HomeMy WebLinkAbout2004 06 28 Consent 204
COMMISSION AGENDA
ITEM 204
Consent X
Informational
Public Hearing
Regular
June 28. 2004
Regular Meeting
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Mgr. 1
Authorization
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Dept.
REQUEST:
The Finance Department is requesting that the City Commission authorize a
supplemental appropriation in the amount of $82,500 from the Water and Sewer
Utility Fund Reserve, $82,500 from the General Fund Reserve and $1,993 from
the 2000 Info System Debt Service Fund Reserve. These funds, totaling
$166,993, will be used to payoff the Information Systems portion of the Year
2000 Bank of America Loan - Series A in the Fiscal Year 2003/2004 Budget.
PURPOSE:
The purpose of this Agenda Item is to ask for a supplemental appropriation in the
amount of $82,500 from the Water and Sewer Utility Fund Reserve, $82,500 from
the General Fund Reserve and $1,993 from the 2000 Info System Debt Service
Fund Reserve. These funds, totaling $166,993, will be used to payoff the
Information Systems portion of the Year 2000 Bank of America Loan - Series A
in the Fiscal Year 200312004 Budget as discussed at the June 1,2004 Fiscal Year
200412005 Budget Workshop.
The Year 2000 Bank of America Loan - Series A was for two purposes: the
Information Systems project and a medical transport purchase. The Medical
Transport portion of this loan has already been paid off in the Fiscal Year
2003/2004 Budget. This payment will payoff the loan in full.
CITY OF WINTER SPRINGS
CITY COMMISSION
REGULAR MEETING -JUNE 28, 2004
CONSENT AGENDA ITEM "204"
PAGE 2 OF 2
CONSIDERATIONS:
During the Fiscal Year 2004/2005 Budget Workshop held on June 1, 2004, the
City Manager discussed "Prepayment of Notes." It was determined that in order
to: fund new operating costs in the Fiscal Year 200412005 without a tax increase;
be in compliance with the City's Current Position Policy, which provides that
recurring expenses (personnel, operating and debt payments) may not be funded
from non-recurring revenue sources (fund balance, reserves and revenues
dedicated to non-recurring expenses, such as grants); as well as, be in compliance
with the City's Fund Balance Policy, which provides the General Fund must not
maintain less than a three-month operating reserve unless there is a declared
emergency, the City needed to consider paying off the 2000 Information System
note also known as the Year 2000 Bank of America Loan - Series A. It was City
Commission consensus that evening to proceed with this initiative.
FUNDING:
A supplemental appropriation from: the Water and Sewer Utility Fund Reserve of
$82,500 and the General Fund Reserve of $82,500, which will both be transferred
to the 2000 Info System Debt Service Fund (220) for Line Code 220-57110 Debt
Service - Principal $163,591 and for Line Code 220-57210 Debt Service -
Interest $1,409; and from the 2000 Info System Debt Service Fund Reserve of
$1,993, which will be reallocated to Line Code 220-57110 Debt Service -
Principal. These funds totaling $166,993 will be used to payoff the Information
Systems portion of the loan.
RECOMMENDATION:
Staff recommends that the City Commission approve this supplemental
appropriation totaling $166,993 to payoff the Year 2000 Bank of America Loan -
Series A in fiscal year 2003/2004.
ATTACHMENTS:
Page from 6/1/04 Commission Workshop Package: FY 05 Budget Issues:
"Prepayment of Notes"
COMMISSION ACTION:
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FY05
BUDGET ISSUES
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"PREPAYMENT OF NOTES"
ISSUE:
Does the Commission support payment of the 2002 Information System note and Fire Truck note
to fund the FY 05 Budget in conformance with established budget policies?
DISCUSSION:
Numerous laws policies and practices guide the financial management of City funds, two of the
most important are the Current Position Policy and the Fund Balance Policy.
Fund Balance Policy:
The Fund Balance Policy provides that the General Fund must not maintain less than a three-
month operating reserve unless there is a declared emergency.
The City is currently in compliance with this policy.
Current Position Policy:
After several years of planning the City has worked itself into' conformity with a Current Position
Policy which provides that recurring expenses, (personnel, operating, and debit payments) may
not be funded from non-recurring revenue sources (fund balances, and reserves and revenues
.dedicated to non-recurring expenses such as grants). This is an extremely important fmancial
discipline which if violated will most certainly led to financial problems.
The City is currently in compliance with this policy.
FY os:
In order to fund new operating costs like those listed below without a tax increase, and to be in
. compliance with the above budget policies, we need to prepay the remaining $87,000 of the FY
2000 Information System note and pay cash for the $302,000 Fire Truck, removing
approximately $137,000 in recurring note payinents from the General Fund.
Expanded Roadway Landscape Maintenance
Senior Bus Service Increases
New Town Center Street Lighting
New Town Center Maintenance
New Parker property Park Maintenance
TOTAL
$47,000
$13,000
$45,000
$40,000
$60.000
$205,000
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FISCAL IMPACT:
If these recurring note payments are left in the FY 05 budget, a millage increase of 0.1003 mills
would be necessary to maintain the current position policy which discourages the use of non-
recurring revenues to pay for recurring cost.
Payment of these notes will reduce 'the projected FY 04 ending fund balance to approximately
$4.6 million, some $600,000 above our minimum fund balance policy requirement.
RECOMMENDATION:
It is r~commended that the Commission approve the prepayment of the FY 2000 Information j
System note and $302,000 Fire Truck note from General Food Reserves. ,