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Home My WebLink AboutFIN 2019-06-10 Item 2B - Public Safety Plan - Funding for Fire Station 52Allan Ekberg, Mayor Administrative Services Department- Rachel Bianchi, Deputy CityAdministrato INFOR ATIONAL E ORANDU TO: Finance Committee CC: Mayor Allan Ekberg FROM: Rachel Bianchi, Deputy City Administrator DATE: Updated June 5, 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 3 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: Tukwila A.gov 4 UPDATE JQNE5,3Q1S Staff has updated the "D-20" funding model to indicate how the funding gap for Fire Station 52 could be achieved (see ettached). Per the direction ofthe Finance Committee gtthe May 280eetnq.staff utilized thefoUovinq revenue sources to achieve thieQoa|: w $167.000 in Fire Impact Fees collected in 2018 but not allocated. wThe unanticipated Streamlined Sales Tax W1iUgaUonpayments that were added back jnthe 2019 |eQialative session, ThefoUnVVOq are the chaOqes from what was adopted in the 2O1Q/2O2Obudgetand previously seen in the "[J-20" model were incorporated into the attached draft: w Line13: Fire Impact Fees were increased by $167,000 in 2019 to account for the $167,000 in Fire Impact Fees collected but not allocated inZO1O. * Line 17: Streamlined Sales Tax K8itiqation payments included as a new revenue source. ° Lines 28 and 29: Justice Center expenditure reduced, and Fire Station 51 expenditure increased per Council action durinq the Fire Station 51 MACC and Justice Center "mini-MACC" approval. m Line31: The $4.23W1gap for Fire Station 52was added asmseparate line item. * Line 33: Apparatus funding in2O1Owas reduced towhat was actually spent; additional fundinq put inthe out years aeoplace holder until apparatus and equipment schedule isupdated. With these updates, fundingtho Public Safety Plan, as nnmdMOed in 2018. remains attainable and positive fund balance ieachieved each year, /\shas been previously stated, the fundinqmodel iaan iterative process that will continue to be updated as the City proqresses in funding the Public Safety Finally, the project teonnhaenoyvoonlp|etedUleDeoqnDeve|opnnentphaseandbothLvdiq Construction and the independent estimators, Robinson, have completed the latest round ofest|nnatinq. The $4.23 M qap for Fins Gtotion52 was validated in this effort. RECOMMENDATION Staff recommends funding the qap for Fire Station 52with the two sources identified above. Once bids for the mini-K8ACC are received the full Council will be able to make a final decision. Staff i8seekinq consensus from the Committee tomove tgthe June 24Committee of the Whole for Council discussion. Phone:2O6-433'lgUO + EnnaikMayor@Tukwi + VVebsihsTukwi 6 PUBLIC SAFETY PLAN - Financial Framework - Scenario D - 20 Year Debt with Apparatus Financed Updated June 5, 2019 B D E F G H I J K L M N 0 P Q R S 1 actual actual actual projected budget budget 2 TOTAL 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 9 Revenues: 10 UTGO bond proceeds, Voted 77,385,000 36,709,954 40,675,046 11 LTGO bond proceeds, Councilmanic 45,000,000 20,000,000 +, 25,000,000 1 I 12 Fire Impact fees & deposit - Segale 4,750,000 500,000 300,000 300,000 300,000 ; 300,000 300,000 ; 300,000 300,000 ; 300,000 300,000 ° 300,000 300,000 300,000 300,000 13 Fire Impact fees other 7,984,000 1,017,000 400,000 667,000 500,000 ; 300,000 300,000 ! 