COUNCIL AUDITOR S OFFICE COMMENTS AND RECOMMENDATIONS MAYOR S PROPOSED FY 2011/12 BUDGET FINANCE BANKING FUND (S/F 592)

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1 COUNCIL AUDITOR S OFFICE COMMENTS AND RECOMMENDATIONS MAYOR S PROPOSED FY 2011/12 BUDGET FINANCE BANKING FUND (S/F 592) PROPOSED BUDGET BOOK Page #86-87 BACKGROUND: Ordinance E approved the creation of the Banking Fund as a replacement for the City Loan Pool. The Banking Fund may be used by City departments to finance purchases for which there are insufficient funds to purchase outright. The interest rate charged on loans from the Banking Fund shall be the fund s cost of money. Prior All Years Budget Annual Increase All Years Budget Removal of Capacity Amended All Years Budget Paid off Projects / Transfers FY 04/05 N/A 66,603,366 66,603, ,603,366 0 FY 05/06 66,603,366 52,052, ,656, ,656,171 0 FY 06/07 118,656,171 22,471, ,127, ,127,362 1,854,317 FY 07/08 142,981,679 90,093, ,075,540 10,345, ,729,615 (926,095) FY 08/09 221,803, ,893, ,696,876 6,064, ,632,788 (335,170) FY 09/10 325,297, ,628, ,925, , ,089,716 (22,385,570) FY 10/11 415,706,146 64,761, ,468,055 5,491, ,976,334 (40,592,801) FY 11/12 Proposed 434,383,533 71,089, ,472, , ,117,280 REVENUES: 1. Charges for Services: This revenue item represents the repayment of debt from user departments into the Banking Fund. Repayments include principal, interest, and banking service charges. 2. Other Sources: This amount represents the FY 2011/12 proposed new Banking Fund borrowing. EXPENDITURES: 1. Other Operating Expenses: This amount represents the cost of administering the Banking Fund for FY 2011/12 and includes letter of credit costs, remarketing agreement costs, rating fees and costs associated with the issuance of commercial paper

2 2. Debt Service: This amount represents the payment to various financial institutions for the cost of borrowed funds in the form of commercial paper. The decrease is due to projects that have been paid off. 3. Other: This amount is the FY 2011/12 proposed new loan amounts to be borrowed. TRANSFERS-NON DEPARTMENTAL: Debt Service: This amount represents the transfer of debt service payments to the subfunds out of which prior and future year s bond issuances will be paid. The increase is due to the anticipated issuance of debt in FY 2011/12. SERVICE LEVEL CHANGES: There are no significant service level changes to the budget. EMPLOYEE CAP CHANGES: There are no positions in this subfund. BANKING FUND DETAIL: See the attached summary schedules for a detailed listing of new items financed through the banking fund. B4 Main Banking Fund Schedule B4a Information Technology System Development Projects B4b Capital Improvement Projects COMMENT: Ordinance E authorized the issuance of $76,500,000 of banking fund debt for the Courthouse project. This debt is financed through the General Fund and the subfund 15T traffic fine. Because this project s debt service is entirely separate from the banking fund operations, it was removed from the banking fund schedule in the proposed budget. RECOMMENDATIONS: 1. Correct the language in the Budget Ordinance ( ) to reflect the amended All Years Budget of $505,117,280. This will have no effect on Special Council Contingency. 2. Allow the Council Auditor s Office in coordination with the Budget Office make the necessary changes to Schedule B4, B4a, and B4b to reflect the actions of the Finance Committee

