14.A.
City Council Meeting
- Meeting Date:
- 08/26/2013
- From:
- Barbara Goodrich, Management Services Director
Information
TITLE:
Consideration and Adoption of Resolution No. 2013-21: A resolution of the Council of the City of Flagstaff, Arizona, repealing resolution Nos. 1422, 1534, and 1674 adopted by the Flagstaff City Council respectively on September 17, 1985, February 16, 1988, and June 19, 1990, regarding the Real Estate Proceeds Trust Fund.
RECOMMENDED ACTION:
1) Read Resolution No. 2013-21 by title only
2) City Clerk reads Resolution No. 2013-21 (if approved above)
3) Adopt Resolution No. 2013-21
2) City Clerk reads Resolution No. 2013-21 (if approved above)
3) Adopt Resolution No. 2013-21
Policy Decision or Reason for Action:
The prior resolutions allowed for interest earnings to be used for real estate purchases. This resolution will allow principal, interest, and any other deposits made to the Real Estate Proceeds Fund to be budgeted and expended per Council direction.
Financial Impact:
The City will have authority to spend all fund proceeds.
Connection to Council Goal:
Effective governance
Has There Been Previous Council Decision on This:
Not on this proposal. The Council has considered the purpose of the Real Estate Proceeds Fund in the past and that information is contained in the Background Section on the next page.
Options and Alternatives:
1) Approve the resolution as written which allows for the expenditure of all funds received.
2) Do not approve the resolution as written and have staff follow the current guidelines in Resolution 1674 that requires only interest be spent on capital and infrastructure needs and that principal would be held.
3) Do not approve the resolution as written and eliminate the Real Estate Proceeds Fund. Future proceeds would be deposited into the General Fund unless otherwise obligated for repayment to another fund.
2) Do not approve the resolution as written and have staff follow the current guidelines in Resolution 1674 that requires only interest be spent on capital and infrastructure needs and that principal would be held.
3) Do not approve the resolution as written and eliminate the Real Estate Proceeds Fund. Future proceeds would be deposited into the General Fund unless otherwise obligated for repayment to another fund.
Background/History:
The City of Flagstaff originally created the Real Estate Proceeds Fund on September 17, 1985 through a resolution to fund infrastructural capital projects. The intent of the resolution was to limit the annual budget amount to the unexpended investment earnings of previous years. The resolution was updated on February 16, 1988 to state that the amounts on deposit could only be expended for the purchase of real estate as the City Council may deem necessary. The last update to this resolution was June 16, 1990 that gave authority to spend 50% of the investment earnings for capital projects in FY1990-1991, but in 1992 the fund proceeds could only then again be spent on real estate. In Fiscal Year 2000, the Council made a policy decision to make an annual contribution into the Real Estate Proceeds fund of $150,000 per year from General Fund excess capacity to purchase open space. Copies of the prior resolutions are included as an attachment to this staff summary.
The change proposed through for the resolution would allow for the appropriation of expenditure of all fund proceeds for any infrastructure or other capital building project The value of this separate fund is it allows for transparency in both the sale of land and the use of proceeds rather than having these transactions blended in the General Fund.
The change proposed through for the resolution would allow for the appropriation of expenditure of all fund proceeds for any infrastructure or other capital building project The value of this separate fund is it allows for transparency in both the sale of land and the use of proceeds rather than having these transactions blended in the General Fund.
Key Considerations:
The City is contemplating selling various land holdings throughout the City that may assist in the funding of the Core Services Maintenance Facility and/or the Flagstaff Municipal Court projects. This fund would provide a vehicle to accumulate real estate sales that aren't dedicated to other City funds.
Expanded Financial Considerations:
The current fund balance is approximately $550,000. Other than interest earnings, there has been no activity from Fiscal Year 2010 forward.
This fund activity is maintained separately, but is currently combined with the General Fund for annual reporting purposes.
This fund activity is maintained separately, but is currently combined with the General Fund for annual reporting purposes.
Community Involvement:
Inform
Expanded Options and Alternatives:
Approve the resolution as written. This will allow the Real Estate Proceeds Fund to continue and provides a segregation of future real estate sales that are not currently obligated for repayment to another fund.
Do not approve the resolution as written and have staff follow the current guidelines in the existing resolutions which would require that only interest be spent on capital and infrastructure needs and that principal would be held.
Do not approve the resolution as written and eliminate the Real Estate Proceeds Fund. Future proceeds would be deposited into the General Fund unless otherwise obligated for repayment to another fund.
Do not approve the resolution as written and have staff follow the current guidelines in the existing resolutions which would require that only interest be spent on capital and infrastructure needs and that principal would be held.
Do not approve the resolution as written and eliminate the Real Estate Proceeds Fund. Future proceeds would be deposited into the General Fund unless otherwise obligated for repayment to another fund.