By Ken Jackson

Staff Writer

The Kissimmee City Commission chose Tuesday to eliminate some improvements to reduce costs in the Lakefront Park project, as the final Guaranteed Maximum Price for completion of phase III rose to exceed the amount originally funded by the city.

As approved Tuesday, the city eliminated items that may have been removed anyway from the project for value, such as premium lighting, excessive landscaping materials, marina parking lot pavers and redundant boardwalk designs.

Those changes reduced the total cost of the phase to just over $11.5 million, a savings of $1.27 million but still higher than the $9.3 million budgeted in the city’s capital plan for the project.

This option requires the city to borrow about $4.5 million in the 2014-15 fiscal year, increasing debt service expense by one annual repayment of $675,000 and raising the city’s ratio of debt service expense to sales tax revenue to 55 percent in 2014-15 and over 50 percent, above where city staff tries to keep the ratio, for another two years after that. If sales tax revenues do not meet projections during that process, other capital projects would be deferred to as late as 2019.

City Manager Mike Steigerwald said with the real estate and construction industries recovering from the recession, building costs have risen, contributing to the extra debt service to finish the project. Added costs to build the park’s bait shop over the surface of the lake also pushed the price up.

However, he said the city wasn’t nervous about taking on extra loans to pay for it.

“We feel we can comfortably push capital projects back, and keep our debt ratios low,” he said.

Staff brought another more expensive option to the board: completing the entire phase of the park as designed but reducing its $1 million contingency for cost overruns in half.

Both options would enable the city to fund installation of a railroad crossing at Beaumont Avenue that will be part of the SunRail construction. It also requires that the “Rain” water cube feature designed by local artist Jefré would be pursued after completion of phase III once funding for it becomes available.

Phases I and II of the park project will ultimately be completed at or under budget. Steigerwald noted Tuesday that neither phase required dipping into the contingency fund.

Also at Tuesday’s meeting, the commission approved the first reading of an ordinance establishing the trust fund for the Vine Street Community Redevelopment Agency, in order to provide capital to implement the corridor’s redevelopment plan.

The account will be funded by increased ad valorem collections tied to rising property values that take advantage of the improving economy. Fiscal year 2013 values will be used as the baseline for the increases.

Another ordinance was passed Tuesday to establish the City Commission as the Community Redevelopment Agency for the city, to which advisory boards for the Downtown and Vine Street CRAs will report to.

State statues mandate that a municipality can only have one CRA, meaning that the existing CRA board will become the downtown CRA advisory board. The commission, acting as the CRA, will handle major policy decisions, such as budgets, master plans, selection of vendors and property acquisitions.

The advisory boards would offer recommendations on such issues.

Steigerwald said staff will disseminate all of this information to those who sit on the existing CRA before moving forward with any redevelopment initiatives.

“There’s some housekeeping to be done as far as what the Commission will provide to the existing board, and how we’ll support both boards,” he said.