Looking for ways to move forward with a $24.5M courthouse and $33.5M public works yard, the city council is exploring creative financing and other cost-reduction methods to make a new bond measure more palatable to voters in November:
Flagstaff projects to shave costs
by JOE FERGUSON
Arizona Daily Sun
July 12, 2012
New details emerging about a proposed new courthouse and public works yard suggest the projects will be vastly different than what was proposed two years ago. The newly seated Flagstaff City Council took out the cost-cutting scissors Tuesday night, looking to find ways to cut corners on the already slimmed-down proposals. Council must decide by next week whether to refer the bonds to the voters in November. The motivation is fueled by a desire to keep the amount of new bonds under $29 million, which city officials state is the maximum amount the city can bond for without having to raise the current secondary property tax rate. The constant rate means Flagstaff homeowners see their secondary taxes rise or fall each year with their property valuations. Primary tax collections citywide cannot by law rise by more than 2 percent a year, regardless of the change in property values.
CITY COURT
Under one scenario, construction of a new courthouse and adjacent parking garage in downtown Flagstaff could avoid the need for bonds altogether through a combination of court fees and a land swap with the developer. Don Jacobson, the city's court administrator, stated
the possibility exists if the city could finance the entire $24.5 million project by giving the developer various city-owned parcels as well as dedicating a revenue stream from some recently adopted court fees. No firm agreement, however, has been reached.
The plan, known as Option 3, was favored by several councilmembers eager to find a solution other than asking voters for millions of dollars in new bonds. Two years ago, city voters rejected $23 million in new bonds to build a new city court. On Tuesday, Jacobson briefly showed a rendering of a new three-story courthouse built on the northwest corner of Agassiz Street and Aspen Avenue. The project, if built, would use some floors of he Bank of America building and its adjacent parking, both of which would get a facelift.
PUBLIC WORKS YARD
The Council also looked to trim the overall cost of a new public works yard, which is expected to cost $33.5 million. Erik Solberg, the city's public works director, declined to reveal many details about the leading proposal to build a new 22-acre public works yard but said it was on a county island with some existing buildings. Councilmembers tried to chip away at the first phase of the public works yard, estimated to cost $7 million. Councilmembers suggested the city does not immediately need to annex the land, tie the facility into the city's water system (rather than rely on wells) and fully upgrade the facilities.
Mayor Jerry Nabours said he told staff he was interested in a "stopgap measure" that would allow the city to acquire the necessary land but only put in the minimum improvements to get the new facility up and running. "What is the minimum we could do to get you into a new facility?" Nabours would ask during the three-hour discussion.
Solberg said his staff is trying to bring down the cost of the yard before going to the voters. One current sticking point is state-required appraisals of the various parcels involved in the land swap. "We are working really hard to come in way under ($19 million in bonds)," Solberg said.
Members of the Council also were interested in delaying Phase 2 of the public works yard, which would have purchased adjacent land for future expansion. Solberg said the city would have to provide some type of up-front compensation to the developer in order to tie up the land for the next decade. The concern, Solberg said, is that without the land tied to the second phase, the public works yard would have no place else to expand if needed. Bidders for the public works yard were offered two city-owned parcels in trade -- McCallister Ranch and the existing yard.
FOREST THINNING
There was broad support for a $10 million bond project to pay for the thinning of forested areas in Dry Lake Hills north of the city, where a wildfire could lead to massive flooding downtown and on the NAU campus. The bond would also pay for thinning around Lake Mary, where a fire could threaten a major source of potable city water. City Manager Kevin Burke spent part of the meeting explaining the tax ramifications of approving new bonds and why the secondary primary tax rate would not increase. He used the example of paying off a mortgage to illustrate the issue before the Council. "Let's say you pay off the mortgage on your home. You have some choices. You have already built into your budget that monthly payment," he said. "You can now choose to put that monthly payment to that car that you've been putting off acquiring or you can put it in savings." While Burke wants to keep the rate flat, he conceded the amount taxpayers would actually pay each year would still fluctuate depending on home valuations.
City Projects Under Negotiation*
Public works yard
-22 acres
-78,000 sq.ft. building
-$19M max. in bonds
Courthouse, parking garage
-$6M to $8M max. in bonds
-Agassiz St. at Aspen Ave.
*Leading proposals
New vs. Old
Public works yard
2010 Bond Question
- $42 million in bonds
- 200,000 square feet
- all new facilities
- 22 acres
- city-owned land
- no increase in secondary property tax rate
2012 Bond Question*
- $19 million in bonds maximum, less if phased
- 78,000 square feet
- no new construction, modifications to existing facilities
- 22 acres
- privately-owned land
- no increase in secondary property tax rate
*Leading proposal
Courthouse, parking garage
2010 Bond Question
- $23 million in bonds
- completely financed with bonds
- courthouse & parking garage
- unknown location
- no increase in secondary property tax rate
2012 Bond Question*
- between $6 million and $8 million in bonds (maximum)
- partially financed with court fees, property exchange and bonds
- downtown redevelopment
- northwest corner of Agassiz Street and Aspen Avenue
- no increase in secondary property tax rate
*Leading proposal
http://azdailysun.com/news/local/gov...7e1cdd878.html