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HomeMy WebLinkAbout13.A.1. Consideration of a Resolution Determinging the necessity for the Issuance of General Obligation Bonds and Calling a Special Election for Community Center Improvements-Res. No. 7034CITY OF SHAKOPEE ~ ~' ~~' ~y Memorandum T0: Mayor and City Council Mark McNeill, City Administrator FROM: Jamie Polley, Director of Parks, Recreation & Natural Resources SUBJECT: Consideration of a Resolution Determining the Necessity for the Issuance of General Obligation Bonds and Calling a Special Election for Community Center Improvements -Res No. 7034 DATE: August 17, 2010 Introduction: The Council is asked to determine whether to place the question of issuing $7.855 million of General Obligation Bonds, to provide for improvements to the Shakopee Community Center, on the General Election ballot of November 2, 2010. Background: The City Council has been reviewing the Community Center Improvements since April, 2010. The City Council chose to research the improvements further by hiring an architectural consultant and a financial consultant to present the anticipated revenues and expenditures generated by the improvements, as well as a concept design of the Community Center. On August 2"d the City Council chose the (preliminary) final design of the improvements. The facility improvements will include a Senior Center with a designated senior space, restrooms and two meeting rooms; a second floor to the fitness areas that will include programming anal aerobics space; and a 2"d sheet of ice that will seat 200 people. The ice sheet will not include high school team rooms at this time. The estimated cost for the improvements totals $7,855,000--see attached estimates. Discussion: The City Council must determine the importance of the Community Center Improvements and decide if now is the time to move forward in an effort to improve the Community Center and the quality of life for the residents of Shakopee. It has been determined that most if not all of the funding for the Community Center improvements would have to be approved through a referendum. "Shakopee Recreastion: Bringing People Together", which is a group advocating for the improvements, has recommended that the referendum take place concurrent with this November's elections, because of favorable current construction costs, and avoidance with anticipated future school referendums. The final date for the Council. to make the call for a November 2"d referendum is August 17t", 2010. Budget Impact/Homeowner Impact: The total cost for the improvements is $7,855,000. The cost to issue the bonds is $155,000. Therefore, the total amount of the bond referendum is $8,010,000. The financial consultants/staff determined that the annual operating increase to the Recreation budget for the Community Center improvements is estimated at $331,000--see attached documentation. The City will make a determination at the time of issuing bonds as to whether they will be taxable or tax exempt bonds, based on Internal Revenue Service regulations-the annual difference in interest payments between taxable, and tax exempt bonds is $82,000. The debt levy amount will be determined based on the bonds that are issued. The impact on the City's budget would be as follows: If the bonds are tax exempt: Operating levy $331,000 Operation and Maintenance Debt levy 613 000 Bond repayment-20 yr Total levy increase $944,000 Annual additional taxes If the bonds are taxable: Operating Levy $331,000 Debt Levy (Taxable) 695 000 Total levy increase $1,026,000 Operation and Maintenance Bond repayment-20 yr Annual additional taxes The additional estimated annual payment for a typical Shakopee house with a value of $231,000 would be $36/yr for tax exempt bonds only, plus $18 for operation & maintenance costs, fora total of $54/yr. Those figures would be $41/yr, $18/yr for a total of $59/yr, respectively, if the bonds are taxable. The taxes levied would not be impacted for pay 2011 but would be implemented for taxes beginning in 2012 and continuing for 20 years. Relationship to Visioning: This supports Goal A, "Keep Shakopee a safe and healthy community, where residents can pursue active and quality lifestyles." Recommended Action: If Council concurs, it should approve the following resolution: Resolution No. 7034, A Resolution Determining the Necessity for the Issuance of General Obligation Bonds and Calling a Special Election Thereon. Jamie Polley, CPRP Director of Parks, Recreation & Natural Resources ,.