90-1241 O 1 � � � 1 �.� � Council File �` 9� -/c�L��
Green Sheet # Q 7�
RESOLUTION
CITY OF SAINT PAUL, MINNESOTA ' �
� �
Presented By `� -----�.�
Referred To Committee: Date
WHEREAS, federal tax law enacted in 1986 and 1989 imposed
stringent guidelines for the reporting, tracking and rebate of
arbitrage interest earnings on tax exempt bond funds, and
WHEREAS, these bond account arbitrage interest earnings
occur when the City invests the bond proceeds at a higher
interest rate than the City had to pay when borrowing money by
selling bonds, and
WHEREAS, each bond account arbitrage interest, when earned,
is receipted into the appropriate bond debt service account and
must be transferred to the designated City Agency Account at the
end of each bond year for repayment to the federal government,
and
WHEREAS, arbitrage rebate interest in the amount of
$388, 323.15 for the 1988 and 1989 bond years was previously set
aside in the City's Arbitrage Rebate Account, and
WHEREAS, arbitrage rebate interest earned for the 1990 Bond
year is $638, 650. 01 in the General Debt Service Fund 960,
$61, 040.65 in the General Obligation Special Assessment Debt
� Service Fund 963, and $135,443 . 33 in the Sewer Service Enterprise
Fund 260,
NOW, THEREFORE, BE IT RESOLVED, that the City Council, based
on the Mayor's recommendations pursuant to Section 10. 07. 1 of the
City Charter is amending the 1990 Budget to allow for the
transfer of $835, 133 .99 in arbitrage interest earnings from the
bond Debt Service Funds to the City Agency Funds, and be it
FURTHER RESOLVED, that the City Council approves the
following changes to the 1990 Budget:
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� 0 R�I �G ! i��A L � � ��o-����
Current Amended
Budget Changes Budget
-------- ------- --------
FINANCING PLAN
960 General Debt Service Fund
89987 General Debt 1987 Bonds
6602 Interest on Investments - 0 - 47, 092 . 16 47, 092 . 16
All Other Financing 2, 096,263 . 00 - 0 - 2, 096, 263 . 00
------------ ----------- ------------
Total Financing 2, 096,263 . 00 47, 092. 16 2, 143, 355. 16
89988 General Debt 1988 Bonds
6602 Interest on Investments - 0 - 91, 529. 46 91,529.46
Al1 Other Financing 1, 608,975.00 - 0 - 1, 608,975. 00
------------ ----------- ------------
Total Financing 1, 608,975. 00 91, 529.46 1, 700, 504.46
89989 General Debt 1989 Bonds
6602 Interest on Investments - 0 - 290, 028 . 39 290, 028. 39
All Other Financing 3, 359,976. 00 - 0 - 3, 359,976. 00
------------ ------------ ------------
Total Financing 3, 359,976. 00 290, 028 . 39 3, 650, 004. 39
SPENDING PLAN
960 General Debt Service Fund
89987 General Debt 1987 Bonds
0514 Arbitrage Rebate - 0 - 107 , 092 . 16 107, 092 . 16
0605 Arbitrage Expense 60, 000. 00 (60, 000. 00) - 0 -
All Other Spending 2, 036,263 . 00 - 0 - 2, 036, 263 .00
------------ ----------- -------------
Total Spending 2, 096, 263 . 00 47, 092 . 16 2, 143, 355. 16
89988 General Debt 1988 Bonds
0514 Arbitrage Rebate - 0 - 141, 529.46 141, 529. 46
0605 Arbitrage Expense 50, 000. 00 (50, 000. 00) - 0 -
All Other Spending 1, 558,975. 00 - 0 - 1, 558,975. 00
------------ ----------- ------------
Total Spending 1, 608,975. 00 91, 529.46 1,700, 504 .46
89989 General Debt 1989 Bonds
0514 Arbitrage Rebate - 0 - 390, 028 . 39 390, 028. 39
0605 Arbitrage Expense 100, 000. 00 (100, 000. 00) - 0 -
All Other Spending 3,259,976. 00 - 0 - 3, 259,976. 00
------------ ---------- ------------
Total Spending 3, 359, 976.00 290, 028. 39 3, 650, 004 . 39
