Milford City Council Sets Timeline for Police Station Referendum

by Terry Rogers

 

 

The current Milford Police Station is located on NE Front Street.

UPDATE:  On Monday, October 26, Milford City Council voted to change the dates of the public hearing and the referendum vote. Regulations require that a vote be taken on the referendum at least 30 but not less than 60 days after a public hearing. The new date for the public hearing is December 14, 2020 and the referendum vote is planned for January 26, 2021.

On Monday, September 28, Milford City Council approved a timeline for a referendum designed to cover the cost of a new police station. The referendum for the new station was originally planned for April but was postponed due to the COVID-19 pandemic.

“We had worked with Richard Y. Johnson for a budget for this project around this time last year,” Brendan Frederick of Becker Morgan, the company hired to design the police station, said. “At that time, the number was $18,429,000 for everything in the building. We had to push the referendum due to the pandemic and we needed to know what impact that would have on the price. RYJ believes that we only need to increase the total by 3 percent, which raises the price to $18,917,800. There are still a lot of things we can do with the design to adjust the costs but wood prices have soared astronomically over the past few months. We just felt we needed to look at this as you are looking at completing design and starting construction in 2021.”

Mayor Archie Campbell questioned the increase in price as well as whether there is any information on what the interest rate on the bonds to build the station might be. Frederick explained that the increase is known as an escalation factor and that once the bid is accepted, a contractor is committed to finishing the building at that price.

“Normally, we estimate a one year delay as adding 5 or 6 percent,” Frederick said. “RYJ felt comfortable with 3 percent. If you delay another year, however, you could be facing another 3 percent, or you could face 5 or 6 percent. There is no way to know at this time.”

City Finance Manager Lou Vitola explained that the interest on the bonds is not based on whether the City borrows $18 million or $19 million but on how the market is, how the bonds are sold, the date they are issued and other factors. Vitola explained that with a project like this, the City needs to look at whether there is an adequate revenue stream to cover the bonds, not the interest rate. He suggested that the City did not want to keep putting off the police station until the interest rate drops.

The timeline begins with Council issuing a Resolution for Issuance of General Obligation Bonds on October 12, 2020. City Manager Mark Whitfield explained that the resolution would ask for $20 million in bonds be issued with maturities not to exceed 30 years. It is estimated that the cost of the bond issuances would be between 1 and 2 percent. In terms of property tax increases, if the bonds were issued for a term of 30 years with an interest rate of 2.41 percent, property owners could see an increase of $19.15 or $230 per year on their tax bill.

Once Council authorizes the issuance of the bonds, there would be a public hearing and vote on the resolution on December 14, 2020. The bond referendum allowing the public to vote on the referendum would take place Tuesday, January 26, 2021.

“What is our backup or alternative plan?” Councilman Andy Fulton asked. “I don’t think our community has any anti-sentiment toward police but if there is any, I hope that would not come out in a referendum.”

Whitfield explained that if the referendum failed, the City would have to gain an understanding of what caused it to fail.

“Is it the tax increase? Is it the cost of the building?” Whitfield said. “We would need to go back and see why the referendum failed. We could then tweak our message and go forward with another referendum.”

Council voted unanimously to approve the proposed timeline.

“I vote to approve the timeline subject to more discussions with the finance committee,” Councilman Dan Marabello said. “I approve the timing, but I am concerned about the bonds.” Councilman Todd Culotta commented that it was unfortunate the pandemic delayed the voting but he feels the new police station is very important to Milford.

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