Loading...
HomeMy WebLinkAbout1989-05-03 EURA MINUTES• • • I. CALL TO ORDER. ENG LEW OOD URBAN REN EWAL AUTH ORITY May 3, 1989 D R A F T The regular meeting of the· Englewood Urban Renewal Authority was ca 11 ed to order by Chairman Robert Voth at 5: 45 P. M. in the George Perrin Conference Room of the Englewood City Hall. Members present: Tatton, Voth, Byrne, Cole, Keena, Mcintyre, Minnick Hanson, Alternate Member Hinson, Executive Director/Executive Secretary Members absent: Daugherty, Alternate Member Also present: Harold J. Stitt, Assistant to EURA Director Richard S. Wanush, Director of Community Development II. APPROVAL OF MINUTES April 5, 1989 Chairman Voth stated that the Minutes of April 5, 1989, were to be considered for approval. Minnick moved: Cole seconded: The Minutes of April 5, 1989 be approved as written. AYES: NAYS: ABSENT: ABSTAIN: Voth, Byrne, Cole, Minnick None None Keena, Mcintyre, Tatton The motion carried. III. PROPERTY TAX INCREMENT ALLOCATION Mr. Hinson stated that he has written to the Executive Directors of the Urban Renewal Authorities throughout the State alerting them to the different i nterpretat i ans of the law regarding tax increment abatement a 11 ocat i ans by the various County Assessors, and the possible ramifications to bond issues. Mr. Hinson stated that at this time, the only response he has received is from the Littleton Riverfront Authority, stating that it will join EURA in a suit for declaratory judgment, but is unable to contribute financially to this suit. Mr. Hinson stated that he has also written to Mr. Ken Buckius of Cen- tral Bank of Denver, the EURA Bond Trustee, notifying him of EURA's problem with the Arapahoe County Assessor. He has not received a written response, but in telephone conversations he has had with Ms. Margie Walker of Central Bank of Denver, it is his impression that the Trustee does not want to be placed in the position of "telling the Authority how to proceed." - 1 - Ms. Carolyn Justice, legal counsel from Mr. Benedetti's office, entered the meeting. Mr. Hinson stated that he had also talked to Mr. Greg Johnson, of Kutak Rock & • Campbell, bond counsel for the Authority. Mr. Johnson indicated that the Trustee probably would not want to be put in the position of "telling the Au- thority to file suit or not to file suit." It appears as though the Authority will have to make the decision alone whether to proceed with legal action for a declaratory judgment on the abatement issue. Ms. Justice addressed the issue of filing suit, stating that requests for de- claratory judgments are given priority on court dockets, and she anticipated that a hearing would be scheduled within a few months. Ms. Justice stated that to this point, the Assessor's Office has refused to put anything in writ- ; ng on the procedures that they foll ow in making the abatement adjustments, and she is not sure how much "discovery" work will be entailed in preparation for the hearing. Ms. Justice stated that there would be need to take deposi- tions from the County personne 1 . Ms. Justice emphasized that there is no guarantee a declaratory judgment would be a "victory" for EURA. Ms. Justice stated that the issue is a matter of interpretation of the law, and it is her opinion that EURA is interpreting the Statute properly. Mr. Steve Bell, of Prudential-Bache, entered the meeting. Ms. Keena asked what the Court function is in this case where the law is so unclear that counties are diametrically opposed in their interpretation of the law. Ms. Justice stated that the suit would ask for a legal interpretation of the 1 aw. If the declaratory judgment is in favor of EURA' s interpretation, • this would make the procedure followed by the Arapahoe County Assessor ille- gal, and would determine how other County Assessors apportion tax abatements and allocate property tax increment monies. Ms. Justice cautioned the Au- thority that whatever decision is handed down by the Courts may be appealed. Mrs. Cole asked if there was a rough estimate on cost to pursue this issue through the courts. Ms. Justice stated that the cost would be the legal fees. If the case is not filed, the Authority stands to lose what appears to be sub- stant i a 1 tax revenues. Ms. Justice stated that she did not anticipate this case would