Agenda Date: 09/09/2025
Subject:
Title
Long-Term Capital Financing discussion
Body
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From: |
James L. Becklenberg, City Manager |
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Prepared by:
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Adrienne Burton, Director of Major Projects |
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Presentations: |
Adrienne Burton, Director of Major Projects |
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Brent Soderlin, Director of Public Works & Utilities |
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Rachel King, Director of Economic Development |
PURPOSE:
To provide City Council with updates on major projects, illustrate the City’s financing capacity, and introduce a long-term capital planning framework. This discussion is intended to guide Council’s consideration of how best to balance immediate project needs with strategic, long-term planning, fiscal responsibility, and community priorities.
LONG-TERM OUTCOME(S) SERVED:
High-Quality Governance; Fiscal Sustainability; Vibrant Community and Economic Vitality
DISCUSSION:
Council guidance to date emphasizes:
- Flexibility: Caution with debt service to preserve future capacity.
- Sound Investment: Prioritize readiness and long-term economic potential.
- Preservation: Maintain a healthy, sustainable 3A fund to endure downturns.
Major Project Updates
The City has identified several high-priority capital projects because they represent critical opportunities to invest in the City’s future while addressing immediate operational and community needs. Together, these projects illustrate how strategic investments can balance core service delivery, economic vitality, and community identity—while also serving as near-term examples of how financing choices and prioritization shape the City’s long-term capital roadmap.
- Belleview Service Center (Buildings 2 & 3): The Belleview Service Center is a crucial hub for municipal operations, supporting essential services such as public works, fleet maintenance, and infrastructure management. Buildings 2 and 3 are beyond their useful life and have been identified for replacement. The City is proceeding with issuing a Request for Proposal (RFP) for a Basis of Design to establish the building requirements. The Basis of Design will be completed in 2026 and will inform the scope of a future RFP for full design services, which is anticipated for release in late 2026 or early 2027. This phased approach ensures the City is well-positioned to pursue a thoughtful and efficient facility replacement that supports long-term operational sustainability.
Approximate cost: $30M - $35M
Annual debt service impact: $2.1M - $2.4M
Why it Matters? Operational Impact
- Santa Fe & Mineral (Quad Road Improvements): The improvements at Santa Fe Drive and Mineral Avenue are aimed at easing congestion and improving safety at one of Littleton’s busiest intersections. The bid opening occurred in early August 2025, and award is pending with anticipated City Council concurrence in early fall 2025. Project costs are covered within existing funds, and certificates of participation (COPs) are no longer required to supplement funding. Construction is anticipated to begin in late 2025 with completion by Spring of 2027.
Total Cost: $22.5M
Why it Matters? Operational Impact
- Town Hall Arts Center Improvements: The Town Hall Arts Center is a beloved cultural hub that has long served as a venue for live theater, music, and community events. Town Hall Arts Center city has outlined a capital improvements plan aimed at modernizing key aspects of the building while preserving its historic charm, and as part of this work, the City of Littleton has committed to providing supplemental funding. 50% design has been completed.
Approximate cost: $3M - $6M
Annual debt service impact: $210K – 420K
Why it Matters? Cultural and Economic Impact
- Project Downtown (Main Street Improvements): Project Downtown is the guide for the city’s long-term investment decisions to improve mobility, connectivity, parking, pedestrian safety, wayfinding, and streetscape enhancements (i.e., lighting, trees, and wider sidewalks) in Downtown Littleton. Phase I of Project Downtown focuses on Main Street improvements—roadway, sidewalks, utilities, lighting, and streetscape elements.
Deferred maintenance, downtown deficiencies, escalating construction costs, and an ongoing Economic Impact Study (EIS) underscore the need for targeted reinvestment. The EIS findings will further inform the fiscal and community benefits of downtown reinvestment, and this study would be a key element for any further community outreach to reconnect the concept plan with next steps.
Staff has proposed two schedule alternatives for Council’s consideration. Option 1 schedule denotes COPs as the funding source and features an expedited schedule. Approximate timeline details design occurring in Q2 2026 through Q2 2027 with construction following in Q2 2027 through Q3 2028. Each design phase is planned to be longer than originally anticipated to account for additional public engagement due to the gap in the planning and design phase.
