Description: AGENDAHED.JPG
 

Item No:                    5I.

 

Meeting Date:           September 24, 2012

 

From:                          Bill Spinelli, Finance Director, CPA

 

Subject:                      Resolution approving a Special Transfer from the Water Utility to the Fleet Internal Service Fund in the amount of $547,688 to fund Fleet Replacement vehicles

 

 


Staff Recommendation:

Staff recommends approval of a Special Transfer from the Water Utility to the Fleet Internal Service Fund in the amount of $547,688 to fund Fleet Replacement vehicles.

 

Analysis:

In Fiscal Year 2003, the City established a Fleet operations division and placed it in the General Fund.  All vehicles were transferred from their respective funds and owned by the General Fund.  Additionally, lease and maintenance fees were charged to the various funds.  Since 2003, unspent Fleet lease payments have accumulated in the General Fund and have not been restricted to be available for future fleet replacements.  In the proposed budget for Fiscal Year 2014, the City Commission has approved establishing a new Fleet Internal Service Fund.  All lease and maintenance payments will come directly into this fund allowing the cash to be restricted and available for fleet replacement purchases.

 

In accordance with the Utility Transfers Policy, Ordinance 07-81, the General Fund was required to refund the Water utility transfer (dividend payment) of $547,688 in Fiscal Year 2010, due to the fund having a net loss.  The Water Utility has since recovered and is now healthy enough to transfer the $547,688 to the new Fleet Internal Service Fund.  The funds will be used as “seed” money to start the new Fleet Internal Service fund. 

 

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                       $ 1,759,098

Add 15% Reserve                                                           263,865

Minimum Level of Acceptable Cash Reserve            $ 2,022,963

Unaudited Cash Balance as of September  2012          5,345,864

                                                Surplus Cash              $ 3,322,901

 

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

 

 

Options:

1.  Approve the Special Transfer from the Water Utility to the Fleet Internal Service Fund in the amount of $547,688 to fund Fleet replacement vehicles; Or

2.  Such alternative action as the Commission may deem appropriate

 

 

Fiscal Impact: 

The impact on Surplus Cash of the Water Utility would be minimal decreasing the Surplus Cash from $3,322,901 to $2,775,213.  In addition, pro forma cash flow projections for the next five years reflect continued growth in cash reserves.

 

 

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. _________________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________

 

RESOLUTION NO._______________

 

RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLOIRDA AUTHORIZING A SPECIAL TRANSFER FROM THE WATER UTILITY TO THE FLEET INTERNAL SERVICES FUND NOT TO EXCEED $547,688 TO FUND FLEET REPLACEMENT VEHICLES; 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 in the amount of $547,688 from the Water Utility to the Fleet Internal Service Fund to fund Fleet replacement vehicles.

 

             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