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\ ' Item 5 . 4 . <br /> '►+/i <br /> cgor <br /> Elk <br /> River <br /> MEMORANDUM <br /> TO: Mayor and City Council <br /> FROM: Pat Klaers, City Admin. s..f or <br /> DATE: October 28, 2002 <br /> SUBJECT: Boys & Girls Club Issues <br /> The city has been a big supporter of the Boys and Girls Club. This support from the City <br /> Council includes having the club located in Lions Park, incurring a sizeable legal bill in <br /> development of the ground lease and other documents, and authorizing the city street crew <br /> (and equipment) to assist in the preparation of the building construction site. The city <br /> continues to have a strong interest in seeing that the Boys and Girls Club is successful. <br /> The Boys and Girls Club ground lease states that the city must agree to the club taking on any <br /> more debt which is tied to the building. In order to obtain an influx of cash for operating <br /> expenses, the Boys and Girls Club desires to add to their current building debt. Due to a <br /> variety of circumstances, including lower than anticipated local contributions and the turnover <br /> of the Executive Director position, the club has fallen behind financially. The board of <br /> directors for the Boys and Girls Club sees this as a short-term, temporary situation. <br /> Representatives from the Boys and Girls Club will be at this City Council meeting to discuss <br /> the request for the city to "sign off" on the club incurring more building debt. <br /> There is one important point to bring to the attention of the City Council regarding this <br /> request. This point is that under worse case scenario, if the Boys and Girls Club does not <br /> make it financially and has to dissolve for whatever reasons, then the city is the likely buyer of <br /> the building which includes assuming the building debt. Accordingly, agreeing to the club <br /> taking on more debt does have a possibility - even if it is a small possibility - of costing the city <br /> some money at sometime in the future. The current debt on the building is about $72,000. <br /> A second item to discuss with the City Council is the possibility of the city leasing gym space <br /> at the Boys and Girls Club. City Recreation is always looking for opportunities and building <br /> space to provide programs and we have recently talked with the Boys and Girls Club about <br /> leasing gymnasium space for running City Recreation programs. If this lease of the gym space <br />