Dubuque Racing Association Lease Agreement_Third AmendmentTHE CITY OF ~ Dubuque
DUB E
Masterpiece on the Mississippi
2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Third Amendment to Amended and Restated Lease Agreement between
the City of Dubuque, Iowa and Dubuque Racing Association, Ltd.
DATE: January 25, 2009
On January 23, 2009, the Dubuque Racing Association approved an amendment to the
existing Lease Agreement between the City of Dubuque, as owner of Dubuque
Greyhound Park and Casino, and the Dubuque Racing Association.
The foundation of this amendment are the requests of new DRA General Manager
Jesus Aviles, as he identified the flexibility he needed to operate a successful gaming
and entertainment facility in light of the competitive environment that exists in this
industry.
The success of this facility is very important as the City receives one percent (1 %) of the
coin-in as a lease payment, which is estimated at $7,167,954 in the Fiscal Year 2010
budget. The facility also provides over 400 jobs to the local economy and purchases
millions of dollars each year in goods and services. The added entertainment option for
residents and visitors adds to the community's quality of life.
The City will be giving up several million dollars in revenues over the next three years
because of the elimination of distributions of the DRA net cash remaining at the end of
these fiscal years and additional dollars in future years because of the way the
distributions are calculated. This is important to the long-term viability of Dubuque
Greyhound Park and Casino.
The DRA has decided to support the City of Dubuque's sustainability initiatives by
creating a permanent endowment fund with a portion of their distribution that is reserved
for charitable giving. As this endowment fund grows, it will annually provide about 5%
of the fund balance to be distributed to charities. This will always be available to
charities even when the DRA experiences financial challenges, as is occurring now, or if
for some reason the concept of gaming is no longer attractive to the general public, as
has happened with greyhound racing.
This agreement is subject to final approval by the Iowa Racing and Gaming
Commission.
I want to acknowledge the hard work of City Attorney Barry Lindahl, Budget Director
Jennifer Larson, former DRA Board President John Schmidt, current DRA Board
President Dan Kruse, DRA Attorney Steve Krumpe of the O'Connor & Thomas Law
Firm, and DRA General Manager Jesus Aviles in crafting this document.
I respectfully recommend Mayor and City Council approval.
t!
Micha I C. Van Milligen
MCVM/jh
Attachment
cc: Jesus Aviles, CEO & General Manager, Dubuque Greyhound Park & Casino
Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
.#~ ~ _ a Y ~ ~ _'~'
1 T ~ F~~
~JJ {~
February 23, 2009
Mr. Kevin Firnstahl
City of Dubuque City Clerk's Office
50 West 13th Street
Dubuque, Iowa 52001
Dear Kevin:
L.s ~T..a
~~~ ~ 4e
4""^ `~
_ _ ~--
~
~~~
~, ; .`
;=
1
- ,_ e~ ~. _-~1
`ate ~3on ~;~~,~
~~
~;r-~
Enclosed please find the original executed document of the Third Amendment to the Lease
Agreement between the DRA and the City of Dubuque. As requested, I am sending the
original to you and have kept a copy for my records. If you have any questions or need
additional information, please feel free to contact me.
Sincerely,
r ,~
~, fr ,.
,~~` ~ ~ r t~~ ~.~~
t;
Andrea M. Greene
~ ~,
~ ` ~ ~ ~~ . r
Executive Assistant/Recording Secretary
Dubuque Greyhound Park & Casino/
Dubuque Racing Association
Direct Phone: (563)585-2955
This THIRD AMENDMENT TO AMENDED AND RESTATED LEASE AGREEMENT is
dated for reference purposes the 2nd day of February , 2009.
Whereas, the City of Dubuque (City) and Dubuque Racing Association, LTD. (Association)
are parties to an Amended and Restated Lease Agreement dated for reference purposes
the 31 st day of March, 2004, as amended by the FirstAmendment dated April 4, 2005, and
the Second Amendments dated June 29, 2005; and
Whereas, the parties now desire to further amend the Amended and Restated Lease
Agreement as set forth herein:
Par. 1 is amended to read as follows:
Term of Lease. The term of this Lease shall commence on the 1 St day
of April, 2004, and terminate on the 31St day of March, 2024.
