Minutes - Council Work Session - 07/26/2022

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is $2.4 million in their given time frames per year if they are averaged out. He stated overall he thought if they area going to do it, he would rather bond either option three or option four and try to get done as much as possible in five years and spread the costs over the next 15 or 20 years. He stated the fact that they have a CIP that’s $22 million in roads and an additional $13 million in projects that are not in the CIP but still need to get done immediately is his concern. He stated even though it costs more in interest, hopefully by the year 2030 a lot of those other projects or needs will not be as high and they wouldn’t be sending out teams to fill potholes for weeks at a time which is costly. He stated he hates paying interest on things but he is in favor of this because the roads need extra attention right now. Mayor Kuzma asked when City Hall will be paid for and Fire Station Two, when does that come off to be able to off-set some of this stuff. Finance Director Lund replied they have a Public Works campus also. She stated the debt of City Hall was set up that it comes off in 2031 and the Public Works comes on full bore. Councilmember Musgrove addressed Councilmember Woestehoff’s comments. She asked if they do a lot in five years because they bond out, then in 40 to 60 years there is another bubble at five years because they have that same number of roads that would potentially need to be redone. She stated they may be built better and may have less deterioration and better practices with regard to what is out there in technology, such as seal coating. She stated with those improvements it may make the bubble in the future less but she thought the $907,000 per year would actually have to be more in order to meet the needs to stay ahead of it because they are behind. She thought they would have to save more to keep up with it and not be behind. Councilmember Heineman asked for option four, taking for example there is $11 million dollars for repairs, he asked if in 2037 they are still repairing the bubble of road work that needs to be done. Finance Director Lund replied, yes, this sheet is based off of if it was done over a ten-year average time frame. They are only seeing $907,686 on option four because it is a 20-year bond and when they get to year 2038, the additional five years, they are only seeing the debt service on this, they are not seeing the additional road levy that is a part of the 5% because that would continue on after year 2032 for other CIP road projects. Councilmember Heineman asked if either way all the work is being done by 2031, it’s just whether they are paying for it. He stated he was concerned that the dollar wouldn’t go as far in 2037 as it would now but it makes sense. Finance Director Lund stated they would be bonding for the full $11,150,000, and if she understood correctly, Councilmember Riley is saying to take that $11,150,000 and do projects over three years and use up the bond proceeds and this is just the payment schedule to pay back that. City Council Work Session /July 26, 2022 Page 14 of 19