1. Southwest Metro Transit Update-Loan Request.SOUTHWEST METRO TRANSIT Phone 612 - 934 -7928 .
8080 Mitchell Road, Suite 104, Eden Prairie, MN 55344 FAX 612 - 949 - 8542
SMTC and CHANHASSEN JOINT MEETING
Monday, March 3, 1997 6:30 pm
Proposed Agenda
I. INTRODUCTIONS
II. CONCERNS / PURPOSE OF MEETING
III. UPDATE ON EXECUTIVE DIRECTOR POSITION
IV. CASH FLOW SHORTAGE AND PROPOSED ADVANCE FROM CITIES
V. FINANCIAL CONTROLS OF AGENCY
VI. SUBURBAN TRANSIT ASSOCIATION (STA)
VII. COUNCIL / COMMISSION COMMUNICATIONS
The Southwest Aletro Transit Commission operates wider a Joint Powers Agreement by and between the cities of Ctanhassen, Chaska, and Eden Prairie.
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SOUTHWEST METRO TRANSIT
8080 Mitchell Road, Suite 104, Eden Prairie, MN 55344
Phone 612 - 934 -7928
FAX 612 - 949 -8542
February 5, 1997
Mr. Don Ashworth
City of Chanhassen
670 Coulter Boulevard
Chanhassen, MN 55317
Mr. Carl Jullie
City of Eden Prairie
8080 Mitchell Road
Eden Prairie, MN 55344
Mr. Dave Pokorney
City of Chaska
1 City Hall Plaza
Chaska, MN 55318
Gentleman:
I have now had the opportunity to speak with all of you regarding the cash flow situation
Southwest Metro Transit will be facing as we enter our first year of operations under Local
Levy authority. This letter will document our understanding and outline a proposed action
plan.
As way of background, I have attached the packet agenda item that was discussed by the
SMTC Commission at our last meeting. Possible options discussed were (1) assistance
from the cities, (2) pursuit of bonding authority in order to issue tax anticipation bonds, (3)
assistance from the Met Council, or (4) pulling service. For a variety of reasons, the
Commission directed that the agency pursue assistance from the cities. As a joint powers
agency, it is appropriate that this assistance be requested from all parties.
As you can see from the attached operating cash flow forecast worksheet, the agency's first
shortfall will occur in April 1997. For this shortfall, SMTC has determined that it would be
most cost effective to borrow the funds in two lump sums of $250,000 each on April 1 and
June 1, 1997. We have also discussed that a pro -rata share from each city is most
appropriate. Based on the 1997 tax levy forecasts, this translates into the following
percentages: 17% Chanhassen, 8% Chaska, and 75% Eden Prairie. Therefore, please
accept this correspondence as a formal request for the first installment of financial
assistance, as follows:
i ► Aril l June 1
Chanhassen $42,500 $42,500
Chaska $20,000 $20,000
Eden Prairie $187,500 $187,500
The Sonthwest Ii4etro Transit Commission operates tinder a Joint Powers Agreement by and between the cities of Chanhassen, Chaska, and Eden Prairie.
Mr. Don Ashworth
Mr. Carl Jullie
Mr. Dave Pokorney
February 5, 1997
As we have agreed, SMTC will repay this short-term advance in mid -July, when tax
receipts are collected. In addition to the sum borrowed, an interest factor will be paid
equivalent to the 3 -month Treasury Bond rate as quoted by Americana Community Bank of
Chanhassen (SMTC's official bank) on March 31, 1997.
Similar terms can be reached for the funds to be borrowed for the anticipated November
1997 and June 1998 shortfalls. At this time, it is prudent to delay the exact sums to be
borrowed until we have a better estimation of our needs.
If you have any questions regarding our understanding, please give me a call. On behalf of
the Commission, we sincerely thank you for your assistance.
Sincerely,
G�
olleen Dockendorf
Acting Executive Director
SOUTHWEST METRO TRANSIT COMMISSION