HomeMy WebLinkAboutFIN 2023-03-27 COMPLETE AGENDA PACKETCity of Tukwila
Finance and Governance
Committee
O Kate Kruller, Chair
O Kathy Hougardy
De'Sean Quinn
AGENDA
MONDAY, MARCH 27, 2023 — 5:30 PM
Distribution:
K. Kruller
K. Hougardy
D. Quinn
C. Delostrinos Johnson
T. McLeod
M. Abdi
T. Sharp
Mayor Ekberg
D. Cline
R. Bianchi
C. O'Flaherty
A. Youn
L. Humphrey
THIS MEETING WILL BE CONDUCTED BOTH ON-SITE AT TUKWILA CITY HALL AND ALSO VIRTUALLY.
ON-SITE PRESENCE WILL BE IN THE DUWAMISH CONFERENCE ROOM
(2ND FLOOR, 6300 SOUTHCENTER BOULEVARD)
THE PHONE NUMBER FOR THE PUBLIC TO LISTEN TO THIS
MEETING IS: 1-253-292-9750, Access Code 313004383#
Click here to: Join Microsoft Teams Meeting
For Technical Support during the meeting call: 1-206-433-7155.
Item
Recommended Action
1. BUSINESS AGENDA
a. Financial considerations regarding annexation into
the PSRFA.
a. Discussion only.
Pg.1
David Cline, City Administrator, and
Vicky Carlsen, Finance Director
b. Capital facilities financing update.
b. Discussion only.
Pg.5
Brandon Miles, Business Relations Manager
2. MISCELLANEOUS
Next Scheduled Meeting: April 10, 2023
SThe City of Tukwila strives to accommodate individuals with disabilities.
Please contact the City Clerk's Office at 206-433-1800 (TukwilaCityClerk@TukwilaWA.gov) for assistance.
TO:
City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
Finance and Governance Committee
FROM: David Cline, City Administrator
Vicky Carlsen, Finance Director
CC: Mayor Ekberg
DATE: March 14, 2023
SUBJECT: Financial Considerations Regarding Annexation to the Puget Sound Fire
Authority
ISSUE
The Council has asked staff to provide additional information on financial considerations
regarding annexation to the Puget Sound Fire Authority.
BACKGROUND
In 2022 the City made the decision to contract with the Puget Sound Fire Authority (PSRFA) for
the delivery of fire and EMS services in Tukwila. This decision was made based on a
community -driven process that included formal recommendations from the City's Future of Fire
and EMS Services Community Advisory Committee. That group recommended annexation to
the PSRFA because of the high level of service the PSRFA is able to provide — above and
beyond what Tukwila was able to provide with an in-house Fire Department — and because of
the long-term financial sustainability of the provision of fire, EMS and other municipal services in
Tukwila. The City Council adopted the Advisory Committee's recommendations, which the
Mayor also supported, and the City began contracting with the PSRFA on January 1, 2023 with
the goal of a formal annexation within two years. To access the report, visit
http://records.tukwilawa.gov/WebLink/ElectronicFile.aspx?docid=355066&dbid=1.
DISCUSSION
The City of Tukwila and the PSRFA worked diligently on the contract for services, which
resulted in most of the annexation details being agreed to during the contracting process. As
the Council heard at its meeting on March 20, 2023, the annexation plan has also been agreed
to and satisfactorily met the Council's key issues of governance and reversion of existing fire
stations. Along with the annexation plan, the Council is being asked to place the annexation on
the August 1, 2023 primary election ballot. The Council must act before May 12, 2023 in order
to make the August ballot, which both City Administration and the PSRFA recommend for this
measure.
As a part of its deliberations on placing the measure on the ballot the Council has asked for
more information on the financial implications of annexation. It is important to note that if the
August 1, 2023 vote is successful, the City and PSRFA will retain the contractual arrangement
until January 1, 2025 and only at that point will the PSRFA levy property taxes for fire and EMS
services on Tukwila properties. The City will continue to pay for Fire and EMS services from its
general fund through December 31, 2024.
