2009_0207_ Packet_ Spec_StratPlanning

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Item: License Center Facility Year: 2010 Status: $200,000 available (projected) 2009 - 2018 Capital Improvement Plan Division: Finance Cost: $600,000 Description: The City currently leases 3,330 square feet of store space in the Lexington Shopping Center, immediately North of Fire Station #1. While the City is enjoying below-market lease terms for 2008, beginning in 2009 the lease agreement will require a significant increase in rent. Seginning in 2009, the City expects to pay $57,000 annually, with $3,000 annual increases thereafter. Given these amounts, it is arguably in the City's best interest to either acquire or construct a city-owned facility (perhaps a multi-purpose facility) to house the License Center. Justification: Financing for the new facility (less existing cash reserves) is expected to require an annual debt service payment of $45,000 over a 10-year period beginning in 2011. However, current lease payments are expected to be $63,000 during that same year. With a new facility, the City would forgo these payments and realize an annual savings of approximately $18,000. Funding for a new License Center facility will come from agent fees derived from the issuance of State licenses and passports. Ca ital Costs ii� i i i i i i- i; Fundin Sources De u Re istrar Fees $ - $ 400,000 $ - $ - $ - $ - Cash reserves - 200,000 - - - - Other - - - - - - Total Sources $ - $ 600,000 $ - $ - $ - $ - Ca ital construction $ - $ 600,000 $ - $ - $ - $ - Other - - - - - - Total Expenditures $ - $ 600,000 $ - $ - $ - $ - O erations and Maintenance Costs ii� i i i i i i- i; Idin Sources De u Re istrar Fees $ - $ - $ - $ - $ - $ - Other - - - - - - Total Sources $ - $ - $ - $ - $ - $ - Other $- $- $- $- $- $- Total Ex enditures $ - $ - $ - $ - $ - $ - ** No operational costs are shown. With a new facility, the City expects to realize operational savings and those savings are noted above. 44