Madras Redevelopment Commission · Page 1 of 2 Madras Redevelopment Commission 125 SW “E” Street Madras, OR 97741 Phone: 541-475-2344 Fax: 541-475-7061 . City Hall . Council Chambers

March 7, 2018 Madras Redevelopment Commission Meeting

An Equal Opportunity Provider Page 1 of 2

Madras Redevelopment Commission

125 SW “E” Street Madras, OR 97741 Phone: 541-475-2344 Fax: 541-475-7061

City Hall Council Chambers March 7, 2018 Work Session 5:00 PM Regular Meeting Immediately Following Work Session

Agenda Work Session (5:00 PM) 1. Call Meeting to Work Session Order 2. Madras Vision Source Façade Improvement Project Discussion

Nicholas Snead, Community Development Director Jessica Tegan, Madras Vision Source Marco Urieta-Leon, Ascent Architecture

3. Adjourn

Regular Meeting to Immediately Follow Work Session 1. Call Meeting to Order 2. Consent Agenda

A. Adoption of Agenda B. Approval of February 7, 2018 MRC Meeting Minutes C. March 2018 Vouchers

3. Visitors Comments

4. Presentation of FY 2016-17 Annual Audit

Kristal Hughes, Finance Director Brad Bingenheimer, Partner; Bolt, Carlisle, and Smith, CPA, LLC

March 7, 2018 Madras Redevelopment Commission Meeting


5. Approval Amendments to Ali & Travis Alire Façade Improvement Loan Payment

Schedule

Nicholas Snead, Community Development Director

6. Supplemental Budget Hearing

A. Proposed Changes to the MRC General Fund for FY 2017-18.

1. Call Supplemental Budget Hearing to Order 2. Staff Report 3. Comments from the Public 4. Commission Deliberations, Questions, and/or Comments 5. Close Supplemental Budget Hearing 6. No Action at this time – Formal Action will be take on the Resolution

Kristal Hughes, Finance Director Nicholas Snead, Community Development Director

7. Resolution No. MRC 2018-01

A Resolution Authorizing an increase in appropriation to recognize unanticipated revenues, and expenses and the transfer of appropriations within funds for FY 2017-2018.

Kristal Hughes, Finance Director Nicholas Snead, Community Development Director

8. Additional Discussion 9. Adjourn Pursuant to ORS 192.640, this agenda includes a list of the principal subjects anticipated to be considered at the above referenced meeting; however, the agenda does not limit the ability of the Madras Redevelopment Commission to consider additional subjects. Meetings are subject to cancellation without notice. This meeting is open to the public and interested citizens are invited to attend. This is an open meeting under Oregon Revised Statutes, not a community forum; audience participation is at the discretion of the Madras Redevelopment Commission. Anyone wishing to address the Commission will need to register prior to the meeting. The meeting will be audio taped; minutes of this and all public meetings are available for review at the Madras City Hall. The meeting place is handicapped accessible; those needing assistance please contact the City of Madras Community Development two (2) days in advance of the meeting.

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1. .E SIGNAGE TO BE REMOVED2. E ROC ON FACADE TO BE REMOVED3. E FENCING TO BE REMOVED4. E EXTERIOR ENTRANCE CANOPY TO BE REMOVED5. E REMOVE TAPPERED WINDOW BUILD OUT, SEE FLOOR PLAN FOR

COORDINATION OF WOR6. E SIDING TO BE REPLACED OR REPAIRED7. E EXTERIOR WALL SURFACE TO BE CLEANED, PREP FOR PAINTING.

EMO EXTERIOR ELEV KEYNOTES

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Date:Project:

10/13/2016ADDITIONAL EXTERIOR INFORMATION

MADRAS VISION SOURCE920 NW Bond St. Suite 204

Bend, Oregon 97703

t | 541-647-5675

e| [email protected]

© 2016 ASCENT ARCHITECTURE & INTERIORS

16057

NEW WOODSIDING ANDHORIZONTALFIBER CEMENTSIDING WILL WRAPSIDE OF BUILDINGAND TERMINATE ATTHIS FACADE

THIS SIDINGMAY NEEDREPLACING

THIS SIDINGMAY NEEDREPLACING

EXISTING EXTERIOR ENTRANCECANOPY TO BE REMOVED

EXISTING PARAPET TO RETAILSIDE IS TO BE EXTENDED APROX. 2-2.5 FT.

EXISTING ROCK ON FACADETO BE REMOVED RAISED PLANTING BED AREA

WINDOWS TO BE MODIFIEDWINDOWS TO BE MODIFIED

EXISTING FENCING TOBE REMOVED

NEW ARCHIETCTURALCOLUMN AT THISLOCATION TOTERMINATE BUILDINGAT CORNER

EXISTING ROCK ON FACADETO BE REMOVED

EXISTING ROCK ON FACADETO BE REMOVED

SIGNAGE TO BEREMOVED

https://www.google.com/maps/@44.6330966,-121.1295689,3a,75y,43.68h,82.29t/data=!3m6!1e1!3m4!1smMF_lWFL624wDJyGt4sokQ!2e0!7i13312!8i6656!6m1!1e1

https://www.google.com/maps/@44.633279,-121.1295697,3a,75y,105.46h,80.24t/data=!3m6!1e1!3m4!1sq7HG7QKDUuu_NSSDuSDJXA!2e0!7i13312!8i6656!6m1!1e1

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CONCEPTUAL EXTERIOR ELEVATION

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http://www.eldoradostone.com/products/marquee-limestone/sanderling/

http://www.norstoneusa.com/gallery/basalt-il-tiles/grey/

http://www.archdaily.com/catalog/us/products/3408/wall-siding-arbor-wood-co-ash-basswood-siding-line-intectural

http://www.damsinc.com/brise-soleil/aluminum-sunshades/

http://www.lowes.com/pd/James-Hardie-HardiePlank-Primed-Iron-Gray-Smooth-Lap-Fiber-Cement-Siding-Panel-Actual-0-312-in-x-6-25-in-x-144-in/50325681

http://www.hinkleylighting.com/product/titanium-luna-led-outdoor-6

http://www.kawneer.com/kawneer/north_america/en/product.asp?prod_id=4157&desc=commercial-aluminum-thermal-framing

EXTERIOR ELEVATION KEYNOTES1. EXTERIOR ALUMINUM SUNSHADE

2. STAINED WOOD SIDING

3. BASALT TILE, 2'-6" H 4. FIBER CEMENT LAP SIDING, 8" W

5. SMOOTH STONE VENEER

6. EXTERIORWALL

MOUNTEDLIGHTING

7. LOW-E,ANODIZED

CLEARALUMINUM

STOREFRONT

8. RAISED CONCRETE PLANTER BED, 1'-0" H9. WALL MOUNTED OFFICE DIRECTORY10. FLUSH MOUNTED BUILDING SIGNAGE, 2'2" H X 12-0" L11. HORIZONTAL SLAT SCREENING12. EXTENDED PARAPET13. METAL COPING14. EXISTING WINDOWS, APPLY LOW-E FILM

AND REMOVE TAPERED BUILD OUT15. HORIZONTAL FIBER CEMENT TRIM BOARD

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Madras Vision Source Design Concept: Reception, Exam & Back-of-House Areas

Reception Desk

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Reception Area CeilingPairs of suspended 2x8 wood ceiling slats, installed in the form of a semi-circle array, referencing an “orthops” chart. Small-scale LED pendant lighting will be interspersed

throughout, and dropped slightly below the wooden ceiling installation.

https://www.etsy.com/listing/62158791/eye-chart-poster-art-orthops-eye-chart https://www.dezeen.com/2013/11/29/hyper-

realistic-renderings-cafe-ukraine/

Standing Height

Transaction Height

ADA Height

Painted Logo Color (1)

Reception area high-traffic LVT flooring will transition from a white tone to dark gray, beginning in the reception area and continuing on to the retail area. The lighter hue will continue from reception down the corridor toward the existing exam rooms.

Flooring

https://www.atrafloor.com/floors/mist/

Color Palette

1 Accent Color

2 Accent Color

3 Accent Color

4 Accent Color

5 Overall Color

6 Overall Color

The color palette is founded in the Vision Source logo, with fresh, complimentary tones added. Modern neutrals in a range of gray and white help to balance the brighter accent colors.

The Reception Desk face will be comprised of vertically and horizontally oriented, low-profile wood slats over a light painted background and painted company logo in contrasting color. The logo and wood slats will create an intriguing peek-a-boo effect, setting the tone for a new clinic experience.

Design Concept:Now You See Me, Now You Don’t

The redesign for Madras Vision Source is intended to be a fresh and modern boutique experience. Aesthetically, the design incorporates a bright palette of clean whites, pale grays, and pops of carefully selected, joyful hues that compliment the company logo. Light wood design details and a hint of deep, contrasting gray ground the space and balance the brighter accent colors. The arrangement of color, form, pattern, and material present a playful yet subtle game of “Now you see me, now you don’t,” with surprising elements referencing the tools of optometry.

Exam RoomsThe first three accent colors (1)-(3) may be alternated on one to two walls in each exam room, balanced by light ceilings and walls (6), and complementary LVT flooring.

Back-of-HouseBack of house spaces, including restrooms, are to have pale gray walls (5) and white ceilings (6), with a colorful LVT flooring, that references the accent colors (1)-(3).

Wall Color Behind Reception

CeilingsDark ceilings in the reception area will balance the brighter flooring, while white ceilings in the retail area will be contrasted by darker gray flooring.

Ceiling Above Painted Accent

Color (4)

January 9, 2018

Reception Desk

The redesign for Madras Vision Source is intended to be a fresh and modern boutique experience. Aesthetically, the design incorporates a bright palette of clean whites, pale grays, and pops of carefully selected, joyful hues that compliment the company logo. Light wood design details and a hint of deep, contrasting gray ground the space and balance the brighter accent colors. The arrangement of color, form, pattern, and material present a playful yet subtle game of peek-a-boo, with surprising elements referencing the field of optometry.

