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HomeMy WebLinkAbout4. Discussion: Special Election for the Issuance of General Obligation Bonds to Fund a Community Center Expansion If, CITY OF SHAKOPEE MEMORANDUM "- To: Mayor and City Council Community Center Task Force Parks and Recreation Advisory Board From: Mark Themig, Parks, Recreation, and Facilities Director Meeting Date: March 22, 2005 Subject: Requested Community Center Expansion Feasibility Study Information INTRODUCTION The Community Center expansion feasibility study was presented to City Council in a work session with the Citizen Task Force and Parks and Recreation Advisory Board on March 15. City Council requested additional information and set a follow-up workshop for 6:00 p.m., March 22. DISCUSSION City Council requested additional information related to costs associated with the pr()posed expansion. The questions included: . How would the projected annual. operating subsidy compare with the current subsidy on the general fund levy? . How will the proposed growth management policy impact the future reduction in per household levy amounts? . What is the total tax impact for the referendums that have been approved over the past few years, plus the proposed Community Center expansion amount and a possible future school referendum? Mr. Voxland and Mr. Leek have helped me assemble the following responses to these questions. The Task Force also met on March 17 and requested a comparison of Shakopee's tax level compared to other communities analyzed in the feasibility study. Annual Operating Subsidy Buildinq Rental Charqe In order to estimate the annual operating subsidy that an expansion would require, there needs to be a discussion about the building rental charge. Following the proposed terms for calculating the annual fee (30-year replacement period), the rental charge for the proposed expansion would total $1 million annually. In speaking with Mr. Vox/and, it appears that there wasn't a specific financial analysis done in 1997 when the building fund was created. The fund was created to provide a funding source for the construction and replacement of buildings. Over time, the purpose of the building fund has evolved to provide for major maintenance items. Annual fees for the building fund are based on the initial project cost, life expectancy, an annual maintenance factor, and an inflation factor. The following are the amounts that each building contributes to the building fund: r Buildin Annual Fee 180,910 Center 150,220 140,470 94,600 86,990 77,530 31 ,1 00 11 ,290 11 ,000 135,000 470,000 Total 449,110 1. City Council has decided to pay the annual bond payments from the Building Fund in lieu of levying that amount. A decision to make the bond payment from the Building Fund will need to be made on an annual basis in order to cancel the levy for the subsequent year. Annual Tax Impact Councilor Helkamp asked for information on the subsidy impact. The amount of building rental charge has a significant impact on the annual financial viability of the proposed expansion, and the projected annual operating subsidy for an expanded community center would depend on the decisions City Council makes regarding the building rental charge. The following table outlines the subsidy for the Community Center, as well as the entire Recreation Fund, which also includes recreation programs, the aquatic park, park services, natural resources, and park development. Annual Tax Avg Avg Avg Subsidy House House House 2005 ExistinQ Expansion Total Chanfle Existinfl Expansion Total Community Center per BRS 399,773 (38,848) 360,925 -9.7% 27.36 (2.66) 24.70 Building Rent 150,000 850,000 1,000,000 10.27 