The PSFRA has both a property tax levy and Fire Benefit Charge (FBC) available to levy on
property owners for Fire and EMS services. The property tax available to the PSRFA is a
maximum of $1.00 per thousand and the FBC is dependent on several factors such as
building's square footage, type and use of building, and fire flow and sprinkler; the higher the
1
2
INFORMATIONAL MEMO
Page 2
square footage and these other factors, the more the property owner pays in FBC. For
illustrative purposes only, here is a chart to show how the PSRFA's tax levy would impact a few
hypothetical buildings in Tukwila:
Tukwila
Equivalent
Property Assessed Square Levy Rate
Type Value Footage ($1.90)
Residential 500,000 2,240 949.75
Residential 500,000 2,710 949.75
Commercial 521,700 3,556 990.97
Commercial 14,561,000 103,200 27,658.62
Apartment 963,200 25,240 1,829.60
Apartment 9,014,000 40,432 17,122.09
PSRFA
Fire Levy Total
Rate at PSRFA Increase /
$0.90 FBC Cost (Decrease)
450.00 227.14 677.14 (272.61)
450.00 270.96 720.96 (228.79)
469.53 453.73 923.26 (67.71)
13,104.90 17,000.71 30,105.61 2,446.99
868.88 7,192.49 8,061.37 6,231.77
8,112.60 9,103.22 17,215.82 93.73
The City currently assesses a regular rate of $1.94728 per $1,000 of assessed value, which
generates $17.5 M in property taxes for general fund purposes, excluding voter approved
bonds'. If the annexation vote is successful, in 2024 as a part of the 2025/2026 biennial budget
process the City will need to make a determination as to what to do with its property tax
capacity. While the Community Advisory Committee recommended annexation to the PSRFA in
part due to the long-term financial stability of funding fire, EMS and other municipal services,
ultimately it will be a City budget decision in 2024 balancing the desired level of City services
with taxes. While the City adopts a biennial budget that only covers two years, the six-year
planning document also adopted with the biennial budget does forecast the City spending $11.5
million annually of property taxes beginning in 2025 just to maintain existing levels of service
currently provided to the Tukwila community. This would result in the overall reduction of City
property taxes by $6M annually if adopted in the 2025/2026 budget.
As a part of the 2023/2024 budget process, the Administration and City Council agreed to
initiate a long-term financial sustainability effort that will kick off in the third quarter of this year.
This will include bringing in an outside expert to help develop a long-term model, as well as a
stakeholder and community advisory group to provide input and ideas on how the City can be
financially sustainable while providing quality services. A big part of this effort will be to identify
what that balance is between desired levels of City services and taxes. The Administration
believes that this effort should include contemplating what the City should do with the additional
property tax capacity if the August annexation vote is successful because it:
1. Allows for the City to take a comprehensive approach to financial sustainability and folds
it in to an already agreed upon process to take a deep dive into the City's finances and
tools for long-term sustainability;
2. Includes a community and stakeholder advisory body to ensure that diverse voices are
at the table and weighing services levels and revenues;
3. Informs the ultimate adoption of the 2025/2026 biennial budget; and
4. Ensures that the current Council does not bind the next one, as the true decision makers
on this issue will be the Council seated in 2024.
1 It is important to note that the vast majority of property taxes paid by Tukwila property owners go agencies of
the City of Tukwila, including State and local schools, as well as other taxing agencies.
INFORMATIONAL MEMO
Page 3
The City has worked for many years on multiple community -led efforts to get to the point of
annexing to a Regional Fire Authority. Participants have determined that the benefits of
regionalization and the high level of service that being a part of a Regional Fire Authority affords
the Tukwila community cannot be matched by a municipal fire department. Moving forward to
place this item on the August 1, 2023 ballot sustains this momentum, while allowing for
significant time to determine — with the assistance of community members and other
stakeholders — the best service -level and financial outcomes to influence the 2025/2026 budget
process.
