AGENDA #4f

MEMORANDUM

TO:	Roger L. Stancil, Town Manager
FROM:	Kay Johnson, Finance Director
SUBJECT:	Homestead Park Aquatic Center Budget Amendment
DATE:	January 8, 2007

PURPOSE

Enactment of the attached budget ordinances would authorize a total budget of $6,486,058 for the Homestead Park Aquatic Center (Aquatics Center).

BACKGROUND

On November 20, 2006, the Council approved a bid for $6,486,000 for building the Aquatics Center.  We recommend funding the Aquatics Center from a number of sources. 

In 1996, Town voters approved a $5,000,000 bond referendum which, among other things, was to fund an aquatics center at Homestead Park. Approximately $1,167,000 from that bond authorization has been appropriated for the aquatics center project.  Several smaller allocations raised the existing budget for the Aquatics Center to $1,226,058.

DISCUSSION

There are a number of sources for the balance of $5.26 million needed to fund the Aquatics Center.  In November 1997, Orange County voters authorized general obligation bonds for parks. The Board of Orange County Commissioners pledged $1,000,000 from the Parks Bond for Homestead Park. Of that amount, $855,000 remains for the Aquatics Center.  Orange County approved $3,500,000 of the 2001 Parks Bond Fund for the Aquatics Center, and the Council has approved an additional borrowing of $1.35 million.  A portion of the $1.35 million ($600,000) was originally planned for the Southern Community Park.  We simplified the borrowing by allocating the entire borrowing to the Aquatics Center. As a result, we plan to reallocate $600,000 of the 1996 bonds to Southern Community Park.  Interest earnings of $118,000 are recommended for the Aquatics Center budget.  All but $10,000 of that interest is available in the 1996 Parks and Recreation Bond Fund, with the balance is available from the General Fund. The debt service on the $4.95 million in general obligation bonds was less than budgeted by $37,000 because the budgeted interest rate was 5 percent and the actual rate of the issuance was 4.1 percent, and so we recommend reallocating $37,000 to the Aquatics Center.  The funding sources are summarized below:

SUMMARY OF PROPOSED REVENUES

1996 Town Parks Bonds (already budgeted)	1,226,058
Less reallocation to Southern Community Park	(600,000)
Balance – 1996 Town Parks Bonds	626,058
1997 Orange County Parks Bond	855,000
2001 Orange County Parks Bond	3,500,000
Proposed Borrowing	1,350,000
Accrued Interest^1	118,000
Debt Service Savings^2	37,000
Total Funds for Homestead Park Aquatics Center	6,486,058

1. These interest funds are available from a combination of current 1996 park bonds ($108,000) and from General Fund interest (($10,000). Use of this revenue was newly proposed at the time that bids were presented to the Council on November 20, 2006.
2. Bond issue of $4.95 million was sold at 4.1 percent interest, but budgeted at 5 percent interest. Use of this revenue source was newly proposed at the time that bids were presented to the Council.

PROPOSED EXPENDITURES

Construction Costs	5,238,000
Contingency	530,058
Design (including past concept plan development)	456,000
Misc. Expenses, furnishing, testing, fees, permits, etc.	262,000
Total Expenditures for Homestead Park Aquatics Center	6,486,058

RECOMMENDATION

That the Council enact the attached budget ordinances authorizing a total budget of $6,486,058 for the Aquatics Center.

ATTACHED BUDGET ORDINANCES

1. An Ordinance To Amend The 1996 Parks And Recreation Bond Fund For Capital Improvement Projects (2007-01-08/O-2a)
2. An Ordinance To Amend The Capital Projects Ordinance For Various Capital Projects (2007-01-08/O-2b)
3. An Ordinance To Amend “The Ordinance Concerning Appropriations And The Raising Of Revenue For The Fiscal Year Beginning July 1, 2006” (2007-01-08/O-2c)