58.18 68.44 549,773 811,152 1,360,925 37.63 55.52 93.15 Subsidy for Remainder of Recreation Fund 524,777 - 524,777 35.92 - 35.92 Total tax subsidy with full building rental 1,074,550 811 ,152 1,885,702 75.5% 73.55 55.52 129.06 Total tax subsidy without building (38,848) (2.66) rental 924,550 885,702 -4.2% 63.28 60.62 Growth Managen:-ent Implications There were questions at the March 15 work session about how a proposed growth management policy might impact increases in the total estimated market value, and therefore, impact any reduction in the levy for a Community Center expansion over time. For comparison, Mr. Voxland provided information on a property parcel that showed the valuation nearly doubling, and the tax impact of the referendum decreasing by 55% due to increases in the total estimated market value of the City: Shakopee Fire Station Referendum Comparison - $3.4 million bond Tax Year Total EMV Rate Property EMV Tax 1996/97 695,306,365 0.04245 $141,800 $60 1997/98 776,534,400 0.03237 $146,800 $48 1998/99 897,901,119 0.02909 $156,600 $46 1999/00 1,087,145,000 0.02497 $166,000 $41 2000/01 1,369,102,400 0.01980 $211,100 $42 2001/02 1,743,136,300 0.00764 $195,400 $15 2002/03 2,062,115,200 0.01189 $214,900 $30 2003/04 2,426,033,300 0.01189 $240,700 $29 2004/05 2,654,170,900 0.00969 $276,800 $27 City Council has discussed limiting residential growth to somewhere in the range of 500- 750 units per year. Using the same time period as above, the number of building permits issued during these years were: Year Residential Buildinq Total EMV of Permits Issued1 Permits 1996 533 40,512,000 1997 548 39,121,000 1998 677 57,814,000 19992 916 121,255,000 2000 1,322 115,628,000 2001 1,191 123,252,000 2002 1,095 90,942,000 2003 1,580 154,010,000 2004 1 ,477 169,001,000 1. Includes all residential building permits (housing units, decks, etc.) 2. Development moratorium. One factor that contributes to the increase in the total estimated market value for the city is growth in commercial/industrial. Even if Council were to limit residential growth, there would likely be some level of commercial/industrial development occurring in the city. Michael Leek has helped prepare the following analysis of future commercial/industrial growth opportunities: Commercial Area A roximate Growth Quantit Shakopee Crossings 40-50 acres east of CR 18 15 acres west of CR 18 Eastern Shako ee Commercial/Industrial Area 375 acres Dean Lakes Development 1.4 million square feet of business park U to 375,000 s uare feet of commercial Areas Identified il1 the Scott County 2,258 acres commercial/industrial Comprehensive Plan for Future Urban 995 acres commercial reserve Expansion (see also March 2004 Shakopee 6,116 urban residential expansion Com rehensive Plan U date Referendum Amounts The referendum amount included with your March 15 meeting packet was based on beginning the levy in 2007. Councilor Menden requested information on other amounts. The following analysis provides alternative options: $25,940,000 in Project Costs. Lew Beqinninq in 2007 $ 4?',P$PiP(J(J Residence Total EMV 2005 Rate MV Tax Per Mo $ 2,654,170,900 0.000847 $ 160,000 $ 135.55 11.30 187,000 158.42 13.20 213,000 180.45 15.04 277,000 234.67 19.56 513,000 434.60 36.22 590,000 499.84 41.65 $25,9401gQgi~~~()iect Costs. Lew Beqinninq in 2006 $" 4Q;$P(J;()(JP Residence Total EMV 2005 Rate MV Tax Per Mo $ 2,654,170,900 0.000826 $ 160,000 $132.14 11.01 187,000 154.44 12.87 213,000 175.91 14.66 277,000 228.77 19.06 513,000 423.67 35.31 590,000 487.26 40.61 $25.00.0QQinPr()i~ct Costs, Lew Beqinninq in 2006 $ 4P;()(J0;PQP 95% Residence Total EMV 2005 Rate MV Tax Per Mo $ 2,654,170,900 0.000784 $ 160,000 $ 125.37 10.45 187,000 146.53 12.21 213,000 166.90 13.91 . 