Finance Committee

City of Oconomowoc Finance Committee Aldermen: Spiegelberg, Chairman / Shaw, Secy / Rosek Tuesday, October 01, 2019 - 6:00 PM City Hall - Conference Room 3 Notice: If a person with a disability requires that the meeting be accessible or that materials at the meeting be in accessible format, call the City Clerk at least 48 hours prior to the meeting to request adequate accommodations. Tel: 569-2186. 1. Call to order and confirmation of appropriate meeting notification 2. Committee Business a. Consider/recommend Authorizing Funds for Façade Improvement Grant Project at 24 S. Main Street b. Consider/recommend Providing for the Issuance and Sale of $7,200,000 Note Anticipation Notes 3. Adjourn ________________________________ Diane Coenen, City Clerk City of Oconomowoc Notice is hereby given that a majority of the Common Council will be present at the above scheduled meeting to gather information about a subject over which they have decision-making responsibility. This constitutes a meeting of the Common Council pursuant to State ex rel. Badke v. Greendale Village Board, 173Wis. 2d 553, 494 N.W. 2d 408 (1993) and must be noticed as such, although the Common Council will not take any formal action at this meeting. 1  MEMORANDUM DEPARTMENT Date: September 13, 2019 To: Mayor Nold City Council Administrator Kitsembel From: Bob Duffy, Economic Development Re: Major Façade Grant for 24 S. Main Street RELATES TO THE STRATEGIC PLAN Strategic Goal- III. Focus on Economic Development A. Research & Plan for Development 10. Promote Major Façade Program BACKGROUND In 2017, the City Council approved several resolutions creating Major Façade Grant Program. Since that time, City Staff has been working with owners of the designated downtown properties to determine the level of assistance that will be required to bring these structures back to their former grandeur. The program allowed a maximum grant amount of $50,000. In working with the owner of the 24 S. Main Street property, the façade improvements approved by the Architectural Commission will cost approximately $540,000. In an effort to make this project a reality, I have worked with the building owner and First Bank to collectively fund the improvements. The building owner already has equity in the building through the purchase, so that was also factored into the funding strategy as well. The funding strategy is as follows for the façade portion of the project.: City Grant - $50,000 First Bank Loans - $50,000 Building Owner funding sources - $440,000 $540,000 Based on the building permit value, the owner is making a $1,780,000 investment into Downtown Oconomowoc. In an effort to be equitable to this property owner similar to the $100,000 Mann Block building grant, there could be a consideration for the approval of a TID #4 Site Grant in the amount of $50,000. Based on the investment being made, the increment being generated would be reimbursed within 2 years. $16.35/1000 value x 1,780 = $29, 103 1 2 As demonstrated below, the building improvements would have a tremendous impact on the S. Main Street corridor. Before Approved Facade FINANCIAL IMPACT The City currently has the $50,000 funding available for the Façade grant. The program has increasingly been used for both small and large façade projects which have enhanced Downtown Oconomowoc. TID #4 did not anticipate the proposed investment being made into this property. By providing a $50,000 Downtown TID grant, once the project is completed and property is at full value, the City will continue to receive $29,103 in value each year until the retirement of the district in 2027. 2 3 RECOMMENDATION Restoring this prominent building will definitely make an aesthetic difference and demonstrate achieving another implementation goal of our Downtown Revitalization Plan. The project will also serve as a catalyst for other building owners to improve their properties as well. It is recommended consideration of this request to approve: a. $50,000 from the Major Façade Project fund; and b. Consideration for a $50,000 TID #4 site improvement grant SUGGESTED MOTION Motion to approve: Resolution Authorizing the Grant Amount of $50,000 from the Major Façade Project fund and a $50,000 TID #4 Site improvement Grant for improvements being made at 24 S. Main Street. 