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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/15/2005 - SECOND READING OF ORDINANCE NO. 027, 2005, APPROPR ITEM NUMBER: 8 AGENDA ITEM SUMMARY DATE: March 15, 2005 FORT COLLINS CITY COUNCIL STAFF: Michael B. Smith Terri Bryant Brian Janonis Chuck Seest SUBJECT Second Reading of Ordinance No. 027, 2005, Appropriating Bond Proceeds in the Water Fund. RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. EXECUTIVE SUMMARY A $4,150,781.22 non-interest bearing bond was issued to the City of Fort Collins Water Utility Enterprise to acquire from the North Poudre Irrigation Company (NPIC) the property and rights it owns that were necessary to proceed with the permitting and development of the Halligan Reservoir Enlargement Project, however, no appropriation was done at that time. The transfer and sale of the property to the City of Fort Collins closed on January 22, 2004. Because the debt consists of a non-interest bearing bond, the value of the investment in the property is calculated at the net present value of the payment streams required in the bond obligation, which results in an appropriation for $2,476,446.24 in constructive bond proceeds. The City will commit to the annual payments, which includes the principal and the interest as imputed, for the next 27 years. The Water Utility will pay the debt primarily from development fees paid to the City. This Ordinance, which was unanimously adopted on First Reading on March 1, 2005, appropriates the constructive bond proceeds to the Halligan Project. ORDINANCE NO. 027, 2005 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING BOND PROCEEDS IN THE WATER FUND WHEREAS,by adopting Resolution 2003-121, the Council approved the option to proceed with the development of the Halligan Reservoir Enlargement Project; and WHEREAS, the City of Fort Collins Water Fund is estimated to have a $87,200,000 fund balance from prior year reserves at the end of 2004; and WHEREAS, $2,476,446 of such funds have not been committed to or appropriated for any other use and are available for expenditure of the bond proceeds received in 2004 in conjunction with the exercise of the option to proceed with the enlargement of the Halligan Reservoir; 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 Water Fund , the amount of TWO MILLION FOUR HUNDRED SEVENTY SIX THOUSAND FOUR HUNDRED FORTY SIX DOLLARS($2,476,446)for the Halligan Reservoir Enlargement Project. Introduced, considered favorably on first reading, and ordered published this 1st day of March, A.D. 2005, and to be presented for final passage on the 15th day of March, A.D. 2005. Mayor ATTEST: City Clerk Passed and adopted on final reading on the 15th day of March, A.D. 2005. Mayor ATTEST: City Clerk ITEM NUMBER: 11 AGENDA ITEM SUMMARY DATE: March 1, 2005 FORT COLLINS CITY COUNCIL STAFF: Michael B. Smith Terri Bryant Brian Janonis , Chuck Seest SUBJECT First Reading of Ordinance No. 027, 2005, Appropriating Bond Proceeds in the Water Fund. RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. FINANCIAL IMPACT Through the adoption of Res o ' 203 1; it -approved exercising the City's N; . Option from the North Poudr igati Comp y :" < C' roceed with the development of the Halligan Reservoir enlarg ent pr ect. e oard of e Water Utility Enterprise of the City of Fort Collins authorizedissuanee o non-in st bearing water revenue bond ("Bond") to secure the payment obligations. The Bond is a 27-year, $4,150,781.22, non-interest bearing bond. The City must pay annual payments to NPIC for the next 20 years in the amount of$188,223.51 and annual payments of an average amount of$55,229.84 for the last 7 years of the bond. The value of the series of payments in today's dollars (net present value) is $2,476,446.24. This is also the value of the asset and long-term obligation that was placed on the Water Utilities books in 2004. EXECUTIVE SUMMARY A $4,150,781.22 non-interest be bo as ' t Ci of Fort Collins Water Utility Enterprise to acquire from the .i orth q, re I on o an} (NPIC) the property and rights it owns that were necessary procee y with e ittin nd development of the Halligan Reservoir Enlargement Projec , o e _, pr riation s done at that time. The transfer and sale of the property to the City of Fort Collins closed on January 22, 2004. Because the debt consists of a non-interest bearing bond, the value of the investment in the property is calculated at the net present value of the payment streams required in the bond obligation, which results in an appropriation for $2,476,446.24 in constructive bond proceeds. The City will commit to the annual payments, which includes the principal and the interest as imputed, for the next 27 years. A payment schedule is attached. The Water Utility will pay the debt primarily from development fees paid to the City. March 1, 2005 -2- Item No. 11 This Ordinance appropriates the constructive bond proceeds to the Halligan Project. ATTACHMENTS 1. Payment schedule for Halli Bon -T.