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We're good to go. You're good to go, OK. 00:00:00
Today is February 12th, a time 2025. The time is. 00:00:02
601 and we're going to start the RDA meeting. 00:00:08
We'll go ahead and have an invocation and Pledge of Allegiance by Councilmember Clausen. 00:00:12
And then we'll move on with the rest of our agenda. 00:00:18
Our Father in heaven, we are grateful that we can. 00:00:23
Meet to discuss the business of the city and we're grateful for all the citizens that are here to. 00:00:26
Observe and participate. 00:00:31
And ask that we can. 00:00:33
Be mindful of those needs. 00:00:36
And as we pray, in the name of Jesus Christ, Amen. Amen. 00:00:39
All right. 00:00:43
I pledge allegiance to the flag. 00:00:49
United States of America. 00:00:51
Republic for which it stands. 00:00:55
A nation under God. 00:00:57
Indivisible with liberty and justice for all. 00:00:59
All right, we'll go ahead and move right into our meeting. 00:01:07
We need to have a motion on our consent items. 00:01:10
Board, do you guys have a motion or would you like to take it off to discuss? 00:01:20
I move to approve the consent items as presented. Thanks. I have a first by Marty. Can I get a second? 00:01:26
Second by Sarah. 00:01:33
All in favor. 00:01:34
Aye. 00:01:36
All right. We'll move on to our business items. 00:01:37
We have one business item tonight and that was continued from our last meeting. It's to talk about the bid award for the 00:01:40
architectural services for the new. 00:01:44
Center, we'll go ahead and have. 00:01:49
Eric or no, Josh reintroduced this from our last meeting. 00:01:53
Great. Thank you. Your packet is the proposal, if you'll recall last meeting. 00:01:58
Community Development Morgan gave a more detailed outline. 00:02:04
And review of the vendor proposal. 00:02:09
And this item is to award. 00:02:12
The selected vendor. 00:02:15
To begin the architectural process for the Vineyard Center. 00:02:18
You got it on yours. 00:02:31
Which is great, yeah. 00:02:32
Hold on. 00:02:34
We've got Laura from LRB that's going to talk a little bit about the. 00:02:44
The sort of long term fiscal outlook for the potential for bonding. 00:02:47
Anyway, for those of you that don't come, my name is Laura Lewis. I am a. 00:02:59
Owner of our public transport. 00:03:05
Advisors. So you can tell by my grandchair, I've been working with cities for a long, long time, for 36 years, that I feel really, 00:03:07
really old. 00:03:11
We work with. 00:03:18
As municipal advisors. 00:03:20
Needs to work helping those utility great studies. 00:03:22
And all kinds of. 00:03:26
You can't hear. 00:03:29
Can you lean into them microphone a little bit more? Oh, it's not on? 00:03:30
Sorry, we might have. 00:03:36
Yourself, OK. 00:03:38
I don't know, I can talk really loud, just ask my children. 00:03:39
Testing 1-2, Three. There we go. 00:03:48
All right, Thank you. I'll do a repeat performance. You can see if I get it any better. Laura Lewis, principal and owner of LRB 00:03:50
Public Finance Advisors. 00:03:56
I'm the L of LRB public renounce advisors. 00:04:02
And I've been assisting local governments, primarily in Utah, for almost 36 years now. 00:04:04
We help with your municipal advisory work. 00:04:10
When you want to issue debt, we also do. 00:04:13
You know, financial sustainability planning, we do impact free studies, a lot of consulting, utility rate studies, that kind of 00:04:16
thing, so. 00:04:20
We're well acquainted with all the options that cities have when they need to finance something. We've worked with several cities 00:04:24
as they finance their city halls. 00:04:29
And that's what we're here to talk to you about tonight. 00:04:35
Umm, do you want me to just, do you want to get to the slide? There we go. 00:04:39
So there are. 00:04:44
Several ways that. 00:04:45
Then your city could choose to issue debt or to secure its debt. 00:04:48
When most of your constituents probably think of, oh, we're doing debt, they're probably assuming. 00:04:53
That you're going to raise their taxes and that it's a general obligation bond that they have to vote on. 00:04:59
And. 00:05:04
Yeah, that neither of those things are true. Cities in Utah have several options that we can use to secure debt. 00:05:06
And one of those is, I mean, you could choose to go out to a vote. 00:05:13
And raise property taxes to pay for the building. 00:05:19
But that is not your only solution, and it's a tool that isn't frequently used in in Utah by cities. 00:05:22
Your constituents are probably well aware they've probably gone to the polls to vote for school district Geo bonds, because school 00:05:31
districts have. 00:05:35
Pretty much 2 tools. They can either do a lease or they can do a general obligation bond. 00:05:39
Cities have a lot of other. 00:05:44
Options and one of the best options. 00:05:47
Is to pledge your sales and or franchise tax revenues. 00:05:51
So sales tax revenues, everybody knows what those are every time we go shopping. My, my kids, if you could get them to move here, 00:05:56
would boost your sales tax, I'm certain. 00:06:01
Um, and your franchise fees are what you see on your natural gas electric bill. 00:06:06
That are a charge of the franchise to them, they pass on to the customers and that is collected by the city. 00:06:13
So we've got here in front of you. 00:06:20
Your six year history. 00:06:24
Of your sales tax revenue and of your franchise fees. 00:06:26
Your sales tax revenues, as you can see have grown quite helpfully and we're assuming they're going to. 00:06:30
Continue to grow at a fairly rapid pace. 00:06:36
Under state law, the sales tax revenues that you get are based on a formula. 00:06:39
It's not just everything that is charged, everything I just purchased, excuse me, in your city. 00:06:46
You do get benefited from that. That point of sale is a benefit to the city. 00:06:53
But cities in Utah share all of the sales tax through a state sharing formula. 00:06:58
That sharing formula is 50% based on population. Your population compared to the states. 00:07:04
And 50% your point of sale, so. 00:07:09
The fact that you have had such a growing population and that you also are have had. 00:07:14
Are poised to continue to have. 00:07:20
Great growth in your commercial, you know, property development here and now that you've kind of got the rooftops. 00:07:23
It's highly likely that your sales tax will continue to grow, so. 00:07:29
The rating agencies love sales tax pledge because it's, you know, it does have some elasticity. I mean, and you know, you'll see 00:07:35
those numbers go down like 2008, 2009 sales taxes dropped, right? Oh, COVID. 00:07:41
Sales tax kind of shifted around because people started ordering stuff online. 00:07:48
But they they really like that. 00:07:53
That pledge is very readable and great security to use to secure your debt. 00:07:55
Franchise tax revenues as you can see in the 1234 column over and then the 5th column, you can see how they bounce around a little 00:08:00
bit more. 00:08:05
Why do they bounce around? Well, certainly it's driven somewhat by population and new rooftops and new businesses, right, Because 00:08:10
more people are using gas. But oh. 00:08:14
It's also driven by we have a warm winter. 00:08:18
People don't use as much gas. We have, you know, not so hot of a summer. 00:08:22
That hasn't been lately, but but it will fluctuate with things that are out of your control. 00:08:26
But umm, you've had some, you know, in that, you know, five year window, you still had umm, some very good growth. So we've. 00:08:31
Put a 1% growth in that. As you can see, that's very conservative given what you've. 00:08:40