Madras Vision Source

1 Accent Color

2 Accent Color

3 Accent Color

4 Accent Color

5 Overall Color

6 Overall Color

In addition to the calming pale gray on the majority of the retail area’s walls, accent colors (1)-(4) will be used to bring an energizing variety and depth to select portions of the retail area.

Kids’ Waiting AreaA custom mural of an animal themed “orthops” chart in the kids’ waiting area will create a playful, yet sophisticated space that ties in well with the clinic’s overall redesign. A shelving unit for visiting children may be equipped with play glasses, doctor’s coat, and other optometry themed props.

http://www.ovolohotels.com/en/

Color Palette

Retail Shelving

LED Display Lighting

Merchandise Signage

Integrated Mirror

Sanded and Sealed Birch Plywood Shelving

https://www.woodworkerssource.com/

Design Concept:Now You See Me, Now You Don’t

Coffee Bar & Feature WallBuilt-in wood & solid surface coffee bar in the retail space will bring a welcome boutique amenity. Closed cabinets will provide needed storage that is protected from children’s interest.

A custom sculptural installation of trial lenses, or a comparable material, will bring a unique artistic feature to the retail space, while also creating an opportunity to enhance light in an otherwise dim corner.

To provide hospitality and enhance the boutique atmosphere of the retail area, leather upholstered seating will be provided around the existing column.

Retail Area Boutique Seating

Accent Colors

Floors & CeilingThe ceilings will be entirely white to elevate the height of the room as much as possible. Dark gray floors (4), having transitioned from white (6) in the reception area, will provide a luxurious, grounded feeling throughout the space.

https://www.frameweb.com/news/aesop-university-place

A subdued pale gray overall color (5) for the retail area walls will provide a cozy ambiance that lets the merchandise shine.

Open shelving with concealed hardware will be placed strategically throughout the retail space. Shelves are comprised of sanded and sealed birch plywood (option: solid birch, dependent on pricing). The longest span of shelving along the south wall will be arranged to accommodate a mirror and space for signage display, in addition to eyewear displays. Updated display lighting will highlight merchandise and provide an adequately lit area in which to shop for eyewear.

Design Concept: Retail AreaJanuary 9, 2018

920 NW Bond Street, Suite 204 Bend, Oregon 97703Phone | 541-647-5675

Email | [email protected]

Last Updated: 2/28/2018Project Title: Madras Vision Source Remodel Est. Bldg. Area: 2,547 Square Feet

Est. Proj. Budget: 120.29$ / Square FeetProject No.: 16057 Est. Site Area: N/A Square Feet

PROFESSIONAL FEES Comments: EstimatedAppraisal Fee -$ N/AEnvironmental Study (Phase I: Abestos/Lead Survey) 750.00$ EstimatedCultural Survey -$ N/ASite Survey (topo) -$ N/AGeotechnical Investigation -$ Not AnticipatedTraffic Impact Analysis/Debit Letter -$ Not AnticipatedSewer and Water Analysis -$ Not AnticipatedArchitecture 4,710.00$ Based on ConceptStructural Engineering 4,500.00$ EstimatedInterior Design 9,100.00$ (Based on Concept)Civil Engineering -$ Not AnticipatedLandscape Architect -$ Landscape Design Build by GCSpecial Inspection/ Testing 3,000.00$ EstimatedSpecialty Consultants -$ Not AnticipatedCost Consultant -$ Not AnticipatedCertification (LEED®, Earth Advantage, Energy Star) -$ Not AnticipatedLegal & Administrative -$ Not AnticipatedPre-Construction Services -$ Typically by General ContractorReimbursable Expenses (% of professional fees) 2% 441.20$ Printing, Shipping, etc.

Subtotal 22,501.20$ CONSTRUCTION: Per Mission Building and Rennovation 02/06/2017 Comments: Estimated

Exterior Remodel 90,125.56$ Interior Remodel 190,000.00$

Subtotal 280,125.56$

EQUIPMENT & FURNISHINGS: By Owner CommentsFurniture -$ Equipment -$ Building Maintenance Equipment -$ Network/Phone Systems -$ Security Systems -$

Subtotal -$ OTHER DEVELOPMENT COSTS: Exteriors Only Comments: EstimatedPlan Review 1,022.15$ Life Safety Review 545.15$ Building Permits 1,362.87$ Demolition Permit 123.60$ Sign Permit 79.21$ Code Enforcment Fee 75.00$ Plumbing Permit 128.14$ 1-3 fixturesPlumbing Review -$ N/AMechanical Permit 89.00$ Mechanical Review -$ N/AElectrical Permit 326.63$ Electrical Review -$ N/A

Subtotal 3,751.75$

PROJECT CONTINGENCY CommentsEstimating Contingency (% of subtotal project costs) 5.0% 14,006.28$

TOTAL PROJECT BUDGET 306,378.51$

Web | www.ascent-architecture.com

1 of 1 (c) 2016 Ascent Architecture Interiors.

All Rights Reserved

February 7, 2018 Madras Redevelopment Commission Meeting


Madras Redevelopment Commission

125 SW “E” Street Madras, OR 97741 Phone: 541-475-2344 Fax: 541-475-7061

City Hall Council Chambers February 7, 2018 Regular Meeting 5:30 PM

Official Meeting Minutes

1. Call Meeting to Order

Chair Brown: Called the meeting to order at 5:36

Commissioners in Attendance Blanca Reynoso, Chuck Schmidt, Tom Brown, Bartt Brick, Doug Lofting

Commissioners Absent Royce Embanks, Denise Piza, Don Reeder

Staff in Attendance Community Development Director Nicholas Snead, Finance Director Kristal Hughes, Assistant Planner Morgan Greenwood, Public Works Office Coordinator Michele Quinn

2. Consent Agenda

A. Adoption of Agenda B. Approval of January 3, 2017 MRC Meeting Minutes C. Approval of Amendments to September 6, 2017 MRC Meeting Minutes D. Approval of Amendments to Resolutions No. MRC 2017-07. E. February 2018 Vouchers

Commissioner Lofting: Moves to accept consent agenda.

Commissioner Schmidt: Seconds; motion carries unanimously.

3. Visitors Comments

None. 4. Approval of Letter of Support for Madras Spray Park




Director Snead: Noted that the letter included in the packet says MRC would contribute $35,000, but that the letter will be amended to read $30,000 before it is submitted, in order to accurately reflect the formal action taken by the Commission at the June 2017 MRC meeting.

Office Coordinator Quinn: Explained that letter of support is for a grant from the land and water conservation fund, a requirement of the grant funder.

Commissioner Schmidt: Asked what the total cost of the spray park is, and if the grant will fund the entire project.

Office Coordinator Quinn: Replied that the total project cost is $275,000. Stated that to date, $138,000 has been raised, and that the grant being applied for is for $136,500. Reported that the grant will fund half of the total project cost.

Commissioner Schmidt: Asked if the project cost included contingency costs. Office Coordinator Quinn: Replied that Public Works Director Jeff Hurd is confident that the project cost estimate is accurate. Reported that a Central Oregon Community College is also using the project for a grant writing class; whatever the class raises can be used for contingencies, or spent on additional spray park amenities.

Commissioner Brick: Asked if the MRC’s spray park contribution will come from the 2017-2018 or 2018-2019 budget.

Director Snead: Replied that it will come from the 2018-2019 budget.

Commissioner Brick: Asked what the funding vehicle is.

Director Snead: Replied that $25,000 will come from reinvestment fund, and $5,000 will come from the general fund, per formal action taken at the June 2017 meeting.

Commissioner Reynoso: Moved to approve the letter of support with the amendment of $35,000 donation to $30,000.

Commissioner Lofting: Seconded; motion carries unanimously.

5. Madras Urban Renewal District Annual Report Presentation

Nicholas Snead, Community Development Director Kristal Hughes, Finance Director



Director Snead: Stated that this report is required by ORS 457. The report is for Fiscal Year 2016-2017. Noted that on Page 2, the urban renewal project that the MRC has funded have been detailed and enumerated. Reported that maximum indebtedness has also been calculated to be $14 million. Stated that prior to this report, the exact amount of maximum indebtedness was unknown. Stated that $11.5 million in debt capacity currently remains; prior to this report, it was thought that approximately $9 million in debt capacity remained.

Commissioner Brick: Questioned the increase in maximum indebtedness from $9 million to $11.5 million.

Director Hughes: Replied that whenever debt was issued, the first $2.5 million that was issued was duplicated on the maximum indebtedness calculation when that was turned over into a bond, but that the bond paid off the line of credit, and was counted twice in the original calculation. Reported that by correcting that error, it added that $2.5 million to the maximum indebtedness.

Commissioner Brown: Asked what the MRC currently owes on the present line of credit.

Director Hughes: Replied that there is a principle balance of $305,000, and that there is approximately $700,000 remaining to invest.

6. Discussion of FY 2018-19 MRC Budget Objectives

Nicholas Snead, Community Development Director Kristal Hughes, Finance Director

Director Snead: Reported that the MRC has not changed their goals and objectives very much from last year; this budget discussion is underpinned by the 2016 Urban Renewal Action Plan, in which the top three projects were identified as development of a general merchandise store, recruitment of a brewery, and development of a toolkit to help the City be receptive to new development needs, and to create ongoing relationships with developers. Stated that staff would like to renew the Commission’s line of credit and help to incentivize new development; to continue to build the MRC’s general fund ending balance to 20% of expenditures in order to prepare for future bond issuance; and to fund services to assist in recruiting new development. Stated that this final goal does not specifically mean renewing the contract for The Retail Coach next year. Added that beautification of downtown streetscape by funding flower pots and baskets is a budget priority, as is funds for remediation or demolition of derelict buildings.

