City seeks counsel for city hall bond funding

City seeks counsel for city hall bond funding
The Vermillion City Council agreed Feb. 20 to seek the services of Dougherty & Company as bond underwriter and Dorsey &Whitney as bond counsel as it finalizes plans for financing the proposed new city hall project. "Obviously, the financing is a very important piece that will determine whether the project happens," City Manager John Prescott told aldermen at their Feb. 20 meeting. "What we're seeking from the city council is to authorize the administration to work with bond counsel to prepare a sales tax revenue bond resolution for presentation to the city council."

To pay for the new building, the city plans to use $1.7 million of second penny funds that are in a reserve fund.

"We're also looking at combining that with future second penny sales tax revenues," Prescott said. "That will be the income stream for the bond resolution that we will bring back to the city council."

City staff and the architectural consultants involved with the project are still crunching numbers to arrive at a figure that represents the total construction cost of the new building.

The new city hall's plans call for a lower level, main floor, and a third floor with a total area of about 31,000 square feet.

The present city hall will be razed and three houses purchased recently by the city will be moved to provide space for the new city hall and its parking lots.

Early estimates of the new building's costs came in at $4.3 million without furnishings.

"At this point in time, we're still compiling the final numbers," Prescott said. "It's estimated that to remove the current structure and the three homes we own along Elm Street ? is approximately $4.3 million. If you add in everything with respect to this project, such as architectural fees, surveys, phones, electrical work, furnishing, items like that, you're looking at a total project cost of $5.2 to $5.4million."

He said the sales tax resolution would call for the revenue bond to be structured to provide the construction fund for this project.

�It would be structured so that no more that $4 million would be added to the construction fund for the building,� Prescott said.

He added that the actual cost of the building wouldn�t be known until bids for the project are opened sometime in July.

�When we get the bids in, hopefully that number will drop, and we won�t have to issue the bonds for quite as much,� he said.

The city�s annual debt payment for the project, once the city council gives the project the green light, will tap the second penny sales tax funds of $350,000 to $400,000 over 20 years.

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