HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/18/2003 - SECOND READING OF ORDINANCE NO. 147, 2003, APPROPR ITEM NUMBER: 8
AGENDA ITEM SUMMARY DATE: November 18, 2003
FORT COLLINS CITY COUNCIL STAFF: Alan Krcmarik
SUBJECT
Second Reading of Ordinance No. 147, 2003, Appropriating Prior Year Reserves in the
Wastewater Fund for Prepayment of Debt Service.
RECOMMENDATION
Staff recommends adoption of the Ordinance on Second Reading.
EXECUTIVE SUMMARY
Each year, the Finance Department reviews all of the City's debt instruments to determine if
there are opportunities to lower interest payments. This year, staff evaluated an opportunity to
save interest by prepaying debt service from reserves held in the Wastewater fund. In 1995, the
City of Fort Collins issued $13,800,000 of refunding bonds to lower annual costs of the
Wastewater fund. The bonds mature in 2005. Under the conditions of the bond ordinance, the
City may prepay the bonds that mature in 2004 and 2005 without any prepayment penalty. By
prepaying the bonds, the City can avoid $147,500 of interest costs on the bonds. Ordinance No.
148, 2003, was unanimously adopted on First Reading on November 4, 2003.
ORDINANCE NO. 147, 2003
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING PRIOR YEAR RESERVES
IN THE WASTEWATER FUND FOR PREPAYMENT OF DEBT SERVICE
WHEREAS, the City of Fort Collins Wastewater fund is projected to have $17,600,000 of fund
balance at the end of 2003; and
WHEREAS, $2,275,000 of such funds have not been committed to or appropriated for any other
use and are available for the prepayment of outstanding bonds; and
WHEREAS,Ordinance No. 2 of the Wastewater Utility Enterprises provides that the outstanding
2004 and 2005 bonds may be prepaid, without penalty, on December 1, 2003; and
WHEREAS, the Council of the City of Fort Collins finds that avoidance of future debt service
interest costs is prudent and in the best interest of the Wastewater Utility; and
WHEREAS, Article V, Section 9, of the Charter of the City of Fort Collins permits the City
Council to appropriate by ordinance at any time during the fiscal year such funds for expenditure as may
be available from reserves accumulated in prior years, notwithstanding that such reserves were not
previously appropriated.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS that there is hereby appropriated for expenditure from prior year reserves in the Wastewater
Fund the total sum of TWO MILLION TWO HUNDRED SEVENTY FIVE THOUSAND DOLLARS
($2,275,000)for payment the principal portion of debt service on the Series 1996 bonds maturing in 2004
and 2005.
Introduced,considered favorably on first reading,and ordered published this 4th day of November,
A.D. 2003, and to be presented for final passage on the 18th day of November, A.D. 2003.
Mayor
TTEST:
City Clerk
Passed and adopted on final reading this 18th day of November, A.D. 2003.
Mayor
ATTEST:
City Clerk
ITEM NUMBER: 21
AGENDA ITEM SUMMARY DATE: November4, 2003
FORT COLLINS CITY COUNCIL STAFF: Alan Krcmarik
SUBJECT
First Reading of Ordinance No. 147, 2003, Appropriating Prior Year Reserves in the Wastewater
Fund for Prepayment of Debt Service.
41'
RECOMMENDATION s
Staff recommends adoption of the Ordinance on First Reading.
FINANCIAL IMPACT
The Wastewater Fund is projected to have $17.6 million of fund balance at the end of 2003. The
interest rates on the Series 1996 bonds that mature in 2004 and 2005 carry interest rates of 5.0%.
Current market conditions limit the investment return on the fund balance to approximately
1.6%. By prepaying the bonds, the City will avoid over$147,$00 of net interest costs.
EXECUTIVE SUMMARY
Each year, the Finance Department reviews all of the City's debt instruments to determine if
there are opportunities to lower interest payments. This year, staff evaluated an opportunity to
save interest by prepaying debt service from reserves held in the Wastewater fund. In 1995, the
City of Fort Collins issued $13,800,000 of refunding bonds to lower annual costs of the
Wastewater fund. The bonds mature in 2005. Under the conditions of the bond ordinance, the
City may prepay the bonds tht"matre 2 and 2005 i# thQnt any prepayment penalty. By
prepaying the bonds, the City n avoid 5 ci interest�st's on the bonds.