Fort Walton Beach Council agenda — 01-08-08 regular agenda — reading text

Governor that said publicly he would not back it up and wished to know if she had heard the Governor recanting the statement. The Finance Director replied no. Mr. Garvie received clarification that the City's total exposure is approximately $ 2 million if a decision .is made to withdraw the funds. Mr. Holmes wished to know if there is a chance that the City would lose the $ 7 million if it is not withdrawn. The Finance Director replied she did not think that would happen, she did not think the City Mr. Holmes asked if there was a possibility or a chance it could happen, if there would lose the $7 million. is not a guarantee. The Finance Director replied there is not a guarantee. Mr. Reeves wished to know if there is a possible loss of liquidity in Fund A where. the SBA could say no more withdrawals, that the School Boards have pulled out and there is a limited amount, and change the terms of the money market fund. The Finance Director replied as soon as funds are withdrawn and there is a run, that could happen and the SBA could say no one can have their funds until they reach maturity and will not even give an option of the 2 %. Mr. Minich questioned why the SBA has given the 2% option. The Finance Director replied it is only there as a deterrent to investor panic. Mr. Minich received clarification that although the City Manager has the authority to transfer funds, the transfer of funds would cause a loss of money to the City and because it would be an expenditure of funds the City Manager is asking the City Council for authorization to remove the funds from the SBA Account Fund A. The City Manager replied yes and stated for the record that her concern is the safety of the corpus of that money and the liquidity of that money, which is why she makes the recommendation to withdraw the funds.  12 -20 -07 266 Emergency Council meeting INVESTMENTS IN THE SBA cont. Mr. Garvie moved to authorize the City Manager to withdraw the $7, 764,441. 61 from Fund A of the SBA and pay the 2% withdrawal penalty of approximately $ 155,288.83, and to reinvest at the Qwlr discretion of the City Manager and Finance Director. Mr. Reeves seconded motion. Mr. Garvie reflected when the stock market lost money that if you got out early then the loss could be made up in a period of time but if you waited too long then the loss could not be made up. He commented the City could make up the loss over the long term if they at least get a good portion of the money out and there is nothing left if there is a run on the money by the School system and perhaps other cities in the State. Mr. Miller commented you did not take a loss until you sell something that is an investment and said the SBA is a State Fund administered by the State Statutes and he did not think it will go belly up. He commented the $ 7. 7 million is invested in top grade investment and the $ 1. 7 million were invested in top grade but have been downgraded but it does not mean they have lost value, just that they are not as liquid. He said he is not willing to take a $ 155,000 loss. Mr. Holmes expressed he is not comfortable taking a chance and agreed with Mr. Garvie that they will have a little better opportunity to recoup the loss and there is not a certainty that it will not happen. Dr. Pullen expressed that he did not think the State of Florida will go broke, that the City could ride it out. Mr. Reeves commented that he did not consider his money market fund an investment as it is something he goes to if he needs access to it. He hated the thought of losing $ 156, 000 in the fund but thought for security it would bring by having the funds and not receiving a letter saying they will have to freeze Fund A, his fear is the non -liquidity. He agreed the City could ride it out and eventually have access to the money again but at this point was unwilling to take that chance. Mr. Miller commented the $ 9.5 is not all the liquid money the City has and questioned whether the $ 6 million included the $ 2 million already withdrawn from the SBA fund. The Finance Director gave an update that the $ 6 million in the checking account does comprise the $ 2 million cashed out of the SBA and tomorrow it would be in CDs. She went over the current pooled cash over $ 30. 