Tuesday evening Todd Samuelson from Umbaugh, the City’s financial consultants discussed financing possibilities for phase I of the new park.
Estimated project costs including the entry plaza, new Farmer’s Market area and Water Street renovations, the Christmas Tree plaza, a flexible performance area, property acquisition, design fees, survey work, and a contingency of 15% brings the estimate project costs to nearly $2.1 million.
A bond issue for the project was discussed. The illustration presented included additional costs for the bond issue including $146,890 in debt service reserve..one year of payments that would enhance the credit and bond council fees of nearly $89,000 bringing the total project cost estimate to $2.325 million.
Funding the project could be with $470,000 of Tax Incremental funds already on hand from TIF # 2, $250,000 from the City Development Funds already on hand, and a issuance of a $1.6 million Redevelopment District Bond.
Assuming the bonds are payable from TIF funds Samuelson said securing the bonds with a property tax back-up will make them more appealing because of the additional security although he doesn’t anticipate the need for property taxes to pay the debt back.
In looking at the revenue generated in TIF # 2 annually it’s $220,000. Taking the projected bond issue of $1.6 million and paying $140,000 annually Samuelson said the bond could be paid off in 14 ½ year although he would add a call feature to pay off the bond issue earlier after 7 years if additional TIF funds are available.
Redevelopment Commission member Dan Tyree asked Jim Causey and Bob Biter from the Park Board if they were ready to move forward with the new park. He commented that the large area will take additional time and manpower to care for and the expertise that would be needed to manicure the landscaping. Both said “Yes” and explained that Park employees have already been caring for the area with mowing and watering.
Mark Gidley from PIDCO asked if the size of the bond issue was optimal for a good interest rate. Samuelson said, “For this size, the bond issue is deemed bank qualified.” He said, “Bonds can be sold in dominations a low as $5,000 but typically we like to see $100,000 blocks.”
When asked on how to proceed, Mayor Senter said, “It’s in our long-term plan for the Park Department.” He continued, “It was a blighted area 5 years ago. I recommend we move funding this project to the next step.”
The board motioned unanimously to move forward with the bond issue.
Although there are many items to take care of, Samuelson presented a proposed time line and said funding could be available in early to mid July so work could be started yet this summer.