Agenda Date: 12/16/2014
Subject:
Title
A resolution approving a Cooperation and Loan Agreement between the City of Littleton and Littleton Invests for Tomorrow and authorizing an initial advance of $50,000 under the agreement
Body
Presented By: |
Michael Penny, City Manager |
POLICY QUESTION:
Does the city council support a resolution providing a loan to Littleton Invests for Tomorrow ("LIFT") for the purpose of financing the activities and operations authorized to be undertaken by LIFT with respect to the implementation of the adopted urban renewal plans as approved by the city and future urban renewal projects to be undertaken by LIFT under the Act?
BACKGROUND:
LIFT has requested a loan of up to $200,000 and an advance on that loan of $50,000.
The city council has adopted four urban renewal plans as prepared by LIFT in accordance with Part 1 of Article 25 of Title 31, C.R.S. The approval of the plans includes the authorization for the Arapahoe County Treasurer to collect and distribute incremental property tax revenues as per the Act. As part of the plan approval for the Littleton Boulevard and the North Broadway Urban Renewal Plans, the city council has also authorized city staff to collect and distribute sales tax increment revenue as authorized by the Act for a period of twenty-five years. The implementation of the plans will require LIFT to incur costs for its staffing and consultants in connection with urban renewal projects in any plan area prior to the receipt of any tax increment revenues that result from the projects. LIFT does not currently have sufficient financial resources to pay for these upfront costs, but will receive tax increment revenues when projects are developed within the urban renewal areas that would be used to repay any advances made by the city through a loan agreement.
Staff received the following from LIFT:
LIFT respectively requests a $50,000 draw on the loan of $200,000. The November legal costs are $3009 at $185/hour. Communications Infrastructure Group (P.R. firm/website developer, call center, scheduler, graphic design, media relations, packet compiler,etc.). The retainer contract expires on December 31 at $7,800 a month, plus postcard notification mailing and other expenses and total for October and November is $16,523. Ricker Cunningham's contract has $575, plus LIFT authorized impact reports for all taxing entities which is $14,300 for a total of $14,875. Executive Director expenses ($130/hour) for October/November total $3,888. Other miscellaneous expenses (secretary, office supplies, legal notices, etc.) incurred are estimated at $350. We have survey costs associated with the new legal descriptions following the city council changes to the boundaries by removing properties in the Littleton Blvd URA. The total is $38,645 with no current estimate of the surveyor expenses.
The total funds available to LIFT at the beginning of the year was $142,068. Funds being drawn on the account started slowly at first, but as issues became more complicated, the monthly draws became more severe until we ran out of money after paying the September and some October invoices. LIFT conducted more public meetings than the law required, and have done an extensive number of public appearances, always with printed materials of the latest news and happenings.
STAFF ANALYSIS:
The proposed Cooperation and Loan Agreement will provide funds that will enable LIFT to implement the urban renewal plans and eliminate and prevent conditions of blight found in the plan areas. The associated development projects that will occur as a result of LIFT's efforts will generate sufficient tax increment revenues to repay the loan amount by December 16, 2019 as per the Cooperation and Loan Agreement.
The loan requires justification on the proposed use of funds and a report of how the funds were actually expended. Council will have the opportunity to review both prior to any additional draws on the loan. This review will allow council oversight on the use of the funds, appropriateness of the expenditure, and an ability to gain updates on the status of projects. Staff highly recommends that Council be diligent in the review of all requests and the status of projects and uses of the funds to minimize risk.
FISCAL IMPACTS:
A $200,000 loan to LIFT from the General Fund. An immediate payment of $50,000 would come from the 2014 General Fund and further loan proceeds would come from fiscal year 2015 General Fund.
STAFF RECOMMENDATION:
Staff recommends council approve this resolution.
PROPOSED MOTION:
Proposed Motion
I move to approve the resolution approving the Cooperation and Loan Agreement between the City of Littleton and Littleton Invests for Tomorrow and authorizing an initial advance of $50,000 under the agreement.