Traverse City commissioners will discuss a proposal Tuesday for the city to bond construction costs to build a new Senior Center on East Front Street – a move contingent on Grand Traverse County commissioners agreeing to put a higher millage request on the ballot this fall that would cover both the bond payments and operational costs for the county’s Senior Center Network.

Traverse City Mayor Richard Lewis requested that commissioners discuss and possibly take action on the proposal Tuesday, and also asked that county commissioners take up the issue at their Wednesday meeting. Lewis is part of an ad hoc committee of county and city representatives who have been meeting this spring to explore funding options for a Senior Center rebuild. The city owns the deteriorating building on East Front Street, but the county leases the space and runs part of its Senior Center Network programming there.

Both city and county commissioners have agreed the building should be reconstructed – a project estimated to cost $7.5 million – but have clashed on how the rebuild should be funded. County commissioners previously declined to put a construction millage on the ballot, expressing reluctance to ask county taxpayers to pay for a new city building without a long-term county lease and citing a desire to pursue private fundraising instead. Senior Center supporters, meanwhile, worry that private fundraising could take years to complete and that the building is in urgent need of repairs now – comments echoed by Lewis in a memo this week to city and county commissioners.

“While both governmental bodies have agreed on new construction, the holdup has been how to finance the new facility,” wrote Lewis. “This topic has been an issue for quite some time, not just the last two years. The major difference today, versus the last twenty years, is that the current facility is nearing the end of its usefulness and it is imperative that action be undertaken if senior services are to be continued at the current location.”

According to Lewis, after ad hoc committee discussions stalled without agreement on a funding recommendation, he worked with city and county administrators “to discuss and develop a workable request for presentation and consideration.” The proposal calls for the city to issue a 20-year bond not to exceed $7.5-$8 million to pay for building a new Senior Center. The city would issue a resolution of intent to bond in September, kicking off a 45-day period when city voters can petition to put the bonds on the ballot. If no petitions are submitted, the city could issue bonds next year once construction bids are awarded and received. Otherwise, if a referendum required the bonds to be placed on the ballot, that question would be put to voters first in 2023 before bonds could be issued.

In the meantime, county commissioners are being asked to approve ballot language by August to put a millage request to voters this November. The 10-year millage request to support the Senior Center Network would need to be at least .1800 mills, according to Lewis, which would include .0750 mills to cover the construction bond payments. The city and county would enter a 25-year intergovernmental agreement for the county to provide senior services at both the current and rebuilt Senior Center. The agreement would include the county paying “rent” from its millage proceeds to cover the annual bond payment, estimated at $510,300. Because the county only wants to use roughly 88 percent of the space in the new 17,124-square-foot Senior Center building, the county would pay $450,600 for rent and the city would cover the remaining $57,700. Once the bond is paid off, the rental rate would be renegotiated between the city and county, according to the proposal.

In addition to putting the issue to voters this fall, the county would also agree to seek a renewal of the millage in 2032 under the plan. Lewis notes that there are two risks to the proposal which could impact both the county and city. Intertwining the fate of the Senior Center Network’s operational millage with additional mills for construction this fall means both could be rejected by voters, Lewis points out. “If the county places the millage as indicated above on the November 2022 ballot, and if the electorate rejects the proposal, then the operational millage for the centers will also be rejected,” he wrote. The city would also be on the hook for bond payments if a millage renewal was rejected in a decade. “If the proposal passes, yet fails in 2032, then the city will have to make the remaining bond payments, as well as other costs of the facility, from the general fund,” according to Lewis.

The upside to the proposal, however, is that voter support means construction could begin on a new Senior Center as soon as next year. According to a timeline provided by Lewis, following millage approval by voters in November, the city would immediately begin the process of hiring an architectural consultant to prepare final construction and bid documents. That process would include a review to update programming needs, determining whether a commercial or catering kitchen is needed for the building, and evaluating possible additional square footage for future Senior Center needs. The city and county would work to approve the new intergovernmental agreement for the space by early 2023, then solicit construction bids, issue bonds, and begin construction in the second half of next year.

Another funding option for a Senior Center rebuild remains on the table, though its exact timing and status is unknown. State Sen. Wayne Schmidt discussed the possibility with city and county leaders this spring about putting in a request for $7 million in funding from the state for the project. Schmidt, who leaves office at the end of this year and is running for county commission, noted that significant dollars are available within the state budget, including from COVID relief funds. Lewis wrote in his memo to city and county commissioners that “the request for an allocation from the state of Michigan in the amount of $7 million dollars remains in consideration and discussion within the context of the state’s budget.”