HomeMy WebLinkAbout20345 - RESOLUTIONS - 5/15/2002 RESOLUTION NO. 20345
OF THE CITY COUNCIL OF THE CITY OF '
PALM SPRINGS, CALIFORNIA, REDUCING
THE AIRPORT'S MAINTENANCE RESERVE
ACCOUNT FROM 25% TO 15% OF
OPERATIONS AND MAINTENANCE COSTS
(O&M).
WHEREAS the Installment Sale Agreement securing the 1992 and 1998 Airport Revenue
Bonds states that "The Treasurer shall establish the Maintenance Reserve Account at an
amount initially equal to 25% of total current annual Operations&Maintenance Costs,which
may be changed from time to time by the Director'; and
WHEREAS the first year's O&M costs were $4,692,078 and the initial reserve was set at
$1,173,019; and
WHEREAS over the years, as the O&M costs rose,the reserve also rose to its 2001102 level
of$2,335,364; and
WHEREAS in the aftermath of the terrorism attacks of September 11, 2002, the Airport, like
all airports in the Country, experienced dramatic reductions in commercial flights which
resulted in an operating deficit of over$1.4 million; and
WHEREAS the City's financial consultant, Harrell and Company, has recommended that a '
reduction in the Maintenance Reserve Account should not result in a reserve balance less
than the post 9/11 deficit which, at Palm Springs, was $1.4 million; and
WHEREAS, based on a projected O&M cost for 2002/03 of $9,791,892, a Maintenance
Reserve amount of 15% of the O&M cost would result in a Maintenance Reserve Account
balance of$1,468,783; and
WHEREAS on May 1,2002,the Palm Springs International Airport Commission reviewed the
reserve level issue and took action to recommend City Council approval of a 15% O&M
reserve,
NOW THEREFORE BE IT RESOLVED by the City Council of the City of Palm Springs,
California,that the Palm Springs International Airport Maintenance Reserve Account funding
requirement is hereby reduced from 25% to 15% of Operations & Maintenance costs,
1
a
Resolution 20345
May 15, 2002
Page Two
1
ADOPTED this 7 Sr7, day of�M y , 2002.
AYES: Members Hodges, Mills, Oden, Reller-Spurgin and Mayor B1eindienst
NOES: None
ABSENT: None
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
City Clerk City Manager
REVIEWED&APPROVEDAS TO FORM