277,000 217.05 18.09 513,000 401.97 33.50 590,000 462.30 38.52 $20,00.000 in Proiect Costs. Lew Beqinninq in 2006 $ 4(),(JOO;()(J()\ 76% Residence Total EMV 2005 Rate MV Tax Per Mo $ 2,654,170,900 0.000627 $ 160,000 $ 100.30 8.36 187,000 117.22 9.77 213,000 133.52 11.13 277,000 173.64 14.47 513,000 321.57 26.80 590,000 369.84 30.82 Total Tax Impact Councilor Lehman requested an analysis of total tax impacts. Various actions have impacted the total property tax. The following is an analysis to show the impact of the recently passed high school referendum, a future elementary school referendum, and the proposed Community Center referendum. 2006 2005 2007 2007 Proposed Community Residence Center Tax HS - 47 HS - $18 New Elem MV Tax Capacitv 0.059229 0.02268345 0.042201 Total 160,000 132.14 1,600 94.77 36.29 67.52 266 187,000 1 54.44 1,870 110.76 42.42 78.92 311 213,000 175.91 2,130 126.16 48.32 89.89 354 277,000 228.77 2,770 164.06 62.83 116.90 461 513,000 423.67 5,163 305.80 117.11 217.88 859 590,000 487.26 6,125 362.78 138.94 258.48 1,019 Tax Comparison of Other Cities with Community Centers The Task Force requested information on how Shakopee compares with other cities that have Community Centers. The following is information from the 2004 Citizens League report, the most recent available. City Average Tax Metro Area $195,000 Metro Area Home Ranking EMV Tax Ranking Value Chaska $209,342 2,489 39 $2,293 37 Eden Prairie 283,440 3,301 13 2,155 54 Eagan 212,303 2,082 64 1,882 85 Inver Grove 202,100 1,891 77 1,812 91 Heights Maple Grove 216,570 2,632 34 2,332 34 Maplewood 173,940 2,145 60 2,449 18 Shoreview 205,311 2,348 44 2,212 46 Shako pee 185,473 1,184 84 1,927 82 Source: Citizens League 2004 Report REQUESTED ACTION We have attempted to provide the information that was requested at the March 15 City Council meeting in order to facility discussion among the City Council, Task Force, and Advisory Board. Possible discussion items include the following: . Proposed Expansion Components . Construction Cost Estimates . Financial Operations Analysis . Building Rental Charge . Determining whether or not to call for a special election. If so: ~ When to have the election? ~ What amount? ~ How does that impact the project and referendum costs? ~ Do you want to authori:z:e th~ 3-D video work? If you desire to move forward with a special election, we have included a draft of the resolution that would set the special election. This resolution can be amended as necessary. RESOLUTION NO, 6207 RESOLUTION DETERMINING THE NECESSITY FOR THE ISSUANCE OF GENERAL OBLIGATION BONDS AND CALLING A SPECIAL ELECTION THEREON BE IT RESOLVED by the City Council (the "City Council") of Shako pee, 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 meeting rooms, an expanded fitness and weight-training area, an activity center for seniors, a leisure pool, additional space for aerobics and other fitness classes, a cafe and lounge, a multi-use turf field that converts to an ice sheet during hockey and skating season, locker rooms, expanded walking track, and a multi-use community room (the "Project"); b) That the City is authorized by the provisions of Minnesota Statutes, Chapter 475 (the "Act") to issue its obligations to finance 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 financial management of the affairs of the City that the Project be financed 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 $ 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 as part of the special election on Tuesday, May 24,2005. 