June 18, 2007
Winsted City Council OKs new funding plan for city center
By Linda Scherer
Financial advisor Steve Mattson of Northland Securities told the council that the $4 million project can be funded without an additional tax levy.
Because recent legislation that would have given the city bonding authority to fund the city center project was vetoed by Governor Tim Pawlenty, other financial options were considered by the council.
Now, unless the legislature calls a special session to renew the tax bill, the city has approved the following alternatives for financing the city center project:
• A capital improvement bond for the upper level of the city center in the amount of $2,444,000. This is the same type of bond issue used for the public works building.
• An $866,000 lease revenue bond to cover the expenditures on the lower level community center, the promenade, and amphitheater.
The city will lease the lower level of the building from the Economic Development Authority (EDA), made up of the city council, Don Guggemos, and Paul Wiebel.
By doing this, the city will have to give up $140,000 in redevelopment grant dollars because the grant calls for the property to stay in public ownership permanently.
Under a lease agreement, its holders need to have security in the building should the city’s plans fall through.
• An inner-fund loan of $220,000 from the city’s general fund to be paid back in four years. Industrial Park Land Sales of $65,000, and an additional $40,000 in 2007 budget cuts will fill the remaining funding gap.
• An equipment certificate for $223,500.
Should a special session in the legislature occur during this process, the city would drop this financing option and accept the special legislation.
The city council is moving forward with this project because the city center bids received to date are about $750,000 less than the original estimate. Also, architects are saying if the city doesn’t begin the project now, by next spring, the costs will go up by $750,000.
“We have this window of opportunity to do a project that is close to $4 million and do it under budget, as of right now, and with significantly less of a tax impact on the residents than what we originally estimated,” City Administrator Brent Mareck said.
The most recent total estimated project cost for the city center and lakefront promenade project was $4,604,759.
The new funding is for $3,858,500 which should cover the cost of the project with the lower bids that have been received.
The city will continue to receive bids for the city center until Sunday, Aug. 5.
A public hearing is scheduled for Tuesday, July 3, at 6 p.m. to go over the new funding and to answer questions Winsted residents might have.
Demolition is to begin on the former public works building Monday, June 18.
Construction could begin on the city center and lakefront promenade as soon as the end of August.
Winsted’s web site has a new look
The City of Winsted’s web site has a new design. Take a look at www.winsted.mn.us.