FY 2004/2005 cuts state Local Government Aid (LGA) and Market Value Homestead Credit (MVHC) payments to cities by up to 5% of total revenues for 2003. This cut effectively eliminates the total LGA and MVHC the City expected to receive in 2003 and 2004, creating a 2003 budget gap of $502,546. The issuance of additional certificates of indebtedness would fill a substantial amount of the gap left by the Governor's proposal, and the City has the debt capacity to issue additional certificates of indebtedness to fund equipment replacement needs. The Area and Unit Fund (406) has sufficient reserves to issue a loan for this additional amount. This would be repaid over a three - year period through a special levy in 2004, 2005 and 2006. It is also important to note that bills being proposed in the State Legislature, specifically Senate File 330 and House File 751, may have an adverse affect on the City's ability to issue these certificates at a later date. To eliminate a substantial portion of the City's projected shortfall due to the Governor's proposed state aid cuts, and to preserve the City's ability to issue this debt and maintain future flexibility, staff recommends th eadoption of Resolution 03 -42 authorizing the issuance of $200,000 in Certificates of Indebtedness. OPTIONS 1. Approve Resolution 03 -42 issuing the 2003 Certificates of Indebtedness, Series B 2. Return to staff for further review RECOMMENDATION Option 1.