Minutes 06/10/1986 - Laserfiche WebLink

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>' 3 TUESDAY, JUNE 10, 1986 The Honorable Mayor and City Page 5 June 3, 1986 Note: The Sewer Fund status in FY 88-89, contract prices and buy-in cost will determine the actual scope of the bond issue that will be needed to cover the Phase III costs and possibly repay the $216,667 transfer from the Water Fund to the Sewer Bond Fund. It is recommended that the Sewer Fund balance be monitored closely from now to July 1, 1988, at which time a decision would be made as to the size of the bond issue needed to meet the City's financial obligations as outlined in Phase III above. A bond referendum could be scheduled for November 1988, for an amount to be determined at that time. A $l,OOO,OOO bond issue is reflected in this financing plan for FY 88-89. The annual debt service on $1,000,000 @ 8.5% interest rate, having a twenty (20) year amortization schedule is $105,671. Phase IV The facilities planned under this phase of the program is in the distant future; therefore, the financing of this phase of the improvements are not included in this plan. Summary In our consideration of a financing plan for future wastewater facilities, it was recognized that, because of the need to get the expansion of the City's plant underway as soon as POSSible to meet the immediate industrial wastewater treatment needs, it would not be possible to hold a bond referendum in time to meet the projected construction schedule. In consideration of this, it was decided that the Phase I obligation (expansion of the City's plant) would be financed from the Sewer and Water Funds in view of the balances in these funds. I realize that the Sewer Fund will be depleted to a low level; however, I would anticipate that increased revenue will bring this balance to a reasonable level by the end of FY 88-89; if this does not occur; and, if the drop in revenue resulting from the diversion of the PSA waste from the City's plant to the Marrowbone Plant, plus the cost of debt service on bonds sold, create a fund-balancing problem, consideration should then be given to an adjustment in the sewer rate. The above financial obligations and financing plan do not include any provisions for the removal of color, toxic material or chlorine. At the time that the State agencies require Martinsvi1le to make provisions to remove these elements, we will call upon the contributing industries to pay their fair share of this cost. .