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' TO: James Fornell, City Manager <br />FROM:. Russ Van Gompel, City Accountant <br />RE :'- Acquisition Costs of Long. Lake Park <br />BackcLround <br />I was given a file of historical costs associated with the <br />acquisition of land for Long T_,ake Parl.~4 The file contained <br />an itemized list of expenditures tota~.ng $651,541 and the <br />supporting. documentation. -The list did not include the cost <br />of obtaining funds to .make acquisitions. <br />Cost of Obtaining Funds <br />Expenses were incurred by-the City to make funds available for <br />the land acquisition. Funds were obtained through grants, which <br />incurred minimal administrative expense, and 1969 bond sale] <br />In addition to administrative expense for the bond sale, the City <br />is required to pay interest to bond holders. This interest.. expense, <br />significant amount,. should be consic.ered when determining the cost <br />of acquiring property for Long Lake Park. <br />Allocation of Interest to Long Lake Acctuisition <br />S ince not all of the bond proceeds were used to acquire property <br />.for Long Lake Park it is necessary to determine the percentage of <br />.acquisition cost to the bond proceed. This percentage would be <br />applied to interest to determine the amount applicable to <br />Long bake Paris. <br />Calculation of Percentage <br />1969 Park Bond Proceed <br />Expenses paid from bond proceed <br />.Purchase price <br />Less: Funds from grants <br />Plus: Legal fees <br />Professional fees <br />Appraisal fees <br />TOTAL <br />71.4, 000 <br />641,7x5 <br />(114,375) <br />12,189 <br />6, 414 <br />11, 13 0 <br />5.57,163 <br />