Firehouse

At a meeting June 2, city council members approved a base bid of $3,219,000 from Garling Construction, of Belle Plaine, and added four alternates totaling just over $400,000, for a new Solon firehouse.

SOLON– “Congratulations, fellas, you got yourself a firehouse,” Mayor Steve Stange told members of the Solon Firefighter Association.

Competitive bids for construction and financing greased the wheels for action on a winning contractor and interest rate for the Solon Firehouse project.

At a meeting June 2, city council members approved a base bid of $3,219,000 from Garling Construction, of Belle Plaine, and added four alternates totaling just over $400,000, allowing firefighters to keep their vision of a station with eight total bays.

Council members also locked in a true interest cost of 1.54 percent on the $3 million in general obligation bonds to be issued to fund the new facility.

In January, council members agreed to assist the Solon Tri-Township Emergency Response Agency and the firefighter association with a proposed station at the intersection of Windflower Lane and Prairie Rose Lane, just east of Highway 1 on Solon’s south side.

Bids for the project were opened Thursday, May 27, according to Al Buck, architect and partner with Solum Lang Architects LLC, in Cedar Rapids, which designed the new facility.

“They came in favorably which is awesome,” Buck noted.

Garling was the lowest of nine bids received. The highest was a base bid of $3.99 million, but most were tightly grouped.

Stange noted Garling is an established contractor “that’s done a lot of work for the people of this town,” including Solon City Hall and the addition to the fire station.

“I’m pretty excited about that,” he noted.

The bids were considered the previous night by the fire agency, City Administrator Cami Rasmussen said. The agency approved four of the five alternates included in the bid, she added.

Two of the alternates were added bays originally included as part of the overall project but bid as an option to control costs.

Retaining the seventh and eighth bays added $270,000.

The agency also agreed to two other alternates– upgrading the sectional overhead doors from solid to glass panel at a cost of $90,000, and providing dorm rooms for another $45,000.

The agency declined to pick up an alternate for a garden wall, part of a landscape and patio plan, at a bid price of $100,000.

Council member Dan O’Neil said agency members wanted to stick to a target of $4.2 million total cost.

“It was pretty cool to see it all come together,” he said. “With those alternates that they voted to recommend, it would keep the project under ($)4.2 (million) which would be in line with what the city has committed, the agency has committed and what the association has raised.”

The city and agency struck a deal to share the costs of up to $3 million in financing for the new station. One million dollars of the debt would represent the city’s repurchase of the current fire station, with $1 million paid by the agency. The remaining $1 million would be absorbed by the city through sales tax or Tax Increment Finance (TIF) revenues.

Approximately $1.2 million of the $4.2 million price tag was raised by firefighters.

Greg Morris, who spearheaded the firefighter association’s efforts, was present for the meeting.

“It has been interesting, exhilarating,” he said. “I wouldn’t trade my two-and-a-half years for anything.”

Seeing the joy in the hearts of people when they donated was another example of why Solon is an incredible place, he commented.

“When a kid collects cans and gives you five bucks, and you know he really, really wanted to give his five bucks,” he said, “you can’t go wrong.”

Morris said he believed firefighters could have raised the entire project amount if not hampered by a global pandemic. It was difficult to generate contributions without personal contact, he said.

The association will continue to fundraise for a while, he added.

“See what we can do,” he said. “Help the bottom line and help the cause.”

Council member Lynn Morris questioned how the project would deal with landscaping without the alternate.

Stange said it mostly came down to the cost of brick and concrete.

The agency wanted to keep costs controlled, he said, and it was felt the landscaping could be dealt with down the road by the agency and firefighters.

He noted no building permits would be required because the city took over the project.

Council members unanimously approved the base bid and the alternates from Garling.

The city will borrow slightly less than $3 million because of a premium offered by investors, according to Heidi Kuhl of Northland Securities.

The consultant walked members through a bond sale summary and purchase agreement for adoption by resolution, locking in interest rates for the firehouse’s financing.

Two-thirds of the general obligation bonds will be repaid by the city, with one-third by the agency, she noted, with slightly lower payments for the first few years in case the city utilizes TIF revenues.

The city would like to use Local Option Sales Tax (LOST) funds to repay the debt, but needs to change the language contained in the voter-approved Revenue Purpose Statement that defines how LOST dollars are spent.

Initially, TIF funds will be used, with payments structured to keep the city’s overall TIF budget in line, Kuhl said.

The general obligation bonds are backed by the full faith of the city, she explained, and could be paid with a debt service levy, although that’s not anticipated.

The bonds were offered publicly, with Bridge Community Bank, Solon State Bank and Hills Bank expressing interest locally, she reported.

The heavy participation by local banks helped lower the overall cost of financing significantly, Kuhl said, with the true interest cost, including the cost of financing, coming in at 1.54 percent.

“Which is phenomenal,” she said.

As a non-rated bond, the city went through no additional process to have lower rates, she said, which reflects well on the city’s finances and local banks.

Solon will borrow only $2.93 million thanks to a $70,000 premium offered on the bonds, Kuhl added. Because interest rates are so low, she continued, investors are willing to pay a premium for a higher rate.

After passing the bond purchase agreement, council members will be asked to approve an issuance resolution at a June 16 meeting, the final legal document needed before closing on the bonds July 7, she said.

The city locked in interest rates at historical lows, Kuhl noted.

“Overall, very pleased with everything,” she reported.

Mayor Stange and council member John Farlinger both wanted to know how the bonds were sold and if local banks were able to purchase them.

Kuhl said the interest expressed by the local banks pushed rates to where they are. The bonds would be sold the next day, she said, through a highly regulated process at the trading desk.

Council members unanimously approved the resolution provided by bond counsel Dorsey & Whitney.

At the conclusion of the meeting, Stange thanked all involved in the firehouse project, singling out Rasmussen, City Attorney Kevin Olson, Public Works Director Scott Kleppe, City Clerk and Agency Clerk Susie Siddell, Fire Chief Bob Siddell and Greg Morris for their time and efforts.

“It’s just an unbelievable project,” he observed.

The current fire station was built in 1958, he said, and now the city will have a state-of-the-art facility.

“Just really proud of everybody that’s been involved,” he said.

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