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 shown in SectioIl 5 and a notice of election in substantially the form attached as Exhibit A, to be posted, published, and delivered as required by law as follows: (a) The notice of election will be published once in the official newspaper of the City at least two weeks prior to the election; (b) The notice of election and a sample ballot will be posted in the office of the City Clerk at least four days prior to the election; (c) The sample ballot will be published in the official newspaper at least one week prior . to the election; and SH155-161(JAE) 259971v.l (d) The notice of election will be delivered to the Scott County Auditor at least 53 days prior to the election, together with a written request to notify the Secretary of State of the election at least 46 days prior to the election pursuant to Minnesota Statutes, Section 205.16, Subdivision 5. 4. The polling places, hours of election, and the respective judges for the election will be those established by the City for special elections. The polls will be open from 7:00 a.m. until 8:00 p.m. 5. (a) The City Clerk is authorized and directed to prepare the ballot in substantially the following form, subject to the terms of Section 5(b) hereof: SH155-161(JAE) 259971 v.l CITY QUESTION BALLOT SPECIAL ELECTION CITY OF SHAKOPEE Tuesday, May 24, 2005 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 BONDS FOR IMPROVEMENT OF CITY'S CUMMUNITY 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? C) YES 0 NO The amount of taxes that would be raised in the first year of the property tax levy to pay the principal and interest on the bonds is estimated to be approximately $ . The maximum amount of taxes that would be raised in any subsequent year for the purpose is estimated to be approximately $ . This maximum increase in property tax levy is estimated to be.approxirnately _% of the taxable market value of property in the City. BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING FOR A PROPERTY TAX INCREASE, SH155-161(JAE) 259971v.l (b) The City Clerk is authorized and directed to prepare ballots pursuant to the requirements of Minnesota Statutes, Section 206.61. The City Clerk will provide each polling place with at least two sample ballots which are facsimiles of the card to be voted on in that precinct to be posted at the polling place, in accordance with Minnesota Statutes, Section 206.62, 6. The City Council shall meet in the City Hall on Thursday, May 26, 2005, at 7:00 p.m., C.T. to canvass the results ofthe election and to declare the results thereof. Adopted by the City Council of the City of Shakopee, Minnesota on this 22nd day of March, 2005. Mayor City Clerk SH155-161(JAE) 259971 v.l EXHIBIT A NOTICE OF SPECIAL ELECTION CITY OF SHAKOPEE SCOTT COUNTY, MINNESOTA NOTICE IS HEREBY GWEN that a special election will be held in and for the City of Shakopee, Scott County, Minnesota, on Tuesday, the 24th day of May, 2005, at which the following proposition will be submitted to the voters ofthe City for their approval or rejection: CITY QUESTION NO.1: ISSUANCE OF BONDS FOR IMPROVEMENT OF CITY'S COl\t1MUNITY CENTER. Shall the City of Shakopee be authorized to issue its general obligation bonds in an amount not to exceed $27,030,000 to provide funds for constructing and equipping improvements to and expansion of its community center? YES NO The polling places for said election are as follows: Shakopee P-1 Valley View Baptist Church 1980 West 10th Avenue Shakopee P-2 Shakopee Public Library 235 Lewis Street South Shakopee P-3 Central Family Center 132 East 5th Avenue Shakopee P-4 Fire Station 2788 Vierling Drive East Shakopee P-5 Sweeney Elementary School 1001 Adams Street Shakopee P-6 Community Center 1255 Fuller Street Shakopee P-7 Faith Lutheran Church 150 West 130th Street (CR 78 and CR 79 Shakopee P.8 Calvary United Methodist Church 2488 Vierling Drive East Shakopee P-9 Cross of Peace Lutheran 1506 E. Wood Duck Trail Shakopee P.lO Red Oak Elementary School 7700 Old Carriage Court Shakopee P-11 Shakopee Area Catholic Education 2700 17th Avenue East Center Shakopee P-12 Presbyterian Church 909 South Marschall Road The polls for said election will be open at 7:00 a.m. and will remain open until closing at 8:00 p.m. 