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MEMORANDUM <br /> To: Mayor and Council <br /> From: Ron Olson, Finance Director <br /> Subject: Facility Upgrade Funding <br /> Date: July 8, 2013 <br /> The funding for improvements to both the remodeling of the police station and the police garage <br /> is anticipated to come from the additional revenue available from the Mound police service <br /> contract. The additional expenditures related to the contract are $144,725 less than the additional <br /> revenues. As indicated in the Mound Police Revenue attachment that accompanied the <br /> 6/28/2013 budget memo, the additional contract expenditures were estimated on the high side of <br /> expectations. As a result, it is expected that there will be $185,000 in contract revenue available <br /> in the first year of the contract. In addition, there are some one-time funds associated with the <br /> contract in the amount of$42,000 available for use. This brings the amount on hand for the <br /> construction to $225,000. Additional funds will become available over the term of the contract. <br /> The available funds are indentified in the following table. <br /> 2013 $ 225,000 <br /> 2014 $ 175,000 <br /> 2015 $ 150,000 <br /> 2016 $ 125,000 <br /> 2017 $ 100,000 <br /> 2018 $ 100,000 <br /> 2019 $ ]00,000 <br /> 2020 $ 100,000 <br /> 2021 $ 100,000 <br /> 2022 $ 100.000 <br /> 1.275.000 <br /> Because the funds will accumulate over time and payment will be needed when the construction <br /> is completed, an upfront funding source will be needed in addition to the contract revenue. One <br /> option would be to sell bonds for the project, and use the contract revenue to pay the debt service <br /> on the bonds. Another option would be to use an inter-fund loan to finance the project. In this <br /> scenario, another fund would loan the needed monies to the Police Building Construction Fund <br /> and would be paid back with interest as the contract revenue was received. <br /> Funding for the parking lot repairs/improvements could come from the Community Investment <br /> Fund. The Community Investment Fund was originally created when the Building Fund was <br /> closed and the balance was transferred to the community Investment Fund. The current balance <br /> of the fund is $1,700,000. If the Council was interested in bonding for the police building <br />