2. Par. 3 is amended to read as follows:
3. Rental. Association shall pay City monthly rent equal to one per cent
(1%) of gross receipts from all gambling games (including but not
limited to slot machines and video machines which simulate table
games of chance) and four and eight-tenths per cent (4.8%) of the
table game adjusted gross receipts (amounts actually wagered at
table games less winnings paid to wagerers) for table games
conducted at Dubuque Greyhound Park and Casino for each month
such games are conducted. Such payments shall be due on the tenth
day of the following month. City shall expend such funds for capital
expenditures, including but not limited to, street lighting, street
improvements, the Civic Center, parks & recreation, the replacement
of motor vehicles and operating equipment, economic and tourism
development projects. In the event rent payments under this
paragraph exceed the budgetary needs enumerated for the foregoing
capital expenditures in City's general fund capital improvements
budget, then the City shall use remaining rents for funding of police,
fire, and other public safety departments. City shall use any rent
payments remaining after exhausting the foregoing purposes, if any,
Page 1 of 7
~;;/
for mass transit and library budgets. Notwithstanding the foregoing,
however, City shall not be limited in any manner from the issuance of
debt to fund capital improvements for other purposes or from using
other revenue sources, required to be dedicated to capital
improvements, to fund the capital improvement budget. All rent
payments shall be used by City exclusively for the promotion of social
welfare under IRC §501(c)(4).
3. Par. 34 is amended to read as follows:
34. Maintenance of Facility.
a) The Association agrees that, at all times during the term
of the sublease of Lot D by Association to Peninsula
Gaming LLC and its successors, the Association shall,
at its own expense, maintain, preserve and keep Lot D
in good repair and in good working order and condition,
including but not limited to snow removal, mowing,
landscaping, sweeping of parking areas, lighting,
cleaning, removal of litter, and repair and replacement
of surfaces The assumption by a third party under a
sublease of the premises of any such obligation
imposed on the Association in this paragraph shall not
relieve the Association of its obligation to the City
hereunder. Association's obligationswith respect to Lot
D shall terminate upon expiration or othertermination of
the sublease of Lot D by Association to Peninsula
Gaming LLC.
b) The City agrees that, at all times during the lease term,
the City shall, at its own expense and at commercially
competitive rates, maintain, preserve and keep Lot C in
good repair and in good working order and condition,
including but not limited to snow removal, mowing,
landscaping, sweeping of parking areas, lighting,
cleaning, removal of litter, and repair and replacement
of surfaces (hereinafter "maintenance"). The
Association shall, during the term of the sublease of Lot
C by Association to Peninsula Gaming LLC, reimburse
City for City's actual annual cost for such maintenance
within thirty days after receipt of a statement from City
forsuch costs. The Association's obligation to reimburse
City for such costs shall not commence until such time
as City has notified the Association that it has
exhausted the funds in the former Depreciation and
Page 2 of 7
Improvement Fund for the repair and replacement of
surfaces in Lot C. The Association agrees that City shall
be entitled to the funds in the former Depreciation and
Improvement Fund for such purpose. Association's
obligations with respect to Lot C shall terminate upon
expiration or other termination of the sublease of Lot C
by Association to Peninsula Gaming LLC.
