1. Financing - Street Maintenance Building{{ }
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Post Office Box 1997 - Kalil e..1. Montana 59903-1 7 - Telephone 7 8R770 Fax(406)758-7758
Date: November 29, 2005
`o. Mayor Kennedy and City Council Members
Jim Patrick, City Manager
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From: Amy Robertson,Director y
RE: Financing for Street Maintenance Building
We have budgeted $180,000 in the Special Street Maintenance budget for the
construction of a Street building at the shop complex. The bids have been received and
are within budget. The adopted budget identifies Board of Investments financing over 10
years, however, I would like to suggest an altemative. Revenue from street assessments
s now projected to be $ 5,000 more annually than was budgeted. I would recommend
using cash on hand o $90,000 and a loan o $90,000 from the Community Development
fund. The CD fund has approximately $900,000 invested in STIP. STIP is the Board of
Investments so it doesn't make sense to go thru a loan application when we could borrow
intemally. I believe we can pay this loan off much sooner than 10 years. We will pay
interest at the sarnc rate as S — currently a %. The Community Development money
s not appropriated for this use currently. It is being used for operation of the Community
Development e ar m nt. An appropriation is not needed for are internal loan.
Atcr..aty, a STIP loan would need to have the pledge of the General Fund as the
Special .Assessment fund does not have the statutory ability to borrow. We would prefer
not to use our general obligation debt capacity on this loan,
Recommendation: Motion from Council to fund the construction of the Street
Maintenance building internally with ids on hand and an advance from. the Community
Development mod.