The Madison City Council affirmed Tuesday, in a 15 to 5 vote, the proposal to refinance funding for the Overture Center for the Performing Arts, utilizing a trust fund and holding the city responsible for any uncovered costs.
More than twenty community members, many involved in various programs at the Overture Center, voiced their opinions on the proposal. Although disputed among council members, most of the community turnout supported refinancing.
The approved refinancing plan relies on two firewalls before the city would become involved.
The first firewall comes from an endowment from W. Jerome Frautschi, who originally provided more than $200 million for the Overture Center. After reconstruction, approximately $107 million are left in the trust fund, which proponents of the plan say will be able to grow in the next six years.
Proponents based their support of refinancing on the probability that this fund would grow to cover the cost of construction, maintenance and beyond. If it does not, the Madison Cultural Arts District is the only other safety net before the city would become responsible for approximately $5 million.
Opponents, including Mayor Dave Cieslewicz, argued that relying on the stock market would be too risky. Instead, they suggested liquidation of the remaining balance of Frautschi's endowment, which would finish payments on the building and then allow the city to purchase it for $1.
The debate between both choices emphasized the magnitude of risk to taxpayers-the risk in the stock market or the risk of drawing funds from the city's operating budget for the prolonged operation of the Overture Center at the expense of other city services.
Ald. Zach Brandon, District 7, placed dice on the desks of each alder to illustrate the gamble the city would be taking by opting for the refinancing plan.
\Investing is a marathon, not a sprint. And we are in a sprint scenario,"" Brandon warned.
Cieslewicz said if the investments have one ""modestly bad year"" in the first three, city taxpayers will be ""on the line for 2.5 million dollars"" during the sixth year of the refinancing plan, money which would be ""vaporized in the market.""
Ald. Mike Verveer, District 4, said he was especially pleased with the vote because the 15 votes would be enough to override a mayoral veto, which Cieslewicz publicly indicated he would exercise.
""I think that it is absolutely the best deal for the Overture Center, for the arts in our community and indeed for the taxpayers,"" Verveer said.