4. Par. 41 is amended to read as follows:
41. Distribution of Net Cash Proceeds.
a) Association shall, following the end of each fiscal year (except
as provided under subparagraph (e) below), distribute its net
cash remaining after payment of the following expenses:
i) operational expenses and expenses for normal
replacement items;
ii) required payments to the Depreciation and
Improvement Fund underthe Dubuque Greyhound Park
and Casino Lease (Part A) above;
iii) provision for (i) operating funds, (ii) capital
improvements, and (iii) a cash reserve fund not to
exceed five per cent (5%) of total budget for Dubuque
Greyhound Park and Casino forthe following fiscal year
(the Cash Reserve Fund), which is calculated each year
and is not cumulative;
iv) required debt service payments (including prepayment
of debt, upon Board approval and City consent) for debt
incurred with the consent of City and for activities
pursuant to Iowa Code Chapters 99D and 99F;
v) distributions to charities or non-profit entities from
operational funds, not to exceed the greater of Four
Hundred Fifty Thousand Dollars ($450,000.00) orsixty-
five (65) basis points (0.0065) ofAssociation'sadjusted
gross receipts from all gambling games (slots and table
games);
vi) funds which Association is required to provide as
collateral or otherwise for purposes of obtaining and
securing any bond required by the Iowa Racing and
Page 3 of 7
N°"
Gaming Commission pursuant to Iowa Code Section
99D.10 (1995); and
vii) payment into a capital reserve fund (the Capital
Reserve Fund) subject to a maximum annual payment
of Five Hundred Thousand Dollars ($500,000) and a
total balance not to exceed Five Million Dollars
($5,000,000.00)), for use in funding future capital
improvements or gambling devices (including but not
limited to gaming devices and necessary hardware
and/or software relating to the installation or operation
of such gaming devices) in the discretion of
Association's board ofdirectors;
as follows:
Fifty percent (50%) to City; and fifty percent (50%) to be
distributed to charitable or non-profit recipients, and/or
allocated to Association accounts for use in advancing
Association's non-profit purposes (including, by way of
illustration and not limitation, contributions to Association's
Future Fund) in the discretion of Association's board of
directors. Commencing at the end of Fiscal Year 2011, and
continuing thereafter during the term of this Agreement, not
less than 30% of the 50% not allocated to City shall be
contributed to an irrevocable permanent endowment
established at an organization in the City of Dubuque where
the principal is invested, and only a portion of the investment
earnings is spent and the restofthe earnings are directed back
into the fund, so that the endowment grows over time. The
portion of the investment earnings spent shall be available for
distribution to other charitable and non-profit recipients and
distributed in the discretion ofAssociation'sboard ofdirectors.
However, if, after the 30% distribution to the endowment fund
in a fiscal year, the amount available for distribution to other
charitable and non-profitable recipients is less than One Million
Dollars ($1 M), the distribution to the endowment may be
reduced so that the amount available for distribution to other
charitable and non-profit recipients shall be One Million Dollars
($1 M). The endowment fund shall be established by
Association not later than July 1, 2009, on terms and
conditions approved by Association's board ofdirectors.
b) City shall use funds distributed to City under this Par. 41 in the
same manner and for the same purposes that City is
Page 4 of 7
authorized to use rent payments under Par. 3 of this
Agreement.
c) Monies deposited in the Cash Reserve Fund are the sole
property of Association and shall be designated for the sole
purpose of maintaining a cash balance for Association. Any
interest accruing on the balance in the Cash Reserve Fund
shall be available to the Operating Fund.
d) Association shall be obligated under this Par. 41 to distribute
City's share of net cash remaining at the end of each of fiscal
year as described in subparagraph 41(f) no laterthan March 31
following the end of each such fiscal year, except as provided
in Par. 41(e) below.
e) Notwithstanding the foregoing, there shall be no distribution
under this Par. 41 from net cash remaining following fiscal
years 2008, 2009 and 2010 (ending November 30, 2008, 2009
and 2010, respectively). However, distributions to
charitable/non-profit entities will be made from net cash
remaining following Fiscal Year 2007, as set aside by
Association's Board of Directors on January 15, 2008 to be
under Association's Annual Grants Program, on the following
schedule:
i) one-third shall be distributed prior to June 30, 2009;
ii) one-third shall be distributed after the end of fiscal year
2009 and prior to June 30, 2010; and
iii) the remaining amount shall be distributed after the end
of fiscal year 2010 and prior to June 30, 2011.
f) All net cash remaining at the end of Fiscal Years 2008, 2009,
and 2010, as computed under paragraph 41(a), shall be held
by DRA and may be used for any of the purposes in paragraph
41(a). However, any net cash remaining at the end of Fiscal
Year 2011 shall be distributed under Par. 41(g).
g) Normal distributions to the City and charitable/non-profit
recipients shall resume under Par. 41(a) following fiscal year
2011 and continue following each fiscal year thereafter during
term of this Lease.
