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HomeMy WebLinkAboutMinutes - Finance Committee - 06/02/2011 -Finance AdministrationCityC)215 N.MasonFtc::LL 2 FloorOr0IflSP0Box580 Fort Collins CO 80522 970.221.6788 ~970221782-fax Council Finance Committee Minutes 6/2/11 10:30a.m.12:00 p.m. Council Attendees:Mayor Karen Weitkunat,Mayor Pro Tern Kelly Ohlson,Councilmember Ben Manvel City Staff Attendees:Darin Atteberry,Mike Freeman,John Voss,Jim O’Neill,Lawrence Pollack,Steve Mason,Wendy Williams,Heather Shepherd Others:Kathy Cardona,Matt Robenalt,DDA.Board Members from the DDA and NPC. Approval of the Minutes from the May 16.2011 meeting. Mayor Karen Weitkunat moved to approve the minutes and Kelly Ohslon seconded.Minutes are approved unanimously. Ben Manvel moved to nominate Mayor Karen Weitkunat as the permanent Chair person for the Council Finance Committee,Kelly Ohlson seconded the motion.Motion passed unanimously. Museum Pledges and Financing Presenter:Marty Heffernan There is currentLy a shortfall in the funding for the new Museum of Discovery,and a bridge Loan from the City to the museum project is being proposed in order to assist the museum project in moving forward. The amount that is needed to complete construction of the building is $3,975,000.A combination of factors has contributed to this.The DDA committed $3 million but those funds are now not currently available and the DDA states they won’t have the money in 2011. Also,the Museum Non-profit Corporation (NPC)has committed $4,561,916 to the museum building.Of that amount,$975,000 is in the form of pledges which is payable over the next few years. Additionally,The Museum Non profit Corporation (NPC)has raised $2.975 million for museum exhibits,with $1.2 million in the form of pledges to be paid in future years (2011-2017). Appropriating $1 .2 million from General Fund reserves for museum exhibits would enable the City of new museum to open with a complete exhibit experience.The City will be reimbursed by the NPC as the future year pledge funds are received. This Committee’s direction is now being sought on whether and when to take this issue to the City Council.Does the Council Finance Committee support consideration of a short term loan for $3.975 from the General Fund for the museum building to be paid back by the DDA and the Museum,and provide sufficient time for the DDA and Museum to secure private financing or long term financing from the City,as approved by Council? AND Does the Committee support consideration of a $1 .2 million loan from the General Fund for museum exhibits,to be paid back by the NPC from committed pledge revenues that will be paid in future. Darin Atteberry asked Interim Finance Director John Voss to state his recommendations on whether the City is in a position to loan the money,and what the best procedure would be? Kelly Ohlson stated that if the City is to loan any money,he thinks that very specific Loan terms must be drafted to ensure thy City will be repaid. John Voss said that at the end of 2010,the City had $40.9 million in the general fund,and $19.3 of that amount was not allocated for anything.There is currently $12 million that isn’t in play in some way.This proposal is a short term loan from the City in order to give the Museum time to secure longer term funding,and to pay the City back. Matt Robenalt said that the DDA had made this commitment in 2009,and then when their debt was issued in 2010,the debt was largely placed with the private sector,resulting in higher interest rates,etc.Consequently,the DDA’s financial advisor recommended that the DDA not enter into any loan or financial terms at least until August 2011 when the County Assessor confirms what dollar amount the DDA will be getting from property taxes. Kelly Ohlson advised also getting the City’s legal opinion on this issue.City Attorney Steve Roy said that this proposal is currently written as an appropriation and to restate it in specific loan terms in time for the upcoming City Council Meeting in three business days from now would be possible,but would require a large amount of work.Therefore,it would be better to bring before Council at a little later date so that terms can be more specific.First reading July 5th,and Second reading July 19th~ The Committee agrees that this time frame is best to present this proposal to the Fort Collins City Council.Darin Atteberry also asked that the DDA and NPC to each draft a letter to City Council stating why this is important and that there is a sold commitment to repayment of the loan. Create New Museum Fund The Cultural Services Fund accounts for both the Lincoln Center and the Museum so they are currently combined.Staff is recommending the creation of a specific museum fund in light of the new museum facility and partnership with Discovery Science Center.City staff also recommends making this fund retroactive to January 2011. r r City ofFort oLLins Committee members recommend drafting a more detailed explanation of the funds,and then to bring it back to the Council Finance Committee next month. Storm Drainage Refinancing Conditions are favorable for refinancing the outstanding 2002 Storm Drainage Revenue Bonds. There is a potential for the City to save $560,000 on a net present value.The Committee is in favor and taking this to City Council for approval. KFCG Money The City ended up with extra money in the Keep Fort Collins Great fund due mainly to an unexpected addition of grant fund money.Mike Freeman said this will potentially keep happening in future years,and he prefers that a List of projects be drafted for which these project savings can be used.This topic will be moved to a later Council Finance Committee meeting due to time constraints.