` OERTEL ARCHITECTS 1795 SAINT CLAIR AVENUE, SAINT PAUL, MN 55105 TEL: 651/696-5186 FAX: 651/696-5188 DATE: July 21, 2010 RE: City of Shakopee Community Center Study Project cost estimate: Initial estimate MEMORANDUM The following is our cost estimate and budget for the community center expansion and ice arena expansion based on the current master plan and layout of the building. Please note the following assumptions: 1. The costs noted below are broken down by building component and related items. Assumptions have been made since the study included very little detail and follow up discussions with user groups. 2. One of the goals of the project was to unify the building design. There is a budgeted amount for this in the estimate, which is not excessive. Most of the work, it is assumed, would be along the west elevation. 3. The finishes and quality are assumed to bemiddle-of--the-road, nothing too high end but durable and appropriate for a municipal building. 4. It is assumed that certain energy-saving systems will be included and that sustainable construction is a part of the design. With that said, we did not include any extravagant items such as wind energy, solar panels or a geo-thermal heat system. 5. Costs are based on what is current in the industry for the 2010/2011 construction period. The current bidding climate is incredibly competitive and low, relative to the past several years in any case. 6. The cost of bonds was not included in the previous estimates but is included herein. A contingency is not included as was the case previously. 7. Concerning the ice arena addition, the final layout includes 200 seats in the new addition and does not include any team lockers and associated spaces for the high school. 8. At the end of this memo are two possible schedules, assuming that the project will be accepted by the voters and approved by Council in November. The first schedule is an aggressive one, assuming that the team will be working "full speed" and adjusting to the feedback, changes and process, with a minimal amount of down-time. It also includes an aggressive but workable amount of time for construction. The second schedule is a little more relaxed. 9. Another note on the schedule, it is assumed that construction will take place while the building is in use. The schedule assumes that there will be some down time and working around certain conditions through this period. 10. Included in the estimates below are the following: Community Center: Operable partitions, appliances, washroom accessories, projection screen, floor finishes and similar attached components are include in the building cost. Furnishings (such as chairs, tables and desk) are included in the "Equipment" line item. The only type of thing that would be missing from amove-in would be such things as a coffee maker, dishes, and so on. Ice Arena Addition: Seating and all fixed components within the ice arena addition are included in the building cost.. Nets, scoreboard, furniture in the office /rooms are included in the "Equipment" line item All of the ice related equipment and installation is under that specific item in the building construction category. A new ice resurfacer is not included in this estimate. COST ESTIMATES Community Center A. West addition Seniors /entrance: $ 325,000.00 2 small meeting rooms: $ 300,000.00 Restrooms: $ 150,000.00 Sub-total: $ 775,000.00 B. Renovation, interior New floor, program, etc.: $ 500,000.00 Misc. interior renovation $ 100,000.00 Staging /temporary cond.: $ 50,000.00 Sub-total: $ 650,000.00 C. Exterior renovation $ 100,000.00 D. Site related Earthwork: $ 50,000.00 Demo, utilities, lands., misc.: $ 3,000.00 _Resurfacing, repair exist.: $ 100,000.40 Sub-total: $ 185,000.00 E. Non-construction costs Survey, borings, inspections: - $ 25,000.00 A/E fees: $ 180,000.00 Equipment: $ 20,000.00 Permits, SAC/WAC, fees: $ 30,000.00 Low voltage, telecom: $ 20,000.00 Sub-total: $ 275,000.00 Total for community center: $1,985,000.00 Ice Arena Addition A. West addition Main building addition: $4,200,000.00 Ice sheet/ equipment: $ 800,000.00 Sub-total: $S, 000, 000. DO B. Exterior renovation $ 40, 000.00 C. Site related Earthwork: $ 80,000.00 Demo, utilities, lands, misc.: $ 50,000.00 Paving, west lot: $ 70,000.00 Sub-total: $ 200, 000.00 D. Non-construction costs Survey, borings, inspections: $ 40,000.00 A/E fees: $ 450,000.00 Equipment: $ 30,000.00 Permits, SAC/WAC, fees: $ 90,000.00 Low voltage, telecom: $ 20,000.00 Sub-total: $ 630, 000.00 Total ice arena addition: $5,870,000.00 Allowance for bond cost: $ 160,000.00 Total cost estimate for the entire project: $8,015,000.00 3 Schedule: A~~ressive Schedule: Start design: November 15, 2010 Complete design development: January 17, 2011 City approvals: February 2011 Complete bid documents: April 15, 2011 Bids due: May 12, 2011 Construction starts: May 29, 2011 Shell complete: October 2011 Building expansion substantially complete: February 2012 Completion of final lift of paving & related: May 31,.2012 Alternate (more relaxed) schedule: Start design: November 29, 2010 Complete design development: February. 