Agenda - Council - 02/10/1981 - Laserfiche WebLink

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of minn, so'ba oities January 23, 1981 TO: Mayors, Managers and Clerks FROM: Donald Slater, Executive Director RE: League Building Progress Report The 1980 League Convention meeting in Duluth unanimously directed that the League proceed ~m~O build~ts own headquarters building in St. Paul. Since then, Minnesota cities have Ween considering the question of how to finance the construction of a permanent home for the League. The League Board of Directors, after reviewing the responses from cities throughout the state, concluded that there was a broad base of financial support for construction of the proposed project and voted unanimously to proceed with the project. In considering the financing plan for the League construction project, the Board made several adjustments. These changes were necessitated by virtue of the fact that the cost of borrowing money -- interest rates -- have gone up considerably after the initial calculation of the project costs and also because of a more defined construction package. The Board accepted the commitments of cities who selected the single payment option -- one-time, lump sum payment -- the five and ten year payment schedules as well. Twenty year payment schedules, however, will not be possible. At the time of the regional building financing survey, the proposed financing plan contemplated a 20-year payment option. Further refinement of the overall costs of the project, but particularly re- calculation of the projected interest costs from the regionally anticipated 8 3/4% to a more realistic level of over 10%, made it financially impossible to offer the 20-year ~ayment option. The Board of Directors concluded that those who had selected the 20-year option desired to pay over the longest time available and, therefore, moved those cities to the ten year option. Those cities who did not respond to the financing survey, will be treated as paying over the ten year period as well. Given the present design, bid, and construction schedule, invoices will be mailed to each member city in February for their share of the project. The first payment will be due July 1, 1981. Recapping the Board's decisions: 1. As a result of the member city's unanimous approval at the June convention, the League has ~een proceeding with the building project and construction will begin early during 1981 for occupancy in early 1982. 2. Cities who committed themselves to one-time payment, five-year payment, and ten-year payment will be billed on that basis. (OVER) 500 hanover building, 480 oedar street, saint ~aul, minnesota 55101 (612) 222-2B61