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Councilmember Jeffrey explained he had qUestioned if it would be more economical to build the <br />municipal center with all of the intended floors and lease out the space to create a revenue stream <br />to pay for the initial construction of the additional floor. In future years the construction costs <br />will be much greater than they currently are. <br /> <br />Finance Officer Lund explained it must be known when going into the bonding if any of the area <br />will be leased and what it will be used for. Taxable bonds would be required for the leased area. <br /> <br />Assistant City Administrator Nelson explained the current cost for the municipal center is at 15.8 <br />million dollars. Staff has recommended that the police garage be built, which brings the total to <br />16.2 million dollars. She explained there are two options, one for the third floor expansion to <br />City Hall at a cost of approximately 2.64 million dollars to build as a shell. The second and <br />probably most reasonable option would be to build the second floor of the police facility that <br />would mainly serve as additional City Hall space for a cost of 1.762 million dollars. This option <br />would bring the total cost of the project to approximately 18 million dollars. <br /> <br />City Administrator Norman advised there are pitfalls in leasing space. First, the City is put in a <br />difficult position when accused of competing against the private sector. Another issue is who to <br />lease thc space to. He explained he worked for a City that leased space to an engineering firm <br />and was accused of sweetheart contracts. <br /> <br />Councihnember Cook stated an additional 1.7 million or 2.6 million dollars in addition to the <br />project cost is not a lot for an additional floor. Bonds will never be this cheap again and there is <br />not a lot of expense on the inside compared to a floor being built. <br /> <br />Councihnember Strommen inquired how far out the initial building is estimated to meet the <br />City's needs. <br /> <br />Assistant City Administrator Nelson replied the projection was based on a population build out <br />of 45,000, which would require a full time staff of 145 employees at City Hall. <br /> <br />Councihnember Strommen stated her concern is the current timeframe being projected for the <br />building is 10 to 15 years out. The 1.7 million dollars is not huge on the lifetime of the cost, but <br />there is a slippery slope. The City needs to be careful about the costs and balance that with <br />making sure the project is planned far enough out. <br /> <br />Assistant City Administrator Nelson indicated one of the cost saving measures is to take the <br />arched roof off of the police facility, These savings could be taken into consideration with the <br />additional 1.7 million dollars for the second floor on the police facility. <br /> <br />Police Chief Way stated the police facility that is currently planned will se~,e the City's needs <br />way beyond 20 years. The second floor above the police facility will not be needed for police use <br />and would be used for City Hall space. <br /> <br />City Council Work Session/January 11, 2005 <br /> Page 2 of 6 <br /> <br /> <br />