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Home My WebLink About13839 RESOLUTION NO. 13839 A RESOLUTION AUTHORIZING THE TRANSFER OF $620,000 TO PROJECT ED0801. LEASE PROCEEDS ESCROW/RMS, PREVIOUSLY ESTABLISHED IN THE 1992 - 2021 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 $620,000 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 – 2021 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 this Resolution which are necessary or desirable to effectuate the transactions described therein. SECTION 4. This Resolution shall become effective immediately upon final passage. INTRODUCED: December 11, 2017 BY: Ed Brown City Clerk’s Office Item # M-4 Background Paper for Proposed Resolution COUNCIL MEETING DATE: December 11, 2017 TO: President Stephen G. Nawrocki and Members of City Council CC: Sam Azad, City Manager VIA: Brenda Armijo, Acting City Clerk FROM: Roni Kimbrel, Finance Director SUBJECT: A RESOLUTION AUTHORIZING THE TRANSFER OF $620,000 TO PROJECT ED0801, LEASE PROCEEDS ESCROW/RMS, PREVIOUSLY ESTABLISHED IN THE 1992 - 2021 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 Resolution 13332, November 9, 2015 authorizing $500,000 Resolution 13483, May 23, 2016 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 $400,000 for building expenses, plus $220,000 for roof repairs, for a total of $620,000. FINANCIAL IMPLICATIONS: The amount of $620,000 is available in the 1992 - 2021 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.