5.2. SR 12-10-2007 - Laserfiche WebLink

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Item• 5.2. city of fiver MEMORANDUM TO: City Council FROM: Lori Johnson, City Administrator DATE: December 10, 2007 SUBJECT: Ice Arena Financing The Council directed staff to look at options to fund a $2.5 million dollar ice arena improvement project including expansion of the lobby and various improvements and repairs to the existing arena. The proposed improvements would greatly enhance the arena, particularly the lobby expansion. In order to address the specific financing of this project, we must look at it in the context of all of the other city building obligations and priorities since all of the projects utilize the same funding sources. This memo gives a brief summary of the overall financing picture for all building projects and discusses in specific the proposed ice arena improvements. At Monday's meeting, staff will be prepared to discuss this in greater detail. Before discussing the ice arena improvements, it is helpful to have some background on how city facilities are typically financed. As you know, city facilities are financed generally either through reserve funds or bonds. The bonds, either lease purchase or capital improvement, authorize a tax levy, but the debt may be paid through a combination of tax levies and reserve funds as approved by the Council. Currently, the city has ongoing debt payments or financial obligations for the following buildings: library, public safety building, city hall, YMCA, and ice arena. The library was funded by capital improvement bonds and the debt service is currently being funded through reserves; however, as you can see from the attached Building Reserve Cash Flow spreadsheet, in the future it may be placed on the tax rolls. The YMCA was approved by voter referendum and is being paid for through a tax levy (with the Sherburne County Landfill Legacy Grant reducing the first six years of tax levies). The public safety building was constructed with lease revenue bonds paid by tax levies. The city hall debt is being paid through reserves. In addition to these completed projects, a future high priority project that has not yet been funded is the public works expansion project. This project has been discussed for the past several years and it is very evident that there is a need for space because temporary office facilities have been secured to meet the office space needs until the expansion takes place. Funds for this project were set aside in the government buildings reserve as part of the CIP