Steve, a consultant from Baker Tilly, told the Fargo Convention Center Committee that a conservative scenario using the voter-approved 3% lodging tax produces a project deposit capacity of about $37.5 million and that a longer financing term or higher growth assumptions could raise that figure to roughly $41.18 million.

The analysis matters because the committee is designing an RFP and budget framework tied to the lodging-tax revenue approved by voters; the numbers will shape what size project the city can support without additional subsidies.

Steve said the model assumes tax receipts would begin to be collected in June 2026, with financing closing in August 2026 and principal payments beginning June 2027, and that the baseline scenario uses 2% annual taxable activity growth for 10 years and 1% thereafter with a 20-year bond term. "Bottom line, what we're looking at, is a capacity somewhere in that 37 and a half, $38,000,000 range just given this scenario," he said.

The presentation included alternative scenarios: a 3% growth assumption for the first 10 years and a 25-year financing term, which produced the higher capacity estimate. Steve described components built into the model: projected lodging-tax receipts, a carve-out for revenues from a new convention-center hotel, construction fund earnings, a debt-service reserve funded at closing, and an operating subsidy that reduces cash available for debt service. He said the modeled total revenues produced about 1.1 times coverage of annual debt service in the conservative scenario.

Finance Director Susan Thompson emphasized the team deliberately ran a conservative baseline for investor comfort and to avoid "getting anybody's hopes up too, too terribly high," then noted the tradeoffs: a 25-year term increases capacity by several million dollars but also raises lifetime financing costs. "For $4,000,000 worth of additional construction costs, you know, the financing cost of that goes up by, like, $15,000,000," she said.

Committee members asked about timing and sensitivities. Eric Johnson, assistant city attorney, asked whether the extra millions discussed would appear as a larger project deposit; Steve confirmed the project deposit under the 25-year scenario would increase to about $41.18 million and that borrowing capacity rises by roughly $4 million. Members asked staff to run additional growth scenarios, including a 4% growth example, and to provide the detailed Word documentation supporting the model.

Committee directions recorded in the meeting: Baker Tilly will provide the detailed modeling Word document to staff for distribution; staff will post the materials on the committee web page; and Baker Tilly agreed to run at least one additional growth-rate scenario for committee review. No formal motions or votes occurred during this discussion.

The committee scheduled follow-up work and will review the modeling and RFP criteria at the next meeting at 9 a.m. in City Commission Chambers. The presentation and the committee's requests will inform the RFP scope and the initial project-size planning.