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/ Judith S. Cox City Clerk Dated: , 2005. SHl55-161 (JAE) 259971 v.1 STATE OF MINNESOTA ) ) COUNTY OF SCOTT ) SS. ) CITY OF SHAKOPEE ) I, the undersigned, being the duly qualified and acting Clerk of the City of Shakopee, Scott County, Minnesota, 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 March 22, 2005 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 $27,030,000 General Obligation Bonds of the City. WITNESS My hand as such City Clerk and the corporate seal ofthe City this _ day of ,2005. City Clerk City of Shakopee, Minnesota (SEAL) SH155-161(JAE) 259971v.l J ~{~~~ ~ ~ '::''';I.:~,:."...... .......... .'.'. '.....~..........."'. Background " '~ . .i, . ...... · 2003 Resident Survey - City conducted resident survey in 2003 on parks and '. . . .. ... .! City Qf $"akol'~e r~~reation services . ~ j proPtJ'SedComo/lJnifyCentetExpansion - CItIzen Task Force desIgned the survey ~~ i Marcfr22; 2QO!;"- <:;ityCouncil Work Session - Trails, parks, and community center enhancements SI-JAKOPEE ~ ranked high in the survey C<JM'MtJNtrYPRiDilSlNdll.851 1 - Trails and parks are being addressed through . .... ..... .. ~ comprehensive plan update ~ - City Council created the Community Center Citizen ! Task Force to analyze options for the future of the , ,- 'q' ,..1;iij Ii -~~~:",~":;". ~h", ..,... I' ~ .~4:fk;z Community Center {H'l ~~ i?',--;~C',..,$'~"Xl'ci;j;,J': "",- !jf~~,'" ";I'{ ." ~"~'li;;:. -_.' -\~ rP>. ~-,;:;''''".-<--;::->'''''~~' . "Jiji""it~1j:< ~ I ~ ,~~~. ""." .~ '" '"; . . , ,i",,:B;ir~:.::,..,.t;;;;, - .. .:,,: - 'i\:'l.~ . .:w-::;-'.....' ft;> l' ., ~'-"""'>"";;':::'"~~~~'~I"....<<-\4..!~ ~.'~~m' ^~ . ;~,. ' , ~ I ~ ~ ~:l3.i:'{_" -- f '$~~';:\ '''''If.'''' I :;;~ /1:"l j l! ~"~~t~I "i< ,~ ;;u ~~~:: ~P} r::f~ ~~~ ~ Shako nsfon Good Health Good FrIends GreatComm ~ ~~""__~<_,.. ""~ "'~ "~M!Ji1 ~'1fi~ ~ .~ "'^""'" Background Background · 2004 Citizen Task Force Options: . Fall of 2004, City Council asked for - Close the Facility additional work by the Citizen Task - Privatize the Facility Force _ Expand throughPublic/PrivatePartnership · Authorized a Feasibility Study _ No Changes · Selected consultant team comprised of _ Expand through Public Financing Barker Rinker Seacat, Baliard*King, and Bonestroo Sports . Task Force recommended expansion · ~pproxim~te:ly 40 residents participated through public financing. In the feasIbility study ~ Shako nsTon Good Health Good Fri Great CORm"" ~ Shako nsion ~ ~ 1 A Feasibility Study Findings Feasibility Study Findings . Market can support the proposed expansion. . Components proposed from resident survey · Repairs to Existing Facility and task force work - Water Infiltration - Leisure Pool (warm water) with aquatic support - Ught Levels areas - Fitness Area: cardio and strength training - Energy Efficiency in Arena - Aerobics Dance! Spinning Areas - Dedicated Senior Center w! kitchen & meeting · Task Force Recommendation rooms - Indoor Playground for children - $25.9 million project - Cafe, snack area and birthday party rooms - $26.35 million bond - Short-term child care - May 24 Special Election - Multi-Use Turf Facility! Second Ice Sheet ~ Shakooee Communltv Center EJaJanslon Good Health Good Friends Great CommrmlM ~ Shako Good Health Good Friends. Great Comm ~ Con~eptyal Site Plan Final Concept Plan ,..