City Manager’s Weekly Report
for week ending Nov. 22, 2019
The contract with architects Miller Hull Partnership is under way. Yesterday, Miller Hull submitted the last item required to actualize the contract for conceptual design and costing of Normandy Park government facilities (insurance documents, business license, etc.). We will begin the process of scheduling the initial work to allocate space and determine siting options in mid-December. Once this is completed with staff and Council, then public engagement sessions will be scheduled to explore and refine concepts of siting, space use, architectural preferences, landscaping and parking, as well as to assure currently expected complementary uses of the City Hall Park site as expressed in the PROS Plan. We anticipate that the first of two public engagement sessions will be initiated by the middle of January. Public participation in these sessions will be a significant aspect of the architect’s work. We have lot of nuts-and-bolts space and siting ground work to complete before the day when architectural concepts will be initially explored.
Building government facilities in Normandy Park. How to pay? 1) Use no General Fund dollars (do not interfere with current city services, including police services); 2) be able to pay during depressed economic times; 3) continue to build capital facilities projects for storm water and streets (as projected in the Transportation Improvement Plan); 4) maintain fund balances per city policy; and 5) do not increase property or any other taxes. Okay, we can do that! See Funding Source Options – Community Center, attached. I am convinced Miller Hull can design cost-effective, graceful civic buildings, that evoke the history and spirit of Normandy Park.
Concern about the integrity of REET funding in bad times. Note the attached spreadsheet, Funding Sources Constrained, that totals $4.9m in facilities payment by 2028 with $300,000 of yearly REET revenue through 2026 (the same financial burden as projected in the spreadsheet for a normal economy). Bear in mind, these REET funds cannot be used for anything but capital facilities. Note that the “Pavement Management” line remains the same as the current economy; it includes funding for streets ($200K each year). Also, note the “Grant Reimbursement” line on the spreadsheet. If grant matches don’t come in, then projects don’t get built (a normal problem), which conserves the net of the two lines in any year. Moreover, street projects can simply not be built. Through 2028, this can conserve, if necessary, about $3m over the nine-year period to make up for bad economic times and a loss of REET funding due to slow moving real estate.
In other words, if REET funding slows to levels during the Great Recession, then there will still be about $200K per year on the average in REET funding. Again, this means that if everything tanks for the subsequent 9 years after 2019, then the worst case is that the city can meet its REET government facility revenue estimate of $300,000 – quite easily actually – as you can see from the attached spreadsheet. Of course, unlike this spreadsheet, our intent is to keep building public projects, which is possible through grants and REET, while maintaining fund balances per city policy.
Will taxes increase? No. Will the city remain financially intact? Yes. The bonds that will be sold and paid from MPD and REET revenues are city councilmanic bonds and do not increase taxes at all. (Councilmanic bonds are not at all like school bonds that can potentially increase taxes.) To remain burdened only by the existing ability to pay, however, the city must not commit debt to build anything more than $4.9 million over a 10 year period; that is, unless any desired additional cost is cash-funded through donation or grant. In either a good economy or a terrible economy, the revenue capacity projected can be utilized with no damage at all to the General Fund or to the city’s financial structure. $4.9 million over 10 years is a safe commitment.
Algona did it! See: http://www.auburn-reporter.com/news/big-great-deal-for-a-small-town/ Normandy Park can do it. First, the City Council (after public engagement) needs to decide exactly what is desired and what it costs, then the city develops a final strategy to pay for everything over time. The city has limited financial capacity, but with time and will – and likely with phasing – a construction project is possible without new taxes and without risk to the city’s financial integrity, even in hard economic times. With donation and limited grant opportunities, more can be built sooner.
Mark E. Hoppen, City Manager
City of Normandy Park
801 SW 174th Street
Normandy Park, WA 98166
(206) 248-8246 (Direct Phone)