Local Issue: Safety Center

On June 5, 2012, the City Council approved $7.28 million in lease revenue funding to finance the building of a new safety center.  The project includes purchase of land at 1601 Riverview Dr. (behind Perkins Restaurant), construction of a police facility and fire department administrative offices, and upgrades to the current fire facility. The fire equipment would remain in the current facility.  This marked an important (and contentious) milestone in a long process.

NEW (6/26/12): Statement from the City of Northfield regarding funding of the new safety center.

What's next: According to Northfield Finance Director Kathleen McBride, a plan will be developed in the next 4-6 weeks (by the end of July 2012), with purchase of the land in August or September.

The funding: The City Council voted to finance the project with "lease revenue bonds." According to McBride, "The City will lease the land to the HRA (Housing & Redevelopment Authority); the HRA will sell the bonds to construct the facility; the HRA will then lease the facility back to the City. The lease payments the City pays to the HRA are the source of funds to pay off the bonds and are the basis for being able to sell the bonds in the first place."

McBride continues: "The lease revenue bonds are not a general obligation of the City. Payment of the debt is based solely on the lease payments. With this, lease revenue bonds will carry a slightly higher interest rate than general obligation bonds (ranging from .40 to .80 basis points higher)."

Where does the money for the lease payments come from? The City generates the funds through a property tax levy.

Has the City used this type of funding before? Yes, for the construction of the new outdoor pool, when the EDA (Economic Development Authority) issued the bonds.

Here is a rough timeline of the process thus far:

January 2009: City Council approves the creation of a Safety Center Taskforce to “research, analyze data and define facility space needs, building location, and financing and ultimately make a report clearly defining public safety needs to the City Council.”

November 2009: City Council agreed to the reuse of the existing location for a new fire facility and a new location for a police facility.

June 2010: City Council selected referendum bonding rather than general obligation bonds method to finance the facility.

September 2010: Flooding of the Cannon River affects the current safety center, which is located in a flood plain.

November 2010: City Council decided to build a combined safety center on one site at a cost of  $10.7 million.

February 2011: City Council decided to finance the site acquisition and construction with general obligation bonds.

April 2011: Two advisory groups were approved: one to look at reuse of the current facility, and the other to look at potential sites.

May 2011: City Council reopened consideration of separate facilities.

March 2012: City Council voted to split police and fire facilities.

April 2012: City Council agreed to purchase 1601 Riverview Dr. property for $622,000 (4.2 acres).

June 2012: City Council approved $7.28 million in lease revenue funding for a new safety center.

 

Some resources

City of Northfield: Police & Fire Facilities Projects (only up-to-date through summer 2010)

Northfield City Council Unanimously Approves New Safety Center (Northfield Patch 11/17/2010)

Northfield Council to Split Police, Fire Department Facilities (Northfield Patch 3/7/12)

Council Moves Ahead on Safety Center; Considers Bond Referendum, Sales Tax Increase for Funding (Northfield Patch 4/4/12)

Fire chief rethinks reuse of Northfield Safety Center (Northfield News 5/30/12)

Chamber Board wants voter approval for Northfield Safety Center financing (Northfield News 6/1/12)

Council Approves $7.28 Million Lease Revenue Bonds for Safety Center (Northfield Patch 6/6/12)

Financing for Northfield Safety Center a done deal (Northfield News 6/6/12)

Northfield public safety center gains traction (Star Tribune Metro South 6/12/12)

Second Ward City Councilor Betsey Buckheit's blog posts on the issue. Councilor Buckheit explains the various funding mechanisms, among other things.

Memo from Northfield Finance Director Kathleen McBride explaining lease revenue bonds

Discussion on LocallyGrownNorthfield

 

Also in this Local Issues series on Northfield.org: Local Issue: Skatepark

Note that, because of the Northfield News's website redesign in 2012, older articles are no longer accessible to searches. Hence there are no Northfield News articles before 2012 linked above. Some of the information in the above timeline is drawn from Jane McWilliams' League of Women Voters' observer report.


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