The Cherokee City Council has agreed to proceed with negotiations to refinance a short term loan with Cherokee State Bank due to a $228,000 shortfall in the $3.6 million Bacon Aquatics Center and Gillette Park renovation project.
After the new Aquatic Center and renovations to Gillette Park were completed, the City in February 2007 secured a five-year $1,650,000 enterprise revenue capital loan note at 5-percent interest from CSB to "bridge the gap" between the payment schedule and the time involved for community pledges to reach fruition. As part of the entire $3.6 million project, a community fund-raising campaign was held, with supporters donating $1,000 each, which could be paid over a five-year period at $250 per year. Those donor payments are continuing, according to City Administrator Don Eikmeier, but there is still more than $400,000 left to collect.
There also were several major donors to the project with those monies coming in at the onset, and there are others still out there, according to project organizers, who may step forward in the future to enable the projet to be paid off in a timely fashion.
The Council has been advised by Bond Counsel that if it refinances the CSB loan at the same time as the recent refinancing of a $710,000 G.O. Bond issued in 2002, that it can save $7,000 in Bond Counsel administrative fees.
Refinancing the G.O. Bond was approved at the April 14 Council meeting, with its purpose to defer the largest principal and interest payments, and reduce the tax rate for Fiscal Year 2010-2011.
Restructuring that G.O. Bond will result in a net savings of approximately $7,500 and reduce the tax impact for debt service by approximately 80-cents per $1,000 valuation for the next two years.
Bacon Aquatics Center and Gillette Park project organizers said they were roughly $150,000 short on the $3.6 million project heading into construction. Unforeseen major costs, such as the need for a holding pond to handle 9th Street run-off, and an expanded storm drain through the park to empty on the east side of the new pool inflated the project cost.
In other action at Tuesday's special meeting, the Council approved a bid of $4,730 by Schoon Construction of Cherokee to raze a dilapidated structure at 324 E. Main St. That figure does not include any related landfill fees to be paid by the City. Costs will be assessed against the property owner.
The Council also agreed to keep negotiating on another dilapidated structure at 105 S. Sioux St. that was bid by Schoon to be razed for $7,445. The City has an interested party that wants to purchase the property in question. Eikmeier will continue negotiating with that party and report back to the Council in the future.