Mayor Dennis Estok said the building’s HVAC system and roof need to be replaced. To do that, the city plans to raise $250,000 by issuing bonds. “We’ve dealt with three heating and air companies,” he said. “We pretty much know the range that it’s going to cost us to redo all that. That’s $120,000 to $150,000. The metal roof, we’ve got anywhere from $100,000 to $68,000. What does that take you? Pretty close to the quarter of a million.” Estok said any leftover money could be used to replace the carpeting with new flooring.
Todd Samuelson with accounting firm Umbaugh and Associates told council members the city can issue those bonds without a major impact on its tax rate. He explained that as the city’s outstanding bonds are paid off, the expected rate of eight cents per $100 of assessed valuation will actually be lower than what property owners were paying in past years. “So the tax rate would be well below what it was in ’14, ’15, and ’16,” Samuelson said. “From a timing perspective, it did go down in 2017 a little bit but then would be reestablished around eight cents for the final four years of payment.”
Umbaugh is recommending that the city issue the bond through the community center’s building corporation, rather than as a general obligation bond. The fees associated with the bond issue are estimated to be $68,000, but Samuelson says the city may be able to bring that down by working with a local bank. “With a building corporation, you also have the option of negotiating the sale of the bonds,” he explained. “In the bond world, this is a relatively small amount, and perhaps if you have a relationship with your local bank or a local bank that would be interested, the sale of the bonds can be placed with that local bank, assuming the interest rates are competitive, et cetera.”
The city council voted to allow the mayor to sign a contract with Umbaugh to keep the process moving forward. However, some council members recommended borrowing some more money, to make sure flooring can be included in the project.
Samuelson said that if the process moves ahead according to plan, the city could have the money in 60 to 85 days.