Agenda - Council Work Session - 03/12/2019

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CC Work Session 2. 3. Meeting Date: 03/12/2019 Title: Discuss Public Works Facility Information Purpose/Background: The City Council reviewed the Public Works garage financeing at the work session of January 22, 2019. At that time it was suggested that the financing be brought back for discussion, with consideration given to the future tax levy impacts. The construction of a public works campus has been in the City's Capital Improvement Plan (CIP) since 2006, and is shown as first affecting the City tax levy in 2023 in the amount of $732,457, if construction commenced in 2022. A subsequent study by the City's Finance Consultant from Ehlers and Associates indicates that the annual tax burden can be lowered substantially (to $$478,425) if the city makes a cash contribution to the project upfront (using Sewer and Water Enterprise Funds) and makes an interest only payment until 2032, at which time the current debt for the Municipal Center will be paid. In 2015, a Public Works Space Needs Study (attached) was completed by the BKV Group. A copy of the study is attached.In this 2015 study, BKV quoted an estimated 2017 construction (including soft costs) of approximately $12,843,000. A 5% annual inflationary estimate has been used to determine a 2020 construction estimated cost of approximately $15,000,000. Also attached is the 10-year Capital Improvement Plan that includes the cash balance of the major City Funds starting on page 245 of the document. Some of these funds can be used for an upfront contribution and/or meeting annual debt service obligations. Timeframe: Funding Source: To be determined. Responsible Party(ies): City Administrator Outcome: Future action based upon discussion. Consider moving forward with plans and specifications for a Public Works building or delay the project until a future date. Public Works Bonding 5Yr Tax Capacity 2019 2023CIP PWspace study2015 Attachments Form Review