1994 ADJ MIN DEC 7 - Laserfiche WebLink

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Bennett said the other thing that is happening is that the Council is looking at the proposed vs the current budget. Director Chamberlain said this was also correct. Councilmember Bennett inquired as last night's report of $2.5 million in a Trust Account. She said she was stunned by the report as that was the first she had heard of the money and the trust account. She asked where the money was at and why it was in the trust account. Economic Development Director Gabriel reported that because this money was proceeds from the assessment district, Bond Counsel advised that it should go to pay down the debt. This is separate money from the one time $4 million being discussed. Mayor Fulp asked Director Chamberlain if it was correct that when the budget was put together, it was anticipated that half of the one time revenue would be received prior to mid -year. Director Gabriel replied that receipt of the revenue was anticipated beginning January 1995. Discussion continued on the break down of anticipated one time revenue. Mayor Fulp stated the practice of balancing the budget on a projected revenue that might not materialize is wrong. He cited the example of past anticipated revenue based on city provided ambulance service that was prohibited by a court of law. He asked staff how many mobile home sales have been realized. Director Gabriel responded none to date. Mayor Fulp said the sale of 227 mobile homes is not a reality because some of the residents will not be able to secure a loan and therefore, the City will not receive all of this revenue. Director Gabriel said the dollar amount used, is to be generated through the sales to the residents and the sale of the remaining vacant homes to a non-profit organization. Mayor Fulp asked if the major portion of the revenue is expected to come from the sale of the mobile homes owned by the Agency. Director Gabriel said $700,000 of the $3.8 million is expected from the sale of Agency owned coaches; $2.6 million is the return of the money used for the downpayment to purchase the park; $2 million came from the RDA and $600,000 from the City as a loan. The balance of $500,000 is administrative fees in the event we go forward to purchase the additional two mobile home parks. Director Gabriel expressed confidence in the ability to sell 125 of the 227 mobile homes. Mayor Fulp stated his conclusion is that the City has a paper budget, is operating in the red, has a financial crises and that the City will not receive the revenue from the sale of one mobile home before the end of the fiscal year. The average escrow is running three to four months. Mr. London stated Space 68, a vacant home, is in escrow. The sale was for $78,000 and the cost to the Agency was a couple of thousand dollars. This would be the first sale. The marketing of the remaining vacant homes has not been started and would be a separate program. The way in which the existing bonds are paid off has an accelerating retirement, such that, after about 145 sales there is no debt left. The City will 2 n G r 17 " lq9