11/19/2002 Meeting Minutes - Laserfiche WebLink

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Council Minutes of 11/19!2002 Springvale wouldn't open until May and the investment earnings on monies set aside for debt service would be used to pay the 2002 share of the debt service for Springvale. The total amount was $540,000, to be paid out of the General Obligation Bond Retirement Fund from the investment earnings made on those monies. All the Springvale debt, as is WWTP debt, is general obligation debt other than two small pieces of WWTP. General Obligation Bond Retirement Fund is well within the proper means to pay that debt service. Mrs. Kasler asked, in layman's terms, the bond retirement interest fund is being used to pay the debt that Springvale couldn't pay this yeaz? Mrs. Copfer said yes. Mrs. Kasler asked was it not a fact that the bond retirement interest money could be infused into the General Fund and used for General Fund purposes? Mrs. Copfer said not all the bond retirement fund money can be utilized for that. The investment earnings that go into the bond retirement fund before 2002 could potentially be used. But it is a prudent fiscal practice to set aside those monies in the bond retirement fund to have flexibility so the city doesn't go into default. It is important to have that flexibility to be able to cover the debt because Springvale wouldn't have been able to pay it. Mrs. Kasler said that under normal circumstances that would be good and be fiscally responsible. The question is, is it fiscally responsible to be in a $2 million deficit? The $540,000 that was used because Springvale was closed for a yeaz when it was not supposed to be and they could not pay their debt, could have been used toward the $2 million deficit. Mrs. Copfer said she doesn't make the adminis~'ative decisions, she just accounts for it. Springvale couldn't pay its debt before the projected deficit of $2 million for 2003. The debt service must be paid. Could this $540,000 go to pay General Fund wages-yes, but we would have to do a $700,000 transfer because Springvale doesn't have the money to pay the debt and the city is legally obligated to pay the debt. Mrs. Kasler said she has no argument with that but is saying the city should never have gotten to that position. Had the administration not closed the facility and got themselves in the position they are now in, the funds could have been used to help defray the deficit. Mrs. Copfer said she couldn't speak to that as she is not the administrative decision maker-she is trying to solve problems that exist. Luckily, we put the investment earnings in the bond retirement fund. She didn't have that privilege when she started in January 1998. She had debt payments and had $17,000 in that fund. There is flexibility by being conservative. She doesn't regret keeping the investment earnings in that fund. You can't get rid of the debt unless Springvale is sold. If that is what is wanted, go for it. Mr. Limpert said everyone has recollections of things that have taken place and they are different than what happened or what someone might remember happened. He remembers that, when Springvale was being purchased, he asked if it was a general obligation debt. He was told it was not general obligation. That turns out to be untrue. We may be talking slightly different things on the lake azea, as he recalls the original agreement, the equipment was going to be rented by Springvale, the operators were going to be provided by the Service Department because the lake construction job was to lower the lake 3 feet which eliminated flooding problems in basements on the south section of the city. Other projects had been done by general contractors with regazd to flood abatement, and it was very, very expensive. Mrs. Kasler said she would like to clarify by asking for documentation of the breakdown of the work done at 5pringvale, since the $2.5 million was borrowed, with regard to Service Department employees being used there, what '~"" work they were used on, how many hours they put in, what years, times and days of the 17