BY COUNCILOR GILBERT:
RESOLVED, that the city of Duluth hereby declares its intent to deduct $9,975.24 annually for a period of five years from the funding allocated to the Depot in order to provide for repayment of a loan made by the city to the Art Center.
STATEMENT OF PURPOSE: In 2001, the city and the Art Center entered into a loan agreement in the amount of $85,000 to fund roof and window renovations at the St. Louis County Heritage and Art Center. The loan was for a period of five years with interest at a rate of 5-1/2 percent per annum. The city deducted an equal monthly loan payment from the monthly disbursement of tourist taxes which it provided to the Art Center. The last payment made to the Art Center and last loan payment deducted from said payment was in January 2003.
In 2003, the city entered into an agreement with a new entity, the Depot, and provided the Depot funding in the amount of $100,000 for the year 2003. Over the course of the year 2003, the Art Center loan was reduced by making payments out of the tourism and tax fund. The unpaid balance on the loan to the Art Center is $35,743.92. If the loan repayment is spread over five years at the rate of 5-1/2 percent per annum, the annual payment equals $9,975.24.
This resolution expresses the city's intent to deduct the $9,975.24 from the money allocated annually to the Depot for five years beginning in 2004 in order to repay the remaining balance on the Art Center loan.