be as complicated as the Mountain Bell case, for instance, but she also cautioned that she does not know how Arapahoe County litigates. Regard- ing a legal cost estimate for the suit, Ms. Justice estimated a $20,000 maxi- mum, assuming the case took no extraordinary and unusua 1 twists prompted by Arapahoe County. Mr. Tatton asked if a favorable decision would be retroactive. Mr. Hinson stated that this is a relief that would be requested by the Authority. He added that while there is no means to recoup the funds that have been lost to date, if the reapportionment is made retroactive back to 1987 additional fund- ing would not be lost. Ms. Justice agreed that this would be a request of the suit. Ms. Justice stated that there are two ways to clarify the interpretation of the law, one of which is proceeding through the Courts, and the second is by legislative action. Mrs. Keena asked if the suit is filed by EURA, and the judgment rendered is in • favor of EURA, will this act ion cost the City and School Board money? Ms. - 2 - • • • Justice stated that this is one way to look at it, because the proportional allocation of abatements will not all fall on the EURA tax increment revenue. However, the City and School Board have the ability to increase their mill levy to compensate for whatever loss in revenue would result from the propor- tional allocation, whereas EURA does not have that ability. Another aspect of this issue to consider is that currently the City, School Board, and other taxing entities are receiving a windfall they should not receive under a more appropriate tax abatement allocation process. Ms. Keena discussed what she perceives as a conflict of interest on her part as an Authority member, who is, on one hand, responsible to the taxpayers of the City of Englewood, but is also responsible to the bond holders. Ms. Byrne stated that she felt the same conflict that Ms. Keena has cited. Mr. Tatton pointed out that if the suit is filed, and the decision favors EURA's inter- pretation of the law, even if the City and School Board had to increase the mill levy to compensate for their loss of revenue, it would not be a substan- tial increase in the tax base. On the other hand, if EURA does nothing to correct this apparent erroneous interpretation of the law, and further proper - ty tax abatements are allowed, the ability of the EURA to repay the bonds will be seriously eroded. Mr. Hinson stated that taxing entities are allowed to compensate for abatements over and above the 5.5% tax increase limit. Mrs. Cole asked if there is any other way EURA can compensate for the loss of revenue. If the legal action is not pursued, will EURA be in trouble in paying off the bonds? Mr. Hinson stated that the Authority has already expe- rienced a $200,000 shortfall in tax revenues as a result of the property tax abatement allocation. The sales tax revenues have been in excess of the pro- jections. However, if the property tax abatements continue with no adjustment to the base and the abatements are a 11 applied to the tax increment amount, the shortfall will be compounded and over a 15 year period, the Authority could be faced with a loss of approximately $3,000,000. With a minimum annual shortfall of property taxes in the neighborhood of $200,000, thereby increas- ing the drain on the Reserve Fund, EURA could face serious financial problems in the not too distant future. Mr. Totton pointed out that Buyer's Club seems to be experiencing some financial distress, and that if businesses are lost that have been large contributors to the sales tax revenues, this will also have a great impact on EURA. Mrs. Keena asked if it was feasible that Arapahoe County could request support from the various Cities and School Boards that would be affected by a ruling on the allocation of abatements. Ms. Justice stated that the School District and City are not a party to the suit. Arapahoe County might request the back- ing of other counties that are interpreting the law as they do. Ms. Justice pointed out that Littleton Riverfront Authority is directly affected by the manner of abatement allocation, as EURA is, and this is the reason they were asked to join the suit. Mr. Tatton asked what court this suit would be heard in. Ms. Justice stated the hearing would