DEBT MANAGEMENT COMMISSION

DEBT MANAGEMENT COMMISSION CALVIN STARK Chairman GARY CUMMINGS JOHN ELLISON MIKE FRANZOIA ANNETTE KERR PAUL STEVENS STAN ZUNINO STATE OF NEVADA, ) COUNTY OF ELKO. ) ss. The Debt Management Commission met in regular session on August 26, 2009, at 10:00 a.m. PST., in Room 105 of the Elko County Courthouse at 571 Idaho Street, Elko, Nevada. There were present: ABSENT Debt Management Member Calvin Stark Debt Management Member Gary Cummings Debt Management Member John Ellison Debt Management Member Mike Franzoia Debt Management Member Annette Kerr Debt Management Member Paul Stevens ABSENT Debt Management Member Stan Zunino Others Present: Elko County Deputy Clerk Marilyn Tipton W. Wendover Recreation Dist. Jamey Christie --- The proceedings were as follows: I. CALL TO ORDER: Vice Chairman Annette Kerr called the meeting to order at 10:00 a.m. ROLL CALL: Vice Chairman Annette Kerr acknowledged that Chairman Calvin Stark and Stan Zunino were not present. II. PUBLIC COMMENT: Vice Chairman Kerr asked for comments by the public. There were no PAGE 1

comments submitted. III. APPROVAL OF MINUTES: Vice Chairman Kerr asked for the approval of the minutes of the meeting held on March 25, 2009. MOTION: Commissioner Stevens moved for approval of the minutes with correction submitted. Commissioner Ellison seconded the motion. The motion passed unanimously. IV. REVIEW OF POLICIES AND PLANS: CARLIN TV DISTRICT: PAGE - 2 MOTION: Commissioner Stevens moved to accept the Carlin TV District Debt Management Plan as presented. Commissioner Franzoia seconded the motion. The motion passed unanimously. CITY OF CARLIN: Commissioner Stevens stated on page 3 under the Schedule of Indebtedness they showed a total general obligation bond debt of $156,063 but in their Loan Amortization Schedule USDA Water Line Bond they indicate it as a bond. Commissioner Franzoia noted it was indicated at $257,684. Commissioner Stevens stated that was indicated as a bond. He questioned if they had those two figures reversed. He noted under the general obligation they have listed public cars, a backhoe, and an ambulance. He stated in the mediumterm obligation, they mention negotiable notes or bonds. Commissioner Stevens felt the water line could be a medium-term obligation. Commissioner Franzoia noted it could be under the medium term-bond but normally a medium-term bond loan was seven years or less. He commented a general obligation bond was always going to be backed by property taxes for the most part but the amortization schedule shows it to be 40 years. Commissioner Franzoia felt it should be an obligation bond. He believed they had placed that under OTHER DEBT on page three. He stated it shows the USDA Senior Center loan for 30 years in the amount of $185,887. Commissioner Stevens noted that they use the other Senior Center as $181,741.40. He was confused with their figures. Vice Chairwoman Kerr inquired if the board wished to table this report. Commissioner Franzoia asked that it be tabled and ask them for an explanation because the numbers were not matching. Commissioner Ellison commented that they were

running out of time. He stated they were holding their general meeting but felt they could table this and have it brought back in September. MOTION: Commissioner Franzoia moved that they table this and request an amended copy. Commissioner Ellison seconded the motion. Vice-Chairwoman Kerr asked that they amend their motion to include that they must have a representative present. Commissioner Franzoia amended his motion that this be reviewed because there were potential errors in their report and have a representative from Carlin come in and explain that. Commissioner Stevens seconded the amendment. The motion passed unanimously. CITY OF ELKO: Commissioner Stevens noted with regards to the City of Elko Interpretive Center bonding fees of two million for 20 years it started out with an ending balance of two million and comes down to $1,740,000. He asked for clarification. He stated the previous report would have shown the breakdown from the two million dollars down to the $1,740,000. He noted the due date for that was August 22, 2005. Commissioner Franzoia explained that was not the due date. They allocated that money out in 2005 and set it aside but the process of getting the loan was not secured for about a year or so. He believed the start date was for this process to go forward but they had to get buyers for the bond. Commissioner Stevens clarified that difference between the 2 million and the $1,740,000 would have been in the previous report from the City of Elko. Commissioner Franzoia believed that there had been two payments on that like fiscal year of 2010. Commissioner Kerr noted that would be on the previous report. Commissioner Ellison commented that was still secured with the room tax. Commissioner Franzoia believed they had put one more year in the report than they should have. MOTION: Commissioner Stevens moved to accept the City of Elko s Indebtedness Report as presented. Commissioner Ellison seconded the motion. The motion passed unanimously. CITY OF WELLS: MOTION: Commissioner Stevens moved that they accept the City of Well s Debt Management Policy as presented. Commissioner Ellison seconded the motion. The motion PAGE 3

