Where is the Event Center Project in the Recommended Capital Program?

The mayor presented the finance package for the Event Center. I don't know about all of you but I am still scratching my head about it. I understand that the city will authorize the sale of bonds to finance the construction of the event center. The construction debt will be retired using the 2nd penny sales and use tax for the next 22 years. 

The mayor intends to fund the entire construction project, estimated at $110 million, with bond proceeds paid back with the 2nd penny sales and use tax. Within the proposal there will be no down payment on the debt and the first two years' payments will be interest only. Let's hope we see the projected sales tax growth over the next five years  so the city can make the payments when they come due. If there's a shortfall, the city will have to rob Peter to pay Paul. That means the current obligations of the sales tax dollars for capital projects may have to be reduced.

It is hard to get a handle on the financing of the event center until the city authorizes the bonds. Financing the event center bonds with 2nd penny sales and use tax does not require a vote of the public. Can the council refer this to a vote of the people? Is the public the only one who can petition it for a vote?  The ordinance, authorizing the debt, will address how much the bonds will be, what the money will be used for and what funds will be used to pay back the debt. All ordinances of the city are referable to a vote from a petition of the public.

In the 2012-2016 Mayor's Recommended Capital Program's summation, the event center bond debt payment was identified as follows:

• 2012: $4,200,000
• 2013: $4,600,000
• 2014: $5,900,000
• 2015: $6,900,000
• 2016: $7,900,000

This summation does not meet the charter requirements for the event center capital program.

The City Charter requires that these items be addressed:

Section 5.11. Capital program.

(a)Submission to city council. The mayor shall prepare and submit to the city council a five-year capital program no later than July 1 of each year for consideration.

(b) Contents. The capital program shall include:

(1) A clear general summary of its contents;

(2) Identification of the five-year goals of the city;

(3) A list of all capital improvements and other capital expenditures which are proposed to be undertaken during the five fiscal years next ensuing, with appropriate supporting information as to the necessity for each;

(4) Cost estimates and recommended time schedules for each improvement or other capital expenditure;

(5) Method of financing, upon which each capital expenditure is to be reliant;

(6) The estimated annual cost of operating and maintaining the facilities to be constructed or acquired;

(7) A commentary on how the plan addresses the financial sustainability of the city and the region of which it is a part; and

(8) Methods to measure outcomes and performance of the capital plan related to the long-term goals of the city.

The above shall be revised and extended each year with regard to capital improvements still pending or in process of construction or acquisition

There is nothing in the CIP that identifies the project costs for the new Event Center. The Event Center project sheet just lists $500,000 for 2012. There is no identification of the estimated impact on operating expense for the Event Center. Here is the event center project page in the 2012-2016 Mayor's Recommended Capital Program:

6/23/11 CAPITAL IMPROVEMENT PROGRAM 2012 - 2016

CITY PROJECT NUMBER: 000122 DEPARTMENT: 22- EVENTS CENTER

DEPARTMENT PROJECT PRIORITY: 1

PROJECT DESCRIPTION:

EVENTS CENTER; DESIGN (12)

TOTAL 5 YEAR PROJECT COST: $500,000

PROJECT TITLE: EVENTS CENTER

PROJECT JUSTIFICATION AND RELATIONSHIP TO OTHER PROJECTS:

This project will provide funding for the planning and design

of an Events Center. Debt service payments are based on estimated project

costs of $110 million.

CONFORM TO COMPREHENSIVE PLAN: In Conformance with the Plan

STATUS OF PLANS: Nothing Done Except This Report

CONFORMANCE TO AMERICAN DISABILITIES ACT: Y

PROJECT CATEGORY: New Building/Land and Improvem

ESTIMATED IMPACT ON THE ANNUAL OPERATING BUDGET:

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PROGRAMMED EXPENDITURES:

YEAR: 2012 2013 2014 2015 2016

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ST SALES TAX 500,000

A ENGINEERING

253-2201-460.35-21

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The finance director did say that the city intends for the naming rights money to pay for the operating expenses of the event center. If that money is not forthcoming in a sales push by Superlative or some other consulting company hired by the city, where will that money come from?


At this point, the public really doesn't know what the cost will be until that ordinance authorizing the debt is before the council for adoption. That's where the details will be outlined.