Thanks for joining us this evening.

Um, regularly scheduled workshop or first Tuesday for the year.

So uh for the benefit of the public, the city council as a reminder, we'll be hosting uh our workshops on the final Tuesday of the month.

We have a couple items today, including the capital project financing options and the council contingency fund and travel policy discussion, followed by any new ideas that council members may have for the year.

So we will begin with our first presentation of the night with Capital Project Financing Options.

So we have our city manager here, Katie Doling to get us started, I believe.

Yep.

Thank you.

Thank you, Mayor.

Good evening, Council.

We're very excited to begin what we hope to be one of many conversations related to our capital project financing options.

We touched on this a lot during the 2025 budget development process, and it will be a joint presentation tonight with Deputy City Manager Megan Davis, Chief Financial Officer Zach Karthaya, as well as our financial advisors from Hilltop Advisors, Jason Simmons and Maddie Prodonovic.

So we'll be breaking this if you want to go to the next slide into kind of three different sections with opportunities to ask questions after each.

The first is really to touch on and elaborate on three priority projects that we've identified going through this project, answering council questions about kind of the conditions of the facilities as well as assessments we've done about future needs and kind of the projects moving forward.

Hilltop Securities will be providing a capital financing options, really giving you like all the tools in the toolbox.

And then we'll end with sort of talking about other considerations, including timing of ballot questions potentially and next steps to get direction on whether council wants to continue forward with these conversations and sort of at what pace to go forward with.

So as we've noted over the last several years, while CPI kind of fluctuates and ebbs and flows, construction and construction costs have a much different escalation rate that you can see kind of off to that right of the chart.

So really why we're here tonight is that we've had several capital projects that have been deferred, many of them at their end of the useful lifespan.

And the cost of the materials are really continuing to rise.

And so we want to make sure that you know any decisions that we make hit on it because the further we delay these, the more costly they become.

And so really kind of trying to balance the you know the impact that it will have to our financials versus you know delaying any further costs.

And so that's sort of where we're here tonight.

The background is um, and last year we worked with a consultant to conduct a facilities needs assessment for our various facilities.

Um we did a kind of a high overview during our September CIP tour with those facility needs, and then um kind of narrowed down all of our needs to ones that are pretty critical and urgent, like our aquatic center versus some of those that are still more in the conceptual plan that you may have toured, but we aren't quite prepared to move forward with yet due to just um limitations on what that project might look like.

So uh we'll also kind of talk about at the ending, you know, why our current capital funding sources aren't sufficient to complete some of those improvements necessary.

So, what this is tonight versus kind of what it isn't, right?

Tonight is really to get a lot of detailed information and clarity around those priority projects.

Um, give you guys clarity on our different financing options, and then again to kind of discuss timing.

What this isn't is necessarily deciding how we're gonna finance it, what mail levy, what projects.

We just kind of want to get a sense, and then that way um we could start to move forward in February if council decides to continue down this path with getting more clarity around how we could potentially finance this, what that impact looks like from revenue perspective, but also what that impact might look like to either a taxpayer through a sales tax or property tax rate.

But with that, I will turn it over to Deputy Davis to talk about some of those priority projects.

And again, we'll pause kind of after each major section, but feel free to jump in if you have a pressing question.

All right.

Thank you, City Manager.

Uh Megan Davis, Deputy City Manager.

Um, thank you, Mayor and Council.

I'm gonna kick us off by talking about the capital projects and capital needs and give you a little bit more information than you may have received during the CIP tour.

So this year, um, I shouldn't say actually last year in 2024, the city um completed some city facilities assessments, and we looked at four kind of key facilities that are approaching end of life or um have had a lot of facility issues, maintenance issues, management issues, and we're starting to have a lot of replacements of you know the the infrastructure and um the mechanicals for those facilities.

City hall was the first one, City Hall is 40 40 years old.

Um during the same assessment process that we did for City Hall, we also looked at the service center, and that's 52 years old, and we looked at open space and golf maintenance.

Prior to that, beginning in 2023, the recreation center had started to look at that facility, the BBRC and the Aquatic Center, and look at some of the needs, do an assessment of the existing facility, and come up with some ideas and options for potential improvements there.

So we worked with two different partners.

We worked with Oz Architecture for the three facilities that we talked about, and then for the recreation center, we worked with the CENSA architecture.

So through these processes, we established options for renovation and replacement of these key facilities.

And today we're going to talk about what we received in terms of recommendations from those consulting partners that we worked with.

For City Hall, the recommendation was for replacement of City Hall.

For the recreation center and aquatic center was a renovation and a renovation for the service center.

So I'll go to some details about that assessment.

So just a little bit about kind of what which projects we looked at and kind of how we're viewing this these capital needs.

As you know, we do have numerous other capital projects, significant significant capital projects.

Many of those fall into our special funds or enterprise funds.

And so we're specifically looking at these kind of high priorities that would need to be funded through the general fund.

So just to give you an overall sense of these three priorities, we're looking at about $74 million in need, $34 million for the recreation center, $34 million for this for City Hall, and $6 million for the services center.

I'll talk a little bit more about what each of those will include.

So the recreation and aquatic center.

The assessment identified several challenges.

And I think on your tour, and I think each of you individually also had the chance to come to the recreation center this summer.

But obviously, one of the key issues that we face most recently is the aging mechanical systems within the aquatic center.

And so that includes the pipes, the pumps, boilers, et cetera.

And this has really compromised the functionality and our ability to kind of reliably operate this facility on an ongoing basis.