Commissioner Lofting: Asked when the MRC’s obligation to support the Police Station/City hall sunsets.

Director Snead: Replied that it does not.

Commissioner Lofting: Asked how much how much a year the MRC contributed per year.



Director Snead: Replied that it was approximately $70,000 per year, eventually totalling a full commitment of $1.1 million.

Commissioner Lofting: Replied that he recalled that $1.1 million was asked for, and that $550,000 was approved.

Director Snead: Asked if the MRC would you like to formalize an annual commitment.

Commissioner Lofting: Replied that once the first commitment is met, another agreement should be considered by the Commission.

Commissioner Brick: Stated that he recommended that the Commission honor the commitment that was originally made, and then direct budgets that reflect that. Noted that perhaps the budget should say “consultant” instead of “retail coach.”

Director Snead: Replied that the budget will not say “retail coach”; the line item will be for estimated costs for consulting. Stated that if additional services are needed, staff will bring back a request to the Commission.

Commissioner Lofting: Stated that he agrees with the six points Director Snead read as a roadmap to a budget.

Commissioner Brick: Asked if the Commission has enough in contingency as rates continue to increase.

Director Snead: Replied that staff has met with First Interstate Bank , and is working with another renewal of the line of credit.

Director Hughes: Replied that the current agreement expires April 30 2018, so the discussion will be held at the April MRC meeting, if not before.

Director Snead: Stated that First Interstate did not predict any significant interest rate changes, and staff will make a recommendation accordingly. Requested formal direction from the Commission.

Commissioner Brick: Moved to Approve the Fiscal year 18-19 Budget Goals as presented.

Commissioner Schmidt: Seconded; motion carried unanimously.



7. Additional Discussion

Director Snead: Reported that staff is in communication with the attorney representing the Masonic lodge property, and that the Masonic Lodge board is continuing discussions regarding the City’s interest in the property.

Commissioner Lofting: Asked if staff is working with their attorney directly.

Director Snead: Reported that the City attorney has contacted the Lodge board, and that their counsel reported back to the City attorney today. Reported that moving forward, staff will work with the Lodge board directly. Reported that the Retail Coach subcommittee expressed interest in developing a pharmacy on the Opportunity Foundation property, on B Street between 4th and 5th Streets, on which there is a deed restriction limiting the property exclusively to pharmacy development. Reported that the Retail Coach will contact Rite Aid to see if they’re aware of the deed restriction, and to see if they are interested in the property. Reported that if they are not, the Retail Coach will see if the restriction can be removed. Reported that if they are not interested and the deed restriction cannot be removed, the Retail Coach will pursue other pharmacies.

Commissioner Lofting: Asked when the last time staff spoke with the Opportunity Foundation.

Director Snead: Replied that it was in 2012, and that development of this property would really help the community.

Chair Brown: Asked about the current condition of the rock shop on Highway 26. Stated that it is not in the MRC area and asked if the City is pursuing code enforcement.

Director Snead: Replied that the ownership of the property has changed, and that staff is confirming current ownership before sending notice.

Chair Brown: Replied that if a derelict building is ignored, the City is implicitly saying that it is permissible. Stated that perhaps MRC could encourage the City to pursue abatement actions.

Director Snead: Agreed, and stated that the first step is to understand the legal circumstances inherent in code enforcement, and that the second step is to develop a strategic plan. Noted that the MRC has a far greater financial capacity to respond to difficult challenges like this one than the City does.

Commissioner Lofting: Stated that the MRC would like the City’s commitment to begin code enforcement on the rock shop.



Director Snead: Replied that staff will investigate pursuing code enforcement, and bring reports to the Commission.

Commissioner Lofting: Reported that homeless individuals have begun staying in the structure.

Director Snead: Reported that some property owners are very responsive to nuisance abatement and code enforcement. Stated that as the City enforces code on homeless populations, they move elsewhere. Noted the relationship between abatement actions and new code enforcement issues.

8. Adjourn

Chair Brown Adjourned at 6:27 p.m.

MADRAS REDEVELOPMENT COMMISSIONMadras, Oregon

ANNUAL FINANCIAL REPORTFor the Year Ended June 30, 2017

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MADRAS REDEVELOPMENT COMMISSION

OFFICERS AND MEMBERS OF THE GOVERNING BODYFor the Year Ended June 30, 2017

BOARD OF COMMISSIONERS

Doug Lofting

Tom Brown

Bartt Brick

Royce Embanks, Jr.

Blanca Reynoso

Chuck Schmidt

Don Reeder

Denise Piza

Commissioners receive mail at the address:

Administrative Offices125 SW E Street

Madras, OR 97741

FINANCE DIRECTOR

Kristal Hughes



TABLE OF CONTENTSFor the Year Ended June 30, 2017

Page

INDEPENDENT AUDITOR'S REPORT ......................................................................................... A – B

MANAGEMENT’S DISCUSSION AND ANALYSIS ..................................................................... a – f

BASIC FINANCIAL STATEMENTSGovernment-wide Financial Statements

Statement of Net Position......................................................................................................... 1Statement of Activities ............................................................................................................. 2

Fund Financial StatementsGovernmental Fund

Balance Sheet ...................................................................................................................... 3Statement of Revenues, Expenditures and Changes in Fund Balance................................. 4Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund

Balances of the Governmental Fund to the Statement of Activities................................. 5Statements of Revenues, Expenditures and Changes in

Fund Balance – Budget and Actual General............................................................................................................................ 6

Reinvestment .................................................................................................................. 7Notes to Basic Financial Statements................................................................................................ 8 – 16

COMPLIANCE SECTION Independent Auditor’s Report Required by Oregon State Regulations ........................................... 17, 18


A

INDEPENDENT AUDITOR’S REPORT

Board of CommissionersMADRAS REDEVELOPMENT COMMISSIONMadras, Oregon

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities and each major fund of the MADRAS REDEVELOPMENT COMMISSION, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the Commission’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

B

INDEPENDENT AUDITOR’S REPORT (Continued)

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the MADRAS REDEVELOPMENT COMMISSION, as of June 30, 2017, the respective changes in financial position andthe budgetary comparisons for the General and Redevelopment Funds, for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages a through f be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Oregon State Regulations

In accordance with Minimum Standards for Audits of Oregon Municipal Corporations, we have issued our report dated February 28, 2018, on our consideration of the Agency’s compliance with certain provisions of laws and regulations, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance.

Boldt Carlisle + SmithCertified Public AccountantsSalem, OregonFebruary 28, 2018

By:

Bradley G. Bingenheimer, Member

MANAGEMENT’S DISCUSSION AND ANALYSIS


Madras Redevelopment Commission125 SE E Street Madras Oregon 97741

Phone: 541-475-2344 Fax: 541-475-7061

Management’s Discussion and Analysis

This is management’s discussion and analysis (MD&A) of the financial performance of the Madras Redevelopment Commission (MRC), the urban renewal district of the City of Madras (City), for the fiscal year ending June 30, 2017. The report has been prepared in accordance with generally accepted accounting principles (GAAP) as promulgated by the Government Accounting Standard Board (GASB). The MD&A should be read in conjunction with the basic financial statements and notes to the financial statements.

History

The Madras Redevelopment Commission (MRC) was formed by City Ordinance No. 709 on June 24, 2003 and transferred the power of the Urban Renewal Agency of the City of Madras, to the Madras Redevelopment Commission pursuant to ORS 457.055. The Urban Renewal District lies primarily in the downtown corridor and extends to Lee Street to the north and Hall Street to the south. The Commission is managed by a governing board of eight members. The primary objectives of the Urban Renewal District are to 1) eliminate blighted conditions; 2) reverse physical and economic decline; and 3) use tax increment financing to achieve its objectives to a $14 million maximum indebtedness.

Financial Highlights

The MRC continued the downtown flower program and paint program throughout 2016-

2017.

The MRC met the debt obligation payment of $179,500 per the intergovernmental

agreement with City of Madras for the $2.5 million long-term obligation issued in 2011-

2012.

The MRC made a $75,000 payment to the City of Madras to assist with the debt

obligations for the City Hall/Police Station which serves as a central civic facility in

accordance with the Madras Urban Renewal Plan.

The MRC drew down on the line of credit in the amount of $55,000 in anticipation of two

façade loans.

a

Overview of the Financial Statements

The discussion and analysis is intended to serve as an introduction to the MRC’s basic financial statements. The financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report contains required supplementary information and other supplementary information in addition to the basic financial statements themselves beginning on page 1 of this report.

The government-wide financial statements are designed to provide the reader with a broad overview of the Commission’s finances and are made up of the following two statements: the statement of net position and the statement of activities. Both of these statements were prepared using accounting methods similar to those used by private-sector businesses, which use the economic resources measurement focus, and the accrual basis of accounting.

The statement of net position presents information on all of the Commission’s assets andliabilities, with the difference between the two reported as net position. Over time,increases or decreases in net position may serve as a useful indicator of whether thefinancial position of the Commission is improving or deteriorating.

The statement of activities presents information showing how the Commission’s netposition changed during the most recent fiscal year. All changes in Net position arereported as soon as the underlying event giving rise to the changes occurs, regardless ofthe timing of related cash flows. Thus, revenues and expenses are reported in thisstatement for some items that will only results in cash flows in future fiscal periods (e.g.,uncollected property tax, which is earned but not physically collected by the Commissionin this fiscal year).

Both of these government-wide financial statements distinguish functions of the Commissionthat are principally supported by taxes and assessments. The Commission does not have other functions that are intended to recover all or a significant portion of their costs through user fees and charges (referred to as business-type activities).

