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Council to fund over budget Ector - Odessa American: City Of Odessa

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Council to fund over budget Ector

City to tap general fund flush with sales tax

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Posted: Thursday, July 5, 2018 6:00 am

The Odessa City Council plans to cover cost overruns of the Ector Theatre by drawing on the city’s general spending fund at a time when sales tax revenues are soaring but an oil boom also increases demand for city services.

The City Council is expected to fund the $10.8 million renovation as soon as next week, after the estimated cost of the project doubled in the past year and efforts to scale back the renovation produced only meager and uncertain saving.

The elected officials face pressure to move quickly with the project and funding it has planned.

City officials pitched renovation to the public as a key component of the public investment in the city-backed downtown hotel and conference center intended to spur a broader redevelopment of downtown Odessa. They also want to ensure that the theater can open around the same time of the hotel and conference center, which, like the theater, would be managed by private investors Toby and Sondra Eoff.

The general fund that City Manager Michael Marrero said the city will likely draw on to fund the Ector Theatre renovation is flush with sales tax revenue that has soared during the oil boom.

After the latest sales tax payment from the state last month, Odessa had around $15 million more than what budget writers predicted for this point in the fiscal year that ends Sept. 30. That’s about 65 percent more than the city officials’ estimates.

“Hallelujah — otherwise we’d be back starting at the beginning again,” District 2 Councilman Dewey Bryant said.

But city officials also hoped to consider other projects with that money.

“In terms of looking at the numbers, you certainly have enough to finish this project, but as with anything you could use that money for other things as well,” Marrero said.

If they fund the theater project as expected, the City Council would still have more than $9 million in unanticipated funds to consider funding one-time expenses with the unexpected sales tax revenue such as manning an additional ambulance or two, something Mayor David Turner said the city needs because of surging demand.

The City Council is also expected to consider pay increases for employees.

Faced with the unexpected cost increases after construction firms returned bids on the project in late April, the City Council weighed alternatives including tearing down the theater and replacing it or scaling back the project. During a committee meeting Tuesday, District 1 Councilman Malcolm Hamilton said the theater “is becoming a money pit” and would burden taxpayers despite the benefits he said it would bring.

“Quite honestly, I feel like we should just scrap the whole deal,” Hamilton said. “I think it’s just costing us too much to do this. At the end of the day, what are we actually going to get back from this?”

But the two other council members who were present, Bryant and District 5 Councilman Filiberto Gonzales, said the city had an “obligation” to deliver on the theater.

Bryant said failing to renovate the theater would be unfair to private developers the Eoffs, but it would also harm the city’s reputation with future partners and fall short of what city officials promised Odessans — a downtown theater for the public to enjoy.

“It’s a disappointment with what we are looking at, but we have an obligation,” Bryant said. “We have a great part of downtown being redone and a venue that we promised would be there — would be this type of venue — that we have made a commitment on.”

City administrators had asked San Antonio-based architect Killis Almond, who specializes in historical theater restorations, to find savings on elements of the rehabilitation project such as the mechanical system. But Almond on Tuesday presented savings of only about $300,000, or around 3 percent of the total estimated cost.

Mayor David Turner had criticized the city-hired architect as incompetent and on Tuesday chided him for earning the same fee despite whiffing on the cost estimates.

Last year the city awarded a contract to Almond’s firm for design and management of the Ector Theatre project expected to cost about $800,000. But Almond said the swing in the economy was at least partly to blame for the higher-than-anticipated costs, citing a struggle to find West Texas builders amid the oil boom underway today and other cost inflation.

“There’s nothing in this building that’s gold-plated at all,” Almond said. “It’s all been carefully designed to meet the requirements of a performing-arts theater.”

Proposed cuts included a cheaper curtain, lights and air conditioning system, which could be noisier and result in other unexpected costs.

“I don’t want to play with that kind of stuff,” Bryant said, citing the paltry savings and uncertainties.

If the City Council approves, Marrero said he expects construction crews can still finish the theater around the time of the hotel and conference center, possibly within a few weeks.

“I think that they would be pretty close,” Marrero said.

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