be in Arapahoe County. Discussion ensued on the judges pre- siding in Arapahoe County. Mr. Tatton stated that he personally would rather experience the animosity from citizens who might be affected by a ruling in favor of the EURA than from the bond holders if EURA does not pursue the mat- ter through Court. Further discussion on the responsibilities of EURA members to the bond holders vs. responsibility to the citizens of the City ensued . - 3 - Minnick moved: Keena seconded: The Urban Renewal Authority go into Executive Session . The motion carried. * * * * * * * * * * The Authority came out of Executive Session, and Mr. Voth called the meeting back to order. Tatton moved: Keena seconded: The Englewood Urban Renewal Authority authorize its legal counsel to proceed with litigation requesting a declaratory judgment and interpretation of the law on the allocation of property tax abatements. AYES: NAYS: ABSENT: ABSTAIN: Byrne, Cole, Keena, Mcintyre, Minnick, Totten, Voth None None None The motion carried. IV. PENDING LAWSUIT Carl Ryberg Ms. Justice was asked for a report on the notice of intent to sue filed by Mr. Ryberg. It was moved, seconded, and carried that the Authority go into Executive Session. * * * * * * * * * * It was moved, seconded, and carried that the Authority come out of Executive Session. V. REMAINING EURA ISSUES Mr. Hinson discussed a memorandum he prepared and included in the packet out- 1 ining issues remaining to be resolved by EURA. VI. AWARDS FOR LITTLE DRY CREEK Mr. Hinson stated that the Little Dry Creek project has won the following awards: 1988 LITTLE DRY CREEK FLOOD CONTROL IMPROVEMENTS AWARDS Colorado American Society of Consulting Engineers (ASCE) Civil Engineering Project of the Year. - 4 - • • • • • • 1988 1989 1989 1989 Honor Award -Col or ado Chapter American Society of Landscape Architects . Colorado Consulting Engineers Council Engineering Excellence Award. Award of Excellence -American Concrete Institute. National Honor Award -American Consulting Engineer's Council. Mr. Hinson suggested that there should be some permanent repository for dis- play of the various awards this project has received, and suggested possibly a cabinet similar to that in the Community Room which was constructed to display the Quilt. Discussion ensued. Ms. Justice suggested contacting the High School Shop Class to see if the students would be interested in taking on such a project. VII. INVESTMENT REPORT Mr. Hinson reviewed the Investment Report with members of the Authority. VIII. MCLAUGHLIN WATER ENGINEERS Contract Amendment Mr. Hinson discussed a request for an amendment to the contract for Mclaughlin Water Engineers to cover current and projected budget overages. These over- ages relate to work performed during the months of March and April. The grand total of the proposed amendment is $11,994.05. Mr. Hinson stated that it has been the practice to have a 11 bi 11 s and statements on the construction and inspection services on Little Dry Creek reviewed and approved for payment by City Engineer Ragland and her staff. Mr. Hinson stated that City Engineer Ragland will out of the office for an extended period of time following the birth of her baby daughter on April 17, and that Mr. VanSwearingen of the En- gineering staff has resigned his position with the City of Englewood. These two individuals had worked most closely with the Little Dry Creek improvement project, and the remaining members of the Engineering staff have not been as involved with the construction work. Mclaughlin Water Engineers has been doing follow-up inspection work, as-built drawings, etc., and the charges for this work has resulted in the budget overage. Mr. Hinson stated that Office Engineer Kahm has indicated that, because of a manpower shortage, the En- gineering Department will need to use McLaughlin's services in following up on the warranty work on the RBI work on the Little Dry Creek. Staff recommends approval of the amendment to the Mclaughlin contract in the amount of $11,994.05. Discussion of the warranty work required on the RBI portion of the Little Dry Creek improvements ensued. Mr. Hinson stated that RBI is involved in the re- placement of plant materials that did not survive the winter. Additional dis- cussion centered on other work that