1990-07-23 Public Hearing and Regular Meeting

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• CITY OF LA PORTE INTER -OFFICE MEMORANDUM TO: Robert T. Herrera, City Manager FROM: Jeff Litchfield, Director of Finance DATE: July 10, 1990 SUBJECT: Potential Funding Sources for Renovation of Broadway Property Recently, you asked me to review certain funds of the City of La Porte to determine if they could be used in the renovation of the property we purchased. I have reviewed those funds and have the following recommendation as to potential funding sources. Use of Proceeds of Streets and Alley Closings In the current Fiscal Year, the City of La Porte sold property to International Cargo Network through the closing of Streets and Alleys. The proceeds from the sale of these properties totaled $362,400. This revenue source is outside of the normal realm of General Fund Revenues. In the current year budget, we did not project that a sale of property of this magnitude would occur and accordingly, the current year expenditures were not dependant on the receipt of this revenue. We have discussed the sale of streets and alleys several times in the past and I believe that we both agree that the City of La Porte should not use the proceeds from the sale of an asset to offset operation and maintenance expenses. Any revenues received from the sale of these assets should be rolled into another fixed asset of the City. The use of these funds to renovate the property would be in accordance to that philosophy. To carry this thought back to past history, we had street and alley closings in both Fiscal Year's 1987-88 and 1988-89. The combined total of both years was 86,549. Later in this memorandum, I will explain how these funds could also be used for the renovation. Use of Proceeds from Settlement of Lawsuit In Fiscal Year 1989, the City received a lump sum settlement in the final determination of the Tinker/Lovelace lawsuit. There was a revenue to the General Fund of $249,666 caused by the settlement. This revenue source is not a normal item that would occur in the City and can be considered to be extraordinary. The result of placing this revenue into the General Fund increased the balance of the Funds Working Capital. We could also use these funds in the renovation without any serious financial impact to the General Fund.