4.8. SR 11-17-2003Pover
TO:
FROM:
DATE:
SUBJECT:
MEMORANDUM
Mayor and City Council
Pat Klaers, City Administrator
November 17, 2003
Consider Payment to the School District for the Little Theatre
Item 4.8.
In September 2001 the Elk River City Council agreed to pay the school district $563,000 to preserve
the Little Theatre. This payment was to be made over 5 years (equal installments with no interest). In
November 2001 the school district Facility Use and Procedure Manual was updated to include a
section on the Little Theatre. The Community Education Department is responsible for scheduling
the use of the Little Theatre.
In 2001 growth and development related revenues (building permits, heating/plumbing permits, and
plan check fees) exceeded the estimate in the budget and the f~rst of five payments by the city for the
Little Theatre was made without using city reserves. Unfortunately, this same scenario did not happen
in 2002. Accordingly, the second payment for the Little Theatre came from the NSP reserve.
In 2003, the city had its LGA payments reduced by about $644,000 by the State. In response to these
cuts the city amended its operating budget in June 2003. At this time it appears that revenues ~vill
exceed expenditures in 2003 but with all the uncertainty surrounding state finances and the state
financial commitments to municipalities, it is recommended that we not use fund balance monies to
make the Litde Theatre payment. It is recommended that city again use its NSP reserve for the third
payment to the school district for the Little Theatre.
The NSP reserve was set up in 1991 and revenues will continue to be received annually through 2009.
The 2003 NSP revenues are slightly more than $250,000. The t~vo expenditures in 2003 from this
fund are $108,857 for the City Hall (1993 project) and $39,500 for the general fund. The remainder of
the 2003 NSP revenues have not been allocated to a project or program and are available for use at
the discretion of the City Council.
Recommendation
It is recommended that the city use NSP reserve funds to finance the 2003 payment of $112,600 to
the school district for the Little Theatre.
S:~Council~Pat~2003~littletheatrepmt.doc