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Sponsored by: Oates
Postponed to: June 27, 2011
CITY OF SEWARD, ALASKA
RESOLUTION 2011 -049
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, APPROPRIATING FUNDS IN AN AMOUNT UP TO $1,500,000
FOR PURPOSES OF PAYING COSTS ASSOCIATED WITH THE
PROPOSED SEWARD COMMUNITY LIBRARY MUSEUM
WHEREAS, the City of Seward (the "City ") and the Seward Community Library Museum
Building Committee (the "Committee ") have been working since 2003 to secure funding for the
design and construction of a new community library museum (the "Project "); and
WHEREAS, the City and Committee have secured $5.1 million in State of Alaska and
private foundation funding for the Project, and $1.1 million in grant applications are pending; and
WHEREAS, the City voters approved the issuance of a general obligation bond (the "Bond ")
in an amount not to exceed $5 million to finance capital costs of the Project; and
WHEREAS, the City has determined that it is in the best interests of the City to issue the
Bond in an aggregate amount not to exceed $3,700,000; and
WHEREAS, the City has estimated that it will need an additional amount to pay for costs of
the Project, and the City Council desires to appropriate an amount not -to- exceed $1.5 million for the
project; and
WHEREAS, the estimated undesignated fund balance in the General Fund is approximately
$3.5 million prior to this appropriation, and the City's Fund Balance Policy bond requires
undesignated fund balance between $2.8 million and $5.7 million, representing between three and
six months operating costs; and
WHEREAS, this appropriation will reduce the undesignated fund balance in the General
Fund to $2.0 million which is 29% below the minimum required undesignated fund balance
threshold according to the City's Fund Balance Policy.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA that:
Section 1. An amount up to $1,500,000 is hereby appropriated from the General Fund
undesignated reserves account no. 101- 0000 - 3071 -0 to the Library \Museum Capital Project account
no. 626- 6262 -5920 to be used for payment of Project costs.
is
i.. Section 2. This resolution shall take affect immediately upon its adoption.
CITY OF SEWARD, ALASKA
RESOLUTION 2011 -049
aid
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 27th
day of June, 2011.
THE CITY lAttn ALASKA
Willard E. Dunham, Mayor
AYES: Valdatta, Casagranda
NOES: Smith, Keil, Shafer, Dunham
ABSENT: Bardarson
ABSTAIN: None
ATTEST:
FAILED
Johanna Kinney, CMC
City Clerk
(City Seal)
j
Council Agenda Statement e.of SFs2,
9
Meeting Date: June 13, 2011
From: Phillip Oates, City Manager
Agenda Item: Appropriating Funds NTE $1.5 million for Library/Museum Project Costs
BACKGROUND & JUSTIFICATION:
The Seward City Council has voted to issue general obligation bonds in an amount not to exceed
$3.7 million for the purpose of constructing a new library /museum facility. In an effort to limit the
amount of debt issued for the project, the Council has expressed an interest in utilizing some of the
General Fund's Undesignated Fund Balance to reduce the required amount of capital financing.
The General Fund Undesignated Fund Balance (after setting aside $100,000 in costs associated with
the Borough's costs of implementing an increase in sales tax on alcohol and tobacco products) is
approximately $3.4 million. The City's fund balance policy requires that undesignated fund balance
be equal to between three and six months expenditures and transfers -out which is between $2.8
million and $5.7 million. The Council can utilize up to $600,000 of undesignated fund balance and
stay within the current policy bands. However, the Council has asked for the flexibility to utilize an
amount not to exceed $1.5 million of undesignated fund balance for this project. The actual amount
of funding needed will depend on a number of factors including the ultimate construction costs of the
project, the level of fundraising accomplished by the Seward Library Museum Building Committee,
and the magnitude of any unanticipated project costs.
INTENT:
To appropriate an amount not -to- exceed $1.5 million to pay costs associated with the proposed
library /museum project.
CONSISTENCY CHECKLIST: Where applicable, this agenda statement is consistent with the
Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Council
Rules of Procedures or Other Plans or Policies:
FISCAL NOTE:
This appropriation will reduce the City's undesignated fund balance from approximately $3.4 million
to $1.9 million, which is $900,000 lower than the floor of the City's current fund balance policy, and
$2.35 million lower than the mid -point of the fund balance policy "band ". The City's current level
of undesignated fund balance is largely the result of one -time EXXON Valdez Oil Spill Settlement
Proceeds of nearly $2 million received in 2009/2010, rather than the result of prudent fiscal
management. The finance director has strong concerns about the reduction in undesignated fund
balance given the poor condition of some City enterprise funds, the lack of funding available for
capital repair and replacement, current financial challenges associated with the healthcare system, the
need to match grants to leverage funding for harbor and other critical infrastructure, taxpayer fatigue
associated with increases in fees and taxes, and the need to demonstrate strong positive fund balance
to secure bond financing for the library/museum and other City projects.
Approved by Finance Department: ,cif
4A b
CITY OF SEWARD
RESOLUTION 2011 -
ATTORNEY REVIEW: Yes X No
RECOMMENDATION:
Council adopt Resolution 2011 - , a ppropriating an amount not to exceed $1.5 million for the
purposes of paying costs associated with the proposed library /museum project.
t i e \ ,