Previous City Manager IssueCity of Kalispell
Yost office Box 1997 - Kalispell, Montana 59903-1997 - Telephone (406) 758-7000 Fax - (406) 758-7758
REPORT TO: Honorable Mayor and City Council
FROM: James H. Patrick, City Manager
SUBJECT: Chris Kukulski PERS Payment Request
MEETING DATE: December 20, 2004
BACKGROUND: Council received a proposal from Mr. Kukulski that would equate to
loaning him approximately $35,000 (due to late payment penalties), by paying the Montana
Public Employee Retirement System (M PERS) for a portion of his retirement account. He
proposes to repay the City over a period of 48 months.
The City Auditors (Denning & Downey) have been asked their option of this course of action.
They are not in favor of this course of action. They feel that this is not a proper use of tax
payer's money and there is no provision for collateral or a way to collect should he relocate.
Attached please find an amortization schedule for repaying this loan should Council take this
course of action. This schedule is based on 48 months at an 8% interest rate. This rate takes into
account the interest the City would loose in a hank account as well as an adjustment for inflation
and real dollars in four years and lost opportunity costs.
There is no budget authority for the City of Kalispell to write a check in this amount to PERS.
Should Council wish to proceed, there would need to be a public hearing and budget amendment.
The Finance Director has spoken with Mr. Kukulski and suggested that he use the money he
contributed from ICMA as the City of Kalispell's contribution and PERS would then allow him
up to five years to make his payments for his match. This seems to be a better solution for all
involved.
RECOMMENDATION: The requested loan is not fiscally prudent for the City to consider
and might be a breach of the City's fiduciary responsibilities to its taxpayers.
FISCAL EFFECTS: Encumbering up to $35,000 in an uncollateralized loan for 48 months.
ALTERNATIVES: As suggested by the City Council.
espectfu fitted.
arMes H. Parzcku�
City Manager
Report complied: December 16, 2004
FIRS i- PAY'MEIN T [SATE
01-Jan-05
PRINCIPAL BORROWED
$35.000
TERM IN aIMONIHS - 4 yeah
48
BEGINNNING INTEREST RATE -8%
8.0000%
PAYMENT
$854A5
AMORTIZATION TABLE
PAYNIPNT
PAYMENT
CURRENT
INTEREST
PRINCIPAL,
PRINCIPAL,
NUMBER
DATE
RATE
PAYMENT
PORTION
PORTION
BALANCE
t
DI-Jan-05
8.00%
S854.45
$233.33
$621.12
$34,378.88
2
01-1°cb-05
8.00%
S854.45
$229,19
$62526
$33.753,62
3
01 _Mar-05
8.00%
$854.45
$225.02
$629.43
$33,124.19
4
01-Apr-05
8.00%
S854.45
$220.83
$633.62
S32,490.57
5
01 _May-05
8.00%
$854A5
$216.60
S637.85
$31,852.72
6
01-Jun-05
8.00%
$954,45
$212.35
$642,10
$31.210.62
7
01-Jul-05
8.006/
$854.45
$208.07
S646.38
S30.564-24
8
Ol Aug-05
8.00%
$954.45
$203.76
$650.69
S29 913.55
9
01-StV-05
8.00%
$854.45
$199.42
$655.03
S'29,25N.52
10
0 -Dot-05
8,00
$854.45
$195.06
S659.40
S28,599.12
11
01-Nov-05
8.00%
$854.45
S190.66
$663.79
S27.935.33
12
01-Dec-05
8.00%
$854.45
$186,24
$668,22
$27.267.12
13
014<311-00
8.00%
$854A5
$181.78
S672.67
$26-594.44
14
01-Feb-W
8.W/
S854A5
S177.30
S677A0
$25917.29
15
01 ,Mar-06
8.001/0
$854.45
$172.78
$68[.67
$25,235.62
16
01-Apr-06
8.00%
S854.45
$168.24
5686.21
S24,549.40
17
01-May-06
8.00%
$854,45
$163.66
S690.79
$2---3,858.61
18
01-Jun-06
8.00%
$854.45
$159,00
S695.39
$23,163.22
19
01-Ju1-06
8.00%
$854.45
$154.42
$700.03
$22-463.19
20
01-Aug-06
8.00%
$854.45
$149.75
$'704.70
$21,758.49
21
01-Sep-06
8.00°/
$854.45
$145.06
S709.40
S21,049.09
22
01-Oct-06
8.W
$854.45
$14033
5714.12
$20,334.97
23
01-Nov-(*
8.000%
$854.45
$135.57
$718,89
$19,616.08
24
01-Dcc-06
8.00%
$854.45
$130.77
$723,68
$18,892,40
25
01-Jan-07
8.00%
$854,45
$125,95
$728.50
$18,163.90
26
01-Feb-07
8.00%
$854.45
$121.09
$733.36
S17430.54
27
01-Mar-07
8.00%
$854.45
$116,20
$738.25
St6.692.29
28
01-Apr-07
8.00%
$854.45
$11128
$743.17
S15,949.'12
29
01-May-07
8.00%
$854.45
S106.33
$748.t2
S15,201.00
30
01-Jnn-07
8.00%
S854.45
$101.34
$753.11
SMA47S9
31
ol-Jail-07
8.001/6
$954.45
S96.32
$758.13
S13 689.75
32
01-Anr 07
S.00%
$854.45
S91.27
S763.19
$12,926J7
33
01-Sep--07
8.00%
$854.45
S86.18
$768.28
S12,158.29
34
01-Oct-07
8.00%
$854,45
S81.06
$773,40
S11,384.89
35
01-Nov-07
8.00%
S854.45
$75,90
$778.55
S10,606.34
36
01-Dcc-07
8.00%
$854.45
S70.71
$79-1.74
S9,822.60
37
01-Jan-08
8.(X)%
S854.45
$65,48
S788.97
$9033,63
38
01-Feb-ON
8.00%
$854,45
$60,22
$794.23
$8.239.40
39
Ol-male 08
K00%
$854.45
$54.93
$799.52
$7439,88
40
01-Ap 08
8.00%
$854.45
S49.60
S804.85
56635.02
41
01 May -OS
8.009/a
S854.45
S44.23
$820.22
$5,824.81
42
01-Jun-08
8.00%
S854.45
S38.83
$815.62
$5.009.19
43
01-Jul-08
8.00%
$854.45
$33.39
$821.06
S4.I88.13
44
01-Aug-08
8.001/6
$854.45
$27.92
$826.53
$3 3€i1.60
45
01-Sep-08
S.W/o
S854.45
$22.41
$832.04
$2,529.55
46
01-(act-08
8.00%
$854.45
$16.86
$837.59
S1,691.97
47
01-Nov-08
8.00%
$854.45
$ I I.28
$843.17
$848.79
48
Of-Dec-08
8.00%
$854.45
$566
$848.79
($0.00)