HomeMy WebLinkAboutPackets - Council Packets (1233)Council Meeting
Regular Session
November 6, 2019
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Town Council Meeting Announcements
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Upcoming Meetings
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Upcoming Meetings
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Risa Waldt
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Financing Options for Capital Improvements for the Town Community Center and Golf Course
November 6, 2019
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Background
October 2, 2019 Town Council directed staff to present options and recommendation to finance capital improvements for Community Center and Golf Course.
Assumptions
Options
Pay-as-you-go
Inter-Fund Loans
Bonds
Recommendation
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Assumptions
Project budget is used for comparison, not intended to scope project.
Project budget of $3.8M for golf course and $3.0M for community center ($6.8M total).
Inflationary increase of 6% in the current year and FY 20/21, then 3% thereafter.
Bond rates – 10-year term callable at any time
Tax exempt 1.97%
Taxable 2.67%
Fund balance projections utilized 10-year cash flow projections
Water savings result in 15% or $105,000 of savings
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Option 1 - Pay-As-You-Go (PAYG)
Practice of funding new projects with cash saved from prior appropriations.
Community Center fund would not have full funding until FY 25-26.
With assumed increases in construction costs, project would increase to $7.76M or a $960,000 increase.
Projected additional cost of water $525,000.
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Community Center Fund Balance Summary
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Option 2 - Intra-Fund Loans
Internal borrowing from a fund that has excess funds available, General Fund.
General Fund does not have adequate capacity to fund the entire $6.8M project.
Projects can start sooner, mitigating inflationary and water costs.
Lower costs than bond issuance.
Competes against other capital needs in the Town, and may delay other projects.
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Option 3 - Municipal Bonds
Debt instrument issued by Town with an interest rate and payment schedule.
Tax-exempt bonds have a lower interest rate, and must have a governmental purpose.
10-year, 1.97% interest rate – interest cost $760,000
Taxable bonds have a higher interest rate (currently 70 basis points higher) and can be used for non-governmental purposes.
10-year, 2.67% interest rate – interest costs $1,040,000
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Summary of options
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Summary of options
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Summary of options
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Recommendation – Combination of 3 Options
Intra-Fund Loan
$1.9M loan from the General fund, paid back over 3 years
Fund improvements for the Conquistador course
Project timeline Summer 2020
Minimize escalation of construction costs
Maximize water savings
No taxable bonds for golf course improvements
Total additional financing/inflationary costs $0
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Recommendation – Combination of 3 Options
Tax Exempt Municipal Bonds
Tax exempt bond issue for $3.2M for community center improvements
Construction could begin in FY 20/21, minimizing inflationary increases
Provides for construction of community amenities as soon as possible
Total additional financing/closing costs $390,000
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Recommendation – Combination of 3 Options
Pay-As-You-Go
$2.1M PAYG for improvements on the Canada course
Project timeline May 2021-October 2021
Limits escalation of construction costs
Maximize water savings
No taxable bonds
Total additional inflationary/water costs $305,000
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Summary of options
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Community Center fund projections
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Recommendation Summary
$1.9M Intra-Fund Loan for Conquistador course
$3.2M bond financing for community center
$2.1M PAYG for Canada course
Establish a minimum fund balance threshold for the community center fund
Contingency plan
Extend intra-fund loan payment up to 10 years
Bond financing would have a fixed payment - no prepayment
PAYG improvements – additional GF loan, defer project components, or temporarily adjust minimum fund balance
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Key Implementation Milestones
Golf Course Operator
Issue competitive RFP solicitation by January 3, 2020
Award professional services contract by March 31, 2020
Start date July 1, 2020
Capital improvements course #1
RFQ for to solicit golf course/irrigation designer
Award professional services contract
Consultant evaluation of course #1
Construction drawings completed and approved by Town
Construction bid solicitation
Award construction contract
Over seed for fall 2020 season
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Key Milestones
Community Center Improvements
Community input via Parks & Recreation needs assessment
Competitive solicitation for Contractor (Construction Manager at Risk)
Final needs assessment report completed
Architect and CMAR develop preliminary master plan concepts
Public input
Architectural drawings developed and approved by Town
CMAR bids construction work
Contract negotiated, awarded and work commences
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