HomeMy WebLinkAbout13023RESOLUTION NO. 13023
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, THEREFOR
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.
SECTION 3.
The officers and staff of the City are directed and authorized to perform any and
all acts consistent with the intent of the Resolution to effectuate the policies and
procedures described herein.
SECTION 4.
This Resolution shall become effective immediately upon final passage and
approval.
INTRODUCED: July 28, 2014
BY: Chris Kaufman
COUNCILPERSON
City Clerk’s Office Item # Q-2
Background Paper for Proposed Resolution
COUNCIL MEETING DATE:
July 28, 2014
TO: President Sandra K. Daff and Members of City Council
CC: Sam Azad, City Manager
VIA: Gina Dutcher, City Clerk
FROM: Deborah Morton, Finance Director
SUBJECT: 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
SUMMARY:
The attached Resolution authorizes the transfer of $500,000 from the Projects to be
Determined account in the Economic Development Half Cent Tax Fund for payment of
expenses related to the building known as the Pope Block Building.
PREVIOUS COUNCIL ACTION:
On March 24, 2008 City Council approved Resolution No. 11270 approving an
agreement between the City and PEDCO Foundation to setup an escrow account to
receive the balance of $2,000,000 from the 1999 Lease Proceeds Escrow Account from
the lease of the Pope Block Building (317 N. Main St.) for payment of the Foundation’s
operating expenses for the building.
On June 10, 2013 City Council approved Resolution No. 12696 authorizing the transfer
of $500,000 to Project ED0801- Lease Proceeds Escrow/RMS to replenish the escrow
account for payment of the net operating expenses of the Pope Block Building.
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, the Foundation 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.
In June of 2013, Council approved Resolution No. 12696 transferring $500,000 to
Project ED0801 to provide funding for the payment of net expenses incurred by the
Foundation for the upkeep and maintenance of the Pope Block Building from July 2012
through December 31, 2013.
As of December 31, 2013 the balance of funding in Project ED0801 was $77,638. This
resolution will provide funding for the payment of net expenses incurred, and not
previously reimbursed, by the Foundation for the upkeep and maintenance of the Pope
Block Building from January 1, 2014 through December 31, 2014. The expenses are
estimated to be in the amount of $500,000.
FINANCIAL IMPLICATIONS:
$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.
BOARD/COMMISSION RECOMMENDATION:
Not applicable.
STAKEHOLDER PROCESS:
Not applicable.
ALTERNATIVES:
If this Resolution is not approved continued operations of the Pope Block building could
be jeopardized.
RECOMMENDATION:
City staff recommends approval of this Resolution.