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HomeMy WebLinkAboutMinutes - Finance Committee - 06/16/2008 -Minutes 06/16/08 10:30 -12:00 Council Members:Doug Hutchinson,Ben Manvel City Staff:Darin Atteberry,Mike Freeman,Chuck Seest,Heather Shepherd,Kraig Ecton Guests:John Knezovich Approval of the minutes from the June 6th Meeting. Ben moved to accept the minutes and Mayor seconded the motion.The motion carried unanimously. Subsequent Event Briefing Chuck updated the group on a subsequent event disclosure being included in the City’s 2007 Comprehensive Annual Financial Report (CAFR).Chuck stated that a subsequent event disclosure assists users of the City’s CAFR (the public,rating agencies,other governmental entities).Typically subsequent events relate to issuance of new debt after the year-end.They can also be used to disclose significant Legal matters,natural disasters,or any event that may impact the City’s financial standing. An enforcement action occurred in January 2008 with a structured investment vehicle called Victoria (real estate related)that was included in the Wells Fargo securities lending program in which the City participates.Victoria defaulted on a short-term loan payment and as a result was shut down by bank regulators who will restructure its investment portfolio and issue a new investment to the Wells Fargo securities lending program. Ben asked;‘If the event occurred in January 2008,why is it included on the 2007 report?’The reason is because Bondi &Co.,the City’s external auditors perform their test work in May and anything before the completion of their field work may be included. The Final resolution of the enforcement is not yet known.The expectation is that the City will not incur a loss and a new investment wilt be issued to Wells Fargo on the City’s behalf by the end of 2008. Mike said Wells Fargo indicated the City would know within the next 30 days how the debt will be restructured.The City has stated to Wells Fargo that the City dose not City of Fort Collins Council Finance Committee Finance Administration 215 N Mason Street P0 Box 580 Fort Collins,CO 80522 970.221.6788 970.221 6782-fax fcgov.com where renewal is a way of life expect any Loss on principal and expects Wells Fargo to ‘make it whole on the investment. Darin stated that if there was a loss the potential amount would be $800,000 at this time based upon a liquidation of the investment in the current market. The City could still move forward with this program if Wells Fargo fixes it,but the City needs to clarify some of the risk parameters as the basis for the City’s continued participation.Or if there isn’t a loss,the City could move forward with this program. Next steps: -Renegotiate current securities Lending agreement with greater safeguards for risk. -Present updated investment Policy to Finance Committee later this year. Discussion of Capstone Project Mike asked for direction on the development proposed by Capstone a mixed use student housing project at Prospect and College.Mike gave background on the company and reviewed the benefits for this project. Some of the issues are: -Relatively high land prices -Modest rental rates in Fort Collins -Limited parking--because of storm water drainage issues -Development fees for the project One idea being discussed is a short lived URA on the project.This would generate tax increment financing (TIE)until the various public improvements that the URA agreed to fund were repaid by the TIE.Typically a URA lasts for 25 years,but if all the debt has been repaid then the TIOF could be returned to the County and PSD and other taxing entities on the property tax roll. Darn was somewhat uncertain about utilizing a URA for the project and would prefer attempting to do more with a reduction or offset to the fees. Doug and Ben said that since it’s an area focused on Student housing (which is a significant issue within the City),a URA may be an acceptable means to help fund the project.The project’s location on the future line of the Mason Corridor could also justify usage of a URA to address some of the transit related needs. Darn said the next step would be to bring it to Council for a resolution/incentive. Mike proposed doing a blight study for the southeast of side College and Prospect and then present both the resolution/incentive as well as the required blight study to Council.Darn’s preference was to bring the resolution/incentive to Council for discussion first,and then follow-up with other steps including the blight study. Other Business Darn mentioned the Boxelder Master Plan storm water issues.The first issue involves management of the habitat surrounding Boxelder,but that is being worked out. A second issue is the creation of an ‘Authority’Darin proposed rescheduLing the JuLy CrC meeting to an earlier date.The tentative date decided on by the group was June 30th John Voss mentioned that the City wouLd be conducting an RFP for a new Audit Services vendor.He asked if everyone could commit to a special meeting on August 27~”to interview candidates. Meeting was adjourned at 12:00 p.m.