Agenda Packets - 2000/02/14 - Laserfiche WebLink

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Mounds View City Council March 22, 1999 Regular Meeting Page 35 City Administrator Whiting indicated that the concern with regard to having $30,000 for the entire year of 1999, was to make the point that the City wanted to be guaranteed this revenue. He stated this was a negotiating point, and up until the last couple of weeks he had felt that was be doable. He pointed out that when this appeared to be a problem for the facility, in that they were already one quarter into the year at that point, he thought that three additional quarterly payments would be acceptable. He stated he was not contemplating the interest that would be lost on the advance payment, but rather, more in terms of what had been agreed to all along. He advised that the last line of Section 2.5 of the Lease Agreement indicates that if for some reason they are unable to continue with the agreement, prior to the end of this year, they would be obligated for the entire amount of $30,000. He noted there was possibly a calculation for lost interest in this agreement, however, it was not a serious concern at the time he broached that matter with them. Mayor Coughlin pointed out that essentially City Administrator Whiting was expressing the age old phrase “a bird in the hand is worth two in the bush.” He stated in other words, the Children’s Home Society is in the facility, they are paying, and if they are unable to make the full payment in advance because of the difficulties they have had, this agreement was an acceptable alternative. He indicated that if they are making a good faith effort to come up with the money, and if quarterly payments allow them to remain in the facility, and keeps them financially viable, this was an agreeable modification. Council Member Stigney stated he would not quarrel with this, in terms of the first year, when they are attempting to incorporate their first business into their quarterly statements. He explained however, the phrase “…after 1999, and forever, thereafter,” when the City does not incorporate any interest, and this is paid on a monthly basis, rather than on an annual basis, in advance, made a significant difference. He stated he would like to stipulate that if they are not paying in advance, and would be paying on a monthly basis, forever after, there be some type of interest calculated into the payment arrangement. Council Member Marty stated he agreed. He stated monthly payments would involve additional accounting, and he believed that they could continue to pay quarterly, in advance. Mayor Coughlin pointed out that this would probably not involve much additional accounting, in that it would essentially be a matter of receiving a check, and entering it into the register. City Administrator Whiting stated in his opinion, the monthly payment arrangement was similar to paying your rent on a monthly basis, and he had never contemplated requiring them to pay a year in advance. He stated he could not imagine that the City would find a group willing to do that. He pointed out that they do not require this with the Community Education program in this building. He stated he could understand the concern about not having the interest, however, that was not an issue in the first agreement, and certainly not one he had contemplated in this agreement. He stated he was not familiar with a policy requiring renters to pay an entire year at a time, in advance. Mayor Coughlin added that there is some benefit to receiving payments on a monthly basis, in that this provides a guaranteed cash flow. He added that if this arrangement helps this organization remain viable, he was all the more in favor of it.