Idaho Falls approves $30 million in funding to build police station
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IDAHO FALLS — Idaho Falls will get its first police station after the city council voted to approve its funding Tuesday night.
The city council’s vote came after 40 minutes of discussion among city leaders during a Monday afternoon council work session. With the passing of $30 million in certificates of participation, the Idaho Falls Police Department will get its first dedicated police station in the department’s 125-year history. For decades, the police department has been housed in the Bonneville County Law Enforcement Building along with a host of other municipal offices.
“We would not be in a position to consider this financing if it weren’t for the way the city has been well and conservatively run before we came into office,” councilman Jim Freeman said Tuesday night. “I want to ensure the citizens of our community that the consideration by the staff, the mayor, the city council has been careful and in-depth.”
Certificates of participation are a lease-financing agreement renewed annually by the city. The certificates pull from investors to fund the project and then lease the building from the investors. If at the end of the year, the city does not renew the lease, the property and building would go back to the investors while they recoup the cost. Once the lease is paid off, the property’s ownership transfers to the city.
“This is really spending within our means,” Council President Michelle Ziel-Dingman said Monday. “This is spending within the budget and being able to accomplish a law enforcement building. It is complex, it does take 22-years to do so, but one of the benefits is that taxpayers are not going to see this as an additional cost.”
A 2015 Idaho Supreme Court ruling determined certificates of participation as a legal option for funding public buildings. The court made the ruling regarding the Greater Boise Auditorium District project. Since then Ada County and Chubbuck have recently used the certificates to fund facility projects, according to an Idaho Falls news release.
Not everyone was on board with the funding plan though. Councilman John Radford remained adamant that certificates of participation are unconstitutional, despite the Supreme Court ruling. Radford was the only member of the six-person council to vote no on the measure.
Traditionally, cities have funded projects through money already in the bank or through bonds levies. Bonding is a debt a municipal government incurs following voter approval by a two-thirds supermajority of citizens. The money borrowed through a bond is paid back through property taxes, generally over several decades.
“We were told that the bond process at this point would take us much longer,” Councilman Thomas Hally said on Monday. “… The longer we go out, the more likely that the interest rates are going to increase. It might appear upfront that bonding would be cheaper, but that’s if you could do it right now and we can’t do it right now.”
Throughout the past year, council members have talked about the 8% to 10% inflation rate on construction costs. Many council members have said things along the lines of the time is now to build a new police station, knowing costs will only rise.
A 3.25% interest rate and payments over 22 years on the $30 million will bring the total cost of the project to $42,457,377. The city must enter at least a 10-year term with the financers before potentially paying off the balance. With a 22-year term, the city will need to pay about $1.99 million of already budgeted funds towards the lease each year.
While bonding would’ve appeared to cost around 2% less upfront, the city discussed that construction inflation with the cost and time to run the bond would’ve made the project more expensive in the long run.
Mayor Rebecca Casper said Monday choosing certificates of participation over bonding would “be a great kindness” to the residents of Idaho Falls. If a bond was passed by the voters, taxes would increase, but the certificates obligate the city to stay within the current budget.
Talks of a new police station have been ongoing for over a decade. In the past 10-years, two citizen committees determined the need for a new facility, with the most recent convening in 2019. The 2019 committee recommended that the city build a new facility now.
Talks about occupying vacant box stores like the old Deseret Industries building, the Planet Doom haunted house and vacant Shopko were all on the list. However, research into the idea did not come without hurdles. Officials found it cost-prohibitive to retrofit such a building to meet a police department’s needs. Additionally, many of the properties were not available at the time and the city wants to revitalize the Northgate Mile and 1st Street area.
In September 2019, the city purchased the old stockyards on Northgate Mile for $675,000. Officials announced this as the site for the new police facility and hired an architect team to create initial designs. An Environmental Protection Agency grant was also used to check the potential need for remediation of the property. Results from that study came back favorable.
The city will get the final pricing on the certificates of participation on Dec. 8, and the deal will then be closed by the end of 2020. With the money available, the city can begin the construction process by finalizing the design and finding contractors to complete the work.
The actual interest rate and total cost for the $30 million in certificates could be even less than the $42,457,377 if interest rates on Dec. 8 are lower than 3.25%.
“To finally reach this point at this time is exciting,” Idaho Falls Police Chief Bryce Johnson said in a news release. “We are grateful for the support of the city council, mayor and city staff who have worked tirelessly on this effort and members of the community who continue to support IFPD. This facility will be a great improvement to the city and an enormous aid in our efforts to serve the community and keep Idaho Falls safe for decades to come.”