Meeting: Redevelopment Agency Board

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Event transcript
	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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Event transcript
	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