RECOMMENDATION
Information Only
3
4
City of Tukwila
Allan Ekberg, Mayor
INFORMATIONAL MEMORANDUM
TO: Finance and Governance
FROM: David Cline, City Administrator
Vicky Carlsen, Finance Director
BY: Brandon Miles, Business Relations Manager
CC: Mayor Ekberg
DATE: March 6, 2023
Updated, March 21, 2023
SUBJECT: Public Works Operations Campus Phase 2, Financing Report (DRAFT)
ISSUE
Follow up on the February 27, 2023 Finance and Governance Committee meeting regarding
financing for Public Works Operations Campus, Phase 2. At the meeting the Committee asked
staff to provide information on various items. This memo begins the process of creating a
consolidated document to address the Committee's questions. The memo below is organized to
address the topics staff heard in the Committee meeting. The memo will be updated throughout
the Spring to address the items raised by the Committee and new items that might be added as
the process continues,
March 21, 2023, Update
Staff has highlighted headings in yellow to reflect area of the memo that have been updated
since the March 6, 2023 meeting
BACKGROUND
I. Overview of the Public Safety Plan and Public Works Phase Operations Campus
The following provides a brief overview of the City's recent investment in public facilities over
the last 15 years.
Development of the Public Safety Plan
In 2008 the City completed a comprehensive seismic study of city buildings, which was recently
updated in 2022. This report found that several buildings, including fire stations and public
works shops, would be unusable after an earthquake. It was this study that was the impetus for
the City to begin examining how to invest in upgraded facilities, specifically public safety
buildings (fire stations, police, municipal court, emergency management and public works
functions).
In 2015, after a two-year process, the City Council was presented a report entitled, "Investing in
Tukwila: Essential Governmental Services Facilities Plan 2015-2040." The plan recommended
the construction and/or replacement of several public safety buildings, including a new justice
center to house police, emergency management and municipal court; the replacement of three
fire stations; and a combined public works operations facility. The plan also included
recommendations for City Hall and the 6300 building.
5
INFORMATIONAL MEMO
Page 2
This final report was presented to the City Council by the Facilities Committee, made up of
community members, councilmembers and staff. This Committee recommended a public safety
facilities ballot measure, which results in the City Council adopted "Public Safety Plan" to
prioritize:
• the construction of three replacement fire stations,
• a new justice center (police, emergency management and municipal court),
• a consolidated public works shop, and
• a funding plan for 20 years of fire apparatus and equipment.
In November 2016 Tukwila voters approved the public safety plan bond measure with 60.5%
approval. Funds from the bond measure were used for the new fire stations, fire equipment and
apparatus and the justice center. Separately, funding for the public works facilities would come
from a variety of sources, including general fund and utility funds.
In 2018, this financing and expenditure plan was updated with the D-20 Model, adopted by the
City Council and discussed further below.
In 2018 the City began to identify and acquire land for the public safety plan, based upon the
recommendations of the community Siting Advisory Committee. Existing City owned land was
used for two of the new fire stations (51 and 52); the City assembled land on Tukwila
International Blvd for the Justice Center; and the City acquired three parcels in the north end of
the City for a consolidated public works shop. Public Works Operations Campus Phase 1
(hereinafter "Public Works Phase 1") entailed the construction of the west side of the property
and moving the City's fleet and facilities functions from George Long to the new site. Public
Works Phase 2 will entail work on the east side of the property and will eventually allow the City
to move the street and utilities functions from the Minkler Shops to the site, as well as
consolidating other functions currently found on other sites, such as spoils storage, etc.
The Justice Center and Fire Station 51 went operational in 2020 and Fire Station 52 become
operational in 2021. The Fleet and Facilities building became operational in 2022 (Public Works
Phase 1). In 2022, the City Council authorized the test to fit work for the eastern portion of the
Public Works Phase 2 - Operations Campus, which will conclude in March of 2023.
The Public Works Operations Campus is the final project remaining from the Public Safety Plan.
Funding for design of the Public Works Operations Campus was adopted in the 2023-2024
Budget and construction costs were included the 2023-2028 Capital Improvement Plan starting
in 2025.
