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SR-8A (27)PCb:PPA:SF:PC f:~ppd~share~ccreport\police2 Council Meeting: August 2, 1994 TO: Mayar and City Council FROM: City Staff AUG 2 Santa Monica, California SUBJECT: Recommendation to Adopt an Ordinance Ordering the Submission of a Proposition of Incurring Banded Debt far the Purpase of the Acquisition, Construction and Completian of a Po~ice, Fire and Emergency Operations Center to the Qualified Voters of the City af Santa Monica INTRODUCTION This report recommends adoptlon of an ordinance submitting a bond measure to fund the construction of a new Palice, Fire and Emergency Operatians Center to the voters on the Navember 8, 1994 ballot. The proposed ordinance reflects the cost and bond assessment as presented by staff at the July 26, 1994 meeting. Staff has provided a supplemental staff report responding to issues raised at the July 26, 1994 Council meeting. BACKGROUND At the Ju~y 26, 1994 City Council meeting, the City Counci~ adopted a Resaluti~n stating the necESSity for placing a$33 mill~on bond measure before the voters to fund a new 114, 454 square faat Police, Fire and Emergency Operations Center behind the ex~stzng City Hall. Adoption of an ardinance ordering the submission of the bond to the voters is required a~ this time to place th~ measure on the Navember S, 1994 ballot. If the Council chooses to lawer the ~ AUG q 2 '~ amaunt of ~he bond praposal, that change can be made at the August 2, 1994 meeting. BUDGET/FINANCIAL IMPACT There is a budget/financial impact to p~ac~ng the bond measure on the November, 8, 1994 ballot. The cast to the City of placing the measure on the November ba].lot is appraximately $20, 000 and will be paid through general fund revenues. RECDMMENDATION It is recommended that the City Council adapt the following ordinance in order ta place a bond on the November 8, 1994 general election to fund construction of a new Police, Fire and Emergency Operations Center: o Ordinance of the City Council Drdering The Submission Of A Proposition Of Incurring Bonded Debt For The Purpose Of The Acquisit~on, Construction And Completion Of A Police, Fire And Emergency Operations Center To The Qualified Voters of The City Of Santa Manica Attachments: A) Ordinance of the City Council Ordering The Submission Of A Propositian Of Incurring Bonded Debt For The Purpose Of The Acquisitian, Construction And Campletion Of A Police, Fire And Emergency Ope~ations Center To The Qualified Voters Of The City Of Santa Monica Prepared by: Lynne Barrette, Assistant Czty Manager Suzanne Frick, Planning and Community Development Dir~ctor James T. Butts Jr., Chief of Police Richard Bridges~ Fire Chief Paul Casey, Actinq Senior Planner 2 ATTACHRIENT A CA:MJM:f:~atty~muni\laws\mox~band.ord City Council Meeting: 8-2-94 Santa Monica, California DRDINANCE NO. (CC8) {CITY COUNCIL BERIE3) AN ORDINANCE OF THE CITY C~UNCIL ~F TH~ CITY OF SANTA MONICA ORDERING THE SUBMISSION OF A PROPOSITION OF INCURRING HONDED DEBT FOR THE PURPOSE OF THE AGQUIBITION, CONSTRUCTION AND COMPLETION OF C~RTAIN MUNICIPAL IMPROVEMENTS TO THE QUALIFIED VOTERS OF THE CITY OF BANTA MONICA AT AN ELECTION TO BE HELD FOR THAT PURP03E WHEREAS, the City Council (the "City Council") of the City of Santa Monica (the City") has heretofore adopted, by a two-thirds vote of all the members of the City Council, Resalution No. (CCS} entitled "A Resalution of the City Council of the City of Santa Monica Determining That the Public Interest and Necessity Demand the Acquisition, Construction and Campletion of Certain Municipal Improvements and Their Financing Through the Issuance of General Obligation Bonds" (the "R~solU~lOI1~~); WHEREAS, in order to provide for the issuance by the City of its general obligatian bonds to finance the improvements described in the Resolu~i~n, it is necessary for the City Council to pass an ordinance vrdering the submission of the propositian of incurring bonded indebtedness for such purpose ta the qualified voters of the City at an election held for that purpase; Z WHEREAS, in accordance with the provisions of the Charter of the City and the laws of the State of California, a General Municipal Election has been called by the City Council and ordered by the City Council to be he~d in the City on Ntivember, 8, 1994 (the "Municipal Election"); and WHEREAS, the City Council desires to submit said proposition to the qualified votezs af the City at the Municipal Electian; NOW, THEREFORE, THE CITY COUNCIL ~F THE CITY ~F SANTA MDNICA DOES ORDAIN AS F~LLOWS: SECTIDN 1. It is hereby ordered that there be submitted to the qualified voters of the City, at the Municipal Election, the propnsition set forth below in substantially the following form: PROPOSITION " ". Shaii the City of Santa Monica incur YES general obligation bonded indebtedness in the principal amount af not to exceed $33 Miliion for the acquisitian and construction of a Police, Fire NO and Emergency Operations Center and parking for afficial vehicles? The propasition submitted by this Ordinance shall be designated on each ballot by a letter printed on the left margin af the square containing the description of the proposition, as provided in Section 10219 of the California Elections Code. 2 SECTION 2. Tha object and purpose af incurring the indebtedness is the acquisition and constructian of a public safety building, including police and fire administration and emergency operations center, jail areas, and related parking, to be lacated east of the existing City Hail (the "Impravements"). SECTION 3. The estimated cost of the Impravements is Thirty- Three Million Dollars {$33,000,000.04), The estimated cost includes J.egal and other fees and the cost of printing the bonds and ather costs and expenses incidental to ar cannected with the issuance and sale of the bonds. SECTION 4. The amount of the principal of the indebtedness to be incurred is not ta exceed Thirty-Three Million Dollars ($33,004,Q~0.00). SECTION 5. The maximum rate of interest on the indebtedness shall be twelve percent (12~} per annum, or such higher rate as may hereaft~r b~ established for general obligation bonds of the City by the Legislature of the State of Califarnia. SECTION 6. The date of the election for the propositian submitted by this Ordinance shall be November 8, 1994, the date of the Municipal Election. 