3 4  RESOLUTION NO. 19-R_______ RESOLUTION AUTHORIZING FUNDS FOR FAÇADE IMPROVEMENT GRANT PROJECT AT 24 S. MAIN STREET Whereas, the City of Oconomowoc has established a priority to eliminate undesirable conditions, and to undertake urban renewal and community development programs; and Whereas, the City Council has approved Resolution No. 17-R2682 creating a Major Facade Grant Program to serve as an assistance tool to provide funds for façade improvements, and costs of improving existing commercial structures and businesses located in Downtown Oconomowoc, and commercial property along E. Wisconsin and Summit Avenues; and Whereas, an application has been received to revitalize the prominent structure located at 24 S. Main Street; and Whereas, a public/private partnership is necessary to complete the project given the building’s street front mass, prominence and the costs associated with the approved façade improvement; and Whereas, the City Council authorized a maximum grant amount to implement the program; and Whereas, City Grant dollars will be provided as funds to assist along with the building owner’s private funds. Now Therefore Be It Resolved, that the City Council recommends and authorizes the use of $50,000 of fund balance from account #100-36402 (designated for major façade projects) for the Façade Improvement Grant program, as well as a TID #4 Site Improvement grant of $50,000 for the improvements at the 24 S. Main Street property to be expensed from account #100-509-9100-730. Be It Further Resolved, that authority is hereby granted to the Oconomowoc City Administrator and Economic Development Director to take the necessary steps to execute the application and approval process for the project. DATED: _____________________ CITY OF OCONOMOWOC By: _____________________________ David Nold, Mayor ATTEST: ____________________________ Diane Coenen, City Clerk 5  MEMORANDUM FINANCE DEPARTMENT Date: September 26, 2019 To: Mayor Nold, City Council, and City Administrator Sarah Kitsembel From: Laurie Sullivan, Finance Director Re: Issuance of $7.2M Note Anticipation NoteRelates to the Strategic Plan RELATES TO THE STRATEGIC PLAN Strategic Goal II. A. 2 – Improve and Maintain our Infrastructure/Facilities – Complete Public Safety Facility BACKGROUND The Council approved a construction contract with Camosy Construction for the new Police Facility in the amount of $6,769,725, with an overall project budget of $10,715,048. $9,237,558 of the costs is slated to be financed by Debt issue. We currently have a note with First Bank for the land purchase in the amount of $2,000,000. ADDITIONAL ANALYSIS The attached resolution provides for the issuance and sale of $7,200,000 in note anticipation notes (NAN) for the police facility project. Use of the short-term NAN allows the Council to work on the overall debt structure of the City as discussed during the Capital Plan and Budget Workshops. The Council will meet after this budget cycle to review the 5 year capital needs in more depth and discuss overall debt financing for the future. Using the Short-Term NAN allows the Council the time they need to make decisions regarding the outlot on the parcel and to make decisions regarding the amount and structure of future financing for the City’s 5 year capital plan. The NAN would then be refinanced with long term financing once the Council has put together their 5-year Capital financing plan in early 2020. Our financial advisor recommended the City obtain this short-term note through a bank to save debt issuance costs. Staff has made initial contact with the City’s bank about this matter. FINANCIAL IMPACT To be determined – this resolution authorizes staff to take necessary actions to provide for the sale of notes. The final sale and loan details will come back to Council for approval. RECOMMENDATION Staff recommends approval of Short term Note Anticipation Note financing. SUGGESTED MOTION Motion to approve Resolution providing for the issuance and sale of $7,200,000 Note Anticipation Notes for the Police Facility Project. 1 6  Resolution No. RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $7,200,000 NOTE ANTICIPATION NOTES FOR POLICE FACILITY PROJECT WHEREAS the City of Oconomowoc, Waukesha County, Wisconsin (the "City") is in need of approximately $7,200,000 for the public purpose of paying the cost of the construction of police facilities; WHEREAS the City intends to issue general obligation promissory notes for such purpose pursuant to Section 67.12(12) of the Wisconsin Statutes; and WHEREAS it is desirable to provide interim financing for such project costs through the issuance of note anticipation notes pursuant to Section 67.12(1)(b), Wis. Stats.; NOW, THEREFORE, BE IT RESOLVED that: Se tion l. Issuance of Notes. The City shall issue its note anticipation notes (the "Notes") in the amount of approximately $7,200,000 for the public purpose set forth above, pursuant to Section 67.12(1)(b) of the Wisconsin Statutes. Section 2. Sale of Notes. The Common Council hereby authorizes and directs the officers of the City to take all actions necessary to provide for the sale of the Notes. At a subsequent meeting, the Common Council shall take further action to approve the details of the Notes and authorize the sale of the Notes. Passed this 1st day of October, 2019. Approved this 1st day of October, 2019. Mayor Attest: City Clerk QB\59605480.1 7