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j I i FUND BALANCING Debt Service Reserve ~ Debt Service and Arbitrage Rebate Liability Reserve Requirements i ! City of Eugene and Urban Renewal debt obligations have different debt service reserve requirements, depending on what was pledged at the time of issuance. All reserves will be reviewed and recalculated (if necessary) as part of the annual budget fund balancing process. The fund schedules used in fund balancing will include a brief description of the reserve requirement for each debt obligation. i ~ The City has established separate object codes to track the externally covenanted reserves from hose established to comply with internal agreements and management policies. Debt service funds will have reserves. budgeted in either object code 97998 (mandated reserves) or 97999 (other reserves). In addition, the City sets aside reserves for future arbitrage rebate liability payments (97997). The reserve requirements for each of the outstanding debt obligations are set out below. Arbitrage Rebate Liability Reserve (97997): Only one fund currently holds an arbitrage rebate liability reserve. The FY10 budget should include an appropriation sufficient to pay out the arbitrage liability to the IRS. The appropriation should be $70,000 to allow some room for a potentially higher rebate amount. Fund Amount Expected Rebate' Liabili Pa ent Date 221- Library Debt Service Fund $63,708 .12/1/09 final maturi Debt Service Reserves -Mandated (97998):. Some debt obligations have specific reserve requirements that are mandated by covenants made with the bond holders. The only obligation with a mandatory reserve is the DEQ loan, which will be fully paid off during FY10. The reserve amount is shown below: ' Reserve Held Amount for Issue Name Reserve Requirement in Fund FY10 DEQ'Loan, Bethel Pump Station 10% of outstanding amount 334 $17,432 ~ (Loan #831797) City of Eugene Fund Balancing January 2008 User's Manual 6.15 '