By Lauren McSherry

Although funds have been set aside to pay for the hard and soft costs of constructing Los Altos Hills’ $4.2 million new town hall, the city council considered financing nearly half of the project through a proposed private placement at its July 15 meeting.

The council is examining a private placement to avoid bringing reserves down further than it would be comfortable with, so that it doesn’t limit what future councils can do in terms of projects or in case of an emergency, said Sarah Joiner, administrative services director.

At the meeting, the council directed staff to look into a proposed private placement that would finance $2 million of project costs over 15 to 20 years while the other half would be paid from town reserves, already accumulated and set aside for the project, and fund raising from the donor wall. The new town hall is the single largest capital improvement project in the city’s history.

Maureen Cassingham, city manager, credited prior administration and councils for putting aside funds for the new town hall and being fiscally conservative.

“They tried not to spend more than was taken in, and that has served them well over time,” she said.

The council seems to favor a 15-year plan because of its 4.6 percent interest rate versus a 20-year plan with an interest rate of 4.75 percent, Cassingham said.

The council is expected to vote on the proposal Aug. 19.

The cost of the new town hall is included under the capital improvement program of the city’s budget.