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Eastlake looks to retire $10 million of stadium debt
News-Herald, July 14, 2009
Five years of planning is on the verge of becoming reality in Eastlake.
At tonight's meeting, City Council will consider an ordinance that would authorize the city to pay off more than $10 million in stadium debt associated with Classic Park. The meeting is scheduled for 7:30 p.m. at city hall.
"This is a substantial amount of debt we're getting rid of," Mayor Ted Andrzejewski said. "It's a great feeling to know what we planned out has worked and will come to fruition."
If the ordinance is approved, the city would pay down all of its 2002 taxable bond — about $8.09 million — completely eliminating it from the city's books. Also, the city would pay down about $2.62 million on its 2004 tax-exempt bond.
The funds to pay down this debt came from about $4 million in federal transportation funds and $4 million as part of the naming-rights agreement with the Lake County Captains — both of which surfaced in 2005 — as well as about $2.4 million in other revenue collected in recent years by the city.
"It's exciting to see the culmination of this process," said City Councilman David Knuchel, the finance committee chairman. "It's something we've been working on for years — both the administration and council has put aside money to make this happen. It's very rewarding to see things come together."
Perhaps the most significant impact of paying down the stadium debt would be seen in the general fund, where the amount of money the city uses each year would significantly decrease.
For example, should the ordinance be approved, the city would likely pay about $750,000 less — $507,450 as opposed to about $1.26 million — from the general fund in 2010. Each scenario assumes $700,000 in stadium-related revenues for the year deducted from the total amount due.
"The more debt we pay down, the less the burden on the general fund," Andrzejewski said.
"We want to get to the point where what we earn at the stadium equals the amount of money to pay out the bonds. That's now our goal."
With more available in the general fund, Andrzejewski said he would look into bringing back recreational programs because many options were eliminated years ago when the city entered into fiscal emergency under the Ohio Auditor's Office.
The city was released from fiscal emergency in December 2007.
Also, newly available funds would be set aside for things such as future sick-time payouts for retiring city employees and new radios that will be required by the county's new telecommunication system, Andrzejewski said.
"It gives us flexibility to plan for future expenses we know are coming," he said.
Said Knuchel: "This gives us an opportunity to have a little bit of breathing room, especially since the economy is so tight. Does it mean we'll be able to spend a lot of money and do a lot of things we weren't doing? No, this will keep the ship sailing. This will keep us on course."
Moving forward, the city will continue designating $125,000 in each year's budget for paying down the debt further, with the hope that by each year's end other funds can be identified to raise that total to at least $200,000 per year, Finance Director Brian Condron said.
"If we can continue to contribute $200,000 per year, we can get out of debt earlier," he said.
Either way, Knuchel feels retiring a portion of the stadium debt would be an important step for the city.
"What I hope is that it gives residents the opportunity to look at our work and see that we did what we said we were going to do," he said, "which is pay down stadium debt."
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