Capital Bond Exploration Community Meeting #2 – Financial Responsibility – April 30, 2025
Capital Bond Exploration Community Meeting #2 – Financial Responsibility – April 30, 2025
This second community meeting in a series focused on financial responsibility for three potential capital projects: renovation and expansion of the Bob L. Burger Recreation Center (BBRC), a new civic center on South Public Road, and a service center on South Boulder Road. The total estimated investment is $74 million, with annual debt service of approximately $5.9 million over 20 years. City staff presented funding options—primarily a sales tax increase or a property tax increase—and answered questions from the public about economic considerations, cost escalations, and community impacts. The meeting ran from 6:00 PM to approximately 7:00 PM MDT.
Public Comments & Testimony
- Frank (Lafayette resident) questioned the planned relocation of the municipal court from the police building to the new civic center, citing security and cost concerns. Staff responded that the chief of police indicated the police building has outgrown its planned capacity and that court security would be handled by contractors rather than police staff. Frank also raised concerns that the city is underfunding annual road maintenance (stating that $2 million per year is needed to prevent decay, but the city allocates substantially less). He asked about the potential for bonding for road maintenance; staff explained that ongoing maintenance is prioritized through the general fund and that large transportation projects rely on grants. Frank also asked about the city’s current reserve; staff deferred to the finance director.
- A resident asked about the share of property taxes paid by a $685,000 home, noting that total property taxes have increased significantly in recent years (from under $3,000 five years ago to over $4,000 currently). They expressed concern that a $300 annual increase from the bond would compound existing financial pressures on homeowners, especially given economic volatility and potential impacts from federal grant reductions.
- Stephanie asked whether the city has considered bonding transportation projects separately and how sales tax or property tax increases for these capital projects would interact with future transportation funding needs. She also asked about the city’s debt service ratio and history of bonding.
- The chair of the Lafayette Senior Advisory Board shared that the board is aware of the projects and will discuss co-mingling senior services with recreation, noting that the community is aging and many residents are on fixed incomes. She expressed support for intergenerational programming but emphasized the need to consider long-term affordability.
- A resident asked about interest rate assumptions (staff and consultant Matty Bradonovic of Hilltop Securities stated that 5% is assumed for bond projections, though current market rates are around 4.5%; a 5% estimate provides ballot flexibility) and whether the city’s bond rating would be affected (the city does not have a current general credit rating but has a double-A-rated GO bond outstanding; the impact would be minimal because new revenues would support the new debt).
- A resident asked about city sales tax composition and whether increasing the rate to near 10% could discourage high-volume sales businesses from locating in Lafayette. Staff acknowledged that the total sales tax rate is already at 9.055% and that approaching 10% could shift the city’s economic profile toward tourist-based economies.
- A resident questioned whether the city considered laddering (phased) bond issuances to reduce risk. Maddie of Hilltop responded that while phasing is possible, issuing all debt at once would be more cost-effective in terms of total interest; however, that does not mitigate future economic uncertainties.
Discussion Items
- Project Overview and Costs: Staff (led by Megan Davis) presented the three projects: BBRC renovation/expansion (including aquatic center, fitness, senior programming), new civic center (replacing city hall, including council chambers, municipal court, and community space), and service center (for public works, parks, fleet). All three would cost about $74 million in total; debt service would be $5.9 million annually. Preliminary cost estimates include 4% annual escalation and 25-30% soft costs, but not catastrophic scenarios.
- Financial Options: Two primary funding mechanisms were discussed:
- Sales Tax Increase: Would require at least a 0.85% increase (from 3.87% city rate to 4.72%), bringing total sales tax to about 9.90%. This is near the 10% threshold where tourist economies dominate. Current city sales tax revenue is not sufficient to cover debt service.
- Property Tax Increase: For an average home valued at $685,000, the estimated increase would be about $300 per year (or $48 per $100,000 of assessed value). Lafayette’s current municipal mill levy is 15.87 mills, which includes earmarks for fire/ambulance and general public safety. Comparison with other Front Range cities showed Lafayette is near the top of the bottom third for municipal property tax mill levies when accounting for special districts.
- Other Funding Sources: Grants (state DOLA, Colorado Energy Office, Xcel Energy) and potential fee adjustments were mentioned but are uncertain or insufficient for the full project costs.
- Discussion on Variables: Interest rates, construction cost inflation, property tax volatility, and impacts of federal policy changes (e.g., FEMA, transportation grants) were acknowledged as unknowns. Staff noted that the city is not recommending immediate action but wants community input before any council decision.
- Next Steps: A community poll is underway, and results will be presented to city council at the May 27 meeting. Council may then decide to place a measure on the November 4, 2025 ballot, or postpone. One more community meeting (on environmental stewardship) remains.
Key Outcomes
- No formal votes or decisions were made at this meeting. It was an information-gathering session.
- The city will continue to collect community feedback via survey (QR code and website) and sticky-note prompts at the meeting.
- Council will receive a report at the May 27, 2025 city council meeting, including poll results and meeting feedback, to inform a potential ballot measure for the November 2025 election.
- Staff reiterated that the projects are at the conceptual stage; if approved, each would undergo 8-16 months of design with further community engagement.