passed unanimously. Commissioner Stevens asked that when the City submits their report that they have the pages numbered correctly. He noted that the page numbers jump around. Commissioner Stevens had previously assumed there were missing pages but did not think there were. Annette Kerr noted on page 5 the City of Wells may need long term debt for the completion of the earthquake repairs. She noted they had $800,000 and there was no type of notice on their reimbursement from FEMA. Commissioner Ellison noted that the Department of Emergency Management had given them some funding but they were still in limbo on the Federal funding. Annette Kerr inquired if the board was comfortable with that. Commissioner Ellison stated they still did not know if they would be funded. They were approved but the funding had not been allocated. Commissioner Franzoia noted that they could accept it as presented with that. He questioned if they would pursue the $800,000 but they would have to come back before this board. He noted there was a cap in place and they were capped out. Commissioner Franzoia stated that they could not use their General Fund to obligate it. They would have to increase their tax rate. He stated even at the established tax it was a tax override by the voters. They may want $800,000 but they would have to have a bond issue passed by the voters. He noted there was a State tax cap of 3% based on growth rate and the state combined rate of $2.64. Commissioner Franzoia commented that the City of Wells may be at that tax cap. He stated they might have to get a vote by the public to get around the cap. Commissioner Ellison noted that if they have to go back in and do a bond issue they still have to assess the water and sewer damage. Commissioner Stevens noted on page 6 regarding the street sweeper there should be a correction of 7/1/2017 instead of 7/1/2007. Commissioner Stevens amended his motion to include the corrections that were discussed. Commissioner Ellison seconded the motion. The motion passed unanimously. CITY OF WEST WENDOVER: Commissioner Stevens inquired about the standby service charge. Jamey Christie noted that was in the West Wendover Recreation District Report. MOTION: Commissioner Gary Cummings moved to accept the City of West Wendover report as presented. Commissioner Franzoia seconded the motion. The motion passed unanimously. PAGE - 4

COUNTY OF ELKO: Commissioner Stevens noted they had received a temporary Capital Improvement Plan. He suggested that in the future they submit it at the same time as the Indebtedness Report. Vice-Chair Kerr inquired about the new County building on the CIP. Commissioner Franzoia noted it was $10,180,000 in the Indebtedness Report on page four. Vice-Chair Kerr questioned why it was $4,991,620.00 on the Capital Improvement Plan. Marilyn Tipton contacted the County s Administrative Officer and was told the Chief Financial Officer would come to the meeting to answer their questions. Vice-Chair Kerr tabled the matter until they had someone to answer their questions. ELKO CONVENTION & VISITORS AUTHORITY: Commissioner Stevens stated that the building of the Convention Center they had a General Obligation Bond of 2.5 million dollars. He questioned if the Convention Center had the authority to bond the 2.5 million or did that go through the County or City. Commissioner Franzoia stated that would go to the vote of the public. Commissioner Franzoia noted they originally put a property tax rate for that and backed it up with a room tax allocation to the Convention Center. He stated the Convention Center had used the excess every year from the room tax obligation to operate it. He noted they use the property tax now for operation and put the room tax into capital improvements. Commissioner Stevens inquired if they were doing additional building. Commissioner Ellison believed they were looking at expansion. Commissioner Franzoia stated there was a design for a northwest expansion plan and design for 1.72 million dollar. Commissioner Kerr stated they were looking at pulling that from property tax and general fund trust or extending their bond. Commissioner Stevens asked if they were putting away the excess money away and utilizing it for their expansion. Commissioner Kerr noted that they were using that funding for building upgrades and that was reflected in their Capital Improvement Plan. Commissioner Stevens understood the Convention Center had the authority to issue that bond up to 2.5 million. Vice Chair Kerr believed that had to go to a vote of the public. Commissioner Franzoia noted that originally the public agreed to go into debt and created a district then created a funding source by the vote of the public to build the facility. He stated that when the facility was paid off, that tax rate did not sunset. He stated that they could bond at whatever that tax rate generated. He noted at the construction costs they may contract for under the 2.5 million dollars. Commissioner Franzoia stated any long term bond would take a vote by the public and if they do anything longer than seven years it comes before this PAGE 5

