sr-092650-5b~ 1
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CITY OF SANTA MONICA
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INTER-DEPARTMENT MEMO
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'~ DATE: September 25, 1950
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TO: City Council
~ttentione R, ~, Dorton' City Alaanager
-' FROM: ~ a. :3ard' City Controller
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SUBJECT: Investment of a portion of Perpetual Care funds in Cemetery expansion gg//
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It is proposed to invest sow X909000,00 of Cemetery Perpetual Care Fund
money in unimproved real property for ~e purpose of expanding the present limits of
~?oodlaxvn Cemetery and to make available thereby a substantial increase in the number
of salable lots.
It is further proposed that the money so invested be returned to the Cemetery
Perpetual Gare Fund as the lots so acquired are sold, plus an anneal interest of 3®1f2
on the uaroaid balance.
It is further proposed that the proportion of each lot sale placed in the
Perpetual Care Fund be increased from the present .1,00 per square foot to 1,b0 per
sgaare foot,
The Cemetery Perpetual Care Fund sac established for the purpose of providing,
from the interest received on the invested principal of the fund, perpetual care for
ioodlatm Cemetery from the time that no more lots sere available for sale.
.r`ithin the present limits of V~oodlasn Cemetery that point has been virtually
reached, but the interest income from the present principal of the fund is inadequate for
the pu_Tpose for which the fund sac established and unless some steps are taken to increase
the principal amount of the fund substantially' the balance of perpetual care requirements
must be furnished from general tax funds,
The proposed plan seems reasonable and prudent then, for two reasons. "r'irst,
the present principal of the fund, amounting to :~1999039,5d as of august 31, 1950, sill
be increased, both by the sale of additional lots and by the increased percentage of each
let sale deposited in the fund, to sash an extent that by the time the expanded portion
of the cemetery has been sold the principal of the fund Yrill be adequate tto provide the
necessary perpetual care sithout assistance from general tax funds. Secondly, the rate
of interest proposed to be paid to the Perpetual Care fund for the use of the j90,000.00
is substantially greater than that being earned through the present form of investments,
tsmich earn approximately 2.}~~ annually.
St should be mentioned9 hotaever, that of the current principal balance of the
fund, b3,000,00 is represented by "Series 0" goverment bonds, of trhich it will be
necessary to sell approximately X55,000,00, By the terms under t~nich these bonds are
purchased at par, selling them prior to their maturity dates ~4vi11 entail a loss equiva-
lent to the amortized unpaid pre.~ni.um from date of purchase to date of sale, shich twill
have the effect of reducing the interest revenue received chile se have held the lands ~®raj,~
WRITE IT ---DON'T SAY IT
I7ATD: September 25, 1950 Page 2.
TU: City Council
i~ttention: R® I~. Dorton' City ilanager
FROM: ~. A. Hard9 City Controller
SITBJDGT: Investment of a portion of Perpetual Care funds in Cemetery expansion
from the coupon rate of 2-1/2~ to about 1.85„ On X55,000.00 worth of bonds
this gull represent a'~ut X1,0']2.50 loss, but the int=rest rate proposed to be
paid for the use of the ~90y000.00 is such as to more taaan recover the loss to
the Perpetual Care Fund.
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Sa, fl. FL4RD
~',1 ty Contrflller
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