Approximate cost: $27.5M - $30M
Annual debt service impact: $1.9M - $2.1M
Why it Matters? Cultural, Economic, and Operational Impact
Option 2 schedule denotes a General Obligation (GO) Bond funding source (assuming a successful ballot measure in 2027) and anticipates design occurring between Q2 2027 and Q2 2028 with construction following in Q2 2028 through Q3 2029. Each approach has implications for timing, engagement, and capacity, and the city is prepared to support either at the direction of City Council.
Approximate cost: $27.5M - $30M
Annual debt service impact: $1.8M - $2.4M
Why it Matters? Cultural, Economic, and Operational Impact
Capital Planning Framework
Beyond near-term decisions, staff recommends the development of a long-term framework to guide future capital planning. The City’s needs go beyond the major projects discussed as part of this presentation, and a roadmap ensures the City is proactively sequencing projects across time and funding sources. The City must explore all financial levers rather than defaulting to a single method. Each potential funding approach comes with its own trade-offs, timelines, and transparency requirements. By building a clear, thoughtful framework now, the City can be better prepared to prioritize what matters most, leverage funding opportunities, and engage residents in shaping the future of their public infrastructure. To manage this, staff is building a framework that:
- Assess Needs (systematic facility & infrastructure evaluations)
- Prioritize Strategically (condition, risk, impact, alignment with goals)
- Evaluate Funding Tools (grants, fees, assessments, COPs, GO Bonds—each with trade-offs)
- Engage the Community (transparent, values-based, trust-building)
- Create Alignment (Council goals, departmental priorities, fiscal responsibility)
The list of potential program and project needs is broad – facilities like the library or City Center, downtown projects, parks and open space, ADA improvements, transportation, and public safety infrastructure – and that is why prioritization and sequencing are so important. The City is proposing how major program and project needs could fit into a debt-issuance cycle. It’s not a schedule, but it’s a diagram for how the City could structure financing over decades.
Financing Capacity
General Obligation (GO) Bonds require approval by the voter, and the earliest ballot measure the City could pursue would be in November of 2026. GO bonds typically results in lower interest rates when compared to COPs; however, they are paid for through a dedicated property tax mill level increase. The voter approval process allows for strong community validation, but this process requires extensive consultant support for engagement and polling to prepare. For a $30M bond this would require approximately 1.4 mills and will cost about $1.8M - $2.4M in annual debt service.
Financial models illustrate that with current 3A sales tax revenues and certificates of participation (COPs), the City can advance Main Street, the Service Center, and Town Hall Arts Center while preserving approximately two-thirds of annual 3A revenues for other priorities or reserves. Adding the new facility at the Belleview Service Center also increases the City’s secured building value, which directly improves the capacity for COP financing (increase from $78M to $97M).
BACKGROUND:
The City faces a widening gap between its growing list of capital needs and available pay-as-you-go funding. The March 2025 City Council Retreat surfaced shared priorities around fiscal stewardship, project readiness, transparency in engagement, and maximizing the impact of infrastructure investments. Major project decisions, including Project Downtown, originate from the voter-approved 3A sales tax measure in 2021, intended to support transformational, multi-generational capital investments. Council’s direction on financing strategy will help shape the City’s approach to balancing immediate project needs with sustainable long-term planning.
Prior Actions or Discussions
City Council Retreat – March 2025
Council Retreat Update – May 2025
FISCAL IMPACTS
Preliminary models indicate that advancing Main Street Improvements, the Service Center, and the Town Hall Arts Center with COP financing would commit approximately one-third of projected 3A sales tax revenues to debt service. Alternatively, pursuing a GO Bond approach for Main Street would have a similar fiscal impact but would be paid through a dedicated property tax mill levy. Both approaches preserve a majority of 3A revenues for grant matching, ongoing maintenance, staffing, and other needs. The trade-offs between the options center on timing, transparency, and voter approval, while the ultimate fiscal impacts will depend on Council’s direction regarding financing approach and project prioritization.
STAFF RECOMMENDATION:
Staff requests Council guidance on project priorities and financing approaches to inform the development of a long-term financing framework.
ALTERNATIVES
Advance selected projects individually rather than as a coordinated financing package.