The Layton City Council, acting as the Municipal Building Authority, approved a budget Thursday calling for the sale of just over $7 million in bonds in 1989 to build municipal and court buildings
Plans for the $6.8 million, two-building complex were approved after a public hearing at the council's meeting Jan. 4.The council issued $5 million in short-term bonds last August and then reinvested the funds, generating $855,000 in interest. That money has been used by the council to pay architect's and legal fees as it studied the city's needs and drew up site plans.
Those bonds come due in August 1990, City Recorder Steve Ashby said, and will probably be paid off.
To generate the money needed to build the new city hall and court building, Ashby said $7,029,820 in revenue bonds will probably be issued in the next few months.
The council has indicated it will issue revenue bonds rather than call a bond election to sell general obligation bonds to finance the project.
That stance has drawn opposition from Councilman Gerald Nebeker, who voted against forming the building authority and Thursday night cast the lone dissenting vote against the authority's proposed budget.
In addition to approving the tentative budget, the council set a Feb. 2 public hearing date and final vote on it.
According to the tentative budget passed Thursday, the two bond issues and the interest generated on the short-term bonds will generate $12,884,820 in revenue for the city.
The council plans to repay the $5 million in short-term bonds, budgeting $6,872,379 for the construction of the two buildings. Of the rest of the money, $25,000 will go for a new computer and telephone system.
Issuing the bonds also costs money, including $180,000 for underwriters fees, $63,000 for bond counsel, $23,841 for printing and having the bonds rated, and $70,000 for bond insurance.
The building authority also set aside $2,700 for miscellaneous and office expenses.
The council has not decided how the long-term construction bonds will be paid off. The city has $1.8 million set aside to help pay for the construction, Ashby said.
The council could use that money to make the first few bond payments, pay a lump sum, or spread the payments out. At the Jan. 4 public hearing on the construction project, Mayor Richard McKenzie refused to rule out a tax increase to pay for the construction.