Page 5 of 7
~j/
CITY ®F ®UUQU, I®W~4
gy.
Roy D. d~uol, Mayor 4
®ul3uc~u~
LT ®.
By.
Page 6 of 7
ident~°
ASS®C1,4T°I®IV,
CONSENT TO AMENDMENT
American Trust & Savings Bank consents t the foreg ing Third Amendment to
Amended and Restated lease Agreement this ,~ay of , 2009,
AMERICAN TRUST & SA~CiNCS BANK
ay:
Its ~,~,~ /~~
Page 7 of 7
~-
COMPARISON OF THIRD AMENDMENT TO
AMENDED AND RESTATED LEASE
1._ Term of Lease. The term of this Lease shall commence on
the 1St day of April, 2004, and terminate on the 31St day of
March, 242024.
3._ Rental. Association shall pay City monthly rent equal to one
~er~cent (1 %) of gross receipts from all gambling games
(including but not limited to slot machines and video
machines which simulate table games of chance) and
eeefour and eight-tenths per cent (44_8%) of the fisted
stable game adjusted gross receipts (amounts actually
wagered at table games less winnings paid to wagerers) for
table games ,conducted at Dubuque Greyhound
Park and Casino for each month such games are conducted.
Such payments shall be due on the tenth day of the following
month. -City shall expend such funds for capital
expenditures, including but not limited to, street lighting,
street improvements, the Civic Center, parks & recreation,
the replacement of motor vehicles and operating equipment,
economic and tourism development projects. -In the event
rent payments under this paragraph exceed the budgetary
needs enumerated for the foregoing capital expenditures in
&City's general fund capital improvements budget, then
the City shall use remaining rents for funding of police, fire,
and other public safety departments.- City shall use any rent
payments remaining after exhausting the foregoing
purposes, if any, for mass transit and library budgets.
Notwithstanding the foregoing, however, City shall not be
limited in any manner from the issuance of debt to fund
capital improvements for other purposes or from using other
revenue sources, required to be dedicated to capital
improvements, to fund the capital improvement budget. All
rent payments shall be used by City exclusively for the
promotion of social welfare under IRC ~ ~ 501(c)(4).
34. Maintenance of Facility.
a~The Association agrees that, at all times during
the lease-term of the sublease of Lot D by
Association to Peninsula Gaming LLC and its
successors, the Association shall, at its own
expense, maintain, preserve and keep ,
a~-Lot D in good repair and in good working
order and condition, including but not limited to
snow removal, mowing, landscaping, sweeping
of parking areas, lighting, cleaning, removal of
litter, and repair and replacement of surfaces
The assumption by ~D-~€~a third party under
a sublease of the premises of any such
obligation imposed on the Association in this
paragraph shall not relieve the Association of
its obligation to the City hereunder.
Association's obligations with respect to Lot D
shall terminate upon expiration or other
termination of the sublease of Lot D by
Association to Peninsula Gaming LLC.
b) The City agrees that, at all times during the
lease term, the City shall, at its own expense
and at commercially competitive rates
maintain, preserve and keep Lot C in good
repair and in good working order and condition
including but not limited to snow removal
mowing, landscaping, sweeping of parking
areas, lighting, cleaning, removal of litter and
repair and replacement of surfaces (hereinafter
"maintenance"). The Association shall during
the term of the sublease of Lot C by
Association to Peninsula Gaming LLC
reimburse City for City's actual annual cost for
such maintenance within thirty days after
receipt of a statement from City for such costs.
The Association's obligation to reimburse City
for such costs shall not commence until such
time as City has notified the Association that it
has exhausted the funds in the former
Depreciation and Improvement Fund for the
repair and replacement of surfaces in Lot C.
The Association agrees that City shall be
entitled to the funds in the former Depreciation
and Improvement Fund for such purpose.
