Designs for a field house at the Soldotna Regional Sports Complex are nearly complete. Now, the city of Soldotna is looking at how to fund the project.
At Wednesday night’s council meeting, the Soldotna City Council will introduce legislation to ask the voters if the city should borrow $10 million in the form of a bond to build the field house and increase the sales tax by a half percent to cover the debt service on the 10-year bond.
“It’s two parts that we see working together, if the public gives us the go-ahead,” said City Manager Stephanie Queen. “We borrow money and, simultaneously, add a sales tax to cover the cost of the debt over a 10-year period.”
The city does have the money to fund the project reserved in the fund balance, Queen said, but the administration found it would be more financially prudent to pay for the project with a bond.
“We have cash and we typically pay as we go for projects,” Queen said. “We have a significant fund balance to put a good portion towards the project, but we’re recommending debt because our cash is doing really well in our investments and interest rates are low. We can leave the extra funds balance in our investment, earning rates much higher than it costs to borrow funds.”
If approved by the public, the city would take on a 10-year bond with an interest rate between 3 and 3.5 percent. It would be paid off in 10 years with 10 annual payments.
The half-percent sales tax increase would cover that debt.
“Then the extra half percent would go away after 10 years, because it’s in the code,” Queen said.
The approximately 42,000-square-foot metal building would be connected to the current sports complex and offer a variety of recreation options for the community. The building could hold three high school basketball courts, eight large wrestling mats or nine pickleball courts, Queen said.
“It’s an appropriate design for the community,” she said. “It’s a really flexible space that will allow different sports to be played at once.”
After the ordinance is introduced at Wednesday’s meeting, the council will set a public hearing on Dec. 12. From there, the bond question could be seen on a special ballot in March. If voters approve the bond in March, the half-percent increase would be seen starting July 1, 2019. The council could change the time line as needed, however.
Reach Kat Sorensen at email@example.com.
• By Kat Sorensen, Peninsula Clarion