3 Schedule B4 Summary Indexcode Project Name Prior All Years Budget FY 12 New Borrowing All Years Budget FY 12 Payment Removal of Excess Capacity Amended All Years Budget ITIT536 Sch B4a Technology Replacement 7,010, ,140 7,695,454 3,239, ,843 7,477,611 CIP - JXMS011BKFND Sch B4b - Capital Impr Projects 294,477,447 50,828, ,306,408 21,928, ,306,408 CIP - JXMS461BKFND Sch B4b - Stormwater Projects 19,593,312 17,505,947 37,099,259 1,116,451-37,099,259 CIP - ITIT534 Sch B4b - Radio System 21,000,000-21,000,000 3,105,816-21,000,000 OPFM512 Sch B4c Fleet Replacement 35,115,123-35,115,123 6,710,671-35,115,123 FROD011 CAD replacement (ord E) 1,380, ,146 1,556, ,323-1,556,321 SHAD011 FY12 - Data Storage Equipment - 165, ,000 25, ,000 SHAD011 FY12 - Network Server Upgrades - 255, ,000 39, ,000 SHAD011 FY12 - Data Communications Equip Upgrades - 200, ,750 31, ,750 SHAD011 FY12 - Scanning Equipment - 114, ,680 17, ,680 SHAD011 Detective Case Management System - 230, ,000 35, ,000 SHAD011 Logistics Management Software - 50,000 50,000 7,809-50,000 SHAD011 NIST Manager upgrade - 7,600 7,600 1,187-7,600 SHAD011 FY12 - Computer/Laptop Replacements - 737, , , ,000 SHAD011 FY12 - Speciality Computers / Laptops - 132, ,864 20, ,864 Various All Previously Approved Projects 55,807,161-55,807,161 8,553, ,498 55,669,663 Totals 434,383,533 71,089, ,472,621 45,317, , ,117,

4 Schedule B4A Summary FY 11/12 Information Technology Projects Funded via Banking Fund Borrowing Project Number Indexcode Project Name Prior All Years Budget Removal of Excess Capacity FY 12 New Projects Amended All Years Budget FY 12 Payment Carryover IT FRRS011 JFRD Mobile data terminals - FY , ,849 46,639 - IT EREQ011AQLS TMDL Upgrade - Environmental GIS Database , ,507 19,212 - ITC ITIT531DCS ITD Server Refresh , ,725 26,374 - ITCT01 01 COCI15U Court Admin - Family Court Case Management System(FCCMS) ,934 51,934 9,734 - ITDS01 04 PWEN011AD Engineering: Digital Imaging by Vendor - As- Builts , ,125 26,449 - Various All Previously Approved Projects 7,010, ,843 (0) 6,792,471 1,664,912 2,039,403 Totals 7,010, , ,140 7,477,611 1,793,320 2,039,403 NOTE: The ITP projects as presented as part of the 536 IT System Development subfund included an additional $2,510 in the total project cost because they were being funded within the 531 ITD Operations subfund and not with banking fund dollars. If the projects are cancelled, the $2,510 in subfund 531 would also be reduced

5 Schedule B4b Summary FY11/12 Capital Improvement Projects Funded via Banking Fund Borrowing Projects Funded Via General Fund - GSD Sources Dept. Indexcode Project No. Project Name Debt Proceeds ER ERAS32AMP ERR Gold Merit/Pope Place 6,250,000 ER ERAS32AAS ERR JAX Ash Sites 25,000,000 ER ERAS32AMP ERR Environmental Compliance - County Wide 3,000,000 PW PWCP32ASD539 PW Countywide, City Maintained St. Johns River Bulkhead, Assessment&Restoration 610,000 PW PWCP32APB519 PW Facilities Capital Maintenance - Government 5,000,000 PW PWCP32ARD549 PW Intersection Improvements, Bridge, Misc Construction 1,500,000 PW PWCP32ARD549 PW Roadway Resurfacing 6,968,961 PW PWCP32ARD549 PW Sidewalk Construction and Repair 1,500,000 RC RCCP32AF5720 RC Jacksonville Fair Relocation Phase 1 1,000,000 Total Non-Stormwater Projects 50,828,961 Stormwater Projects Dept. Indexcode Project No. Project Name Debt Proceeds PW PWCP462SD PW Lower Eastside Drainage 4,520,000 PW PWCP462SD PW Lincoln Villas Drainage 700,000 PW PWCP462SD PW Crystal Springs Area Drainage 800,000 PW PWCP462SD PW Hogans Creek Drainage 1,000,000 PW PWCP462SD PW County Creek Drainage 1,000,000 PW PWCP462SD PW Hamilton / Jersey Outfall to Roosevelt 450,947 PW PWCP462SD PW Noroad / Lambig Drainage 1,160,000 PW PWCP462SD PW Old Plank Road Outfall 1,025,000 PW PWCP462SD PW Messer Area Drainage 900,000 PW PWCP462SD PW Ave B / Zinnia Ave Box Culvert 1,350,000 PW PWCP462SD PW Septic Tank Phase Out 3,000,000 PW PWCP462SD PW Bunche Road Pond (Cleveland Road) 1,600,000 Total Stormwater 17,505,947 Total Capital Improvement Projects 68,334,

