08-23-84 Agenda & Packet - Laserfiche WebLink

Home Browse Search

MEMO TO: Councilmember Phyllis Blanchard 411) ,IFROM: Finance Director - Treasurer Don Brager DATE: August 22, 1984 SUBJECT: Defeasance Improvement Bonds Clerk-Administrator Don Pauley conveyed to me your request for a summary of actions the City has taken concerning the defeasance of several improvement bond issues and subsequent actions taken regarding the cash balance remaining in the Improvement Bond Fund after those bonds were defeased. The defeasance occured on January 18, 1984. Formal Council approval was given by Resolution 1715. Specific details concerning the defeasance are outlined in my February 2, 1984 memo which is attached. After the defeasance the Council , by Resolution 1714 cancelled $904,800 of debt service property tax levies which were scheduled to be levied between 1984 and 1994. A balance of $928, 120. 00 cash remained in the Improvement Bond Fund after the defeasance and was available for any lawful municipal expenditure. Additionally it is estimated that approximately $970, 000 in special assessments principal and interest payments will be received between 1984 and 1995 and placed in the fund. • • Shortly after the defeasance Ordinance 356 Establishing Chapter 27 of the Municipal Code entitled "Special Projects Fund" was adopted. Attached please find my January 12, 1984 memo on the subject outining the ordinance and presenting some of the rationale for it' s establishment as well as a copy of the ordinance. Basically the ordinance closes the Improvement Bond Fund and transfers that fund ' s assets ( cash remaining after defeasance and future assessments payable to the City) to the newly established Special Projects Fund. Section 27. 02, Subdivision 1 through 4 outlines expenditures which may be made from the fund. The primary purpose of the fund was to provide a source of financing for equipment and capital improvements which are included in the Long Term Financial Plan of the City and which would otherwise have required the expenditure of tax dollars. Other uses include transfers to the General Fund for cash flow and contingency reserves and emergencies. Resolution 1717 transferred $338,000 from the Special Capital Projects Fund to the General Fund; $238, 000 was designated as a reserve for cash flow and $100,000 was designated as a reserve for contingency. The second page of my January 12, 1984 memo outlines the reasons for establishing this reserve. This year will be the first time in the six years that I have been employed by the City that the General Fund will not incur a temporary cash • deficit during the year. Page four of the January 12, 1984 memo