Lawsuit adds cost to library project
A lawsuit challenging a development agreement between the town and Fain Signature Group for a Wal-Mart store is driving the cost of borrowing money for Prescott Valley's new library-classroom up.
Town Manager Larry Tarkowski said the 52,000-square-foot complex is estimated to cost between $19 million and $22 million.
It is time for the council to decide how it wants to finance the project so the town can call for bids on the project in December, he said.
Tarkowski said the lawsuit against the development agreement has developed into an attack on the town's use of Municipal Property Corporation financing even though communities throughout Arizona have used it consistently for decades.
As a result, until this lawsuit is resolved, new MPC financing is not available, he said.
Therefore, he said, it appears the town needs to use financing involving Certificates of Participation in a lease involving the town's interest in the condomium arrangement used to put the intergovernmental agreement with Yavapai College together for the library-classroom complex.
The town's financial advisors estimate using Certificates of Participation to build the library complex could cost the town an additional half of a percent in interest.
If the town uses the Certificates of Participation financing, the council must approve an annual appropriation to cover the lease.
This financing could cost the town an additional $700,000 to $1.5 million, the financial advisors said.
Tarkowski said staff will work with the architects, Richard + Bauer, to bring the project in within budget.
He stressed that the town is still on schedule with financing to come in mid-December and construction to start in January.
Right now, Tarkowski said, is a good time for the town to go call for bids on the library complex because the contractors are hungry. "The savings in construction costs should offset the higher interest cost," he said.
Town Attorney Ivan Legler reminded the council if construction doesn't start on the library-complex by Jan. 1, 2008 Yavapai College can back out of the IGA, which calls for the college to pay 20 percent of the project's cost.
Councilwoman Lora Lee Nye said this project is a matter of community pride.
Mayor Harvey Skoog said the town must proceed with this project.
The council directed staff and the town's financial advisors to proceed on acquiring Certificates of Particiaption financing for the project.
In other action, the council:
Heard a presentation from representatives of Mingus West Development, the Arizona Department of Transportation and a Roundabout design consultant on a proposed Roundabout ADOT plans to put on Highway 89A by the Mingus West Subdivision at Old Fain Road to provide a place for trucks to turn around before going over Mingus Mountain. The Roundabout also will provide a convenient place for ADOT to close Highway 89A in bad weather.