6 FY 2011/12 Proposed Banking Fund Borrowing Indexcode Project Name FY 12 New FY 12 Borrowing Payment FROD011 CAD replacement (ord E) 176, ,323 SHAD011 FY12 - Data Storage Equipment 165,000 25,770 SHAD011 FY12 - Network Server Upgrades 255,000 39,826 SHAD011 FY12 - Data Communications Equip Upgrades 200,750 31,353 SHAD011 FY12 - Scanning Equipment 114,680 17,911 SHAD011 Detective Case Management System 230,000 35,921 SHAD011 Logistics Management Software 50,000 7,809 SHAD011 NIST Manager upgrade 7,600 1,187 SHAD011 FY12 - Computer/Laptop Replacements 737, ,105 SHAD011 FY12 - Speciality Computers / Laptops 132,864 20,750 FRRS011 JFRD Mobile data terminals - FY12 248,849 46,639 EREQ011AQLS TMDL Upgrade - Environmental GIS Database 102,507 19,212 ITIT531DCS ITD Server Refresh 140,725 26,374 COCI15U Court Admin - Family Court Case Management System(FCCMS) 51,934 9,734 PWEN011AD Engineering: Digital Imaging by Vendor - As-Builts 141,125 26,449 2,754, ,363 CIP Projects ERAS32AMP Gold Merit/Pope Place 6,250,000 78,300 ERAS32AAS JAX Ash Sites 25,000, ,400 ERAS32AMP Environmental Compliance - County Wide 3,000,000 37,600 PWCP32ASD539 Countywide, City Maintained St. Johns River Bulkhead, Assessment & Restoration 610,000 7,600 PWCP32APB519 Facilities Capital Maintenance - Government 5,000,000 62,600 PWCP32ARD549 Intersection Improvements, Bridge, Misc Construction 1,500,000 18,800 PWCP32ARD549 Roadway Resurfacing 6,968,961 87,300 PWCP32ARD549 Sidewalk Construction and Repair 1,500,000 18,800 RCCP32AF5720 Jacksonville Fair Relocation Phase 1 1,000,000 12,500 50,828, ,900 Stormwater Projects PWCP462SD Lower Eastside Drainage 4,520,000 - PWCP462SD Lincoln Villas Drainage 700,000 - PWCP462SD Crystal Springs Area Drainage 800,000 - PWCP462SD Hogans Creek Drainage 1,000,000 - PWCP462SD County Creek Drainage 1,000,000 - PWCP462SD Hamilton / Jersey Outfall to Roosevelt 450,947 - PWCP462SD Noroad / Lambig Drainage 1,160,000 - PWCP462SD Old Plank Road Outfall 1,025,000 - PWCP462SD Messer Area Drainage 900,000 - PWCP462SD Ave B / Zinnia Ave Box Culvert 1,350,000 - PWCP462SD Septic Tank Phase Out 3,000,000 - PWCP462SD Bunche Road Pond (Cleveland Road) 1,600,000-17,505,947 - Banking Fund Totals 71,089,088 1,483,

7 1 Introduced by Council President at the Request of the Mayor: ORDINANCE AN ORDINANCE ADOPTING THE FISCAL YEARS INCLUSIVE CAPITAL IMPROVEMENT PROGRAM (THE "CIP"), AS REQUIRED BY PART 6, CHAPTER 122, ORDINANCE CODE; DIRECTING REVISIONS AND UPDATING OF THE CAPITAL IMPROVEMENTS ELEMENT OF THE 2012 COMPREHENSIVE PLAN, AS REQUIRED BY SECTION , FLORIDA STATUTES; PROVIDING AN EFFECTIVE DATE WHEREAS, pursuant to Part 6, Chapter 122, Ordinance Code, the Department of Finance, the Department of Planning and Development and the Department of Public Works have met with all departments, agencies and commissions of the City to develop, and have developed, a Capital Improvement Program ( CIP ) for fiscal years inclusive; and WHEREAS, pursuant to Chapter 163, Part II, Florida Statutes, the Council adopted the 2011 Comprehensive Plan, which contains the numerous elements required by Section , Florida Statutes, including a Capital Improvements Element designed to consider the need for and location of public facilities in order to encourage efficient utilization of such facilities and setting forth estimated public facility costs, including a delineation of when public facilities will be needed, the general location of the facilities and projected revenue sources to fund the facilities; and WHEREAS, Section , Florida Statutes, requires that the Capital Improvements Element be reviewed, revised and updated - 7 -

