[media-credit name=’NATALIE WEINBERGER/Herald photo’ align=’alignnone’ width=’648′][/media-credit]The Madison Common Council approved the city's refinancing of the Overture Center for the Arts by a vote of 15 to five after considerable discussion during a meeting Tuesday.

City refinancing obliges Madison to provide up to $2.5 million per year over the course of six years if the Overture's endowment fund, which is dependent on the stock market, falls below a minimum threshold.

The endowment is currently $107 million, but in the situation that the fund was to fall below $100 million, monetary firewalls and the city's financial backstop would be used to cover the debt. The first firewall would be $5 million from Jerry Frautschi, the local philanthropist who funded Overture's endowment fund almost entirely. The second would be money from an Overture reserve fund, totaling $2.5 million and the third backup would be asking Madison for support.

The decision came down to either refinancing the Overture or having the city buy the arts center. Ald. Ken Golden, District 10, said his decision to vote for refinancing was driven by the desire to make life easier for future alders.

"I want this decision to be a legacy," Golden said. "I want to be able to look at the next five [District 10] alders down the line and not have them have to deal with this from the standpoint of finances."

Golden added the uncertainty of handling Overture debts within the city-budget discussions each year will be a considerable task.

Ald. Mike Verveer, District 4, who authored the proposal, said the endowment fund on which Overture is financed must be given time to grow.

"The reason why I favor refinancing is that we have to give the endowment a chance," Verveer said. "The payoff of the fund could be substantial. The fund could generate $40 million over 30 years. It is a small risk to taxpayers versus city ownership."

Verveer added city ownership would obligate taxpayers to fund the operation and maintenance.

"If this becomes a city agency, taxpayers are on the hook for all costs," Verveer said.

George Austin, president and chief executive officer for Overture Development Corporation, said under city ownership, Madison would have to pay $10 million after 10 years and $31 million after the next 20 years for facility maintenance.

Refinancing instead only puts taxpayers on the hook for $5 million over the course of six years, Austin added.

Ald. Tim Bruer, District 14, was so opposed to refinancing the center that he suggested a veto of the approval.

"I think, Mr. Mayor, that this decision would be such a huge mistake that it would be worth a veto," Bruer said. "The short-term risk factor here is significant. This is the taxpayer's dollars we are risking [on the stock market]."

Bruer said he was "appalled" at the notion of putting city taxpayers in the position to handle Overture finances.

However, a veto is impossible because, according to Verveer, a 15 to five vote for approval nullifies the mayor's ability to veto council's decision.