NET CHANGE $428, 650. 01
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Q�R ��� I �J A L. � � �ya�a��
Current Amended
Budget Changes Budget
-------- ------- --------
FINANCING PLAN
963 seneral Obligation Special
Assessment Debt Service Fund
89387 G.O. Special Assessment
1987 Bonds
6602 Interest on Investments - 0 - 4, 386. 72 4, 386.72
All Other Financing 258, 063 . 00 - 0 - 258, 063 . 00
----------- --------- -------------
Total Financing 258, 063 . 00 4 , 386.72 262,449 .72
89388 G.O. Special Assessment
1988 Bonds
All Other Financing 280, 138. 00 (2, 875.26) 277, 262 .74
----------- ----------- -------------
Total Financing 280, 138. 00 (2 ,875.26) 277, 262 .74
89389 G.O. Special Assessment
1989 Bonds
6602 Interest on Investments - 0 - 29, 529. 19 29, 529. 19
All Other Financing 156, 675. 00 - 0 - 156, 675. 00
------------ ----------- -------------
Total Financing 156, 675. 00 29, 529. 19 186, 204 . 19
SPENDING PLAN
963 General Obligation Special
Assessment Debt Service Fund
89387 G.O. Special Assessment
1987 Bonds
0514 Arbitrage Rebate - 0 - 14 , 386. 72 14, 386.72
0605 Arbitrage Expense 10, 000. 00 (10, 000. 00) - 0 -
All Other Spending 248, 063 . 00 - 0 - 248, 063 . 00
------------ ----------- ------------
Total Spending 258, 063 . 00 4, 386.72 262,449.72
89388 G.O. Special Assessment
1988 Bonds
0514 Arbitrage Rebate - 0 - 7, 124 .74 7, 124 .74
0605 Arbitrage Expense 10, 000. 00 (10, 000. 00) - 0 -
All Other Spending 270, 138. 00 - 0 - 270, 138. 00
------------ ---------- ------------
Total Spending 280, 138. 00 (2 , 875. 26) 277, 262 .74
89389 G.O. Special Assessment
1989 Bonds
0514 Arbitrage Rebate - 0 - 39, 529. 19 39, 529. 19
0605 Arbitrage Expense 10, 000. 00 (10, 000. 00) - 0 -
Al1 Other Spending 146, 675. 00 - 0 - 146, 675. 00
------------ ----------- ------------
Total Spending 156, 675. 00 29, 529. 19 186,204 . 19
NET CHANGE $31, 040. 65
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Q�R r� � �� }� �.. � � �yo_ ,���
Current Amended
Budget Changes Budget
-------- ------- --------
FINANCING PLAN
260 Sewer Service Enterprise Fund
22221 Sewer Separation
Construction Account
6602 Interest on Investments - 0 - 2, 590. 95 2, 590. 95
Al1 Other Financing 9, 674, 393 . 00 - 0 - 9, 674, 393 . 00
------------ --------- ------------
Total Financing 9, 674, 393 . 00 2 , 590.95 9, 676,983 .95
22222 Sewer Revenue Bond
Debt Service Account
6602 Interest on Investments - 0 - 132,852 . 38 132,852 . 38
All Other Financing 8, 026, 140. 00 - 0 - 8, 026, 140. 00
------------ ---------- ------------
Total Financing 8, 026, 140. 00 132, 852 . 38 8, 158, 992 . 38
SPENDING PLAN
260 Sewer Service Enterprise Fund
22221 Sewer Separation
Construction Account
0514 Arbitrage Rebate - 0 - 2, 590.95 2,590.95
All Other Spending 9, 674, 393 . 00 - 0 - 9, 674, 393 . 00
------------ ---------- ------------
Total Spending 9, 674, 393 . 00 2 , 590. 95 9, 676,983 . 95
22222 Sewer Revenue Bond
Debt Service Account
0514 Arbitrage Rebate - 0 - 132 ,852 . 38 132,852 . 38
All Other Spending 8, 026, 140. 00 - 0 - 8, 026, 140. 00
------------ ---------- ------------
Total Spending 8, 026, 140. 00 132,852 . 38 8, 158,992. 38
NET CHANGE $135,443 . 33
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, � R� � l �l�A L � � � �--9�-����
AND BE IT FINALLY RESOLVED, in accordance with federal law,
that on each five year arbitrage rebate payment date the City
Treasurer will remit the appropriate rebate payments to the
federal government.
