Agenda - 12-03-1979 - Laserfiche WebLink

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A In mentioning other actions, I refer to freezes in hiring, equipment purchases, travel, etc., that offer one of the few avenues for controlling any of the fund balance factors. I feel these are drastic measures and are not appropriate on a county-wide basis. Ob%.iously, very careful administrative review of hiring and purchasing is appropriate, but only in extreme circum- stances is it beneficial to substantially alter annual operating plans of a department in mid-year. The appropriate time to cut back is in the approval of the annual butget, when these cuts can be carefully planned to have the least negative impact on services. An additional factor in utilizing the protential fund balance is the cash flow problem. For several years we have not had this problem with capital reserves and bond funds available but these will be gone, and there will be a slight cash flow problem even in funding the jail. Tax anticipation notes, are available if the cash flow is not adequate, but we'would not want to continue that over time as a fiscal policy. This means that TA's are only a temporary solution and eventually we would have 'ta bail out with additional revenues. Other Debt Options The sale of bonds up to 2/3's of our net debt reduction in the previous fiscal year is available to the County with no referendum required. $215,000 is available in the current year and after July 1, 1980 $170,000 would be available if we exercise the $215,000 option. $310,000 would be available after duly 1, 19BO, if we don't exercise the option. I would note that a petition of 10% of the registered voters could require that a referendum be called. Another debt option is the use of financing agreements similar to the one the County currently has for the computer. We will be preparing at least two of these for you this year. You have already entered into a contract for additional computer equipment, and I am now pursuing a financing agreement that will produce approximately $1oO,0O0 to be paid off at about $:30,000 for each of the next 91z years. We are also considering the purchase of a new telephone system and will be receiving proposals in the near future. This will cost approximately $200,000 to be financed at $45,000 per year for five years with at least 10% paid up front. (It appears that buying the telephone system will be cheaper than renting it as we now do.) The point of this is that, in the equipment area, we have the ability to "borrow" funds over time, and will actually be able to free some currently committed funds for other limited purposes in the computer funding. Of these debt options, I would recommend that you authorize a bond order in the near future for the $215,000 1979-80 net debt reduction authorization subject, of course, to your judgement of the political factors related to potential petitions. (The purpose could be for the jail, thus freeing the capital funds.) We could issue bond anticipation notes in 1979-80, then on or after July 1, 1980 a second net debt reduction bond order could be made for $170,000. 'Then in 1980-81, both amounts could be sold together (only one bond sale in the national market) and the bond anticipation notes of the previous year paid off. This would provide $385,000 in capital funds at a cost of about $32,000 per year of 20 or more years.