7, 2011 City approvals: March 2011 Complete bid documents: May 24, 2011 Bids due: June 21, 2011 Construction starts: July 7, 2011 Shell complete: Late November 2011 Building expansion substantially complete: March/Apri12012 .Completion of final lift of paving & related: May 31, 2012 Note: Under most any scenario, the facility will be ready for use in early summer of 2010. JLO a Shakopee Community Center 2012 2012 2012 2012 Senior Center Civic Center Ice Arena TOTAL SCC Fitness Center Grand Total Revenues $ - $ 261,000 $ 566,500 $ 827,500 wages $ 59,903 $ 333,519 $ 160,600 $ 554,022 Benefits $ 14,760 $ 83,722 $ 57,800 $ 156,282 Total Wages and Benefits $ 74,663 $ 417,241 $ 218,400 $ 710,304 Other Than Personnel Operating Supplies $ 5,000 $ 45,000 $ 49,500 $ 99,500 Repair & Maint Building $ 5,000 $ 45,000 $ 2,700 $ 52,700 Communications $ 5,000 $ 3,150 $ $,150 I)ues/Training/Travel $ 2,000 $ 1,700 $ 3,700 Insurance $ 15,000 $ 14,000 $ 29,000 Utilities $ 8,700 $ 90,000 $ 177,700 $ 276,400 Building and Equip Rent (IS) $ 97,600 $ 179,540 $ 280,950 $ 558,090 $ - TotalOther $ 116,300 $ 381,540 $ 529,700 $ 1,027,540 Total Expenditures $ 190,963 $ 798,781 $ 748,100 $ 1,737,844 Less Building and Equip Rent (IS) $ (97,600) $ (179,540) $ (280,950) $ (558,090) Net Operational Expenditures $ 93,363 $ 619,241 $ 467,150 $ 1,179,754 NET REV-EXP $ (93,363) $ (358,241) $ 99,350 $ (352,254) Net Cost from above $ 190,960 $ (748,100) Revenue from above 566,500 (181,600), 2011 existing budget Expend (457,340) 2011 existing budget revenue 318,640 (138,700) 10% Rec Supervisor wage (6,715) Custodian 20,000 .6 staff 37,700 Supplies 15,000 Rent (97,600) 280,950 Rent revised 52,750 22,600 (334,310) Increased cost 139,395- 95,300 96,260 330,955 8/12/2010 CITY OF SHAKOPEE, MINNESOTA RESOLUTION NO.7034 RESOLUTION DETERMINING THE NECESSTI'Y .FOR THE ISSUANCE OF GENERAL OBLIGATION BONDS AND CALLING A SPECIAL ELECTION THEREON BE IT RESOLVED by the City Council (the "City Council") of the City of Shakopee, Scott County, Minnesota (the "City"), as follows: 1. The City Council hereby finds and determines: (a) That it is in the best interest of the health, welfare, and safety of the City and its residents that the City construct and equip improvements to and the expansion of its community center, including the addition of a senior center, the addition of a second floor to the community center's fitness area, and a second sheet of ice at the Shakopee Ice Arena, (the "Project"); (b) That the City is authorized by the provisions of Minnesota Statutes, Chapter 475, as amended (the "Act"), to issue its obligations to fmance the Project in whole or in part and to pledge its full faith, credit and taxing powers to the payment of such obligations; and (c) That it is necessary and expedient to the sound fmancial management of the affairs of the City that the Project be fmanced in whole or in part by the issuance and sale of the City's general obligation bonds pursuant to the Act in an amount not to exceed $8,010,000. 2. The proposition for the issuance of the bonds will be submitted to the voters of the City at a special election to be held on Tuesday, November 2, 2010: The election will be held and conducted in accordance with the laws of the State of Minnesota relating to special municipal elections. 3. The City Clerk is directed to cause a sample ballot in substantially the form attached as .Exhibit A and a notice of election in substantially the form attached as Exhibit B to be posted, published, and delivered as required by law as follows: (a) The notice of election will be delivered to the County Auditor of Scott County, Minnesota, at least 74 days prior to the election, pursuant to Minnesota Statutes, Section 205.16, Subdivision 4, together with a written request to notify the Secretary of State of the election at least 74 days prior to the election pursuant to Minnesota Statutes, Section 205.16, Subdivision 5; (b) The notice of election will be published twice in successive weeks in the official newspaper of the City commencing at least two weeks prior to the election, pursuant to Minnesota Statutes, Section 205.16, Subdivision l; (c) The sample ballot will be published twice in successive weeks in the official newspaper of the City commencing at .least two weeks prior to the election, pursuant to Minnesota Statutes, Section 205.16, .Subdivision 2; and (d) The sample ballot will be posted in the. office of the City Clerk at least ten days prior to the election, pursuant to Minnesota Statutes, Section 205.16, Subdivision 3. 