Funding approved to commence La Joya City Hall construction

The new La Joya City Hall is one step closer to begin construction as the city has secured extra funding for the long-delayed project.

 

At Tuesday’s city council meeting, council members approved the issuance of a $500,000 certificate of obligation to cover $400,000 in cost overruns for construction of the city hall and combined police station with an additional $100,000 serving as a buffer in the event of further cost overruns.

City of La Joya Seal

 

The certificate will be given to the city by the U.S. Department of Agriculture in addition to the $3.5 million loan the city received from U.S.D.A. five years ago which at the time was the original estimate for the project, City Administrator Mike Alaniz said.

 

“This is the last obligation we have to do that, I believe, will finally get us our new city hall,” Alaniz told the council. “I’m hoping construction begins next month.”

 

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.

 

Originally intended to open later this summer, the new city hall — formerly a PlainsCapital Bank that closed in 2015 — was purchased from the bank through the loan the city received from the U.S.D.A., Alaniz said.

 

Alaniz said the project took its time coming to fruition, which increased its cost adding the additional  $400,000 that was not included in the original budget. Alaniz attributed the cost increase to construction bids he described as   “a little bit more expensive” than what the city was expecting five years ago..

 

“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 could not commence until the entire funding had been settled.

 

According to Alaniz, the $3.9 million total cost of the project will be financed at a 2.75 percent interest rate over a period of 40 years where the city will have to pay around $100,000 a year.

 

Alaniz said the city will review their budget at the start of the upcoming fiscal year this October to see where the money for the payments will be made from. He stressed to city councilmembers why a new facility is important for the city.

 

“Given the fact that we’re growing, we’ve annexed the west side and north side of the city plus new businesses coming into the city that I can’t talk about at this time, we have to be prepared for incoming development,” Alaniz said. “This will ensure the city is prepared enough to handle not only infrastructure but our revenues as well and sustain our city and continue our progress and development.”

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