05-1194Couneil File #
Green Sheet #
RESOLUTION
CITY OF SAINT PAUL, MINNESOTA
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6 Whereas, the 1932 Saint Paul Auditorium and the 1970 Civic Center Arena and Pazking Ramp were financed with City
7 of Saint Paul issued general obligarion bonds which were paid for by citywide property tas levies; and
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Whereas, since 1982, all capital improvement and major capital repairs at the Civic Center complex have been financed
with a combination of Civic Center/RiverCentre operating profits, 'h% City Sales Tax proceeds, Hotel Tax proceeds,
tenant contributions, and State fmanced loans, with a conscious effort by Saint PauPs elected officials to avoid using
property tax levies; and
Whereas, when financing construction of the convention center in 1994, City and Civic Center officials detemuned that
the Civic Center's 40% annual share of the City's'/z% Sales Taz would not initially provide enough funding to pay for
the debt service on the authorized revenue bonds, so the City Council ganted the Civic Center Authority the ability to
use sales tas dollars dedicated by state law to the City's Neighborhood Inveshnent Account and Cultural Projects
Account to cover shortages for Civic Center debt service, provided it was paid back with interest; and
Whereas, CouncIl file 94-1127 permitting the temporary use of Neighborhood and Cultural STAR dollars did not
specify an interest rate or computation method to be used; and
Whereas, as originally planned, the temporary use of sales tax revenues from the Neighborhood Investment Account
and Cultural Projects account is no longer necessary; and
Whereas, the RiverCentre operating profits have been affected by the Xcel Arena that was constructed and leased to
Minnesota Hockey Venriu Group, LP; other parking facilities constructed near the area; need to maintain an aging
facility; and, the decline in the convention business because of September 11; and
Whereas, these changes in operating profits when combined with higher operating expenses for the new convention
facility have made it difficult for the RiverCentre authority to pay all outstanding debt payments as originally planned;
and,
Whereas, in 2002 officials representing the City of Saint Paul, the Saint Paul Aousing and Redevelopment Authority
and the RiverCentre Authority developed a"Fle�ble RiverCentre Debt Deferral Plan" which would help the Authority
continue to meet all of its debt obligations over a longer period of time without any reliance on property tas levies; and
Whereas, the Saint Paul City Council encouraged, supported, and approved the merger of the Saint Paul RiverCentre
Authority and the Saint Paul Visitors and Convention Bureau as a way to reduce operating costs, increase revenues, and
be more coordinated in seeking new convention business; and
Whereas, the recent reduction in Downtown tas increments has made it difficult for the HRA to continue the
RiverCentre/HRA related debt deferral schedule; and
Whereas, the City Council has considered various options and recommendations for setting an interest rate and
computation method for use of STAR dollars for RiverCentre debt service and now desire additional financial impact
information; now
Resolufion Setting An Interest Rate and Computation Method for the RiverCentre to Pay for the
Temporary Use of STAR Sales Tax Dollars Used to Help Finance Debt Service Payments for
Construction of the RiverCentre Convention Center and Arena; and Requesting Other RCVA Actions.
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Therefore Be It Resolved, that the Saint Paul City Council wishes to review how different interest rate assumptions
would affect the preparation of a revised "RiverCentre Fle�cible Debt Repayment Schedule to the CiTy & IiI2A" before
the Council makes a policy decision as to an appropriate interest rate and computation method for the use of STAR
money for RiverCentre debt service. The three interest rate assumptions that the Council requests to be used in the
revised "RiverCenlre Flexible Debt Repayment Schedules to the City & IIRA" are:
1) Fized interest debt at 12-31-04 =$184,103, with annual compounding interest at 1% thereafter
2) Fizced interest debt at 12-31-04 =$390,419, with annual compounding interest at 2% thereafter
3) Fixed interest debt at 12-31-04 =$620,843 with annual compounding interest at 3% thereafrer
The City Council requests that the review include considerntion of vazyiug the above interest rates based on changes in
the economic condirions of the RCVA.
After the City Council deternunes an appropriate interest rate and computation method, the City's Office of Financial
Services shall keep a record of interest expense incurred and repayments made, and the City's Office of Financial
Services shall annually report to the City Council, at budget time, the balances paid and outstanding; and
Be It Further Resolved, that stafFfrom the City's Office of Financial Services and Planning and Economic
Development are requested to work cooperatively with the RCVA to prepaze by May 1, 2006 for City Council review
and approval the following items:
a) Updated "RiverCentre Fle�ble Debt Repayment Schedule to the City & HRA";
b) Capital Reserve and Maintenance Plan for the City's convention facility;
c) Fund Balance Policy for the Authority's budgets;
d) Budget and annual report, to be prepared by the RCVA, in a format that meets the needs of City officials in
conducting their fiduciary responsibilities for reviewing how general revenues of the City, including how the CiTy's %z
cent tas and hotel motel taac dollars are being used, payments being made on City/F�RA debt obligations, and that City
owned facilities are being maintained;
e) 2006 Legislative requests pertaining to the RiverCentre;
� Plan for strengthening revenues of the RCVA.
And Be It Finally Resolved, that the City's Lease Representative, as defined in the Arena Lease, provide to the City
the materials required under Section 14.2 of the Arena Lease, pertainiug to the capital improvements and repair and
maintenance requirements of the Lease by Febmary 1, 2006.
I�_.ES�i.�
Yeas
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Requested by Department of
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� � � Form Approved by City Attomey
Adopted by Council: � Date � �,�� � � �US
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Adoption Certified by CouncIl Secretary
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Approved by
Approved by Mayor for Submission to Council
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ContactPerson 8 Phone:
Margaret Egan
26G&564
MustBeonCoundlAgerv
28-DECD5
ContractType:
RE-F2ESOUJrION
oare io��a:
,s-oecas
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Assign
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For
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Green Sheet NO: 3029119
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1 uN e tor
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Setting an interest rate and computation method for the RiverCentre to pay for the temporary use of STAR Sales Tac Dollats used to
help finance debt service payments for construction of the RiverCe�re Convention Center and Arena; and requesting otha RCVA
action.
Recommendations: Appm�e (A) or Reject (R):
Planning Commission
CB Committee
_ CiWI Service Commission
1. Has this persodfirtn e�er wnrked under a cadrad forthis department?
Yes No
2. Flas this person/firtn e� been a ci[y employee�
Yes No
3. Does this person/firtn possess a skill rwt namally possessed by any
,curreirt city employee?
Yes No
Explain all yes answers on separete sheet and attach W green sheet
Initiating Problem, Issues, Opportunily (Who, What, When, Where, Why):
Advantages H Approved:
DisadvantageslFApproved:
Disadvantages N Not Approved:
loWl Amount of
Transaction:
Funding Source:
Financial Information:
(Explain)
CosURevenue Budgeted:
Activity Number:
December 16, 2005 6:45 PM Page 1