Item No: 5.J
Meeting Date: March 26, 2012
From: Gladys Johnson, Interim Finance Director
Subject: Resolution authorizing an Interfund Loan between the Stormwater Utility and the Communications Utility
Staff recommends approval of a Special Interfund Loan from the Stormwater Utility to the Communications Utility in an amount not to exceed $315,000 for the Lake County School project to increase the infrastructure.
In an effort to improve its cash position, staff updated and the City Commission adopted new cash policies in fiscal year 2007. Ordinance 07-80, Section 2-230 provides for utilization of surplus cash which is defined as cash that exceeds 115% of the minimum acceptable level of cash reserve. Utilization of Surplus Cash can be approved for any one of the following; elimination of shortfalls in related funds, reduction or avoidance of debt, funding of a renewal and replacement program, one time capital needs and for use in funding tax, fee or rate stabilization. In addition to the Surplus Cash test, Ordinance 07-82 provides for a pro forma cash flow projection to determine the financial impact if any on the fund from which the transfer is drawn (attached). The following test reflects the amount of Surplus Cash available as of January 31, 2012:
Minimum Cash Reserve Requirement $ 387,000
Add 15% Reserve 58,050
Minimum Level of Acceptable Cash Reserve $ 445,050
Unaudited Cash Balance as of January 31,2012 2,238,357
Surplus Cash $1,793,307
The calculation as prescribed by ordinance reflects adequate surplus cash to allow for the special transfer.
The impact on Surplus Cash of the Stormwater Utility would be minimal decreasing the Surplus Cash from $1,793,307 to $1,478,307. In addition, pro forma cash flow projections for the next three years reflect continued growth in cash reserves.
Prepared by Puggy Johnson
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Reviewed by: Dept. Head ________
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Deputy C.M. ___________________
City Manager ___________________
Project No. ___________________
WF No. ______________________
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, TO APPROVE A SPECIAL INTERFUND LOAN FROM THE STORMWATER UTILITY TO THE COMMUNICATIONS UTILITY IN AN AMOUNT NOT TO EXCEED $315,000 TO INCREASE INFRASTRUCTURE FOR THE AGREEMENT WITH THE LAKE COUNTY SCHOOL BOARD; AND PROVIDING AN EFFECTIVE DATE.
BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:
THAT the City Commission hereby authorizes the Special Interfund Transfer of an amount not to exceed $315,000 from the Stormwater Utility to the Communications Utility to increase infrastructure as needed per the agreement with the Lake County School Board.
THAT this resolution shall become effective immediately.
PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the 26th day of March, 2012.