Board. Commissioner Stevens stated on the property tax bill it said.0392 per $100 and he understood they were currently using that for operating. He noted they could put some of that excess away to be applied toward capital improvement. Commissioner Franzoia noted once that debt was paid for they could roll over that revenue source into a capital fund and not have their operating budget go up because they have that extra cash. MOTION: Commissioner Stevens moved to accept the Elko Convention Center s report as filed. Commissioner Ellison seconded the amendment. Vice Chair Kerr requested clarification on the ECVA s geothermal upgrade in their Capital Improvement Plan. She noted the School District had set aside more funding for that upgrade. She believed that upgrade was based upon the geothermal proportion usage. She questioned if the Convention Center could cover that with property tax. Vice Chair Kerr commented that the City and the County were on that line. Cash Minor arrived at 10:25 a.m. Cash Minor stated that the County was not involved with the line owned by the School District. He stated they were on Elko Heat. Vice Chair Kerr clarified that the City, the School District and Convention Center were on that line. Commissioner Franzoia believed the School District was the biggest user, the college may tape into the line, the City and the pool was on the line and the hospital was no longer on it. He stated there were upgrades over the past several years and now they were banking some of that for future upgrades. The motion passed unanimously. COUNTY OF ELKO (continued): Vice-Chair Kerr requested clarification from Cash Minor regarding the Capital Improvement Plan if it was final. Cash Minor stated it would be on the Commissioner s agenda next week for approval. She questioned the Courthouse Annex discrepancy on the amount in the Indebtedness Report compared to the amount on the Capital Improvement Plan. Cash Minor stated he could not answer that question. He stated it could be just debt service but he would get them the answer. MOTION: Commissioner Ellison moved to approve the County of Elko s report as presented with the caveat that County staff would get back to them and explain the difference in the figures for the Courthouse Annex. Commissioner Stevens seconded the motion. The motion passed unanimously. PAGE - 6

Cash Minor departed from the meeting room at 10:32 a.m. ELKO COUNTY RECREATION BOARD: MOTION: Commissioner Stevens moved to approve the Elko County Recreation Board as presented. Commissioner Ellison seconded the motion. The motion passed unanimously. ELKO COUNTY SCHOOL DISTRICT: Commissioner Ellison inquired when the pay as you go program would expire. Vice Chair Annette replied 2012 but it would go to the voters for another 11 years extension. Commissioner Stevens asked if that would be done at the General Election on 2010 and received an affirmative response. Commissioner Stevens stated when report was prepared under the general obligation debt comparison they had 8 districts listed on page two. He noted that only five of the districts were really comparable. He noted the difference in the population statistics for White Pine, Humboldt County, and Churchill. Commissioner Stevens felt the reason for showing that was they don t really have any general obligation compared to the other counties. However, he felt they should compare it to districts with similar population. He believed comparing it to six districts was sufficient. Vice Chair Kerr would take that information back to the School Board. Commissioner Stevens noted Carson, Douglas, Elko, Lyon and Nye Counties population were close. He understood the reason of comparing their debt to Ely. MOTION: Commissioner Ellison moved to approve the Elko County School District s report as submitted. Commissioner Stevens seconded the motion. The motion passed unanimously. ELKO TELEVISION DISTRICT: MOTION: Commissioner Stevens moved to accept the Elko Television District Report as presented. Commissioner Gary Cummings seconded the motion. Commissioner Stevens noted the TV District received.0289% of the property tax per $100.00. He understood they had set aside money for an additional and replacement to the equipment. He questioned what they did with the access. He noted they do not have any indebtedness. He would speak to the County regarding this. The motion passed unanimously. PAGE 7

