HomeMy WebLinkAbout12696RESOLUTION NO. 12696
A RESOLUTION AUTHORIZING THE TRANSFER OF $500,000
TO PROJECT ED0801, LEASE PROCEEDS ESCROW/RMS,
PREVIOUSLY ESTABLISHED IN THE 1992 – 2016 SALES AND
USE TAX CAPITAL IMPROVEMENTS PROJECT FUND
WHEREAS, in 1999 an agreement was entered into between the City and PEDCO
Foundation to place all rents and other payments received by the Foundation for the lease of
the Pope Block Building (317 N. Main St.) into a separate escrow account, known previously as
the “1999 escrow account”; and
WHEREAS, in 2008, the balance of the escrow account was approximately $2,000,000;
and
WHEREAS, Receivable Management Services Corporation agreed to modify its lease
arrangements as well as employ an additional 250 employees provided that the City pledge the
balance of the 1999 escrow account for the payment of net operating expenses of the Pope
Block Building; and
WHEREAS, all $2,000,000 of the original pledged escrow funds have been expended for
payment of said net operating expenses; and
WHEREAS, the City and Foundation desire to replenish the escrow account for the
continued payment of net operating expenses of the Building. NOW, THEREFORE
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The amount of $500,000 is hereby authorized to be transferred to Project No. ED0801,
Lease Proceeds Escrow/RMS.
SECTION 2.
Said funds shall be made available and transferred from the Projects to be Determined
account within the 1992 – 2016 Sales and use Tax Capital Improvements Project Fund.
INTRODUCED: June 10, 2013
BY: Sandy Daff
Background Paper for Proposed
RESOLUTION
DATE:AGENDA ITEM # Q-1
JUNE 10, 2013
DEPARTMENT:
FINANCE DEPARTMENT
DEBORAH MORTON, DIRECTOR
TITLE
A RESOLUTION AUTHORIZING THE TRANSFER OF $500,000 TO PROJECT
ED0801, LEASE PROCEEDS ESCROW/RMS, PREVIOUSLY ESTABLISHED IN THE
1992 – 2016 SALES AND USE TAX CAPITAL IMPROVEMENTS PROJECT FUND
ISSUE
Should the amount of $500,000 be transferred from the Projects to be Determined
account in the economic development half cent tax fund for the payment of expenses
related to the building known as the Pope Block Building?
RECOMMENDATION
Approval of the Resolution.
BACKGROUND
In 1999, an agreement was entered into between the City and PEDCO Foundation to
place all rents and other payments received by the Foundation for the lease of the Pope
Block Building (317 N. Main St.) into a separate escrow account, known previously as
the “1999 Escrow Account.” In 2008, the balance in this escrow account was
$2,000,000. At that time, the Receivable Management Services Corporation agreed to
modify its lease arrangements with PEDCO Foundation and lease additional space in
the Building in order to employ an additional 250 full-time employees; provided,
however, that the $2,000,000 balance in the 1999 Escrow Account (the Lease Proceeds
Balance) be escrowed with the City’s Finance Department and pledged for the payment
of Net Foundation Operating Expenses as defined under said lease. This arrangement,
as well as other terms and conditions, was approved by the Council on March 24, 2008,
by Resolution No. 11270. The term of the agreement was January 1, 2008 through
March 1, 2013.
In July of 2012, all of the $2,000,000 escrowed funds had been spent for the
reimbursement to Foundation for their Net Operating Expenses as defined in the
agreement. Since that time, Foundation has incurred significant additional expenses
related to the Building under the lease agreement between Foundation and RMS. In
addition, the lease agreement has been extended by those parties. However, there are
no longer funds available for the payment of the Building’s expenses.
This Resolution will provide funding for the payment of net expenses incurred, and not
previously reimbursed, by Foundation for the upkeep and maintenance of the Pope
Block Building from July 2012 through December 31, 2013. The expenses are
estimated to be in the amount of $500,000.
FINANCIAL IMPACT
$500,000 is available in the 1992 – 2016 Sales and Use Tax Capital Improvement
Projects Fund (the Economic Development Half Cent Tax Fund) in the Projects to be
Determined account.