City Council is a step closer to cashing in on a $13.4 million
settlement from the failed Shipyards project after the Rules Committee voted 6-0 on legislation to approve an agreement to accept those funds.
A last-minute bill was filed for the April 20 council meeting, but members put off any decision for one cycle so it could review any concerns on how it could spend the money.
But, those concerns seem to be alleviated by a legal opinion from the GreenbergTraurig law firm.
Several attorneys with the firm said a U.S. Treasury rule allows the money to be considered investment proceeds that can be spent on government purposes. Those needs can include parks, public safety and pension obligations.
The catch is those investment proceeds need to be deposited into a “comingled fund,” such as the city’s general fund and spent within six months. Transferring the money would mean the funds were considered spent for federal tax purposes.
Otherwise, the $13.4 million would most easily be applied to capital costs or debt service.
“It’s a nice opinion, it really is,” General Counsel Cindy Laquidara told Rules Committee members.
No fees need to be paid out of the settlement and there is no obligation toward Shipyards clean-up costs, she told the group.
Instead, the opinion meant maximum flexibility and discretion for council members.
That six-month period to spend, triggered by the cashing of the check, is past the start of the Oct. 1 fiscal year — and well past budget talks that will begin in late July and throughout August.
Yet, others already have their eye on the windfall, too.
The Downtown Investment Authority last week passed a resolution seeking the entire $13.4 million. Of that money, $5 million would be used toward making the authority’s economic development budget whole again, with the remaining applied toward clean-up of the Shipyards.
Anything left would then go toward the authority’s budget.
There was another idea thrown into the mix Monday.
Council member Greg Anderson suggested that after council voted in recent weeks to borrow $2 million to complete the Southbank Riverwalk, the Shipyards settlement might be a “great” place to recoup that cost.
Anderson serves as chairman of the council Finance Committee, which will be the final stop
of the settlement bill today before it moves to a final vote May 13.
A large sum of money and spending flexibility — a desirable combination, just in time for summer budget talks.