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Recreation center plan: city presents $37M design and financing path, proposes $15M bond without new millage
Summary
City staff and consultants presented a $37 million construction estimate for the proposed Pontiac recreation center and a financing plan that would combine existing fund balances, ARPA dollars and a proposed $15 million bond; no new millage would be required, officials said.
Deputy Mayor Michael Calfani and finance consultants presented a financing plan March 4 for a proposed new recreation center at the former McCarroll School site. The design estimate presented to council was $37 million for construction (not including some optional features); staff proposed up to $40 million in total project funds to hedge against market changes and recommended a borrowing package capped at $15 million with no new millage.
The proposal’s funding mix, as presented, would use $15 million from the city’s unassigned general fund balance, $3.2 million previously set aside from the youth millage, $6.8 million in ARPA funds and a proposed $15 million bond issuance. Financial advisers estimated annual debt service on the proposed bond at roughly $1.1 million; the advisers projected the city could obtain a double-A bond rating given its current cash position.
Consultants from Raymond Consulting Group and Acting Finance Director Daniel Clark said the city’s audited cash balances have grown since 2020 and that, under conservative revenue and expenditure projections, the general fund could absorb the proposed debt service without adding taxes. The plan calls for the council to approve design work, then retain a construction manager-at-risk who would develop a guaranteed maximum price (GMP); the city retains the option to stop work before the GMP stage if bids exceed the council’s budget.
Council members asked about operating costs, long-term staffing and whether the youth-millage dollars could be used for a facility serving broader community uses. Deputies and consultants said the city would return with more detail on operating costs and stressed that funding to pay debt service was proposed from existing revenue streams and not from a new tax.
Ending: Council kept the project moving through design approval steps and scheduled further review and bond paperwork to return to council in the coming week; the Racer contract amendment for design scope was postponed one week for additional review.