Had historically we put a 4% growth in your sales tax for the next 5 years. 00:08:44
And then back that down to 2 1/2 and then down to one just to show some sort of leveling off. 00:08:48
So you can see in that third column from the right you back up. Umm. 00:08:54
Your total sales and franchise tax revenues. 00:09:00
Are were 4 million and change last year, we've got them. 00:09:03
Projected at 4 million, 165. 00:09:08
I don't know what that slight growth rate going forward. 00:09:11
The next column is what we call the debt service coverage goal. So when you're pledging sales and franchise tax revenues. 00:09:14
Think of, you know for a moment, you're the bondholder, you're the bond issue or the city and the bondholders. 00:09:24
Want to have some coverage protection, right? 00:09:30
They want to know that you're not borrowing up to that very last penny sales tax debt that you have. 00:09:34
So ideally they like to see a 2 times debt service coverage how they I mean they can't come force you to make people shop, right? 00:09:41
So you have issued water revenue bonds before? 00:09:50
And when we issue water revenue bonds, that coverage is like 1.25 times. 00:09:53
Well, the reason it's tighter is because your covenanting when you issue utility revenue bonds to maintain your rates and your 00:09:59
expenses. 00:10:04
In such a way that it will deliver that coverage, right? You have control there. So they're willing to let that coverage go lower. 00:10:09
With the sales tax bond there, you know bondholders understand they cannot force people to shop. 00:10:15
So they want that is my phone. 00:10:21
And I was going to get with my daughter who are going to go. 00:10:29
I was at a City Council. 00:10:32
I'm just full of humor here. 00:10:35
So with sales tax, they like to know because because of that elasticity of demand and a tough economic time or whatever, right, 00:10:38
they want to know that you have at least two time step service coverage. 00:10:43
So that was our, you know, our servo litmus test of do you have enough revenue to issue this debt and show that you have excess 00:10:49
coverage. 00:10:54
What you do so that far right column? 00:10:59
Compares are currently estimated debt service, which again it's going to fluctuate. 00:11:02
Until we get to the point the bonds are issued. 00:11:07
Once they are issued, it is a fixed rate for the duration of that bond issue. 00:11:10
So you have sufficient coverage with extra headroom should you need to issue debt for something else. 00:11:15
The other thing that you need to be aware of is from the bond purchasers perspective, this is what they will see. This is what the 00:11:22
rating agencies will rate you on. 00:11:26
All that and you know how other many other swell things are going on in the city. 00:11:31
But they take this into consideration. 00:11:34
But from the city's finance plan perspective? 00:11:37
This does not take into account that a part of the building will be leased. Part of it will be leased to MAG is the plan. 00:11:42
And those revenues will come into you to offset what you have to pay in terms of paying out your sales tax, right? 00:11:49
As well as other space that you lease to private party. 00:11:56
To clarify. 00:12:00
We're not leasing to Magrite Mag is purchasing. Yeah, Magg will purchase, but then we'll have. 00:12:03
Yes. 00:12:09
You'll be issuing the bonds there's. 00:12:12
Strengthen numbers, strengthen volume in terms of your cost of issuance and whatnot. They could issue their own debt. 00:12:14
But then both of your cost of issuance would effectively be higher. I mean, there's right. So there's, there's some benefit in 00:12:21
doing it together. 00:12:24
So when, if you proceed forward with this, when you're ready to issue bonds? 00:12:30
You'll get to see my smiling face fans the phone hopefully next time. 00:12:35
And. 00:12:39
You'll have a. 00:12:41
One single bond issue that will have a tax exempt piece. 00:12:42
And a taxable piece. 00:12:45
The taxable piece of the debt is because of the private use, right? So MAG is an interlocal cooperative. 00:12:48
There we can issue their debt on a tax exempt base check, Vineyard check, tax exempt. 00:12:55
But for any of that space that might be leased to a private party will issue a taxable bond. 00:13:01
So that we we don't run afoul of the tax laws. 00:13:07
All of that has been baked into the. 00:13:11
These numbers. 00:13:14
And. 00:13:16
With that I will take any questions. 00:13:17
Thank you so much. 00:13:21
Council or board, do you have any questions for Laura? 00:13:22
Are we planning on raising our our city tax sales tax rate or if this is based on. 00:13:30
What we have now and it's staying the same. 00:13:36
Your sales tax rate is a maximum. 00:13:41
OK. 00:13:48
But most cities. 00:13:49
OK. 00:13:52
OK, perfect. 00:13:55
Should be good now, all right. 00:13:59
So repeat that so it's in your minutes or whatever. 00:14:05
You can't hear so. 00:14:08
Hello, is that better? 00:14:11
Yeah. 00:14:14
The city imposes the sales tax rate at the maximum rate of the state, which most cities do. I'm not aware of any statewide that 00:14:15
don't impose it at the maximum right now. 00:14:20
Some cities, like Park City, have the benefit they they can actually do a little bit higher because they're a resort community. 00:14:26
But for, I mean, every city I know imposes it at the Max. That's what Vineyard does and that's what you'll be pledging that and 00:14:32
your franchise fees. So for your constituents. 00:14:37
Let's say everything you know goes to hell in a handbasket and you don't have the money to pay the debt. 00:14:42
That's not what we're planning, right? 00:14:49
But if that were the case. 00:14:51
The bondholders cannot come in and demand you raise property taxes. 00:14:53
Their pledge is the sales and franchise taxes. That's what their security is. 00:14:58
So if you don't pay them. 00:15:03
They can, you know, effectively through the trustee run up to the state and say you intercept that sales tax, right, instead of it 00:15:05
coming from the state of the city to then pay the bondholders. Oh. 00:15:11
No, they're not being good. You know, actors. So you can they can intercept that, but they cannot make you raise property taxes. 00:15:17
OK, more questions. 00:15:26
As a reminder for the public, we are not voting on bonding. 00:15:31
We are discussing. 00:15:34
Future options as we think about the vote tonight, which is to go for the bid award that goes through design engineering and 00:15:36
assesses how much it could cost. 00:15:42
But because we're trying to be a little bit more thoughtful, we're talking about what our options are for the future. Again, not 00:15:48
voting on this, just discussing. 00:15:52
Potential opportunities for the future. 00:15:57
With this discussion, very different votes. 00:16:00
And one thing to be aware of as well is since we're not bonding today, the city will be spending monies on architectural design, 00:16:03
whatever. 00:16:08
The city can reimburse itself when it issues bonds for those expenditures. You don't have to, but you can choose to do that. 00:16:14
So there's an unlimited kind of look back time for all those soft costs for architect and engineering costs. 00:16:23
You can reimburse yourself if you were to start with like hard cost shovels in the ground, you know, foundation pouring or 00:16:31
whatever. You can only look back 60 days from when we adopt the bond parameters resolution. 00:16:38
Can you explain? 00:16:48
What the debt service coverage actually means, I'm not sure everybody here understands. 00:16:51
Like when you when we see a. 00:16:57
Hey, the goal is to and in. 00:16:59
