Minutes 06/14/2011 - Laserfiche WebLink

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June 14. 2011 11 - 235 - Adoption of an ordinance to de-obligate $56,964 of unexpended appropriation authority in closed Public Utility Capital Improvement Program (PUCIP) projects, to reprogram $265,680 of revenue and appropriation authority in various active and closed PUCIP projects, to reprogram $13,724,462 of bond proceeds to cover expenses and obligations in active PUCIP projects, to appropriate $4,183,511 of interest earnings from bond proceeds and $1,832,720 of Series 2010 Bond Proceeds to various PUCIP projects, and to appropriate $62,126.40 of Cost of Issuance funds related to the Series 2010 General Obligation Bonds for bond counsel fees, advisory fees and other related costs. Vision Principle: Thriving Neighborhoods and a Sense of Community. Background: . Appropriation authority for CIP projects is made on an annual basis but the CIP is a multi-year fund. CIP Projects may span two to five years or more. . Variances may occur between authorized contract price, actual final contract price, and budgeted amounts for projects in the CIP. These differences result in variances between budgeted and actual expenditures but only to the extent that actual is less than budgeted, not vice-versa. . Projects and appropriation authority were approved by City Council for FY2008 and FY2009; however, the City did not issue bonds in those years largely as a result of economic conditions caused by the Great Recession. As a result of the delay and changes in project funding priorities, funding sources do not match one-for-one with certain approved projects. . Project priorities changed after adoption of the CIP in subsequent years, which has created the need to reallocate funding resources. For example, receipt of ARRA grant funds for the Prentis Park project caused us to construct and complete the entire project at one time even though it was initially planned to occur over several years in the CIP. Discussion: . De-obligating unexpended appropriation authority (example unexpended bond proceeds in closed projects) will help fund existing completed projects waiting to be closed in the financial system. Further, the action will also make for simplified financial reporting. . Reprogramming revenue and appropriation authority will fund completed projects and projects under construction where the funding source was unrealized. . Reprogramming of available bond proceeds and unallocated bond funds will fund projects with revenue shortfalls. Again, the reprogramming is required to properly match revenues with expenses; no additional appropriation authority is needed or requested. . Interest earned on bonds issued for CIP projects would be utilized to fund shortfalls in completed and active projects. The appropriate use of these interest earnings is to fund CIP projects. . The Cost of Issuance allocated is $62,126.40 to the Public Utility Fund. . Bond proceeds are invested with the Virginia State Non-Arbitrage Program account and are usually drawn-down on a quarterly basis as expenditures are made. . Future bond issues will replenish reprogrammed revenues as result of the appropriations of this ordinance to fund remaining approved projects in the CIP that are planned for FY12 through FY16. Financial impact: . No additional funding required. Recommended Action: . Adoption of the ordinance. Vision Principle: Thriving Neighborhoods and a Sense of Community.