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AGENDA ITEM REVIEW FORM
11.A.
Regular City Council Meeting
Meeting Date:
07/27/2016
Department Head:
Kay Macuil
Submitted By:
Kay Macuil, City Attorney, Attorney's Office
Action Requested:
Motion

ITEM:

Discussion and possible action on any and all matters regarding litigation costs on case number CV 14-02633 PHX DMF in the United States District Court for the District of Arizona. (Kay Marion Macuil, City Attorney)

SUMMARY:

The San Luis Facility Development Corporation (SLFDC), a municipal corporation of the City of San Luis, is requesting a loan from the City to pay for litigation costs on case number CV 14-02633 PHX DMF in the United States District Court for the District of Arizona in the amount of $75,000.00 to pay for an expert witness on finance calculations and to pay other costs associated with the litigation.  SLFDC brought this suit against the prior operators of the San Luis Regional Detention Center in order to recover the costs of penalties and the costs of reissuing of bonds from tax free bonds to taxable bonds in the financing of the building of the facility as well as additional damages.  Attorneys fees are to be paid contingent on the out-come of the case.  However, costs  are not covered in the contingency agreement.  SLFDC is requesting this loan because it receives no funds.  There is a City of San Luis Business License Fee in lieu of taxes on the Detention Center.  Since the only funds that SLFDC might receive are from proceeds of the case, it is requested that repayment on the loan be contingent on any proceeds from the case. 

 

RECOMMENDATION / SUGGESTED MOTION:

I MOVE TO APPROVE A LOAN TO THE SAN LUIS FACILITY DEVELOPMENT CORPORATION IN THE AMOUNT OF $75,000.00 FOR LITIGATION COSTS IN CASE NUMBER CV 14-02633 PHX DMF IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA AND THAT REPAYMENT ON THE LOAN BE CONTINGENT ON PROCEEDS FROM SAID CASE .

Fiscal Impact

IS THERE FISCAL IMPACT ASSOCIATED WITH THIS ITEM:
Yes
CITY/STATE/FEDERAL FUNDS:
City
TOTAL:
$75,000.00
BUDGETED:
No
AVAILABLE TO TRANSFER:
N/A
GL ACCT # & NAME/REMAINING BALANCE BEFORE PURCHASE:
GL# 100-110-81000 City Council Contingencies $285,500.00

FISCAL IMPACT STATEMENT (IF THIS IS A BUDGET TRANSFER, YOU MUST ATTACH THE BUDGET ADJUSTMENT FORM):

Fiscal impact as described above.