FRANKFORT, Ind. – With all six Frankfort police station construction bids rejected by the Board of Works, each being at least $2 million over the appropriated cost of $8.5 million, and still wanting to have a dedicated facility for the Police Department, the Frankfort City Council held a work session after its Monday council meeting to discuss how to accomplish that goal.
The result. Approach the project using a 20-plus-year-old Indiana law allowing city and county governments to utilize an alternative procurement method to deliver a public project by way of a public-private partnership. The alternative procurement method is called BOT, an acronym for build, operate, transfer, and allows a government body to have greater control over the upfront cost and allows for negotiating costs while not having to rejects bids and starting the process over. The latter being the traditional way of doing a government project.
BOT also allows for combining multiple projects into a single, larger project with the desired outcome of lowering costs by developers bidding to do both projects.
With the information of combining projects, the council via consensus will now add the aquatic center to the police station project – an official vote could occur at its next meeting on August 9. All bids associated with the aquatic center had previously been rejected by the BOW due to fiscal uncertainty during the pandemic.
“I think it is something we all want to see to move forward and as quickly as possible,” said Frankfort Mayor Judy Sheets addressing the council. “This is what our constituents want, they expect us to be out here working for them and I think it is time we just got to move. We got to get going on this.”
The single, combined project would have a total projected cost of $20 Million based on financial assumptions presented by Gary Smith of Reedy Financial Group, the city’s financial consultant.
Smith provided the council with an affordability report for the two projects showing current account balances of the respective budget funds that will be used to make yearly payments once financing is secured as well as information on how much the city could afford for each based on future city revenue projections. The project costs discussed for the police station and aquatic center were $9.5 million and $10.5 million, respectively.
Council president Eric Woods remarked after Smith’s presentation, “looks like the police station is fine, but the pool is going to require a little extra.”
Smith noted he removed the 4-lane lap pool from the project based on the $1.25 million cost for that portion alone as the city would not be able to afford this based on any of the financial assumptions provided in the report. The lap pool costs were provided by Kyle Lueken of HWC Engineering, the firm the city is using to handle the aquatic center project.
Prior to the August 9 council meeting, much legal work will need to be completed. A timeline both city attorney Les Bergum and Richard Starkey with Barnes & Thornburg, outside city counsel, noted as complex due to the BOT consisting of multiple projects, funding sources, architects, and holding entities.
Due to the Indiana Constitution that places a limit on municipalities on the maximum debt ratio a municipality can borrow, the city will need to use “legal fiction” – a term used by attorneys to pass taxpayer-owned assets to a third party to hold for the purpose of securing funding for the life of the bond. Currently, the City has two such projects utilizing such entities – one for Old Stoney and the other for Prairie Creek Park.
Starkey noted, “going to go through the Redevelopment Authority for the pool and the [Frankfort Police Station] Building Corporation for the police station” for the purpose of holding the assets. While Bergum discussed the complexities and time associated with completing the legal work, “It is going to take some time to put this RFP together from my point because it involves two projects, two funding sources, and two architects.”
The City Council will meet next on Monday, August 9 at 7 pm in the council chambers located in Old Stoney.
