HomeMy WebLinkAbout13332RESOLUTION NO. 13332
A RESOLUTION AUTHORIZING THE TRANSFER OF
$500,000 TO PROJECT ED01801. LEASE PROCEEDS
ESCROW/RMS, PREVIOUSLY ESTABLISHED IN THE
1992 - 2016 SALES AND USE TAX CAPITAL
IMPROVEMENTS PROJECTS FUND
WHEREAS, the City of Pueblo is a party to a lease agreement which obligates
the City to pay certain net expenses incurred at the Pope Block Building (317 N. Main
St.); and
WHEREAS, additional funds are periodically provided, as necessary, for the
costs incurred under said lease agreement; NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1:
The amount of $500,000 shall be transferred to Project 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.
This Resolution shall become effective immediately upon final passage.
INTRODUCED: November 9, 2015
BY: Ed Brown
City Clerk’s Office Item # Q-3
Background Paper for Proposed
Resolution
COUNCIL MEETING DATE: November 9, 2015
TO: President Stephen G. Nawrocki and Members of City Council
CC: Sam Azad, City Manager
VIA: Gina Dutcher, City Clerk
FROM: Roni Kimbrel, Finance Director
SUBJECT: A RESOLUTION AUTHORIZING THE TRANSFER OF $500,000 TO
PROJECT ED01801. LEASE PROCEEDS ESCROW/RMS,
PREVIOUSLY ESTABLISHED IN THE 1992 - 2016 SALES AND USE
TAX CAPITAL IMPROVEMENTS PROJECTS FUND
SUMMARY:
This Resolution provides additional funding needed for the payment of expenses related
to the building known as the Pope Block Building.
PREVIOUS COUNCIL ACTION:
Resolution 11270, March 24, 2008 authorizing $2,000,000
Resolution 12696, June 10, 2013 authorizing $500,000
Resolution 13023, July 28, 2014 authorizing $500,000
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. In January of 2015,
ownership of the building was transferred to the City of Pueblo. The lease agreement
with RMS (now iQor) is still in place, and the City is still responsible to the payment of
the expenses incurred under the lease.
Periodically, additional funds are appropriated as needed to continue paying the
expenses. This Resolution will provide an additional $500,000.
FINANCIAL IMPLICATIONS
The amount of $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, the City may be in default of the Lease agreement.
RECOMMENDATION:
City staff recommends approval of this Resolution.