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4B Sales Tax Corporation Minutes - 08/21/2009MINUTES OF THE 4B SALES TAX CORPORATION August 21, 2009 Present: John Alexander § Alan Donaldson § Charles Elmore § Jim Ginnings § Corporation Board Members Darron Leiker § Randy Schaffner § Bob Seabury § Rick Hatcher, Liaison § City Council Matt Benoit, Assistant City Manager § Miles Risley, City Attorney § Bob Sullivan, MPEC § John Burrus, Director of Aviation, Traffic & § Transportation § Linda Merrill, Recording Secretary § Gail Smith, Backdoor Theatre § Attendee 1. CALL TO ORDER Matt Benoit called the meeting to order at 1:03 p.m. 2. APPROVAL OF MINUTES (MAY 18, 2009) Darron Leiker moved, seconded by Charles Elmore, that the minutes be approved. The motion carried unanimously. 3. APPOINTMENT OF OFFICERS Mr. Elmore moved, seconded by John Alexander, that Jim Ginnings be elected to serve as President. The motion unanimously carried. Mr. Alexander moved, seconded by Mr. Leiker, that Randy Schaffner be elected to serve as Vice - President. The motion unanimously carried. Alan Donaldson moved, seconded by Mr. Elmore, that Darron Leiker be elected to serve as Secretary- Treasurer. The motion unanimously carried. RECEiVED CITY CLERK'S) OFFICE Data; ii h7 j - - - - - -- eyr e'0 413 Meeting Minutes — August 21, 2009 2 4, PUBLIC HEARING AND APPROVAL OF BUDGET FOR FY 2009 -2010 President Ginnings opened the public hearing for approval of the 4B Sales Tax budget for fiscal year 2009 -2010, itemizing the projects described in the budget: 1. Public Safety Projects Debt Service — $510,915 2. Radio Maintenance — $127,500 3. CAD /Records Maintenance — $135,000 4. MDT Software Maintenance — $142,566 5. Outdoor Warning Siren Replacements - $141,200 6. Trail, Seymour Highway Land and Firing Range Debt Service — $515,088 7. Golf Renovation and TIF #2 Debt Service — $597,027 8. Trail Extension along McNeil to Lake Wichita Dam — $175,000 9. Administrative Charge - $10,000 10. MPEC Improvements - $1,142,100 Randy Schaffner asked for an explanation of the $10,000 administrative charge. President Ginnings replied that it is a payment from 4B funds to the City's general fund to pay in part for services rendered to the 4B Board by City staff. A like amount will be requested from the 4A Board. Mr. Alexander noted that sales tax revenues have dropped significantly this year, and questioned whether staff anticipated a financial recovery. Mr. Benoit said it is anyone's guess. He projects the sales tax revenue by taking the current year's growth ( -1.4 %) and applying it to the previous fiscal year's actual ($3,558,983). Once he had computed this, a very disappointing sales tax collection figure came in that is 17% lower than the same time last year. This budget does not reflect that; therefore, it has the potential to be even lower. The City's method of projecting sales tax has always been very conservative. Mr. Alexander anticipated that sales tax collections may pick up based on projections for Hotter 'n Hell. Mr. Schaffner asked if there is any contingency in the budget. Mr. Benoit said the budget contains everything he knows about, including the three new items to be considered, and the existing debt service. This is the tightest budget he has ever prepared for the 4B Board. Mr. Elmore asked Bob Sullivan what items in the request for funds from MPEC are mandatory. Mr. Sullivan said that City staff had identified 11 needed items. It is important to keep the facility competitive, and to address certain safety issues. Councilor Hatcher noted that dehumidification is critical to future maintenance issues; Mr. Sullivan agreed, adding that when the weather is warm, the air conditioning in the Coliseum is run at a cool temperature to balance the air so that the ice floor does not fog up. That makes the environment too cool for patrons, and also increases utility costs. Rust is occurring on speaker cabinets on the scoreboard, and in spots on the girders, due to the excess moisture in the air. 46 Meeting Minutes — August 21, 2009 3 Mr. Sullivan also addressed the deterioration of the sprinkler system at the Ag Center. Due to its inoperability, any time an animal is housed overnight at the center, MPEC retains security in the event of a fire. Mr. Elmore asked if the current system is made of PVC or steel. Mr. Sullivan said it is steel, but it would be replaced with PVC. Mr. Schaffner asked the income possibilities for 2010. Mr. Sullivan said income is down as a result of the concert industry and the overall economy. Activity has increased on the convention side due to the efforts of the new CVB Director. They are looking at ways to diversify event loads and increase activities. President Ginnings called for a motion in order to discuss this issue. Mr. Elmore moved seconded by Mr. Schaffner, that such item be approved for discussion by the Board. President Ginnings asked Mr. Benoit for the total cost of the items requested by MPEC. Mr. Benoit replied it is $3,501,396. Mr. Seabury observed that it is normal that convention centers lose money, but asked if MPEC is seeing an improvement in the numbers. Mr. Sullivan said the trend is still