03-13-2023 Council Packet - Laserfiche WebLink

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AGENDA ITEM Prepared By: RJO Reviewed By: ND Approved By: 1. Purpose. To close Fund 322 – 2016 Refunding Bonds Series 2016A and transfer the residual balance as of 12/31/2022. 2. Background. The final payment on the 2016 Refunding Bonds was made on 02/01/2023. By State Statute municipalities are required to levy 105% of debt service requirement. This requirement is meant to ensure that debt service funds will be available in the event the total levy is not collected. Because of Orono’s high rate of levy collections, this results in a residual cash balance once the bonds are paid in full. The cash balance of Fund 322 as of 12/31/2022 is $582,223.05. The residual funds are routinely transferred to other debt service funds. The debt service fund for the Series 2010 bonds currently has a cash balance of ($235,266.96). The negative balance occurred when the bonds were retired early and the levy for the bonds was ended a year early. By retiring the bonds early, the city saved $115,000 in interest. By transferring a portion of the residual balance to the 2010 debt service fund the negative balance will be cleared. The balance of the funds can be transferred to the 2021 bond debt service fund. 3. Staff Recommendation. Staff recommends approval of the attached resolution closing fund 322 and transferring the residual balance to the 2010 Refunding Bond Fund (310) and the 2021 Bond Fund (323). COUNCIL ACTION REQUESTED Motion to approve the attached resolution closing Fund 322 and distributing the residual balance to the 2010 Refunding Bond Fund and the 2021 Bond Fund. Exhibits A. Resolution Item No.: 5 Date: March 9, 2023 Item Description: Close Fund 322 – 2016 Refunding Bonds – Resolution Presenter: Ron Olson Finance Director Agenda Section: Consent Agenda