Re Nid Recovery Strategy - Dave Rittman Thoughts And Clarification Of Our Discussion ID: 33014

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Lauren

CC: The addressee in Lauren't note below

Good morning. I thought it would be helpful to clarify that there were two subjects discussed in our brief conversation this morning ... both of which have the same general theme which was helping to clear up the recent uncertainties of the Board regarding where we are with these two subjects, and thus helping us all to make prudent decisions based on the most current financial info at hand.

Uncertainly of the amount of potential income to be generated by the Parkville Highway 9 CID

The request was that once we knew the status of Walgreen and a few others, could we please have a revised estimate provided us all of what the Highway 9 CID would generate (ref discussion at the Board meeting two weeks ago). A modest increase for inflation and additional business growth in year two through 5 would be appropriate of course.

A subjected we discussed a week ago ... While I had offered to assist you in developing a one page summary Excel chart of Highway 9 phase one and two cost data from your policy presentation, with a breakout of phase three data as a separate line item, and then providing a combined data summary to include the calculated City contribution and CID contribution. Before distributing the chart, it would have been run by you and staff for proofing, of course, once those revised numbers became available. It was a pure volunteer offer. However that volunteerism requires access to the info slightly ahead of time. As you felt that was not possible, then of course I defer to Staff to put that type of graphic together so that it all goes to everyone at once. The goal here is to reduce the confusion of the Board trying to calculate out by hand or in their heads all the numbers in the text write ups at the meeting - again with the goal of avoiding the uncertainties of some of the meeting discussion two weeks ago, and thus helping to foster a better consensus of what would be in the best interests of the City. That was the spirit of the request.

Clarification of the risk of the I-435 and Rt. 45 assessment issues on City budget

So that we are all working from the same numbers, I requested that the former Excel chart staff developed and released to the Board and newspapers previously be updated from prior years to include the current amortization balance as of the loan Dec 2016 year end year end (should be just a lift of a number off the schedule), and that the Board be provided both:

1. a worst case scenario similar to what was handed around in prior years - which I believe you defined as a "what-if" no one made a payment from hence forth for the next 5 years. Please label the chart with whatever assumptions are appropriate. I believe that is the basis for your note below about a negative 500k -- the request is to have the definitions fully defined on the chart so everyone is clear about what is being discussed.

2. A middle of the road reasonable scenario that assumes payments being made currently for CID assessments are continued to be made, existing defaults are taken into account of course, and how that impacts our reserves down the road. That would be a very different number than above worst case, of course. Please also label the chart with whatever assumptions are appropriate.

3. My thought was that most info was available now and thus it could be provided near term - it would be one less thing to do later this year. It also could help us better understand and make decisions on the pending Rt. 9 phase 1. 2. and 3 discussions. However if it needs to wait and be produced as part of the budget packet, that's fine also, along as both versions (plus any other you wish to do) are provided. My spirit wit the request this AM was to soften your workload during budget season

4. The bottom line spirit here was all Board members get the same info when available, and that might be difficult to provide at the last minute thus I verbalized the request in advance to ensure that middle of the road scenario info (and perhaps best case scenario) would also be available ... not just worst case scenario.

Thanks for all your assistance with this,

Dave Rittman

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From: Lauren Palmer [lpalmer@parkvillemo.gov ]
Sent: Wednesday, July 20, 2016 10:27 AM
To: Dave Rittman
Cc: Nan Johnston ; Diane Driver; Tina Welch- Personal Email; Jim Werner ; Doug Wylie; Robert Lock; Marc Sportsman; Greg Plumb; Melissa McChesney; Tim Blakeslee; Matthew Chapman ; Steve Berg; Kevin L. Chrisman; Stephen Lachky; Alysen Abel
Subject: NID recovery strategy

Dave,

This email is a follow up to our conversation this morning regarding the NID financing strategy. I am cc'ing the mayor, BOA, and senior staff as they may share your interest in this information.

Attached is the spreadsheet with the NID Recovery Strategy that the Board discussed during the budget process last fall. Staff will definitely update this document for the 2017 budget process. It will likely be part of the 1st budget work session discussion (revenue forecast, emergency reserves) and, if not, it will be part of the debt service discussion at the 2nd work session.

Much of the information in this spreadsheet is fixed based on debt schedules. NID assessments were essentially level in 2016 (as predicted). I admit that the temporary tax levy projections are intentionally conservative. We projected 1.5% annual increases, and Steve Berg informed me this morning we're looking at an approximately 3.5% increase in 2017. That level of growth may not be sustainable long-term, but we will evaluate and make the necessary adjustments. Overall, I don't anticipate significant changes. So, for planning purposes and thinking ahead for the 2017 budget process, the trend reflected in the Emergency Reserve Fund Balance chart is still accurate. Barring other direction from the BOA, we will continue to eat into reserves if/until the temp levy is renewed in 2025 and the COP (now lease-purchase) debt is retired in 2027.

Based on current staffing, services, and the 5-year CIP, I'm projecting a half million dollar deficit in the General Fund by 2021. Neither staff nor the Board of Aldermen would let that happen, so we know we have work to do in the budget process. On the upside, the Transportation Fund is finally healthy, but not healthy enough to continue the level of street maintenance we did this year on an ongoing basis. The 5-year CIP currently includes about half the level of 2016 funding on an ongoing basis. I predict this will be a focus of discussion in the 2017 budget process.

The wild card in all of this is, of course, development of the NID properties. I am optimistic that we will achieve a development solution through the pending RFP process. However, it's important to manage expectations. There is much that needs to happen before bricks and mortar come out of the ground. Plus, there are over 300 acres. It won't happen all at once. It could take years, and I suspect the city will be asked to participate with public incentives. My guess is we will recoup some of our investment, but not all. It's impossible to predict numbers, but I hope to have a better idea for the budget process this fall after we open proposals in September.

There will be plenty of opportunity to discuss these issues and more in the budget process, but please let me know if you have additional questions at this time.

Thanks,

Lauren

Lauren Palmer , ICMA-CM

City Administrator

City of Parkville

8880 Clark Avenue

Parkville , MO 64152

816-741-xxxx

lpalmer@parkvillemo.gov