Association's obligations with respect to Lot C
shall terminate upon expiration or other
termination of the sublease of Lot C by
Association to Peninsula Gaming LLC.
41._ Distribution of Net Cash Proceeds.
a~_Association shall, a~following the end of each e~+ts
fiscal yea~syear (except as provided under
subparagraph (e) below), distribute its net cash
remaining after payment of the following expenses:
i) operational expenses and expenses for normal
replacement items;
sii required payments to the Depreciation and
Improvement Fund under the P-afki~Dubuaue
Greyhound Park and Casino
Lease (Part ~~ above;
d}-iii provision for operating funds ii
capital improvements, and (iii) a cash reserve
fund not to exceed five per cent (5%) of total
budget for Dubuque Greyhound Park and
Casino for the following fiscal year (the Cash
Reserve Fund), which is calculated each year
and is not cumulative;
e}iv required debt service payments- ~~,
(including prepayment of debt, upon Board
approval and City consent) for debt incurred
with the consent of City and for activities
pursuant to Iowa Code Chapters 99D and 99F;
f~--v) distributions to charities or non-profit entities
from operational funds, not to exceed the
greater of Four Hundred Fifty Thousand
Dollars ($450,000.00) or sixty-five (65 basis
points (0.0065) of Association's adjusted gross
receipts from all gambling games (slots and
table games);
vi funds which Association is required to provide
as collateral or otherwise for purposes of
obtaining and securing any bond required by
the Iowa Racing and Gaming Commission
pursuant to Iowa Code Section 99D.10 (1995};
as-#el~e,~ ~ and
o °
~ }hir}~i r~ornon} /Z(10/ \ }n rocor~ro
~' \ I w u -rc..rvrvc
fu~t~ ~~ y~j~noc nn I Innn
tCl'tttii"~t~'1~J ~~-~ c v ~ n rne~CYFr-ttF
d~J~~~etdtFe~-nQfr ?cnni~4inn' c~~~n }.~{j~p
n~~r~on~ /7 0/B\ ~f s~n re~rvo ~Fi~n~ ch~~~ll ~~h~o'
vii) payment into" a capital reserve fund (the
Capital Reserve Fund) subject to a maximum
annual payment of Five Hundred Thousand
Dollars ($500,000) and a total balance not to
exceed Five Million Dollars ($5,000,000.00)),
for use in funding future capital improvements
or gambling devices (including but not limited
to gaming devices and necessary hardware
and/or software relating to the installation or
operation of such gaming devices) in the
discretion of Association's board of directors
as follows:
Fifty percent (50%) to City; and fifty percent (50%) to
be distributed to charitable or non-profit recipients
and/or allocated to Association accounts for use in
advancing Association's non-profit purposes
(including, by way of illustration and not limitation
contributions to Association's Future Fund) in the
discretion of Association's board of directors.
Commencing at the end of Fiscal Year 2011 and
continuing thereafter during the term of this
Agreement, not less than 30% of the 50% not
allocated to City shall be contributed to an irrevocable
permanent endowment established at an organization
in the City of Dubuque where the principal is invested
and only a portion of the investment earnings is spent
and the rest of the earnings are directed back into the
fund, so that the endowment grows over time. The
portion of the investment earnings spent shall be
available for distribution to other charitable and non-
profit recipients and distributed in the discretion of
Association's board of directors. However if after the
30% distribution to the endowment fund in a fiscal
year, the amount available for distribution to other
charitable and non-profitable recipients is less than
One Million Dollars ($1M), the distribution to the
endowment may be reduced so that the amount
available for distribution to other charitable and non-
profit recipients shall be One Million Dollars ($1 M).