Meeting Transcript
Second in our series of our each meeting is um focus on a little bit different. So last meeting we focused really on kind of the projects, and this evening we're gonna talk a lot more about kind of the financial responsibility of the city and the financial impacts. So with that, I will turn it over to Megan Davis. I know some of you attended the first the first one. We're gonna start tonight by giving a little bit of an introduction of staff. I'll introduce staff here in a minute, and then we'll do a brief project overview. We will talk about kind of the economic considerations, both in terms of the kind of current economic setting and the project financial kind of overview, and then we'll talk about funding options and we'll have some time for QA actually throughout the conversation. So just um, well, let me just start off. We have several staff who are gonna be involved in present tonight. We have Morgan Walton and Morgan is in our finance director, acting finance directors, and she's gonna join the conversation tonight, and then we have Alex Nelson and Alex is also going to participate. He's assistant to the city manager, and then we have Debbie and Natalie who are both in our communications team, and you saw some of our IT folks too. And then we also have Maddie, who is with our kind of consulting financial consultant group. So she has helped us with some of our financial analysis and our kind of projections around the financing for these projects. So lots of support and lots of work gone into these projects to get to this stage, and we're really kind of just at the beginning, which is why we're here tonight is to start to get some input and feedback from the community on these potential projects and this potential opportunity and option for the community. So we are looking at three projects for potential development and renovation. The three projects that we're looking at are the recreation center, the BBRC, and this is for a renovation and expansion of the existing facility, and it would expand and enhance the aquatic center. Um, also the fitness center, older adult programming, so add on a space for senior programming and other services for community members of all ages. Um, also for a new civic center on South Public Road, just north of here, and it would be basically replacing this city hall building to provide a more accessible and welcoming public building that would be more of a civic center, so it would have a little bit more kind of interactive, accessible community space for people to have meetings, um for people to interact and engage in in local government activities as well as the services that we provide, and also to house staff and uh government services. And then the third one is our service center. You probably haven't been there before. You can see on the map that it's um further east on South Boulder Road, and this is where we have many of our city services with public works, parks, open space. We have a lot of maintenance that happens out of those buildings, we have our operations, our public works operations that happen out of those buildings. So everything from kind of street maintenance, open space maintenance, park maintenance, that's where kind of the hub of all of those um like the equipment, the uh uh fleet, so the vehicles, our mechanics are there, all happen from that facility. Um we identified these three projects through kind of an extensive assessment project or process where we looked at all of the city's facilities. The city has really more than 30 plus actual facility buildings that we maintain, and that doesn't include things like kind of build like water buildings that house just like a pump station, it's actually facilities that we have to maintain, and we assessed all of our facilities and looked at the age, the condition, um, sort of the systems, the infrastructure, how they're utilized, the future needs of those facilities for the city, and identified these as the top priorities for making investments to better serve the community. And so these are the three that we are here to talk about tonight. Uh we did through that assessment process, we did some initial costing, so really just kind of preliminary costing around what it would look like to develop these projects. Um, the recreation center and civic center would both be approximately 34 million dollars, um and the service center approximately six million. So, in order to move these projects forward, it would be about a 74 million dollar investment. And if we move forward with a debt service model, it'd be about just under six million a year, so 5.9 million of debt service required for a year, and that's looking at a 20-year bond issuance. So these are all these projects were all kind of identified through the lens of our strategic outcomes. And really some of the focus areas that we've been kind of thinking about are the excellent city services and infrastructure and how we are able to currently maintain these facilities successfully and really in kind of a fiscally responsible way, which is to say, you know, repairing and replacing expensive aging mechanical systems, getting to a point of failure at systems and kind of building infrastructure and what those next steps look like and what those investments look like and what replacement looks like. We also want to have quality community amenities. So when we think about the rec center, we know that our community likes to have community spaces where they can interact and engage and have you know kind of quality services. And then also, of course, we're thinking about environmental stewardship, um, connectivity, a sense of place, and all these other factors as well. So when we think about why now, um, it's always hard to uh you know find the right time. Um, and these buildings range anywhere from 30 to over 50 years. Um, so they are all quite old. So we know that we're kind of again approaching end of life, but we also know that what we've seen in the past decades is that construction costs trends are obviously only going up. And so every year that goes by, the costs of these projects get more expensive. So if we wait a year, two years, um, again, we're really trying to weigh what those costs of sustaining and maintaining these buildings looks like, you know, in kind of comparison to what replacement looks like over time and what the cost of building it, say in five years or 10 years would be. So we expect this to continue. Um, again, we don't know what's going to happen with the economy. We'll talk a little bit about that, but um, we do foresee that construction costs will likely continue to go up. And in Colorado, this is C Doc, CDOT's construction cost index. Um, that's we've seen that across the state of Colorado as well. This is um from 2012. Um, there's some fluctuations that occurred from year to year, but um, in general, the trend line is is increasing. So we also, when we were looking through going through this process and conducting the assessments, just um being in the very early stages of these projects and not having completed any substantial design at this point, just the conceptual and preliminary design. We wanted to get some ideas about what's happening in other communities on the front range with the construction and development of these types of projects.
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