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Bayfield Town Board approves financing for town hall
9/28/2007 By: Carole McWilliams
The Bayfield Town Board has approved a 10 year financing package to pay for the new town hall.
They approved the lease-purchase deal with Wells Fargo on Sept. 18, effective 30 days after the ordinance was published in the Times last week. Lease purchase deals are allowed under the state TABOR amendment because they are subject to annual appropriations and don’t obligate future boards to make the payments.
The town will lease its land where the town hall will be built, next to Eagle Park, to Wells Fargo. They in turn will lease the land and building back to the town until it is paid for. The town can pay it off early without a penalty.
“I feel real comfortable with (the deal),” town attorney Dirk Nelson said.
Town Manager Justin Clifton said the deal is for $2.2 million. The project budget is $3.6 million. The town already has $1.4 million set aside for it.
Trustees debated whether to go for a 10 or 15 year deal. The over-all cost is estimated at $331,000 higher with the longer term, but the annual payments are less.
The actual interest rate will be set when the deal closes in October.
Audience member David Black worried the town is locking up too much of its revenue for too long when there are so many other community needs. “We can’t even take care of Mill Street. Sidewalks, potholes, a street sweeper. This doesn’t make sense,” he said.
Construction on the new sewage treatment plant should start first, because that is holding up development the town needs to pay for the new town hall, Black said.
Clifton asked trustees if they are more concerned about total cost or about annual cash flow.
“My gut reaction is to pay it off as soon as possible,” trustee Rick Smith said. “I think it’s $330,000 (the additional cost for the 15 year term) we could be using for something else over the long haul.”
Clifton said that even with a projection of flat sales tax revenue, “I’m not worried about being able to make the debt service payments.”
Trustees also discussed funding for another major town project happening at the same time - the new senior center to be built on land provided by the county near the rodeo grounds.
Trustee Tom Au worried it is starting “way over budget.”
The town and county each committed $250,000 for it in their 2007 budgets. Clifton planned on grants for the rest of it.
He said he general contractor FCI bid everything including kitchen equipment and furnishings. The town already has a grant for kitchen equipment. Clifton wants to get the construction budget down to $900,000, with a total project cost around $1.2 million. That will build the basic building, he said.
The plan is to start construction next spring, so there is time to apply for more grant funding from private foundations, Clifton said. “We are cutting back to fit the budget and adding back as funds come in,” he said. Add-backs include porches and finish landscaping.
“My approach is to make sure the $250,000 that the town has committed isn’t exceeded without board authorization. We’ll know before we put a shovel in the ground if we have to make any more changes,” if grants come in lower than expected, he said.