Battle brewing over FedExForum CIP reserve fund - WMC Action News 5 - Memphis, Tennessee

Battle brewing over FedExForum CIP reserve fund

All eyes are on a taxpayer trust fund, worth millions, tied to FedExForum.

The question is -- who holds the purse strings?

When the Memphis and Shelby County Sports Authority sold $250 million worth of bonds to pay for FedExForum, 10 million went straight into a trust account.

Now there's a BATTLE brewing over who should control that money.

FedExForum's Capital Improvement Reserve Fund, now worth nearly 11 million dollars with interest, is basically a safety net.

It's a big head start to cover costs on any big capital repairs, like the roof, air conditioning, and elevators.

"This is something that cries out to be watched very closely and administered properly," said Shelby County Commissioner David Lillard.  "Once it's gone, it's going to be the taxpayers pockets and that's a problem."

Right now, Wachovia bank, the accounts trustee can't release the funds for repairs without approval of the Sports Authority and, only then, not until the Grizzlies, the City, and the County agree repairs are necessary.

However, nowhere in the thousands of documents governing FedExForum's operation does it specify who with the City or the County gets to make that decision.

"Is it the legislative bodies?  Is it the City or County Attorney?  Is it some administrative personnel?  And that I think is up to interpretation,"  said Sports Authority financial advisor Lisa Daniel.

County Commissioner Lillard's interpretation: local lawmakers should control the purse strings, since under FedExForum's operating agreement, city and county taxpayers are on the hook to cover capital repair costs for at least the next 25 years.

"Those people, the councilmen and the commissioners are the ones that are going to have to approve an increase in the tax rate, changes from another areas of county and city government to fund these things, I mean that money is going to have to come from somewhere," Lillard said.

That's why Lillard believes it's critical to clarify who controls the first 11 million.

Action News Five spoke with Sports Authority Chairman Willie Gregory this afternoon by phone. 

Gregory said the Authority's board historically waits for City Council and County Commission resolutions before taking any action.

Still, Lillard says he wants a guarantee spelled out in writing.

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