3 SECTION 7. Except as fltherwise pravided in this Ordinance, the manner of holding the electian shal~ be as provided by law for municipal elections. Ballots far the election shall be provided in the form and in the number provided by law. On said ballots, in addition ta any other printed matter which may be required by law, two voting squares shali be set off to the right of the proposition submitted at the eiection, in the manner provided by law, ane having the word "YES" printed b~fore it, and the other having the word "NO" printed before it. Each voter to vote for the proposition and for the incurring of said indebtedness shall stamp or write a cross, or indicate by hole punch or other means, in the blank space oppasite the word "YES" on the ballot to the right of the propasitian; and each voter to vote against the proposition and against the i.ncurring of the indebtedness shall stamp or write a crass, or indicate by hole punch or ather means, in the blank space oppasite the word "NO" on the ba~~at to the right of the propositian. SECTION 8. This Ordinance shall be adopted upon a vote of no less than twa-thirds of all members of the City Council. SECTION 9. This Ordinance shall take effect upon adoption, as provided in Sectian 619(a) of the City Charter. SECTION 10. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City C~erk shall cause 4 the same to be published in full once a day for at least seven (7} days in The Outldok, the newspaper of genera~ circu~atian for the City. The first af said publications shall be within fifteen {15} days after adaption of this ordinance. APPROVED AS TO FORM: , :; fl-G~L -~'~-~..Sr -~~/1 ~~,C~i.{~ MARSHA J~NE~ MOUTRIE City Attorney 5 r ~" ~/~z 9~ .~ PCD:PPA:SF:PC f:~ppd\share~ccreport\polsupp Council Mee~ing: August 2, 1994 Santa Manica, California TO: Mayar and City Council FR4M: City Staff SUBJECT: Supp~emental Staff Report on the Proposed Police, Fire and Emergency Operations Center INTRODUCTION This suppZemental s~aff repart pravides informatian re7.ating to the praposal for placing a bond measure on the November 8, 1994 ballat to fund construction af a new Police, Fire and Emergency Operations Center. At the July 26, 1994 meeting, Council requested infarmation on optians ~.o reduce the bond amount and alternatives to placing the bond measure on the Na~amber ballot withou~. impacting the construction schedule. COST SAVINGS The original 1990 space study recammended a building of I21,325 square feet ~or j~st a Police Department Headquarters. The praposed facility has been reduced substantially by revising the projected 2D10 s~affing Ievels to account for more accurate population forecasts, and through savings and effzciencies in the design af the building. A Palice-only facility under the current praposed programming would b~ approximately 105,000 square feet, With the addition of F~re Administration and an Emergency Operations Center, the facility is approximately 114,000 square feet, still smaller than the 1990 proposed Police Headquarters. 1 The proposed cost for the faczlity is consistent with other recently constructed palice/publ~c safety buildings, considering inflat~on casts to the point of construction. The following is a comparisan of the proposed fac~lity with other recently constructed facilities: EST. CONST. CITY BLDG SIZE COST~ COST/SQ/FT Santa Monica 114,454 $23.5 M $202 Pasadena 94,~~0 $17.5 M $194 Concard 72,O~Q $13 M $180 Santa Ana 468,000 $86.5 M $184 * Far comparison purposes, daes not inc~ude cost of parking, architectural and eng~neering fees, and cantingencies. In addition, when considering possYble cast saving scenarios, the Counc~l should be aware that the following project-related items are nat included in the band proposal: o Furniture and fixtures far the building, which would cost approximately $1.4 million. o Cost far a 1,00~ space parking structure behind the County Courthouse~ which wi~l cost approximately $8.9 million and could be paid through revenue bonds, user fees or other revenues. o Extension af olympic Drive, which wi11 cost approximately $2 millian. This wili be funded through transportation revenues. o Recanstruction or remodeling of the existing pal~ce facility. The ex~sting east wing cauld be remodeled ar demalished and reconstructed to accommodate City functions maving from off-site locatians back to the building. Potential cost for this reconstruction would be $4.8 miilion. 