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Legislation #: 100525 Introduction Date: 6/24/2010
Type: Ordinance Effective Date: 7/1/2010
Sponsor: None
Title: Authorizing the Director of Finance to borrow up to $10,200,000.00 from the unreserved and undesignated balance of the KC Airports Fund to meet a portion of the General Fund’s obligations to the Special Allocation Fund; directing the City Manager to identify resources in the current year’s budget and in the next two budget years to either prepay the interfund loan’s principal or make any scheduled principal and interest payments; further authorizing execution of a memorandum of understanding between the Finance and Aviation Departments setting forth the terms of the loan; estimating and appropriating funds to pay the City’s historical TIF liability; establishing requisitioning authority; and recognizing an emergency.

Legislation History
DateMinutesDescription
6/23/2010 Filed by the Clerk's office
6/24/2010 Referred to Finance and Audit Committee
6/30/2010 Advance and Do Pass as a Committee Substitute, Debate
7/1/2010 Passed as Substituted

View Attachments
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100525.pdf Authenticated 142K AUTHENTICATED
http://kansascity.granicus.com/ViewSearchResults.php?view_id=2&keywords=100525 Video Link 0K http://kansascity.granicus.com/ViewSearchResults.php?view_id=2&keywords=100525
TIF Finance-Aviation MOU 06.22.10.doc Advertise Notice 57K TIF Finance - Aviation MOU
TIF Historical Liab Appropriation Transaction 06.22.10.xls Advertise Notice 85K TIF Historical Liab Appropriation Transactions
TIF Historical Liab Fact Sheet 06.22.10.xls Advertise Notice 60K Fact Sheet

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COMMITTEE SUBSTITUTE FOR ORDINANCE NO. 100525

 

Authorizing the Director of Finance to borrow up to $10,200,000.00 from the unreserved and undesignated balance of the KC Airports Fund to meet a portion of the General Fund’s obligations to the Special Allocation Fund; directing the City Manager to identify resources in the current year’s budget and in the next two budget years to either prepay the interfund loan’s principal or make any scheduled principal and interest payments; further authorizing execution of a memorandum of understanding between the Finance and Aviation Departments setting forth the terms of the loan; estimating and appropriating funds to pay the City’s historical TIF liability; establishing requisitioning authority; and recognizing an emergency.

 

WHEREAS, Section 806 of the Charter provides that the Council, by a two-thirds vote, may “by ordinance authorize the borrowing of monies from the unreserved and undesignated fund balances of a fund to meet the operating and capital cash requirements of another fund, provided that the Council makes provision for repayment within a designated time and provided that the repayment include interest at a reasonable rate”; and

 

WHEREAS, $10,200,000.00 of the City’s tax increment financing (“TIF”) liability is deemed “historical” and the Special Allocation Fund lacks the necessary financial resources to pay off this portion of the City’s total TIF liability; and

 

WHEREAS, the full amount of the City’s historical TIF liability is booked as a “due-to” the Special Allocation Fund from the General Fund; and

 

WHEREAS, the KC Airports Fund has sufficient reserves to loan $10,200,000.00 to the General Fund and is willing to do so on agreed upon terms, as detailed in a memorandum of understanding between the City and its Aviation Department; and

 

WHEREAS, the proposed interfund loan may be completed on a mutually beneficial basis between the parties; and

 

WHEREAS, execution of the proposed interfund loan will have no effect on the General Fund’s GAAP basis fund balance until paid and once paid will improve it; and

 

WHEREAS, the City Manager will be charged with identifying resources in the current year’s budget and in the next two budgets to either prepay the interfund loan’s principal or make any scheduled principal and interest payments, as they are due; and

 

WHEREAS, the proposed interfund loan will bring current the City’s TIF liability and enable the City to meet its statutory and contractual obligations; NOW, THEREFORE,

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That the Director of Finance is hereby authorized to borrow the principal sum of $10,200,000.00 from the KC Airports Fund at an interest rate of 3%, to be repaid over a three year period. These funds will be utilized to pay the TIF historical liabilities incurred through December 31, 2009. The Finance and Aviation Directors are hereby authorized to execute a Memorandum of Understanding (”MOU”) setting forth the terms of the loan. A copy of the MOU is on file with the City Clerk.

 

Section 2. The Council hereby directs the City Manager to identify resources in the current year’s budget and in the next two budgets to either prepay the interfund loan’s principal or make any scheduled principal and interest payments, as they are due.

 

Section 3. That the sum of $10,200,000.00 is hereby appropriated from the Unappropriated Fund Balance of the KC Airports Fund to the following account:

 

11-8300-129998-X Transfer to the General Fund $10,200,000.00

 

Section 4. That the revenue in the following account in the General Fund is hereby estimated in the following amount:

 

11-1000-120000-508300 Transfer from KC Airports Fund $10,200,000.00

 

Section 5. That the sum of $10,200,000.00 is hereby appropriated from the Unappropriated Fund Balance of the General Fund to the following account:

 

11-1000-122530-B TIF Historical Liabilities $10,200,000.00

 

Section 6. That the following General Fund appropriation is hereby reduced by $153,000.00:

 

11-1000-129064-B Reserve for TIF/STIF $ 153,000.00

 

Section 7. That the sum of $153,000.00 is hereby appropriated from the Unappropriated Fund Balance of the General Fund to the following account:

 

11-1000-129604-G KC Airports Fund Repayment $ 153,000.00

 

Section 8. That the Director of Finance is designated as requisitioning authority for Account Nos. 11-1000-122530 and 11-1000-129604 in the General Fund.

 

Section 9. That this ordinance is recognized as an emergency measure within the provisions of Section 503(a)(3)(c) of the City Charter in that it appropriates money and shall take effect in accordance with that section.

 

____________________________________________________

 

I hereby certify that there is a balance, otherwise unencumbered, to the credit of the appropriation to which the foregoing expenditure is to be charged, and a cash balance, otherwise unencumbered, in the treasury, to the credit of the fund from which payment is to be made, each sufficient to meet the obligation hereby incurred.

 

________________________________

Randall J. Landes

Director of Finance

 

Approved as to form and legality:

 

 

_________________________________

Heather A. Brown

Assistant City Attorney