CITY OF NORTHAMPTON

SUSAN WRIGHT FINANCE DIRECTOR

Office of the Mayor 210 Main Street Room 12 Northampton, MA 01060-3199 (413) 587-1255 Fax: (413) 587-1275 swright@northamptonma.gov

MEMORANDUM
TO: City Council FROM: Susan Wright, Finance Director DATE: October 28, 2011 RE: Update to City Council for November 3, 2011 1. Orders to Rescind: Our periodic review of our outstanding debt authorizations has identified two additional orders that can be rescinded. The first order is to rescind the $275,000 authorized in September of 2005 for engineering and permitting for the landfill. According to the DPW these funds have never been borrowed and will not be spent. The second order is to rescind a portion of a vote taken in May of 2010. The Council voted $646,400 to make energy conservation and alternative energy improvements at Smith Vocational and Agricultural High School. Following the authorization, the initial project scope was further refined and the project for the photovoltaic array ended up costing $489,000. Approximately $228,000 of the project cost was covered by two grants: a Green Communities Grant and a Clean Energy Grant. The final cost to the city was $261,000 and this was bonded in December of 2010. This vote would rescind the remainder of the authorization $646,400 261,000 = $385,400. 2. Order to transfer from Stabilization to Reserve for Debt Exclusion for Police Station: At the September 1, 2011 meeting, the City Council voted to transfer, from the Receipt Reserved Premium on Loans Account to the Stabilization Account, the amount of $104,246.16. This premium was generated by proceeds on the short-term borrowing that was issued 4/21/11, which included the $10 million dollars borrowed for the Police Station construction. Since this $10 million represents the debt excluded portion of the project, in order to set the tax rate, the portion of the premium received on this must be applied to the short term borrowing costs in FY2012.

Interest on $10 million short-term borrowing for PD due 2/2012 Premium on $10 million short-term borrowing for PD Amount that can be debt excluded on the FY2012 Recap

$120,416.67 ($ 74,900.00) $ 45,516.67

Therefore, of the $120,416.67 that the city will pay in interest, only $45,516.67 can be debt excluded and the premium must be applied to the remainder of the interest payment. In order to apply the premium to the short-term debt payment, City Council must vote to move the premium from Stabilization into a Reserve for Debt Exclusion Account. The current balance in the Stabilization Account is $353,524.89. This transfer will bring the balance to $308,008.22. $278,624.89. 3. Question regarding total received for FEMA reimbursement for prior storms: In response to Councilor Tacys question, we received $54,456.89.