Independence officials are looking at financing options to cover a funding gap for the proposed farmers market structure on the north side of the Square.
Half of the $3.3 million facility would be enclosed and heated, so it would be open year-round for events from festivals to family reunions. The 300-foot facility would face Truman Road on the block between Liberty and Osage and have such things as a catering kitchen and restrooms.
“All in, that’s a $3.3 million vision. That’s what’s up for bid right now,” said City Manager Zach Walker.
Officials hope have it open in time for the Santa-Cali-Gon Days festival on Labor Day weekend and describe it as another step in the Square’s resurgence.
“We want to sustain the energy and enthusiasm that we’ve (seen) in our community here,” Walker said.
The city has money in hand and commitments of $815,000, about one-fourth of the total needed. The biggest chunk is $600,000, one year’s entire allocation of federal community development funds. Also: $65,000 in tax increment financing, $50,000 in state tax credits and $100,000 committed by local Rotarians who are in the midst of raising at least that amount.
That leaves $2.48 million. Walker outlined three options. One is to issue 20-year bonds, paid off with city parks sales tax funds. Borrowing at 4.46 percent, the city would pay $1.3 million in interest on top of the principal. He said that’s excessive.
What about shorter bonds and a lower rate? Fifteen years at 4.13 percent still leaves $911,453 in interest.
So Walker’s suggestion is that the city borrow the money from itself. The water utility fund has about $3 million earning 1.86 percent a year. Borrowing from that fund at 2.5 percent and paying back from the park sales tax means both a better return for the water utility fund and less interest paid by the city, $521,626.
“We’re saving the city money. We’re completing the project, which is a major step forward for us,” Walker said, adding that the water fund comes out ahead too.
The City Council could vote on the plan soon. The city expects to have bids for the project back within a couple weeks.
The farmers market is to be run through the Parks and Recreation Department. Even with parks sales tax money used to pay off the facility, Walker said, no parks projects will be cancelled. Still, he said, the city has an overall backlog of $1 billion in deferred infrastructure work, and the money for the farmers market would be unavailable to address that.
Walker said the water utility fund is well managed and that borrowing the money wouldn’t stop any planned water service upgrades.
The city has run into legal questions along these lines in years past, but Walker said the city attorney views this as clearly being a “business decision” and therefore within the rules of the City Charter.