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REQUEST FOR COUNCIL CONSIDERATION Agenda Section: 7 <br /> STAFF REPORT Report Number: 93-573WS <br /> 1111706 <br /> August 2, 1993Report Date: 7-29-93 <br /> AGENDA SESSION DATE <br /> DISPOSITION <br /> Item Description: Continued Discussion of Golf Course Financing <br /> Administrator's Review/Recommendation: <br /> - No comments to supplement this report <br /> - Comments attached. <br /> Explanation/Summary (attach supplement sheets as necessary.) <br /> SUMMARY; <br /> The City Hall expansion/remodeling project is in need of approximately <br /> $125, 000 in addition to the amount presently in the City Hall Project <br /> Fund. Our financial consultants have stated that in order to make the <br /> Golf Course Project financially sound $250, 000 is needed up front to <br /> assist with operations in the early years. Those monies would <br /> subsequently be repaid, with interest, over a period of 20 years. The <br /> Clerk-Administrator has requested that I look at the financial <br /> feasibility of obtaining the monies for both of these projects from the <br /> Water and Sewer Utility Funds. A suggested alternative source of <br /> funding for the City Hall Expansion/Remodeling Project is the Special <br /> Projects Fund. <br /> While analyzing the Water and Sewer Funds I considered the following <br /> factors: <br /> • The cash flow reserve requirements of the fund. Does the fund <br /> have sufficient cash on hand during the year to pay operating <br /> expenses? Expenses are incurred on a monthly basis while <br /> revenues are received on a quarterly basis. <br /> • Are there any required reserves which would place restrictions <br /> on the fund's cash? <br /> • The effect a reduction of cash balance would have upon the <br /> funds operations. A permanent transfer of funds reduces the <br /> cash balance of the fund. <br /> The Water Fund has a cash flow requirement of approximately $200, 000. <br /> There is sufficient cash on hand to meet this requirement. Two reserves <br /> have been established in the Water Fund: Reserve for Water Main <br /> Breaks ($140,594) and Reserve for Future Maintenance($237,297) . The <br /> Reserve for Water Main Breaks is a reserve for emergencies and a small <br /> increase for this reserve is budgeted for each year. The Reserve for <br /> biL/-'°"-)Lel\ <br /> RECOMMENDATIONt Don Brager, Fina a- Director-Treasurer <br />