City Council Second Monthly Meeting

SECOND MONTHLY WORKSHOP MEETING MAY 27, 2020 PAGE 458 MINUTES May 27, 2020 SECOND MONTHLY MEETING OF THE CITY COUNCIL [ELECTRONIC] ASSEMBLY ROOM – OPERATIONS CENTER 4:00 p.m. Present: Mayor Barbara G. Volk and Council Members: Jeff Miller, Jennifer Hensley Participating Electronically: Mayor Pro Tem Smith, Council Member Lyndsey Simpson Staff Present: City Manager John F. Connet, City Attorney Sam Fritschner, Assistant Manager Brian Pahle, Communications Manager Allison Nock, Finance Director John Buchanan, Revenue Supervisor Jennifer Musselwhite, Budget & Management Analyst Adam Murr 1. Call to Order: Mayor Volk called the meeting to order at 4:00 p.m. and welcomed those in attendance. A quorum was established with three members in attendance physically and two participating electronically. 2. Consideration of Agenda 3. Update regarding utility bill delinquencies Manager Connet recalled City Council taking steps ahead of the Governor’s Executive Order 124 to prohibit disconnections of utility services due to COVID-19. Manager Connet discussed a three-year trend of utility collection revenues indicating general revenues are flat due to an increase use of residential water and decrease use of commercial water. Manager Connet stated the rate of account delinquency of 31-60 days past due has risen from 18,168 in January 2020 to almost 82,783 in May 2020. Manager Connet stated staff are anticipating new Governor’s orders sometime in June which will give further direction regarding utility billing. Manager Connet stated staff will continue working with customers through policies enacted by Council to get water accounts current. 4. Presentation of Capital Project Financing Options David Cheatwood, Managing Director with First Tryon Advisors presented a general overview of financing options and structures for the Parking Deck Project. Mr. Cheatwood presented different options weighing pro’s and cons of each with Council. Council Member Jeff Miller asked for clarification between taxable and non-taxable projects and Mr. Cheatwood explained parking decks are usually taxable projects as they are not exclusively for full public use and explained that the taxable portion depends on the amount of spaces dedicated to public use versus private use (by the potential Hotel Project). Manager Connet stated once the project is underway Council would need to make decisions regarding the amount of dedicated public space. Manager Connet stated the project may be considered non-taxable as long as all the spaces are dedicated for public use with the potential Hotel being allowed to utilize the spaces as public. Council Members discussed private financing options and Mr. Cheatwood stated the bank market would be a tougher market with fewer banks being interested in financing this type of project and further discussed the debt service structure for repayment with both private and public funding as shown below. Estimated Debt Service • Th e ta bles below provide an esti mate o f th e debt se rv ice for the C ity 's parking deck financing based on the following assumptions: $ 8,000,000 project fund with $75.000 cost of issuance 15 and 20 year level debt service repayment terms with p rin cipal repayment beginn ing in year 2 (afte r constructio n ) Bank placement at estimated tax-f!xempt rates of 3 .00% and 3.50% for the 15 and 20 year terms. respective ly $ 8.075.000 $ 8,075.000 Tota l Sou r ces o f Fund s $ 8 ,0 7 5 ,000 To t al S ources o f Fu nds $ 8. 0 7 5. 0 00 Project Fund $ B.000.000 Project Fur.ct $ 8,000.000 Cost of Issuance (esL) 75.000 cost o t Issuance (est.) 75.000 To ta l Uses o f F u n d s $ 8 ,075 , 0 0 0 To t al Uses o l Fund s $ 8 ,075, 0 0 0 ! interes t Ra te (est .) i1 nterea1 Rate (e at. ) 3.so" I == 2022 2023 473.000 - 235.521 242.250 $ Io1al 235.521 715.250 ~ 2022 2023 306,000 ~ 274,774 282,625 S IAlW 274. 774 588,625 2024 487,000 228.060 715.060 2024 3.17 ,000 271,915 588, 9 1 5 202!5 !50.1.000 213.450 714 ,450 2025 328,000 260,820 588, 820 2026 5 1 6 .000 198.420 714 .420 2026 3 4 0 .000 2 4 9 ,340 589. 