2026 we're sitting at 2.75. What? What does that actually mean? 00:17:02
Absolutely. The easiest way is through a very simple example, if you had $4 million worth of or in your total revenues and sales 00:17:07
and franchise. 00:17:11
Tab 2 times coverage would mean that you could only have a debt for that year. 00:17:16
Of $2,000,000 so it's a really simple. 00:17:21
X / Y your total revenues divided by that debt service. So if we had 4 million in revenues and 2 million in debt service, that 00:17:24
would be two times coverage. 00:17:30
And then another question I wanted to ask about. 00:17:40
These calculations. 00:17:43
And I, and I think you alluded to this. 00:17:47
Earlier, umm. 00:17:49
That, uh. 00:17:50
This projection is about as conservative as we can go. 00:17:51
In that there. 00:17:58
Are options and opportunity to actually improve the way we structure this. So this is the. 00:17:59
Worst case scenario that we could look at. 00:18:07
I mean, I mean we could, you know, you could say we want to go exactly the two times coverage and pay it off as soon as possible, 00:18:10
right. I would shorten the debt service that would increase your payments. 00:18:14
You could say, oh, we want to aim for three times coverage and we have the flexibility to take the debt out 40 years under state 00:18:20
law. 00:18:23
This is what I would call a reasonable expectation. 00:18:27
So just to clarify, so the. 00:18:33
The debt, sorry, the estimated debt service coverage. 00:18:37
Umm, it will adjust as we take out. 00:18:40
Bonds. So it could, it would go lower, it could go lower, it could, you know, I don't expect it to fluctuate a lot, right? But 00:18:44
let's say your bids come in $1,000,000 more than you expected. Let's say interest rates go up a little bit, right? 00:18:50
Then those things are going to have pressure to reduce that debt service coverage before we issue. 00:18:56
Could also go the other way, right? Raise people down a little bit. If you get a little bit better rating than we're thinking, 00:19:01
whatever. 00:19:04
And then that means your coverage would go up, but once we price the bonds. 00:19:07
Then that rate will be set. Then the covenant because again, they can't come in and make people shop. 00:19:12
The covenant is that it would prevent you from. 00:19:19
Issuing additional bonds. 00:19:22
If those additional bonds made you drop below that coverage. 00:19:24
So let's say you issue the bonds and you know things. 00:19:27
You know, the economy slows down a lot. 00:19:30
And you only have 1.95 times coverage. 00:19:32
No, no one's going to come knocking on your door. I wanted to make the payment. 00:19:36
Umm, you just wouldn't be able to issue additional bonds at that time. 00:19:42
And just to clarify as well. 00:19:49
If we so we're not bonding today, of course. 00:19:52
When we decide whether or not to bond? When? When we would bond? 00:19:55
It would. 00:20:00
Would the rate happen? 00:20:02
At closing when the building is completed or whatever before then. So think about it, if you were going to go get a home loan to 00:20:04
construct a new home, right, we're a little bit. 00:20:09
We're a little bit better than that. 00:20:15
Typically if you get a construction loan, they they set that at a variable rate until the construction is done. So it's a 00:20:16
reasonable question, right? 00:20:20
The way it works in our world is. 00:20:24
We issue the bonds once you know what your construction costs are going to be. 00:20:28
We can issue that bond with a little bit of headroom in it. And again, you get to decide that the bondholders and I don't cram 00:20:34
that down your throat, right? 00:20:37
If you have a guaranteed maximum price contract, we know that for certain, sometimes those end up costing you a little bit more. 00:20:42
So if you don't have that, then we would say, OK, your construction cost is X. 00:20:47
Maybe let's do X + 5% just so you have some cushion, right? 00:20:54
Once we know that dollar amount. 00:21:00
Then we'll go through a roughly. 00:21:02
2:00-ish month process. 00:21:05
Two 2 1/2 months to get the bonds issued. 00:21:07
And about two weeks before. 00:21:10
Closing and proceeds are delivered to you. The interest rates are set. 00:21:13
Further questions? 00:21:21
So as it relates to what we're actually going to. 00:21:24
Discuss and vote on tonight. 00:21:28
Questions that? 00:21:32
This is a projection based on. 00:21:32
The I don't want to say vague, but the less accurate information that you already have. 00:21:35
In terms of construction costs, yes, this is someone else's estimate, not not mine. But also you haven't gone through the full 00:21:42
architect engineering design process. So us going through that process gives us the information to make this accurate, absolutely. 00:21:48
And then we can make a decision at that point, absolutely we want to continue, correct. 00:21:54
OK. 00:22:01
And that's a really good clarity for the public because we can only do projections and preliminary until we have the actuals 00:22:05
correct. 00:22:09
But you wanted to know that. 00:22:14
Protections. 00:22:16
Good work. 00:22:20
Any other questions for Laura? 00:22:21
Have one more so. 00:22:25
On the estimated debt service coverage. 00:22:27
So the blank column there, I know we use sales tax revenue in our general fund. 00:22:30
So. 00:22:36
So that's going. 00:22:39
Because we're projecting when. 00:22:41
When the building will be finished. 00:22:43
I am apologize, I'm not following your question. The the debt service coverage goal in 2025, the reason it's blank there's because 00:22:46
we won't, we're not anticipating you will have a bond payment in 2025. That makes sense. 00:22:52
OK. I think it's more of a. 00:22:58
A Christian question. OK, sorry. 00:23:00
Any other questions for Laura? 00:23:04
Thank you. 00:23:08
Thanks, Lori. 00:23:10
Really appreciate it. 00:23:11
OK, let's go back to the item. 00:23:13
Let's talk about the questions that you have on the. 00:23:15
For statements that you want to make or a motion. 00:23:26
I think it would be worth having staff review what the actual bed is for the public. 00:23:32
So the bid that's before us tonight is for the architectural contract. 00:23:40
That contract is a contract for 1.5 million. 00:23:46
500,000 of that is covered by our partner. 00:23:49
Mountain Association of Governments. 00:23:53
1,000,000 is what the city is. 00:23:55
Contracting as our portion of that overall contract. 00:23:58
With Method Studios. 00:24:02
Would it be appropriate or possible to show the public the company that we've picked maybe there? 00:24:05
We have it in our on our agenda here, but. 00:24:12
Like the projects that they've done and why we're picking them? 00:24:16
Yeah, I will have Morgan pull that up right now. 00:24:21
Any other questions while we pull that up? 00:24:25
Just a. 00:24:35
Clarification. Umm. 00:24:36
When we say that the city is pledging $1,000,000, that's. 00:24:39
Pre budgeted. 00:24:42
RDA funds that we approved in that budget in December. 00:24:44
True. 00:24:49
Yes, for all intents purposes, we we approved it back in June of last year. So it's for the fiscal year 2025, but yes. 00:24:51
So there's no. 00:24:58
General Fund. Impact of. 00:25:00
Making this decision. 00:25:03
Correct. 00:25:04
Yeah, I think that's a great point because project feasibility came out. 00:25:07
In 2023. 00:25:11
We talked about. 00:25:14
Opportunities for South sales tax, leasing, shared space and the. 00:25:16
Lack of burden It would be on property tax. 00:25:22
And we came to that conclusion and number in June. We solidified it again in August. 00:25:25
And then we had a resolution in the fall. 00:25:31
