Missoula Parking Commission approves $956,455 GMP amendment, authorizes lender solicitation with up to $500,000 reserve deposit

The Missoula Parking Commission on July 8 approved a guaranteed maximum price (GMP) amendment of $956,455.46 for bid package number 2 of the Bank Street parking garage repair and authorized a competitive lender solicitation for financing that includes a debt-service reserve deposit not to exceed $500,000.

The actions came after staff and outside advisors summarized construction bids and financing options for the repair of structural and mechanical systems at the Bank Street parking structure. Jody Pilgrim, director of the Missoula Parking Commission, told commissioners, “We have received our final GMP for bid package 2 from Jackson Construction, and which will bring our final GMP for the full project to $3,210,774.”

The commission’s fiscal year 2026 budget for the full repair project was $3,490,000, Pilgrim said; the current GMP total therefore fell below that approved budget. Tyler Kirk of Jackson Construction described bid package 2 as primarily mechanical and electrical work, masonry repair, handrails, metal roofing for a canopy, painting, plumbing and lighting, and said the package was worth “approximately $956,000.”

Why it matters: the commission must balance immediate repair needs against longer-term liquidity and credit considerations. Steve Sharp of Baker Tilly Municipal Advisors, the commission’s municipal advisor, recommended a competitive solicitation using a term sheet that sets the financing structure and creates uniformity among lender proposals. Sharp said the commission would not pursue a formal credit rating for this offering and that lenders would perform their own credit diligence. Courtney Ellis, partner at Dorsey & Whitney and bond counsel to the commission, added that banks bidding for a direct loan often prefer the transaction to be structured as a loan rather than a public security.

On the construction side, Jackson reported the project is holding schedule and that the contractor is managing procurement risks, particularly lead times for electrical gear and light fixtures. Kirk noted that some allowances included a moisture-mitigation epoxy primer, irrigation and planter repairs, and bird-protection hardware; he also said a $130,000 allowance held in the first GMP for certain shear-connection repairs will be credited back because those connections can be retained.

On financing, Sharp outlined the solicitation plan: staff and advisors will distribute a term sheet to a mix of local, regional and national lenders, allow roughly two weeks for proposals, and aim for proposals to be returned by July 29 with a target closing in mid-September. He explained key elements of the term sheet will include the borrower, repayment source, term structure (up to 20 years discussed), customary bank-product transfer restrictions, and a description of any reserve-account requirements.

Pilgrim and Baker Tilly presented scenarios for the commission’s cash contribution toward the project. Staff noted issuance costs are budgeted at about $100,000 and that the reserve requirement discussed in the term sheet was in the neighborhood of $160,000–$180,000 depending on the final financing structure. Advisors discussed larger cash-contribution scenarios — figures discussed in the meeting ranged roughly from about $745,000 to $794,000 for a larger contribution — but advised against using the full cash balance because doing so could materially reduce commission liquidity and pressure its existing credit metrics.

Commission discussion focused on the trade-offs between reducing borrowed amounts now (by contributing more cash) and preserving liquidity for future needs, including existing Series 2014 bonds and other aging structures. Commissioner Joe Easton emphasized the need to retain some cash for unforeseen maintenance and other projects; Commissioner Peter Walker Kelleher raised questions about the municipal advisor’s role and the mechanics of establishing the par amount. Commissioner Tiffany Brander said she trusted staff and advisors and moved approval of the term sheet and financing solicitation.

Formal actions recorded in the meeting: Tiffany Brander moved to approve the GMP amendment for bid package 2 in the amount of $956,455.46; Mike Steinberg seconded. Roll-call votes were: Mike Steinberg — “Approve”; Peter Walker Kelleher — “Approve”; Tiffany Brander — “Approve”; Joe Easton — “Approve.” The motion passed. Later, the commission approved a motion to solicit lenders on the term sheet and, by amendment, to fund the debt-service reserve requirement with a cash contribution not to exceed $500,000. The amendment and the main motion were approved by roll call with all present commissioners voting “Approve.”

Staff indicated the solicitation will proceed immediately upon approval; staff and Baker Tilly will evaluate proposals for overall cost and compliance with the term sheet, and the board will review a financing recommendation and finalize the financing package at a future meeting, currently targeting mid-September closing. Pilgrim said the commission will return to the board at its August 12 meeting with the recommended financing package and with a jurisdiction expansion map for the Hip Strip project.

The commission adjourned the meeting at 12:58 p.m.