Today's bleak municipal bond market, hit hard by the national economic crisis, doesn't have to slow down the rebuilding of Palo Alto's libraries under the $76 million library bond approved by voters Nov. 4, according to a plan proposed by city staff.
The only immediate funds needed are about $4 million for design work on library rebuilding and $400,000 for other required contracts over the next two months, according to a new staff report.
The staff is recommending borrowing that amount from the city's General Fund and repaying it in the spring of 2010, when the city would need to sell bonds so construction can begin after the final design work and approvals are completed. The plan was presented to the City Council as a non-action informational report Monday night (Dec. 15).
The plan would mean the current downturn in the municipal bond market would not likely affect the library project – unless the bleak conditions persist into 2010, according to Lalo Perez, director of administrative services.
"We're at least a year away from issuing bonds, so the current market conditions are not much of a concern," Perez said. "We can only hope things will get better."
The plan to borrow from then reimburse the General Fund was suggested by staff before Measure N was passed on Nov. 4. While Measure N gave the city the green light to issue $76 million in bonds it created no timeline requirements.
So the city can wait until the need for money is particularly urgent or until interest rates on municipal bonds become favorable before issuing any bonds.
The new report advises the council to do just that.
"It would be inefficient and more costly to issue general obligation bonds at this time and more optimal to wait until the first phase of construction begins," the report states.
Meanwhile, the city could proceed with design plans. Officials expect to approve design contracts for Mitchell Park and Downtown libraries in the next two months, launching the design phase. Construction contracts would then be awarded in spring of 2010.
Under the proposed plan, the Mitchell Park Library and separate Community Center would be combined in a new building and expanded to include a children's area, space for teenagers, a program room and group-study rooms. The plan calls for a new 15,000-square-foot community room, which would replace the current Community Center building and which would be attached to the library.
The Downtown Library would be refurbished and receive seismic and fire-safety upgrades.
City officials said they expect to begin designing renovations on the Main Library in late 2010. These would include new group-study rooms, lighting upgrades and a new "program space" that would seat 100 people.
(Staff Writer Gennady Sheyner can be e-mailed at firstname.lastname@example.org.)