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City Council Regular Meeting Minutes • February 8, 2000 Page 6 1 the same revenues or maintain or lower rates, reduce services, and receive less property tax reve- 2 nues. 3 Mr. Thistle pointed the Council's attention to page 39 of the Report wherein funding for the pro- 4 spective public works building was discussed. The Report stated that the City is considering 5 construction of a new public works building and the estimated cost of the building is $5.2 million 6 to $6.1 million (according to a report by Short, Elliot,Hendrickson, Inc. ("SEH")). 7 The increase in size from the original $1.8 million estimate from September 1999 changes the 8 scope and options available for the City. As such, Springsted set forth financing options -- a total 9 of five -- and of those five, three options were specifically identified as possibilities: 10 1. The first option is for the City to have a referendum to issue general obligation 11 bonds to build the public works building; 12 2. The second option is to borrow a portion of the money from the Army Filtration 13 fund, and to borrow the other portion using a lease revenue; 3. The third option is to have the H.R.A. issue the total amount as a lease revenue 5 bond. 16 In conclusion, Springsted reported that option 1 (issuing general obligation bonds), would be the 17 least costly to the city overall and would not require a reduction in other general fund expendi- 18 tures. However, option 1 would depend upon public support for a referendum. Both options 2 19 and 3 would require levying at the maximum for the operating levy and a reduction in other ex- 20 penditures to finance over$550,000 per year in debt service. 21 Cavanaugh expressed his opinion that a pro forma should be done to arrive at numbers for the 22 capital programs and discover what the realities are on a capital budget for the Council to con- 23 sider capital programs. Although the City has had surpluses each year, Cavanaugh stated, the 24 City needs certain amounts of those surpluses to do other projects. Cavanaugh felt that the 25 amount projected for the public works facility pointed towards a referendum,but that the pro 26 formas would give the Council an appreciation at the actual figures. 27 Cavanaugh requested that a pro forma be developed so that it can be incorporated into the next 28 conversation about the public works facility and the fire station. 29 Horst inquired if the project was positioned to be funded as a referendum, if that issue would be 30 on the November 2000 ballot. •