TO: Mayor and Members of City Council
THRU: Douglas J. Hewett, City Manager, ICMA-CM
FROM: Kristoff Bauer, Deputy City Manager
DATE: November 26, 2018
RE:
Title
Parks and Recreation Bond Financial Plan Approval
end
COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal 4: Desirable Place to Live, Work and Recreate
Executive Summary:
This item was discussed during the Council Work Session of Nov. 5 and the consensus direction to staff was to bring forward the financial plan described on that day as “Option A” for Council approval.
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
Council discussed these issues during the Work Session of Nov. 5 and provided consensus supporting the financial plan described as “Option A” which is attached. That option responds to the financial issue described in the next section.
The revised recommended project funding and timing is attached as “Parks and Rec Bond Project Funding Package 11 26 18”.
Issues/Analysis:
Staff reviewed the financial plan based on Committee direction at the September 26th meeting and found that the debt service funding model would be slightly out of balance based upon projected revenue growth and assumptions for interest rates on the bond issuances. There was a shortfall of dedicated funds projected in fiscal year 2030, which would continue 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 presented options for Council consideration at the November 5th Work Session to address the projected shortfall in dedicated resources. The consensus of Council was to move the option below forward for approval:
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
The summary of this option is attached, and the project funding summary has been revised accordingly.
Recommended Action:
Consistent with Council’s discussion on Nov. 5, Staff recommends approval of the attached financial plan for park bond projects.
Attachments:
Parks and Rec Bond Project Funding Package 11 26 18
Parks and Recreation Bonds Debt Service Funding Model - Option A