Posted on August 24, 2020
Financing for the Office Relocation of the Forest Lakes Metropolitan District Office to Forest Lakes Subdivision – New Office Proposal
At the April Board of Director’s meeting, the Board decided to delay any decisions pertaining to the relocation of the office to Forest Lakes subdivision. However, the District Manager is fairly confident that the reason the voter’s voted against this ballot initiative (only by 42 votes) was because the total cost of $455K was too high. As you recall, this total cost included the construction of the office space, and the 2 additive alternates for the Board meeting space and solar. From the District’s and other’s perspective, we feel that this initiative deserves to be revisited because we have spent and will continue to spend thousands of dollars to lease a building that we do not own. This just does not make good financial sense! There are members of the Board that agree with this as well. We have an opportunity for the residents to again vote on the financing for the office relocation at the November 3rd General Election. This ballot initiative will include the financing for the construction of the office space only!
Here are a few of the details, but we invite you to review the package (also on the website) showing the floor plans, exterior elevations and perspective drawing, costs spreadsheet and the projects that show when the lease costs will exceed the mortgage costs, PROS and CONS, the TABOR Notice and the proposed ballot:
- The total cost of a 1,600 square foot turn-key office space would be $370K.
- The current proposed monthly mortgage on the current 25-year loan offer will be $1,730, which is only $71 more than the current lease cost of $1,659. We continue to research the best value in loans for this initiative!
- With all utility costs, insurance and building maintenance costs included, the total monthly cost in the mortgage scenario will be $2,629. This is only $198 per month higher than the lease cost of $2,431. The additional costs will be taken care of in our existing operational budget.
- The District has paid literally hundreds of thousands of dollars in lease costs since its incorporation in 1973. We have already purchased more than 2 office buildings!Given a 3.5% inflation that is in our present lease, our current costs with our lease would exceed our mortgage costs in record time. Put another way, it does not make sense to lease knowing it will be more expensive than a mortgage in a noticeably short span of time!
At the July 14th Board of Directors Meeting, the Board did not have any recommended changes to any of the documents provided to them by District Staff! So, the residents will have another opportunity to voice their opinions on obtaining financing to construct a FLMD-owned office building in Forest Lakes Subdivision at the November 3rd General Election. In the next couple of months, we (in conjunction with La Plata County since it is a coordinated Election) will mail PROS and CONS Statements, TABOR Notices and official ballots to all registered and eligible voters of Forest Lakes subdivision.