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HomeMy WebLinkAboutFIN 2019-05-28 Item 2C - Public Safety Plan - Fire Station 52 FinancesAllan Ekberg, Mayor Administrative Services Department- Rachel Bianchi, Deputy CityAdministrator INFORMATIONAL MEMORANDUM TO: Finance Committee CC: Mayor Allan Ekberg FROM: Rachel Bianchi, Deputy City Administrator DATE: May 22, 2019 SUBJECT: Fire Station 52 Funding ISSUE Staff provided the Public Safety Committee with an update on the status of Fire Station 52, which will also be discussed at the May 28, 2018 Committee of the Whole meeting. The Schematic Design estimate shows that Fire Station 52 is over the revised budget. The Public Safety Committee agreed that the Finance Committee will look at options for funding Fire Station 52 and ultimately provide a recommendation to the full Council. Staff is seeking discussion and direction on the topic to bring back a proposal to the next Finance Committee meeting. BACKGROUND The new Fire Station 52 is to be located on the City Hall Campus just north of the 6300 Building in the upper parking lot. With Fire Station 51 moving further south, the FACETS study determined that it would be important for Fire Station 52 to move further south to maximize coverage and response times throughout the City. Fire Station 52 will become the new headquarters station and thus is a larger, more complex building than Fire Station 51. With the Schematic Design phase complete, the project team began estimating the project. In addition, the group used the bids received for the Fire Station 51 project, currently under construction, to inform the estimating process. Fire Station 52 is above the adjusted budget adopted by the Council in July of 2018. The project team spent considerable time and discussion identifying places to value engineer the project in order to ensure the best value for the City. The team identified nearly $670,000 in savings that would not affect the functionality of the building. However, it was determined that no additional savings could be found that would not significantly impact the building's usability and long- term functioning. The construction budget is estimated to be over budget by $4.23 million once construction costs, sales tax and contingency are accounted for. The full build out of the Administration space, which has been carried as an alternate since early on in the project, is expected to cost an additional $1.25 million, which would include construction, sales tax, contingency and furniture, fixtures and equipment (FF&E). While this percentage is higher than the overage on Fire Station 51, this project is significantly more complex. It is a two-story building requiring much more structural support and use of steel and has a significant earthwork component. The most volatile costs on this project are associated with earthwork. Because of the current market, the unknowns about what contractors would potentially bid on this project and the very real escalation Tukwila City Hall • 6200 Southcenter Boulevard • Tukwila, WA 98188 • 206-433-1800 • Website: TukwilaWA.gov 79 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