Bay City council approves schematic design and $20 million max budget for public safety center

Bay City Council voted to approve schematic design option B for a proposed public safety center and to set a maximum total project budget of $20 million that includes the municipal court as an included alternate the council can later remove. The approval allows the city's architects to proceed to full design and prepare construction bid documents.

City staff presented the project and recommended design option B, which removes a central courtyard and reduces some exterior and parking scope to lower costs. Scotty, a city staff member leading the project presentation, said the design would reuse the former Kmart building, produce about 40,000 square feet of space and leave roughly "just under 8,000" square feet of blank space for future use.

Scotty described the financing context and cost ranges. The presentation listed a hard-construction cost range near $16.5 million to $18 million, soft costs around $2 million, and an all-in project estimate that staff described at different points as mid/high $18 million up to about $20 million; a later consolidated range presented to council was about $19.1 million to $20.9 million when municipal court build-out is included. Scotty said site acquisition was not included in the all-in total; staff said the community development corporation contributed $1,000,000 toward acquisition and the city's contribution was about $750,000.

Architects from Weaver and Jacobs (present remotely) and city staff said the municipal court could be bid as an alternate so that, if bids come back high, the council could remove the court build-out before final bonding. Scotty told council the municipal court build-out would reduce the project cost by roughly $1.5 million if removed as an alternate.

Scotty and Donald Coronado (Texas Health Benefits) appeared earlier in the meeting; for the public safety item, the council heard from architects (identified as Bridal/Brendan and Brian) and a project finance discussion involving staff and council members. The architect noted that a 100% design-development cost estimate is expected to tighten the cost range later in the fall; staff said a guaranteed maximum price (GMP) and final contractor recommendation would return to council after bidding, with bids currently targeted for March 2026 and a GMP to follow.

Council discussed funding options including grants, new market tax credits and sponsorships. Scotty said the project may be eligible for new market tax credits and that a conservative estimate of potential new market tax credit funding was roughly $2.5 million, subject to securing appropriate partners and agreements. Staff stressed the timing uncertainty for grants and tax-credit proceeds and said any outside funds realized before bonding could reduce the bond amount; funds realized afterward could be used to pay down debt or support other projects.

On financing, staff said the city previously issued $7 million in bonds in February 2024 and discussed a $5 million issue referenced in the meeting record; staff also stated that with current maturities and interest assumptions the city could borrow up to about $17 million without raising the city's interest-and-sinking (I&S) tax rate. Several council members voiced discomfort with the project price but agreed delaying further would likely increase costs; one council member summarized the choice as moving forward now or paying more later.

A councilmember moved to approve a maximum project budget of $20,000,000 including the municipal court (with authority to remove the court as an alternate later); another councilmember seconded. The council voted in favor and the motion carried. Staff stressed the vote authorized Phase 2 (full design) work and did not authorize final bonding or a guaranteed maximum price; those items will return to council after design and bidding work narrows costs.