to lose money each year, but they are closer to achieving budget numbers. Mr. Leiker added that hotel /motel funds are used to make up the operating loss. The operating subsidy is down in all areas except the CVB function; that is up 5% due to its marketing and advertising efforts. The Exhibit Hall is struggling due to the money lost to outside catering. Mr. Elmore asked if the City charges a premium if an outside catering service is used. Mr. Leiker said yes, but that is not as much as MPEC could make if it provided the catering. Mr. Sullivan added that the variance in catering was about $200,000. MPEC competes against a list of approved caterers. Councilor Hatcher asked if MPEC stood to lose activities if it took a monopoly stand. Mr. Sullivan said if MPEC went to a third -party vendor, and disallowed outside catering, it could create an issue in the community. It is a delicate position. There are some very large events coming in, so those numbers may come back up. Alan Donaldson noted the request for carpet replacement at a cost of $250,000. He asked if five years was about average for the facility. Mr. Sullivan said the carpet is in a high traffic area, is worn, and has stains that won't come out. People notice that, and it hurts MPEC in its competition with newer facilities. He is also asking for a commercial carpet cleaner. President Ginnings said the Council's philosophy for large expenditures at MPEC is that the facility cannot attract venues if first -class facilities are not maintained. He then called the question. All Board members voted in favor of approval of the proposed 4B budget for FY 2009 -2010. Mr. Benoit said that, provided the Board spends no additional money other than what is being requested today, it would close out FY 2009 -10 at $2,683,084. However, it is unlikely the Board will go the entire fiscal year without spending more money. 4B Meetinq Minutes — Auqust 21, 2009 4 Mr. Schaffner asked if there was a potential for stimulus money. Mr. Benoit said the Board issued debt for the trail extension between Scott Street and Hamilton Park. There is $2.9 Million in principal there, and the City received just over $3.2 Million in stimulus funds for that project. He did not include that in the balance statement. Even though the Board issued debt for the project, it probably won't need that money until the bids are opened in October. Theoretically, there are some unspent funds that would have parks and recreation -type discretion in the future. He can't tell the Board exactly how much money that would be. Mr. Schaffner asked if the City is paying interest on those funds. Mr. Benoit said yes, at 2 -1/2 %, the rate at which the Board issued debt. The Board would have the option at some point to use that to pay off the principal, but until the bids come in, he wouldn't recommend doing anything. President Ginnings then opened the public hearing to discuss Backdoor Theatre's request for $60,000. Gail Smith, Executive Director of Backdoor Theatre, addressed the Board. Backdoor's dinner theatre had a wheelchair ramp, but it was in bad shape, with rotting wood. A group of volunteers got a donation grant to redo the wheelchair ramp, renovate the courtyard, repair the roof and the air conditioning. The initial budget for this work was $243,000. By December 2008, they had raised $250,000 from grants, 4B funds and TIF funds. They hired an architect, and received bids from local contractors for the three projects. Their original estimates for the projects were low: Project Estimated Amount Bid Amount Ram $35,000 $80,000 New Roof $22,000 $29,000 Courtyard $50,000 $100,000 Their intent was to install a mechanical wheelchair lift, but the thickness of the theatre's concrete walls prohibited such installation. Instead, they went with the ramp, which ultimately proved to be more useful. It was completed in May; only the railing still needs to be done. The next project is to widen an aisle in the dinner theatre to allow for more than one wheelchair spot. They have removed seats in the main stage to allow a patron to remain seated in their wheelchair to watch the show. They intend to install removable seats to accommodate up to six wheelchair occupants. Another part of the planned renovation is to get the bathrooms compliant. The renovation of the bathroom in the dinner theatre will be relatively easy to accommodate a wheelchair, but they also need a restroom for the main stage patrons. The initial budget of $243,000 should have been $350,000 in order to accomplish their desired goals. They need an additional $150,000, and are working on other grants to obtain this money. President Ginnings asked for a motion so that this item could be discussed by the Board. John Alexander so moved, seconded by Randy Schaffner. 