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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: 1 of 5 � 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 2 of 5 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 3 of 5 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 4 of 5 , � 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 � �'� � Finance Dire or Budget Di ector l�_c1✓ �, l,l�./L�.-dL,. �� �Vflr. SawQr S'�rvrcQ Fand ea Navs Absent Requested by Department of: imon o��wz z � Department of Finance and Management Services acca ee �'— ����"W et man �— _�_ � G� une • z son �— BY= -�— � 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. dw , a � . . . + 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