The council approved a resolution regarding the execution and delivery of a lease purchase agreement to finance the city hall project. This agreement involves subleasing the land and improvements of the city hall facility to bond investors over a 20-year period, with the city making lease payments equivalent to the amount for which the certificates are sold in the public market. At the end of the lease term, the city has the option to buy the property back for a nominal fee of $1.

The financing structure does not provide a general obligation pledge to bondholders but makes an annual appropriation pledge to cover lease payments in the city’s annual budget. This introduces a perceived risk for bondholders, expected to slightly affect the bond rating, reducing it by about half a notch. Currently, the city’s general obligation bonds hold a double A minus rating, and it is projected to remain in the high A category due to the essential nature of the asset.

The council anticipates receiving bids on October 8, with the results presented on October 10. The project fund requirement is estimated at just over $3.1 million, factoring in costs for improvements and a Debt Service Reserve fund. Discussion arose regarding prepayment or refinancing options, with the financing agreement estimated to allow for prepayment after the eighth year, though some members expressed a desire for clarity on penalties for early repayment.

The financing plan includes two series of bonds: one tax-exempt and one taxable. The taxable portion relates to reimbursing a prior land purchase, while the tax-exempt portion will cover improvements. The intention is to have a level annual debt service structure that aligns with the estimated interest earnings.

Following this, the council addressed a discussion related to the labor agreement for police officers, with a current three-year agreement set to expire on December 31. The negotiations began in spring due to challenges in attracting and retaining law enforcement personnel. Discussions involved proposed wage increases effective July 1, 2024, and terms for a new agreement starting July 1, 2025. The pay scale discussed included a range starting from $30.22 to $41.03 for the first year of the contract, translating to annual salaries between $62,185.76 and $85,342.40. The average pay increase among officers was noted at 10.63%.

Various terms were negotiated, including holidays, vacation policies, wages, and training requirements. The contract proposed adding Juneteenth to the holiday list, resulting in a total of 12 holidays for officers. Officers are allowed to carry over 60 hours of unused vacation into the following year, with any excess being paid out in December. The proposed pay scale for the first year showed a starting pay of $36.99 to $47.07 for 2025. The fiscal impact of the new agreement is expected to be slightly over $109,000.

The council also discussed the preliminary budget and property tax levy for 2025. The discussion included an overview of previous topics such as levy options, wage and benefit considerations, and updates to the capital improvement plan. A significant project mentioned was the rehabilitation of the booster station located at JC Park, estimated at half a million dollars, essential for maintaining water pressure in the upper Northwest section of the city.

The council reviewed various options for the property tax levy, including scenarios for maintaining the tax rate or increasing it by 3%, 4%, or 5%. The consensus leaned toward a 4% increase, where each 1% increase in the tax rate would generate approximately $31,000. It was noted that from 2019 to the proposed 2025 budget, the tax rate has decreased by nearly 6.5%.

Additionally, planning studies related to water tower siting and main connections were highlighted. The conversation also touched on the implications of a surplus in the budget, amounting to approximately $226,000, which could potentially be used for various purposes, including offsetting taxes or funding a compensation study.