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Administration proposes narrow changes to BDO lease revenue ordinance; council voices concerns about using funds for recurring general-fund needs
Summary
Administration proposed amendments to the BDO lease revenue ordinance to provide limited flexibility for one-time supplemental transfers to the general fund (considering unused wages averaging ~$2M) and to add debt-service backstops for particular RDA areas; council members expressed persistent concern about using BDO revenues for ongoing payroll or operational obligations and requested additional charts and historical overlays before action.
Justin Sorensen (presenter) summarized the history and scale of the city’s BDO (lease) revenue and described proposed ordinance language that would allow administration—subject to council approval during the annual budget process—to recommend supplemental transfers from BDO lease revenue to the general fund when there is a year-by-year delta in budgeted wages and unused-wage savings are insufficient. He said the administration typically estimates around $2,000,000 average in unused-wage dollars in recent years and stressed that the proposal was not a set annual percentage but an option to propose a supplemental transfer when needed.
Justin told the council that the city currently receives over $15 million annually in BDO lease revenue and that the proposed ordinance adds clarifying language for debt backstops related to specific RDAs (Continental and MBA/Wonder Block areas) with caps discussed in the presentation (e.g., up to $4.2M and $4.0M respectively while tax-increment or parking revenue would reduce the actual need over time). The ordinance also proposed renewing the Quality Neighborhoods program for another five years at $1,000,000 annually.
Council response: Several members expressed strong reservation about using BDO funds for recurring general-fund needs, describing “heartburn” at the idea that the revenue source intended for capital, redevelopment and deferred maintenance could be used year-to-year to backfill payroll or ongoing obligations. Council members requested additional visuals and overlays for the council meeting: (1) a chart mapping historical BDO revenue against ongoing encumbrances/commitments; (2) a square-footage and lease-rate timeline showing remaining developable capacity; and (3) an itemized breakdown of what BDO funds have been used for (quality neighborhoods, deferred maintenance, etc.). Several members said they expected staff to supply those materials before moving the ordinance forward.
What’s next: Presenter agreed to provide additional data and visual overlays in the council meeting packet to support deliberation; council indicated it was not prepared to give final approval without further detail.
