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HomeMy WebLinkAbout61-89 RESOLUTIONRESOLUTION NO. ‘,/"-AP% No resolution was ever drafted. Attached is a copy of the Board of Director minutes where the resolution was adopted. • - 23 ' July 18, 1989 precedent in Fayetteville where city taxpayers subsidized schools. The Mayor reminded Blackwell that the majority of Fayetteville citizens had voted to approve the issue. The Mayor said the Board would proceed with speed to resolve this issue. He said 234.1 we would move forward with with a separate school issue if need be. LEASE AGREEMENT The Mayor introduced consideration of a resolution authorizing the Mayor and City Clerk to authorize a lease between the City of Fayetteville and Fayetteville School District 1. He explained the provisions of the lease included having the district make lease payments to the City if the City provides certain tax base improvements within the district. He said if tax base expansion didn't occur with the district, lease payments would not be inccurred nor would they accrue. He said lease payments would be deposited into an interest bearing account designated the "Fayetteville Economic Development Revolving Fund" and would be used as the Board determined necessary to stimulate economic development in the City. He reported the City Manager recommended approval. The City's Economic Development Coordinator Richard Shewmaker explained the lease would give both entities an opportunity to expand the tax base. He explained funds would not be allowed to be expended anywhere but within the Fayetteville school district. In answer to•a question from Director Marinoni, Shewmaker said the agreement had been discussed with School Superintendent Winston Simpson who had discussed it with School board members. He added that Simpson was in support and indicated he had received a positive indication from the School Board. Shewmaker said lease payments would only be made when the tax base expanded and only for one year, if a new industry were constructed. He said the value of the lease payments would equal the increased taxes generated from a piece of property where an industry located. He said the lease payment would take three years to make it into the revolving fund, because of certain legal requirements stating a minimum of 70% of any new revenues have to be set aside for teachers' salaries. In answer to a question from Mayor Martin, Shewmaker explained the school board would be leasing from the City the $10 million of school improvements to be paid for by City sales tax. He said because the law requires the City to construct the buildings to be used by the school system, the facilities can be leased to the school system. 234.2 234.3 234.4 234.5 Director Vorsanger commented that it appeared the request was really for the 234.6 Board to authorize the staff to work with bond counsel to make this agreement a part of the closing documents for the capital improvement bonds. He asked, if this is made a part of the bond indenture, if any additional agreement was needed from the Board. Vorsanger said he thought it was an excellent idea and would help the schools and city in the future in developing its economic base. Vorsanger, seconded by Kelly, moved to approve the lease. 235 July 18, 1989 235.1 Director Green said this was an innovative idea that would get Fayetteville's economic development going again. He said although it was complicated the benefits were tremendous. He asked if it was possible to use the anticipated tax increase ascollateral. Shewmaker said he thought that was possible. 235 2 Bob Brandon, Fayetteville citizen, said he had school-age children and was interested in the issue. He said what we were doing was laundering money through our school bond issue into a purpose for which that money was not intended by people who voted for funds to build the school buildings. He said we were taking money out of the schools by diverting the funds into a slush fund for economic development. Brandon said he didn't see this as assisting the school system but as simply a means of getting money for some other purpose with the idea that in the future this will form a tax base increase for the school system. He suggested some tax money be dedicated to economic development rather than involving the school system. Brandon said this was not discussed for the school bond election. Shewmaker said the $10 million the people voted on for school improvements will not be siphoned off for some other purpose. He said the proposal was reviewed both by those who would be paying the school system, and those who would be the recipient through the expanded tax base via the school system. He said he didn't think they would have supported it if they felt it would be to their detriment. 235.3 235.4 • Al Vick, Fayetteville citizen, said at the time of the election a lot of news articles claimed that if the sales tax didn't pass the City would actually collapse and City services wouldn't be in place anymore. He said, if we are considering paying some of the incinerator debt from sales tax, it seems to prove that the City was really not on the verge of collapse before the tax was approved. He said the tone of the news articles may be the reason some people voted for the tax. He asked why everybody wanted the City to continue to grow so much. He said if we are going to talk about doubling the population we need to talk about what we're going to do with the solid waste and raw sewage. Mayor Martin said he shared many of Vick's our concern shouldn't be growth versus no so we get the best, not the worst, out of concerns but told him that he thought growth, but carefully managed growth an expanding tax base. 235.5 Joe Robson, Fayetteville resident, said he had children in the school system and would like to see the school system continue to improve the quality of service. He said he wasn't really opposed to economic development. Robson said the idea was creative but wondered whether we knew exactly what we were getting into. He said it .appears to him we were "playing another shell game with money." Robson asked if bond counsel, or the City's attorney, would receive benefit from involvement in the bond issuance. The Mayor said, if the City didn't yet know who bond counsel would be, they wouldn't know if any benefit would be received. Robson said we had received an opinion in regard to the incinerator and he still held the view that opinion was faulty. 235.6 Robert Reus, Fayetteville resident, said he remained skeptical of the proposal. He said he recalled when the sales tax was put before the voters, it was with the provision that approximately $10 million would be used for the schools. He said he didn't think the sales tax would have passed without that provision. He said he opposed the sales tax because of the fiscal irresponsibility he had July 18, 1989 seen on the part of City Directors for several years now. He said he hadn't seen anything to indicate, with three new Board members, there has been a drastic change in the fiscal policy of the Board. He said most of the money goes out of the community to consultants. He said he took issue with that as a policy. He said if the tax base expanded, he thought the money should stay in the schools. He said any drain on school revenues will continue to accelerate a trend of mediocrity. Martin said he thought this was really a proposal towards producing additional revenues, rather than a drain on revenues. Reus said it was a loss to the schools if they are to kick back some additional revenues they might receive due to new industry locating here. Martin said he saw it as a generator of money to the schools. He said those who support the idea think it is a way.to produce finer schools. Reus said he thought we needed an expanded industrial base, not to lower unemployment, but to raise wages. He added that we needed to attract clean industry to the area. Green said he thought some people were confused about one point - that we aren't talking about spending any of the $10 million the voters approved for the schools. He said the lease payments would consist of about 30% of any excess property tax, due to additional industry in the community. He said he thought 70% of it was dedicated to teachers' salaries and other benefits. He said the only connection with the bond issue is the fact that the city would fund the school building and lease it back to the school. Reus said he preferred any increase in the tax base staying within the school system. He said any economic development fund should be created with the knowledge and consent of the Fayetteville voters. • Director Vorsanger said he didn't appreciate Reus questioning his integrity. He said a majority of people in the city, such as himself, who don't have any children in school, feel it a social responsibility to build a better city. He said he didn't trust Reus' judgment, Al Vick's judgment, and Joe Robson's judgment. Reus said he didn't mean any insult to Vorsanger personally and didn't question his integrity. He said he was questioning judgment. 231 236.1 236.2 Upon roll call, the motion passed, 6-0-1, Marinoni abstaining. 236.2 RESOLUTION 61-89 APPEARS ON PAGE OF ORDINANCE AND RESOLUTION BOOK Marinoni said nothing had been heard from the school board on the issue, and the board had had about a week to think about it. He said for that reason he would abstain. BID WAIVER/RADIO EQUIPMENT The Mayor introduced consideration of a request for an ordinance waiving the requirements of competitive bidding for the purchase of radio equipment for one year. He said the City Manager recommended approval because the supplier is the sole source of the specified equipment, making the formal bid process unnecessary. 236.1 236..5 The ordinance was read for the first time. Director Kelley, seconded by 236.4 Marinoni, made a motion to suspend the rules and place the ordinance on its •: