Finance Advisory Board Special Meeting on Casino Financing

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The FAB meeting was called to order at 5:40 last evening by Vice Chair, John Pickett. Chair Ron Exline and Darrian Dority were absent.

The reason and the purpose of the special meeting was to discuss the casino financing using the City’s cash portfolio which would be a $6 million dollar loan for 16 months that would also coincide with the first year of leasing revenue in 2013. Vice Chair Pickett thought it important, as well as one of the Board’s responsibilities, to recommend a Financing Plan to the Commission that is meeting Monday night for a vote.

He called the meeting at the request of the Board’s liaison. When asked by Board member Jennifer Marchal whether the liaison was Steve Carr or Susan Stanton, he answered, “It was Susan.” It was said that Stanton called him because Exline was unreachable. We contacted Mr. Exline who stated, “I never got a call.”

In a nutshell, the proposal is-- borrow $6 million from the City and then after rents start, repay the City the $6 million plus interest of approximately 2.5% per annum for the 16 months it borrowed the money. The City will then go out on a 20 year bank loan at 7.25% interest. By borrowing $6 million from the City’s Cash Portfolio, which has a balance of $60 million of unrestricted funds, the City would save $400,000. This is the City Manager’s recommendation and why the meeting was called.

Bill Thrasher said that he was “in love” with the project but he was conflicted giving the following reasons:

• John Pickett’s name on the list of Contributors to the Study

• Mr. Pickett had called the Special meeting

• The person who had created the Study was an associate of Mr. Pickett’s.

• Therefore, it is a possible conflict and therefore the Study was flawed. Later he stated that the Board should not accept the Report.
  

Mr. Thrasher said that they should guard against any member on the Board to the possible perception of wrongdoing and that the entire report could be challenged.

Picket then explained that he called the meeting because Exline "was not available.” He stated that he was appointed to the Finance Advisory Board because of some of the expertise he has is in the commercial real estate business. Susan approached him and he gave the city some names. The associate who did the Study, Mark Squillante, was described as an independent contractor and not an employee of HTT Capital, LLC., a firm of which Pickett is "affiliated." It came out subtlety a little later in the meeting that Pickett actually was the owner of HTT Capital.

Mr. Pickett further stated that he does not have an economic interest…he will not be compensated and his calling the special meeting was coincidental.

Laurel Decker said that she "feels conflicted because of Thrasher's level of concern...that it was important to have a consensus. She then asked, "What does the City need to present to make you feel comfortable?"

Mr. Thrasher, feeling very distraught, said that he viewed the matter as very serious and his instincts say that it is wrong. “Government is different than the corporate world,” he further said. “Anyone wanting to make trouble, there is now an open door.” He wants the Casino project to go forward and believes that this project will turn the city in the right direction. He does not want any possible appearance of a conflict to get in the way. Worried about the perception of a possible violation of ethics, he even tried to seek advice of his attorney who was unreachable.

Picket said that he hopes very much that the potential unintended consequences do not diminish the work that the Staff put into the Study. He was distressed that he might have caused a problem which was derived from possibly not understanding government.

As Jessica Plotkin had to leave the meeting at 6:30...it was stated that there was no longer a quorum and therefore no vote could be taken. The meeting soon adjourned.