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Pover <br /> <br />TO: <br /> <br />FROM: <br /> <br />DATE: <br /> <br />SUBJECT: <br /> <br /> MEMORANDUM <br /> <br />Mayor and City Council <br /> <br />Pat Klaers, City Administrator <br /> <br />November 17, 2003 <br /> <br />Consider Payment to the School District for the Little Theatre <br /> <br />Item 4.8. <br /> <br />In September 2001 the Elk River City Council agreed to pay the school district $563,000 to preserve <br />the Little Theatre. This payment was to be made over 5 years (equal installments with no interest). In <br />November 2001 the school district Facility Use and Procedure Manual was updated to include a <br />section on the Little Theatre. The Community Education Department is responsible for scheduling <br />the use of the Little Theatre. <br /> <br />In 2001 growth and development related revenues (building permits, heating/plumbing permits, and <br />plan check fees) exceeded the estimate in the budget and the f~rst of five payments by the city for the <br />Little Theatre was made without using city reserves. Unfortunately, this same scenario did not happen <br />in 2002. Accordingly, the second payment for the Little Theatre came from the NSP reserve. <br /> <br />In 2003, the city had its LGA payments reduced by about $644,000 by the State. In response to these <br />cuts the city amended its operating budget in June 2003. At this time it appears that revenues ~vill <br />exceed expenditures in 2003 but with all the uncertainty surrounding state finances and the state <br />financial commitments to municipalities, it is recommended that we not use fund balance monies to <br />make the Litde Theatre payment. It is recommended that city again use its NSP reserve for the third <br />payment to the school district for the Little Theatre. <br /> <br />The NSP reserve was set up in 1991 and revenues will continue to be received annually through 2009. <br />The 2003 NSP revenues are slightly more than $250,000. The t~vo expenditures in 2003 from this <br />fund are $108,857 for the City Hall (1993 project) and $39,500 for the general fund. The remainder of <br />the 2003 NSP revenues have not been allocated to a project or program and are available for use at <br />the discretion of the City Council. <br /> <br />Recommendation <br />It is recommended that the city use NSP reserve funds to finance the 2003 payment of $112,600 to <br />the school district for the Little Theatre. <br /> <br />S:~Council~Pat~2003~littletheatrepmt.doc <br /> <br /> <br />