The Weyauwega Common Council is directing city staff to investigate all possible funding sources for the remodeling and expansion of city hall and the police department.
That directive is also for Cedar Corporation.
The Green Bay company is working on the project design and is expected to complete the design from September to December.
The cost of the project is estimated at $2.2 million, and during the Monday, Aug. 18, meeting of the Common Council, the city’s financial adviser presented three financing options.
Jon Cameron, of Ehlers & Associates in Brookfield, spoke to the council via telephone.
He recommends exhausting all funds on hand and considering grants and also donations from large businesses as part of the financing scenario for the project.
All three of the financing options include finance related expenses for the financial adviser, bond counsel and paying agent, with an underwriter’s discount.
Option 1 assumes the city would apply $200,000 of funds on hand toward the project and then borrow $2.05 million.
The principal and interest would be paid off over the course of 20 years at a total cost of $2.88 million.
The second and third options presented to the council do not include applying $200,000 of funds on hand toward the project.
In those two scenarios, the city would borrow $2.25 million.
Option 2 would be a borrow for 20 years, while the third option would be a 10-year note, Cameron said, with a balloon payment at the end.
The city would then refinance for another 10-year period, he said of Option 3.
In Option 2, principal and interest would total $3.12 million.
The cost of the 10-year note for Option 3 would total $2.74 million in principal and interest payments.
City Administrator Patrick Wetzel said, “This is just to get the discussion going on how we could finance it.”
The reality is the city could obtain grants to fund some items in the project, he said.
Wetzel said the city needs to know that before it makes a decision on how much to borrow.
Ald. Scott Rasmussen expressed a concern about how it would affect the city’s tax rate.
Wetzel said the council should assume it would fit within the city’s borrowing capacity.
Cameron said the council’s next step should be looking at the city’s entire debt so new debt payments match outstanding debt, keeping the city’s tax rate as level as possible.
“The next step is to more clearly define the amount you would be financing,” he said.
Wetzel described the options as preliminary ones and said Cedar Corporation is looking into different grants the city could seek.
A report on possible grants is expected at the council’s Sept. 22 meeting.
Bids for the city hall and police department project could be sought over the winter.
Construction would then take place from March through December of 2015.
The city’s discussion about how to improve city hall first began in 2008.
The options included renovating the current city hall or constructing a new building on various sites.
After reviewing various options, the common council decided to keep city hall downtown.
Cedar Corporation was retained in 2011 to review city hall’s suitability for renovation, as well as the two buildings next to it for potential opportunities. The city purchased those two lots a couple years ago.
An assessment of city hall identified a number of items needing to be addressed including a lack of security, proper storage, meeting space, voting space, proper police functions, efficiency and energy efficiency.
Plans call for a two-story building to be constructed on three lots – the present lot city hall and the police department are located on in downtown Weyauwega – and the two lots located to to it, at 105 and 107 E. Main St.