Where we talked about the RFP moving forward and now we're here for the bid process as it went through the vetting program. 00:25:34
That's it. So each firm provided their their case studies this method studio. 00:25:44
Form City Hall. 00:25:49
Was one that was designed a few years ago. It's under construction now I think. I believe they're projecting. 00:25:52
I think it's like. 00:25:59
And added this month to be open so. 00:26:01
They have several projects that provides kind of the interior layout. 00:26:06
Design. We also took a tour of that project as well, and I don't know if you went on that one. 00:26:11
Not enjoy it without Juan. 00:26:18
Baltic points. So they've done. 00:26:21
A lot of mass timber. There was some interest from the material standpoint having. 00:26:24
Mass Master. 00:26:28
Summit County Library and Community Center. 00:26:31
Davis County Administration Building. 00:26:35
So those are some of the. 00:26:38
Some of their case studies and examples that were provided as part of their there are. 00:26:41
Our fee proposal. 00:26:45
And these are part of the package is the public welcome to? 00:26:51
To do a deep dive, umm. 00:26:54
We also remind the public how many stories we have, kind of what the plan is for the building. Yeah. So the the conceptual. 00:27:00
Design that we completed with Nelson Partners. 00:27:09
That projected approximately 80,000 square feet. Partnering with with MAG and potential for a business incubator. 00:27:14
That was shown at four stories. 00:27:22
The ground floor being very public space that, that that'd be next to the the promenade. Yeah, yeah, it's kind of connecting the 00:27:26
outdoor spaces, the public spaces. 00:27:31
From from the promenade with the ground floor potential for a lot of public. 00:27:38
Type type uses like. 00:27:45
Business incubator space, even on the ground floor or just local local businesses could have a spot where they could have their 00:27:47
wares, a place for. 00:27:52
Like festivals that could kind of move into the into the City Hall. 00:27:56
And then also providing space for MAG, they have weatherization programs so there'd be like on the back of the building. 00:28:00
Some warehouse spaces we would also have. 00:28:08
The sense of storage capacity. 00:28:12
In that location as well. 00:28:14
There's also a lot of interest in providing heritage. 00:28:16
Spaces where we where we could. 00:28:19
Provide. 00:28:22
Kind of kind of amuse them, not necessarily like amusing itself, but but setting the ground floor up so that we would have art and 00:28:23
things that could tell the story of a vineyard. 00:28:28
The agricultural uses. 00:28:33
I apologize. So space on ground floor for for heritage type type uses. 00:28:36
I want to point out, and I think it's important to talk about is that as we talk about leasing and own space. 00:28:41
The private partners have actually been part of the discussion since 2023 when we were going through this, but until we go through 00:28:49
this process and actually prove it. 00:28:53
We can't make a contract and so we always have to talk about potentials that they've been actively working on the project. So it's 00:28:58
not looming in the air that we don't have people that are interested or working with us. They're actually helping to design and 00:29:05
talk about what their needs are actively. It's just we cannot say it until we have approved it and assigned it. 00:29:11
I also wanted to point out that we've talked about as Laura presented current members and we're looking at them, I know there was 00:29:18
a lot of questions about future possibilities or hoping for something to be developed. 00:29:23
But you were looking at current numbers with preliminary projections of what the cost of a building would be that we're thinking 00:29:29
of based on construction? 00:29:34
Umm, estimates that were given to us. 00:29:39
So each of these numbers are relevant and meaningful. 00:29:42
They're not things that we're looking out into the future. 00:29:45
Except for until we have the engineering. So is that clear to you guys? 00:29:48
What I'm saying so we've got actuals. 00:29:53
And then we've got preliminary estimates that we have to go through the designer. 00:29:56
We also received quite a bit just in talking about cost savings in in the land donation as well. So the land is being donated to 00:30:00
the city. 00:30:03
So I believe that's about 3.5 million so. 00:30:07
And that that's on that fifth block of the promenade, the Aquatic Center that's that's going to go under construction soon. Great. 00:30:11
Okay. Any other questions from the board? 00:30:16
I know that we don't have the actual numbers. 00:30:26
But then this might be a question for Laura. But the. 00:30:29
I think someone once explained the process of how much. Well, first of all how much it would cost. 00:30:34
Let's say a $30 million. 00:30:40
Building. 00:30:42
Minus Max portion depending on the bond rate depending on all these things. 00:30:45
Does it eat up all of our tax revenue? Is it? 00:30:50
Portion like I know we have that. 00:30:54
That goal and that rate. 00:30:55
But it'd be nice to have an estimated. 00:30:58
Just a throw out number, right? 00:31:01
I mean, that's right. Are you meaning it's throw out number for the 30 million or a throw out number for our what it would eat at 00:31:03
the annual cost of what that draw out number could possibly be? So the numbers that that Laura presented the the debt ratio 00:31:07
coverage. 00:31:12
That is the conservative estimate of the portion. 00:31:17
Of our. 00:31:21
Sales tax revenue that would be used so the one times. 00:31:22
Is. 00:31:26
The debt coverage or the debt? 00:31:28
The 2 1/2 times the 2.75 that we saw. 00:31:30
Is the range we could pay for that debt. 00:31:33
2 3/4 times over. 00:31:36
With the amount of sales tax that we bring in. 00:31:38
That does not include. 00:31:40
The portion of the structure that we will lease out. 00:31:43
To other tenants and so those dollars will come to the city. 00:31:46
And just. 00:31:50
Defray our costs that much more so if we bring in an extra $500,000 a year in leased space. 00:31:51
That will be $500,000 of our sales tax revenue that we do not need to assign to that debt coverage which to Brett's current. 00:31:57
That, I think, is when he's a conservative. Conservative means we have the opportunity for better outcomes. 00:32:06
OK. Any other questions or can I get a motion? 00:32:14
I move to approve resolution U2025-01 as presented. 00:32:26
I have a first by Brett. Can I get a second? 00:32:32
Second Second by Sarah. This is done by resolution. 00:32:35
And roll call Jake is absent, Brett. 00:32:38
Aye, aye. 00:32:41
Aye, Sir. 00:32:44
Hi, all right. 00:32:45
That concludes this meeting. Give us a few minutes and we will start our next meeting. 00:32:48
What? Great. One moment in a closed session for the board. Just kidding, we have a small closed session. 00:32:53
We are not adjourned. 00:32:59
We will be right back. 00:33:00
Oh yes, what are we going in for? 00:33:03
Can I get a motion to go into a closed session? 00:33:08
I moved to go into a closed session for. 00:33:11
Litigation. 00:33:13
A strategy session to discuss pending or reasonably imminent litigation. Thank you, Laura. 00:33:15
She was leaving. 00:33:22
We have a first primary, can I get a second? 00:33:24
Second. Second by Sarah. All in favor. 00:33:27
Aye, aye. OK, We will be back in just a minute. 00:33:30
We'll hurry. 00:33:33
All right. We just finished a closed meeting, so I'm going to adjourn the RDA. We'll turn our minutes over and we'll start our 00:33:36
next meeting. 00:33:40
