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The city bond consultant, Springsted, has analyzed financial data that was <br />provided to them by MSF. Please carefully review the attached September 4, <br />1996, report from David MacGillivray. This report outlines some important <br />concerns and risks to the city if we move forward and publicly finance this <br />project. The biggest issue that David raises in his report relates to the <br />proposed fitness center program and revenues. <br /> <br />In response to this analysis, Pat Pelstring from Public Resource Group, Inc., <br />who represents MSF, provided the attached September 25, 1996, letter. <br />Point #2 of this letter offers some additional financial information regarding <br />the project. The revenues identified in point number 2 cannot be put into <br />the revenue side of a bond project, but are important to understand. The <br />fitness center comments made under number 3 actually will reduce the <br />revenues in the financial projections that were analyzed by Springsted. <br /> <br />Also attached is the September 30, 1996, draft Letter of Intent between MSF <br />and the city. This Letter of Intent provides the framework for a future <br />commitment by the city for funding and for providing sites if MSF raises <br />sufficient funds and if the city agrees with the revenue and expenditure <br />estimates. As you can tell by this Letter of Intent, the details of how MSF <br />can use the Cass fields that are under development have yet to be worked <br />out. MSF is in agreement that it does not need land for its own permanent <br />complex and restaurant for fifteen years or until the city is through using it <br />for WWTP sludge purposes. Regarding the water tower site, the big issue <br />relates to the immediate building needs (6 acres) versus a master plan and <br />long term use of additional property. <br /> <br />s:\council\msf1017.doc <br /> <br /> <br />