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HomeMy WebLinkAbout1990-04-04 EURA MINUTES• • • CITY OF ENGLEWOOD URBAN RENEWAL AUTHORITY April 4, 1990 D R A F T I. CALL TO ORDER. The regular meeting of the Englewood Urban Renewal Authority was ca 11 ed to order at 5:40 P. M. by Chairman James Totton. Members present: Minnick, Schmidt, Totton, Byrne, Keena Richard S. Wanush, Executive Director/Executive Secretary Members absent: Voth, Bullock Daugherty, Alternate Member Harold J . Stitt, Planner 1..J.<.'.: Jim Kreidle, Kirchner Moore; Bond Workout Analyst r U~/~) Mike Johnson, Davis, Graham & Stubbs; Bond Worko~t Co ~s~1 ~ Steve Be 11 , Prudent i a 1 -Bache; EURA Fi nanc i a 1 Adv· . ~ 1, / Also present: Gordon Yale, Boettcher & Company / }lf ~T APPROVAL OF MINUTES J11~t I l/3 / 1 ~ March 7, 1990 .----~ I 1. Chairman Totton stated that the Minutes ?r Marc ~?, 199JJwere to be considered for approval. -/ -----· Minnick moved: Keena seconded: The Minutes of March 7, 1990 be approved as written. ! The Minutes were approved as written; Mr. Voth and Mr. Bullock were absent. III. TAX INCREMENT BONDS Mr. Wanush summarized the discussions of the past several months, pointing out that in 1988 and 1989, insufficient tax increment revenue necessitated that the Authority draw on the Reserve Account to make the bond payments which were due. The Authority recognized that the projected tax increment revenues did not appear to be sufficient to meet bond payments for 1990 and the best pro- jections available indicated that the Reserve Fund will be depleted sometime in 1991. Therefore, the Authority authorized the hiring of Kirchner Moore to analyze the revenues and debt service payments, and to recommend a course of action for the Authority. The Authority also authorized hiring Mr. Mike John- son, of the firm of Davis, Graham & Stubbs, to act as the legal advisor for the bond workout. Mr. Wanush stated that based on the report from Kirchner Moore, there will not be sufficient revenues to retire the bonds, and the Reserve Fund depletion is sill projected for sometime in 1991. Kirchner Moore did recommend three options that the Authority could consider, those options being to (1) To take no action and allow the existing indenture documents and procedures to prevail; (2) To pledge additional securities, which would have - 1 - to be done by the City. This possibility has been discussed with City Council members and does not appear to be likely considering the current financial • condition of the City. (3) A tender/exchange program, whereby the Authority would offer some type of new bonds in exchange for existing bonds. This pro- cedure would require the approval of the bondholders, and would also be quite expensive, with no guarantee of securing the bondholders' agreement. Mr. Bell entered the meeting. Mr. Wanush stated that his recommendation is that the Authority authorize the staff to make full disclosure to all of the bondholders on the status of the Authority's finances. Mr. Wanush stated that he wanted to make the disclosure in the early part of next week, if possible. Ms. Schmidt asked if there is a possibility that large companies/corporations holding bonds might suggest renegotiation of the debt structure, and might be willing to put up the funds to finance such renegotiation. Mr. Wanush stated that he anticipated contacts from a number of bondholders, and it is possible that these bondholders will offer some alternatives. Mr. Kreidle stated that he didn't know whether holders of large blocks of bonds would be receptive to renegotiation, or whether they would be willing to bring it up. He suggested that in the course of discussions, it would be proper to ask "what would you suggest we do." Mr. Johnson agreed that this line of inquiry would be acceptable. Mr. Tatton asked if anyone knew a projected timetable on the litigation regarding bankruptcy of public entities. Mr. Johnson stated that there is supposed to be a ruling tomorrow (4/5/90); however, this ruling can be ap-• pealed, so there is no way to project a timetable. Mr. Johnson also discussed a bill that is before the legislature, which has been sidelined because of the budget considerations in the legislature. Mr. Johnson further pointed out that a ruling by one bankruptcy judge would not necessarily be binding on other bankruptcy judges. Mr. Tatton stated that in his opinion, the best determination is to continue the status quo; any decision on restructuring the debt service is something that City Council should be a party to. Mr. Tatton asked for a motion on the course of action to be pursued. Keena moved: Byrne seconded: The Urban Renewal Authority approve Re solution #4, Seri es of 1990, A RESOLUTION OF THE ENGLEWOOD URBAN RENEWAL AU- THORITY DIRECTING THE EXECUTIVE DIRECTOR TO FULLY DISCLOSE THE FINANCIAL STATUS OF THE 1985 SERIES A AND 1985 SERIES B TAX INCREMENT REVENUE BONDS. Mr. Johnson suggested clarification that the funds drawn from the Reserve Fund in both 1988 and 1989 were used to make bond payments. Mr. Wanush agreed, and suggested