City finance staff told the Budget Committee the public safety facility project will require additional funding to complete construction and pay federal arbitrage obligations tied to bond proceeds.

"We anticipate that the proceeds from the original bond will not be sufficient to fully construct the public safety facility," City Finance Director Gloria Butch said. She said the city expects an arbitrage repayment after proceeds were invested and substantially unused for construction within the five-year window, and staff estimated an arbitrage liability of about $565,000 for fiscal year 2025 that could rise to roughly $665,000 when paid in 2026.

Committee members asked whether the arbitrage will be paid from the public safety facility fee receipts; Butch clarified the arbitrage would be paid from accrued interest earnings rather than the public safety facility fee. Committee members also pressed City Administrator John Walsh and staff for historical context about the original bond authorization and project scope.

"The council initially authorized the issuance of $22 million in bonds ... the initial $15,000,000 sale was made to get the project going," John Walsh explained on Zoom, describing subsequent project downsizing and cost pressures that reduced the scope to a police station and increased costs over time.

Butch told the committee staff now anticipate another $2,000,000 loan to complete the project; that estimate includes property purchase costs. Committee members asked for documentation of earlier counsel or staff statements that the project would be short at the outset; Walsh and others said project design changes and rising construction costs affected outcomes.

No loan was approved at the meeting; staff flagged the financial obligation as part of the FY2026 overview and said they would return with more detailed financing options and documentation.

Ending: The committee asked staff to provide documentation about project estimates, bond authorizations and a financing plan for any additional borrowing before making decisions.