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ATTACHMENT B Civic Center/Police Building Financing Plan SOURCES OF FUNDS General Obligation Bonds: The City could ask voters to approve a property tax levy to repay general obligation bonds. Under Measure 50, a bond measure would be subject to double- majority requirements, which includes an exception if the bond election is held at a November general election in an even numbered year. GO Bond proceeds cannot be used for furnishings and equipment. Other Borrowing Methods: If the City had a dedicated revenue stream to put towards this project, other borrowing methods could be used. Attachment C includes a summary of the alternate borrowing methods that might be available for a large construction project. Capital Levy: The City could ask voters to approve a capital levy of up to 10 years to pay for the costs of capital construction. The levy would exacerbate Measure 5 compression in the General Government category of taxes and cause a loss of taxes levied for the library and youth/schools programs. In addition, the funding would come in over time, rather than up front when capital construction is occurring. For those reasons, this option seems undesirable. Facility Reserve: The City has been saving money for several years towards construction of a new civic center, including a police facility. The current balance in the Facility Reserve is approximately $6million. Capitalization Charge for Downtown City Offices: General City office space in the downtown area pays a capitalization charge that's meant to help offset a portion of the replacement cost for downtown City office facilities. The annual charge is deposited into the City's Facility Reserve. Net Freed-Up Lease Payments: If sections of Public Works that are located in private lease space are moved into City-owned space, the annual amount that is paid in lease payments (net of the operations and maintenance costs on the new space) could be re-directed towards debt service payments on bonds issued for the new space. Rate Increases for Services Housed in City Hall: Those services that are rate-based, such as stormwater, wastewater, and so on, could increase their rates to contribute funds towards annual debt service payments on bonds issued to construct a proportionate area in the new City Hall. Service Reprioritization in the General Fund: Services in the general fund could be reprioritized to dedicate a portion of the resources towards annual debt service payments on a civic center or police facility. This will probably need to be done in order to pay for higher operating and maintenance costs on the facilities too. CDBG Non-Profit Grants: CDBG funds could be used for leasehold improvements on any space built into the project for the provision of social services by non-profit entities. The amount L:\CMO\2004 Council Agendas\M040428\S040428A. doc