Idaho Falls Redevelopment Agency

IDAHO FALLS REDEVELOPMENT AGENC Y P.O. BOX 50220 IDAHO FALLS, ID 83405 November 16, 2017 Regular Meeting Minutes Council Chambers Call to Order: Brent Thompson called the meeting to order at 12:00. Members Present: Brent Thompson, Kirk Larsen, Thomas Halley, Dave Radford (via telephone). Members Absent: Lee Radford, Terri Gazdik. Also Present: Brad Cramer; Ryan Armbruster (via telephone); and interested citizens. Modifications to Agenda: Cramer requested a change to add: “Consideration and Approval of the Engagement Letter for Rudd and Company to perform the Audit”. Cramer stated that the item was on last month’s Agenda and it was not rolled over to this month. Dave Radford moved to add an item: “Consideration of Approval of the Engagement Letter for Rudd and Company to Perform the Audit”, and the reason for the addition is the item was not rolled over, Kirk Larsen second the motion and it passed unanimously. Minutes: Thomas Halley moved to approve the minutes of October 19, 2017, Chris Harvey seconded the motion and it passed unanimously. Approval of Bills: Brent Thompson presented the finance report dated November 16, 2017. The following bills were presented to be paid from the Snake River Allocation Fund: Oppenheimer Development, $14,999.00 for reimbursement of overpayment on conveyance to the property; Harper Leavitt Engineering, $5,472.50 for study to determine the incremental cost of the garage for the Broadway; IF-1, $100,000.00 for 1st scheduled payment on Broadway pursuant to the PSA; Elam and Burke, $6,949.25 for legal services; Rebecca Thompson, $75.00 for transcription of minutes. The following bill was presented to be paid from the Jackson Hole Junction Revenue Allocation Fund: Elam and Burke, $3,476.38 for legal services. Thomas Halley moved to approve the Finance Report, Kirk Larsen seconded the motion and it passed unanimously. Request for Assistance- Riverwalk Drive. Jeff Stokes, Woodbury. Stokes stated that they have firmed up the change order process and are cleaning up the project. Stokes stated that each month they get a better financial understanding. Stokes stated that there has been some movement in the final numbers. Stokes stated that they have gone through line by line cost. Stokes stated that they have a few loose ends. Stokes stated that the issue is the rock removal for the parking lot on the hotel project. Stokes stated that it was a change order that was big, and it affected the budget negatively. Stokes stated that they were worried early in the project that they were going to exceed the maximum reimbursable amount. Stokes stated that the geotechnical report had 11 test holes on the property and they assumed pursuant to that report the amount of rock they anticipated and bid the project for. Stokes stated that the subsurface of the rock appeared to be 3’ to 18” below the asphalt. Stokes stated that when they started to dig they found the rock had more undulation than anticipated and the rock was higher than the asphalt needed to be. Stokes stated that they have been diligent and critical of every ton that left and was blasted so they have accurate surveys. Stokes stated that 1 Idaho Falls Redevelopment Agency November 16, 2017 everything else could balance into the budget. Stokes stated that with the original overrun on the rock it affected the guaranteed maximum. Thompson asked how much Woodbury is asking for. Stokes stated that they are requesting $285,084.28. Stokes asked for this amount as a budget number and he will continue to attempt to decrease the amount due. Halley asked if the $285,000 was completely attached to the rock removal. Stokes stated that the rock removal was closer to $350,000. Halley asked, and Stokes agreed that they found savings in other areas to bring the number down. Stokes stated that they tried hard to build a quality building and improvements, and keep the cost down. Stokes stated that the overrun on the rock exceeding the entire contingency on the project and that made him nervous. Stokes stated that they didn’t have a lot of information when they built the road, so they supplemented the geotechnical report along the road and added test holes every 50’ and did their best in design. Stokes stated that 11 test holes throughout the lot was good, but the rock was unpredictable. Cramer stated that by the end of the life of the District, there would be enough cash to make the requested payment, but not immediately. Cramer stated that the earliest date they could pay would be January/February 2019. Halley asked how much payment they could make currently. Cramer stated that without having numbers in front of him, he would give a rough guess of $100,000. Thompson asked if Stokes is agreeable to waiting for the payment. Stokes stated that they will take any assistance the Agency can offer. Thompson stated that the Agency has gone out of their way to help Woodbury, and hopefully Woodbury can wait till the end of the District for payment. Stokes stated that if something falls off and frees up cash, they would like paid earlier. Armbruster stated that the drop-dead date will be on or before September 30, 2019 for payment. Kirk Larsen asked if they are committed to paying the money even if the funds are not available. Armbruster stated that if the funds are not available you are not committed, as you cannot draw the funds from anywhere else, and the Agency can only pay what they have Kirk Larsen moved to commit to pay for the extra lava blasting cost of no more than $285,084.28, subject to audit by the City Staff, and paying when the Agency has the money available on or before September 30, 2019, Thomas Halley seconded the motion and it passed unanimously. Stokes asked when they can anticipate being paid for the original reimbursable amount. Cramer stated that they do have the cash to pay the