Approved As To Funding Approval Recommended
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Finance Dire or Budget Di ector
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ea Navs Absent Requested by Department of:
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Form Approved by City Attorney
Adopted by Council: Date ,J�� 2� 19a� �
Adoption rtified by Council Secretary By: �` 7` + �
BY° Approved by Mayor for Submission to
Approved by ayor: Date JUL 2 4 1990 Council
�' By: i�Jr�s�d��� ��
By: �
� �uauswEO AU G -41990 5 of 5
. •, . C��t�'/�`�/
� DEP l7FFI(�JCOUNpL DATE INITIATED � O� �
� Finance and Manaqement ��es 6����� GREEN SHEET No.
CONTACT PERSON 8 PFIONE �NITIAU DATE INIiIAUDATE
DEPARTMENT DIFiECTOR �CITY(�UNCIL
Shirley Davis 292-7038 �� �CITY ATTORNEY �Crrv c.�E�c
MUBT BE ON WUNCIL A(�ENDA BY(DA ROUTINO �BUDOET DIRECTOR �FIN.3 MOT.BERVICES DIR.
�MAYOR(OR ASSISTANT) i� Chief Accountant
TOTAL iY OF SIGNATURE PAQiE8 (CLIP ALL LOCATIONS FOR SIGNATUR�
�Ci�REOUE87ED: is resolution establishes a bu qe to provi e or the trans er o ar rage n eres earn ngs
from the City Bond Fund Accounts to the appropriate City Arbitraqe Rebate Agency Fund Accounts. The City Aqency
Fund collects money that belongs to someone else.
This money is a payment due to the federal qovemment at specified times (5 year intervals) durinq the life of a
bond issue. REC�IVED
RE(�MMENDATIONB:Approw(A)a Ryect(F� COUNCIL COIMMITTEE/RESEARCH REPORT OPTIONAL
_PL4NNINO COMMISSION _qVIL SERVICE COMMIS810N �A�Y� J UN 15 1990 ��E NO.
_qB COMMITTEE _
c�,MENTS: p���Ct OF THE DIRECTOR
_STAFF _
—o���T�� — DEPARTMF,NT OF FIIVANCE
SUPPORTS WHI(Y1 COUNqL OBJECTIVE9 �ND IViANAGEMENT SERVICES
�r�rtwnNO PAOe�,issue,o�oa�uNm�vuno,wnu,wns�,wn.re,wny>:
The Tax Acts of 1986 and 1989 imposed stringent requirements for the reporting, tracking and rebate of arbitraqe
interest earninqs for tax exempt bond funds. These arbitrage earninqs are the interest earnings on bond proceeds
in excess of the net interest rate on the bonds and are receipted into the debt service account for each bond
issue. The money is available, but must be budgeted for in 1990.
A budqet must be approved before funds can be transferred to an Aqency Account.
Arbitraqe rebate expense for 1990 is $835,133.99 of which $240,000 was budgeted. This Council Resolution provides
the budqet authority for the additional $595,133.99.
ADVANTAC�ES IF APPROVED:
The City is in compliance with federal law.
Arbitrage rebate is due to the federal qovernment each five years for the life of a bond issue.
Budqeting yearly for these e�cpenses is good fiscal policy as it allows the Cfty to set aside the money needed for
rebate to the federal govemment.
DISADVANTAQE8 IF APPROVED:
None.
To be in compliance with the law, the City must set these funds aside in a Aqency Account and rebat�eE�f�s�+
arbitrage interest earninqs to the federal qovernment at specified times. `lu�
2 � 1990
BU�►t�c; �ir'��iVe
DI8ADVANTAOE3 IF NOT APPROVED:
Nonconformance to the law can lead to loss of tax exemption on Citp bond issues. This is a verp serious consequence
for the City�s hiqh bond rating.
