EIC staff report progress on bond-funded projects and outline bond cash, investments and arbitrage exposure

EIC staff gave the board a consolidated update on Quality of Life bond projects and a finance briefing on bond proceeds, investments and projected cash flows.

Project updates: Staff reported construction timelines and milestones for the Calla (Calla/Playhouse) Theater renovation, the Olympic-style pool, Scour Runner golf-course renovations (greens, tee boxes and bridge work), the A.C. Schreiner House restoration and park play-structure replacements at KSP and Guadalupe Park. The Calla Theater contract was set to start in early March with an estimated completion window by the end of August 2025; staff said the Eddington (sic) Gym and the A.C. Schreiner House renovation work is underway with anticipated practical completion later in the year.

Staff said the golf-course work (estimated about $3.5 million across greens, tee work, bridges and site improvements) is in active construction; the bridge contract is roughly $500,000 and work is in progress. The Olympic Pool design had reached 50% drawings; staff planned a mid-March bid date and expected to return to council with a contract award in May, with an approximate 50-week construction schedule.

Granger McDonald boating-access planning and grant work was discussed; staff noted the planning grant requires U.S. Fish & Wildlife review and that the construction grant timeline depends on that federal review.

On housing and development, staff reiterated comments raised earlier by James Avery: local housing supply and affordability remain constraints on recruiting and retaining a workforce. Habitat for Humanity’s infrastructure work was reported as moving forward and the group expected to be substantially complete by June; staff said reimbursement scheduling for Habitat would require a grant agreement amendment if the EIC opts to release funds earlier than the current two-fiscal-year reimbursement plan.

Financial update: Finance staff reported the EIC’s bond proceeds account holds approximately $17.9 million with about $18.0 million net available for projects after obligations and an arbitrage liability estimate of roughly $302,000 booked against earnings. Staff explained that arbitrage rules can trigger a calculated liability when investment earnings on bond proceeds exceed the interest cost on the bonds; that liability is typically measured and paid on a multi-year schedule.

Staff also described existing short-term investments that mature in upcoming months and said the board’s cash-flow forecasts will account for maturing investments and projected project draws; staff projected a year-end operating cash balance for EIC operations (excluding bond funds) and noted the board retains options on how aggressively to reinvest bond earnings versus keeping additional liquidity for projects.

Board members requested a separate multi-year operational cash forecast (excluding bond proceeds) to better evaluate long-term commitments such as the proposed economic development manager funding request.