R2023-182 Resolution Authorizing Agreement Decatur Civic Center Authority-Zamboni

Home Browse Search

MEMORANDUM 2023-14 DATE: September 5, 2023 TO: Honorable Mayor Julie Moore Wolfe and City Council FROM: Scot Wrighton, City Manager Jon Kindseth,Deputy City Manager SUBJECT: Resolution Authorizing Agreement - Decatur Civic Center Authority- Zamboni SUMMARY RECOMMENDATION: Staff recommends the City Council authorize the proposed Agreement with the Civic Center to empower them to pursue acquisition of a new electric Zamboni. BACKGROUND: The Decatur Civic Center would like to acquire a new Zamboni ice finisher for the Ice Arena. They have had a gas-powered Zamboni for many years and the machine is due for a replacement. The Civic Center would like to pay the additional costs to not just replace the machine with a like model,but to take the next step and replace the Zamboni with an all-electric model which is better for the air quality in the arena and the Civic Center for all users. With this agreement, the City is providing the financing to the Civic Center for this acquisition. The City is using our current cash to make this strategic investment which is mutually beneficial to both parties. The City will realize a better return on our cash than any other investment option available to the City as a public entity, meanwhile the Civic Center is getting a lower interest rate than they otherwise would get from a commercial lender for this type of unsecured loan. This creative financing solution ultimately saves the City money even beyond the agreed upon interest collected in that the City largely funds the Civic Center budget shortfalls anyway so reducing their financing costs saves the City from a larger year end subsidy. The Civic Center Board has already authorized this agreement pending City Council approval. The negotiated and agreed upon terms of the loan are for an 8-year loan at 5% interest. The Civic Center indicated that they would seek to fund this new machine through individual donations and there would be no prepayment penalties. The actual loan amount is estimated to be approximately $170,000.00 as reflected in the attached Zamboni spec sheets. INPUT FROM OTHER SOURCES: City staff and Civic Center staff. STAFF REFERENCE: City Manager Scot Wrighton or Deputy City Manager Jon Kindseth can address any questions related to this agreement.