413 Meeting Minutes — August 21, 2009 5 Mr. Schaffner asked if there is a specific contract bid for these improvements. Ms. Smith said she had spoken with contractor Anthony Inman. With the $60,000, they could widen the dinner theatre aisle and renovate the two bathrooms. Mr. Schaffner asked if they had this in writing from Mr. Inman. Ms. Smith said no, but that everything he has done for the theatre thus far has been on target, or cost less than estimated. They could not be more pleased with his work. They gave eight companies the opportunity to bid on the jobs. He was the only one to come to the theatre to measure, take pictures, and look at the electrical before bidding. Mr. Leiker asked the Theatre's prospects to raise $30,000, if the Board agreed to match to $30,000. Ms. Smith said she would not see that as a problem; they already have commitments from other people who have previously given money. She also has two additional grants in the works. Some funding sources have told the Theatre to submit another funding request, as it has been a year since their last request. Mr. Schaffner asked if the City required a bid sheet or an invoice. Mr. Benoit said it is customary for these projects, but not obligatory. President Ginnings asked if the Theatre plans to do anything with the building that fronts on Ohio. Ms. Smith said they do not. The Theatre's executive director at the time it was offered did not consider what it would mean to accept the donation. He took it with a tax debt, at a time when Backdoor had its own tax debt. President Ginnings asked if the Theatre would be willing to bring back a report of its funding success from other sources. Ms. Smith said she has the potential to get a matching grant. It would work in her favor if she could tell them that the City is willing to match funds, as well. The Theatre's minimum goal is $150,000. Mr. Schaffner asked if the $250,000 raised in 2008 has been entirely collected. Ms. Smith replied that it had, and was pretty much all spent. He then asked if the projects discussed today total $150,000. Ms. Smith said that is their initial budget to do the bathrooms and open the walkway to the dinner theatre. Mr. Schaffner summarized that the project total is $150,000; the Theatre needs $60,000 from the 413 Board, and will then get matching grants of $60,000 or possibly more. Ms. Smith said her plan is to match all of it up to $150,000. The Theatre is at or above their attendance levels from this time last year. They do band nights, and have held half -price nights for the BCI and Leadership Wichita Falls. These efforts have made a positive difference in the number of reservations. Mr. Leiker asked if any of the grant prospects that are coming up on new cycles do not require a match. The Theatre's prospects of getting money from other groups appear to be good. He is tempted to have the 4B Board wait until the Theatre has exhausted all other efforts and then consider making up the deficit. Ms. Smith said that 413 Meeting Minutes — August 21, 2009 6 her other sources are not all matching grants. If she can tell these other prospects that she has other commitments, it shows that she is not solely relying on them for funding. Councilor Hatcher said the Theatre is $150,000 shy of completing the desired projects. It hopes to get $60,000 from the 4B Board, or at least an expectation of those funds. It will then approach other funding sources to raise the difference between $60,000 and $150,000. He wondered if the 4B Board could agree that if the Theatre can get other money, it would provide funding up to a maximum of $60,000. If the Theatre is able to get all but $30,000 of the $150,000, it would not necessarily need the entire $60,000 from the Board. Mr. Alexander amended his motion, seconded by Mr. Schaffner, to amend the 4B budget to grant Backdoor Theatre's request for funding up to a maximum of $60,000. Mr. Leiker said he would desire to see evidence of the other match. Mr. Schaffner asked if the Board could require an itemization of the different line items. President Ginnings replied that it ought to be a standing policy for the Board. He declared that, throuah inclusion of this conversation in the minutes, this is now an adopted policy of the 4B Board for this and subsequent requests. Miles Risley asked if it is the Board's intent that the Theatre come back to the Board with proof of other funding. President Ginnings said yes. Mr. Leiker said that if the motion is nailed down, City staff would receive evidence of the funding and would release payment. President Ginnings agreed. Mr. Elmore asked if it would be a full match. President Ginnings said that if the Theatre receives $120,000 from other sources, the 4B Board would pay the balance of $30,000. The Board is guaranteeing up to $60,000 for the Theatre to reach its $150,000 goal. Mr. Benoit asked if the Theatre is obligated to raise a certain amount of money. Councilor Hatcher said if the Theatre raised $90,000, the 4B Board would contribute $60,000; if it raised $120,000, the Board would contribute $30,000. Mr. Benoit asked for clarification that if the Theatre raised $90,000, it would then have access to $60,000. Mr. Risley said the motion could more accurately be stated to amend the 4B budget to arant Backdoor Theatre's request for fundinq up to a maximum of $60,000, subject to the Theatre raising at least $90,000, but declining on a dollar -for- dollar basis to the extent $90,000 is not reached. The amended motion carried. 8. Adjourn The meeting adjourned at 2:15 p.m. le_W ­30. rri-MO-1p • Al