Fund Financial Statements

Local governments use fund accounting to demonstrate compliance with finance-related legal requirements. All of the funds of the Commission are considered governmental funds.

Governmental fund financial statements, unlike the government-wide statements, use modified accrual accounting which focuses on viewing changes in current financial resources. The objective is to answer the question, “What are the transactions or events of the current period that have increased or decreased the resources available for spending in the near future?”Therefore, under the modified accrual accounting, revenues are not recognized until they are measurable and available, and expenditures are recognized in the period in which liabilities are liquidated rather than when the liability is first incurred. Unlike the government-wide financial statements, the governmental funds financial statements focus on near-term inflows and outflows of spendable resources, as well as on balance of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. However, this information does not encompass the additional long-term focus of

b

the government–wide statements. Therefore, both the governmental funds statements are followed by a reconciliation that explains the relationship or differences between governmental funds and the governmental-wide financial statements.

The MRC maintains two individual governmental funds, the General Fund and the Reinvestment Fund. The two funds are presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures and changes in fund balance, beginning on page 3.

The MRC adopts an annual appropriated budget for all governmental funds. A budgetary comparison has been provided for each fund to demonstrate compliance with the adopted budget. These budgetary comparison statements can be found starting on page 6 of this report.

The financial statements also include notes that provide additional information that is essential to the full understanding of the data provided in the government-wide and funds financial statements. The notes to the basic financial statements can be found beginning on page 8 of this report. In addition to the basic financial statements and the accompanying notes lies additional pertinent information for the reader referred to as Auditor’s Comments and Reports. This information can be found in this report following the notes to the basic financial statements.

Financial Analysis of the Government-Wide Statements

Net PositionOur analysis focuses on the net position (Table 1) and changes in net position (Table 2) for the Madras Redevelopment Commission’s government-wide financial statements.

2017 2016 Amount Percent

Assets:

Cash and cash equivalents 395,950$ 360,405$ 35,545$ 9.9%

Receivables 86,556 105,241 (18,685) -17.8%

Reinvestment Properties 208,000 329,698 (121,698) -36.9%

Total Assets 690,506 795,344 (104,838) -44.8%

Liabilities:

Current liabilities 461,298 275,419 185,879 67.5%

Non-current liabilities 1,970,000 2,185,000 (215,000) -9.8%

Total Liabilities 2,431,298 2,460,419 (29,121) 57.6%

Net Position:

Unrestricted (deficit) (1,740,792) (1,665,075) (75,717) 4.5%

Total Net Position (1,740,792)$ (1,665,075)$ (75,717)$ 4.5%

Table 1


NET POSITION

Net Change

Governmental Activities Increase/(Decrease)

c

At the conclusion of fiscal year 2016-17, the MRC’s combined governmental funds reported anending fund balance of $559,023, down from the prior year fund balance of $668,782. Significant change in FY 2016-17 was the revaluation of properties held by the MRC. The current economic factors and market trends have decreased the estimated value by $121,698. As of the end of the fiscal year 2016-17, total receivables decreased $18.7 thousand from the prior year, primarily as a result of payments on facade improvement loans. The MRC facadeimprovement loan program is an ongoing project as identified in the action plan. This program offers qualifying merchants the opportunity to obtain a combination of a grant and a low-interest loan to revitalize their storefronts and give the downtown businesses a fresh curb side appeal (i.e. remove blight).

Change in Net PositionBelow, Table 2 reflects the change in net position for fiscal year 2015-16 to fiscal year 2016-17.

During the fiscal year 2016-17, total property tax revenue was consistent with the prior year’s reported revenues.

Fund Financial Analysis

The focus of the governmental funds is to provide information on near-term inflows, outflows, and balance spending recourses. Such information is useful in assessing the government’sfinancing requirements. Fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

At the conclusion of fiscal year 2016-17, the MRC’s combined governmental funds reported anending fund balance of $559,023, up from the prior year fund balance of $668,782. The increase in fund balance is primarily driven by facade loans being paid back in full. The combination of

2017 2016 Amount Percent

Revenue:

Property taxes 354,532$ 354,388$ 144$ 0.0%

Interest on investments (119,655) 4,011 (123,666) -3083.2%

Miscellaneous - 254 (254) 100.0%

Total Revenues 234,877 358,653 (123,776) -2983.1%

Expenses:

Community development 310,594 468,307 (157,713) -33.7%

Total Expenses 310,594 468,307 (157,713) -33.7%

Change in Net Position (75,717) (109,654) 33,937 -30.9%

Net Position - beginning of year(1,665,075) (1,555,421) (109,654) 7.0%

Net Position - end of year (1,740,792)$ (1,665,075)$ (75,717)$ -23.9%

Table 2


CHANGE IN NET POSITION

Net Change

Governmental Activities Increase/(Decrease)

d

grants and loans, debt service, and administrative expenses exceeded property tax, assessments, and other revenues. Assessments refer to payments from borrowers for their loans from the MRC associated with the facade improvement program.

Debt Administration

At the end of the fiscal year 2016-17, the MRC’s total outstanding debt was $2,384,892. This includes a $2,080,000 balance advanced from the City of Madras. The terms of the advance match the City’s related bond issuance of which the original amount of the advance was $2,585,000 with a 20-year term, issue date of 5/15/2012 and maturing in 6/1/2032.

The remaining $304,892 represents draws from a line of credit. The term of the line of credit is up to $500,000, issue date of 5/15/2015 and maturing on 3/31/2017. Options to renew the line of credit are available and will be explored during the development of the 2016-17 MRC budget.

Economic Factors and Next Year’s Budget

Major factors anticipated in the 2017-18 budget include the following:

General Fund: Budget appropriation has been made for special payments in thefollowing categories in the Urban Renewal District as supported by the district’s UrbanRenewal Plans.

o New development or redevelopment within the District including facade andbuilding renovation

o Sidewalk Grant Repair Programo Continued project financial support of the new Police Station/City Hall/Civic

Plaza Projecto Hiring local and national retail recruiters including special effort in the Brew Pub

Recruitment, consistent with the 2016 Urban Renewal Revitalization Action Plan

General Fund: On October 19, 2017 the 2017 Bond Refinancing of the 2011B Series and2012B Series bonds was completed. A total of $3,145,000 was refinanced resulting in$252,698.03 in net present value savings. The Madras Redevelopment Commissionportion of that savings is $21,954.84. The partnership between the City of Madras and theMadras Redevelopment Commission made the original financing possible and continuedto be strengthened through pursuit of this savings opportunity.

General Fund: The City of Madras has arranged for a line of credit up to $1,000,000 withFirst Interstate Bank (formerly Bank of the Cascades). This line of credit is anticipated tobe sufficient for supporting the District’s plans for the next 12 to 24 months. The line ofcredit will ultimately be paid off with long term bond financing consistent with theDistrict’s round one funding approach as anticipated by the Urban Renewal Plan.

Reinvestment Fund: Anticipating multiple façade and building renovation loans withinthe district this year. The Reinvestment Fund is directly related to the grants for facadesand building renovations within the General Fund, special payments category. This fundis also continuing to support the downtown flowers program.

e

Request for Information

This financial report is designed to provide a general overview of the Madras Redevelopment Commission’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be address to the City of Madras/Madras Redevelopment Commission, Attention: Finance Director, 125 S.E. “E” Street, Madras, Oregon 97741, (541) 475-2344.

The City’s website address is http//www.ci.madras.or.us.

f

BASIC FINANCIAL STATEMENTS


Governmental

Activities

ASSETS

Cash and cash equivalents 395,950$

Investment in properties 208,000

Receivables, net

Property taxes 17,931 Notes 68,625

TOTAL ASSETS 690,506

LIABILITIES

Accounts payable and accrued liabilities 46,406

Short-term debt obligations 304,892Long-term liabilities:

Due within one year 110,000Due in more than one year 1,970,000

TOTAL LIABILITIES 2,431,298

NET POSITIONUnrestricted (1,740,792)$


STATEMENT OF NET POSITION

June 30, 2017

See accompanying notes

1

Governmental

Activities

PROGRAM EXPENSES

Economic development 229,897$ Interest on long-term obigations 80,697

Total program expenses 310,594

GENERAL REVENUES

Property taxes 354,532Investment income (loss) (119,655)

TOTAL GENERAL REVENUES 234,877

CHANGE IN NET POSITION (75,717)

NET POSITION - BEGINNING (1,665,075)

NET POSITION - ENDING (1,740,792)$


STATEMENT OF ACTIVITIES

For the Year Ended June 30, 2017


2

General Reinvestment Total

ASSETS

Cash and cash equivalents 148,945$ 247,005$ 395,950$

Investment in properties 208,000 - 208,000

Receivables, net

Property taxes 17,931 - 17,931

Notes - 68,625 68,625

TOTAL ASSETS 374,876$ 315,630$ 690,506$

LIABILITIES

Accounts payable and accrued liabilities 18,513$ 27,893$ 46,406$

TOTAL LIABILITIES 18,513 27,893 46,406

DEFERRED INFLOWS OF RESOURCES

Unavailable revenue 16,452 68,625 85,077

TOTAL DEFERRED INFLOWS OF RESOURCES 16,452 68,625 85,077

FUND BALANCE

Restricted for economic development 339,911 219,112 559,023

TOTAL FUND BALANCE 339,911 219,112 559,023

TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES

AND FUND BALANCES 374,876$ 315,630$ 690,506$

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO

THE STATEMENT OF NET POSITION

Fund balance restricted for ecomonic development 559,023$

Amounts reported for governmental activities in the statement of net position are different because:

Other long-term assets are not available to pay for current period

expenditures and, therefore, are deferred in the funds 85,077

Short-term debt obligations are subject to annual renewal and, therefore,

are not reported in the funds (304,892)

Long-term obligations, and accrued interest thereon, are not due and payable

in the current period and, therefore, are not reported in the funds (2,080,000)

