Aurora advances plan for new animal shelter; staff seeks up to $27 million in COP financing

Aurora City staff presented plans for a new animal shelter and introduced an ordinance authorizing lease-purchase financing (certificate of participation) of up to $27 million to help pay for a roughly $51 million project, Teresa Sedmack said at the Finance Committee meeting.

"The ordinance which I have introduced, allows for the financing, with COPs, We just lease purchase as you know, in the maximum amount maximum borrowing amount of $27,000,000. It states a maximum interest rate of 6%." Teresa Sedmack said. She told the committee staff's financial adviser indicated current market rates would likely be about 4.8% if the city went to market that day.

City project staff described the proposed facility as a modern, roughly 38,000-square-foot shelter with capacity for about 250 animals, separate spaces for cats and dogs, improved customer experience and indoor/outdoor animal areas. Jessica Prosser told the committee the current shelter is out of compliance with state requirements, the facility has been operating under waivers and that renovation of the existing building is not feasible.

Prosser gave a summary of the funding plan: approximately $39 million in construction costs within a total project cost of about $51 million; roughly $11 million in soft costs and specialized equipment. Proposed funding sources in staff materials included project-specific impact fees, $5 million from the capital projects fund, about $2.9–3.0 million in American Rescue Plan Act (ARPA) funds that must be expended by the end of 2026, an estate gift, and $27 million in COP debt issuance.

She described the preferred site as existing city-owned land near the current shelter (near Chambers and Airport), and a projected timeline with final design wrapping up in early 2026, a construction manager/general contractor (CMGC) procurement in the summer, and a construction window of about 18 to 24 months.

On financing terms, Sedmack said the ordinance sets a $27 million maximum borrowing amount, a maximum interest rate of 6 percent and a maximum maturity of 30 years. She reported a 4.8 percent market estimate from the city's financial adviser and said debt service at that rate would be approximately $1.7 million per year.

Council members asked about reducing the requested COP by pursuing contributions and intergovernmental agreements. Roberto (staff) said staff would open conversations with neighboring jurisdictions and Arapahoe County, and that the city had reviewed an existing 15-year-old funding agreement with Arapahoe County and the county is already providing some funding and sending animals to the shelter from unincorporated areas.

Several council members requested staff pursue a range of options including county contributions, contractual agreements with nearby cities that contract for animal services, and possible congressional-directed or other federal appropriations for eligible vertical components. Sedmack and other staff said they would follow up but cautioned that interjurisdictional approvals could take longer than the city's COP schedule.

A majority of committee members expressed support for moving the project forward to additional council consideration, while one member said they were undecided and emphasized other city priorities such as fire-station response standards. No final council vote on the ordinance or COP issuance occurred at the committee meeting; Sedmack said the COP element is expected to come to council for action (staff indicated June as a likely time frame for the financing step).

Clarifying details from staff included a $51 million total project estimate, approximately $39 million of construction costs, about $11 million in soft costs and equipment, COP maximum $27 million, ARPA allocation approximately $2.9–3.0 million (some ARPA funds already spent on preliminary design), required ARPA expenditure by end of 2026, estimated debt service of about $1.7 million per year at a 4.8% rate, and a projected 18–24 month construction window after procurement and grading.

The committee advanced the item for further consideration and asked staff to pursue potential contributions and partnerships before finalizing the COP issuance amount.