Number
031356
Version
Substitute 2
Reference
Sponsor
THE CHAIR
Title
Substitute resolution approving Second Amendment to Access Management Contract between the City of Milwaukee and Milwaukee Access Telecommunication Authority, Inc.
Analysis
This resolution authorizes the Second Amendment to the City's Access Management Contract with the Milwaukee Access Telecommunication Authority ("MATA"). Under the amendment, the City Clerk is authorized to provide a grant in the amount of $500,000 for use in refinancing the current first mortgage on MATA's production facility located at 2404 West Clybourn Street (the "Property"). The source of the funding for the grant shall be the sale of certain of the investments that were made with the $5.2 million grant received by the City from Time Warner under the terms of the December 17, 1999 franchise agreement between the City and Time Warner. That grant from Time Warner was invested in order to produce a level quarterly payment of $125,000 per quarter for each quarter of the 17 years of the franchise agreement. The sale of certain investments producing the $125,000 per quarter would allow the City to provide the $500,000 grant to MATA. The current economic conditions and interest rates provide an opportunity to secure substantial savings for MATA over the remaining term of the agreement by refinancing its current mortgage for the production facility. The effect of the $500,000 City Grant will be, as shown in the schedule developed by the City Clerk, a reduction in future scheduled payments to MATA under the agreement.
Body
Whereas, The City, acting pursuant to Common Council Resolution File No. 991747, and the Contractor entered into an April 20, 2000 Access Management Contract (the "Original Agreement"); and
Whereas, The City, acting pursuant to Common Council Resolution File No. 000491, and the Contractor entered into an October 18, 2000 Amendment to the Original Agreement modifying certain approval and funding dates (the "First Amendment"; the Original Agreement as amended by the First Amendment is hereafter referred to as the "Agreement"); and
Whereas, Under the terms of the Original Agreement, as amended, Contractor is to provide specified community and educational access services for the 17 year term of the Agreement; and
Whereas, Contractor purchased, renovated and furnished the real estate located at 2404 West Clybourn Street ("the Property") for the purpose of providing community and educational access in accordance with the Agreement. The Property was purchased with the proceeds from two loans that have current outstanding balances in the total amount of approximately One Million Three Hundred Thousand Dollars ("Loans") and are secured by a first lien on the Property; and
Whereas, The City under the terms of the Agreement has a second lien on the Property; and
Whereas, The City received a $5.2 million grant ("Access Grant") from Time-Warner as a part of the 1999 Cable Franchise Agreement and invested most of that Access Grant in investments producing quarterly payments of $125,000 ("Access Payments) over the 17 years of the Franchise. The Access Payments were made available to Milwaukee Access Telecommunication Authority under the Original Agreement, as amended; and
Whereas, MATA has requested the City to enter into a Second Amendment to the Original Agreement under which the City would sell certain of the investments producing the Access Payments in order to provide MATA with a $500,000 grant. The grant would reduce the future Access Payments as provided in the Second Amendment. The grant would be used to reduce the current principal amounts of the Loans and refinance the Loans at a lower interest rate; now, therefore, be it
Resolved, By the Common Council of the City of Milwaukee that the Second Amendment to Access Management Contract between the City of Milwaukee and Milwaukee Access Telecommunication Authority, Inc. attached to this file is hereby approved and that the City Clerk is hereby authorized and directed to execute the Second Amendment on behalf of the City of Milwaukee.
Requestor
Drafter
City Attorney
PBM:dms
2/1/05
1055-2003-2808:77118