City To Pay Back Park Funds

A schedule for repaying more than $933,000 Ann Arbor borrowed from the voter-approved 1966 and 1971 park bond issues was accepted by City Council Tuesday night. Along with scheduling the repayments, council, at the request of the Michigan Municipal Finance Commission, directed administration officials not to borrow any more money from the funds. The loans from the two bond issues were made over a number of years to an assortment of other city funds experiencing financial problems. Administrator Sylvester Murray told council the borrowing was done to meet legitimate operating expenses, such as paying salaries of city workers. The repayment schedule will funnel the $933,000 back into the funds between now and 1978. The last scheduled payment in that year is $120,200 from the airport fund. Murray suggested it be paid back from assignment of rents paid to the Building Authority for use of airport facilities. The administrator said the MFC has questioned the lateness of this last payment, suggesting instead that the money be taken in the more near future from the general fund and then returned to the general fund later. But Murray said because of the trouble the general fund is in he could not recommend this step. The park fund borrowing has not interfered with purchase of park lands or development of park sites, Murray said. But he acknowledged that the $120,200 might be needed before the airport fund is ready to repay it. Murray did not mention, nor did his plan contain, any provisions for repaying interest the borrowed money would have earned had it not been borrowed. He previously indicated the interest should be repaid, but because of practical financial reasons could not be. Part of the money, according to the schedule, will be repaid this year. This includes $116,017 loaned to the 1971 dam and storm sewer fund; $142,100 loaned to the local streets weight and gasoline tax fund; $50,000 to the special assessment fund; $55,000 to the sewage disposal fund; $15,000 to the golf course fund; and $20, 000 to the Veterans Arena fund. Murray noted the $142,100 from the weight and gasoline tax fund would need approval from both City Council and the state Highway Department. The largest single repayment, $192,015 loaned to the 1966 highway improvements fund, is slated to be repaid by 1977 contingent on the city selling land purchased for the Packard-Beakes street project. Murray suggested the city could make the park bond funds co-owners of the land to insure the repayment. The land is thought to be worth about $1 million. A $97,000 repayment from the water supply fund is scheduled in two parts, $50,000 in November and the rest next April. A $126,527 repayment is scheduled from the parking system fund by May 1976, pending a restructuring of operations and rate increases in the parking system. But Murray said alternatives to rate increases can be discussed.