Work to start on emergency services center, bond financing continuing
Whitefish Pilot
Work on the city's new emergency services center at Baker Commons, near The Wave, could begin soon, now that the Whitefish City Council has accepted a bid for part of the overall construction.
The architect's estimated cost for the 32,656-square-foot building last fall was $6.6 million, but nine of the 11 bids received by the city on April 22 ranged from 2 percent to 19.5 percent under that estimate.
The low bid came from Swank Enterprises, of Kalispell, at $5.31 million. Public works director John Wilson recommended awarding the full contract to Swank once the city has arranged financing for the project, but he wanted to get started on the site now.
Citing problems with Swank's work at Whitefish Middle School and The Wave, councilor Nick Palmer asked about hiring an additional inspector to watch over the project.
Swank did an excellent job building the city's water treatment plant, Wilson said, and the city "can't pass up" the $600,000 in savings over the next bidder. That savings could easily fund a full-time inspector, including one of the city's building department inspectors, he noted.
"Although we continue to work on developing a complete financing package, staff recommends the city council award a partial construction contract at this time to allow a quick start and ensure the project is well positioned to move efficiently into the coming winter," Wilson told the council at its regular Monday meeting.
The initial work, which will consist of site and foundation work and preparation of shop drawings, will cost $337,266. Wilson said that money is available in the city's tax-increment financing (TIF) fund.
City manager Chuck Stearns told the council the "excellent construction bids' helped close a prior financing gap, and Standard and Poor's assessed the city's credit in the range of BBB+ to BBB-.
Stearns also said the city's bond underwriter, D.A. Davidson, is confident the city can complete a bond sale to pay for the new building, which will house the city police and fire departments as well as city court.
"The bond underwriter, our financial advisor and bond counsel were all comfortable with the city doing a partial construction contract award," Stearns said. "This cost can be paid out of the bond proceeds, or it can also be paid out of existing tax-increment cash balances if the bond sale is delayed."
The council on Monday unanimously approved a "parameters' resolution delegating 'some authority" to Stearns, mayor Mike Jenson and city finance officer Rich Knapp for the pricing and sale of the $16.7 million in bonds.
About half of that money, from $8.2 million to $8.6 million, is for the new emergency services center. The other half of the $16.7 million bond sale will be used to refinancing outstanding tax-increment bonds issues from 2000, 2001 and 2004 at current lower-interest rates.
The city council approved use of TIF funds to pay for the emergency services center last year, but 'since that time, the credit crisis which hit the global economy changed bond buyers' preferences towards more traditional debt instruments," Stearns explained, 'so, in consultation with our financial advisor, Springsted Inc., and the underwriter D.A. Davidson, we have found we are better off doing a more traditional tax-increment revenue bond issue."
Stearns said city staff have tentatively set June 11 as the date for marketing and selling the bonds. The closing date for the bond issue and receipt of funds would be June 30.