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HomeMy WebLinkAbout09/17/1996, COMM.1 - FINANCES AVAILABLE FOR COMPLETION OF CONSTRUCTION OF THE PERFORMING ARTS CENTER MEETING AGENDA! MEMORANDUM DATE 9"-==ITEM # W-Y- Date: September 9, 1996 To: City CimZM ncil Fmm: Dave and John Dunm:� Subject: Finances Available for Completion of Construction of the Performing Arts Center We attended a meeting of the Steering Committee of the Performing Arts Center last Friday afternoon. What we are transmitting to you at this time is the generalized statement of the issue. Additional work is being done to detail the specifics of the issue, and then it will be discussed by the Budget and Finance Committee of the Commission and subsequently the Commission itself. The gist of the problem is that we have about$2.2 million worth of construction completion, equipment . and furnishings to do before the Center is fully operational for the types of events that have already been booked into the Center for the first year. The problem is that only about $1.3 million of actual money is available for these purposes. This means that there is both a short-term and a longer-term problem. The short-term problem is to make the Center fully operational for the grand opening and for the weeks and months that follow. This will have to be done in some fashion simply because there is no alternative. The longer-term problem is that some things will have to be done in a make-shift way; more particularly, some equipment that would normally be purchased will have to be leased. First, this means that the money spent on leasing of equipment will not be available towards the ultimate purchase of the equipment, and, secondly, there will be a period of time when the leased equipment is to be installed and later removed and then the permanent equipment will need to be installed. Because of the lack of funds for purchasing equipment, operating costs will be increased, which raises the longer-term possibility of increasing the operating deficit, which the City and the Foundation for the Performing Arts Center are responsible for making up. Needless to say,the City has a very keen interest in how all this is to be worked out. Last Friday, after struggling with the options, the alternatives and all the resulting consequences, we agreed that the Budget & Financing Committee (John Dunn and Bill Statler serving as the City's representatives) should take a closer look at this situation and, shortly thereafter, the Commission as a whole (the three partners) need to be fully apprised of this situation and its potential implications. Dave Romero will speak to this situation under the Communications section of the agenda at the September 17th meeting. In the meantime, we will be awaiting more facts and will then examine the situation more closely. However, given that last Friday afternoon was the first time that we identified a clear relationship between the equipment needs of the Center (construction phase) and its potential impact on the annual budget (operational phase), we felt that it was important to let the Council know of the situation at the earliest possible time.