existing requirements of the OPA, and they are waiting for the project to finish and get the documents reviewed. Stokes asked if there will be another meeting. Cramer stated that normally they submit all the documents and they are staff reviewed by Cramer and Engineering, then Cramer comes back to the Agency to report that the documents are good and recommend approval of the payment, which would involve one more meeting. OPA Ball Ventures. Cramer stated that years ago the Agency approved an amendment to the OPA with Ball Ventures in the amount of $665,000 for work done by the new apartment buildings on White Water. Cramer stated that the work has been completed and the invoices were reviewed and approved, and the Board approved the payment of the $665,000.00 to be rolled into the existing note. Cramer stated that Ball Ventures approached him to see if a cash payment might be a possibility. Cramer stated that he and Mark Hagedorn reviewed the accounts for the District (River Commons) and did not feel comfortable paying 100% of the $665,000 as it would not leave enough in reserve to make future OPA payments. Cramer and Hagedorn both agreed that an 80% cash payment ($532,000). Cramer stated that in the 2 Idaho Falls Redevelopment Agency November 16, 2017 Finance Report under River Commons Hagedorn inserted a $532,000 payment to see the available funds after the payment would be $198,471.45. Cramer stated that it would lessen the amount of interest paid on the note. Thompson stated that the interest is approximately 4.5% and they would be saving 4.5% interest to pay a cash payment of 80% and would leave almost $200,000 in reserve in the District. Thompson stated he doesn’t see a downside to paying the cash payment. Larsen asked about upcoming projects in this District. Cramer indicated that there are no upcoming projects in this District. Kirk Larsen moved to authorize payment of the $532,000 toward the $665,000 commitment and the remaining balance of $133,000 be added to the existing note, Chris Harvey seconded the motion and it passed unanimously. The Broadway Update. Thompson stated that the deed has been executed to convey the property to Oppeneheimer, and the PSA has been executed. Thompson stated that there were minor tweaks on the option that Oppenheimer has to re-purchase the 3 units (underground garage, surface parking, plaza), and if they elect to purchase the 3 properties at the end of 5 years, it will be at the price the Agency paid for it as of the date of Certificate of Occupancy. Thompson stated that they are making the $14,999 refund back to get the payments back on schedule as structured in the agreement and then the Agency is preparing to pay the first installment of $100,000. Thompson stated that they are almost done blasting. Cramer stated that the subcommittee members will see an invite for a meeting to discuss the plaza design on November 30, 2017 at 11:00 a.m. in Council Chambers. Bonneville Hotel Update. Cramer stated that they were supposed to know if they got the Affordable Housing Tax Credits, but the Idaho Housing and Finance Association moved the award date to December 1. Cramer stated that the wild card now, is the Trump Tax Plan that eliminates the Historic Preservation Tax Credit. Thompson asked how much the credits were. Cramer stated that it was roughly $3-4 million. Thompson asked if the project is in trouble if they don’t get the credits. Cramer agreed it would be in a lot of trouble. Jackson Hole Junction Update. Thompson stated that City Council has approved the District in a 4-2 vote. Thompson stated that Matt Morgan and his partners now have 13 years to get the development done and generate the tax revenues to create the payments that the Agency agreed to participate in up to a total of $4 million. Armbruster stated that the Summary of the Ordinance needs to be published and then they can take steps to record the document and send out another round of letters to the taxing entities and tax commission, and then they are done and can move forward with implementing the plan. Armbruster stated that the next step for the Agency is likely an OPA with Morgan, like the agreement with Ball Ventures or Eagle Ridge. Consideration of Approval of the Engagement Letter for Rudd and Company to Perform the Audit. Mark Hagedorn indicated that this is the annual audit engagement letter which sets for the parameters that the auditor will come and do the testing. Hagedorn stated that it is standard, and they have been doing it for the last couple of years. Hagedorn stated that the City did move to a regional firm, but Hagedorn feels that Rudd and Company does a good job for the Redevelopment Agency. Hagedorn stated that the City didn’t change for technical skills, but rather they were having multiple auditors doing the City audit and they wanted to move to one that could audit the whole City and the electrical power utility. 3 Idaho Falls Redevelopment Agency November 16, 2017 Hagedorn doesn’t see any issues with Rudd and Company doing the audit this year, and next year put it out for bid. Hagedorn stated that GFOA standards and AICPA recommend that you change auditors every 3-5 years. Thomas Halley stated that Rudd and Company does good work. Kirk Larsen stated that he sits on the Board for the Idaho Falls Business Assistant Corporation that manages a small revolving loan fund. Larsen stated that The Housing Company has approached the Board to provide some funding for the Bonneville. Larsen stated that due to the potential conflict of interest he will no longer be part of the discussions and/or voting on the Bonneville Hotel Project. Next Regular Meeting: December 21, 2017. Dave Radford moved to adjourn the meeting, Kirk Larsen seconded the motion and it passed unanimously. Respectfully Submitted: Beckie Thompson 4 Idaho Falls Redevelopment Agency November 16, 2017