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Staff REPORT
Action ITEM
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| | | | | | | | SUBJECT:
| Proposed Budget Adjustment to change Hirst Reservoir CIP Project from USDA Loan Funding to Cash (E. Krens) pgs. 58-61
| DATE OF MEETING:
| November 9, 2021
| | Staff CONTACT(S): | Elizabeth Krens, Director of Finance
Linda Jackson, Financial Analyst |
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SUMMARY and RECOMMENDATIONS:
During the October 12th meeting, Town Council directed staff to prepare a budget adjustment to realign the funding source for the Hirst Reservoir Improvements capital project from USDA loan to cash. Staff recommends Council adopt BA 22-008 to amend the project’s funding source to use of cash reserves totaling $1.445m.
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BACKGROUND:
The Town Council adopted the FY22 budget on June 8, 2021. The budget’s Capital Improvement Plan (CIP) identified USDA loan as the funding source for several projects: Hirst Reservoir Improvements, WTP to Town Water Main, Reservoir to WTP Raw Main. In recent discussions regarding the Hirst Reservoir project, Council indicated a desire to amend the project’s funding source from loan to cash reserves. The funding for the other projects will be discussed in more detail during the ARPA/CIP work session on November 17.
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ISSUES:
As of 6/30/21, the Water Fund’s cash balance totaled $6.3m or $3m available above fiscal policy limits (100% of operating expenditures and debt service). After reviewing proposed use of cash in the FY22 budget, Water Fund cash reserves are sufficient to support the Hirst Reservoir Improvement project costs of $1.445m. After adoption of BA 22-008, $1.6m in Water Fund cash will be available beyond fiscal policy requirements for future uses.
A public hearing is not required as there is no change to the total FY22 appropriation.
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BUDGET IMPACT:
There is no budgetary impact as this action is limited to realignment of funding sources.
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MOTION(S):
“I move the Town Council approve Budget Adjustment BA 22-008 to amend the Hirst Reservoir Capital project funding source from USDA loan to cash reserves totaling $1.445m.”
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