Financing the Public Safety Plan- the D-20 Model
In 2018, due to cost escalation from market conditions and initial estimates based on incomplete
data, the City created options for the Public Safety Plan. Throughout the first half of 2018, the
City Council's Finance Committee, together with staff, deliberated on a variety of financing
options (A, B, Cl, C2 and D) to support the Public Safety Plan. In June 2018, the City Council
adopted their recommendation of option D-20 which directed the:
• Construction of two new fire stations (51 & 52) and the Justice Center
• Dedication of $30 million for land acquisition, building upgrades and master planning for
public works shops
• Fire apparatus and equipment funding for ten years
• Issuance of 20 -year bonds
6
INFORMATIONAL MEMO
Page 3
• Use of a variety of financial sources (e.g. Limited Term General Obligation Bonds
(LTGO), Fire impact fees, land sales and one-time funds, ongoing REET 1, General
Fund.)
This long-range model — D20 - (2018-2039) has been updated several times to reflect changing
revenues and expenditures.
1. All major projects in the D-20 model are now complete as originally anticipated in
2018. The following is a basic overview of the revenue and expenditures to date in the
D-20 Model. The work outlined below includes all land acquisition costs (Justice Center,
Fire Station 54, and Public Works Operations Campus) construction to date for Fire
Stations 51 and 52, Justice Center and Public Works phase 1 (fleet and facilities);
interim improvements on Minkler; and planning and test to fit associated with Public
Works Phase2. In addition, the initial planning for the Teen and Senior Center was
funded from unused budget leftover from the Justice Center and therefore funded from
the D-20 model. The only remaining items are finishing the roof and siding updates for
the Public Works Phase 1 and the final payment for the 2022 fire engine, which is
expected in 2025.
2. The D-20 Model accounted for all financial aspects of these projects. Data
incorporated two capital project funds, 305 and 306 as well as all debt service funds and
other funds that contributed funding sources (general fund, 301, utility funds). Note,
revenues are forecasted to be higher than expenditures due to financing costs.
3. Other Changes. Sales Tax Mitigation funds were significantly reduced from 2019 to
2020 due to the loss of ongoing Sales Tax Mitigation payments. Council adopted
CARES funding for project costs associated with COVID supply chain delays and added
Teen/Senior Center planning from unspent Justice Center budgeted funds. Additional
general fund and utility fund payments were adopted in 2022 to continue the public
safety plan efforts for the consolidated public works shop.
4. Assuming a successful annexation vote to the Puget Sound Regional Fire
Authority (PSRFA), capital acquisition responsibilities for future fire equipment
and apparatus shift to PSRFA in 2025. A portion of the proceeds from completed land
sales (Travelers Choice and HealthPoint) and approved (still pending) George Long sale
are currently budgeted to support remaining public safety plan financing requirements as
well as Public Works Phases 1 and 2.
5. Land Sales, originally contemplated in the D-20, are no longer required in their
entirety.
a. The updated D-20 model (December, 2022) removes future land sales.
b. Future City Council direction will be needed on use of land revenue (e.g. lease or
sale) for capital facility planning.
