HomeMy WebLinkAboutRes 05-68 Loan for Construction of City Corp Yard1
CITY OF PALM DESERT
FINANCE DEPARTMENT
STAFF REPORT
REQUEST: CONSIDERATION OF A LOAN BETWEEN THE CITY'S
GENERAL FUND AND THE NEW CONSTRUCTION TAX FUND
DATE: August 25, 2005
CONTENTS: Resolution No. 05 -
Recommendation:
By Minute Motion:
Waive further reading and adopt Resolution No. 05- 68, approving a loan from
the General Fund to the New Construction Tax Fund.
Backaround:
At the June 23, 2005 City Council meeting staff received approval to appropriate $6
million for the new Corporation Yard. In order to provide the additional funds needed in
the New Construction Tax Fund to cover the additional cost, it is necessary to loan
approximately $3.4 million for the next five years from the General Fund to the New
Construction Tax fund.
Attached is a resolution authorizing a loan to the New Construction Tax at the State
pool funds LAIF rate. The City Attorney and City Manager approved loaning the
necessary funds to cover the increased construction costs. Staff believes that it will
take five to ten years to repay the loan to the General Fund (dependent upon timing of
build -out for the north sphere).
Staff recommends approval of the resolution authorizing the loan to the New
Construction Tax Fund.
Paul S. Gibson, Director of Finance
Approval:
Carlos L. Ortega/,City Manager/RDA Executive Director
RESOLUTION NO. 05-68
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT,
CALIFORNIA, AUTHORIZING A LOAN FROM THE GENERAL FUND TO THE NEW
CONSTRUCTION TAX FUND FOR THE CONSTRUCTION OF THE CITY
CORPORATION YARD
WHEREAS, the City Council has authorized the construction of new corporation yard facilities in the
amount of $6,000,000 to accommodate projected increase demands on City services caused by the City's growth;
and
WHEREAS, the City maintains a "New Construction Tax Fund" in which the City deposits the proceeds
from its New Construction Tax, a tax imposed to fund City facilities required to accommodate new construction;
and
WHEREAS, the current balance within the New Construction Tax Fund is insufficient to fund the necessary
improvements to the City corporation yard facilities; and
WHEREAS, the City Council has determined it is desirable to proceed at this time with improvements to the
corporation yard and to loan the necessary funds from the general fund to the New Construction Tax Fund, subject to
repayment, as additional new construction taxes are collected.
NOW, THEREFORE, the City Council of the City of Palm Desert, California, DOES HEREBY
DETERMINE, ORDER AND RESOLVE, as follows:
on the
The City Council hereby authorizes a loan from the general fund to the New Construction
Tax Fund in the amount of $3,425,726.00, subject to simple interest on the unpaid principal
balance thereof, computed at a rate per annum equal to the average monthly rate earned by
the City from its investments in the "Local Agency Investment Fund" from the date of
payment to the date of repayment. The loan will be repaid to the general fund as additional
New Construction Taxes are collected. Payments will be applied to interest first.
PASSED, APPROVED and ADOPTED at the regular meeting of the Palm Desert City Council held
day of , 2005 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST: BUFORD CRITES, MAYOR
RACHELLE D. KLASSEN, CITY CLERK
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