Plans move ahead to secure funding for the new City Hall-Police Station complex, according to a report by City Manager Steve Burkett at the March 25 city council meeting.

Burkett proposed that the city pay for the $12.5 million construction costs through tax exempt bonds and water and sewer revenue bonds. Before the city can issue the bonds, it will have to be assessed by a financial advisor — Seattle NW Securities — and get a bond rating through an outside agency.

The city plans to repay the bonds, estimated at $680,000 per year for 30 years, with a combination of tax revenue and reduced operations costs. The city will save $200,000 each year by not paying rent for facilities such as the Police Building and City Hall Annex at the Sequim Village Shopping Center. Burkett also expects $200,000 per year from the recently passed public safety levy, another $200,000 from utility revenues and $80,000 from real estate excise tax.

The budget also provides $650,000 for 2013 for project management and design, with an additional $450,000 available as a contingency fund.

To further pay for the project, Burkett recommended that the city bundle its waste and rainwater reclamation utilities into a single district.

Burkett admits that the payment plan is based on consistent economic development in the area and that a slump could endanger the repayments.

The next phases of the project planning include selecting the architect, contractor and developer for the site. To keep the building within price, Burkett said that the city plans to select architects through a proposal-first process, instead of the typical design and bid first process.

“Architects tend to be creative types and not as sensitive to general costs,” he said. This process will constrain them to design an aesthetic building within the funding bounds the city sets, instead of getting contracted and designing a structure that exceeds the original budget, Burkett explained.

The city council will see an amendment to the city code for a “Consolidated Waterworks Utility,” which unifies the stormwater and wastewater utilities into a single revenue source.

By consolidating the utilities, the city can draw on several different sources of funds if it comes up short on a yearly payment from other sources.

By the end of summer, Burkett also expects the city to have selected a contractor and acquired funding.

If everything goes smoothly, the city will be ready to begin construction by 2014.