TO: Mayor and Members of City Council
THRU: Douglas J. Hewett, City Manager, ICMA-CM
FROM: Kristoff Bauer, Deputy City Manager
DATE: November 5, 2018
RE:
Title
Parks and Recreation Bond Financial Plan Update
end
COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal 4: Desirable Place to Live, Work and Recreate
Executive Summary:
The Parks Bond Council Subcommittee (“Committee”) met on April 19, 2018 and took a number of actions that will require revisions to this financial plan. (See attached summary) Further revisions have been made based on new opportunities and information. The Committee met again on Oct. 24 to review the plan as updated (attached). That plan is slightly out of balance and options to address that issue were discussed. The Committee directed staff to bring the financial plan to Council along with options to address any shortfall in the funding model. Staff is seeking Council direction regarding the composition and timing of the projects supported by park bond proceeds and consensus regarding actions to be taken to ensure that the plan is sound.
Background:
The initial financial plan was developed based on January 4, 2016, Council action to identify the projects to be funded by the Park Bond and allocate funding to each. The current plan includes adjustments to the timing of some projects based on the direction of the Committee. Additional adjustments were recommended by the Committee during a meeting on April 19, 2018, which are summarized in the attached memorandum. The Council confirmed a number of the Committee’s recommendations during the May 7 Work Session including increasing funding for the senior centers and adjusting the timing and location for the sports field complex (see attached summary memorandum).
After that Work Session, the City received an offer from Ft. Bragg to make property off of McArthur Rd. available to the City for the development of sports fields. Ft. Bragg has proposed to provide this property through a no cost 50 year easement in subsequent conversations. Moving that project from the Military Business Park to this new location allowed funding that had been identified for property acquisition and broader site improvements to be reallocated.
The Committee recommended the following during their Sept. 26th meeting:
• Identify Cliffdale & E.E. Miller Splash Pads as Future Unfunded
• Split the funding for the “TBD” Splash Pad among two new projects;
o Stadium Play Space (installing a permanent play structure and other improvements in this area of the stadium)
o Plaza Fountain (a water feature in the public plaza between the stadium, Prince Charles, and the new parking garage and mixed use building)
• Split the Sports Field Complex project into two projects with soccer going to the Jordan Soccer Complex and Baseball going to the new McArthur road location
• Reduce funding for the Cape Fear River Park to balance total expenditures at $35 million
• Adjust timing of projects
A summary of the recommended project funding and timing is attached as “Parks and Rec Bond Committee Recommended Project Funding”.
Issues/Analysis:
Staff has reviewed the financial plan based on Committee direction. The debt service funding model is slightly out of balance based upon projected revenue growth and assumptions for interest rates on the bond issuances. As illustrated in the attached “Parks and Rec Bonds Debt Service Funding Model”, there is a shortfall of dedicated funds projected in fiscal year 2030, which continues until fiscal year 2035. This was discussed with the Committee during their Oct. 24 meeting and they directed staff to bring the funding plan to Council with options to address the funding shortfall.
Budget Impact:
Revenues from 1.42 cents of the City’s 49.95 cent tax rate are dedicated to support the Parks and Recreation bond projects and debt service.
Options:
Staff has developed three options for Council consideration to address the projected shortfall in dedicated resources, as noted below and as illustrated in attachments:
Option A - Should the Council wish to restrict resources solely to the dedicated tax rate, the bond debt service could be funded within those resources if the River Park and the Tennis Center projects are each deferred by one year.
• Pro - No additional resources needed
• Con - Projects deferred by one year; may defer projects needlessly should financial trends be more favorable than projected
Option B - The funding shortfall could be addressed by loaning funds from the General Capital Funding Plan during fiscal years 2030 to 2033 (total $565,000), to be repaid in fiscal years 2034, 2035 and 2036.
• Pros - Project timing maintained; temporary use of resources outside of dedicated tax; more easily adjusted based upon actual financial trends
• Con - Potential to impact timing for other capital projects in the future
Option C - The funding shortfall could be addressed by a transfer of $565,000 from available General Fund fund balance.
• Pro - Project timing maintained
• Con - $565,000 not available for other projects or priorities; ties up funding for 10 years before needed
Recommended Action:
Staff is seeking consensus of Council regarding the project composition and priorities, as well as the preferred option to address the funding model shortfall.
Attachments:
Park Bond Plan 2016
Park Bond Plan discussed on April 19, 2018, by the Bond Committee
April 19 Bond Committee Memorandum
Park Bond Plan provided on May 7, 2018
Council May 7, 2018, Action Summary Memorandum
Summary of Parks and Rec Bond Committee Recommended Project Funding
Parks and Recreation Bonds Debt Service Funding Model
Parks and Recreation Bonds Debt Service Funding Model - Option A
Parks and Recreation Bonds Debt Service Funding Model - Option B
Parks and Recreation Bonds Debt Service Funding Model - Option C