08-28-1991 Council Minutes City Facilites Public Hearing

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PUBLIC HEARING FOR PROPOSED CITY FACILITIES — AUGUST 28, 1991 There have been public meetings to reduce the size and cost of the building but still trying to maintain a level of quality that would be in keeping with the spirit of Orono. Since then the Design Committee has reduced the public works building to 24,700 s.f. and has been able to reduce the administrative /police building by another 1,000 s.f. making the size 16,500 s.f. The Committee has not addressed new furnishing for the building yet. The Committee has considered items such as large storage tanks for gas, which are quite expensive ($150,000- 200,000), which would permit us to buy gasoline at a $.05 /gallon cheaper which is estimated would pay for the tank installation within 5 years. Also sending people offsite to get repairs done or to fill tanks takes them away from their work. Now the total cost is approaching the $4.0 million mark and the Committee is hoping to reduce that further. The next question for the Council to resolve was how to finance the project. The Council determined to form a HRA and to engage in essentially a sale and lease —back. One result of that is that a referendum will not be necessary. The question of referendum is perhaps misunderstood by the public. The referendum that would have taken place would have been on a bond with a yes or no answer on that question only. There is no room for manuvering. If the result was "no, the bond should not be issued the whole process would stop and have to start all over. Quite often the referendum is a way for citizens to.express their pleasure or displeasure on the entire project. Callahan felt that the citizens have been very interested in this project from the onset and he wanted to assure them that the Council has carefully looked at all of the issues involved. He felt that most citizens felt there should be a new facility, however after that there is not a single factor that has an absolute answer. In the overall picture of the way that the citizens want Orono to be run, the citizens are satisfied as far as -their own input is concerned, and if they are not, it is not too late to change as the money has not yet been borrowed nor has a contract to build been finalized. The HRA, unlike the referendum method, gives us a flexible method of financing at a time when the lowest interest rate for bonds is available and construction costs are also down. The referendum could delay the project for an indefinite time. The City does have a large cash reserve, $2.5 to 2.6 million. However, the Council has not decided whether to use the entire reserve and borrow the remainder or to borrow the entire amount and keep the investment of the reserve. The general revenues of the City are also affected by this reserve as the City receives over $100,000 each year through interest. There are many reasons for maintaining the reserve, including the State closing down on the ability to tax and emergencies. A decision will have to be made within the next month or two. 5