HomeMy WebLinkAbout1988-05-24; City Council; 9444; HOSP GROVE SHORT TERM NOTES-TEMPORARY FUNDINGAB#~~/YL/-
MTG. 5/24/88
FIN DEPT.
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TITLE:
HOSP GROVE SHORT TERM
NOTES-TEMPORARY FUNDING
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RECOMMENDED ACTION: Aoder ~,==~Lunad dD. 88-/7/, G~UERV~NG Fud*J F~R QA~M~M~ 0
I+osP GROVE wrE, ITEM EXPLANATION
When the City issued the Hosp Grove notes last July several conditions were placed
on the City by the bond rating agency, Moody's Investor Service.
conditions was the requirement that 30 days before the due date of the note (May 3
1988) the City take one of three actions: 1) issue G.O. Bonds, 2) issue COP'S, or
3) reserve funds from other City sources to repay the note. The City has not
accomplished option 1) or 2) so the City must comply with option 3).
Staff is recommending that the City Council set aside $3.4 million of General Fund
cash and $3.5 million of Public Facilities Fund cash for one month to meet the
reserve requirement. This action will not impair the operations of either fund
during 1987-88. Upon the close of the long term debt issue these reserves will be
released.
The issue of long term debt is scheduled for June 28, 1988. Based on this scheduli
the proposed reserves would be in place for about 30 days. No reserve or obligatii
would be carried forward into 1988-89.
FISCAL IMPACT
Reserving $3.4 million of General Fund cash will obligate the entire estimated yea
end balance. It will not, however, effect the operations of the fund during the 3
day reserve period since cash flow needs will not require the use of these funds
before June 30, 1988.
Reserving $3.5 million from the Public Facilities Fund will not cause any conflict
with existing projects funding if the reserve is removed by June 30, 1988. Carryi
the reserve into 1988-89 will cause problems in funding the City's Capital
Improvement Program in future years. The existing cash balance in the PFF Fund is
$11.5 million.
EXHIBITS
Resolution No. 8p-171 reserving funds for the payment of the Hosp Grove note.
One of these
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?.:.ESOiUTI3N x(2. 88-171
A RESOLLTIG3 OF THE CITY COEXCIL OF THE CITY OF CAkLSB.41~,
C.i.LIFGRNI.4 I 3ESEF.y.T?;G FLY25 FCX THE P.4riYEST T;F THE HOi?
GROVE KOTE
I ... :\fiEFLEJ.5, :)n Jill!. lk;, ??8$ the ;:it!. of C:ar;sba~>~ i
, iigte tot;ilirlg S6,555,00G, :id
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!?;rIERE.IS+ :AS ;I z:~:idi.tFu~~ of rec:eivL::g a rat in!& fr!:i!i Yo::(!y' : T:L~~ F
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and
!*liERE:lS. loi:g tex debt \%ill not he issued b> ?!a>- '3!:. 1358 In 1
meet this obligat iw-, :icd
17 6TIEREAS. !_b.e Zit>- :s die L(> L<>II~>~! L;ith the ubiig:lti,>u to res€
funcis fro1;i existirL:: sources LLiLiiuut ciariiaging existing operat ioiis. ai;:?
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2) That the aluount of $3. 5 i~illiou is b.er.eb!: :esesved h: !2:e :ep
of the Hosp Gr-u\.e :!zte fri>in :he Public Facilities Fu!ld.
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? -,, \, That those Loh;I:.-,.P5 5:1:31; :,e
of long tern ::%5t [:.I: :!:e fiir>?ing ;f
P.\SSED. .;.PFF;CT'ES, A.!:Zl iGCFTi;E :At- L LS~LY~L :lie :~:f t!:. (;:I.: 1 =
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. .r-,- :\I~>: Council Members Lewis, Kulchin, Pettine, Marnaux and Larso
:;OES: None
.!,.35E?;T : None
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