300,000 300,000 300,000 300,000 I 300,000 300,000 300,000 300,000 14 F301, Lnd & Prk Acq contribution 3,000,000 3,000,000 ; 15 Property/land sales 12,889,300 a 4,889,300 1,000,000 I 2,000,000 5,000,000 , 16 REET 1 10,500,000 500,000 500,000 500,000 I 500,000 500,000 £ 500,000 500,000 " 500,000 500,000 ' 500,000 500,000 500,000 500,000 17 Sales Tax Mitigation payments 4,017,452 - 1 251,091 1,004,363 I 1,004,363 1,004,363 I 753,272 18 Interfund transfer in (out) 1,391,854 1 141,854 1,250,000 i - - 1 19 Investment earnings 1,211,391 9,562 I 258,283 503,546 ; 300,000 100,000 ; 40,000 20 Annual contribution to balance 7,467,650 1 141,854 - 1 - - - - I - - i - 1,000,000 I 1,000,000 1,000,000 ! 1,000,000 1,000,000 21 Additional capacity from maturing, existing debt 14,858,560 i 831,000 831,000 498,600 498,600 880,800 1,196,400 1 717,840 717,840 717,840 717,840 717,840 25 Revenue Total 190,455,208 36,719,516 i 2,058,992 25,953,546 1 72,582,437 4,235,363 ; 4,975,363 7,602,963 1 2,351,872 1,980,800 ! 2,296,400 2,817,840 1 2,817,840 2,817,840 1 2,817,840 2,817,840 26 % Dbt Svc capacity used for PSP - j - - 100% 60% j 60% 60% 60% 60% 60% 60% I 60% 60% 27 Project Expenditures 28 Justice Center 66,994,711 123,833 431,266 17,868,999 ! 26,596,000 21,974,613 1 - - 29 FS 51 14,814,632 59,853 1 254,484 1,145,000 i 9,416,000 3,939,295 1- 30 FS 52 19,260,000 8,256 ! 161,299 771,000 ; 2,963,000 13,749,000 ; 1,607,445 - - 31 FS 52 SD Est Delta 4,230,000 4,230,000 I 32 FS 54 1,502,000 - I 142,791 1,062,209 1 297,000 - t - I 33 Apparatus & equip 10,075,303 14,447 1 573,651 3,373,824 a 624,578 368,146 1 276,621 583,525 1 507,480 287,091 1 384,755 414,980 1 806,277 109,936 ; 758,212 991,778 34 Apparatus financing 5,750,493 I 270,250 ! 270,250 270,250 270,250 270,250 1 575,049 575,049 35 Shops 30,000,000 - I 283,709 22,336,000 ; 2,879,000 4,501,291 I 39 Project Expenditures Total 152,627,138 206,389 1,847,199 46,557,032 I 47,005,578 44,532,345 I 1,884,066 583,525 I 507,480 557,341 f 655,005 685,230 I 1,076,527 380,186 I 1,333,262 1,566,827 40 1 41 Debt Service 1 0 full DS I I I 1 42 Debt service LTGO 58,168,554 239,026 804,200 804,200 i1,500,000 3,232,829 1 3,232,829 3,232,829 ; 3,232,829 3,232,829 1 3,232,829 3,232,829 I 3,232,829 3,232,829 43 Utility Fds pay rent = 50% of dbt svc (21,931,081) (119,513)1 (402,100) (402,100)' (562,500) (1,229,431)! (1,229,431) (1,229,431)' (1,229,431) (1,229,431)! (1,229,431) (1,229,431) (1,229,431) (1,229,431) 44 GF Debt Service Total 36,237,473 - E - 119,513 402,100 402,100 j 937,500 2,003,398 ' 2,003,398 2,003,398 i 2,003,398 2,003,398 9 2,003,398 2,003,398 i 2,003,398 2,003,398 45 Expense Total 188,864,611 206,389 # 1,847,199 46,676,545 j 47,407,678 44,934,445 j 2,821,566 2,586,922 i 2,510,878 2,560,739 j 2,658,403 2,688,628 j 3,079,925 2,383,584 t 3,336,659 3,570,225 46 52 Annual Surplus (Shortfall) 1,590,597 36,513,127 1 211,793 (20,722,999)1 