09.01 Consider Bids for Maintenance Facility Project

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, D D� Parkers Prairie Office: 13979 County Highway 42 Parkers Prairie, MN 56361 ' David Drown Associates, II1C. (612)920-3320 ext. 110�fax(612)605-2375 Public Finance Advisors www.daviddrown.com January 26,2018 Ms.Nancy Adams,Mayor Ms.Nancy Malecha,City Administrator/Clerk City of Pequot Lakes 4638 County Road 11 Pequot Lakes,MN 56472 RE: Project Tax Rate Impacts Honorable Mayor Adams,Members ofthe City Council,and Ms.Malecha: Our firm was requested to review the impact of the new maintenance facility on the City's tax rate. This week,the City received bids for the new maintenance facility and salt shed,with low bid being$972,000. This project will be paid for using County Highway turnback dollars(Fund 402). This letter summarizes our findings. The findings are as follows: 1. The new maintenance facility will have minimal impact on the City's tax rate. The City is currently budgeting$93,170 towards this project in the 2018 budget. Based on this amount,the City will be able to repay Fund 402 over the next 12 years,at an interest rate of 2.25%. 2. Fund 402 is expected to fund several projects over the next 15 years. The following is a summary of projects and the required dollars needed to repay Fund 402: Levy Amount Water/Sewer Funds Dedicated to Dedicated to Project Repay Fund 402 Repay Fund 402 Maintenance and Salt Facility 93,329 Street Quadrant/CR 112 202,063 CSAH 11 94,040 Patriot Avenue Overaly 55,122 The purpose of the repayment of Fund 402 is to build cash for the Patriot Avenue Reconstruction project. 3. With repayments on these projects,we estimate the City will have roughly$3,500,000 in Fund 402 to support the Patriot Avenue Reconstruction project,targeted for 2032. We appreciate the opportunity to assist the City of Pequot Lakes. If you have any questions or concerns,please do not hesitate to contact our office. Respectfully, Jason Murray,Associate David Drown Associates, Inc. lason @daviddrown.com