04-0116R

RESOLUTION AUTHORIZING AMENDED AND RESTATED OPERATING AND REVENUE PARTICIPATION AGREEMENT WITH LAKE SUPERIOR CENTER AND LAKE SUPERIOR CENTER AUTHORITY FOR THE LAKE SUPERIOR AQUARIUM, SUBJECT TO TERMS AND CONDITIONS.

BY COUNCILOR GILBERT:

WHEREAS, in June of 1998, the city of Duluth along with the Duluth economic development authority entered into an operating and revenue participation agreement bearing city contract No. 18,364 with Lake Superior Center, a private nonprofit corporation (LSC) and the Lake Superior Center authority for the operation of the Great Lakes Aquarium (the aquarium); and

WHEREAS, LSC and Lake Superior Center authority have requested that the city agree to enter into an amended and restated operating and participation agreement replacing Contract No. 18,364 modifying the rights and obligations of the parties pertaining to the operation of the aquarium; and

WHEREAS, the city council believes that organizations receiving public funds should be accountable to the public but that LSC, in its role of operating the aquarium, has not always been so accountable; and

WHEREAS, the council believes that the debts of the aquarium to the city and to the Duluth economic development authority (DEDA) should be paid if the Aquarium succeeds in producing sufficient revenue to do so and such payments can be made in such a manner as will not hurt the viability of the aquarium; and

WHEREAS, the council is willing to approve execution of the amended and restated operating and revenue participation agreement, subject to LSC agreeing to make the following commitments to the city.

RESOLVED, that the proper city officials are hereby authorized to enter into an amended and restated operating and revenue sharing agreement, a copy of which is on file in the office of the city clerk as Public Document No. ________, with LSC and Lake Superior Center authority, but only on the condition that the agreement is amended to contain the following terms, or the following terms and conditions are agreed to in a separate, binding contract, and subject to LSC and the Lake Superior Center authority agreeing to accept the terms of the amended contracts:
(a) That the debts of LSC and Lake Superior Center authority under Contract No. 18,364 not be forgiven or extinguished but that they be subordinated to any debts incurred by LSC or its managing agent, if any, to pay for improvements to the aquarium;
(b) That any grants, gifts or donations received by LSC or its managing agent, if any, to pay for improvements to the Aquarium or to pay debt incurred for that purpose would not be required to be used to pay any debts of LSC or Lake Superior Center authority covered by City Contract No. 18,364;
(c) That subparagraph D of paragraph 10 of the operating and revenue participation agreement (giving city officials power to take over operations) be amended in a reasonable manner acceptable to Ripley's Entertainment Corporation in conjunction with their entry into a long-term agreement to manage and operate the aquarium;
(d) That LSC will conduct its business in accordance with the requirements of the Minnesota open meeting law, Minnesota Statutes Chapter 13D;
(e) That in the purchase of goods and services, LSC will abide by the provisions of Minnesota's municipal contracting law, Minnesota Statutes  471.345-471.37;
(f) That members of the board of directors and staff of LSC will be bound by the provisions of Minnesota Statutes  471.87-471.88, governing conflicts of interest;
(g) That access to all data collected or retained by LSC will be governed by the Minnesota Data Practices Act, Minnesota Statutes Chapter 13.

RESOLVED FURTHER, that the city's approval is contingent upon any required approval of the Minnesota department of administration and/or the Minnesota department of finance.


STATEMENT OF PURPOSE:  This resolution authorizes approval of the amended and restated operating and revenue participation agreement subject to certain commitments.

In the first instance the debts that are owed to the city and DEDA would not be completely forgiven but would be subordinated to any new debts incurred to make improvements to the aquarium. Only if funds became available which would not hurt that effort would payments on these old debts be made.

The resolution also requires the commitment from Lake Superior Center, the nonprofit operator of the aquarium, to conduct its business in a manner similar to that of government. This would include the requirement to have open meetings, to publicly bid the purchase of goods and services, to follow state conflict of interest rules for municipalities, to establish a code of ethics for board members and staff and to allow the Minnesota Government Data Practices Act to govern access to LSC's data. These commitments could either be added to the amended and restated operating and revenue participation agreement or be incorporated into a separate agreement.

In any case, approval of the amended and restated operating and revenue participation agreement would still be subject to approval by the Minnesota department of administration and/or the Minnesota department of finance.