Cash Minor returned to meeting room at 10:38 a.m. COUNTY OF ELKO (continued): Cash Minor stated that he had the answers to their previous questions. He explained those were the construction costs for the new building for 2009. He noted the debt service payment was not coming out of the Capital Projects Fund. He stated the debt service was coming from a bond income fund because it was a sales tax bond. Commissioner Franzoia inquired if the Annex amount should total the entire indebtedness. Cash Minor stated that it reflected the construction costs for this fiscal year and did not have anything to do with the bond payment. Commissioner Franzoia inquired if the Capital Improvement Plan should show the total cost of the Annex regardless of what phase they were in. Cash Minor stated no because it was incurred in the prior fiscal year and was not reflected in this report. Cash Minor stated more than half of the project would have been reflected on last year s report. Commissioner Franzoia inquired if the remainder would be completed in the next fiscal year. Cash Minor stated it was scheduled to be done in November of 2009. Commissioner Franzoia noted they borrowed 10 million dollars to build the annex. Cash Minor stated that included equipment and furnishing and that depended upon the dollar amount. Commissioner Franzoia felt the Capital Improvement Plan should be reflective of the amount borrowed on the Annex. He noted that the County s Indebtedness Report and Capital Improvement Plan did not match. Cash Minor stated the financing had nothing to do with the Capital Improvement Plan. Commissioner Franzoia felt that the price of the improvement should be in the Capital Improvement Plan. Cash Minor noted the project crossed fiscal years because the project started in 2007. Commissioner Stevens noted that they would pick up the money in last years reports. Cash Minor departed the meeting room at 10:40 a.m. WEST WENDOVER RECREATION DISTRICT: Commissioner Stevens noted on page 4 under repayment of existing and anticipated debt that the hotel room rates fluctuated over the past five years and therefore the room tax funding fell below projections. He stated under debt management on the next page there was a statement that room tax revenues had grown in the community. Jamey Christie, Secretary/Treasurer for the West Wendover Recreation District, explained that their room tax had grown over the past 18 years but did not meet the budget for the room tax from the past years. She noted they have had expansion on the hotels. Vice Chair Kerr commented the air program which had been in Elko went to Wendover. Jamey Christie PAGE - 8

stated they did have the flight program under the Stateline Casino but it went out and they now have a new flight program. She noted that flight program was instituted under the Peppermill properties. Commissioner Stevens inquired what the stand-by service charge was. Jamey Christie explained that it was a special assessment that was allowed under NRS 318 for General Improvement Districts. She stated prior to the Stateline bankruptcy they opted to drop their room rates to $10.00 per night so they imposed a special stand-by service charge because the money they needed to make up for the shortfall could not be made up because of the tax cap. Therefore, they impose a special service charge based on property square footage; there was a rate for improved and unimproved, and a special assessment rate for campgrounds. Commissioner Stevens noted in 2005 they approved the continuation of assessment at the same rate as in 2004. He asked what the rate was at that time. Jamey Christie did not know that rate. She noted in 2004 the Board voted to drop it 10% and kept it at the same rate ever since. Commissioner Stevens inquired what the current rate was. Jamey Christie could not remember the amounts of the rates. Commissioner Ellison commended them upon their progress. Jamey Christie stated they were in the design phase for their new Recreation Center. She noted they were looking at financial backing. MOTION: Commissioner Ellison moved for approval of the West Wendover Recreation District report as submitted. Commissioner Stevens seconded the motion. The motion passed unanimously. V. COMMENTS BY BOARD MEMBERS AND STAFF: Vice Chair Kerr inquired why they received the Central Dispatch Report. Commissioner Stevens noted on page 2 of their report it states because they were an interlocal agency there was no taxing authority and cannot issue tax supported debt. He noted that Central Dispatch was supported by user fees. He questioned why they submitted a report. Commissioner Franzoia noted it was a quasi-governmental entity. Commissioner Franzoia noted that Central Dispatch was a separate entity and those employees were under the PERS system but not under the City or County. Commissioner Franzoia felt they should be included in the report listing. Commissioner Ellison agreed it should be listed just for review. Commissioner Kerr noted they listed their funding sources as property tax into their general revenues. Commissioner Franzoia stated basically they would charge back all the entities for their services. He noted the city had the choice to PAGE 9

pay from their General Fund or property taxes. Vice Chair Kerr noted the School District was using their General Fund to pay for their services. Commissioner Cummings inquired if the Sheriff s Department ran Central Dispatch. Commissioner Franzoia replied it was run by an individual board. Vice Chair Kerr directed staff to put this entity on the next agenda as an action item. ADJOURNMENT: MOTION: Commissioner Stevens moved to adjourn the meeting. Commissioner Ellison seconded the motion. The motion passed unanimously. There being no other business to come before the Board, the meeting was adjourned. APPROVED ATTEST: MARILYN TIPTON, Deputy Clerk ANNETTE KERR, Vice-Chairman PAGE - 10