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HomeMy WebLinkAbout5 Transfer of funds Agenda Item # � , itrr Memorandum To: Board of Directors From: Kim Szczurek, Finance & Accounting Manager Thru: Mary Chapman, Administrative Services Manager Peter Holzmeister, General Manager Date: July 14, 2006 CORRECTED MEMORANDUM Subject: TRANSFER OF FUNDS 1. HISTORY The Board approved a contract to Vulcan Construction for the installation of the 24" Brockway Transmission Pipeline on April 5, 2006 in the amount of$2,976,939. This project has been identified as eligible for facilities fees funding as it is expanding the capacity of the water system. At the time the contract was awarded, the Board had not determined the method for funding this project. As such, the contract payments are being made out of the Water General Fund. The payments for this project to date have totaled $1,042,097.90. Since the awarding of the contract to Vulcan, the Board has had several discussions in regards to funding this project with facilities fees, either on a cash basis or debt financed with the debt service paid from facilities fees. Since the Board has directed staff to proceed with pursuing long term financing which would include financing this project, I am now recommending that we temporarily move the contract payments for this project from the facilities fees fund until the long term financing funds are available at which time the facilities fees fund will be restored. If the expenditures are left in the Water General Fund, the estimated balance of that fund at July 31, 2006 will be approximately$(1,100,000). This may have an adverse effect on the District's ability to obtain financing. 2. RECOMMENDATION Staff is recommending that the Board authorize the temporary transfer of funds from the Water Facilities Fee Fund to the Water General Fund for the amounts paid to Vulcan Construction for the 24" Brockway Transmission Pipeline project up to an amount of$2,976,939. Staff is further directed to return the amount paid for this project out of facilities fees to the facilities fees fund upon receiving the loan proceeds. Agenda Item # TRUCKEE � . Public Utility District Memorandum To: Board of Directors From: Kim Szczurek, Finance & Accounting Manager Thru: Mary Chapman, Administrative Services Manager Peter Holzmeister, General Manager Date: July 14, 2006 Subject: TRANSFER OF FUNDS 1. HISTORY The Board approved a contract to Vulcan Construction for the installation of the 24" Brockway Transmission Pipeline on April 5, 2006 in the amount of $1,042,097.90. This project has been identified as eligible for facilities fees funding as it is expanding the capacity of the water system. At the time the contract was awarded, the Board had not determined the method for funding this project. As such, the contract payments are being made out of the Water General Fund. The payments for this project to date have totaled $1,042,097.90. Since the awarding of the contract to Vulcan, the Board has had several discussions in regards to funding this project with facilities fees, either on a cash basis or debt financed with the debt service paid from facilities fees. Since the Board has directed staff to proceed with pursuing long term financing which would include financing this project, I am now recommending that we temporarily move the contract payments for this project from the facilities fees fund until the long term financing funds are available at which time the facilities fees fund will be restored. If the expenditures are left in the Water General Fund, the estimated balance of that fund at July 31, 2006 will be approximately $(1,100,000). This may have an adverse effect on the District's ability to obtain financing. 2. RECOMMENDATION Staff is recommending that the Board authorize the temporary transfer of funds from the Water Facilities Fee Fund to the Water General Fund for the amounts paid to Vulcan Construction for the 24" Brockway Transmission Pipeline project up to an amount of $1,042,097.90. Staff is further directed to return the amount paid for this project out of facilities fees to the facilities fees fund upon receiving the loan proceeds.