8 annually; and WHEREAS, the Capital Improvements Element requires that the CIP be prepared in conjunction with the annual review and update of the Capital Improvements Element, and further requires that the CIP contain all of the projects listed in the Schedule of Capital Improvements, which is a part of the Capital Improvements Element; and WHEREAS, the Council has reviewed the CIP and the Capital Improvements Element; now, therefore BE IT ORDAINED by the Council of the City of Jacksonville: Section 1. Fiscal Years CIP Adopted. The fiscal years CIP, including a Schedule of Capital Improvements (attached hereto as Exhibit 1 and incorporated herein by this reference), are hereby adopted for the City and its independent agencies for the fiscal year. There shall be included in the annual budgets of the City and its independent agencies sufficient appropriations to implement the first year of 18 the program. By October 27, 2011 or one month after the enacted date of this legislation, which ever is later, the Department of Finance shall provide the Fiscal Years inclusive Capital Improvement Program and detailed description to all Council Members with a copy to Legislative Services to be placed in the file. Section 2. The Capital Improvements Element of the 2012 Comprehensive Plan Revised and Updated. The Capital Improvements Element of the 2012 Comprehensive Plan shall be revised to reflect the Schedule of Capital Improvements adopted hereinabove as part of the CIP in the next available update of the 2012 Comprehensive Plan. Section 3. Effective Date. This ordinance shall become effective upon signature by the Mayor or upon becoming effective 31 without the Mayor's signature

9 1 Form Approved: /s/ Margaret M. Sidman Office of General Counsel _ 5 6 Legislation Prepared By: Margaret M. Sidman G:\SHARED\LEGIS.CC\2011\Z.Budget \a CIP.doc

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17 1 Introduced by the Council President at the request of the Mayor: ORDINANCE AN ORDINANCE INCREASING THE PRINCIPAL AMOUNT OF BANKING FUNDS BONDS AUTHORIZED TO BE ISSUED BY AN AMOUNT NECESSARY TO PROVIDE NOT IN EXCESS OF $71,089,088 NET PROJECT FUNDS; SUPPLEMENTING THE PROJECT LIST TO REVISE THE ITEMS OF CAPITAL EQUIPMENT AND IMPROVEMENTS AUTHORIZED TO BE FINANCED UNDER ORDINANCE E, AS SUPPLEMENTED AND AMENDED BY ORDINANCES E, E, E, E AND E; DECLARING INTENT TO REIMBURSE; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City Council of the City of Jacksonville, Florida (the "Council") previously enacted Ordinance E (as amended and supplemented from time to time, the "Special Revenue Bond Ordinance") which provided for the issuance of Special Revenue Bonds of the City of Jacksonville, Florida (the "City") to be paid from Covenant Revenues (as defined in the Special Revenue Bond Ordinance) of the City budgeted and appropriated as provided in the Special Revenue Bond Ordinance and deposited into the funds and accounts created thereunder, all in the manner provided in the Special Revenue Bond Ordinance; and WHEREAS, to implement the Special Revenue Bond Ordinance, the Council enacted Ordinance E (as supplemented and amended from time to time the "Banking Fund Bond Ordinance"), which supplemented the Special Revenue Bond Ordinance and authorized the issuance of Banking Fund Bonds as Special Revenue Bonds under the

18 Special Revenue Bond Ordinance in an original aggregate principal amount necessary to provide not in excess of $141,127,362 net funds available to pay costs of the Banking Fund Project (as defined in the Banking Fund Bond Ordinance), including the acquisition and construction of those items of capital equipment and capital improvements of the City more particularly described in Exhibit 1 to the Banking Fund Bond Ordinance; and WHEREAS, the Banking Fund Bond Ordinance provides that the authorized original aggregate principal amount of Banking Fund Bonds authorized thereunder may be revised and such amount and the related project list have previously been revised through Ordinances E, E, E, E, E and E; and WHEREAS, the Council now desires to further supplement the Banking Fund Bond Ordinance to increase the authorized aggregate principal amount of Banking Fund Bonds authorized by an amount necessary to provide an additional $71,089,088 net project funds and to provide an updated project list attached hereto as Exhibit 1; and WHEREAS, in connection with the acquisition and construction of the items of capital equipment and capital improvements comprising the Banking Fund Project, the Council expects to incur certain expenses for which the City will advance internal funds; and WHEREAS, the City intends to reimburse itself for all or a portion of such expenses from the proceeds of the Banking Fund Bonds to be issued by the City; now therefore BE IT ORDAINED by the Council of the City Of Jacksonville, Florida: Section 1. Recitals. The above whereas recitals are adopted as true and correct and incorporated herein. (a) Authority for This Ordinance. This ordinance is enacted pursuant to Section , Florida Statutes, Chapters 125 and 166,

