At last Thursday night's commission agenda review meeting, the commissioners had a discussion regarding funding numerous recreational and infrastructure projects (that have been discussed for about a year now). Previous financing discussions had included potentially using utility enterprise funds to assist in paying the debt service but that had been discouraged by several commissioners and by finance director Cal Bowen for the entire amount of the original $25 million or $17 million bond proposals. This is what led to the exploration of alternative methods of funding including creating a dedicated funding source for the fire department through the fire assessment program which would have had the potential to free up funds currently allocated to the fire department from the general fund that could then be used for bond debt service and created a dedicated funding source for the fire department not tied to property taxes.
After a lengthy discussion on Thursday night, the commission instructed staff to look into alternatives potentially using the utility fund. Tonight City Manager Deric Feacher presented the following proposal:
After the City Commission workshop Thursday; staff began discussions Friday morning to determine the best course of action in accomplishing the goals of the elected body without implementing a Fire Assessment Fee or increasing property taxes. Therefore, I plan on offering an option tonight to fund the projects based on the discussion from Thursday where many options were brought forward.
The projects decided by the Commission are below:
Lake Maude $3.0m
South Park $3.5m
7th street $1.5m
Splash Pad $400,000
Less Cash on Hand is $1m. Therefore, funding needed is $12.1 million. Cal has reviewed the funding options as well as spoken with our Bond Counsel to determine the ability to bond some of these projects as well as long-term bonding capabilities for the Utilities Department. One possibility is to use $6.3 million in cash “on hand” as described below and bond $6.0 million over 20 years. The annual debt service on a $6.0 million would be approximately $450,000 per year. The caveat would be that if property values decline or stop improving; there might be a need in the future to raise the ad valorem rate to pay the debt service or evaluate other areas with in the budget to cover this amount.
The cash on hand is being recommended to come from the following sources below.
$4.5m Water & Sewer Fund Land sale proceeds
$900,000 Landings Proceeds in the General Fund Equity
$700,000 WH sports Complex money in the 2007 Construction Fund
$200,000 Transportation and Recreation Impact Fee money.
While the commission did not specifically vote on the bond projects tonight, they did come to a consensus that they are all comfortable with this plan and voted and approved an emergency resolution brought from the floor to cancel the fire assessment program process and the public hearing on September 8th.
Mayor Birdsong reiterated that this does not mean that other projects will not be funded in the future, but that these were the projects that had planned locations owned by the City and the ability to be started quickly. There was also a discussion about whether to put the skate park on this list of projects as there has been a very vocal group of individuals advocating for a skate park for the last 3 years – give or take. The commission was divided as to whether to include that in the current bond proposal as a location has yet to be determined for that park (it is widely understood that they are considering the Chain of Lakes Complex however that land is currently not available and not able to be bonded against). Instead of adding the skate park back to the current bond project list, they agreed that once all of the other projects are estimated and costs are fairly certain, any additional funds remaining would be used to start the design phase of a skate park. It was discussed that a second bond will likely be necessary to complete the entire original project list.
Commissioner Pete Chichetto also announced during tonight's meeting that he will be running for reelection this November.