12/03/2001 Meeting Minutes - Laserfiche WebLink

Home Browse Search

Council Minutes of 12/3/2001 suggestion was made that use of the rainy day fund be investigated because the title of ~~ that truly fits this particular problem. The meeting concluded with the understanding that the Law Department would be contacted for an opinion on the use of bond retirement fund investment earnings to potentially pay all or some of Springvale's 2002 debt. Also discussed was the issue of Council passing legislation for a formal loan agreement with repayment terms, possibly including the ability or requirement to charge interest. It was felt that, without such an agreement in place, it would seem that covering these debts was a gift from the city. That is not Council's intention. 2) The committee discussed the issue of Ordinance 2000-130 which involves the cell tower at Clague Park and the use of it. It was recommended that this ordinance be tabled at the next Council meeting. Finance Director Copfer said she would like to reiterate that it's not just the bond retirement fund, but it is investment earnings from the bond retirement fund. Regarding the on-going project at Spruigvale, Councilwoman Kesler asked Mr. Miller to clarify the statement that there were no rain days in the bidding process. Mr. Miller said the contractor is counting 30 rain days against their ability to complete the project. Rain days do not just mean falling rain, but the impact of the rain for a day or two thereafter when machinery cannot be used as it may cause damage to the cowse. There were no rain days projected or included in the bidding process when they projected their completion day. In other words, in order to complete it on time, you would need extremely good weather and zero rain days. Mrs. Kesler then asked Mrs. Copfer if it is her first choice to use the investment earnings to make the Springvale debt payments and Mrs. Copfer said yes. Mrs. Kesler then asked if the investmenrt earnings in the bond retirement fund can only be used for debt payment, and Mrs. Copfer said no, not necessarily. She, Mr. Gateau and John Larson (bond counsel) discussed this issue. Technically, it could be used for other things. Traditionally those monies have gone into the bond retirement fund. Mrs. Kesler asked where else the funds could be used. Law Director Gateau commented that Mr. Larson had indicated that, on an annual basis, what you would typically do with the interest income in the bond retirement fund was re- appropriate those funds. The funds could be re-appropriated by transferring those funds (investmern income) to either the general fund or by leaving them in the bond retirement fund to accumulate and presumably to be used to pay debt. The funds are not segregated solely to be used for bond retirement. Mrs. Kesler asked if the investment earnings funds were potentially general fund monies. Finance Director Copfer said potetrtially, but she wouldn't advise it. It was her understanding that once money is in the bond retirement fund, it stays there. It is good financial practice to keep the earnings in the bond retirement fund. Mrs. Kesler asked the Law Director whether Council actually had to re- appropriate the money or whether leaving it in the bond retirement fund was in effect appropriating it there. Law Director Gateau said yes, or it could be appropriated to the general fund or the rainy day fund or wherever Council wanted to put it. Mr. Kesler asked what is a fiscally responsible amount of money to leave in the fund. Mrs. Copfer said there are differing opinions. Wall Street would like to see $2 million, because that's just more security to pay debt down in the futwe. She expects it to top off around about $1.5 million that is her long-term goal. Mrs. Kesler said it is a concern that, if the funds 3 I