About this MOU:
5. Capital Maintenance Fund. The City shall establish a Capital
Maintenance Fund for capital repairs, maintenance and improvements at the Ballpark (the “Fund”). The City shall be responsible for all capital maintenance, repair and improvements of the Ballpark. All monies for the Fund shall be contributed by the City. The City shall submit for approval to the North Carolina Local Government Commission the proposal for financing the project through the issuance of bonds, and the Operator will have reasonable input into that submission, including reasonable input into the determination of what items will be considered items of capital maintenance. The City shall meet with the Operator at least annually to discuss in good faith with the Operator what capital maintenance, repair and improvement items are
desired or necessary, and the priority of such items. However, the City shall control and manage the Fund and shall make expenditures from the Fund as the City deems necessary or appropriate in its reasonable discretion after considering in good faith all reasonable input from the Operator. The City acknowledges its commitments set forth in this Section 5 are a material inducement to ANLBC agreeing to its commitments set forth in Section 7 below. The Parties agree to negotiate and include in the final documents the specific details of which expenditures are eligible to be paid from the Capital Maintenance Fund."
Why does this scare me? Well consider how poorly this MOU was negotiated - it's totally one-sided.
What does NSS sday about Capital funds?
Chapter 8 pg 103:
Industry standards recommend that a capital reserve be established to fund future major capital repairs or improvements beyond routine maintenance and repairs. It is recommended that a reserve be established in the amount of 0.5 percent of project costs in the initial year of operations, with annual contributions increasing
three percent annually thereafter. Assuming a ballpark project cost (excluding land and offsite infrastructure) of $35 million, it is estimated that a capital reserve would need to be funded in the amount of $175,000 per year."
Think about it
MOU says the City shall be responsible for ALL funding of the capital repairs.
NSS said that they assume it would cost:
"it is estimated that a capital reserve would need to be funded in the amount of $175,000 per year."
So - am I mistaken here? Or did the city just agree to pay $175,000 per year into a fund for capital repairs?
SC Tom? Rick? Anyone?
$175,000 per year? Needed or not?
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