Tuesday, November 23, 2004
A resolution that was unanimously adopted by the City Council last night gives Sunnyside the option of financing the purchase of the Monson feedlot with reimbursement bonds.
However, City Manager Bob Stockwell clearly insisted to everyone in attendance at Monday evening's Council meeting that the tax-exempt bonds would only be issued in case of dire financial emergency.
The issuance of such bonds, said Stockwell, is a remote possibility. He explained that the city is merely preserving its right to issue bonds to finance the purchase of the feedlot. Stockwell described the adoption of the resolution as a contingent in case the city experiences a devastating financial setback in the immediate future. Under federal tax laws, the city could only issue the bonds within the first three years of incurring the debt.
If such a financial emergency occurred, most likely revenue bonds would be issued, and they wouldn't require a vote of the people of Sunnyside.
In essence, by issuing bonds it would give the city the right to convert the Monson feedlot property it is buying into ready cash.
"But there is no intent on our part to do this," Stockwell said, adding that the resolution only reserves the city's right to do so.
In early October, city officials announced a deal had been struck to purchase the 150-acre feedlot from the Monson family for $2.5 million. The financing of the feedlot, said Stockwell at the time, would be through a series of internal interfund loans, using monies the city had in reserve that were yielding low returns.
In responding to questions from several in attendance at last night's Council meeting, Stockwell said the interfund loans the city will make to purchase the property isn't taking money away from any of the city's existing programs. He explained that the funds being used aren't coming from the general operating budget, which will total just under $6 million in 2005. The money for the feedlot purchase instead will be taken from invested reserves, none of which can legally be used for general operating expenses.