New Prague council preliminarily approves up to $10.415 million in bonds for new police station after heated public hearing

The New Prague City Council voted to approve a capital improvement plan and gave preliminary authorization for the issuance and sale of general obligation capital improvement plan bonds totaling up to $10,415,000 to fund a proposed new police station.

The action followed a public hearing during which residents and local contractors expressed sharply divided views about the project’s size and cost. Opponents urged delay, more resident engagement and value engineering; supporters said the current police facility is functionally obsolete and the community should invest in a modern facility.

Rebecca Kurtz of the city’s financial adviser, Ellers, told the council the updated pre-sale report ties the proposed maximum bond amount to current bids and to 2025 property valuation figures. Using updated market values, Kurtz said the city’s statutory debt limit is about $33.4 million and that an estimated annual debt service for the proposed issue would be about $660,000—well below the 0.16% market-value cap that limits annual debt service for CIP bonds.

During the hearing, opponents raised procedural and democratic concerns. Brian Paulson said residents had been insufficiently engaged on the project’s scope and cited Minnesota Statute 475.521, subd.3, arguing that hearings should gather input on a project’s need, size and scope rather than only on funding mechanics. Paulson told the council he intended to organize volunteers to collect signatures for a reverse referendum if the council approved the bonds.

Contracting, costs and the risk of a reverse referendum were central themes in subsequent council discussion. Councilors asked staff whether contractor work should be paused to limit potential termination exposure if a referendum were successful. City legal counsel noted the contract’s termination-for-convenience language would require the city to pay "work executed and reasonable and substantiated costs," and that the final liability amount was unknown until quantified with contractor records.

Council supporters repeatedly pointed to a third-party facility study completed in 2022 and finalized in November 2023 that concluded the existing police building lacks adequate interview rooms, private workspace for investigators, proper evidence-processing space, separate locker rooms for men and women, and adequate garage/storage. Supporters argued those deficiencies, combined with modestly lower-than-expected bids, justified moving ahead now rather than waiting for uncertain future savings.

Council members approved Resolution 2560202 (preliminary approval of the CIP and bond mechanism) and Resolution 2560203 (providing for issuance and sale of GO CIP bonds series 2025A, maximum $10,415,000) by voice vote. Kurtz reminded the council that if the resolutions are approved a 30-day reverse referendum period applies and staff planned a bond sale date in July to allow for timing after that period.

What’s next: The resolutions give staff authority to proceed with the bond process. If residents gather the required signatures within the 30-day window, the council could face a reverse referendum. The city will also continue routine steps necessary to move toward sale, including finalizing the debt schedule and working with underwriters and counsel.