25,174,759 (40,699,082)1 2,153,797 5,016,041 1 (159,005) (579,939)1 (362,003) 129,212 I (262,085) 434,256 1 (518,819) (752,385) 53 Beginning Carryover (Shortfall) - - 1 36,513,127 36,724,920 ' 16,001,920 41,176,679 ; 477,597 2,631,394 1 7,647,435 7,488,429 6,908,490 6,546,487 6,675,700 6,413,615 ' 6,847,870 6,329,051 i I i 54 Ending Carryover (Shortfall) 1,590,597 36,513,127 3 36,724,920 16,001,920 ; 41,176,679 477,597E 2,631,394 7,647,435 7,488,429 6,908,490 ^ 6,546,487 6,675,700 1 6,413,615 6,847,870 = 6,329,051 5,576,666 6/5/2019 Scenario D-20 updated May 2019 1 of 2 00 PUBLIC SAFETY PLAN - Financial Framework - Scenario D - 20 Year Debt with Apparatus Financed Updated June 5, 2019 B T U V W X Y Z AA AB AC AD AE AF AG AH Al 1 2 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 9 Revenues: I I 10 UTGO bond proceeds, Voted I i 1 I 11 LTGO bond proceeds, Councilmanic l i i i i I i 9 i 12 Fire Impact fees & deposit - Segale 350,000 13 Fire Impact fees other 300,000 300,000 I 300,000 300,000 s 300,000 300,000 i300,000 300,000 14 F301, Lnd & Prk Acq contribution { 15 Property/land sales 16 REET 1 500,000 500,000 I 500,000 500,000 ' 500,000 500,000 l 500,000 500,000 " 17 Sales Tax Mitigation payments 18 Interfund transfer in (out) l l I 19 Investment earnings 20 Annual contribution to balance 1,000,000 1,000,000 1 325,796 21 Additional capacity from maturing, existing debt 717,840 i 717,840 ; 717,840 717,840 903,600 I 1,058,800 t 1,058,800 I 640,400 25 Revenue Total 2,867,840 2,517,840 I 1,843,636 1,517,840 I 1,703,600 1,858,800 I 1,858,800 1,440,400 I - - i - - i - - - 26 % Dbt Svc capacity used for PSP 60% 60% 60% 60% 40% 40% j 30% 20% 27 Project Expenditures 28 Justice Center 29 FS 51 30 FS 52 31 FS 52 SD Est Delta 32 FS 54 33 Apparatus & equip 0 OF 0 0 0 0E 0 0 34 Apparatus financing 575,049 575,049 575,049 304,799 I 304,799 304,799 I 304,799 304,799 '' 35 Shops ; I 3 � ? 39 Project Expenditures Total 575,049 575,049 3 575,049 304,799 304,799 304,799 j 304,799 304,799 40 41 Debt Service 1 i i 42 Debt service LTGO 3,232,829 3,232,829 I 3,232,829 3,232,829 3,232,829 3,232,829 ; 3,232,829 1,547,932 3 1,547,932 - - - - - - 43 Utility Fds pay rent = 50% of dbt svc (1,229,431) (1,229,431) (1,229,431) (1,229,431)' (1,229,431) (1,229,431)! (1,229,431) (386,983)! (386,983)- 44 GF Debt Service Total 2,003,398 2,003,398 2,003,398 2,003,398 4 2,003,398 2,003,398 2,003,398 1,160,949 i 1,160,949- 45 Expense Total 2,578,447 2,578,447 ( 2,578,447 2,308,197 ; 2,308,197 2,308,197 j 2,308,197 1,465,748 i 1,160,949 - - - - - - 46 52 Annual Surplus (Shortfall) 289,393 (60,607)I (734,811) (790,357)1 (604,597) (449,397)1 (449,397) (25,348)1 (1,160,949) - - - - - - - 53 Beginning Carryover (Shortfall) 5,576,666 5,866,060 I 5,805,453 5,070,642 4,280,285 3,675,688 { 3,226,291 2,776,894 2,751,546 1,590,597 1,590,597 1,590,597 '' 1,590,597 1,590,597 I 1,590,597 1,590,597 54 Ending Carryover (Shortfall) 5,866,060 5,805,453 5,070,642 4,280,285 ; 3,675,688 3,226,291 , 2,776,894 2,751,546 1,590,597 1,590,597 = 1,590,597 1,590,597 1,590,597 1,590,597 i 1,590,597 1,590,597 6/5/2019 Scenario D-20 updated May 2019 2 of 2