NET POSITION OF GOVERNMENTAL ACTIVITIES (1,740,792)$


BALANCE SHEET

GOVERNMENTAL FUNDS

June 30, 2017

See accompanying notes3


REVENUES

Property taxes 357,236$ -$ 357,236$

Assessments - 13,362 13,362

Investment income (loss) (121,660) 2,005 (119,655)

TOTAL REVENUES 235,576 15,367 250,943

EXPENDITURES

Current

Economic development 180,384 49,513 229,897

Debt service 185,805 - 185,805

TOTAL EXPENDITURES 366,189 49,513 415,702

Excess (deficiency) of revenues over expenditures (130,613) (34,146) (164,759)

OTHER FINANCING SOURCES (USES)

Short-term debt issuance 55,000 - 55,000

TOTAL OTHER FINANCING SOURCES (USES) 55,000 - 55,000

Net change in fund balance (75,613) (34,146) (109,759)

Fund balance at beginning of year 415,524 253,258 668,782

Fund balance at end of year 339,911$ 219,112$ 559,023$


STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS



Amounts reported for governmental activities in the statement of activities

are different because:

NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS (109,759)$

The repayment of the principal of debt consumes the current

financial resources of governmental funds. This transaction

has no effect on net position. This amount is the difference

in the treatment of debt. 105,108

The proceeds from debt provides current financial resources of governmental

funds. This transaction has no effect on net position. This amount is the

difference in the treatment of debt. (55,000)

Revenues in the statement of activities that do not provide current financial

resources are not reported as revenues in the funds as follows:Change in deferred revenue (16,066)

CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES (75,717)$


RECONCILIATION OF THE STATEMENT OF REVENUES,

EXPENDITURES, AND CHANGES IN FUND BALANCES

TO THE STATEMENT OF ACTIVITIES



GENERAL FUND

Original Final Actual Variance

REVENUES

Property taxes 355,735$ 355,735$ 357,236$ 1,501$ Investment income (loss) 500 500 (121,660) (122,160)

TOTAL REVENUES 356,235 356,235 235,576 (120,659)

EXPENDITURES

Materials and services 85,700 88,200 85,535 2,665

Capital outlay 10 - - -

Debt service 191,200 191,200 185,805 5,395

Special payments-grants 200,000 205,000 94,849 110,151 Contingency 10,000 2,500 - 2,500

TOTAL EXPENDITURES 486,910 486,900 366,189 120,711

Excess (deficiency) of revenues over expenditures (130,675) (130,665) (130,613) 52

OTHER FINANCING SOURCES (USES)Short-term debt issuance 125,010 125,000 55,000 (70,000)

TOTAL OTHER FINANCING SOURCES (USES) 125,010 125,000 55,000 (70,000)

Net change in fund balance (5,665) (5,665) (75,613) (69,948) Fund balance at beginning of year 393,154 393,154 415,524 22,370

Fund balance at end of year 387,489$ 387,489$ 339,911$ (47,578)$


SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL


Budget


6

REINVESTMENT FUND

Original Final Actual Variance

REVENUES

Assessments 13,899$ 13,899$ 13,362$ (537)$ Investment income (loss) 2,096 2,096 2,005 (91)

TOTAL REVENUES 15,995 15,995 15,367 (628)

EXPENDITURES

Materials and services 11,000 23,000 22,662 338

Special payments-loan 25,000 40,000 26,851 13,149Contingency 70,000 43,000 - 43,000

TOTAL EXPENDITURES 106,000 106,000 49,513 56,487

Excess (deficiency) of revenues over expenditures (90,005) (90,005) (34,146) 55,859

OTHER FINANCING SOURCES (USES)Transfers out (10) (10) - 10

TOTAL OTHER FINANCING SOURCES (USES) (10) (10) - 10

Net change in fund balance (90,015) (90,015) (34,146) 55,869 Fund balance at beginning of year 235,984 235,984 253,258 17,274

Fund balance at end of year 145,969$ 145,969$ 219,112$ 73,143$


SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL


Budget


7


NOTES TO BASIC FINANCIAL STATEMENTSJune 30, 2017

1. Summary of significant accounting policies

A. Organization

The Commission, a component unit of the City of Madras, was organized in June 2003 under ORS 457and is a municipal corporation created by the City of Madras to facilitate urban renewal within theboundaries of the City. The city council appoints the governing body and is accountable for the fiscalmatters of the Commission.

B. Urban renewal areas

Tax allocation bonds for urban renewal plan areas are authorized by state law to 1) "...eliminate andprevent the development or spread of urban blight and deterioration; and 2) encourage needed urbanconservation and rehabilitation and provide for redevelopment of blighted or deteriorated areas."

Projects are financed in urban renewal plan areas as follows:

· The Commission selects an urban renewal plan area and defines itsboundaries.

· The county assessor "freezes" the assessed value of property within the urbanrenewal area. This is referred to as the "frozen" value.

· Any increase in assessed value above the frozen value is called the"incremental value." The tax revenue generated by the tax rate times theincremental value is provided for use in paying the principal and interest onany indebtedness incurred to finance urban renewal projects.

· Urban renewal tax increment revenues are used to repay the indebtedness ofthe Commission. The proceeds of the indebtedness finance theCommission’s activities.

As required by ORS 457.190(3)(a), the Commission has included in its current plan the maximum amount of indebtedness that may be issued or incurred under the plan in the amount of $14,000,000.

8

NOTES TO BASIC FINANCIAL STATEMENTS (Continued)

1. Summary of significant accounting policies (continued)

C. Basis of presentation, measurement focus, and basis of accounting

Government-wide financial statements

The statement of net position and the statement of activities display information about the Commission, including all of its financial activities. Governmental activities are financed primarily through property taxes and proceeds from borrowings.

The statement of activities presents a comparison between direct expenses and program revenues for the Commission’s program. The Commission does not allocate indirect expenses. Program revenues include grants and contributions that are restricted to meeting operational requirements. Revenues that are not classified as program revenues, including property taxes, earnings on investments and the gain on sale of property, are presented as general revenues.

Fund financial statements

The fund financial statements provide information about the Commission’s fund. The emphasis of fund financial statements is on major funds, each displayed in a separate column.

The Commission reports the following major funds:

General – accounts for general administration of the Commission’s urban renewal areas, for acquisition and rehabilitation of blighted and deteriorated areas within the designated urban renewal areas.

Reinvestment – accounts for the receipts from repayment of redevelopment loans and resources available for future projects.

D. Measurement focus and basis of accounting

Government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the Commission receives value without giving equal value in exchange, include property taxes, grants, entitlements and donations. On the accrual basis of accounting, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

9



Governmental fund financial statements are reported using the current financial resources measurement focus and modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The Commission considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year end. Property taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for claims and judgments, which are recognized as expenditures to the extent they have been incurred. Capital asset acquisitions are reported as expenditures in the governmental funds and proceeds from general long-term debt are reported as other financing sources.

E. Budget policies and budgetary control

Generally, Oregon Local Budget Law requires annual budgets be adopted for all funds. The modified accrual basis of accounting is used for all budgets. All annual appropriations lapse at fiscal year-end.

The Commission begins its budgeting process by appointing budget committee members in the fall of each year. Budget recommendations are developed by management through early spring, with the budget committee meeting and approving the budget document in late spring. Public notices of the budget hearing are generally published in May or June and the hearing is held in June. The governing body adopts the budget, makes appropriations, and declares the tax levy no later than June 30. Expenditure appropriations may not be legally over expended.

The resolution authorizing appropriations for each fund sets the level at which expenditures cannot legally exceed appropriations. The governing body established the levels of budgetary control at the personal services, materials and services, capital outlay, operating contingencies, debt service, and all other requirement levels for all funds.

Budget amounts shown in the financial statements have been revised since the original budget amounts were adopted. The governing body must authorize all appropriation transfers and supplementary budgetary appropriations.

F. Property taxes

Under state law, county governments are responsible for extending authorized property tax levies, computing tax rates, billing and collecting all property taxes, and making periodic remittances of collections to entities levying taxes. Real and personal property taxes are levied upon all taxable property and become a lien against the property as of July 1 of each year. Property taxes are payable in three installments following the lien date on November 15, February 15 and May 15 each year.

Uncollected property taxes are reported in the governmental funds balance sheet as receivables; the portion which is available to finance expenditures of the current period is recorded as revenue and the remaining balance is recorded as deferred inflows of resources. Property taxes which are collected within 60 days of the end of the current period are considered available and recognized as revenue.

10



G. Long-term obligations

In the government-wide financial statements’ long-term obligations are reported as liabilities in the governmental activities’ statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are deferred and amortized over the life of the bond.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as otherfinancing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

H. Equity classification

Government-wide statements

Equity is classified as net position and displayed in three components:

Net investment in capital assets – Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvements of those assets.

Restricted net position – Consists of net position with constraints placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws and regulations of other governments; or (2) law through constitutional provisions or enabling legislation.

Unrestricted net position – All other net position that does not meet the definition of “restricted” or “net investment in capital assets.”

In the government-wide financial statements when both restricted and unrestricted net position are available,unrestricted resources are used only after the restricted resources are depleted.

11



Governmental fund type fund balance reporting

Governmental type fund balances are to be reported within the fund balance categories listed below:

Non-spendable — Amounts that cannot be spent either because they are in nonspendable form or because they are legally or contractually required to be maintained intact.

Restricted — Amounts that can be spent only for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally imposed by creditors, grantors, contributors, or the laws or regulations of other governments.

Committed — Amounts that can be used only for specific purposes determined by a formal action of the council. The council is the highest level of decision making authority for the Commission. Commitmentsmay be established, modified, or rescinded only through ordinances or resolutions approved by thecouncil.

