Bonds Sought To Pay Remainder Of Parks Building Costs
By David Slone
Times-Union
WARSAW — To pay off the remaining costs of the Warsaw Parks and Recreation Department’s new maintenance and office building, the city will be seeking park district bonds in an amount not to exceed $2.8 million.
Park district bonds are something the parks board has never done before, board President Steve Haines said at Tuesday’s meeting.
Randy Rompola, bond counsel with Barnes & Thornburg, South Bend, presented to the parks board a declaratory resolution “which provides for the initial step to contemplate the issuance of park district bonds. This is for the project that city has begun to undertake to provide for a new support building for the Parks Department.”
The building will include office space, vehicle garage and supply storage space.
Part of the project cost has been paid for by city funds. Mayor Joe Thallemer said $1.4 million of the project cost has already been paid with city funds. The maximum cost of the build-operate-transfer agreement with GM Development Companies LLC was set at $3.6 million.
“So what we’re here today for is to talk about the balance of the project cost, which would be funded out of a proposed park bond issue,” Rompola said.
The park district has the ability to issue what generally are general obligation bonds but are called special taxing district bonds because they’re payable out of a tax levy in the park district, which has boundaries coterminous with the city, he explained.
“So the civil city has the ability to issue general obligation bonds, the park district has the ability to issue park district bonds — special taxing district bonds payable from a tax levy on the park district. So the city has its own debt limit, the park district has its own debt limit,” Rompola said. “So the idea here would be to issue these bonds as park district bonds to utilize the park debt limit to help pay for the balance of this project.”
The steps that have to be taken start with the parks board approval of the declaratory resolution, which sets a public hearing at the board’s Feb. 21 meeting. In the meantime, Rompola said, the Warsaw Common Council has to approve of the issuance of the bonds by an ordinance, which also has to be scheduled.
“The bonds that are being contemplated are $2.8 million, that’s a not-to-exceed amount,” he said. “Andy Mouser, who works with Baker Tilly and serves as a municipal adviser to the city, he indicated the actual amount is probably closer to $2.4 million, but, again, as we’re starting this process we want to set out parameters so that when we get to the point of actually issuing bonds, we can produce the bonds size, issue the bonds at the actual interest rate of the sale.”
Thallemer said there’s some issuance costs with the bonds so that’s why the $2.4 million will probably be necessary.
Tuesday’s resolution, as well as the resolutions to be presented to the parks board and common council next month, sets parameters for the bond issuance, Rompola said. The first parameter is the $2.8 million limit.
Rompola reminded the parks board that the city started the building project as a BOT agreement with Greg Martz, it’s under construction now and the first part of the project was paid for by the city out of its funds. The balance will be paid out of park district bonds.
By the parks board approving Tuesday’s declaratory resolution, Rompola said they will begin the process, which includes the publication of notices and a bond resolution to be approved at the board’s February meeting which lays out more of the terms.
“We’re anticipating selling bonds then in mid-March and closing by end of March, early April. At that point then, the park district would have the funds to pay the balance of the project,” he said.
Asked how the bonds are paid back, Rompola explained, “They’re paid back from a special tax levy that would be levied on the park district, which again is similar to what the city would do with general obligation bonds. There’s just an additional debt service tax levy that would be levied.”
The annual payments are expected to be somewhere in the neighborhood of $360,000 to $385,000 annually for the life of the bonds. Currently, Rompola said, Mouser is looking at a final payment of August 2031.
“So it’s a relatively short bond issue, and, as I said, those payments are somewhere between $360,000 and $385,000 annually. And at this point, those are estimates based on some interest rate assumptions. Once the bonds are sold later in March, we’ll have the final interest rates, the final part, the final principle amount of the bonds,” Rompola said.
Councilwoman Diane Quance asked when the levy would go into effect for the taxpayers and when would they see that.
“It would go into effect next year, 2024,” Rompola replied.
Thallemer asked if that debt payment was outside the levy and similar to a general obligation bond. Rompola said it’s outside the levy but inside the circuit breaker.
“It’s a separate levy, but it is inside the circuit breaker,” he said.
Board Vice President Larry Ladd made the motion to approve the declaratory resolution as presented and board member Jill Beehler seconded it. The motion was unanimously approved.
Board member Michelle Boxell asked if the public would be invited to the public hearing on the bonds at the February Parks Board meeting. Rompola said yes and there would be two public hearings at the Feb. 21 meeting — one on the confirming resolution and one on the appropriation of the bond proceeds.
Parks Superintendent Larry Plummer then gave the board an update on the office/maintenance garage project. He said he toured the facility Tuesday.
“A lot has been happening down there. All the metal interior walls are up. All the overhead doors are installed. Almost all of the exterior glass is installed now, there’s a couple on the south side that aren’t. They started hanging drywall today. They’re continuing their mechanical, electrical, plumbing and wall drop-ins in the park office part of it. They’re getting ready to prep the floor of the concrete stairs and the mezzanine. They’re starting to install the toilet accessories and door hardware. They’re also making an adjustment for the ADA parking stall in the front of the building,” Plummer said.
They’re still looking at March 3 for the certificate of occupancy and March 20 for the move-in date. Plummer said they’re still pretty much on schedule.
“We’re excited. (Maintenance Director) Shaun (Gardner) and I were in there and we think this is going to be a really nice building. It’s going to flow, it’s going to bring our staff back together with the maintenance side. Every time I walk in there, it’s exciting,” he said.
Later in the meeting, Haines said, “Well, tonight we did something we’ve never done. I’ve been here a lot of years and this is the first resolution like that we’ve ever done. Something new.”
In other business:
- Thallemer gave Beehler the oath of office as she’s agreed to serve another term.
- The board re-elected Steve Haines as president and Larry Ladd vice president for 2023.
- Gardner reported Young Tigers Football donated $873 toward future holiday displays from the concession stand they ran in December at Central Park. Members of the Warsaw Community High School football team also volunteered. He said the Christmas display was a success this year.
- Recreation Director Stephanie Schaefer reported there will be a mommy and son dance May 12, with details to be announced later.