RES 2012-14 REPAYMENT OF SSWM FEES TO STREET FUNDRESOLUTION NO. 2012 -14
A RESOLUTION of the City Council of the City of Bainbridge
Island, Washington, providing for repayment of Storm and
Surface Water Management (SSWM) fees from the SSWM Fund
to the Streets Fund, with scheduled repayment no later than
December 31, 2013.
WHEREAS, the City has by Ordinance No. 2012 -16 pertaining to storm and surface water rates
for City streets and roads, state highway right -of -way and private roads, established that City
streets and roads shall be exempt from storm and surface water fees retroactive to January 1,
2008; and
WHEREAS, the City had in previous years under Ordinance Nos. 2007 -39 and 2010 -34 made
storm and surface water fee payments from the Street Fund to the SSWM Fund; and
WHEREAS, under the actions taken by Ordinance No. 2012 -16, such fee payments made for
time periods on or after January 1, 2008, totaling $1,374,684, must be refunded to the Street
Fund from the SSWM Fund; and
WHEREAS, the City Council has determined that the SSWM Fund should refund payments to
the Street Fund no later than the end of 2013; and
WHEREAS, refunding payments from the SSWM Fund to the Street Fund in 2013 will in effect
create a short-term, interfund loan in an amount not to exceed $1,374,684 from the Street Fund
of the City with a due date no later than December 31, 2013; and
WHEREAS, the City has by Resolution No. 2008 -14 sought to "establish conditions for the use
of debt and to create procedures and policies that minimize the City's debt service and issuance
costs, retain the highest practical credit rating, and maintain full and complete financial
disclosure and reporting;" and
WHEREAS, the City has also by Resolution No. 2008 -14 pertaining to "Purposes and Uses of
Debt" established Policy 15 - Short -term Borrowing which states; "Except for LIDs and
similar situations, the use of short -term borrowing, such as bond anticipation notes (BANs) and
tax - exempt commercial paper will be undertaken only if the transaction costs plus interest of the
debt are less than the cost of an interfund loan, or available cash is insufficient to meet working
capital requirements;" and
WHEREAS, the 2008 GAAP BARS Manual, Volume 1, part 3, chapter 4, page 1, states that
"the legislative body of a municipality must, by ordinance or resolution, approve all interfund
loans, and provide in the authorization a planned schedule of repayment of the loan principal as
well as setting a reasonable rate of interest (based on the external rate available to the
municipality) to be paid to the lending fund;" and
WHEREAS,
the City has determined
that the
combination
of transaction costs plus
interest for
the City to issue commercial paper or
a note to
a third party
will exceed the costs to
the General
Fund of an interfund loan, primarily because an interfund loan entails no third -party transaction
costs; and
WHEREAS, the use of an interfund loan allows considerably greater flexibility and timeliness
than commercial paper or a note to a third -party lender, and thereby permits the City to reduce
the interest cost to the SSWM Fund by controlling repayments; and
WHEREAS, the Street Fund will be benefited by the interest rates of the interfund loan; now,
therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BAINBRIDGE
NLANII_ WAM4INGTON A.0 F"1.1.0WC•
Section 1. Scheduled Repayment of Storm and Surface Water Management Fees to Street
Fund. The Director of Finance shall cause the repayment of Storm and Surface Water fees paid
by the Street Fund to the SSWM Fund no later than December 31, 2013,
Section 2. Authorization of Loan. The City's Director of Finance is authorized and directed,
on the effective date of this resolution, to establish an interfund loan from the Street Fund to the
SSWM Fund in the amount of $1,374,684.
Section 3. Interest Payable to the Street Fund. Interest shall be computed monthly on the
amount outstanding on the basis of a 365 -day year for the actual number of days. The interfund
loan shall bear interest at a rate equal to the City's weighted average investment net earnings rate
for the preceding calendar month on investments in the Washington State Local Government
Investment Pool and the Kitsap County Local Government Investment Pool. The City Council
finds that the fixing of the interest rate as described in this Section 3 is reasonable and in the best
interest of the City, its ratepayers and its taxpayers.
Section 4. No Fees or Prepayment Penalties. Prepayments shall be permissible at the
discretion of the Director of Finance, and there shall be no fees or prepayment penalties on inter -
fund loans nor shall there be advance notice required for any prepayment.
Section 5. Reporting to City Council. The Director of Finance shall report quarterly to the
City Council on the status of the loan and repayments as part of other Financial reporting,
Section 6. Effective Date. This resolution shall be in full force and effect from and after its
approval by the City Council.
PASSED by the City Council this 19th day of December, 2012.
APPROVED by the Mayor this 19th day of December, 2012,
Debbi Lester, Mayor
ATTEST:
Rosalind D. Lassoff,
FILED WITH THE CITY CLERK: December 14, 2012
PASSED BY THE CITY COUNCIL: December 19, 2012
RESOLUTION NO. 2012 -14