that the seventh Paragraph read: "WHEREAS, the $1,214,623.53 drawn from the Reserve Fund in 1988, and the $806,927.26 drawn from the Reserve Fund in 1989, was used to make bond payments and represents the shortfall of revenue available to pay the bonds." Ms. Keena and Ms. Byrne accepted this amendment to Resolution #4, Series of 1990. The vote was called: - 2 - • • • • AYES: Tatton, Byrne, None Keena, Minnick, Schmidt NAYS: ABSENT: ABSTAIN: Bullock, Voth None The motion carried. Ms. Keena excused herself from the meeting. IV. AMENDMENT OF 1989 BUDGET Resolution #3, Series of 1990 Mr. Wanush stated that the Budget of the Authority for an ensuing year is based on "projected revenues/expenditures"; and the Budget for the previous years require amendment at such times as the actual revenues and expenditures are known. Resolution #3, which reflects the actual source of funds and ap- plication of funds, will amend the 1989 EURA Budget. Minnick moved: Schmidt seconded: The Englewood Urban Renew a 1 Authority approve and adopt Resolution #3, Series of 1990, A RESOLUTION OF THE ENGLE- WOOD URBAN RENEWAL AUTHORITY AMENDING THE 1989 BUDGET. AYES: NAYS: Byrne, Minnick, Schmidt, Tatton None ABSENT: ABSTAIN: Voth, Bullock, Keena None The motion carried. V. FINANCIAL REPORT Mr. Stitt reviewed the Tax Increment Revenue Comparison report, which report reflects that $40,305.72 has been collected in Property Tax revenues, and $278,904.53 has been collected in sales tax revenues year to date. These fig- ures reflect that property tax revenues are behind 1989 collections by 21.36%; and sales tax revenues are down from 1989 collections by 15.39%. Mr. Bullock entered the meeting during this discussion. Mr. Wanush stated that there are two tax increment districts. The tax base in District #1 is relatively high and no increment is coming in from that Dis- trict on sales tax at this time. However, the tax base in District #2 was not as high, and the decreased sales tax increments in this district reflect the closure of the Buyer's Club operation. VI. OLD BUSINESS Mr. Wanush briefly reported on the Physical Whimsical lawsuit, appeal and rulings. Mr. Totton questioned the list of assets referred to in the information con- tained with Resolution #3 on amendment of the budget. Mr. Wanush referred to a list of properties included in the information, and pointed out that several of those properties listed are not EURA properties at this time. A resolution - 3 - will be prepared deeding some of these properties acquired for public improve- ment purposes back to the City. VII. DIRECTOR'S CHOICE Mr. Wanush stated that Alternate Member Alice Hanson has submitted her resig- nation from the Authority. He stated that in his opinion there is no need to fill this position inasmuch as the work load of the Authority is lessening. He asked the opinion of the Authority. Mr. Tatton pointed out that Kristi Daugherty is still serving as an Alternate Member, and he felt that one alter- nate member is sufficient. Schmidt moved: Minnick seconded: The EURA recommend to the City Council that the second Al- ternate Member position on the Authority not be filled. AYES: NAYS: ABSENT: ABSTAIN: Bullock, Byrne, Minnick, Schmidt, Totton None Voth, Keena None The motion carried. Mr. Wanush distributed copies of a letter from Mr. Opperman in response to a request from the auditors. This letter discusses the status of lawsuits the Authority is involved in, or pending litigation against the Authority. • Mr. Wanush further discussed the disclosure to bondholders. He emphasized his • desire that this disclosure be accomplished in the early part of next week. He asked if the Authority would want to approve the disclosure statement be- fore it went out, or if a copy of the document would be sufficient. Ms. Byrne stated that she would like to see the statement before it is released. Mr. Minnick suggested the possibility of sending members a copy in the mail, and a telephone poll follow-up. Discussion ensued. Minnick moved: Byrne seconded: The members of the Authority receive copies of the Disclo- sure Statement prior to the release of this document, and that telephone contact be made to determine approval of or changes in the document. AYES: NAYS: ABSENT: ABSTAIN: Byrne, Minnick, Schmidt, To t ton, Bullock None Keena, Voth None The motion carried. Mr. Totton emphasized that all inquiries regarding the bond workout issue made to individual members be referred to Mr. Wanush. Mr. Bullock asked if perhaps the inquires should be referred to Mr. Johnson. Mr. Wanush stated that he and Mr. Johnson have discussed this, and he would prefer to handle the inquiries himself. Mr. Johnson agreed that he and Mr. Wanush have discussed this issue, and that he was quite comfortable with inquiries being referred to Mr. Wanush . There was no further business brought before the Authority. -4 - • • • • Minnick moved: The meeting be adjourned. The motion was seconded, and carried. The meeting was declared adjourned at 6:05 P.M. hk.a!~A~4-tertrude G. Welty ? Recording Secretary - 5 -