Medina to relocate police, public works

The Medina City Council Tuesday, Sept. 4, decided that it made financial sense to relocate both the police and public works department simultaneously to the newly purchased Clam Corps Building at 600 Clydesdale Trail.

Financial Adviser Shelly Eldridge, of Ehlers and Associates, presented several scenarios that helped the City Council reach a decision. The question was whether to wait until later to move the police department or to include it in the public works relocation project.

For a number of years, Medina has been exploring places to put not only police and public works departments, but also administration. The city was poised to construct a new public works facility adjacent to Hennepin County Public Works at an estimated cost of $6.5 million.

Then Medina had the chance to purchase the Clam Corps Building and took it. The price tag was a more attractive $4.125 million, and the building is large enough to house both public works and police. Relocating those two departments would free up space for expanding City Hall sometime in the future. So Medina’s new strategy is to invest in remodeling projects rather than building three new structures.

Eldridge described the tax and financial impacts of both a $6.1 million bond sale and a $4,475,000 bond sale. The $6.1 million sale would pay for moving both police and public works operations, and the smaller sale would be for moving public works only.

Then she described a third scenario that she called a “wrap around.” This scenario would enable Medina to pay off $1.4 million in bonds by incorporating them into the bond sale for relocating both police and public works. The $1.4 million in bonds originally were sold to pay for a new water tower that Medina has not yet built. The City Council has repurposed this bond money to use it for remodeling the Clam Corps building.

Over 20 years this wrap around bond sale would cost Medina an estimated $10.3 million in principal and interest. Increased interest costs due to the wrap around would amount to $300,000 of the $10.3 million. The average owner of a $500,000 home would see an estimated annual property tax increase of $175 with a bond sale of $7.5 million to cover both repayment of the $1.4 million in old bonds and the $6.1 million in new bonds.

The average owner of a $500,000 home would pay an estimated annual tax increase of $113.83 for a $6.1 million bond sale without the wrap around or $80.05 for a $4,475,000 bond sale without the wrap around, according to the Ehlers report. But in both cases, Medina would be paying a higher interest rate to pay off the $1.4 million in old bonds.

Councilor Liz Weir, compared the figures and said she thought the difference in cost between the two bond issues was small. She preferred to go to tax payers with the whole project now rather than going to them in the future with a second project for relocating the police department.

The rest of the City Council agreed with her and voted unanimously for the $6.1 million bond sale with the $1.4 million wrap around.

In related business, the City Council approved a $2,930,000 bond sale to pay for refunding two sets of bonds from 2005. One set paid for constructing the water treatment plant on Tower Driver and the other set financed storm water, Sioux Drive, and Mill Drive improvements in the Hamel Tax Increment Financing (TIF) district. Eldridge said refunding bonds now at current low interest rates would save the city money in interest costs.