The Bend Park & Recreation District is considering funding a $23 million project using system development charges, a sign the district could be entering a period of slower growth.

On Tuesday, members of the park district’s board of directors sat down with staffers and the district’s budget committee to plan the park district’s budget over the next five years.

During the workshop, Lindsey Lombard, administrative services director for the district, said the possibility of an upcoming period of slower growth, along with potential cost increases in the form of minimum wage increases and reform of the Public Employees Retirement System, could force the district to be creative to maintain its financial flexibility.

One pressure point is the proposed expansion of the Bend Senior Center into the Larkspur Community Center. Lombard said options for funding include borrowing money to pay for the expansion, or paying for a portion of it using system development charges — the fees charged to developers whenever a new home is built in the district’s boundaries.

However, both options come at a cost. Lombard said funding the Larkspur Center through debt would leave the district short on funds in other areas, including money earmarked for a new maintenance facility that would replace an aging building. Using SDCs could delay capital projects slated to break ground in the next five years.

“We don’t want to diminish the quality of our maintenance or the services we provide the community,” said Michelle Healy, planning and park services director for the district.

The Larkspur Center expansion will add a new wing to the existing Bend Senior Center with facilities, including an indoor pool and group exercise equipment, that are aimed at all ages. The project also adds a second story containing an indoor jogging track.

The project, which is slated to break ground this year, will add 36,000 square feet of usable space to the existing 14,000-square-foot building and is expected to cost around $23 million, which makes it the district’s largest and most expensive single-­phase project to date.

Because of that, Lombard said funding the project may take some creativity from the park district. Historically, the district has been reluctant to fund large-scale indoor projects through system development charges. For example, the district funded The Pavilion ice rink through a bond measure that passed in 2012.

Lombard said during the meeting that if the district’s board chooses to fund the Larkspur expansion solely with property taxes and debt, financial forecasts show the district would borrow just under $7.7 million, which would be paid off over 13 years. This approach would likely mean a new park maintenance facility slated for east-side Bend would not be developed in the next five years, and it limits the amount of money the district could save for potential changes to the Public Employees Retirement System or other costs on the horizon, Lombard said.

On the other hand, adding system development charges to the funding mechanism would limit the amount borrowed for the maintenance facility and allow the district to save for PERS, but could delay certain capital projects. Healy pointed to the potential acquisition of a lot near the district’s headquarters — currently being leased to the district for parking and use as a dog park — as a project that could be delayed in the future, potentially saving the district up to $5 million.

During the meeting, the board supported the idea of funding the Larkspur expansion through SDCs and asked staff to return with specifics at a future meeting.

“It seems like (the second option) is a much more restrained and responsible way to manage our resources,” said Ted Schoenborn, vice chair of the park board.

Healy said it’s too early to know whether the district would need to delay other large projects on the docket but said the district would know more once the board begins its discussion about how best to change its methodology for assessing SDCs. Whatever the funding, she stressed that the district won’t cut its investment in its facilities.

“It doesn’t mean we’re going to stop doing park development, trail development,” Healy said. “Those things are still going to happen; it’s just that maybe the scale’s going to shrink a little bit.”

The district is planning a meeting on SDCs on Jan. 29.

— Reporter: 541-617-7818, shamway@bendbulletin.com

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