HomeMy WebLinkAbout2012-03-12 12-117 ORDERCOUNCIL ACTION
Item No. 12 117
Date: 3-12-2012
Item/Subject: Order, Amending Arena Fund Guidelines
Responsible Department: Finance
Commentary:
The attached Order will amend the Arena Fund Guidelines previously established by Council Order
05-333, as amended by Council Orders 09-319 and 10-246. City staff and Global Spectrum
representatives have been working with the City's bond counsel and financial advisor to develop the
plan to permanently finance the construction of the new arena. During this review, the City's bond
counsel requested that the City amend its current Arena Fund policy. The attorney's concerns are
based on some fairly restrictive IRS regulations related to the financing of a project on a tax-exempt
basis with such closely linked existing funds. The proposed amendment is subtle but clarifies that
the Council's flexibility in use of Arena Fund balances. It is the attorney's position that it would be in
the City's best interest to clarify the policy now and avoid any potential future issues.
In addition, to the clarification requested by the City's bond attorney, the attached amendment
replaces the term "slot" revenues with "gaming" revenues, to reflect the recently approved change
to allow for table games at the facility.
This was reviewed and recommended for approval by the Finance Committee on March 5, 2012.
Manager's Comments:
Associated Information:
Arena Fund Guidelines — Proposed Amendment
Budget Approval:
Legal Approval:
Introduced for
X Passage
First Reading
Referral
[W2940501.1)
Department Head
Page _ of _
City Manager
Finance Director
Solicitor
?2 1,17
March 12, 2012
DL�aN�os, Assigned to Councilor - Durgin
CITY OF BANGOR
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(TITLE.) Order, Amending Arena Fund Guidelines
By the City Coundl of the City of Bandar:-
WHEREAS, as owner of the Bangor racetrack and host community for Hollywood Casino, the
City is entitled to a percentage of gaming revenues; and
WHEREAS, it is the intent of the City to utilize a significant portion of these revenues for
activities and costs associated with replacing the Bangor Auditorium with a new
arena; and
WHEREAS, by previous actions, the City Council established a special revenue fund entitled
"Arena Fund" specifying sources of revenues as well as guidelines related to usage;
and
WHEREAS, the original policy designated slots revenue as the primary revenue stream; and
WHEREAS, the City is preparing to issue General Obligation Bonds to finance the construction
of a new arena; and
WHEREAS, based on a review of the existing policy and IRS regulations, the City's Bond
Attorney has requested a clarification to the policy; and
WHEREAS, recent legislation and voter action allows for the introduction of table games, which
Will generate an additional stream of revenues beyond slot revenues;
NOW, THEREFORE BY IT ORDERED BY THE CITY COUNCIL OF THE CITY OF BANGOR THAT,
the Arena Fund guidelines are hereby amended in accordance with the attached revised Arena
Fund Guidelines.
IN CITY COUNCIL
MARCH 12, 2012
MOTION MADE AND SECONDED FOR PASSAGE
PASSED
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ORDER
CUTLE,) AMENDING ARENA FUND GUIDELINES
Assigned to Councilor ��
ARENA FUND GUIDELINES
1.0 Purpose
1217
Revenues received by the City from the operation of a Racino in Bangor
are generally to be utilized for specific designated purposes and not for
general municipal operations. The City's percentage of gaming revenues
shall be designated toward the category of costs listed below in Section
2.0 Uses, including but not limited to the costs associated with replacing
the Bangor Auditorium.
2.0 Uses
2.1 Costs associated with replacing the Bangor Auditorium, including
but not limited to: land acquisition, engineering and architectural
services, other consulting services, and construction and operating
costs for a new facility.
2.2 Capital costs necessary to continue to operate the City's current
auditorium, civic center, and track.
2.3 Demolition and/or renovation costs associated with removal and/or
reuse of the Bangor Auditorium and Civic Center
2.4 Capital costs associated with relocation of the Bangor State Fair,
either within the Bass Park Complex or to a new location.
2.5 Reimbursing the City's General Fund for past, present and future
costs associated with attracting and locating the racino in Bangor.
2.6 Replenishing the City's Undesignated Fund Balance under
circumstances where that balance has fallen below the target
established by City policy, due to annual operations or
extraordinary circumstances.
3.0 Funding
The Arena Fund will be funded by appropriating to it the percentage of
slot revenues received by the City.
4.0 Authority to Use and Withdraw
The City Council must authorize the expenditure of these funds, either as
an element of the annual operating budget or through a separate
appropriation resolve, with the exception of the purposes outlined in 2.4
and 2.5.
5.0 Amounts and Limits.
No limitations are placed on the amount that may be carried in this fund.