HomeMy WebLinkAbout06/03/2008 04B Minutes 05-07-2008 Council Public Safety Committee (2) r " r .. Y
r 41 l ... i DEPARTMENT OF FINANCE & BUDGET
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129 North Second Street
'( * / Yakima, Washington 98901
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MEMORANDUM
May 7, 2008
To: Council Public Safety Committee
From: Dick Zais, City Manager
Charlie Hines, Fire Chief ( _,
Rita DeBord, Finance Director ' V
Subject: Financing Plan — Fire Ladder Truck Purchase
Council approved the purchase of a new ladder truck for the Fire Department in the 2008
budget at an anticipated cost of approximately $1 million. At that time, . staff anticipated
utilizing cash reserves of $250,000 and issuing debt for $750,000 to purchase the truck —
and utilizing REET 1 revenues to pay the debt service on the borrowing. After further
review, staff has determined that REET 1 revenues are not eligible for this purpose and
that a re- allocation of revenues is necessary to maintain compliance with regulations
governing the use of these revenues.
Staff is proposing the following:
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To finance the purchase of the fire ladder truck by utilizing $250,000 of cash reserves
($100,000 fire capital fund reserves and $150,000 general fund reserves) with the balance
paid from proceeds of a general obligation bond. (Note: if approved by Council, the 2008
general obligation bond currently planned for issuance later this year to help fund
various street and signalization projects would be increased to include funding for the
fire ladder truck) Debt service on a 15 year, $750,000 LTGO bond, using recent interest
rate assumptions, is estimated to be approximately $75,000 annually.
In 2007, the City issued 15 year, LTGO bonds to help fund the expansion of the West
Valley Fire Station. The debt service on these bonds is approximately $75,000 annually
and is paid from the City's annual property tax levies. Staff is proposing to shift these
property tax revenues and re- allocate them to pay the debt service on the 2008 ladder
truck bond and utilize the REET 1 revenues to pay the debt service on the 2007 Fire
Station expansion.
This funding reallocation will maintain compliance with regulations on the use of the
property tax and REET 1 revenues and, essentially, utilizes the same funding sources and
in similar amounts as originally planned.
cc: Cindy Epperson, Deputy Director Accounting & Budget
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