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<br /> . <br /> . Arden Hills CouIl:::il 11 Mar-ch 29, 1993 <br /> MOTION: Malone moved, seconded by Hicks, to adopt Resolution <br /> No, 93-21 Ordering Preparation of Plans and <br /> Specifications and Solicitation of Competitive Bids for <br /> the Repair, Refurbishing and Repainting of the Fernwood <br /> Avenue Water Tower. Motion carried unanimously (5-0). <br /> FINANCING PLAN FOR <br /> WATER TOWER FUND <br /> Administrator Person distributed to Council a memorandum and <br /> recommendation from City Accountant Post regarding the <br /> development of a financing plan to fund the north water <br /> tower- maintenance project, <br /> Post's memo recalled that in 1988 the Permanent Improvement <br /> Revolving Fund (PIR) provided funding for the $800,000 <br /> improvement project to construct the south water tower. <br /> Post's recommendation called for consolidating the remaining <br /> $136,035 obligation from the 1988 construction of the south <br /> water tower with the $300,775 obligation for the north water <br /> tower maintenance project to arrive at a total principal <br /> obligation of $468,870 in the Permanent Improvement <br /> . Revolving Fund (PIR), Post explained that the financing <br /> arrangement he has recommended assumes a 6% interest rate <br /> with payments made quarterly from the Water Fund, commencing <br /> with the third quarter of 1993. Under his recommendation, <br /> both obligations would be satisfied by June 30, 2002. <br /> Councilmember Malone and Post discussed the matter of <br /> interest rate, Post stated that he used a 6% interest rate <br /> in his calculations because that is the approximate rate the <br /> City would face if borrowing the funds through other <br /> sources. <br /> Malone expressed concern that establishing a 6% interest <br /> rate would be fair in today's market, but perhaps would <br /> result in "lost opportunity" toward the end of the term. He <br /> asked '~ '. would be possible to establish a f 1 oa,t in; rate, <br /> 1 " 1 '. <br /> perhaps the prime rate plus three. Post said that would be <br /> workable, <br /> MOTION: Ma.lone moved I seconded by Probst, to ratify the City <br /> Accountant's financing plan for the north water tower <br /> project, whereby $300,775 is to be borrowed from the <br /> PIR Fund and consolidated with the remaining obligation <br /> from the south water tower project, The obligation is <br /> to be repaid in quarterly payments to the PIR Fund from <br /> the Hater Fund at an interest rate of prime rate plus <br /> . three (rate to be amended annually), Motion carried <br /> unanimously (5-0). <br />