Funding shortfall delays La Joya City Hall construction

Despite holding a groundbreaking last October, construction has yet to begin on the new La Joya City Hall as the city waits to secure additional funding to cover  $400,000 in cost over runs. City commissioners are expected to hold a public hearing Tuesday on whether to fund the shortfall with a certificate of obligation.

 

La Joya City Administrator Mike Alaniz said Wednesday bids for the project came in higher than expected when it was originally approved about four years ago with a budget of just under $3.5 million.

City of La Joya Seal

 

Originally intended to open later this summer, construction on the new city hall and combined police station — formerly a PlainsCapital Bank that closed in 2015 — has yet to begin while the city decides how to finance an additional $400,000 that was not included in the original budget.

 

At the groundbreaking Alaniz said the purchase was made possible through a $3.5 million loan the city received from the U.S. Department of Agriculture seven years ago. The complete five-acre property, located at 701 E. Expressway 83, was appraised at $1.9 million by PlainsCapital Bank but the city was able to purchase it for $1 million, La Joya Mayor Jose “Fito” Salinas said at the groundbreaking.

 

Alaniz said the project took its time in coming to fruition, which increased its cost.

 

“We’re not dealing with one month or another or six months, this project has been going on for four years,” Alaniz said. “When the architect proposed the full amount for construction of $3.5 million, that was the amount supported by U.S.D.A. Then the project got another delay a few years back and by the time we knew it, when the bids came out, the construction bids became a little bit more expensive.”

 

“The construction manager at risk and all the financial entities we had to pay came out more than we expected,” Alaniz said, adding the project will not commence until the entire funding has been settled.

 

Rather than pay for the project from the city’s general fund, Alaniz said the city decided to finance the project at 3.5 percent interest rate “over 30 or 40 years, I can’t remember exactly which.”

 

Alaniz said the city is seeking a $500,000 certificate of obligation to provide an additional $100,000 as a buffer in the event of further cost over runs.

 

According to the Texas Comptroller website, commissioner courts, city councils and health or hospital district boards can opt to use certificates of obligation in lieu of the more common general obligation bond which requires voter approval. Entities opting to use certificates of obligation must post a description of the projects to be financed and how they will be paid in local newspapers at least twice, first more than 30 days before the governing body’s vote on the C.O. issuance and again a week after the initial posting.

 

“We’re done, we need to build our new city hall now, period,” Alaniz said, adding that once the project receives its funds, construction will begin shortly afterward and be completed within six months.

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