3 million, excluding pension funds, held in various investments with $ 9. 5 in the State Board of Administration, around $ 12. 7 million in Certificates of Deposit, $ 5. 2 million in a repurchase agreement restricted funds, and then approximately $ 3. 9 in the checking account after payroll is done. Mr. Miller commented is not a question of the $7 million needed to be liquid because there are $ 16 million liquid funds and the $ 7 million is not needed to pay salaries or pay immediate expenses, it is investment and it will be there unless the City cashes it in and that is the only way the City will lose money if it is cashed in. Mr. Garvie mentioned he questioned earlier if there was any fund with the State that guaranteed it and that the Finance Director had answered the Governor had said no and has not come back to say yes. He said the $ 7.64 million could be lost, that there is no guarantee anyone is looking out for it right now. He said whether or not the State goes bust has no bearing on it, the fund is standing on it' s own, there is no one backing it up and he believed the City needed to get out before it starts crashing. Dr. Pullen commented the taxes are being collected now so the City has liquid funds coming in from the I> Tax Collector and. asked if it was known how much was coming in. The Finance Director responded the budgeted ad valorem figure was about $4. 9 million. Mr. Holmes agreed that the State is not going to go broke but the State has not said they will back it. He said it is not a matter of liquidity or whether the City needs the money right now, but it is a matter of security, that the City knows what they can get out and they know where it will be and not taking a chance on losing it.  12 -20 -07 Emergency Council meeting 267 INVESTMENTS IN THE SBA cont. The Mayor Pro Tern called for the vote on the motion authorize the City Manager to withdraw the 7, 764,441. 61 from Fund A of the SBA and pay the 2% withdrawal penalty of approximately 155 288. 83 and to reinvest at the discretion of the City Y Manager g and Finance Director, and it carried by a vote of 4 to 2 with Holmes, Reeves, Garvie, and Minich in favor and Miller and Pullen opposed ( Hartwell absent). ADJOURNMENT The meeting adjourned at 7: 00 p. m. APPROVED: Z• ATTEST: CITY CLERK ddm N_  CITY COUNCIL MEETING January 8, 2008 Consent Agenda Consideration of a request to award Bid # 08 -1079 purchase of two Katolight Emergency Stand -by Generators Utilities Director) Council Action 1 St 2nd Vote: Agenda Item Number: 3  CITY OF FORT WALTON BEACH MEMORANDUM DATE: December 26, 2007 TO: Joyce Shanahan, City Manager FROM: John Hofstad, Utilities Director SUBJECT: Request to Award Bid No. 08 - 107, Purchase of Two Katolight Emergency Stand -By Generators SUMMARY Pursuant to City of Fort Walton Beach Code of Ordinances, Volume II, Chapter 4, Section 4. 01, Paragraph 4. 01. 025 and the Purchasing Policies and Procedures, request authorization to award Bid No. 08 - 107, Purchase of Two Katolight Emergency Stand -By Generators, to the low responsive, responsible bidder for each generator: ( 1) C& D Agency, Covington, Louisiana, for the 75Kw generator for the bid amount of $= 31, 103: 00, and ( 2) CJ' s Sales and Service, Ocala, Florida, for the 50Kw generator for the bid amount of 25-, 285. 00, including optional extended warranties and spare KASSEC Engine Control Board for the 75Kw Generator. If approved, funds are available in Account 401 - 1300 - 536 - 6402, Utilities Fund, Administration, Equipment, in the amount of $ 40, 000. 00 for the 75Kw generator, and Account No. 401 - 1350 - 535 - 6402, Utilities Fund, Sewer Collection System, Equipment, in the amount of $ 35, 000. 00 for the 50Kw generator. Recommend the City Council approve the bids received from ( 1) C& D Agency, Covington, Louisiana, for the bid amount of $ 31, 103. 00, and ( 2) CJ' s Sales and Service, Ocala, Florida, for the bid amount of 25, 285. 00. F I N A N C I A L D A T A 1. DEPARTMENT: Utilities 2. DIVISION: ( 1) Administration and ( 2) Sewer Collections 3. FUND: Utilities Enterprise Fund 4. ACCOUNT: ( 1) 401 - 1300 - 536 - 6402 and ( 2) 401 - 1350- 535 - 6402 5. ACCT. DESCRIPTION: Machinery and Equipment 6. FY BUDGET: 2007/ 08 7. AMOUNT BUDGETED: ( 1) $