Action Item:
Discussion of options for budgeting and paying for the police and municipal court building project.
Background:
On April 12, 2017, the City held a public information meeting on the proposed Police and Municipal Court Building site selection process. On May 2, 2017, the City Council approved moving forward with additional site assessment and studies for the New Brooklyn Road site. On August 8, 2017, the City Council directed staff to move forward with design development for a two-story building design for a police station and municipal court building on the New Brooklyn Road site, including an indoor firing range.
On August 8, the Council also requested additional information on how to pay for this project, currently estimated at $28 million, not including land acquisition.
City staff have prepared information to illustrate how different scenarios of cash and bond financing would impact the City’s budgets and fund balance. The attached presentation is provided for review.
As shown in this material, the proposed project represents a significant City expenditure. For the purposes of this discussion, a $28 million scenario is used for illustration. Please note that this number is only an estimate, and the City intends to seek project options that may lower the actual cost.
Even with cost reductions, however, financial planning for this project will require careful management and specific decisions. It is not possible for the current City revenue portfolio to fully support this project alongside existing plans for other significant capital project expenses (over $5 million in the next five years). The recurring costs for the proposed additional debt service (in any of the scenarios shown) are feasible given the City’s level of recurring revenue. However, the plans for significant one-time expenditures for capital spending -- for this project and other items -- may cause the City’s fund balance to fall below policy reserves within the next biennium budget cycle (2021-22).
Given which, City leadership will need to consider options to either reduce the scale of capital spending, or increase access to new revenues, or identify a combination of both options.