Explanation
On February 17, 2021, the City of Columbus issued $371,940,000 in general obligation bonds to fund the 2020 Capital Improvement Budget. In this sale, the tax-exempt series of bonds produced $88,839,393.50 in gross premium. Of this premium, $43,824,514.45 is applicable to the Divisions of Water, Sewers and Drains and Storm Sewer.
In accordance with the IRS guidelines and Auditor of State Bulletin 2014-001, this premium was allocated to various bond retirement funds and is being used for allowable purposes, which includes certain expenses that were budgeted in 2021 in various enterprise operating funds. Due to this, enterprise divisions will have budget savings in the respective operating funds.
In order to efficiently manage cash balances, the City will use the budget offset due to the allowable premium usage and excess cash to fund capital projects. The excess funds will be transferred into new capital PayGo funds allocated by the division that generated the premium. By cash funding rather than financing the projects through the issuance of bonds, the City estimates around $20,000,000 in nominal savings in interest expense over the next 20 years.
Fiscal Impact: This ordinance authorizes the City Auditor to establish new funds for creating PayGo systems, authorizes the transfer of cash within certain operating funds and authorizes the transfer of cash between funds. An amendment to the 2020 Capital Improvement Budget is necessary to align authority with the cash as it is transferred into the new PayGo funds. Emergency action is requested to transfer cash balances in the interest of timely and accurate accounting. ($0)
Title
To authorize the City Auditor to create new PayGo funds for the Division of Water and the Division of Sewerage and Drainage; to authorize the transfer of cash within the Operating Funds for Divisions of Water and Sewerage and Drainage; to authorize the transfer of cash from the Water, Sewer, and Stormwater Operating Funds ...
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