The endowment fund shall be established by
Association not later than July 1, 2009, on terms and
conditions approved by Association's board of
directors.
b~_City shall use funds distributed to City under this
pa~agra~Par. 41 in the same manner and for the
same purposes that City is authorized to use rent
payments under a~Par. 3 of this Agreement.
rlonicinnc f~rovnonrJi+~~ro frnm Accnni }inr~'c rnc+n f .J
~#Att-~c-rTmra~ cnlohi by Accnnir.}inn's Rn rr~ of fliron+nr
c~_Monies deposited in the ~,~~~as;a+RaT,°~,~ n~-~;a
Cash Reserve Fund are the sole property of Association.-
and shall be designated for the sole purpose of maintaining
a cash balance for Association. Any interest accruing
on the balance in the Fes~'r f~ ~nr} oh-~n ho rlonnci}o~J
+n +~~~.d f~Cash Reserve Fund shall be
available to the Operating Fund.
d) Association shall be obligated under this Par 41 to
distribute City's share of net cash remaining at the
end of each of fiscal year as described in
subparagraph 41(fl no later than March 31 following
the end of each such fiscal year except as provided
in Par. 41(e) below.
e) Notwithstanding the foregoing there shall be no
distribution under this Par. 41 from net cash
remaining following fiscal years 2008 2009 and 2010
(ending November 30, 2008 2009 and 2010
respectively). However, distributions to
charitable/non-profit entities will be made from net
cash remaining following Fiscal Year 2007 as set
aside by Association's Board of Directors on January
15, 2008 to be under Association's Annual Grants
Program, on the following schedule:
i) one-third shall be distributed prior to June 30 2009
ii) one-third shall be distributed after the end of
fiscal year 2009 and prior to June 30 2010
and
iii) the remaining amount shall be distributed after
the end of fiscal year 2010 and prior to June
30, 2011.
f) All net cash remaining at the end of Fiscal Years
2008 2009 and 2010 as computed under paragraph
41(a), shall be held by DRA and may be used for anv
of the purposes in paragraph 41(a). However any net
cash remaining at the end of Fiscal Year 2011 shall
be distributed under Par. 41(g).
g) Normal distributions to the City and charitable/non-
profit recipients shall resume under Par. 41(a)
following fiscal year 2011 and continue following each
fiscal year thereafter during term of this Lease.
SUMMARY OF THIRD AMENDMENT TO DRA-CITY LEASE
¶ of 3'~ Amends Changes made
Amend- Current
meat Lease ¶
1 1 TERM of DRA-CITY LEASE: Extends term of DRA-City lease;
current expiration is December 31, 2018 (established by the 2°a
Amendment to the DRA-City lease); the new expiration date would
be March 31, 2024.
2 3 TABLE GAME RENT FORMULA: Changes the formula for computing
rent from table games so that rent is based on actual table game win
rather than on the amount of chips purchased by patrons; the change
is revenue neutral to both City and DRA.
3 34 ICE HARBOR LOT C MAINTENANCE: Transfers maintenance of Lot
C in the Ice Harbor (which is leased by the City to DRA, and
subleased by DRA to Diamond Jo LLC) to the City. The City
maintains the rest of the Ice Harbor parking areas. DRA will
reimburse the City from the balance remaining in the former Ice
Harbor Depreciation and Improvement Fund, then from operating
revenues a$er the D&I fund has been exhausted.
4 41 The most substantial changes to the lease are the changes to
paragraph 41 of the DRA-City lease.
¶ of 3'~
Amend-
ment Amends
Current
Lease ¶ Changes made
4 41(a)-(f) NEw FINANCIAL PROTECTIONS Fox DRA: The elimination ofDRA
from distributions of "net cash remaining" at the end of fiscal years is
offset in several ways:
a) Creation of a new Capital Reserve Fund, which can be
funded with "above the line" contributions up to a
maximum of $500,000 per year, and up to a total
accumulation of $5,000,000. New ¶41(a)(vii). The
CEO/General Manager (Jesus Aviles) believes that this
fund is crucial for DRA operations going forward.
b) Express provision is made in new ¶41(a)(v) for DRA
charitable/non-profit distributions "above the line" (i.e.,
before "net cash remaining" is calculated) of $450,000.00
or 65 basis points of DRA's gaming revenues (.0065
multiplied by DRA's adjusted gross receipts from slots
and table games), whichever is greater. In other words,
a minimum of $450,000 will be available for "above the
line" each fiscal year; if revenues recover beyond FY 2008
levels, the amount will increase.
c) Express provision is made in new ¶41(a)(iii) for provision,
at the end of a Fiscal Year, for operational funds, capital
~rovements, and a cash reserve fund of5% (which must
be replenished when used).
