Tuesday, June 24th, 2025, to order.

We'll go ahead and start with the capital bond measure.

So if we'll turn it over to Megan.

Yes, yes.

Good evening, Mayor Pratem, City Council.

We're going to have another conversation this evening about the Capital Bond projects and specifically talk about the ballot language scoping.

We have a number of folks here with us this evening.

Alex and I, assistant to the city manager, will be presenting along with Maddie Pradonovich with Hilltop Securities, and then we also have Butler Snow, our bond counsel here.

We'll talk about next steps and then discussion and direction.

So in terms of background, um, just as a reminder, we kind of have been discussing with council some of the capital improvement needs throughout the city, and we have significant capital needs.

Um, with kind of the results of that to get council direction on moving forward.

Um council gave us direction at that time to move forward with the capital with a capital projects ballot measure, but recognize that we need a little bit more discussion about what um projects to include in um the ballot measure.

So here we are tonight, and we're hoping to finalize the scope of work and get further direction from you all.

Um the poll, as you recall, was quite extensive, and we got a lot of feedback from the community.

We got everything from kind of that top-line information about the community sentiment around their confidence in the city and their confidence in how the city is kind of running.

We got information on their feedback on the projects before having any information about the projects themselves, and then feedback on the projects after being educated a little bit.

But in terms of the kind of top-line responses, you can see here that with the question that we asked for each of the three capital projects, please indicate whether the inclusion of this project on the ballot makes you more likely to vote yes and approve a tax increase, or more likely to vote no and then reject a tax increase, or if it does not make a difference to you in your decision.

And as you can see, with each of the three projects with the BBRC, 79% of voters indicated that they would be more likely to approve it approve a ballot measure with the civic center, 58%, and with the service center, 64%.

So we generally got pretty good favorability for these projects from the community.

We also took all of the engagement response, including the responses to the survey that we conducted, as well as the information that we kind of gleaned from the engagements and pulled them together in these key themes.

And the key themes that we heard from the community were that the service center and the Rick Recreation Center projects received the most support, although all were favorable by the community.

And while there is concern about increased taxes, property tax was more favorable than sales tax.

And there is concern over the timing of projects.

As you know, when we um started this discussion, it was right with the community, it was right around March, which was kind of when the whole tariffs discussion started.

Um there has been a lot of uncertainty in the in the economy and just um with what's been happening at the national and international level over the past six months, and so I think that's been you know, weighing on the voters' minds.

So that's a consideration.

And we heard that these projects are really viewed as a positive investment in Lafayette's future.

So we're gonna talk a little bit about financing options.

Again, we've had a lot of discussion about this, but we wanted to come back and provide a little bit more information about some financing options around phasing.

So we reviewed several financing financing options with you and um determined that a general obligation bond with a property tax for repayment is going to be the best option for what our needs are and what our revenue generating mechanisms are here at the city with a 20-year general obligation bond scenario, is what we've modeled.

Um, and if council would like to advance the two largest projects, so the BBRC and the Civic Center, those were the two projects that are about 34 million dollars cost estimate.

We believe that phasing debt issuance would be ideal because this would allow us to align the debt issuance with our capacity to design and construct the projects and still meet the requirement to expend the proceeds within the required timeline.

And this would also be well aligned with our capacity at the city to construct them in a way that would minimize the impacts to our operations to staff and to residents in terms of constructing them and having kind of impacts on our operations.

So I'm gonna turn it over to Maddie to give a little bit more detail about kind of what this would look like and what she's modeled in terms of what that might be.

Thanks, Megan.

So uh and good evening.

Uh thanks for having me back.

Um, in addition to the considerations on the city side from construction of projects, uh, there's also a requirement, and this is a little bit more in Dalton's wheelhouse as bond counsel than mine, but um at the time of issuance, uh, the city needs to certify a few things in order for these bonds to be eligible to be tax exempt, which is what we want because that gets you the lowest borrowing cost.

Um the first is that you know the proceeds need to be used towards good public purpose capital projects, so not for operations and not for private use.

So we don't have you know those issues here, obviously.

So to the second piece that we care a lot about is uh particularly to Megan's commentary on the prior slide, is that uh the city needs to have a reasonable expectation to spend 85% of proceeds within three years.

Um that essentially allows you to be able to certify and and bond council give their opinion that you know there's no overissuance here, we're not you know intentionally creating some arbitrage issues and and things like that.

Um so because of that, when we start doing sort of larger bond programs, and we see this a bit more on the school district side, but it does happen on the city side as well.

Um, we typically see then staggering of issuances.

So you may be asking for authorization for all projects, but you're not actually gonna issue bond all of that authorization.

So all in this instance, 74 million at one time.

Um, you would do you know, a single issuance first that would go towards one or two projects, and then you know, two or three years later, you do a second issuance to construct the remaining project.

Um, and so uh as far as overall timing, big picture, you know, if if you decide to put something on the ballot this November, uh, and if it is successful, then really the soonest you would be able to sort of go issue bonds and have proceeds in hand to start on projects would be kind of January or February of next year.

And that's just because uh after the um election in early November, there's some processes that we have to go through both to come back to you all to actually get approval to issue the debt uh related to the authorization, and then there's um some documentation and and disclosure and things like that that has to happen to be able to go sell bonds in the market.

Um that said, you're not required to turn around and issue bonds immediately.

There are many entities that receive voter authorization and then spend some time doing you know some additional design or architecture work.

Um you can reimburse yourself with proceeds from bonds.

So if if the choice was to wait a little bit and get a better sense of what the project scope looks like, um, you can you know start on that and use essentially available city dollars within a fiscal year, and then you know, plan on issuing bonds maybe a little bit later in 2026 to reimburse yourself and to fund the project.

Um then again, you know, that first issuance can be structured to fund one or two projects if you decide to go with the larger package and then maintain uh some of that authorization for a future issuance.

That then brings up a second question of when we're talking about a 20-year term.

You know, what do you envision for that?

Is that 20 years in total that the tax is in place, or is it 20 years for each issuance, right?

If you think about kind of maybe like with a mortgage, um, you know, you take out like an equity line or something like that, right?

You're kind of adding on two, you could try and just increase your annual payment and keep it with the same final term, or you can kind of have another term essentially on those bonds.

And so the next slide to kind of I always think visual representation is a little bit helpful in this instance.