HomeMy WebLinkAboutCC 3 COMM SYS TRUST FD 11-19-90AGENDAII-I.,-,,
DATE:
TO:
FROM:
NOVEMBER 71 1990
WILLIAM A. HUSTON, CITY MANAGER
RONALD A. NAULT, DIRECTOR OF FINANCE
r" -'SENT CALENDAR N0. 3
.9-90
Inter -- Com
SUBJECT: LAW ENFORCEMENT/PUBLIC WORKS COMMUNICATION SYSTEM TRUST FUND
RECOMMENDATION:
Authorize the City Finance Director to deposit second year funds in
the County of Orange's Law Enforcement/Public Works Communications
System Trust Fund, and transfer $142,125 from the appropriated
reserves in the Capital Improvement Fund to the General Fund for
the second deposit for Police and Public Works and appropriate
$9,200 from the unappropriated reserves of the Water Fund for its
proportionate share, for a total appropriation from all funds of
$151,325.
DISCUSSION:
In June of 1989, the City Council adopted Resolution No. 89-96
authorizing participation in the Countywide project of upgrading
the Law Enforcement/Public Works Communications System. The County
has had continuous dialogue with all agencies as to financing
mechanisms and has proposed the use of a County managed Trust Fund
as a reasonable alternative for cities and other agencies. They
have developed a Five Year Amortization Schedule discounting each
agency's total share by an earnings factor of eight (8) percent
annually. I've discussed this program with the County staff, and
I think that they've used reasonable assumptions and the fund will
be easy to administer. The County Treasurer has a very good
reputation in the investment community and I feel that the eight
(8) percent annual yield is probably conservative.
The City will benefit primarily, through the simplification of
accumulating it's $924,129 share of the project cost. We simply
make annual appropriations of $151,325 for five years and with
interest income, the $31 million project cost will be completely
funded. Police, Public Works and Water will all appropriate their
share beginning this year and continuing through fiscal 1993-94.
APPROPRIATION:
These funds are being accumulated in a Trust Account with no
associated expense being recognized until installation of the
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November 7, 1990
system. Upon installation, the system will be expensed, amortized
for depreciation, depending on location, title passing and life of
the equipment.
Trust Accounts are a non -budgeted item but authorization is needed,
and a recommendation, to deposit second year funds with the County
of Orange.
We will receive annual reports that will detail balances and
accrued interest. If we are unhappy with the County's performance,
we simply withhold further deposits.
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Ronal A. Nault
Director of Finance
RAN: LS: ls
a:trustfnd.com