¶ of 3'" Amends Changes made
Amend- Current
ment Lease ¶
4 41(e)- SUSPENSION OF DISTRIBUTIONS TO CITY AND CHARITIES/NON-
(g) PROFITS FOR FY 2008-2010: ¶41(e) would create an exception for
distributions of "net cash remaining" after Fiscal Years 2008, 2009,
and 2010. There will be no distributions of "net cash remaining" to
the City following those fiscal years due to changes in the competitive
environment and the projection of diminished revenues from DRA
operations in those years. Approximately $3.6 million dollars was set
aside for distribution to charities/non-profits in Fiscal Years 2008,
2009, and 2010 from Fiscal Year 2007 revenues; this action was
taken by the DRA Board at its meeting on January 15, 2008. Cash
accumulated during this period may be used by DRA for any purposes
permitted under paragraph 41. Unused cash (if any) accumulated
during Fiscal Years 2008-2010 will be distributed following Fiscal
Year 2011 using the 50/50 formula. See 3rd Amendment, ¶41(e), (fl,
(g)•
4 41(g) RESUMPTION OF "NET CASH REMAINING" DISTRIBUTIONS AFTER
FY 2011: "Net cash remaining" following Fiscal Year 2011 and each
fiscal year thereafter through the term of the lease will be distributed
according to the 50/50 formula discussed in the following section.
See 3`d Amendment, ¶41(g) and below.
4 41(a)-(fl CHANGE IN DISTRIBUTION FORMULA: In light of the changes
discussed under the first heading above ("NEw FINANCIAL
PROTECTIONS FoR DRA"), DRA is deleted as a recipient of
distributions from "net cash remaining" at the end of a fiscal year;
currently, "net cash remaining" is distributed forty percent (40%) to
the City; thirty percent (30%) to charitable and non-profit distributees
selected by DRA through its Grants Program; and thirty percent
(30%) to a reserve fund established by Association. Under the 3`d
Amendment, provision must be made before "net cash remaining" for
DRA operational funds, capital improvements, and a 5% reserve fund.
The new distribution formula for "net cash remaining" under the
Third Amendment would be fifty percent (50%) to the City and fifty
percent (50%) to charitable and non-profit distributees selected by
DRA through its Grants Program and to an endowment fund (see
next section). Distributions to the City are to made no later than
March 31 following a fiscal year (3`d Amendment, ¶41(d)).
¶ of 3'~
Amend-
ment Amends
Current
Lease ¶ Changes made
4 41(a)-(f) ENDOWMENT FUND: An endowment fund would be established by
DRA under ¶41(a)(vii) ofthe Third Amendment with an organization
in the City of Dubuque selected by DRA. Starting at the end ofFiscal
Year 2011 and continuing through the end of the lease, the
endowment fund would be allocated 30% of the 50% available for
charitable/non-profit purposes (or 15% of the total amount of "net
cash remaining" at the end of a fiscal year). However, a minimum of
$1,000,000 of the "net cash remaining" would be reserved for
charitable/non-profit distributions through the DRA Grants Program
each year; if necessary, the amount of the endowment fund
contribution will be reduced enough so that $1,000,000 is available.
Once the $1,000,000 minimum is satisfied, additional funds would go
to the endowment fund until the endowment fund has received 30%
ofthe total "net cash remaining" allocated to the charitable/non-profit
distributions; any amounts remaining after that would be allocated to
the DRA Grants Program. The endowment fund would be set up in
the City of Dubuque by July 1, 2009 but, as noted, funding would not
begin until after FY 2011. The terms and conditions of the
endowment would be established by the DRA board, consistent with
the purpose of the endowment.
¶ of 3~d Amends Changes made
Amend- Current
ment Lease ¶
¶ of 3'd amends Changes made
Amend- Current
ment Lease ¶
¶ of 3'~ Amends Changes made
Amend- Current
ment Lease ¶