4. 'The polling places, hours of election, and the respective judges for the election will be those established by the City for the general election scheduled for November 2, 2010. The polls will be open from 7:00 a.m. unti18:00 p.m. 5. The City Clerk is authorized and directed to prepare the ballot in substantially the form attached as Exhibit A, subject to the requirements of Minnesota Statutes, Section 205.17. 6. The City Council shall meet in the City Hall on Tuesday, November 9, 2010, at 7:00 p.m:, to canvass the results of the election and to declare the results thereof. Adopted by the City Council of the City of Shakopee, Minnesota, on this 17th day of August, 2010. Mayor ATTEST: City Clerk 2 EXIIIBIT A FORM OF BALLOT CITY QUESTION BALLOT CITY OF SHAKOPEE SPECIAL ELECTION Tuesday, November 2, 2010 INSTRUCTIONS TO VOTERS: To vote for a question, completely fill in the oval next to the word "YES" for that question. To vote against a question, completely .fill in the oval next to the word "NO" for that question. CITY QUESTION NO. 1: ISSUANCE OF GENERAL OBLIGATION BONDS FOR IMPROVEMENTS TO COMMUNITY CENTER Shall the City of Shakopee be authorized to issue its general obligation bonds in an amount not to exceed $8,010,000 to provide funds for constructing and equipping improvements to and expansion of its community.center? O YES O NO BY VOTING "YES" ON TffiS BALLOT QUESTION, YOU ARE VOTING FOR A PROPERTY TAX INCREASE. A-1 EXIIIBIT B NOTICE OF SPECIAL ELECTION NOTICE-0F SPECIAL ELECTION CITY OF SHAKOPEE SCOTT COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that a special election will be held in and for the City of Shakopee, Scott County, Minnesota, on Tuesday, the 2nd day of November, 2010, at which the following proposition will be submitted to the voters of the City for their approval or rejection: CITY QUESTION NO. l: ISSUANCE OF GENERAL OBLIGATION BONDS FOR IMPROVEMENTS TO COMMUNITY CENTER Shall the City of Shakopee be authorized to issue its general obligation bonds in an amount not to exceed $ to provide funds. for constructing and equipping improvements to and expansion of its community center? YES NO The polling place for said election is as follows: Shakopee P-1 Shakopee P-2 Shakopee P-3 Shakopee P-4 Shakopee P-5 Shakopee P-6 Shakopee P-7 Shakopee P-& Shakopee P-9 Shakopee P-10 Shakopee P-11 Shakopee P-12 Valley View Baptist Church Shakopee Library Central Family Center Fire Station Sweeney Elementary School Community Center Faith Lutheran Church Shakopee Police Station Cross of Peace Lutheran Church Red Oak Elementary School Shakopee Area Catholic Education Center Presbyterian Church 1980 West 10~` Avenue 235 South Lewis Street 132 5"' Avenue East 2700 Vierling Drive East 1001 Adams Street 1255 Fuller Street 150 130"' Street West (CR 78 and CR 79 475 Gorman Street 1506 East Wood Duck Trail 7700 Old Carriage Court 2700 17~' Avenue East 909 Marschall Road South The polling place for said election will be open at 7:00 a.m. and will remain open until closing at 8:00 p.m. This special election will beheld in conjunction with the State of Minnesota general election. Any qualified registered voter of the City is entitled to vote at said election, and any resident of the City not previously registered as a voter may register on election day. BY ORDER OF THE CITY COUNCIL /s/Mark McNeill City Administrator Dated: , 2410. B-1 STATE OF MINNESOTA ) COUNTY OF SCOTT } SS. CITY OF SHAKOPEE ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Shakopee, Minnesota (the "City"), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of said City held on August 17, 2010, with the original thereof on file in my office and the same is a full, true, and .correct copy thereof, insofar as the same relates to the calling of a special bond election for the issuance and sale of general obligation bonds of the City. in a principal amount not to exceed $ WITNESS My hand as such City Clerk and the corporate seal of the City this day of , 2010. City Clerk City of Shakopee, Minnesota (SEAL) SH155-231 (JAE) 369400v2 Referendum 2010 $8,010,000 Operation & "Rental" "Rental" House Bond Maintenan charge 35 charge 50 35 Year 50 Year Value Payments ce yr yr total total $150,000 $ 24 $ 5 $ 11 $ 8 $ 40 $ 37 200,000 33 6 15 11 53 50 250,000 41 8 18 14 67 62 300,000 49 9 22 16 80 74 500,000 81 16 37 27 133 124 750,000 132 25 59 44 217 202 $ 613,000 $ 117,930 275,700 204,990