CC 03-29-1993 - Laserfiche WebLink

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. . . Arden Hills Council 11 March 29, 1993 MOTION: Malone moved, seconded by Hicks, to adopt Resolution No. 93-21 Ordering Preparation of Plans and Specifications and Solicitation of Competitive Bids for the Repair, Refurbishing and Repainting of the Fernwood Avenue Water Tower. Motion carried unanimously (5-0). FINANCING PLAN FOR WATER TOWER FUND Administrator Person distributed to Council a memorandum and recommendation from City Accountant Post regarding the development of a financing plan to fund the north water tower maintenance project, Post's memo recalled that in 1988 the Permanent Improvement Revolving Fund (PIR) provided funding for the $800,000 improvement project to construct the south water tower. Post's recommendation called for consolidating the remaining $136,035 obligation from the 1988 construction of the south water tower with the $300,775 obligation for the north water tower maintenance project to arrive at a total principal obligation of $468,870 in the Permanent Improvement Revolving Fund (PIR). Post explained that the financing arrangement he has recommended assumes a 6% interest rate with payments made quarterly from the water Fund, commencing with the third quarter of 1993. Under his recommendation, both obligations would be satisfied by June 30, 2002. Councilmember Malone and Post discussed the matter of interest rate, Post stated that he used a 6% interest rate in his calculations because that is the approximate rate the City would face if borrowing the funds through other sources. Malone expressed concern that establishing a 6% interest rate would be fair in today's market, but perhaps would result in "lost opportunity" toward the end of the term. He asked if it would be possible to establish a floating rate, perhaps the prime rate plus three. Post said that would be workable. MOTION: Malone moved, seconded by Probst, to ratify the City Accountant's financing plan for the north water tower project, whereby $300,715 is to be borrowed from the PIR Fund and consolidated with the remaining obligation from the south water tower project. The obligation is to be repaid in quarterly payments to the PIR Fund from the Water Fund at an interest rate of prime rate plus three (rate to be amended annually). Motion carried unanimously (5-0).