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New Prague council moves $12 million police station project into construction documents
Summary
After reviewing financing options, the council voted to advance a proposed $12 million police station into construction documents; staff and advisors outlined bond and EDA lease options and cautioned about timing with bonding and state sales-tax moratoriums.
The New Prague City Council voted on Nov. 18 to move the proposed $12 million police station project into the construction-document phase after a presentation on financing options from Rebecca Kurtz of Ehlers.
Kurtz presented three high-level financing paths under Minnesota statute: a referendum using general obligation (GO) bonds (lowest interest but costlier for a special election), EDA lease-revenue bonds (avoid referendum but higher interest and annual appropriation risk), and capital improvement GO bonds (commonly used and provide the lowest interest cost because of the city’s full-faith-and-credit pledge). She said USDA funding appears unlikely for New Prague and that a state sales-tax moratorium complicates that option; she advised early engagement with legislators if the city wants to pursue bonding assistance.
Councilmembers debated timing and fiscal prudence. Some members urged pausing given rising interest and construction prices; others said delaying could increase long-term costs and stressed the project had been prioritized previously. After discussion, a motion to proceed into construction documents was made and seconded. The council approved the motion by voice vote.
Staff said the move preserves the project schedule, which could allow for an early-to-mid January bid cycle and keep the project on the intended timeline. The council did not adopt a final financing vehicle at the meeting; staff and the city’s financial advisor will return later with more detailed cash-flow scenarios and steps for potential bonding or EDA options.
Next steps include completing construction documents, soliciting bids as appropriate, and further financial analysis to determine the most cost-effective debt structure while monitoring legislative changes to bonding and sales-tax options.