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We're good to go. You're good to go, OK. 00:00:00
Today is February 12th, a time 2025. The time is. 00:00:02
601 and we're going to start the RDA meeting. 00:00:08
We'll go ahead and have an invocation and Pledge of Allegiance by Councilmember Clausen. 00:00:12
And then we'll move on with the rest of our agenda. 00:00:18
Our Father in heaven, we are grateful that we can. 00:00:23
Meet to discuss the business of the city and we're grateful for all the citizens that are here to. 00:00:26
Observe and participate. 00:00:31
And ask that we can. 00:00:33
Be mindful of those needs. 00:00:36
And as we pray, in the name of Jesus Christ, Amen. Amen. 00:00:39
All right. 00:00:43
I pledge allegiance to the flag. 00:00:49
United States of America. 00:00:51
Republic for which it stands. 00:00:55
A nation under God. 00:00:57
Indivisible with liberty and justice for all. 00:00:59
All right, we'll go ahead and move right into our meeting. 00:01:07
We need to have a motion on our consent items. 00:01:10
Board, do you guys have a motion or would you like to take it off to discuss? 00:01:20
I move to approve the consent items as presented. Thanks. I have a first by Marty. Can I get a second? 00:01:26
Second by Sarah. 00:01:33
All in favor. 00:01:34
Aye. 00:01:36
All right. We'll move on to our business items. 00:01:37
We have one business item tonight and that was continued from our last meeting. It's to talk about the bid award for the 00:01:40
architectural services for the new. 00:01:44
Center, we'll go ahead and have. 00:01:49
Eric or no, Josh reintroduced this from our last meeting. 00:01:53
Great. Thank you. Your packet is the proposal, if you'll recall last meeting. 00:01:58
Community Development Morgan gave a more detailed outline. 00:02:04
And review of the vendor proposal. 00:02:09
And this item is to award. 00:02:12
The selected vendor. 00:02:15
To begin the architectural process for the Vineyard Center. 00:02:18
You got it on yours. 00:02:31
Which is great, yeah. 00:02:32
Hold on. 00:02:34
We've got Laura from LRB that's going to talk a little bit about the. 00:02:44
The sort of long term fiscal outlook for the potential for bonding. 00:02:47
Anyway, for those of you that don't come, my name is Laura Lewis. I am a. 00:02:59
Owner of our public transport. 00:03:05
Advisors. So you can tell by my grandchair, I've been working with cities for a long, long time, for 36 years, that I feel really, 00:03:07
really old. 00:03:11
We work with. 00:03:18
As municipal advisors. 00:03:20
Needs to work helping those utility great studies. 00:03:22
And all kinds of. 00:03:26
You can't hear. 00:03:29
Can you lean into them microphone a little bit more? Oh, it's not on? 00:03:30
Sorry, we might have. 00:03:36
Yourself, OK. 00:03:38
I don't know, I can talk really loud, just ask my children. 00:03:39
Testing 1-2, Three. There we go. 00:03:48
All right, Thank you. I'll do a repeat performance. You can see if I get it any better. Laura Lewis, principal and owner of LRB 00:03:50
Public Finance Advisors. 00:03:56
I'm the L of LRB public renounce advisors. 00:04:02
And I've been assisting local governments, primarily in Utah, for almost 36 years now. 00:04:04
We help with your municipal advisory work. 00:04:10
When you want to issue debt, we also do. 00:04:13
You know, financial sustainability planning, we do impact free studies, a lot of consulting, utility rate studies, that kind of 00:04:16
thing, so. 00:04:20
We're well acquainted with all the options that cities have when they need to finance something. We've worked with several cities 00:04:24
as they finance their city halls. 00:04:29
And that's what we're here to talk to you about tonight. 00:04:35
Umm, do you want me to just, do you want to get to the slide? There we go. 00:04:39
So there are. 00:04:44
Several ways that. 00:04:45
Then your city could choose to issue debt or to secure its debt. 00:04:48
When most of your constituents probably think of, oh, we're doing debt, they're probably assuming. 00:04:53
That you're going to raise their taxes and that it's a general obligation bond that they have to vote on. 00:04:59
And. 00:05:04
Yeah, that neither of those things are true. Cities in Utah have several options that we can use to secure debt. 00:05:06
And one of those is, I mean, you could choose to go out to a vote. 00:05:13
And raise property taxes to pay for the building. 00:05:19
But that is not your only solution, and it's a tool that isn't frequently used in in Utah by cities. 00:05:22
Your constituents are probably well aware they've probably gone to the polls to vote for school district Geo bonds, because school 00:05:31
districts have. 00:05:35
Pretty much 2 tools. They can either do a lease or they can do a general obligation bond. 00:05:39
Cities have a lot of other. 00:05:44
Options and one of the best options. 00:05:47
Is to pledge your sales and or franchise tax revenues. 00:05:51
So sales tax revenues, everybody knows what those are every time we go shopping. My, my kids, if you could get them to move here, 00:05:56
would boost your sales tax, I'm certain. 00:06:01
Um, and your franchise fees are what you see on your natural gas electric bill. 00:06:06
That are a charge of the franchise to them, they pass on to the customers and that is collected by the city. 00:06:13
So we've got here in front of you. 00:06:20
Your six year history. 00:06:24
Of your sales tax revenue and of your franchise fees. 00:06:26
Your sales tax revenues, as you can see have grown quite helpfully and we're assuming they're going to. 00:06:30
Continue to grow at a fairly rapid pace. 00:06:36
Under state law, the sales tax revenues that you get are based on a formula. 00:06:39
It's not just everything that is charged, everything I just purchased, excuse me, in your city. 00:06:46
You do get benefited from that. That point of sale is a benefit to the city. 00:06:53
But cities in Utah share all of the sales tax through a state sharing formula. 00:06:58
That sharing formula is 50% based on population. Your population compared to the states. 00:07:04
And 50% your point of sale, so. 00:07:09
The fact that you have had such a growing population and that you also are have had. 00:07:14
Are poised to continue to have. 00:07:20
Great growth in your commercial, you know, property development here and now that you've kind of got the rooftops. 00:07:23
It's highly likely that your sales tax will continue to grow, so. 00:07:29
The rating agencies love sales tax pledge because it's, you know, it does have some elasticity. I mean, and you know, you'll see 00:07:35
those numbers go down like 2008, 2009 sales taxes dropped, right? Oh, COVID. 00:07:41
Sales tax kind of shifted around because people started ordering stuff online. 00:07:48
But they they really like that. 00:07:53
That pledge is very readable and great security to use to secure your debt. 00:07:55
Franchise tax revenues as you can see in the 1234 column over and then the 5th column, you can see how they bounce around a little 00:08:00
bit more. 00:08:05
Why do they bounce around? Well, certainly it's driven somewhat by population and new rooftops and new businesses, right, Because 00:08:10
more people are using gas. But oh. 00:08:14
It's also driven by we have a warm winter. 00:08:18
People don't use as much gas. We have, you know, not so hot of a summer. 00:08:22
That hasn't been lately, but but it will fluctuate with things that are out of your control. 00:08:26
But umm, you've had some, you know, in that, you know, five year window, you still had umm, some very good growth. So we've. 00:08:31
Put a 1% growth in that. As you can see, that's very conservative given what you've. 00:08:40