-----. I Futu", i ~ ~----- L_' eJJI9 Lobby 0 Bolow o ......~ IGymllQllcI !~ Wt5& Wb & Fitness I Fitness : Belo... ..,- r----- ExlsUng , .- Gym , ... L__~=_, ..- IBlInqlMl , .... t::. Upper Lovel Plan ~ Shako GoOd Health. Good ~ Shako Good Health Good Friend Great Commun , 2 '-"';;~ ... ,~ (..:. . Final Concept Plan Concept Design Perspective Option ""!;II Shalro Good Heaflh Good Friend Great Comm ~ Shako nsian Good Health Good Frl ~ ~ Concept Design Perspective Option Concept Design Perspective Option _Shak nslan _ Shako Center Ex nslon ~ ~ 3 Program & Budget Summary Financial Operations Analysis Expenditure - Revenue Comparison Total of New and Renovated SpaCe (170,076 SF) $19,711,000 Proiection Expansion Existina Ctr. Total Buildina Site DevEllopl'l1ent Costs . $1,014,000 Expenditures $2,099,152 $791,423 $2,890,575 Fixtures; Furnishings and Equipment (FF&E) $1,277,000 Revenue Projections $2,138,000 $391,650 $2,529,650 Desian and Construction AdministratiOn $1.865.250 DifferenCe $38,848 ($399,773) ($360,925) Sub-total Project Costs $23,867,250 Recovery Percentage 101% 49% 87% Add 10% Continaencv $2.072.500 Proiection Expansion Existina Ctr. Total Building Total Project Cost $25,939,750 Building Rental $850,000 $150,000 $1,000,000 Total Expenditures $2,949,152 $941,423 $3,890,575 . Based on actual past project costs Revenue Projections $2,138,000 $391,650 $2,529,650 . Factors regional and inflation costs for 2006 Bid Difference ($811,152) ($549,773) ($1,360,925) . Includes 10% contingency Recovery PerCentage 72% 41% 65% ""!;lI She" Good Good Fri Great Common ""!;lI Sheko~ Communltv Center Exoanslon Good Health Good Friends Great CommUl1ltvl ~ ~ . Financial Operations Analysis Financial Operations Analysis Significant Employment Opportunities 5-Year Revenue-Expense Comparison (no building rental fee) for Total Building Staffina levels Exoansion Existina Staff Total Blda. FTE (full-time equivalent) 9.25 4.95 14.2 Part-time (FTE) 46.5 Full-time $306,073 $895,690 Part-time $160.426 $1.024.213 Total $466,499 $1,919,903 ~i_ . on. ""!;lI She" nsfon Good Healfh Good Frfen<ts Gteal ~ ~ 4 0 Q c' " . Financial Operations Analysis Financial Operations Analysis Comparison with other Community Centers ~ Shako ~Shak ~ ~ Financial Operations Analysis Referendum Fees Community Center Referendum $26.35 million levy Household Cost Residence MV TaxlYr. = Taxi Mo. $160,000 $132.14 = $11.01 $187,000 $154.44 = $12.87 Average Value $213,000 $175.91 = $14.66 $277,000 $228.77 = $19.06 $513,000 $423.67 = $35.31 $590,000 $487.26 = $40.61 ~ Shako nslon Good Health Good Friends Great Comm ~ Shako nsian Good Health Good Frlen Great CotmJun ~ 5 Referendum Household Cost Referendum + Subsidy Shakopee Fire Station Referendum Comparison $3.4 million bond Tax Year Rate EMV Tax # Permits 1996/97 0.04245 $141,800 $60 430 1997/98 0.03237 $146,800 $48 381 1998/99 0.02909 $156,600 $46 603 1999/00 0.02497 $166,000 $41 1,105 2000/01 0.01980 $211,100 $42 773 2001/02 0.00764 $195,400 $15 788 2002103 0.01189 $214,900 $30 588 2003/04 0.01189 $240,700 $29 1,069 2004/05 0.00969 $276,800 $27 778 ~ ShaM Commun Good Health Good ~ Shako nsion Good Health Good Friends Great Commun ~ Household Cost Household Cost Proposed Expansion + Future Projects Comparison of Other Cities ~ Shako""'" CommunHv CenIer "~nslon Good Health Good FrIends. Great CommunlM ~ Shako...... Commun"" Center "'~nslon Good Health Good Friends Great Conwnunilvl ""!""" ~ " 6 ::1 0 '" c; c . . Task Force · Spokespersons - Arvid Sornberger - Ion Theis ~Sha Good Health Good Frien ~ 7