10:00 PM PDT on Tuesday, July 6, 2010
By JAN SEARS
The Redlands City Council wrapped up a loose end hanging from the 2010-11 budget with an agreement Tuesday on how to cover the inability of one city fund to pay a nearly $1 million debt.
The public facilities fund, which collects revenue from development impact fees, is obliged each year to pay half of a nearly $2 million bond debt. The bonds were issued in the 1980s to build a corporate yard, fire station and parking garage and to improve A.K. Smiley Library.
But the recession eliminated income from developer fees and the public facilities fund required a loan from other funds to pay its debt, city Finance Director Tina Kundig said.
During June budget meetings, Councilman Jon Harrison objected to a plan to take all of the loan from two funds holding money intended for purchases of open space. He asked that the city find a way to spread the cost over a wider base.
The money will be paid back with interest once the economy improves, construction resumes and the city begins receiving impact fees again, Kundig said.
On Tuesday, the council agreed to cover the debt of $962,769 with loans from five funds rather than just two.
That means the open space fund will lend $256,385; the park and open space fund, $256,384; the storm drain construction fund, $100,000; the water service fund, $150,000; and the general fund, $200,000.
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