6.8. SR 07-10-2006 - Laserfiche WebLink

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City of Elk River REQUEST FOR COUNCIL ACTION Agenda Section Meeting Date W orksession ul 10, 2006 Item Description YMCA U date and Ballot Question Lan ua e Review Administrator Introduction Representatives from the YMCA and the city (Mayor Klinzing, Councilmember Gumphrey, Bond Counsel Mary Ippel, City Attorney Peter Beck, and I) continue to meet to try to come to an agreement and define a relationship between the YMCA and the city based on the Council's previous action to ask the voters to consider funding two-thirds of the construction of a YMCA. Discussion The funding proposal for this YMCA is unique in that the voters are being asked if they want the city to pay two-thirds of the construction cost of the facility. If approved, the city will issue general obligation bonds to fund the entire project. The YMCA will fund one-third of the annual debt service on the bonds. The city will be the owner of the building and the YMCA and city will enter into an agreement defining the arrangement whereby the YMCA will operate programs out of the facility. Attached is an outline of the potential agreement and issues for Council consideration. This proposal was developed based on conversations with YMCA staff and its consultants; it has not been officially approved by the YMCA Board. The YMCA is aware that the proposal is also subject to Council approval. Peter Beck and I will go through the issues in more detail at the meeting. One of the other items yet to be decided is the amount that will be included in the bond question for construction of the facility. The question will include financing for the entire project even though the YMCA will repay one-third of the debt service over the life of the bonds. The YMCA has stated that it estimates construction to be $12 million although we have not been provided with any documentation of this estimate. The $12 million excludes the cost of energy efficiency improvements and the additional cost to use recycled products. The YMCA has requested that the city fund those costs in addition to funding two-thirds of the construction costs since those improvements are being made at the request of the city. If the $12 million construction estimate is used, the city would pay for $8,000,000 plus the energy efficiency and recycled product costs. Some of these additional costs may be eligible for the County's Landfill Abatement Public Building Grant that is being considered by the County Board on July 11. As proposed, the grant is available for projects that meet the national standard for Leadership in Energy and Environment Design (LEED). This means that 25 percent of the building materials must be recycled products that contain at least 25 percent post- consumer recycled materials. The city would be eligible to receive a maximum of 25 percent of the project cost up to a maximum allowed per city or township of $2,000,000. Addition.ally, the County will award only one grant per year so the city may be in competition with other cities or townships applying for a grant in that same year. If the County Board approves this proposal on July 11, the application period is likely to begin this fall. S:\Council\Lori\2006\ YMCA Legal revised.doc