8.4 Magnolia Interchange CITY OF SALINA
REQUEST FOR COMMISSION ACTION DATE TIME
03/04/96 4:00 P.M.
AGENDA SECTION: ORIGINATING DEPARTMENT: APPROVED FOR
NO. 8 AGENDA:
Finance & Administration
NO. 4 Rod Franz
BY: BY:
Item:
Consider an agreement with KDOT providing for innovative management of funds for the
Magnolia/I- 135 Project Number 95-924.
Backeround:
The Magnolia/I-135 project is financed by a combination of Federal Demonstration Grant Funds and
funds provided locally through debt issuance. The project is administered by KDOT. Our normal
experience with such projects is that KDOT required the local share to be paid to them in advance.
Because this project would require a large up front local investment, the City asked if alternate
arrangements for management of the cash was a possibility.. KDOT officials indicated they were
open to a proposal from the City for management of the local share of the project, so long as they
(KDOT) could be assured that funds would be available on a timely basis to pay the contractors on
the project.
We have proposed to KDOT an agreement with provisions as follows:
1. KDOT will apply funds against the project using "Innovative Financing with Federal Funds". The
intent is to apply the federal share of the project costs more rapidly than would normally be the case.
2. The City of Salina will place the proceeds of the Temporary Note Sale in an interest bearing
account. (to be determined)
3. KDOT will require that funds be provided to KDOT according to the following minimum
schedule:
On or before February 28, 1997: $1,472,500 (45%)
On or before August 30, 1997: $2,987,500 (75%)
On or before February 28, 1998: $4,151,550 (100%)
The amounts referenced above are the cumulative totals paid by the referenced date.
4. Not withstanding the above minimum schedule, KDOT may, at any time, by drawdown letter,
signed (KDOT designated official) and delivered by FAX, Overnight mail, or Postal Service, request
submittal of progress payment due the contractor on the project. Said funds will be transferred to
KDOT designated bank account via wire transfer authorized by City of Salina within 2 business days
of receipt of the request, provided that the City of Salina receives the request before noon. The
drawdown letter is to be addressed to Director of Finance, with a copy to the City Engineer.
CITY OF SALINA
REQUEST FOR COMMISSION ACTION DATE TIME
03/04/96 4:00 P.M.
AGENDA SECTION: ORIGINATING DEPARTMENT: APPROVED FOR
NO. Finance & Administration AGENDA:
ITEM: Rod Franz
NO.
BY: BY:
5. KDOT shall apply any payment received from the City in the same manner as other payments
received for KDOT administered local projects, that is, they shall be pooled with other State general
funds and shall not be specifically earmarked for this project.
The agreement essentially provides KDOT with access to the money on demand, and enables the
City to offset interest costs on the project with interest earnings on the unspent proceeds, while
minimizing the potential exposure of the City to arbitrage reporting and rebate requirements.
Recommendation:
Adopt Resolution Number 96-4988 authorizing the Mayor to sign an agreement and other
documents as may be necessary to consummate the intent of the City Commission.
COMMISSION ACTION
MOTION BY SECOND BY
THAT: