AGENDA #4e

MEMORANDUM

TO:                  Mayor and Town Council

FROM:            Roger L. Stancil, Town Manager

SUBJECT:      Resolution Authorizing Requests for Proposal from Banks for Financing Southern Community Park and Aquatics Center

DATE:                        September 11, 2006

The attached resolution would authorize the Manager to seek proposals for financing for a portion of the planned Southern Community Park and a portion of the planned Aquatics Center. 

BACKGROUND AND DISCUSSION

During budget discussions in spring of 2006, the Council learned that estimates for construction of Southern Community Park and the Aquatics Center had increased since original planning for the two projects.  As a result, the Council adopted a budget to including the first year cost of 10-year financing of $600,000 for the Southern Community Park and $750,000 for the Aquatics Center for 2006-07.  The current funding sources for Southern Community Park are as follows: Orange County bonds contribution - $3 million, Parks and Recreation Trust Fund Grant - $500,000, and Town funds of $151,109.  Funds for Southern Community Park would total $4.25 million including the additional planned borrowing. 

The Aquatics Center’s present budget is $1.3 million, for costs related primarily to engineering and design. Engineering and design costs have been funded primarily from the issuance of Town Parks and Recreation bonds authorized in 1996.  Orange County has agreed to a $4.355 million contribution to the project from County bond funds.  The estimated total revenues available for the Aquatics Center total about $6.5 million from all currently anticipated sources including the proposed borrowing. 

We have not yet completed our analysis of bids received for Southern Community Park, nor have we received the bids for the Aquatics Center.  Because of the uncertainty of the total costs of the two projects we would recommend that the Council authorize the planned borrowing totaling $1.35 million to be used for either or both projects depending on the best allocation of funds to the projects.  We hope to bring the actual proposals to the Council for the two projects on September 27 at which time the Council would be able to determine the ultimate allocation of the borrowing.

The attached resolution to seek financing for a portion of the projects is a part of the package of information that must go to the Local Government Commission for approval to borrow funds. In addition, the Local Government Commission will require the bid award documents, a public hearing on the proposed borrowing, and approval of the award of the financing bid proposal.  We plan to hold the public hearing and bring the remaining items for Council approval on September 27, with Local Government Commission review scheduled for October 3.

CONCLUSION

We recommend that the Council adopt the attached resolution authorizing the Manager to seek proposals for the financing $1,350,000 over a 10-year period for Southern Community Park and/or the Aquatics Center.