Had historically we put a 4% growth in your sales tax for the next 5 years. 00:08:44
And then back that down to 2 1/2 and then down to one just to show some sort of leveling off. 00:08:48
So you can see in that third column from the right you back up. Umm. 00:08:54
Your total sales and franchise tax revenues. 00:09:00
Are were 4 million and change last year, we've got them. 00:09:03
Projected at 4 million, 165. 00:09:08
I don't know what that slight growth rate going forward. 00:09:11
The next column is what we call the debt service coverage goal. So when you're pledging sales and franchise tax revenues. 00:09:14
Think of, you know for a moment, you're the bondholder, you're the bond issue or the city and the bondholders. 00:09:24
Want to have some coverage protection, right? 00:09:30
They want to know that you're not borrowing up to that very last penny sales tax debt that you have. 00:09:34
So ideally they like to see a 2 times debt service coverage how they I mean they can't come force you to make people shop, right? 00:09:41
So you have issued water revenue bonds before? 00:09:50
And when we issue water revenue bonds, that coverage is like 1.25 times. 00:09:53
Well, the reason it's tighter is because your covenanting when you issue utility revenue bonds to maintain your rates and your 00:09:59
expenses. 00:10:04
In such a way that it will deliver that coverage, right? You have control there. So they're willing to let that coverage go lower. 00:10:09
With the sales tax bond there, you know bondholders understand they cannot force people to shop. 00:10:15
So they want that is my phone. 00:10:21
And I was going to get with my daughter who are going to go. 00:10:29
I was at a City Council. 00:10:32
I'm just full of humor here. 00:10:35
So with sales tax, they like to know because because of that elasticity of demand and a tough economic time or whatever, right, 00:10:38
they want to know that you have at least two time step service coverage. 00:10:43
So that was our, you know, our servo litmus test of do you have enough revenue to issue this debt and show that you have excess 00:10:49
coverage. 00:10:54
What you do so that far right column? 00:10:59
Compares are currently estimated debt service, which again it's going to fluctuate. 00:11:02
Until we get to the point the bonds are issued. 00:11:07
Once they are issued, it is a fixed rate for the duration of that bond issue. 00:11:10
So you have sufficient coverage with extra headroom should you need to issue debt for something else. 00:11:15
The other thing that you need to be aware of is from the bond purchasers perspective, this is what they will see. This is what the 00:11:22
rating agencies will rate you on. 00:11:26
All that and you know how other many other swell things are going on in the city. 00:11:31
But they take this into consideration. 00:11:34
But from the city's finance plan perspective? 00:11:37
This does not take into account that a part of the building will be leased. Part of it will be leased to MAG is the plan. 00:11:42
And those revenues will come into you to offset what you have to pay in terms of paying out your sales tax, right? 00:11:49
As well as other space that you lease to private party. 00:11:56
To clarify. 00:12:00
We're not leasing to Magrite Mag is purchasing. Yeah, Magg will purchase, but then we'll have. 00:12:03
Yes. 00:12:09
You'll be issuing the bonds there's. 00:12:12
Strengthen numbers, strengthen volume in terms of your cost of issuance and whatnot. They could issue their own debt. 00:12:14
But then both of your cost of issuance would effectively be higher. I mean, there's right. So there's, there's some benefit in 00:12:21
doing it together. 00:12:24
So when, if you proceed forward with this, when you're ready to issue bonds? 00:12:30
You'll get to see my smiling face fans the phone hopefully next time. 00:12:35
And. 00:12:39
You'll have a. 00:12:41
One single bond issue that will have a tax exempt piece. 00:12:42
And a taxable piece. 00:12:45
The taxable piece of the debt is because of the private use, right? So MAG is an interlocal cooperative. 00:12:48
There we can issue their debt on a tax exempt base check, Vineyard check, tax exempt. 00:12:55
But for any of that space that might be leased to a private party will issue a taxable bond. 00:13:01
So that we we don't run afoul of the tax laws. 00:13:07
All of that has been baked into the. 00:13:11
These numbers. 00:13:14
And. 00:13:16
With that I will take any questions. 00:13:17
Thank you so much. 00:13:21
Council or board, do you have any questions for Laura? 00:13:22
Are we planning on raising our our city tax sales tax rate or if this is based on. 00:13:30
What we have now and it's staying the same. 00:13:36
Your sales tax rate is a maximum. 00:13:41
OK. 00:13:48
But most cities. 00:13:49
OK. 00:13:52
OK, perfect. 00:13:55
Should be good now, all right. 00:13:59
So repeat that so it's in your minutes or whatever. 00:14:05
You can't hear so. 00:14:08
Hello, is that better? 00:14:11
Yeah. 00:14:14
The city imposes the sales tax rate at the maximum rate of the state, which most cities do. I'm not aware of any statewide that 00:14:15
don't impose it at the maximum right now. 00:14:20
Some cities, like Park City, have the benefit they they can actually do a little bit higher because they're a resort community. 00:14:26
But for, I mean, every city I know imposes it at the Max. That's what Vineyard does and that's what you'll be pledging that and 00:14:32
your franchise fees. So for your constituents. 00:14:37
Let's say everything you know goes to hell in a handbasket and you don't have the money to pay the debt. 00:14:42
That's not what we're planning, right? 00:14:49
But if that were the case. 00:14:51
The bondholders cannot come in and demand you raise property taxes. 00:14:53
Their pledge is the sales and franchise taxes. That's what their security is. 00:14:58
So if you don't pay them. 00:15:03
They can, you know, effectively through the trustee run up to the state and say you intercept that sales tax, right, instead of it 00:15:05
coming from the state of the city to then pay the bondholders. Oh. 00:15:11
No, they're not being good. You know, actors. So you can they can intercept that, but they cannot make you raise property taxes. 00:15:17
OK, more questions. 00:15:26
As a reminder for the public, we are not voting on bonding. 00:15:31
We are discussing. 00:15:34
Future options as we think about the vote tonight, which is to go for the bid award that goes through design engineering and 00:15:36
assesses how much it could cost. 00:15:42
But because we're trying to be a little bit more thoughtful, we're talking about what our options are for the future. Again, not 00:15:48
voting on this, just discussing. 00:15:52
Potential opportunities for the future. 00:15:57
With this discussion, very different votes. 00:16:00
And one thing to be aware of as well is since we're not bonding today, the city will be spending monies on architectural design, 00:16:03
whatever. 00:16:08
The city can reimburse itself when it issues bonds for those expenditures. You don't have to, but you can choose to do that. 00:16:14
So there's an unlimited kind of look back time for all those soft costs for architect and engineering costs. 00:16:23
You can reimburse yourself if you were to start with like hard cost shovels in the ground, you know, foundation pouring or 00:16:31
whatever. You can only look back 60 days from when we adopt the bond parameters resolution. 00:16:38
Can you explain? 00:16:48
What the debt service coverage actually means, I'm not sure everybody here understands. 00:16:51
Like when you when we see a. 00:16:57
Hey, the goal is to and in. 00:16:59
