FIN 2019-05-28 Item 2C - Public Safety Plan - Fire Station 52 Finances

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in the market, particularly for earthwork services, the project team elected to include a 30% contingency in the budget for earthwork alone, which is over $1 million. Due to the significant amount of value engineering work, this most recent estimating phase took longer than normal, and the project is now finished up with the Design Development (DD) phase. Both Robinson, the outside estimators, and Lydig will be doing another round of estimating on the DD plan set to refine these numbers. As with any project, the final numbers will be known once the bid results are received and compiled. DISCUSSION There is a suite of options available to fund the $4.23 million gap: • Streamlined Sales Tax (SST) Mitigation payments, which were unanticipated, will be restored over the next four years, estimated at approximately $4 million. Previously the State Legislature had ended the SST mitigation payments and the City did not include them in the budget moving forward from their sunset date of 2019. However, during this past session, the Legislature restored the payments for another four years. Because these are one-time funds that should not be programmed for ongoing programs or personnel, using this for a one-time cost like construction of Station 52 makes sense. • Unallocated Fire Impact Fees from 2018, totaling $167,000. • Council's 10% one-time revenue contingency, totaling $525,000. • 2019/2020 ending fund balance in excess of Council policy. • Additional debt issuance. • Dedication of project sales tax. • Other options explored during the 2018 Finance Committee D-20 discussions. The project continues to be constrained by market escalation, and the timeline is critical to ensure the ability to contain costs. The project team is very aware of the importance of utilizing the summer months to do the earthwork and site utilities in order to not have additional costs associated with doing this work in the wet months. In order to achieve this goal, staff will be bringing the project forward in two phases — similar to what was done with the Justice Center — in a "mini-MACC" and total MACC under the following timeline: • Mini-MACC. Earthwork, site utilities, electrical, structural o July 1: Public Safety Committee o July 8: Committee of the Whole o July 15: Full council consideration • Final MACC. Building construction o October 28: Public Safety Committee o November 11: Committee of the Whole o November 18: Full Council consideration While it will be necessary that the City has identified how to fill the $4.23 million gap before starting the "mini-MACC," decisions on funding the alternate of the Administration build -out do not need to be made until Fall and will be informed by how much of the earthwork contingency is used in the mini- MACC, as well as the progress of the other Public Safety Plan projects. RECOMMENDATION Staff is seeking the Committee's direction on how to fund the Fire Station 52 gap. Staff would then return to the June 10 Finance Committee with a funding proposal. Phone: 206-433-1800 • Email: Mayor@TukwilaWA.gov • Website: TukwilaWA.gov 80