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Geneva Community Center Financing
Geneva Community Center Financing & Funding Report
May 8, 2020
Roughly 3 months ago the Geneva City Council was approached with an opportunity to include a new home for the Fillmore County Wellness Center along with the new Geneva Community Center Project. A review of the feasibility to include the Fillmore County Wellness Center with the Geneva Community Center project was conducted.
After an in-depth investigation and review, the Fillmore County Wellness Center (fitness center) addition can be accomplished at an estimated additional price of $1 Million. The Fillmore County Hospital has also indicated they will play a role of support of some kind.
The addition of the suspended gymnasium walking track and fitness center are an extension of the mission of the hospital's outpatient departments. The hospital would support the growth of the membership with both patients and staff. With this new addition, the final estimated engineer’s price range for the Geneva Community Center project now stands at $5.7 million-$6.7 million.
Many hours of discussion and research went into the funding & financing estimates by the Geneva City Hall team.
It is very exciting to share that although the overall price has come in higher with the new addition of the fitness center, through revenue generated from the facility, various budget reallocation, and a favorable long term financing program with USDA Rural Development that has been given first round approval, it is safe to say that no increase in the City of Geneva property levy tax rate or sales tax will occur as a result of this project for at least the next 3-4 years.
On May 4, the City Council voted 4-2 to approve the final design and budget of the new community Center and the reason for this timing is centered on the two big grants the City of Geneva has been awarded that have a combined total value of $750,000 toward the project.
As you may recall, the City Council has asked for multiple extensions on these two grants since being awarded them now almost 4 years ago because of the journey this project has taken. The Nebraska Department of Economic Development has made it clear we must be ready to bid this project to a contractor by August 2020 if we want to use those grant dollars. We want to be responsible with the money that has been awarded and also keep good relations with grant providers.
Upon action by the City Council at the May 4 City Council Meeting, JEO will need every bit of the next 3 months to make a final design and schematics to take this project to bid by August 2020.
We currently have right at $2.2 million dedicated toward this project either in the bank or pledged over the next 4 years with a combination of both grant dollars & private donations (some of which are not yet announced).
Fundraising, while on hold for the time being during the COVID-19 slowdown, will resume when life and business returns to normal. It is still the goal to raise another $1 Million-$1.25 Million which will continue well into the construction phase and beyond based on the current timeline of an August 2020 bid period.
For the remaining estimated dollars needed to pay for the project, our City Hall team has met with USDA Rural Development officials and has received initial approval to apply for a special Community Facilities 40 year, 2.375% locked interest rate, federally guaranteed loan. There is no balloon payment or prepayment penalty with this program either and will help spread the cost of the taxpayer funded portion of the project.
With this loan program and depending on how much of the project is financed and where the final cost of the project comes in at, the annual payment will be anywhere from $175,000/year-$250,000/year.
To facilitate the USDA Rural Development loan, we will establish a non-profit entity to own the land where the new Community Center will be built. This proposed entity will be governed by a board of directors with local representatives from the hospital, school, city, and broader community. Then the City of Geneva will enter into a 40-year lease-purchase agreement. The City will be responsible for operating the facility, and the lease payments will pay down the USDA Rural Development loan over the established 40-year term. At the end of the term or as soon as the loan is paid off, the land and facilities will be deeded back to the City.
As mentioned earlier, we plan to use the pool of donations and grant funds available in combination with City levy/tax dollars in a variety of ways on an annual basis that will help keep the levy impact of this project to zero in the first 3-4 years and at a minimum impact in the years of 2025 and beyond.
In addition to the USDA Rural Development long term financing and current funds raised, after some great work by our City Hall team working together with the Fillmore County Wellness Center Board, they have come to an estimate of $21,600/year in revenue generated from the lease income of the Wellness Center and $24,500/year in rental fees of the large event room spaces and gymnasium and a slight increase in Parks & Rec user fees for larger scale tournaments hosted at the facility.
On the Senior Center side of the operation budget, incredible efficiencies have been found to move the focus of the Senior Center more toward morning coffees, programming and activities, with the flexibility of being creative with working with local food businesses instead of competing with them for noon meals to provide a more customized and streamlined level of food service.
The proposed changes in the annual Senior Center operating budget would result in the reallocation of roughly $240,000/year in funds taxpayers are already paying which alone would roughly cover the vast majority of the estimated annual payment for the loan portion of this building project if it comes in on the high side of cost.
These operational efficiencies combined with the longer term, low interest rate loan, with no prepay penalty make this project a reality at a zero impact to the Geneva taxpayer in the short term and minimal impact in the long term.
This project will serve all generations of our community with the vision and goal of also serving many generations to come.
We have learned in our recent situation with COVID-19 that health and wellness are directly tied to our ability to be social and active. This unique experience has made it clear that providing this facility and opportunity to all ages of our community will be a great investment with a sound financial plan.
-City of Geneva