Description: AGENDAHED.JPG

 

Item No:                    5G.

 

Meeting Date:           September 24, 2012

 

From:                          Bill Spinelli, Finance Director, CPA

 

Subject:                      Resolution approving a Special Transfer from the Gas Utility to the Magnolia Townhomes Fund in the amount of $966,820 for debt service associated with the Kristen Court property

 

 


Staff Recommendation:

Staff recommends approval of a Special Transfer from the Gas Utility to the Magnolia Townhomes Fund in the amount of $966,820 for debt services associated with the Kristen Court property.

 

Analysis:

On October 9, 2006, the City Commission passed a resolution authorizing the issuance of a Bond Anticipation Note (BAN) in the amount of $4,000,000 to facilitate the purchase of the Kristen Court Apartments, a high crime and blighted area.   In December of 2009, the BAN was refinanced in the amount of $4,500,000 with a Capital Improvement Promissory Note. 

 



Issue

Year

Principal

Interest

Total

Magnolia Townhomes Capital

2010

0

75,650

75,650

  Improvement Promissory Note,

2011

0

153,000

153,000

  Series 2009 

2012

0

153,000

153,000

Original Issue Amount:  $4,500,000

*2013

840,000

138,720

978,720

Original Issue Date:  November 3, 2009

2014

870,000

109,650

979,650

Final Maturity: November 3, 2016

2015

900,000

79,550

979,550

Interest Rate:  3.40%

2016

930,000

48,450

978,450

 

2017

960,000

16,320

976,320

TOTAL

 

4,500,000

774,340

5,274,340

*amounts in table reflect calendar year amounts, not fiscal year amounts

 

The General Fund has been paying the interest for fiscal years 2010-2012.  In the upcoming budget year 2012-13 the proposed budget has been prepared to have the Gas Utility cover the debt service (principal and interest) associated with this note.

 

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 five year 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 September 30, 2012:

 

Minimum Cash Reserve Requirement                         $1,203,621

Add 15% Reserve                                                           180,543

Minimum Level of Acceptable Cash Reserve              $1,384,164

Unaudited Cash Balance as of September  2012          8,979,937

                                                Surplus Cash                $7,595,773

 

The calculation as prescribed by ordinance reflects adequate surplus cash to allow for the special transfer.

 

Options:

1.  Approve the special transfer from the Gas Utility to the Magnolia Townhomes Fund in the amount of $966,820 for debt service associated with the Kristen Court property; or

2.  Such alternative action as the Commission may deem appropriate

 

 

Fiscal Impact: 

The impact on Surplus Cash of the Gas Utility would be minimal decreasing the Surplus cash from $8,979,937 to $8,013,117.  In addition, proforma cash flow projections for the next five years reflect continued growth in cash reserves. Staff anticipates the next four proposed budgets 2014-2017 will include this strategy, but because of policy a special transfer resolution is necessary each year. 

 

 

Submission Date and Time:    9/24/2012 3:34 PM____

 

Department: ______________________

Prepared by:  ______________________                     

Attachments:         Yes____   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. __________________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. _042-2088-581-9151___

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________


 

RESOLUTION NO._______________

 

 RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, AUTHORIZING A SPECIAL TRANSFER FROM THE GAS UTILITY TO THE MAGNOLIA TOWNHOMES FUND IN THE AMOUNT OF $966,820 FOR DEBT SERVICE ASSOCIATED WITH THE KRISTEN COURT PROPERTY; 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 Transfer of $966,820 from the Gas Utility to the Magnolia Townhomes Fund for debt service associated with the Kristen Court Property

 

             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 _24th ____ day of _September________ 2012.

 

 

 

                                                                            ________________________________

                                                                             Mayor

 

ATTEST:

 

 

________________________________

City Clerk