Fishers Mayor Scott Fadness has a plan to pay for a new City Hall complex that will include an arts center, as well as a large community center, without an increase in the city tax rate. The mayor shared that plan with members of the City Council Finance Committee December 15th.
Fadness told the committee he had two major goals in financing these projects – incur the lowest finance costs possible and not increase the city tax rate to pay for them.
For the City Hall/Arts Center complex, the mayor proposes to issue bonds in the amount of $17 million. This complex is projected to cost about $22 million. Fadness proposes to utilize $5 million in American Rescue Plan (ARP) funds which the city has not yet spent to make up the difference.
So far, the city has spent just under $1 million of the ARP money to finance COVID contact tracing. The remaining roughly $1 million of ARP cash would remain, with its use not yet determined.
The other part of the plans call for a community center with an estimated price tag of $45 million. That includes sports court space, an aquatic center, classroom space, land purchase and site work.
The mayor’s plan is to have the city purchase the community center in 2025. That would allow finishing the capital projects the city has now, which would bring the debt on in 2025 with no tax rate implications. The city would essentially pay off debt on projects still being financed, allowing room in the debt picture to allow the community center to be financed beginning in 2025, without a large interest rate expense.
With short-term interest rates, and municipal debt backed by property tax revenue, Fadness argues the debt costs will be lower with this plan.
Fadness also says that assessed property valuations have been higher than expected, and if that happens in the future, the debt could be paid-off earlier.
This plan also preserves the city’s favorable debt rating from Standard & Poor, because the cash reserves will remain at a higher level than required.
When asked about financing the operating costs of the community center, the mayor expects the facility to generate more than enough revenue to finance operations.
When asked when these facilities will open, the mayor told the committee his expectation is the design phase will be done in the spring of 2022, breaking ground on both construction projects by the end of 2022. The mayor emphasized that is his hope at this point. “I think the community is ready and eager for both the projects,” the mayor said.