Assigned — Amounts that do not meet the criteria to be classified as restricted or committed but that are intended to be used for specific purposes. The council has granted authority to the Community Development Director to assign fund balance amounts.

Unassigned — The residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications. Additionally, other funds may report negative unassigned fund balance in certain circumstances.

In the governmental fund financial statements, when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the Commission considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the Commission considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless the council has provided otherwise in its commitmentor assignment actions.

I. Fair value measurements

The Commission categorizes its fair value measurements with the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

12


2. Cash and cash equivalents

The Commission’s cash, cash equivalents and investments at June 30, 2017 are as follows:

State of Oregon Local Government Investment Pool 353,604$

Deposits with financial institutions 42,346

Total cash and investments 395,950$

The Commission’s cash, cash equivalents and investments are pooled with the City of Madras. The City maintains a pool of cash and investments that are available for use by all funds. Each fund’s portion of this pool is displayed on the financial statements as cash and investments. Interest earned on pooled cash and investments is allocated to participating funds based upon their combined cash and investment balances.

A. Deposits with financial institutions

Custodial Credit Risk – Deposits: This is the risk that in the event of a bank failure, the Commission’s deposits may not be returned. The Federal Depository Insurance Corporation (FDIC) provides insurance for the District’s deposits with financial institutions up to $250,000 each for the aggregate of all non-interest bearing accounts and the aggregate of all interest bearing accounts at each institution. Deposits in excess of FDIC coverage with institutions participating in the Oregon Public Funds Collateralization Program are collateralized with securities held by the Federal Home Loan Bank of Seattle in the name of the institution. As of June 30, 2017, $344,354 of the City’s bank balances were exposed to custodial credit risk.

B. State of Oregon Local Government Investment Pool

Balances in the State of Oregon Local Government Investment Pool (LGIP) are stated at fair value. Fair value is determined at the quoted market price, if available; otherwise the fair value is estimated based on the amount at which the investment could be exchanged in a current transaction between willing parties, other than a forced liquidation sale. The Oregon State Treasury administers the LGIP. The LGIP is an unrated, open-ended, no-load, diversified portfolio offered to any Commission, political subdivision or public corporation of the state who by law is made the custodian of, or has control of, any fund. The LGIP is commingled with the State’s short-term funds. To provide regulatory oversight, the Oregon Legislature established the Oregon Short-Term Fund Board and LGIP investments are approved by the Oregon Investment Council. The fair value of the Commission’s position in the LGIP is the same as the value of the pool shares.

C. Investments

Credit Risk. Oregon statutes authorize the Commission to invest in obligations of the U. S. Treasury and U. S. agencies, bankers’ acceptances, repurchase agreements, commercial paper rated A-1 by Standard & Poor’s Corporation or P-1 by Moody’s Commercial Paper Record, and the state treasurer’s investment pool.

13


2. Cash and cash equivalents (continued)

Concentration of Credit Risk: The Commission does not have a formal policy that places a limit on the amount that may be invested in any one insurer.

Interest Rate Risk: The Commission does not have a formal policy that limits investment maturities as a means of managing its exposure to fair-value losses arising from increases in interest rates.

Portfolio Credit Rating: The Commission does not have a formal policy that establishes a minimum average credit rating for its investment portfolio.

Custodial Credit Risk – Investments: This is the risk that, in the event of the failure of a counterparty, the Commission will not be able to recover the value of its investments that are in the possession of an outside party. The Commission does not have a policy which limits the amount of investments that can be held by counterparties.

3. Investment in properties

The Commission’s holds land for sale which is reported at estimated fair value measured using level 3 inputs.

4. Notes receivable

Funds are expended to improve and refurbish buildings for the benefit of business in the local area through a combination grant and loan program. Notes receivable have been recorded to reflect the amount the property owners will repay under the program. Loans are repayable over a maximum of 120 months. The loans are secured by the improved property and are considered fully collectible.

5. Short-term debt obligations

A. Transactions for the governmental activities for the year ended June 30, 2017 were as follows:

Outstanding Outstanding

July 1, June 30,

2016 Additions Reductions 2017

City of Madras, line of credit 250,000$ 55,000$ 108$ 304,892$

B. Governmental activities short-term debt obligations

City of Madras, line of credit – The Commission entered into a loan agreement with the City. The agreement was specifically meant to finance an economic development activity The maximum principal available is $500,000, with 2.5 percent interest only payments due quarterly.

14


6. Long-term obligations

A. Transactions for the governmental activities for the year ended June 30, 2017 were as follows:

Outstanding Outstanding Balances

July 1, June 30, Due Within

2016 Additions Reductions 2017 One Year

City of Madras, bond 2,185,000$ -$ 105,000$ 2,080,000$ 110,000$

B. Governmental activities long-term debt obligations

City of Madras, bond – The City issued a bond specifically meant to refinance the Commission’s bond anticipation line of credit. The terms of the advance match the related bond issuance with interest at 63.5 percent of the BBA Libor Daily floating rate plus 2.6 percent with a 3.076 percent floor.

C. Future maturities are as follows:

Fiscal

Year Principal Interest

2018 110,000$ 71,700$

2019 110,000 68,950

2020 115,000 65,100

2021 120,000 61,075

2022 125,000 56,875

2023-27 690,000 215,775

2027-32 810,000 87,850

2,080,000$ 627,325$

Bond

City of Madras

15


7. Unavailable revenue

Resources which are measurable bun unavailable consist of the following:


Property taxes 16,452$ -$ 16,452$

Notes - 68,625 68,625

16,452$ 68,625$ 85,077$

8. Tax abatements

Jefferson County has established an Enterprise Zone under ORS 285C.050-250 that abates property taxes on new business development within the zone. As a result, the property taxes that the Commission received for the year ended June 30, 2017 have been reduced by $8,877.

16

COMPLIANCE SECTION


INDEPENDENT AUDITOR’S REPORT REQUIRED BY OREGON STATE REGULATIONS

Board of CommissionersMADRAS REDEVELOPMENT COMMISSIONMadras, Oregon

We have audited in accordance with auditing standards generally accepted in the United States of America the basic financial statements of the MADRAS REDEVELOPMENT COMMISSION as of and for the year ended June 30, 2017, and have issued our report thereon dated February 28, 2018.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Commission’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grants, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules 162-10-000 through 162-10-320 of the Minimum Standards for Audits of Oregon Municipal Corporations, noncompliance with which could have a direct and material effect on the determination of financial statements amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.

We performed procedures to the extent we considered necessary to address the required comments and disclosures which included, but were not limited to the following:

Deposit of public funds with financial institutions (ORS Chapter 295).

Indebtedness limitations, restrictions and repayment.

Budgets legally required (ORS Chapter 294).

Insurance and fidelity bonds in force or required by law.

Authorized investment of surplus funds (ORS Chapter 294).

Public contracts and purchasing (ORS Chapters 279A, 279B, 279C).

In connection with our testing nothing came to our attention that caused us to believe the Commission was not in substantial compliance with certain provisions of laws, regulations, contracts, and grants, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules 162-10-000 through 162-10-320 of the Minimum Standards for Audits of Oregon Municipal Corporations.

17

INDEPENDENT AUDITOR'S REPORT REQUIRED BY OREGON STATE REGULATIONS (Continued)

OAR 162-10-0230 Internal Control

In planning and performing our audit of the financial statements, we considered the Commission’s internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purposes of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Commission’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Commission’s internal control.

Restriction of Use

This report is intended solely for the information and use of the council members and management of MADRAS REDEVELOPMENT COMMISSION and the Oregon Secretary of State and is not intended to be and should not be used by anyone other than these parties.

Boldt Carlisle + SmithCertified Public AccountantsSalem, OregonFebruary 28, 2018

By:

Bradley G. Bingenheimer, Member

18

1 – AMENDMENT NO. 1 TO PROMISSORY NOTE {13297018-00914758;1}

AMENDMENT NO. 1 TO PROMISSORY NOTE

This Amendment No. 1 to Promissory Note (this “Amendment”) is made on ______ __, 2018,

but made effective for all purposes as of September 1, 2017 (the “Effective Date”), by Travis M. Alire and Allis K. Stensgar-Alire (individually and collectively, “Alire”) and Bosh Properties, LTD. (“Corporation”), an Oregon corporation, in favor of Madras Redevelopment Commission (“Holder”), whose address is 125 SW “E” Street, Madras, Oregon 97741. For purposes of this Amendment, Alire and Corporation will be individually and collectively referred to herein as “Maker.” Maker’s address is PO Box 1265, Albany, Oregon 97321.

RECITALS:

A. Holder holds a certain Promissory Note (the “Note”) concerning a loan which Holder made to Maker on or about September 1, 2017 in the original principal amount of Twenty Thousand Dollars ($20,000.00). The schedule attached to the Note provided that the final payment is due on November 1, 2027.

B. The parties desire to amend the Note to replace the payment schedule to reflect the first payment due date of October 1, 2017 and that the final payment is due on September 1, 2027.

AGREEMENT:

1. Amendment. As of the Effective Date, Schedule 1 to the Note is hereby amended and replaced in its entirety with the payment schedule attached hereto as Schedule 1.

2. Miscellaneous. This Amendment is hereby expressly made part of the Note. The terms and conditions of the Note that are not amended or otherwise modified by this Amendment remain unchanged and in full force and effect. All capitalized terms used in this Amendment and not otherwise defined herein have the respective meanings assigned to them in the Note, except as modified by this Amendment. All prior and contemporaneous agreements, discussions, understandings, and negotiations, whether written or oral, express or implied, are merged herein, and to the extent inconsistent herewith, are of no further force and effect. No addition, modification, amendment, or alteration to this Amendment will be effective against the parties unless specifically agreed upon in writing and signed by the parties. This Amendment may be signed in one or more counterparts.