19 Florida Statutes, Article VIII, Section 2, Constitution of the State of Florida, the Charter of the City of Jacksonville, and other applicable provisions of law, and hereinafter referred to as the Act. Section 2. Definitions. All terms used herein in capitalized form, unless otherwise defined herein or unless the context clearly indicates some other meaning, shall have the same meaning as ascribed to them in the banking fund bond ordinance. 9 Section 3. Supplemental Authorizations (a) The original aggregate principal amount of Banking Fund Bonds authorized to be issued under the Banking Fund Bond Ordinance is hereby increased pursuant to Section 6 of the Banking Fund Bond Ordinance by an original aggregate principal amount necessary to provide not in excess of $71,089,088 of net funds available to pay the costs of the Banking Fund Project (exclusive of costs of issuance, Reserve Account deposits and capitalized interest), resulting in the total aggregate principal amount of Banking Fund Bonds authorized to be issued under the Banking Fund Bond Ordinance, net of amounts previously issued and retired, to equal the aggregate principal amount necessary to provide not in excess of $505,117,280 of net available funds to pay the costs of the Banking Fund Project (exclusive of costs of issuance, Reserve Account deposits and capitalized interest); provided that the original aggregate principal amount of Banking Fund Bonds shall not exceed one hundred twenty percent (120%) of the net funds available to pay the costs of the Banking Fund Project. (b) The revised list of items of Capital Equipment and Capital Improvements of the City comprising the authorized Banking Fund Project is attached hereto as Exhibit 1, which shall supersede any other list of items comprising the Banking Fund Project heretofore approved by Council

20 1 Section 4. Ratification of Banking Fund Bond Ordinance. 2 The Banking Fund Bond Ordinance, as supplemented and revised 3 pursuant hereto, is hereby ratified and confirmed. In the event the Banking Fund Bond Ordinance is hereafter amended to provide that Banking Fund Bonds shall include Special Revenue Bonds and/or bonds secured by another revenue pledge for the purpose of financing Banking Fund Projects, the authorizations and supplements provided herein shall apply to Banking Fund Bonds as then authorized by the Banking Fund Bond Ordinance, as amended. Section 5 Declaration of intent to reimburse. In connection with the construction, acquisition, improvement, purchase of hardware and software and equipping of certain capital improvements during the Fiscal Year which is more specifically outlined in Exhibit 1 attached hereto (the Project ) by the City of Jacksonville, Florida (the City ), the City expects to incur expenses for which the City will advance internal funds. The City intends to reimburse itself for all or a portion of such expenses from the proceeds of debt to be incurred by the City. The City hereby declares its official intent to reimburse itself from the proceeds of debt to be incurred by the City for expenses incurred with respect to the Project within 60 days prior to the date of this Ordinance and subsequent to the date of this Ordinance. This Ordinance is intended as a declaration of official 24 intent under Treasury Regulation Section The debt to be 25 issued to finance the Project is expected not to exceed an 26 aggregate principal amount of $71,089,088. The Mayor, the Corporation Secretary, the Chief Financial Officer, the General Counsel and such other officers and employees of the City as may be designated by the Mayor are authorized and empowered, collectively and individually, to take all action and steps and to execute all instruments, documents and contracts on behalf of the City that are

21 necessary to carry out the purposes of this Ordinance. Section 6. Effective Date. This Ordinance shall be effective upon signature by the mayor or upon becoming effective without the mayor's signature. Form Approved: /s/ Margaret M. Sidman Office of General Counsel _ Legislation prepared by: Margaret M. Sidman G:\SHARED\LEGIS.CC\2011\Z.Budget \a Increasing the Banking Fund clean.doc

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