LINO LAKES — Whether the city should construct a new public works facility was the main topic of discussion at the Sept. 3 City Council work session.
The agenda item has been discussed by the council various times since CNH Architects presented an updated Public Works Site Analysis and Space Needs Study in April 2017. The existing public works building, located at 1189 Main St., was built in 1971.
Financial adviser Paul Steinman, from Baker Tilly, visited the council to explain the city's authority to issue bonds for the project, the types of bonds it could consider issuing and the potential impact the project could have on the city's levy. Finance Director Sarah Cotton explained that the purpose of the conversation was to simply continue the discussion on the topic. She noted that although the $6 million project cost and construction in 2021 was used to provide the council with some examples, the project scope and timing could be adjusted. She also clarified that the $6 million would not include soft costs — that is, costs that are not directly related to facility construction — and that after financing the total cost would likely be closer to $8 million.
Two types of bonds could be used for a new public works facility, including capital improvement plan (CIP) bonds and lease revenue bonds, Steinman explained. Although CIP bonds do not require voter approval, a 30-day reverse referendum provision would be in effect. That means the council would be required to hold a public hearing on its CIP plan, and if a petition against the project is received within 30 days with signatures that total 5% or more of the city voters who cast a vote in the last general election, then the issue would be forced to go on the ballot.
Lease revenue bonds were used when the city financed Fire Station No. 2. Steinman explained lease bonds can be used for a broad purpose, do not require voter approval and are not subject to the reverse referendum provision. The drawback, however, is the bonds have higher interest rates and are more expensive to issue. In addition, there are a lot of requirements. “It is far more involved. It is more like a real estate transaction,” Steinman explained. “The EDA leases land from the city, sells the bonds and builds the facility. Then the EDA leases it to the city, the city appropriates money in its budget every year to pay that lease, which is equal to the debt service.”
Mayor Jeff Reinert said, “If we spend $13 million, the grass doesn't get cut better, the roads don't get plowed better, the trees aren't getting trimmed better, (public works employees) are still doing everything the same, except we just spent $13 million. But what we do get, and what we can all agree on, is we do need to protect the investments that we have and the equipment.” The $13 million refers the top end of the range for project cost that CNH Architects presented back in 2017.
“We need to think about the concept of a public works building, what is it we are buying, why are we buying it and can we afford it right now in this stage where our city is at ... Should we go and spend $8 million and put up a building, or is $8 million better spent repairing roads and giving the residents something that they can actually see?” Reinert said.
The mayor said he would support the idea of moving equipment indoors that is currently stored outside and making improvements to the mechanics/repair bay.
Councilwoman Melissa Maher said, “We have all these vehicles that sit outside, and yes, I think they need to be protected, but I honestly do not understand why we can't just build a couple of big pole barns and get them out of the elements. They don't need luxury accommodations.”
She added, “The building is gross. We do need to do something about it. I think that a new facility might make the grass get cut better because when people are happier at work, they do a better job, but I am concerned about the cost of this and future levies.”
City Administrator Jeff Karlson asked the council for some direction for his staff on where to go from here. Reinert and Councilman Michael Manthey both agreed the scope of the project still needs to be defined further.
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