HomeMy WebLinkAboutReg 2003-02-18 Item 6B - Resolution - Repayment of Loan to Key Bank and Interfund LoansCAS Number: 03-018 1 Meetins Date
2/18/03
COUNCIL AGENDA SYNOPSIS
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ITEM Na
Original Agenda Date: 2/18/03
Agenda Item Title: Resolution authorizing repayment of loan to Key Bank and interfund loans to accomplish the
repayment
I Original Sponsor: Council
I Timeline: Approve at February 18, 2003 Regular Meeting
Sponsor's Summary: See attached staff report
Admin.
Action
X
Recommendations:
Sponsor: Approve as recommended
Committee: Will review at February 18, 2003 Finance Safety Committee meeting.
Administration: Same as Sponsor
I Cost Impact (if known): $1,450,000 (debt reduction)
I Fund Source (if known): General, Arterial Street and Hotel/Motel Tax
A
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Meeting Date Attachments
02 Memorandum to Mayor Council dated 02 -13 -03
Proposed Resolution Draft Format
To: Steve Mullet Mayor as City Council
From: Alan R. Doerschel, Fina Director
Date: February 13, 2003
Subject: Interfund Loans to Hotel /Motel Tax Fund
The $1,450,000 note to Key Bank for land purchased by the Hotel /Motel
Tax Fund (for proposed Exhibition Center) expires on March 1, 2003.
After consultations with Key Bank and the City's Bond Council Foster
Pepper (Hugh Spitzer) we have concluded the most appropriate solution
is to use interfund loans plus a $100,000 principal reduction by the
Hotel /Motel Tax Fund to retire this debt.
The rational is that we can repay the loans when convenient, at a low
interest rate (based on Washington State Investment Pool yields), and we
have not used more of our bond capacity.
The Lodging Tax Advisory Board agreed unanimously at its February 6,
2003 meeting to this solution.
The strategy is to make principal payments to the lending funds (Arterial
street and General) until the land is sold and the repayment is
completed.
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, AUTHORIZING INTERFUND LOANS TO THE
HOTEL/MOTEL TAX FUND FROM THE GENERAL AND ARTERIAL
STREET FUNDS IN THE AMOUNT OF $1,350,000; AUTHORIZING THE
REPAYMENT OF A $1,450,000 NOTE BY THE HOTEL/MOTEL TAX
FUND TO KEY BANK; AND SETTING REPAYMENT AND INTEREST
CALCULATIONS.
WHEREAS, the City's Hotel /Motel Tax Fund has a $1,450,000, five year note to
Key Bank with an expiration date of March 1, 2003, and the City has determined that
interfund loans, along with a $100,000 repayment amount from the Hotel /Motel Tax
Fund, is the most appropriate method of repayment; and
WHEREAS, the Tukwila Lodging Tax Advisory Board has endorsed this
repayment at its February 6, 2003 Board meeting;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1. Payment of 51,450,000 note to Key Bank. The City is authorized to
repay the loan principal on or before March 1, 2003. The Hotel /Motel Tax Fund
($100,000); the General Fund ($600,000); and the Arterial Street Fund ($750,000) will
be funding sources.
Section 2. Repayment and interest calculations.
A. The Hotel/ Motel Tax Fund will make principal payments to the General and
Arterial Street Funds annually in January of each year in an amount to be determined
by the Lodging Tax Advisory Board and the City Council until all principal is repaid.
B. The Hotel /Motel Tax Fund will pay interest to the lending funds based on
the average rate of the Washington State Investment Pool.
C. If the land, which was the purpose of the note and purchased by the
Hotel /Motel Tax Fund, is sold, the proceeds will be used to retire the interfund loans.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, at a Regular meeting thereof this day of
2003.
ATTEST /AUTHENTICATED:
Jane E. Cantu, CMC, City Clerk
APPROVED AS TO FORM BY:
Office of the City Attorney
Hotel/Motel Tax Fund 1.
Filed with the City Clerk:
Passed by the City Council:
Resolution Number.
Pam Carter, Council President