TO: Mayor Bien-Willner and Town Council Members
FROM: Jill Keimach, Town Manager
Douglas Allen, CPA
DATE: March 12, 2020
DEPARTMENT: Finance
Staff Contact Douglas Allen
End
AGENDA TITLE:
Title
Consideration and Possible Adoption of Resolution 2020-06 Authorizing the Sale of Excise Tax Revenue Obligation Pursuant to a Purchase Agreement; Authorizing Agreements; Delegating Certain Authority; and Declaring an Emergency
Body
RECOMMENDATION:
Recommendation
Adopt Resolution 2020-06 Authorizing a Private Placement of Excise Tax Revenue Obligations
Background
SUMMARY STATEMENT:
The 2020 Budget and 2019 audit identify adequate revenues and cash for the Town to:
* Pay the entire PSPRS Unfunded Liability;
* Fund the Capital Improvement Plan;
* Continue status quo Town operations; and
* Maintain sufficient reserves per the Town's policy.
While the Town has sufficient cash in reserve, there is not sufficient capacity under the Town's Annual Expenditure Limitation ("AEL") to complete these activities in a single year. Consequently, the Town has been steadily navigating a multi-year plan to meet these goals.
A potential risk to the Town involves its obligation under the Five Star Development Agreement which requires the Town to pay monthly for all costs associated with the construction of the perimeter roads and then invoice Five Star for its portion of the costs. In the event some of the costs are disputed or reimbursement is delayed, the Town's payment would be under the AEL, therefore potentially restricting other anticipated expenditures. The expenditures at risk under this scenario include other CIP projects, the anticipated PSPRS unfunded liability payment, or other operating expenditures. By bonding to fund CIPs, including but not limited to street and drainage construction for Five Star, the risk to reaching and being restricted on other projects and/or high priority expenditures by the AEL is mitigated.
The Annual Expenditure Limit...
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