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HomeMy WebLinkAbout10425RESOLUTION NO. 10425 A RESOLUTION APPROVING THE TRANSFER AND EXPENDITURE OF $220,280.00 FROM THE 1992 -2006 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR THE PURPOSE OF REIMBURSING PUEBLO DEVELOPMENT FOUNDATION FOR EXPENSES INCURRED WITH RESPECT TO APPROVED JOB CREATING CAPITAL IMPROVEMENT PROJECTS WHEREAS, the City Council by Resolution No. 9621 approved an Agreement dated June 10, 2002 between the City and StoneCraft Industries, LLC whereby $200,000 of sales and use tax capital improvement project funds ( "Funds ") were authorized to be expended for the expansion of the building located on Lot 58, Pueblo Memorial Airport Industrial Park. The expansion of the building has been completed by Pueblo Development Foundation but the Funds were not paid or expended for such expansion because the June 10, 2002 Agreement provided that if Closing did not occur on or before August 31, 2002, the Agreement would terminate, and WHEREAS, Eldorado Stone, LLC, the successor in interest to StoneCraft Industries, LLC and the City have modified the June 10, 2002 Agreement to delete the provision requiring such termination, and WHEREAS, the $200,000 City Funds should be expended for the building expansion and paid to Pueblo Development Foundation, and WHEREAS, Pueblo Development Foundation has incurred expenses in the amount of $20,279.76 relating to other job creating capital improvement projects which should be paid out of the sales and use tax capital improvement projects fund. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO. that: SECTION 1 Funds in the amount of $220,280.00 are hereby authorized to be transferred, expended and made available to Pueblo Development Foundation out of the 1992 -2006 Sales and Use Tax Capital Improvement Projects Fund in reimbursement of expenses incurred by Pueblo Development Foundation with respect to the expansion of the building located on Lot 58, Pueblo Memorial Airport Industrial Park Subdivision as originally approved by Resolution No. 9621 and expenses incurred by Pueblo Development Foundation for other job creating capital improvement projects. SECTION 2 This Resolution shall become effective upon final approval and passage. INTRODUCED June 27, 2005 BY Michael Occhiato Councilperson APPROVED: PRES1DENT 9F CITY C IL ATTESTED BY: CITY CLERK D ED O Background Paper for Proposed RESOLUTION &p, # / 0L12L J AGENDA ITEM # DATE: June 27, 2005 DEPARTMENT: Law Department TITLE A RESOLUTION APPROVING THE TRANSFER AND EXPENDITURE OF $220,280.00 FROM THE 1992 -2006 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND FOR THE PURPOSE OF REIMBURSING PUEBLO DEVELOPMENT FOUNDATION FOR EXPENSES INCURRED WITH RESPECT TO APPROVED JOB CREATING CAPITAL IMPROVEMENT PROJECTS ISSUE Should the City Council approve the Resolution and authorize repayment of $220,280 from the half -cent sales and use tax capital improvement project fund? RECOMMENDATION Approve the Resolution. BACKGROUND Resolution No. 9621 approved an agreement and authorized the expenditure of $200,000 out of the sales and use tax capital improvement projects fund for the expansion of the StoneCraft Industries ( "Company ") building. The expansion was completed by Pueblo Development Foundation ( "PDF ") but because of language in the agreement approved by Resolution 9621, the $200,000 was not paid to PDF. City and Company on May 23, 2005 amended the agreement and the $200,000 should be paid to PDF. In addition, PDF has expended $20,280 on approved job creating capital improvement projects as shown on the attached letter from PDF to the City dated January 10, 2005. PDF is requesting reimbursement of the $20,280 so spent. FINANCIAL IMPACT See Background. PUEBLO DEVELOPMENT FOUNDATION P. O. BOX 1663 PUEBLO, COLORADO 81002 January 10, 2005 City of Pueblo Attn: David J. Galli, City Manager 1 City Hall Place Pueblo, CO 81003 Re: Airport Combined Service Fees and clean-up expenses for shell buildings. #9 and #10 Reimbursement of expenses requested $20,279.76 Dear Mr. Galli: This letter is to bring to your attention of the City's billing of airport combined service fees that have been assessed and paid by Pueblo Development Foundation (PDF) in error. In addition, PDF is requesting reimbursement of expenses incurred related to the clean-up of shell buildings #9 and #10. Combined Service Fees According to the County Assessor's records the properties located at 33850 United Ave. (lot 67) and 2 Jetway Ct. (lot 6); the owner of record is listed as Pueblo Development Foundation. The County Assessor records list the owner of record of 1 Jetway Ct (lot 1) as the City of Pueblo. Beginning July 1, 2004 the City began billing PDF combined service fees for these three properties at a total rate of $2,188.43 per month. Our position is that PDF should not have been nor be billed the combined service fees for these three properties based upon the following: 33850 United Ave. (lot 67) This property is to be used under a lease agreement with DeNeen & Company. The agreement with the City requires PDF to remit 95% of all payments received from the rental and or sale of this property to the City. PDF is merely an agent for the City and as such the combined service fee should be billed directly to DeNeen & Company. The amount of combined service fees paid by PDF for Lot 67 through January 1, 2005 billing was $9,854.00 (July -Dec 2004 at $1,468.75/mo and Jan 2005 at $1,041.50). $ 9,854.00 2 Jetway Ct. (lot 6) : The property is being used under a lease agreement with Takashiba. The agreement with the City requires PDF to remit 95% of all payment received from the rental and or sale of this property to the City. PDF is merely agent for the City and as such the combined service fee should be gilled directly to Takashiba. The amount of combined service fees paid by PDF for Lot 6 through January 1, 2005 billing was $2,372.81 (July -Dec 2004 at $353.67/mo and Jan 2005 at $250.79). 2,372.81 1 Jetway Ct. (lot 1) : This property is also known as Shell Building #10. This property is owned by the City of Pueblo and accordingly no combined service fees should have been billed. The amount of combined service fees paid by PDF for Lot 1 through January 1, 2005 billing was $2,455.60 (July -Dec 2004 at $366.01/mo and Jan 2005 at $259.54). 2,455.60 Total requested refund of combined service fees through January 1, 2005 $ 14682.41 Cleanup expenses for shell buildings #9 and #10 On April 13, 2004, PDF incurred expenses on behalf of the City of Pueblo related to work performed on shell buildings #9 and #10. The construction of these two shell buildings was completed roughly five years ago. Neither of the buildings has ever been occupied. The work performed in April 2004 involved boarding up broken sky lights, removal of animal carcasses and waste, cleaning buildings and cutting and disposing of weeds. The total amount paid by PDF check #2260 was $5,597.35. PDF is merely requesting reimbursement of this expense in the amount of $5,597.35 TOTAL REQUESTED REIMBURSEMENT COMBINED SERVICE FEES FOR CITY PROPERTY $ 14 CLEANUP EXPENSES FOR SHELL BUILDINGS #9 & #10 5,597.35 TOTAL 20,279.76 Attached are copies of invoices and cancelled checks supporting PDF's payment of the items in which reimbursement is being requested. I would be happy to discuss or supply any additional information you require regarding these issues. Sincerely, AIL Joseph A. Fortino, President Pueblo Development Foundation cc: Thomas E. Jagger 503 N. Main, Suite 127 Pueblo, CO 81003 encls.