02-07-2014 Special Council Minutes

Home Browse Search

MINUTES CITY COUNCIL FEBRUARY 7, 2014 identified in recent borings will only have an impact relative to utility trenches. Keis asked the impact of the increase project costs on the bond sale. The Administrator reported that the sale of $2,570,000 G.O. Capital Improvement Plan Bonds is scheduled for next Wednesday, February 12th, and the City has the option of selling G.O. Sewer & Water Bonds to cover the additional cost of the project. The Administrator presented three bond issue options for additional dollars of $500,000, $800,000, or $1 million. The Administrator then explained the debt service on an additional $800,000 in bonding, noting that the annual debt service would increase from $190,000 to $246,000. This debt service would be paid from annual depreciation dollars of $300,000; therefore, there would still be approximately $50,000 in depreciation for capital projects. The Administrator reported that in discussing the need for additional financing with Mark Ruff, Ehlers & Associations, he recommended staying under the $1 million amount as an increase of this size may prevent the City's bond rating from going up. The Administrator again noted that the City's depreciation funds can cover debt service. He also noted that the City has completed most of its needed watermain and sewer work. As a result, the Administrator recommended the financing of the additional project costs. Keis asked about the impact to taxpayers. The City Administrator noted that the bond debt service would be shown as a levy, which would then by eliminated by Council action, and the debt service paid for from depreciation. There would be no increased tax levy to property owners, and there would be no increase in sewer and water rates to cover the cost of debt service on the bonds given the City is already funding depreciation at this level. Keis stated that the issue for him is how he justifies the cost to citizens. He noted that the project proposed is about the same size or less than that of similar -sized cities. He also pointed out that the cost of the project will not result in increased taxes to property owners. Montour also noted that efficiencies will be gained in that the Public Works Department and the Parks Department will be combined into one location. The City Administrator noted that the existing Public Works facility is 7,700 square feet, the Parks Shop is 4,000 square feet, and the City is using a portion of the 4,900 square feet in the former Roseville Plumbing property for a total of approximately 13,000 to 15,000 square feet of current Public Works /Parks space. The Administrator noted that under current conditions, the City still has some equipment stored outside. He further reported that the Public Works needs study done by Oertel in 2000 estimated the need for 10,200 square feet. The Administrator pointed out 3