However, Council approves additional bond financing
On Wednesday, October 4, Mammoth Lakes’ Town Council voted unanimously to authorize Town staff to take on $5.5 million in bond debt to finance the Multi-Use Facility (MUF) at Mammoth Creek Park West.
On May 17, 2017, Town Council approved a funding strategy for the project, which involved the Town taking on $4.9 million in bond debt. That decision was made based on a cost estimate provided by HMC Architects that predicted the building would cost $9.5 million.
Subsequently, on June 21, Town Council authorized an amendment to the existing agreement with HMC Architects, to include the final Architecture and Engineering Design Services for the project, as well as for Construction Administration, for an additional fee of $642,940.
This week, in reports made to the Recreation Commission, Mammoth Lakes Recreation (MLR)’s Board of Directors, and to Town Council, Town of Mammoth Lakes staff announced that the Multi-Use Facility at Mammoth Creek Park West is now a $12 million project, “plus or minus a little,” said Town Manager Dan Holler at Town Council this week.
On July 7, the Town awarded the contract for grading and sitework for the Multi-Use Facility, for a total amount of $486,835 to Spiess Construction. That contract has not yet been executed.
At Wednesday’s meeting, Council also voted to direct Town staff to renegotiate a contract with Spiess Construction to delay breaking ground at Mammoth Creek Park West until early next year. Councilmember Cleland Hoff cast the sole vote against this action, saying she thought it was unwise given the current uncertainties with regard to the cost of the project to enter into a contractual obligation with Spiess at this time. Other Councilmembers expressed their concern that project costs are escalating, and entering into a contract now would allow the Town to prevent Spiess from raising the already agreed-upon cost at a later date.
On Wednesday, Holler told Council that the Town’s Financial Advisor presented a financing agreement for a principal amount of $5.5 million in bond debt to 25 financial institutions, of which three responded with interest. One institution offered to issue the debt with an interest rate of 2.2 percent. The original cost estimates were for a $4.9 million bond with a 3.5 percent interest rate, which, under a ten-year repayment plan, would have yielded annual debt payments of $600,000. With a 2.2 percent interest rate, on a principal amount of $5.5 million with a ten-year repayment plan, the Town would be responsible for annual payments of $615,000.