City Council - Regular Session
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General Business   10.F.1.
City Hall Financing (C)
The Council is asked to approve the financing sources for the construction of a City Hall facility.
Preliminary construction estimates to build and furnish a City Hall facility that would be connected to the current police department facility are anticipated to be approximately $8.5 million. Staff is recommending that financing of City Hall be done internally through a series of transfers and an interfund loan.
Transfers to the City Hall Construction Capital Projects fund include:
$330,000 transfer approved in February 2016 to close the expired 2004C Debt Service Fund.
$1.7 million from the Government Building Asset Internal Service Fund.
$400,000 from the Government Building Asset Internal Service Fund via the repayment of the internal loan to the Property Acquisition Fund. $50,000 annual payments over the course of the next eight years (2016-2024).
$220,000 from the Government Building Asset Internal Service Fund from savings associated with eliminating CIP projects scheduled for the current City Hall facility scheduled for 2016 and 2022. Transfer would be done on the front end of the city hall project (2016).
$1.2 million from the Government Building Asset Internal Service fund from savings realized from refinancing the 2004 Public Works Building project. Annual transfer of $120,000 over ten years (2015-2024).
$1.0 million from the 2015 General Fund excess reserves.
$1.0 million from anticipated 2016 General Fund excess reserves. Historically revenues have exceed expenditures and excess reserves are transferred to various funds for one-time related projects and/or expenditures. If 2016 is representative of the recent past, up to $1.0 million dollars would be available in early 2017 to be transferred to the Government Building Asset Internal Service Fund.
$500,000 transfer from the Sewer Utility Fund. Both the Sewer and Surface Water funds will have employees at City Hall that provide direct services to both the Sewer and Surface Water funds. The engineering and natural resources staff are currently programmed to be housed in the City Hall facility.
$500,000 transfer from the Surface Water Fund.
An interfund loan of $1.65 million from the Surface Water Utility Fund, payable from the Government Building Asset Internal Service fund over 15 years at a simple interest rate of 1.25% annually. This interest rate mirrors the City’s current investment rate of return. The term of 15 years allows the repayment schedule to accommodate the current repayment of the Public Works facility bonds which are set to expire in February 2025. If there remains an outstanding balance after 2025, the Government Building Asset Internal Service fund would have additional capacity of approximately $300,000 to pay any outstanding balance.
The Council has the option of adjusting the terms including eliminating the interest rate charged to interfund loan. In addition, any proceeds from the sale of the existing city hall would first be used to repay the interfund loan and then to replenish the Government Building Asset Internal Service Fund.
Staff recommends approving the attached Resolution 7703, City Hall Construction Financing, by providing the necessary means to finance the construction of a City Hall facility via transfers and an interfund loan to the City Hall Construction Capital Projects Fund.
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