is being performed on the creek, include grouting rocks in place to prevent their relocation by youngsters in an at- tempt to dam up the fl ow of water, and the elevation of a low spot on the bikepath near Sherman Street. Keena moved: Mcintyre seconded: The Englewood Urban Renewal Authority approve the amendment -5 - AYES: NAYS: ABSENT: ABSTAIN: Cole, None None None of the contract with Mclaughlin Water Engineers to increase the contract amount by $11,994.05. Keena, Mcintyre, Minnick, Tatton, Voth, Byrne The motion carried. IX. ENGLEWOOD MARKETPLACE Certificate of Completion Mr. Hinson stated that Trammell Crow has submitted a request for a Certificate of Completion on the Englewood Marketplace. They have constructed 98, 000 square feet of retail space, and have fulfilled the development agreement with the Authority. They now ask that a Certificate of Completion for the total site be issued by the Authority, and the remainder of their letter of Credit be returned to them. Byrne moved: Minnick seconded: The Englewood Urban Renewal Authority issue a Certificate of Completion to Trammell Crow for Englewood Marketplace, and the Letter of Credit in the amount of $19,700 be re- turned to Trammell Crow inasmuch as they have fulfilled the Development and Disposition Agreement with EURA. AYES: NAYS: ABSENT: ABSTAIN: Cole, None None None Keena, Mcintyre, Minnick, Tatton, Voth, Byrne The motion carried. X. TAX REVENUE COMPARISONS Mr. Hinson reviewed sales tax comparison figures for 1988 and 1989. Area #1 has not exceeded the base amount, but should do so within the next month or two. Area #2 has exceeded the base amount, and is 10% over revenues in 1988. Mr. Hinson stated that property tax revenues continue to be below projections, and are in fact below revenues from last year at this time. This is a result of the property tax abatements being applied to the incremental revenues and not allocated on a proportional basis. Mr. Minnick noted that Sound Warehouse is now open, and sales from this outlet should be good because of the appeal to teenagers. XI. MISCELLANEOUS Mr. Hinson stated that he has had no further contact with the owners of Trol- ley Square on the progress of leasing space in that development. • • Mr. Hinson stated that he has heard that Li ncor is considering changing the • leasing agent for the Phar-Mor Plaza area. - 6 - • • • Mr. Hinson stated that he has accepted a position with the City of Thornton as the Director of Special Projects, and his last day of employment will be May 12. He will be on vacation the week of May 8 through May 12. Mr. Hinson stated that City Manager Fraser has written a letter to Chairman Voth suggest- ing the appointment of Richard S. Wanush to the position of Executive Director/Executive Secretary of the EURA. Mr. Hinson stated that Mr. Wanush is familiar with the work of the Authority and with issues that are yet to be resolved, and that Mr. Stitt, who has worked very closely with the Authority projects for several years, would be available to assist Mr. Wanush. Minnick moved: Cole seconded: The Englewood Urban Renewal Authority reluctantly accepts the resignation of Wm. Richard Hinson as Executive Director/Executive Secretary. AYES: NAYS: Keena, Mcintyre, Minnick, Tatton, Voth, Byrne, Cole None ABSENT: None ABSTAIN: None The motion carried. Mr. Voth stated that he does have the letter from City Manager Fraser in hand, and asked for a motion. Minnick moved: Keena seconded: The Englewood Urban Renewal Authority recommend to City Manager Fraser that Richard S. Wanush be appointed as Ex- ecutive Director/Executive Secretary to the Englewood Urban Renewal Authority. AYES: NAYS: Mcintyre, Minnick, Tatton, Voth, Byrne, Cole, Keena None ABSENT: None ABSTAIN: None The motion carried. Mr. Hinson thanked the members of the Authority for their support and efforts during his service as Executive Director. He stated that the Authority should be very proud of the end results of the many years of hard work. Members of the Authority expressed their appreciation to Mr . Hinson for his leadership and congratulated him on his new position with the City of Thornton. There being no further business to come before the Authority, the meeting was declared adjourned at 7 :00 P.M. Gertrude G. Welty Recording Secretary - 7 -