HomeMy WebLinkAbout06-22 RESOLUTION NO.
A RESOLUTION of the City of Port Angeles authorizing an
interfund loan from the Water Utility Fund to the Solid Waste
Fund.
WHEREAS, the City of Port Angeles maintains a Solid Waste Utility Fund, charged
with maintaining sanitary conditions within the City limits; and
WHEREAS, pursuant to the terms of the Solid Waste Processing Facility Development
and Management Services Agreement dated April 5, 2005, as amended (the "Services
Agreement"'), by and between the City and Waste Connections, Inc. ("Waste Connections"),
the City has paid Waste Connections a monthly fee which included operating costs and a capital
component relating to the construction of Solid Waste Utility facilities-, and
WHEREAS,the City's obligation under the:Services Agreement is scheduled to mature
on October 1, 2026; and
WHEREAS, the City is transitioning operations of the City's Transfer Station from
Waste Connections to the City and in connection with such transfer, it will prepay the
outstanding obligation under the Services Agreement; and
WHEREAS, the costs of the City's transition to operating the City's Transfer Station
have been more than previously anticipated; and
WHEREAS, in order to maintain a 90-day fund balance as required by the City's
financial policies an interfund loan is necessary to complete the transition and make necessary
payments; and
WHEREAS, the City now desires to make a temporary loan from the Water Utility
Fund, as lender, to the Solid Waste Utility Fund, as borrower, for the purpose of prepaying the
City's outstanding obligation under the Services Agreement; and
WHEREAS, the Water Utility Fund has sufficient funds to make such a loan without
detriment to any function of such fund; and
WHEREAS, it is anticipated that amortizing the loan authorized herein over a period
substantially similar to the remaining term of the Services Agreement will allow the City to
repay the loan without detriment to the Solid Waste Utility revenues or additional impact to
customers.
ill
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Port
Angeles as follows:
Section 1. An interfund loan from the Water Utility Fund, as lender, to the: Solid
Waste Utility Fund, as borrower, is hereby authorized.
Section 2. The interfund loan amount will be S,2,00f 0,,000.00.
Section 3. This loan funds will come from the Water Utility Fund's excess unrestricted
operating reserves and will not impact utility rates. These reserves are legally allowed to be
invested.
Section 4. The loan will carry an interest rate of 1.2600% per annurn.
Section 5. It is anticipated that the borrowing fund will have sufficient revenues to be
able over the period of the loan to make the specified principal and interest payments, and the
loan is not a perrnanent diversion of funds.
Section 6. The: loan will be amortized over a period of 5 years with yearly payments
occurring on the I" of March each year. This interfund loan includes the option for early
redemption. If this option is exercised, payment of 100%,of the amount to be redeemed should
occur on March 11" of the year the City intends to finalize this debt. The amortization schedule
is attached to this Resolution as Exhibit A and incorporated into this Resolution by reference.
Section 7. The loan status will be reviewed annually by City Council at an open public
meeting.
PASSED by the City Council of the: City of Port Angeles at a regular meeting of said
Council held on the! day of February, 2022.
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Kate Dexter, Mayor,
AT
Kari Martinez-Bailey, CitY
Cl
AP'PR VED�a'P _E AS TO FORM,��
William E. A'Fo_6'r, City At omey
2
City of Port Angeles
Interfund Loan, between the Water Utility fund and the Solid Waste Utility fund
Amortization Schedule
EXHIBIT "'A"
Local)Government Investment Pool(LGIP) 12 month Annualized Gross lEarnings 1.2600%
Rate as of 12/31/2021
PRINCIPAL INTEREST TOTAL PAYMENT BALANCE
March 1,2022 ..0�" 2,0001,000.00
Match 1,2023 1 400,000,00 25,200,00 425,200.00 1,6001,000.00
Match 1,21024 400,000.010 20,160,00 420,160.00 1,2001,0001.00
March L 202S 400,000,010 15,120b0 415,,120,001 800,000.00
Match 1,2026 400,000.00 10,080,00 4.10,080.00 4001,0001.00
March 1,2027 . 400,00 5,04 015,040,00
±00,000.00 01,00 1 4
TOTAL 2,0010,,000-00 75,600.00 2,0175,600-00