Faribault council approves loans for future Viaduct Park

Two weeks after formally approving over $5 million in investments to bring a wide array of amenities to the future Viaduct Park, Faribault’s City Council has formally voted to fund the improvements through an internal city loan.

The vote marked another step toward construction of a park, which Mayor Kevin Voracek conceded has received mixed public feedback but enjoys the strong support of councilors, who see in it the potential to serve as a centerpiece of the city’s parks system and as a regional draw.

Under the revolving loan agreement, the internal loan could deliver up to $6.3 million in funding from the Sewer Fund to the Parkland Dedication Fund, more than enough to cover the pair of contracts the city has approved.

The money will be paid back to the sewer fund at a rate of $650,000 per year, divided into quarterly payments. Of that figure $630,000 would come from gas and electric franchise fees and the remaining $20,000 from water and sewer franchise fees.

Under the two contracts approved by the Council earlier this month, a multipurpose building to the site including concessions, skate and equipment rental and a warming area will be added, along with a new splash pad and other site improvements.

While the internal loan will come with an interest rate of 5%, subject to change based on the city’s investment earnings, and could take up to 13 years to pay off, there will be plenty of ability for the city to borrow less and pay it back sooner than anticipated.

Original bids for the project came in above the Engineer’s Estimate, which along with a lack of hoped for support from the state contributed to the council’s decision to delay plans to add a proposed skate loop and look for other ways to reduce the cost of the project.

While dropping the proposed contract to build the new skate loop, the Council opted to direct staff to pursue change orders rather than rebid the other two contracts. After those change orders are completed, the overall project cost is expected to drop to about $5.5 million.

City officials are also hoping that private fundraising efforts through the Faribault Foundation could reduce the size of the internal loan. City Administrator Jessica Kinser promised that the contract would be regularly reviewed so that taxpayers get the fairest deal possible.