2026 we're sitting at 2.75. What? What does that actually mean? 00:17:02
Absolutely. The easiest way is through a very simple example, if you had $4 million worth of or in your total revenues and sales 00:17:07
and franchise. 00:17:11
Tab 2 times coverage would mean that you could only have a debt for that year. 00:17:16
Of $2,000,000 so it's a really simple. 00:17:21
X / Y your total revenues divided by that debt service. So if we had 4 million in revenues and 2 million in debt service, that 00:17:24
would be two times coverage. 00:17:30
And then another question I wanted to ask about. 00:17:40
These calculations. 00:17:43
And I, and I think you alluded to this. 00:17:47
Earlier, umm. 00:17:49
That, uh. 00:17:50
This projection is about as conservative as we can go. 00:17:51
In that there. 00:17:58
Are options and opportunity to actually improve the way we structure this. So this is the. 00:17:59
Worst case scenario that we could look at. 00:18:07
I mean, I mean we could, you know, you could say we want to go exactly the two times coverage and pay it off as soon as possible, 00:18:10
right. I would shorten the debt service that would increase your payments. 00:18:14
You could say, oh, we want to aim for three times coverage and we have the flexibility to take the debt out 40 years under state 00:18:20
law. 00:18:23
This is what I would call a reasonable expectation. 00:18:27
So just to clarify, so the. 00:18:33
The debt, sorry, the estimated debt service coverage. 00:18:37
Umm, it will adjust as we take out. 00:18:40
Bonds. So it could, it would go lower, it could go lower, it could, you know, I don't expect it to fluctuate a lot, right? But 00:18:44
let's say your bids come in $1,000,000 more than you expected. Let's say interest rates go up a little bit, right? 00:18:50
Then those things are going to have pressure to reduce that debt service coverage before we issue. 00:18:56
Could also go the other way, right? Raise people down a little bit. If you get a little bit better rating than we're thinking, 00:19:01
whatever. 00:19:04
And then that means your coverage would go up, but once we price the bonds. 00:19:07
Then that rate will be set. Then the covenant because again, they can't come in and make people shop. 00:19:12
The covenant is that it would prevent you from. 00:19:19
Issuing additional bonds. 00:19:22
If those additional bonds made you drop below that coverage. 00:19:24
So let's say you issue the bonds and you know things. 00:19:27
You know, the economy slows down a lot. 00:19:30
And you only have 1.95 times coverage. 00:19:32
No, no one's going to come knocking on your door. I wanted to make the payment. 00:19:36
Umm, you just wouldn't be able to issue additional bonds at that time. 00:19:42
And just to clarify as well. 00:19:49
If we so we're not bonding today, of course. 00:19:52
When we decide whether or not to bond? When? When we would bond? 00:19:55
It would. 00:20:00
Would the rate happen? 00:20:02
At closing when the building is completed or whatever before then. So think about it, if you were going to go get a home loan to 00:20:04
construct a new home, right, we're a little bit. 00:20:09
We're a little bit better than that. 00:20:15
Typically if you get a construction loan, they they set that at a variable rate until the construction is done. So it's a 00:20:16
reasonable question, right? 00:20:20
The way it works in our world is. 00:20:24
We issue the bonds once you know what your construction costs are going to be. 00:20:28
We can issue that bond with a little bit of headroom in it. And again, you get to decide that the bondholders and I don't cram 00:20:34
that down your throat, right? 00:20:37
If you have a guaranteed maximum price contract, we know that for certain, sometimes those end up costing you a little bit more. 00:20:42
So if you don't have that, then we would say, OK, your construction cost is X. 00:20:47
Maybe let's do X + 5% just so you have some cushion, right? 00:20:54
Once we know that dollar amount. 00:21:00
Then we'll go through a roughly. 00:21:02
2:00-ish month process. 00:21:05
Two 2 1/2 months to get the bonds issued. 00:21:07
And about two weeks before. 00:21:10
Closing and proceeds are delivered to you. The interest rates are set. 00:21:13
Further questions? 00:21:21
So as it relates to what we're actually going to. 00:21:24
Discuss and vote on tonight. 00:21:28
Questions that? 00:21:32
This is a projection based on. 00:21:32
The I don't want to say vague, but the less accurate information that you already have. 00:21:35
In terms of construction costs, yes, this is someone else's estimate, not not mine. But also you haven't gone through the full 00:21:42
architect engineering design process. So us going through that process gives us the information to make this accurate, absolutely. 00:21:48
And then we can make a decision at that point, absolutely we want to continue, correct. 00:21:54
OK. 00:22:01
And that's a really good clarity for the public because we can only do projections and preliminary until we have the actuals 00:22:05
correct. 00:22:09
But you wanted to know that. 00:22:14
Protections. 00:22:16
Good work. 00:22:20
Any other questions for Laura? 00:22:21
Have one more so. 00:22:25
On the estimated debt service coverage. 00:22:27
So the blank column there, I know we use sales tax revenue in our general fund. 00:22:30
So. 00:22:36
So that's going. 00:22:39
Because we're projecting when. 00:22:41
When the building will be finished. 00:22:43
I am apologize, I'm not following your question. The the debt service coverage goal in 2025, the reason it's blank there's because 00:22:46
we won't, we're not anticipating you will have a bond payment in 2025. That makes sense. 00:22:52
OK. I think it's more of a. 00:22:58
A Christian question. OK, sorry. 00:23:00
Any other questions for Laura? 00:23:04
Thank you. 00:23:08
Thanks, Lori. 00:23:10
Really appreciate it. 00:23:11
OK, let's go back to the item. 00:23:13
Let's talk about the questions that you have on the. 00:23:15
For statements that you want to make or a motion. 00:23:26
I think it would be worth having staff review what the actual bed is for the public. 00:23:32
So the bid that's before us tonight is for the architectural contract. 00:23:40
That contract is a contract for 1.5 million. 00:23:46
500,000 of that is covered by our partner. 00:23:49
Mountain Association of Governments. 00:23:53
1,000,000 is what the city is. 00:23:55
Contracting as our portion of that overall contract. 00:23:58
With Method Studios. 00:24:02
Would it be appropriate or possible to show the public the company that we've picked maybe there? 00:24:05
We have it in our on our agenda here, but. 00:24:12
Like the projects that they've done and why we're picking them? 00:24:16
Yeah, I will have Morgan pull that up right now. 00:24:21
Any other questions while we pull that up? 00:24:25
Just a. 00:24:35
Clarification. Umm. 00:24:36
When we say that the city is pledging $1,000,000, that's. 00:24:39
Pre budgeted. 00:24:42
RDA funds that we approved in that budget in December. 00:24:44
True. 00:24:49
Yes, for all intents purposes, we we approved it back in June of last year. So it's for the fiscal year 2025, but yes. 00:24:51
So there's no. 00:24:58
General Fund. Impact of. 00:25:00
Making this decision. 00:25:03
Correct. 00:25:04
Yeah, I think that's a great point because project feasibility came out. 00:25:07
In 2023. 00:25:11
We talked about. 00:25:14
Opportunities for South sales tax, leasing, shared space and the. 00:25:16
Lack of burden It would be on property tax. 00:25:22
And we came to that conclusion and number in June. We solidified it again in August. 00:25:25
And then we had a resolution in the fall. 00:25:31