[the remainder of this page intentionally left blank – signature page immediately follows]

1 – AMENDMENT NO. 1 TO PROMISSORY NOTE {13297018-00914758;1}

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed on the date first written above but made effective for all purposes as of the Effective Date.

MAKER: Bosh Properties, LTD., an Oregon corporation ____________________________________ By: J.P. Curnutt, President

Alire: Travis M. Alire and Allis K. Stensgar-Alire ____________________________________ Travis M. Alire ____________________________________ Allis K. Stensgar-Alire

For acknowledgement purposes only: HOLDER: Madras Redevelopment Commission ____________________________________ By: _________________________________ Its: _________________________________

1 – SCHEDULE 1 – PAYMENT SCHEDULE {13297018-00914758;1}

Schedule 1 Payment Schedule

[attached]

10/18/2017 12:36 PM Page 1Signet Realty

Compound Period: Monthly

Nominal Annual Rate: 0.000%

CASH FLOW DATA

Event Date Amount Number Period End Date

1 Loan 9/26/2017 20,000.00 1

2 Payment 10/1/2017 186.02 24 Monthly 9/1/2019

3 Rate Change 10/1/2019 Rate: 2.500 % Compounding: Monthly

4 Payment 10/1/2019 186.02 36 Monthly 9/1/2022

5 Rate Change 10/1/2022 Rate: 5.500 % Compounding: Monthly

6 Payment 10/1/2022 186.02 59 Monthly 8/1/2027

7 Payment 9/1/2027 185.47 1

AMORTIZATION SCHEDULE - Normal Amortization

Date Payment Interest Principal Balance

Loan 9/26/2017 20,000.00

1 10/1/2017 186.02 0.00 186.02 19,813.98

2 11/1/2017 186.02 0.00 186.02 19,627.96

3 12/1/2017 186.02 0.00 186.02 19,441.94

2017 Totals 558.06 0.00 558.06

4 1/1/2018 186.02 0.00 186.02 19,255.92

5 2/1/2018 186.02 0.00 186.02 19,069.90

6 3/1/2018 186.02 0.00 186.02 18,883.88

7 4/1/2018 186.02 0.00 186.02 18,697.86

8 5/1/2018 186.02 0.00 186.02 18,511.84

9 6/1/2018 186.02 0.00 186.02 18,325.82

10 7/1/2018 186.02 0.00 186.02 18,139.80

11 8/1/2018 186.02 0.00 186.02 17,953.78

12 9/1/2018 186.02 0.00 186.02 17,767.76

13 10/1/2018 186.02 0.00 186.02 17,581.74

14 11/1/2018 186.02 0.00 186.02 17,395.72

15 12/1/2018 186.02 0.00 186.02 17,209.70

2018 Totals 2,232.24 0.00 2,232.24

16 1/1/2019 186.02 0.00 186.02 17,023.68

17 2/1/2019 186.02 0.00 186.02 16,837.66

18 3/1/2019 186.02 0.00 186.02 16,651.64

19 4/1/2019 186.02 0.00 186.02 16,465.62

20 5/1/2019 186.02 0.00 186.02 16,279.60

21 6/1/2019 186.02 0.00 186.02 16,093.58

22 7/1/2019 186.02 0.00 186.02 15,907.56

10/18/2017 12:36 PM Page 223 8/1/2019 186.02 0.00 186.02 15,721.54

24 9/1/2019 186.02 0.00 186.02 15,535.52

Rate 10/1/2019 0.00 0.00 15,535.52

10/1/2019 Rate: 2.50% Compounding: Monthly

25 10/1/2019 186.02 0.00 186.02 15,349.50

26 11/1/2019 186.02 31.98 154.04 15,195.46

27 12/1/2019 186.02 31.66 154.36 15,041.10

2019 Totals 2,232.24 63.64 2,168.60

28 1/1/2020 186.02 31.34 154.68 14,886.42

29 2/1/2020 186.02 31.01 155.01 14,731.41

30 3/1/2020 186.02 30.69 155.33 14,576.08

31 4/1/2020 186.02 30.37 155.65 14,420.43

32 5/1/2020 186.02 30.04 155.98 14,264.45

33 6/1/2020 186.02 29.72 156.30 14,108.15

34 7/1/2020 186.02 29.39 156.63 13,951.52

35 8/1/2020 186.02 29.07 156.95 13,794.57

36 9/1/2020 186.02 28.74 157.28 13,637.29

37 10/1/2020 186.02 28.41 157.61 13,479.68

38 11/1/2020 186.02 28.08 157.94 13,321.74

39 12/1/2020 186.02 27.75 158.27 13,163.47

2020 Totals 2,232.24 354.61 1,877.63

40 1/1/2021 186.02 27.42 158.60 13,004.87

41 2/1/2021 186.02 27.09 158.93 12,845.94

42 3/1/2021 186.02 26.76 159.26 12,686.68

43 4/1/2021 186.02 26.43 159.59 12,527.09

44 5/1/2021 186.02 26.10 159.92 12,367.17

45 6/1/2021 186.02 25.76 160.26 12,206.91

46 7/1/2021 186.02 25.43 160.59 12,046.32

47 8/1/2021 186.02 25.10 160.92 11,885.40

48 9/1/2021 186.02 24.76 161.26 11,724.14

49 10/1/2021 186.02 24.43 161.59 11,562.55

50 11/1/2021 186.02 24.09 161.93 11,400.62

51 12/1/2021 186.02 23.75 162.27 11,238.35

2021 Totals 2,232.24 307.12 1,925.12

52 1/1/2022 186.02 23.41 162.61 11,075.74

53 2/1/2022 186.02 23.07 162.95 10,912.79

54 3/1/2022 186.02 22.73 163.29 10,749.50

55 4/1/2022 186.02 22.39 163.63 10,585.87

56 5/1/2022 186.02 22.05 163.97 10,421.90

57 6/1/2022 186.02 21.71 164.31 10,257.59

58 7/1/2022 186.02 21.37 164.65 10,092.94

59 8/1/2022 186.02 21.03 164.99 9,927.95

60 9/1/2022 186.02 20.68 165.34 9,762.61

Rate 10/1/2022 20.34 -20.34 9,782.95

10/1/2022 Rate: 5.50% Compounding: Monthly

61 10/1/2022 186.02 0.00 186.02 9,596.93

10/18/2017 12:36 PM Page 362 11/1/2022 186.02 43.99 142.03 9,454.90

63 12/1/2022 186.02 43.33 142.69 9,312.21

2022 Totals 2,232.24 306.10 1,926.14

64 1/1/2023 186.02 42.68 143.34 9,168.87

65 2/1/2023 186.02 42.02 144.00 9,024.87

66 3/1/2023 186.02 41.36 144.66 8,880.21

67 4/1/2023 186.02 40.70 145.32 8,734.89

68 5/1/2023 186.02 40.03 145.99 8,588.90

69 6/1/2023 186.02 39.37 146.65 8,442.25

70 7/1/2023 186.02 38.69 147.33 8,294.92

71 8/1/2023 186.02 38.02 148.00 8,146.92

72 9/1/2023 186.02 37.34 148.68 7,998.24

73 10/1/2023 186.02 36.66 149.36 7,848.88

74 11/1/2023 186.02 35.97 150.05 7,698.83

75 12/1/2023 186.02 35.29 150.73 7,548.10

2023 Totals 2,232.24 468.13 1,764.11

76 1/1/2024 186.02 34.60 151.42 7,396.68

77 2/1/2024 186.02 33.90 152.12 7,244.56

78 3/1/2024 186.02 33.20 152.82 7,091.74

79 4/1/2024 186.02 32.50 153.52 6,938.22

80 5/1/2024 186.02 31.80 154.22 6,784.00

81 6/1/2024 186.02 31.09 154.93 6,629.07

82 7/1/2024 186.02 30.38 155.64 6,473.43

83 8/1/2024 186.02 29.67 156.35 6,317.08

84 9/1/2024 186.02 28.95 157.07 6,160.01

85 10/1/2024 186.02 28.23 157.79 6,002.22

86 11/1/2024 186.02 27.51 158.51 5,843.71

87 12/1/2024 186.02 26.78 159.24 5,684.47

2024 Totals 2,232.24 368.61 1,863.63

88 1/1/2025 186.02 26.05 159.97 5,524.50

89 2/1/2025 186.02 25.32 160.70 5,363.80

90 3/1/2025 186.02 24.58 161.44 5,202.36

91 4/1/2025 186.02 23.84 162.18 5,040.18

92 5/1/2025 186.02 23.10 162.92 4,877.26

93 6/1/2025 186.02 22.35 163.67 4,713.59

94 7/1/2025 186.02 21.60 164.42 4,549.17

95 8/1/2025 186.02 20.85 165.17 4,384.00

96 9/1/2025 186.02 20.09 165.93 4,218.07

97 10/1/2025 186.02 19.33 166.69 4,051.38

98 11/1/2025 186.02 18.57 167.45 3,883.93

99 12/1/2025 186.02 17.80 168.22 3,715.71

2025 Totals 2,232.24 263.48 1,968.76

100 1/1/2026 186.02 17.03 168.99 3,546.72

101 2/1/2026 186.02 16.26 169.76 3,376.96

102 3/1/2026 186.02 15.48 170.54 3,206.42

10/18/2017 12:36 PM Page 4103 4/1/2026 186.02 14.70 171.32 3,035.10

104 5/1/2026 186.02 13.91 172.11 2,862.99

105 6/1/2026 186.02 13.12 172.90 2,690.09

106 7/1/2026 186.02 12.33 173.69 2,516.40

107 8/1/2026 186.02 11.53 174.49 2,341.91

108 9/1/2026 186.02 10.73 175.29 2,166.62

109 10/1/2026 186.02 9.93 176.09 1,990.53

110 11/1/2026 186.02 9.12 176.90 1,813.63

111 12/1/2026 186.02 8.31 177.71 1,635.92

2026 Totals 2,232.24 152.45 2,079.79

112 1/1/2027 186.02 7.50 178.52 1,457.40

113 2/1/2027 186.02 6.68 179.34 1,278.06

114 3/1/2027 186.02 5.86 180.16 1,097.90

115 4/1/2027 186.02 5.03 180.99 916.91

116 5/1/2027 186.02 4.20 181.82 735.09

117 6/1/2027 186.02 3.37 182.65 552.44

118 7/1/2027 186.02 2.53 183.49 368.95

119 8/1/2027 186.02 1.69 184.33 184.62

120 9/1/2027 185.47 0.85 184.62 0.00

2027 Totals 1,673.63 37.71 1,635.92

Grand Totals 22,321.85 2,321.85 20,000.00

1 – MASTER AMENDMENT {13297018-00913975;1}

MASTER AMENDMENT This Master Amendment (this “Amendment”) is made and entered into effective on __________ __, 2018 (the “Effective Date”) between Madras Redevelopment Commission (“MRC”), whose address is 125 SW “E” Street, Madras, Oregon 97741, Travis M. Alire and Allis K. Stensgar-Alire (individually and collectively, “Alire”), and Bosh Properties, LTD. (“Corporation”), an Oregon corporation. For purposes of this Amendment, Alire and Corporation are individually and collectively referred to herein as “Company.” Company’s address is PO Box 1265, Albany, Oregon 97321.

RECITALS:

