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HomeMy WebLinkAboutCity Council Committees - Public Facilities Distict Board - 10/29/2014 (3) it x':7,1000 KENT Public Facilities District Board Special Meeting Minutes October 29, 2014 ShoWare Center 625 West James Street Boardmembers present: Mike Miller, Cass Prindle, Lew Sellers, and Jeff Piecewicz Others present: ShoWare Center General Manager Tim Higgins, ShoWare Director of Marketing Ryan Hart, Finance Director (Board Treasurer) Aaron BeMiller, Economic and Community Development Director Ben Wolters, City Clerk (Board Secretary) Ronald F. Moore and Reporter for the Kent Reporter, Steve Hunter I. Call to Order. The meeting was called to order by Chair Mike Miller at 4:00 p.m. a. Introductions. Attendees introduced themselves. b. New Board Treasurer. City of Kent Finance Director Aaron BeMiller. BeMiller was introduced by Chair Miller. c. Motion to approve the minutes of April 24, 2014. Lew Sellers moved to approve the minutes of April 24, 2014, seconded by Jeff Piecewicz. Motion carried 4-0. d. Position 5 term expiration. Chair Miller highlighted that Position 5 which was held by Randall Smith expired on September 1, 2014. He stated that he has confirmed with Mr. Smith that he wishes to continue serving on the board and Secretary Moore added that the reappointment of Mr. Smith to Position 5 was on the Kent City Council agenda for November 18. U. Finance Reports. a. City of Kent. Aaron BeMiller, Finance Director discussed the 2014 Exit Audit by the State Auditor's Office. He communicated that the conference has been delayed. He discussed the Public Facilities District Fund and communicated that the debt service amount is just under $3.8 million and the City is estimating a $745,000 from sales and use tax. He added that at the end of 2014 the fund is estimated to be at$135,000. He questioned if there was a minimum amount that the board wanted to keep in the fund. Miller communicated that there wasn't a limit set and confirmed that it could be used for debt, but some funds would be kept, according to BeMiller. Public Facilities District Special Meeting Minutes October 29, 2014 Piecewicz inquired if the debt rating has changed and BeMiller communicated that it hasn't. BeMiller communicated that the $10 million bond is almost paid off and the payments on the $53 million bond will begin and there may be a way to lengthen the debt service, but reduce the amount on an annual basis that needs to be paid. Miller verified that the $10 million gets repaid with sales tax revenue and confirmed that the sales tax credit lasts for 25 years. Wolters communicated that there is interest among other public facility districts to have an extension on their authority and when that happens we will do the same to extend the term of our bond. He communicated that the other entities are the facilities in Tri-Cities, Wenatchee, Spokane, Everett, etc. He stated that the older facilities are leading the charge because they need some major repairs on their facilities. Miller confirmed that we have a fixed rate and the rates are still pretty good. BeMiller confirmed that the rates are fixed, but they do change. He said they increase to a curve that we agreed to and they are able to be revised in 2019. At that time an analysis needs to be done to ascertain what is sensible to do. BeMiller communicated the Kent Event Center Operating Fund status. He communicated that the 2014 estimated actuals are a negative $2.45 million and they are estimating $275,000 of admissions tax and $500,000 from the City's General Fund to help pay down that negative balance. Additionally, he is estimating that the payments that will be made out are just over $1 million. He noted that depending upon how the facility does the rest of the year if the trend continues there will be a $230,000 negative change in fund balance and the facility would have an ending fund balance of negative $2.7 million. b. ShoWare Center. Arletta Voter, ShoWare Director of Finance handed out the 3rd Quarter income statement. She announced that September was slightly better than budget projections. She noted that July was significantly less than budgeted due to cancellations and low attendance at events that month. Tim Higgins, ShoWare General Manager communicated that there are 45 events scheduled in 60 days. He discussed and presented the facts about the compressor. Wolters communicated that the City has written a demand letter to Mortensen Construction and the contract was a maximum allowable construction cost and a process to seek claims as long as the statute of limitations hadn't expired. He noted that he has also written a letter to L&M and the demand letter explains the City's point of view. Now, Mortensen is working with their subcontractor to see what can be done and if they decide to do nothing the bonds of Mortensen can be moved upon. Sellers communicated that he appreciated the fact that this is listed as a separate item on the income statement. 2 Public Facilities District Special Meeting Minutes October 29, 2014 Higgins replied to Piecewicz that a consultant was hired and a report was generated for Mortensen and that the expenses listed are for the replacement of the system on the compressor. Wolters discussed the various issues with the facility and that the consultant, PermaCold, has taken ownership of the issues have become a partner to the facility. He added that PermaCold is suggesting changes to the system to extend the life of the equipment at a cost of around $30,000. Higgins communicated that the ShoWare is very pleased with the PermaCold consultants. Piecewicz confirmed that there should be a reduction in operating costs. Higgins communicated that the facilty costs about $1,000 for each hockey game. He noted that the playoffs are not budgeted, so there will be a rise in utility costs last season. However, the facility was open another 17 days and brought in more revenue, he explained. III. Operations Update. a. General Manager/Marketing Update. Ryan Hart, ShoWare Director of Marketing communicated that in September the Ringling Bros/Barnum Bailey Circus was here and 12,000 people attended the four day event. There were two successful concerts in October, he announced and 4,400 tickets have been sold for the Kray - Anomoly Tour. He communicated that they are projecting the 2 millionth fan during the Disney on Ice event and there are close to 1,000 more Facebook fans since the last meeting. The first Seattle Impact game is on November 8 and Disney on Ice has 10 performances scheduled from November 12 - 17. Meeting adjourned at 4:33 p.m. i I y � Ronald F. Mpare, MMC 1 Board Secretary I 3