340 2027 532.000 182.940 714 .940 2027 352,000 237,440 589. 440 2028 548.000 166.980 7 14 .980 2028 364 ,000 225, 1 20 589. 120 2029 564.000 150.540 714 .540 2029 377 ,000 212,380 589, 380 2030 !581.000 133.620 714 ,620 2030 390,000 1 99,185 589,185 2031 !599,000 116. 1-90 715, 190 2031 403,000 185,535 588, 535 2032 6 1 7.000 98.220 715.220 2032 4.18,000 171.430 589, 430 2033 635.000 79.7 1 0 714 . 7 1 0 2033 432 ,000 156,800 588. 800 2034 654.000 60.660 7 14 .660 2034 447 ,000 141,680 588,680 2035 674.000 41.040 715.040 2035 463,000 126,035 589,035 2036 694,000 20,820 714 ,820 2036 479,000 109,830 588,830 2037 2037 496,000 93,065 589,065 2036 2038 5.13,000 75,705 588. 705 2039 2039 53 1 ,000 57,750 588. 750 2040 2040 550,000 39,165 589. 1.65 2041 2041 569.000 1.9,91.5 588.9 1.5 Tota l S 8 . 075,00 0 S 2, 168,421 S 10,243,4 2 1 To t al S 8 , 075,000 S 3,390. 509 S 11 . 465 . 509 - - - - - - - - - - - - - - - - - - - - - 19 M ember: FIN RA & S IPC, M S RB Registrant - - - - - - - - - - - - - - - FIRST7 y ,._ i, .vR,,Y,0, N 0 0 SECOND MONTHLY WORKSHOP MEETING MAY 27, 2020 PAGE 459 An estimated timeline for debt repayment is shown below: Bank Placement Public Sale First Interest Paym ent Up to 1 year after closing Up to 8-9 months after closing Principa l Deferra l During construction period (if desired) During construction period (if desired) Interest Payment Frequency Annual ly, Sem i-Annua lly, Quarterly, etc. Sem i-Annua lly Principa l Payment Frequency Annua lly, Semi-Annua lly, Quarterly, etc. Annua lly Other Payment Date n/ a Debt service payments typically need to occur at Considerations least 3 months after the beginning of the fisca l year in order to mitigate the risk of non- appropriation in the budget process or a late budget adoption 5. Discussion Regarding Proposed Downtown Parking Deck and Metering of Main Street Manager Connet discussed the size and proposed schedule of the Parking Deck Project with City Council. Manager Connet reminded Council of the costs per story and space for the project as follows: 5 Story – 323 spaces - $25,456 per space – Cost = $8,222,228 4 Story – 255 spaces - $25,456 per space – Cost = $6,491,280 (savings from 5 Story $1,731,008) 3 Story – 186 spaces - $31,633 per space – Cost = $5,883,738 (savings from 4 Story $607,542) Manager Connet stated the cost per space increases due to the construction methods for a 3 Story structure and reminded everyone that the Dogwood Lot is 157 spaces for comparison. Council Member Jennifer Hensley stated she favors a 4 Story deck due to cost savings and economy. Council Members Simpson and Smith concurred. Manager Connet stated staff would proceed based on a 4 Story design. Manager Connet discussed the proposed construction schedule with Council below: Schematic Design - May - June 2020 Design Development- July- September 2020 Purchase Jackson Property - July 1, 2020 Construction Document Development - September - December 2020 Purchase Fazio Property - December 1, 2020 Bidding - January 2021 Construction - February 2021- January 2022 Meter Ma in Street - January 2022 Manager Connet stated the schematic design process and guaranteed maximum price will be completed by September 2020 and presented to Council. Manager Connet discussed metering Main Street beginning January 2022 to replace budgetary funding to offset the impact of the project debt service on the Operating Budget. Council Members discussed proceeding with installation of metering kiosks in 2021 and activation of the metering in January 2022. Council Member Smith asked for an updated timeline to reflect metering and closing dates. 6. Presentation of Assessment Process for Water and Sewer Projects Due to time constraints this presentation was deferred to a future date to be announced. 7. Adjourn. The meeting adjourned at 5:35 p.m. upon unanimous assent of the Council. ___________________________________ __________________________________ Barbara G. Volk, Mayor Angela L. Reece, City Clerk