A. MRC and Company are parties to a certain Madras Redevelopment Commission – Urban Renewal Loan Agreement dated September 1, 2017 (the “Loan Agreement”). Pursuant to the terms of the Loan Agreement, MRC extended to Company a loan in the principal amount of $20,000.00 (the “Loan”) to enable Alire to complete certain façade improvement work in and to the real property (and all improvements located thereon) located at 546 and 554 SW Fourth Street, Madras, Oregon 97741 (the “Property”). The Loan is evidenced or secured by a promissory note in the principal amount of $20,000.00 dated September 1, 2017 made by Company in favor of MRC (the “Note”) and that certain Trust Deed, Assignment of Leases and Rents, and Fixture Filing dated September 1, 2017 made by Company in favor of MRC (the “Trust Deed”). B. MRC and Company are parties to a certain Madras Redevelopment Commission – Urban Renewal Grant Program Agreement dated September 1, 2017 (the “Grant Agreement”). Pursuant to the Grant Agreement, MRC made a $20,000.00 grant to Company to facilitate certain façade improvement work in and to the Property. C. The Loan Agreement and Grant Agreement provide that Company must complete the façade improvement work on or before November 30, 2017. Alire has commenced work on the façade improvements. However, weather and contractor unavailability have delayed work and, therefore, Alire has requested additional time to complete the improvements. D. MRC and Company desire to enter into this Amendment in order to, among other things, provide Company additional time to complete the façade improvements.

AGREEMENT:

NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other

good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Amendments. MRC and Company hereby extend the deadline under Section 3.1 of the

Loan Agreement and Section 2.1 of the Grant Agreement by which Company must complete the façade improvements on the Property from November 30, 2017 to May 31, 2018. Contemporaneously with the execution of this Amendment, MRC and Company will execute the Amendment No. 1 to Promissory Note in the form attached hereto as Exhibit A to amend and replace the payment schedule in the Note.

2. Affirmation. As of February 13, 2018, (a) the outstanding balance under the Note is

$19,013.98, and (b) Company has drawn $20,000.00 under the Grant Agreement and there are no


remaining funds under the Grant Agreement. Company affirms and reaffirms to MRC each of the representations, warranties, covenants, and agreements set forth in the Loan Documents and Grant Agreement, except as specifically modified under Section 1 of this Amendment. This Amendment will not be construed as an actual or implied waiver or release of any Company obligation and/or liability arising out of or under the Loan Documents or Grant Agreement. MRC has performed all MRC obligations arising out of or under the Loan Documents and Grant Agreement and no event has occurred and no conditions exist which would constitute a default by MRC under the Loan Documents or Grant Agreement, either with or without notice or lapse of time or both. For purposes of this Amendment, “Loan Document(s)” means, individually and collectively, the Note, Trust Deed, Loan Agreement, and this Amendment.

3. Miscellaneous. This Amendment is hereby expressly made part of the Loan Agreement,

Grant Agreement, and Note, to the extent possible. The terms and conditions contained in this Amendment supersede and replace any conflicting terms contained in the Loan Agreement, Grant Agreement, and/or Note. The terms and conditions of the Loan Agreement, Grant Agreement, and/or Note that are not amended or otherwise modified by this Amendment remain unchanged and in full force and effect. All capitalized terms used in this Amendment and not otherwise defined herein have the respective meanings assigned to them in Loan Agreement, Grant Agreement, and/or Note, as applicable, except as modified by this Amendment. All prior and contemporaneous agreements, discussions, understandings, and negotiations, whether written or oral, express or implied, are merged herein, and to the extent inconsistent herewith, are of no further force and effect. No addition, modification, amendment, or alteration to this Amendment will be effective against the parties unless specifically agreed upon in writing and signed by the parties. This Amendment may be signed in one or more counterparts.

IN WITNESS WHEREOF, the undersigned have caused this Amendment to be executed and

effective for all purposes as of the Effective Date. MRC: Company: Madras Redevelopment Commission Bosh Properties, LTD., an Oregon corporation ________________________________ By: By: J.P. Curnutt, President Its:

Alire: Travis M. Alire and Allis K. Stensgar-Alire

_________________________________ Travis M. Alire _________________________________

Allis K. Stensgar-Alire


Exhibit A Amendment No. 1 to Promissory Note

(attached)

MADRAS REDEVELOPMENT COMMISSION Request for Commission Action

Date Submitted: February 21, 2018 Agenda Date Requested: March 7, 2018 To: Madras Redevelopment Commission Through: Nicholas Snead, Community Development Director Gus Burril, City Administrator From: Kristal Hughes, Finance Director

Subject: Budget Resolution 2018-01: A Resolution Authorizing an

increase in appropriation to recognize unanticipated revenues, and expenses and the transfer of appropriations within funds for FY 2017-2018.

TYPE OF ACTION REQUESTED:

[ X ] Resolution [ ] Ordinance [ ] Report/No Action

DESCRIPTION: This supplemental budget resolution modifies the fiscal year 2017-2018 budget, and makes appropriations.

STAFF ANALYSIS:

Additional resources are needed to facilitate the ongoing objectives for the Madras Redevelopment Commission, including Façade Improvement projects and the Brewery/Pub recruitment efforts.

SUMMARY: See attached budget resolution for full details and descriptions of the budget adjustment needed to be in compliance with Oregon Budget Law.

RECOMMENDATION: Staff recommends the Commission approve and adopt Resolution No. 2018-01, as proposed.

Page - 1 - Request for Action

Page 2 of 3 RESOLUTION MRC NO. 2018-01

RESOLUTION NO. MRC 2018-01 A RESOLUTION AUTHORIZING AN INCREASE IN APPROPRIATION TO RECOGNIZE UNANTICIPATED REVENUES, AND EXPENSES, AND THE TRANSFER APPROPRIATIONS WITHIN FUNDS FOR FISCAL YEAR 2017-2018.

WHEREAS, in accordance with ORS 294.456 and 294.463, Madras Redevelopment Commission (MRC), the governing body of the Urban Renewal District of Madras, Oregon may transfer appropriations within funds for Fiscal Year 2017-2018 that were authorized by the MRC Board of Commissioners pursuant to Resolution No. 2017-04; and

WHEREAS, expenditures for the 2017-2018 Fiscal Year were not well known at the time of the budget; and WHEREAS, the MRC continues to prioritize resources for the revitalization of the downtown corridor; and WHEREAS, one adjustment includes a transfer of appropriation from contingency of greater than 15%; an increase of appropriation of greater than 10%; unanticipated revenues were received that were not anticipated during the initial budget process, a notice of a supplemental budget hearing was posted in the Madras Pioneer on November 29, 2017 to be in accordance with ORS 294.471 (3)(b);

NOW, THEREFORE, BE IT HEREBY RESOLVED by the Madras Redevelopment Commission of the City of Madras as follows:

SECTION 1: Because of the circumstances stated below by fund level, the MRC Board of Commissioners of the Urban Renewal District of Madras determines that it is necessary to recognize unanticipated revenues and transfer appropriations as follows for the 2017-2018 MRC Budget;

SECTION 2: The Finance Director is hereby authorized and directed to execute the following changes to appropriated budget amounts on behalf of the MRC:

701-701

Original Budget

Increase

Decrease

Revised Budget

MRC- General Fund Materials and Services 97,950

15,000 - 111,950

Shared Revenues 140,010 15,000 - 155,010

REASON: Increase revenues to accommodate forecasted expenses in Materials & Services which will include development agreement legal expenses in addition to travel and meeting expense associated with the Brewery/Pub recruitment.

Page 3 of 3 RESOLUTION MRC NO. 2018-01

702-702

Original Budget

Increase

Decrease

Revised Budget

MRC- Reinvestment Fund Contingency 46,760

- 16,000 30,760

Special Payments 45,010 41,000 - 86,010

Beginning Working Capital

193,220 25,000 - 218,220

REASON: Increase expenditures for Loan Distributions to assist businesses with Façade Improvement Projects.

SECTION 3: This resolution shall become effective on March 7, 2018

APPROVED by the Madras Redevelopment Commission of the City of Madras and signed by the Chair this 7th day of March, 2018.

Ayes: Nays: Abstentions: Absent: Vacancies:

Tom Brown, Board Chair ATTEST:
