Janet Roberts, Salt Lake City School District -Business Administrator

TEXT OF RDA LETTER:

15 October 2013

DELIVERED VIA ELECTRONIC MAIL
Kristi Swett, Board President
Salt Lake City School District
2256 South King Street
Salt Lake City, UT 84109 

Re: RDA: West Capitol Hill

Dear President Swett,

I am requesting that item: “2b. WEST CAPITOL HILL RDA Project Amendment Resolution” be placed on the action item agenda. I will be voting against this item due to lack of information that would allow me to make an informed vote.

At the October 1, 2013, School Board meeting the “Extension of the West Capitol Hill RDA” was discussed. In that meeting I asked Business Administrator Janet Roberts, what is the amount and how are we spending current RDA ‘pass through funding’. Janet indicated that she did not know.

Following the meeting, I never received the information that I had asked for.

On Friday, October 11, 2013, I sent an email to Janet asking the question once again (see attached).

On Monday, October 14, 2013, I did receive a reply, stating that last year we received 4.7 Million dollars in ‘pass through funding’. The second part of my question, as to where those dollars are spent was very nebulous. I therefore asked a follow up question that has not been answered.

As a school board member I am entitled to the information that I ask for in order to fulfill my fiduciary responsibilities to my community. I would betray the trust that my neighbors placed in me, if I vote to divert school property tax dollars in order to receive pass through funding that I have not been clearly told how that is being spent.

It also concerns me that during this past budget cycle we were told that the district could not meet our budget due to the “legislature’s failure to fully fund growth” and a “WPU shortfall”.

Yet I find that our district seems to be awash in cash. We recently discovered that the district had half a million dollars to pay a matching grant. We were recently told that there is money to hire a full-time attorney. Now I am being told that we receive close to five million dollars from Salt Lake City RDA.

As I mentioned in a previous meeting, it is like pulling teeth to obtain information on the budget and direct questions about finances are consistently sidestepped. It seems that the only way to learn about the school budget is to stumble upon it. This is unacceptable!

My neighbors have given me the power to act on their behalf by virtue of the November 2012, election. The state legislature has given me the authority over district finances by virtue of state law, yet I am regularly denied or delayed requested information. Denying me financial information of the district is an insult to my community and I would submit, contrary to state law.

Again, please move the: “2b. WEST CAPITOL HILL RDA Project Amendment Resolution” from the consent agenda to the action item agenda as I will be voting against it for the reasons stated above. Thank you for your consideration in this matter.

Shalom,

J. Michael Clára
Board Member, District 2

Enclosures: Robert’s email exchange

cc: Please include this letter and attachment as part of the record of today’s School Board meeting.

PDF Version of Letter

Robert’s Email Exchange

$110 M,total cost with interest on play house will be closer to $187 million.

It’s not exactly a gamble. Call it a calculated risk.

The unveiling of the design for the proposed Utah Performing Arts Center is a month or two away , with construction to begin in January 2014. But Tuesday , the
Salt Lake City Council was still working to fine-tune financing for the $1 10 million playhouse.

The funding aspect in play is called a “Community Development Area” or CDA. If every thing goes as planned, the CDA will bring in $33 million for the theater
project over a 25-y ear period from 2016 to 2040.

While it has been advertised as a $1 10 million project, the total cost of the mega theater, including interest on the debt, will be closer to $187 million if interest
rates were to remain where they are today , about 4.5 percent, according to council budgetary projections.

The debt will be retired by a combination of funding mechanisms, including $15 million in private investment — most notably naming rights.
A CDA is a redevelopment tool much like a redevelopment area, where increased property tax revenues from the increased value of the developed property —
known as increment financing — go to the redevelopment agency . In a CDA, however, the redevelopment agency board cannot exercise eminent domain.
The Salt Lake City Council on Tuesday , acting as the RDA board, adopted a CDA for block 7 0 downtown. The block is bounded by 100 South and 200 South
between Main and State streets.

The City Council — acting as itself — is scheduled to adopt the CDA Feb. 19.
The theater is planned for 137 S. Main St. And according to Stan Penfold, chairman of the RDA, it will spur development on the block, which, in turn, leads to new
property taxes.

“It’s all timing and economy ,” he said of how much the CDA would bring. “I’m feeling pretty good we took a conservative estimate.”
Both Salt Lake County and the Salt Lake City School District have signed onto the plan that gives Salt Lake City 7 0 percent of the increment financing over 25
y ears. The council’s vote next week will make that official.

The largest chunk of funding, however, will come from “Statutory Allocation Reduction Revenue” or what city officials call SARR funding. Those are property
taxes earmarked to retire the debt on the EnergySolutions Arena and the Salt Palace expansion. Those funds will become available in 2016 and could cover about
7 0 percent of the construction costs and interest on the playhouse.
RDA Vice Chairman Carlton Christensen said the $187 million debt will be retired by a combination of those three mechanisms in these approximate proportions:
private funding, 10 percent; CDA, 20 percent; and SARR, 7 0 percent.
That, however, could change based on the productivity of the CDA and fluctuations in interest rates.

“If there is an area in the county with high performance in property value, it’s downtown,” Christensen said. “Property values are increasing. This is a good place
for a calculated risk.”Part of the council’s optimism is the knowledge that an office tower planned for the southeast corner of the intersection at 100 South and Main is well into the planning stages and will certainly bring a property tax boost to the CDA. Chicago-based Hamilton Partners already has signed on to build it and is coordinating with theater architects HKS and Pelli Clarke Pelli, said Council Chairman Ky le LaMalfa. “The creation of the CDA is a significant step forward,” he said.

csmart@sltrib.com

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