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TO: FROM: DATE: SUBJECT: ! INTEROFFICE MEMORANDUM R~n ~chroeder, City Administrator $~dr~ Ashley Helling, Finance Officer A us~ 6, 1992 ~UBLIC WORKS FACILITY If the City iwer~ to purchase a facility for a total purchase price of $265,000, one financin~ a~ternative is: Cash ~B~qu~rement: Purcha~ Price $265,000 Remodefing~ clean-up costs 50.000 Note below ~ Total cash requirement $315,000 Cash A il ble: Public~or~s Capital Fund Bal~Ce~12/31/91 $113,093 1992 {int~rest earnings (est.) 4.097 $118,000 Inter-~undlloan from the Land~ill!Expendable Trust Fund 197.000 i ~otal cash available $315,000 Note: This ~sti~ate does not include handicap accessibility which, if requi~ed,!would be a CDBG eligible activity. I am rec0~end~ng a non-interest bearing Inter-fund loan be made from the Landfill ~X~.~.nd~ble Trust Fund to the General Fund for the purpose of purchasing a public ~o~ks~acility. Sale proceeds from the existing public works facility could be ap~li~ to the loan balance when realized. A ten year pay back from the General Fun~ for this debt service would require annual payments of $19,700 less any adjustment i~or sale proceeds. Due to the~ur~hase of the Holasek property adjacent to the Municipal Center, the City's ~ene~al Fund debt service has been or will be: i ~990 $12,676 ~991 $21,126 i: ~992 $18,166 ~' ~993 $4,226 (final payment) Therefore, ~ncu~rring new debt service in the maximum annual amount of $19,700 would not-~signlf~cantly ~ncrease the General Fund debt service funding requirement~I fo~ 1993 through 2002. The Landfil~ E~pendable Trust Fund would be reimbursed at the original loan value. Whit~ th~ City could make the loan subject to the annual city investment pool earningsI ~ate, this would increase the debt service payments and the general leV~ requirements. During 1989i th~ Ramsey City Council adopted a resolution establishing policy regarding u~e.~ o~ the Landfill Trust Fund. This policy says, in part: - That upito i40% fo the principal of the Landfill Trust Fund may be used as a source of f~ndsifor interest free interfund loans. - That an~ loan or transfer of principal from the Landfill Trust Fund shall be approved by!a f~)ur-fifths vote of the city Council. For the rec¢~rd~ a copy of Resolution #89-11-305 is attached.