Valparaiso City Hall will undergo an expansion and face-lift with a little help from the city’s taxpayers.

The City Council approved a $3 million bond issue toward the $4.2 million project when it met May 14, which officials said would increase taxes by $9.91 a year for someone who owns a $175,600 home, the median home value in the city.

The remaining $1.2 million of the work will be paid for with $700,000 in riverboat funds and another $500,000 from the cigarette tax fund.

The renovation and expansion includes adding about 2,000 square feet to the building’s ground floor, with construction expected to begin in the fall and take about a year to complete.

“We simply need more space,” Valparaiso City Administrator Bill Oeding said.

He and Mayor Jon Costas said former Mayor David Butterfield bought what was a post office at 166 Lincolnway in the 1980s for $200,000.

Over time, a postal substation in the building had to relocate to accommodate city offices.

As the city has grown and its services have increased, so has the need for more room at City Hall, where the new civic engagement director’s office is in a closet, with no room for future growth, Oeding said.

The building, constructed in 1917, also is not compliant with the Americans with Disabilities Act and does not have an elevator.

“The bones of this place are amazing,” he said. “It is in great shape structurally, but it doesn’t serve our needs anymore.”

In summer 2017, officials started looking at options, including a three-story addition or constructing a new building, but both were cost-prohibitive.

A new building, they said, would run $12 million to $15 million, and a multistory addition would be $6.5 million, without renovating the rest of the building.

The plans call for turning the council’s chambers into the clerk-treasurer’s office, among other improvements.

The addition will house the council chambers, seating more than 100 people and offering new technology.

“Though we’re looking at a 15-year bond, we think these improvements will last many years beyond that,” Oeding said.

John Julien, a partner in the accounting firm Umbaugh & Associates, said the $3 million bond issue is well below the city’s bonding capacity of $6.4 million. The city’s payments on the bond will be $270,000 a year at current interest rates.

The overall impact on taxpayers will be 1.2 cents per $100 in assessed valuation, he said. Julien said homeowners already hitting the tax cap won’t see that impact.

“I think it’s great being frugal,” said Councilman George Douglas, R-5th.

The riverboat and cigarette tax funds still will have balances in them after they are used toward the building project, Costas said. The riverboat fund has a balance of more than $1.5 million and the cigarette tax fund has $1.4 million and together, the two funds collect about $260,000 annually.

The City Hall project, Costas said, is the latest in a series of efforts to improve city facilities, starting a few years ago with the police department and including the public works campus and the horticultural center for the parks department.

Amy Lavalley is a freelance reporter for the Post-Tribune.