Also cash penalties could be assessed. RECEIVED �ouncil Research Cer�te.�
,!t!L�01990 �u� og�so
TOTAL AMOUNT OF TRANSACTION = ��5.13�.99 C08T/REVENUE BUDOETED(CIRCLE ONE� YES NO
FUNDINO SOUf�E Interest eamings in debt service accounts ACTIVITY NUMBER �ds %0,963 & 260
FlNANqALINFOFMMTION:(EXPW1� Th1S resolution establishes a budget. The financinq source is interest eamings which are
available in the debt service accounts.
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NOTE: COMPI.ETE DIRECTIONS ARE INCLUDED IN THE CiREEN SHEET INSTRUCTIONAL
MANUAL AVAILABLE IN THE PURCHASING OFFICE(PHONE NO.298-4225).
ROUTING ORDER:
Below are preferred routings for the�ve most frequent types of documents:
CONTRACTS (assumes authorized COUNCIL RESOLUTION (Amend, Bdgts./
budget exists) Accept. Grants)
1. Outside Agency 1. Department Director
2. Initiating Department 2. Budget Director
3. City Attorney 3. Ciry Attomey
4. Mayor . 4. MayoNAssistant
5. Finance 8�Mgmt Svcs. Director, , 5. Ciry Council
6. Finance Accounting 6. Chief AccountaM, Fin &Mgmt Svcs.
ADMINISTRATIVE ORDER (Budget COUNCIL RESOLUTION (ell othere)
Revision) and ORDINANCE
1. Activfty Manager , 1: InitiaUng DepartmeM Dtrector
2. DepanmeM Accountant' � - 2. Ciry Attomey
3. DepartmeM Director . . 3. MayoNAssistant
4. Budget Director 4. City Council
5. Gty Clerk
6. Chief Axountant, Fin 8�Mgmt Svcs.
ADMINISTRATIVE ORDERS (all others)
1. Initiating Department
2. City Attorney
3. Mayor/Assistant
4. Cfty Clerk
TOTAL NUMBER OF SIGNATURE PAGES
Indicate the#of pages on which signatures are required and paperclip
each of these a es.
ACTION REQUESTED
Describe what the project/request seeks to accomplish in either chronologi-
cal order or order of importance,whichever is most appropriate for the
issue. Do not write complete sentences. Begin each kem in your list with
a verb.
RECOMMENDATIONS
Complete if the issue in question has been presented before any body, public
or private.
SUPPORTS WHICH COUNCIL OBJECTIVE?
Indicate which Council objective(s)your projecUrequest supports by listing
the key word(s)(HOUSING, RECREATION, NEIOHBORHOODS, ECONOMIC DEVELOPMENT,
BUDGET, SEWER SEPARATION). (SEE COMPLETE LIST IN INSTRUCTIONAL MANUAL.)
COUNCIL tAMMITTEFJRESEARCH REPORT-OPTIONAL AS REQUESTED BY COUNCIL
INITIATING PROBLEM, ISSUE,OPPORTUNI7Y
Explain the situation or conditions that created a need for your project
or request.
ADVANTAGES IF APPHOVED
_indicate whether this is simply an annual budget procedure required by law/
charter or whether there are specific wa in which the Ciry of Saint Paul
and its citizens will benefit from this pro�action.
DISADVANTAGES IF APPROVED �
What negative effects or major changes to existing or past processes might
this project/request produce if it is pasaed(e.g.,traffic delays, noise,
tax increases or assessments)7 To Whom?When?For how long?
DISADVANTAGES IF NOT APPAOVED
What will be the negative consequences if the promised action is not
epproved? Inability to deliver service? Continued high t�affic, noise,
accident rete? Loss of revenue?
FINANCIAL IMPACT
Although you must tailor the information you provide here to the issue you
are addr�sing, in yeneral you must answer two questions: How much is it
�ing to cost�Who is gang to pay7