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trt6tle <br />uanada <br />MAYOR <br />Bill Blesener <br />COUNCIL <br />Rick Montour <br />John Keis <br />Michael McGraw <br />Shelly Boss <br />515 Little Canada Road, Little Canada, MN 55117 -1600 <br />(651) 766 -4029 / FAX: (651) 766 -4048 ADMINISTRATOR <br />www.ci.little- canada.maus Joel R. Hanson <br />MEMORANDUM <br />TO: Mayor Blesener & Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />DATE: June 21, 2013 <br />RE: Info Update Workshop <br />For the Info Update workshop, here is some background concerning the issues staff would like to <br />discuss with you: <br />Public Works Garage <br />With our pending purchase of the Brings Property, we should discuss the next steps in moving <br />the project forward. There are three key areas we should focus on. The first is long -term <br />financing. My recommendation would be to finance the cost (exact amount yet undetermined) <br />over 20 or so years. While we have funds on hand that could handle the bulk of this project, my <br />assumption is interest rates will rise over the next number of years. By locking in low rates now, <br />we keep cash available for other purposes and will likely be able to invest those dollars at rates <br />higher than we are paying on the debt (this may take a few years but seems very likely over 20 <br />years). To avoid levy impact, we would pledge the depreciation dollars that come from the water <br />and sewer funds to make debt service payments. If you think this is a good idea, I will begin <br />exploring the concept with our financial advisors. <br />The other issue is getting started on design services. Based on our experience with the Fire <br />Station and City Hall projects in the early 90's, I would recommend we utilize the construction <br />management project delivery system. With this process, we effectively serve as the general <br />contractor by having an owner's representative work on our behalf to review plan documents, <br />conduct value engineering, let multiple prime contracts, and oversee construction in conjunction <br />with the architect. Another big advantage that is once again in play is sales tax savings on <br />materials purchases we make directly. (I have attached some summary info on the construction <br />management process to aid in your consideration of this option.) <br />I would recommend we conduct and Request for Proposals process for Construction <br />Management Services. Once we hire a firm for that component, we would then work with the <br />Construction Manager to hire an architect for the project. <br />1 <br />