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HomeMy WebLinkAbout2010-07-07 PACKET 04.H.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # DATE 7/7/10 PREPARED BY Finance Robin Roland ORIGINATING DEPARTMENT DEPARTMENT HEAD COUNCIL ACTION REQUEST Receipt of Public Safety /City Hall project budget and financing plan STAFF RECOMMENDATION Accept information on Public Safety /City Hall project budget and financing. BUDGET IMPLICATION BUDGETED AMOUNT ACTUAL AMOUNT ADVISORY COMMISSION ACTION DATE REVIEWED APPROVED DENIED ❑ PLANNING ❑ ❑ ❑ ❑ PUBLIC SAFETY ❑ ❑ ❑ ❑ PUBLIC WORKS ❑ ❑ ❑ ❑ PARKS AND RECREATION ❑ ❑ ❑ ❑ HUMAN SERVICES /RIGHTS ❑ ❑ ❑ ❑ ECONOMIC DEV. AUTHORITY ❑ ❑ ❑ ❑ - ❑ ❑ ❑ glow - - • n-a1a zso TJ i: I•ra ® MEMO /LETTER: 7/1/10 memo from Robin Roland ❑ RESOLUTION: ❑ ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATION: ❑ OTHER: ADMINISTRATORS COMMENTS City Administrato Date C: \Documents and Settings \rroland \My Documents \City Council Action Form.doc To: Honorable Mayor and City Council members Ryan Schroeder, City Administrator From: Robin Roland, Finance Director Date: July 1, 2010 Subject: Public Safety /City Hall Project Budget and Financing Introduction This memo will recap the preliminary budget and financing scenarios for the Public Safety /City Hall Project. These very broad estimates of project costs, based on the staff updated space needs study and square footage costs, as well as the funding sources for the project, involve many assumptions which will undoubtedly change as the project progresses. The overall approach to the project costs and financing is therefore more important than the "exact" numbers at this time. Discussion The Building The following summarizes preliminary project cost estimates and funding which have been discussed in previous council communications. Revenues Expenses Municipal buildingfund $ 4,320,000 Professional services including $ 1,026,450 Tra nsfer from General Fund 1,000,000 Architect Bond proceeds 11,680,000 Environmental Total $ 17,000,000 Engineering /Testing Construction contract 11,405,000 site improvements 2,015,085 Furniture & equipment 515,000 land acquisition 1,306,800 contingency 731,665', Total $ 17,000,000 Cash on hand in the Municipal building fund and the transfer from the General fund would be spent first. The bond sale would occur after the construction bids are received. Staff proposes using Capital Improvement Plan (CIP) bonds and anticipates the sale of the bonds later in 2011. However, because of the requirements of this particular type of bonding, Council will be asked to hold a public hearing on the project /CIP plan at the first meeting in September. Once the hearing is held and the bonds approved, a 30 day period must elapse before the bonds may be sold, to allow for reverse referendum. Holding the public hearing in September will assure the appropriate steps are followed well in advance of when the bond proceeds are necessary to fund project costs. As discussed previously, the future tax levy required for annual debt service on the bonds is already in place — included in the current tax levy. Two bond issues which are currently levied for would be called (paid off) on February 1, 2011 using existing dedicated debt service fund balances and freeing those current levies for other debt repayment. This funding scenario benefits the City budget in several ways. Cash which has been set aside under Council policy in previous years is used for the dedicated purpose intended (either building or debt). It does not require significantly increasing the current tax levy beyond levels the Council is comfortable with and which would adversely impact taxpayers. Additionally, the ratio of debt levies to the overall levies remains at a level less than 10% which is identified in the Debt Policy adopted by Council earlier this year. Finally, the use of a cash transfer from the General Fund reduces the amount of bonding necessary while maintaining the fund balance level required by policy and keeping it within the range recommended by the City's auditors and the State Auditor's office. Please note that the project expenditure estimates currently include land costs. Since the East Ravine site is Council's stated preference we could revise or remove this amount. However, we will continue to leave this amount in the project budget until such time as we have an agreement with Washington County regarding how (and when) the required land swap would occur. The Infrastructure Construction of the Public Safety /City Hall building on the East Ravine site will require construction of roadway to access the site. The Ravine Parkway project in the City's 2010- 2014 Capital Improvement Plan identifies an estimated $4.8 million cost for this street extension. Sources of funding for the construction of the Ravine Parkway are State MSA Construction funds and the City's MSA Construction Capital Project Fund, Washington County cost sharing for the bridge and City Trunk Water and Storm Water funds. The current balance in the State MSA Construction account is $2.419 million as of June 30, 2010. The State allocates approximately $1.2 million a year to the City for construction of MSA routes and the City has not used any of its 2009 or 2010 allocation to date. Furthermore, the City's MSA Construction Capital Projects Fund had a balance of $1.7 million at December 31, 2009 and these funds would be available for the project as well. City Water and Storm Water trunk funds have ample reserves to cover the anticipated $400,000 costs attributed to them. The Ravine Parkway project is listed as a post 2014 project in the Capital Improvement Plan as it will eventually be constructed whether or not the Public Safety /City Hall building is constructed on the East Ravine site; only the timing is in question. Completing the Parkway project in conjunction with the PS /CH building simply accelerates the timeline to 2011 -2012. 7516 80' Street A discussion regarding the ultimate disposition of the current City Hall facility will need to take place at a later date, assumedly in 2011 -2012 but prior to vacating the site. The sale or reuse of the existing building by other entities (public or private) are obvious alternatives but more options may become clear as the construction project commences. Recommendation No action is required at this time.