Where we talked about the RFP moving forward and now we're here for the bid process as it went through the vetting program. 00:25:34
That's it. So each firm provided their their case studies this method studio. 00:25:44
Form City Hall. 00:25:49
Was one that was designed a few years ago. It's under construction now I think. I believe they're projecting. 00:25:52
I think it's like. 00:25:59
And added this month to be open so. 00:26:01
They have several projects that provides kind of the interior layout. 00:26:06
Design. We also took a tour of that project as well, and I don't know if you went on that one. 00:26:11
Not enjoy it without Juan. 00:26:18
Baltic points. So they've done. 00:26:21
A lot of mass timber. There was some interest from the material standpoint having. 00:26:24
Mass Master. 00:26:28
Summit County Library and Community Center. 00:26:31
Davis County Administration Building. 00:26:35
So those are some of the. 00:26:38
Some of their case studies and examples that were provided as part of their there are. 00:26:41
Our fee proposal. 00:26:45
And these are part of the package is the public welcome to? 00:26:51
To do a deep dive, umm. 00:26:54
We also remind the public how many stories we have, kind of what the plan is for the building. Yeah. So the the conceptual. 00:27:00
Design that we completed with Nelson Partners. 00:27:09
That projected approximately 80,000 square feet. Partnering with with MAG and potential for a business incubator. 00:27:14
That was shown at four stories. 00:27:22
The ground floor being very public space that, that that'd be next to the the promenade. Yeah, yeah, it's kind of connecting the 00:27:26
outdoor spaces, the public spaces. 00:27:31
From from the promenade with the ground floor potential for a lot of public. 00:27:38
Type type uses like. 00:27:45
Business incubator space, even on the ground floor or just local local businesses could have a spot where they could have their 00:27:47
wares, a place for. 00:27:52
Like festivals that could kind of move into the into the City Hall. 00:27:56
And then also providing space for MAG, they have weatherization programs so there'd be like on the back of the building. 00:28:00
Some warehouse spaces we would also have. 00:28:08
The sense of storage capacity. 00:28:12
In that location as well. 00:28:14
There's also a lot of interest in providing heritage. 00:28:16
Spaces where we where we could. 00:28:19
Provide. 00:28:22
Kind of kind of amuse them, not necessarily like amusing itself, but but setting the ground floor up so that we would have art and 00:28:23
things that could tell the story of a vineyard. 00:28:28
The agricultural uses. 00:28:33
I apologize. So space on ground floor for for heritage type type uses. 00:28:36
I want to point out, and I think it's important to talk about is that as we talk about leasing and own space. 00:28:41
The private partners have actually been part of the discussion since 2023 when we were going through this, but until we go through 00:28:49
this process and actually prove it. 00:28:53
We can't make a contract and so we always have to talk about potentials that they've been actively working on the project. So it's 00:28:58
not looming in the air that we don't have people that are interested or working with us. They're actually helping to design and 00:29:05
talk about what their needs are actively. It's just we cannot say it until we have approved it and assigned it. 00:29:11
I also wanted to point out that we've talked about as Laura presented current members and we're looking at them, I know there was 00:29:18
a lot of questions about future possibilities or hoping for something to be developed. 00:29:23
But you were looking at current numbers with preliminary projections of what the cost of a building would be that we're thinking 00:29:29
of based on construction? 00:29:34
Umm, estimates that were given to us. 00:29:39
So each of these numbers are relevant and meaningful. 00:29:42
They're not things that we're looking out into the future. 00:29:45
Except for until we have the engineering. So is that clear to you guys? 00:29:48
What I'm saying so we've got actuals. 00:29:53
And then we've got preliminary estimates that we have to go through the designer. 00:29:56
We also received quite a bit just in talking about cost savings in in the land donation as well. So the land is being donated to 00:30:00
the city. 00:30:03
So I believe that's about 3.5 million so. 00:30:07
And that that's on that fifth block of the promenade, the Aquatic Center that's that's going to go under construction soon. Great. 00:30:11
Okay. Any other questions from the board? 00:30:16
I know that we don't have the actual numbers. 00:30:26
But then this might be a question for Laura. But the. 00:30:29
I think someone once explained the process of how much. Well, first of all how much it would cost. 00:30:34
Let's say a $30 million. 00:30:40
Building. 00:30:42
Minus Max portion depending on the bond rate depending on all these things. 00:30:45
Does it eat up all of our tax revenue? Is it? 00:30:50
Portion like I know we have that. 00:30:54
That goal and that rate. 00:30:55
But it'd be nice to have an estimated. 00:30:58
Just a throw out number, right? 00:31:01
I mean, that's right. Are you meaning it's throw out number for the 30 million or a throw out number for our what it would eat at 00:31:03
the annual cost of what that draw out number could possibly be? So the numbers that that Laura presented the the debt ratio 00:31:07
coverage. 00:31:12
That is the conservative estimate of the portion. 00:31:17
Of our. 00:31:21
Sales tax revenue that would be used so the one times. 00:31:22
Is. 00:31:26
The debt coverage or the debt? 00:31:28
The 2 1/2 times the 2.75 that we saw. 00:31:30
Is the range we could pay for that debt. 00:31:33
2 3/4 times over. 00:31:36
With the amount of sales tax that we bring in. 00:31:38
That does not include. 00:31:40
The portion of the structure that we will lease out. 00:31:43
To other tenants and so those dollars will come to the city. 00:31:46
And just. 00:31:50
Defray our costs that much more so if we bring in an extra $500,000 a year in leased space. 00:31:51
That will be $500,000 of our sales tax revenue that we do not need to assign to that debt coverage which to Brett's current. 00:31:57
That, I think, is when he's a conservative. Conservative means we have the opportunity for better outcomes. 00:32:06
OK. Any other questions or can I get a motion? 00:32:14
I move to approve resolution U2025-01 as presented. 00:32:26
I have a first by Brett. Can I get a second? 00:32:32
Second Second by Sarah. This is done by resolution. 00:32:35
And roll call Jake is absent, Brett. 00:32:38
Aye, aye. 00:32:41
Aye, Sir. 00:32:44
Hi, all right. 00:32:45
That concludes this meeting. Give us a few minutes and we will start our next meeting. 00:32:48
What? Great. One moment in a closed session for the board. Just kidding, we have a small closed session. 00:32:53
We are not adjourned. 00:32:59
We will be right back. 00:33:00
Oh yes, what are we going in for? 00:33:03
Can I get a motion to go into a closed session? 00:33:08
I moved to go into a closed session for. 00:33:11
Litigation. 00:33:13
A strategy session to discuss pending or reasonably imminent litigation. Thank you, Laura. 00:33:15
She was leaving. 00:33:22
We have a first primary, can I get a second? 00:33:24
Second. Second by Sarah. All in favor. 00:33:27
Aye, aye. OK, We will be back in just a minute. 00:33:30
We'll hurry. 00:33:33
All right. We just finished a closed meeting, so I'm going to adjourn the RDA. We'll turn our minutes over and we'll start our 00:33:36
next meeting. 00:33:40
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