Minutes 11/27/1984 - Laserfiche WebLink

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~76 TUESDAY NOVEMBER 27, 1984 3. The second nut, of $3,384,306, can only be par- tially met under this alternative, which assumes a $1,150,000 contribution to the Sewer Bond Fund from the Hydro Escrow, compounded at 12% interest for 42 months; plus $130,000 per year for the next three fiscal years from the Sewer Fund. This $130,000 would be generated by the immediate impo- sition of a 9 cents sewer rate increase. Even at that, the Sewer Bond Fund would still be short, by between $1.0 and $1.5 million, of meeting the demand of the second nut. This shortfall could be remedied by (a) ralslng the sewer rate more than 9 cents; or (b) planning to issue sewer bonds in the amount of the dif f erence . 4. If we take half of the Hydro Escrow and convert the $1,150,000 into a new Electric Fund Capital Reserve, it would grow, assuming 11% interest compounded, to $2,650,218 in eight years. This amount, unless supplemented by additional trans- fers from the Electric Fund would not be suffi- cient to meet the projected capital improvement needs of the Electric Department. Summary These two alternatives are variations of the same theme--using Electric Fund monies for Sewer Fund capital improvements. The first alternative is a full-step in that direction, while the second is a half or, perhaps, three-quarter step. Either plan promises to have an indirect effect on the General Fund and the services to be rendered through the General Fund in the future. This is so because either plan will limit to a certain degree the Electric Fund's ability to make transfers to the General Fund. As this comes to pass, the General Fund will have to look for new revenue sources, maintain General Fund services at cur- rent levels, or reduce services if we suffer a return of signi- ficant inflation. Once the Council decides which alternative to pursue, we can better outline the exact steps and timing for implementing that decision. If additional information or analysis is desired, I'd be glad to hear from you. After some discussion by Council of this report and the two financing plans, Council- man Oakes introduced a motion, to which there was no second, that Council adopt the "Alternative B" plan. Councilman Groden then offered his motion, which was duly seconded, that Council adopt the "Alternative A" plan. Councilman Groden's motion