2 o Direct underground connection to the County Courthouse for custody transfers. Hawever, from the propased $33 million bond propasal, there are a few areas af potential cost savings. These include: o Reduction of the square foot canstruction cost from $202 to $190. Other recently constructed police and emergency services faciZities have been built in this price range. However, a reduction in this amount would limit design flexibility by e~iminating options far building materials, exterior appearance, and ather design features. Cost savings would be $1.4 million. o The proposed cost of the Pico-Kenter storm drain mitigation is $1.5 million. This is a conservative estimate, and could be reduced to $750,040 by considering reinforcement rather than recanstruction of the county drain wh~ch runs belaw the buxld~ng site. o Funding of architectural and engineering costs from other sources. Architectural and engineering costs up through the construction bidd~ng pracess are estimat~d at approximately $2.3 million. These costs could be removed from the bond measure and coverEd through other ~unding sources. Total savings from these measures combined wouZd be approximately $4.5 million, A bond measure refl~cting these cost savings would total approximat~ly $28.5 million. The cost to the owner of a median assessed value residential property would be $38 per year. FUNDING SOURCES The current proposal is to finance the project with a 30-y~ar General obligation bond issue. These bond5, backed by property tax revenues, are considered very secure, have the highest bond rating and lowest long-term interest payments. 3 Alternative sources of funding were analyzed far payment af construction costs. Cash Financinq o General Fund Revenues -- would require significant budget cuts or revenue increases to fund the fu~l construction and design costs over a four year period. An advantage to the "pay as you go" method is the elimination of approximate].y $47 milZion in interest payments that would be requzred with a 30-year General obligation bond. o Earthquake Recovery Redevelopment Revenues -- these funds could be used to help construct the facility, but wauld come at the expense of earthquake recovery programs for multi-farnily and commercial praperties damaged lay the January 17, 1994 earthquake and are not immediately available. o Praposition C Funds -- These funds are limited to transportation and transit impro~ements and are already earmarked for construction of the Olympic Drive improvements. No other construction costs are eligible uses of these funds. o Co~mun~ty Deve~opment Block Grants (CDBG) -- the City has received approximately $2.7 mi~lion of CDBG funds to pay for earthquake recovery programs. The emergency operatians center qualifies for use of these funds, but use on this faci~ity would preclude addressing other earthquake needs. o There is also the possibility of generating future revenues from the neGr facility by providing jail space to the County. Bflnd Financinq Options o Certificates of Participation -- This financing mechanism requires that the full faith and eredit of the City be used to pay the certificates' annual debt service. Th~s means that some anqoing existing or new revenue sourees ather than property tax levy would be earmarked for paying the annual debt service. This is a commonly used financinq mechanism in the state, and anly requires City Council approval. Certificates of Participation bonds have a lower bond rating, and therefore a higher ~nterest rate than general obligation bands rnust b~ pa~d. 4 A cambination of these sources cauld be used to finance the facilities. As mentioned, General Obligatian bonds are the least expensive financing alternative. If the construction were financed by Certificates of Participation the issue would increase from $33 million to a maximum af $41 million due to establishment of a debt service reserve (not r~quired by Genera~ Obligation bonds) and the financing of approximately twa y~ars af debt service interest until the facility is completed. PROJECT TIMING Before construction of the new building, architec~ural des~gn, engineering, and environmental review must take place. The approximate length of time far each of these components is as follows: o Program Campletion, Pre-design, and 5 months Community Meetings o Schematic Design 6 months o Design De~elopm~nt 5 months o Construction Documents 7 months o En~ironmental Review 9 to 12 months o Construction 18 months Environmental review can occur simultaneously with Design Development and Construction Documents. Therefore, it is 5 approximately on~ year for pre-design, community process and schematic design, and another year for design development, constructian documents, and environmental review. Construction would then take approximately ~8 months. If the community process, full design and environmental review is completed in the next two years, a bond measure on the November, 1996 ballot would not delay the project. This would cost appraximate~y $2.3 million and require funds fram the City that wauld be reimbursed from bond proceeds if the bond measure passed in 1996. However, if only community process, schematic design and environmental review are comple~ed, at a cost of $740,000 before a bond measure in November~ 1996, there would be a one year delay in the construction of the building. There would sti~l be approximately one year af work for design develapment and eonstruction documents after the election before construction could begin. ALTERNATIVES 1) Proceed with adoption of ardinance to place a$33 million bond issue before the voters on November 8, 1994. 2) Proceed with adaption of vrdinance ta place a smaller bond issue before the voters an November 8, 1994 and develop an alternative funding scenario for the remaining costs. 3) Proceed ~rith preparation of community process; sche~natic design; construction drawings; environmental review; and teehnical studies priar ta placement of a bond measure on the 6 November, 1996 ballot. Supplemental appropriations of $740~000 would be required in 1994~95 and $1.6 million in 1995-96 to pursue this aptian. Prepared by: Lynne Barrette, Assistant City Manager Suzanne Frick, Planning and Cammunity Development Director James T. Butts Jr., Chief of Police Richard Bridges, Fire Chief Mike Dennis, Director of Finance Paul Casey, Acting 5enior Planner 7