RES 2009-13 SHORT TERM BORROWING FROM THE WATER FUNDRESOLUTION NO,, :too -13
j A, RESOLUTION of the City Council of the' City of Bainbridge
Island, Washington, providing for short-term borrowing from the
Water Fund to the Serer Fund of the Consolidated Waterworks
Utility'for 200 9'.
WHEREAS; the City Of BainbridgeIsland, Washington the `CAY" 'intends to manage it fiscal
matters in a prudent manner; and
WHEREAS, the City has by ResolutionNo, 2008 = l 'sought tb - "establish conditions for the use
of debt and to create procedures arra policies that minimize the City's debt service and issuance
costs, retain the highest.. practical credit rating, arra maintain full and complete financial
di oios' r and reporting"; and
WHEREAS, the City has also by Resolution No. 2008-14 pertaining to "Purposes and Uses of
I ebe' established P y �- Elio t -ter Borrowing which states; `T xcel t for MDs and
similar' sitnati'or s',' the ' use of shori-ferm borrowing, such as bond .tido t o notes (BANS') and
tax-=exo.mpt commercial paper ill .be underta.ken only if the transaction' costs plus interest of the
debt are''less than the e st of an'inte'rfafidloam, or available cash is 'insufficient to meet working
capital requirements"; and
{ WHRFAS the City has reviewed the current financial -position and its cash flog analysis for
the fiscal year of 2009 for the Serer and Nater Funds of the Consolidated Waterworks Utility
and has 'determined that it would be prudent for the' Sewer Fund to engage in shorn -term
borrowing in 2009 of an amountr oot to exceed $31,000,,000 from the Water Fund within the
Consolidated Waterworks s Utility of the City;, wi
WH SAS, the use of an interfund loan -allows. considerably greater flexibility and timeliness ....
Y
than commercial paper or a note to a third -party leader, and thereby permits the City to reduce
the interest cost to the Sever Fuad by controlling the draws and prepayments from month to
month to ensure that the interest-bearing. balance is not substanti lly in excess of thAt mo th"
requirements; and F
'HAS, the City Council finds that it has exercised due regard for the maintefiance and
operation expense of the 'mater system and finds that the Water Fund revenues' and cash
balances are expected to be more than. sufficient to meet all of the needs . of the .mater Fund
through the loan period and has funds available to male the inter�fund 'loan authorized herein; and
WHEREAS, the Water Fund of the Consolidated. Waterworks Utility will he benefited by the,
interest rates of the interfund loam; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL of THE CITY OF BAINBRIDGE
ISLAND, WASHINGTON, AS FOLLOWS:
Section 1. Auth 0-rization of Loan. The City's Director of Finance is -authorized and directed,
on and after May 15, 2009, and from month to mon h thereafter until May.1. , 201 o, td cause the
City's .Sever Fund .to borrow cash from the: Water Fund of the .Consolid ted Waterw f s Unlit
in one or more draws, where the outstanding principal amount of the low hall :at no tifne exceed
$3,000500% and which may vary as determined by the said Director based 'on 'the Director's
analysis of the cash needs of the Sewer Fund from time to time between May 15, 2009 and the
scheduled final. repayment date in section 2. J.,µ
Section 2. Scheduled Repayment. The Director of Finance shall cause any and. all outstanding.
balance of the said interfund loan to be repaid to the Water Fund by the Sewer Fund within the
Consolidated Waterworks Utility on (and in no event later than) May 14, 2010, and this interfund
lending authorization shall terminate on that elate.
Section 3. Interest Payable to 'Yater Fund. Each draw shall hear interest at the interest rate
set forth in this section 3,, which shall accrue from the date of that Draw and be adjusted
monthly. Interest shall be computed monthly on the amounts outstanding on the basis of a 30 -
day year for, the: actual number of days. - Each Loan draw shall hear interest at an annual rate
equal to 25 basis -points, plus the higher of the monthly net earnings rate for the preceding
calendar month on investments in either a the Washington Mate Focal Government Investment
Fool, orb the Kitsap County focal Govemment Investment Fool. The City Council finds that
the fixing of the interest rate set forth herein is reasonable and in the hest interest of the City, its
ratepayers and its taxpayers,
Section 4. No Fees or Prepayment Penalties. Prepayments shall be pennissi le in the
discretion of the Director of Finance, and there shall be no fees or prepayment penalties on inter-
fund lows and, subject to the $3,000,000 ov rall principal limit on outstanding balance as stated
in Section 1, there shall be no advance notice required for any additional interfund draw or
prepayment. q. t
HACITY EXCHANGBRE L UTI I 1 00 APPROVED
RE-SOLUTIONS\RI s 009 1 SHORT `'ERM LOAN APPROVED ISS 1 09.i o
Section 5. Monthly Reporting to City Coun 1. The Director of Finance shall report monthly
to the Council's Finance and Personnel Committee, from May 20 0.9 thxe gh May 2.01. , the inter
fund loan reporting information shown on Exhibit A. to this Resolution.
Section 6. Effective hate. This resolution shall be i fall force andfeet from and after its
approval by. the City Ceunbil until- the date stated in Section 2.
PAS.SED by the City Council this 13th day of May, 2009.
APPROVED by the Mayor this 14th day of May,2009.
Darlene Kordonwy, Mayor
ATTEST;
Rosalind I,' Lassff, CM, City Clerk
FILED WITH THE CITY CLERK: May , 2009
PASSED BY THE CITY COUNCIL: May 13, 2009
RESOLUTION NO. 2009-I3
14ACI 1XCHAN EIESOPUTI NS\20APPROVED
RESOL TI�V01{SHORTTF0RL ANAP yJ E1 1 0
.D
Exhibit A
Sample Forms of Ror ts, to Ci!l Council Finance -and Personnel Committee
Report of Interfund Loan Draws and RevMments