Central City Council considers legal action

CEDA loan repayment due to City By David Josselyn The Central City Council and staff met for a regular council meeting on Tuesday, November 4, 2014. All members of Council were present along with City Clerk Reba Bechtel, Public Services Director Shawn Griffith, City Manager Daniel Miera, Finance Director Shannon Flowers, Police Chief Terry Krelle, Fire Chief Gary Allen, and City Attorney Marcus McAskin. The meeting was called to order at 7:06 pm following a budget work session. Consent Agenda The first item of business was approving the consent agenda which included the regular bill lists for October 9, 16, 23, and 30; and the City Council minutes of October 14. Alderman Bob Spain moved to approve the Council minutes and was seconded by Alderman Kathy Heider. Alderman Gloria Gaines questioned a purchase marked as Amazon and Hurricane Electric. Manager Miera responded that he would get that information. It was hypothesized that the Amazon purchase was for a printer. The motion passed unanimously. Public Forum The Council opened the floor to the public for addressing any issue on the evening’s agenda. No one signed up to address the Council. CEDA Loan Alderman Gaines reviewed the history behind a loan given to the Cultural Economic Development Association (CEDA). When the Creative District was formed, a grant for the group was denied with the Council preferring a loan that would be repaid before the end of the year. Factoring into this decision was the economic hardship the City was facing and the self-imposed capital spending freeze. A loan of $7,000 was approved by the Council at the April 1 st , 2014, meeting to be paid back no later than three months after the event. The agreement stated that interest would be charged beginning November 10, 2014 until paid in full. Attorney McAskin then filled in several details of the April 1 meeting. CEDA requested $29,760 for seed funding which would be applied to professional services and operations for a Jazz Festival described as a three-day city wide event. Jazz Fest Director Cicily Janus stated the Jazz Fest would have to move to a different city without the seed money. The Council asked what the minimum amount is needed to move forward and CEDA Representative Robert Fejeran stated they could get by with $12,000. Mr. Ren Goltra offered to donate $5,000 and the Council approved a loan of $7,000. Cicily Janus stated that three months was more than enough time to repay the loan. The city signed the agreement and disbursed the funds; however, CEDA never signed the agreement. On May 22, 2014, Robert Fejeran resigned his position with the City. On July 3, Kevin Lee, while working with CEDA and also manager of Club Dazzle in Denver, recommended the Festival be postponed one year for additional planning. Two days later, Mayor Ron Engels sent an email to Mr. Fejeran that there would be no further funding. Mr. Fejeran responded that the Jazz Festival would then be cancelled. On July 17, City Attorney McAskin sent a letter to Mr. Fejeran requesting the loan agreement be executed and to return all unexpended funds to the City. One day later, Mr. Fejeran sent a letter stating the Jazz Festival was not cancelled and it would now be a one day event held on August 9 at the Reserve Casino. Fejeran also stated that some portion of the $7,000 was used to pay for preparation of a REDDI grant. A portion of the grant funds would then be used to repay the loan. On July 18, City Attorney McAskin sent a letter requesting Mr. Fejeran to give the names of CEDA board members and asked him again to sign the loan. The City received a letter from CEDA’s attorney Angela Howard asking to change the terms of the loan. The Council moved to Executive Session to discuss legal questions. At 7:52, regular session was reconvened. Alderman Gaines moved to direct the City Manager with input from the City Attorney to receive and review a formal proposal from CEDA to amend terms of the short term loan agreement and if received no later than November 11, to add an agenda item to the November 18 meeting for Council discussion with a CEDA representative present and to authorize the City Manager to confer with the City Attorney regarding future legal action to enforce the repayment obligation. This was seconded by Alderman Spain and passed unanimously. Staff Updates and Council Comments Manager Miera noted that tonight was the first time Channel 20 was televising the meeting this year. Alderman Shirley Voorhies thanked the Public Works crew for getting the Central City Parkway open with four clear lanes. Mayor Engels added that the self-performed work helped to keep costs down. Alderman Gaines thanked Public Services Director Shawn Griffith for his work securing additional funding with FEMA for the work with Xcel Energy. Public Forum The Council opened up the floor to the public for comment on any issues. No one chose to address the Council at this time. Next Meeting The meeting adjourned at 7:55. Mark your calendars for Tuesday, December 2, for the next regular Council meeting.

Central City Council considers legal action

Patrick Henry Sweeney

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