7
INFORMATIONAL MEMO
Page 4
D-20 MODEL FINANCIAL SNAPSHOT 2018-2022
Original
Updated
Updated
Updated
June 2018
Dec 2019
Dec 2020
Dec 2022
EXPENDITURES
Fund 305: Public Safety Plan
$ 114,730,235
$ 122,627,139
$ 120,510,023
$ 109,804,786
Justice Center
$ 68,570,005
$ 66,864,711
$ 65,747,697
$ 65,995,940
Fire Stations
$ 30,334,435
$ 39,936,632
$ 38,936,530
$ 37,791,730
Fire Equipment/Apparatus/Financing
$ 15,825,796
$ 15,825,796
$ 15,825,796
6,017,117
Fund 306: City Facilities
$ 30,000,000
$ 35,700,000
$ 36,200,000
$ 43,150,491
PW Shops Phase I
$30,000,000
$35,700,000
$35,700,000
$36,405,462
Minkler Improvements
$500,000
$500,000
Teen/Senior Center
$395,030
PW Operations Campus Phase 2
$5,850,000
TOTAL
$144,730,235
$158,327,139
$156,710,023
r- $152,955,277
REVENUES
Voted Bonds (UTGO)
$ 77,385,000
$ 77,997,026
$ 77,997,026
$ 77,997,026
Councilmanic Bonds (LTGO)
$ 40,000,000
$ 45,500,600
$ 45,500,600
$ 45,500,600
Fire Impact Fees (Tukwila South- FS 51)
$ 4,750,000
$ 4,750,000
$ 4,750,000
$ 4,750,000
Fire Impact Fee- ongoing
$ 8,517,000
$ 9,817,000
$ 9,497,000
$ 8,244,202
Fund 301 Transfer- REET Funds
$ 3,000,000
$ 3,000,000
$ 3,000,000
$ 3,500,000
Land Sales
$ 15,038,000
$ 13,053,090
$ 13,518,000
3,014,845
REET 1- Ongoing Support
$ 12,813,091
$ 12,813,091
$ 12,852,409
$ 11,000,000
Sales Tax Mitigation
$ 4,017,425
$ 665,909
$ 665,909
Cares Act
$ 300,000
$ 497,247
Investment Earning
$ 707,845
$ 1,480,824
$ 1,725,661
$ 1,626,356
Project Contribution (TeenSenior)
$ 600,000
Project Contribution (General Fund)
$ 141,854
$ 2,991,854
$ 2,991,854
$ 5,950,954
Project Contribution (Utility Fund)
$ 141,854
$ 3,791,854
$ 4,291,854
$ 7,791,854
TOTAL
$ 162,494,644
$ 179,212,764
$ 177,090,313
$ 171,138,993
Completing the Public Safety Plan — Design and Construction of Public Works Phase 2
The last remaining item in the Public Safety Plan is Public Works Phase 2 Operations Campus
in order to move city operations from the Minkler Shops and the Longacres site. The City is still
providing critical public works activities at the Minkler Shops under older, inefficient conditions.
In addition, as part of the Public Safety Plan the City identified a goal to move all critical facilities
out of flood -prone areas and the Minkler Shops is located directly behind a levee that has
significant concerns. The Army Corps of Engineers has identified there is a risk of levee failure
in the event of a high-water event or earthquake.
Public Works has moved from George Long into Public Works Phase 1. On November 1, 2023
the City takes ownership of the eastside of the property and the Council adopted a lease
agreement until March 1, 2025 with the current tenant. The City Council authorized the "test -to -
fit" work which developed design options for the entire combined public works site. The "test -to -
fit" will provide the City better cost estimates for the final phase of the project.
In March 2023, the "test -to -fit" will be completed and the City Council will be briefed on cost
estimates for the full buildout and completion of Public Works Phase 2. The City Council will be
asked to move forward with the Public Works Phase 2 design. The 2023-2024 budget includes
$5.85 million for the City to complete the design work and permitting for Public Works Phase 2,
with construction anticipated to begin in May of 2025.
8
INFORMATIONAL MEMO
Page 5
II. Public Works Operations Campus, Phase 2 Financing
a. The Next D-20 Model, Public Works Campus Financial Model
The D-20 model was a successful tool the City Council approved to track all expenditures and
revenues associated with the construction of the Public Safety Plan. A similar model focused
on the Public Works Campus will need to be developed separately from the original D-20 model.
The table below is a preliminary overview of the current construction estimates in 2023 dollars,
cost escalation, and soft costs.
($ millions)
Construction Estimates
2023 Estimates
Project Related
(Soft) Cost
Construction Costs
(2023 dollars)
Total:
Estimated
Expenditures (2023
values):
$ 29,352
$ 46,835
$ 76,187
January 2026
Escalation':
$ 0
$7,678
$7,678
2026 Adjusted
Totals:
$29,352
$ 54,513
$ 83,865
Sources of Funds
2023/2024 Adopted
Budget
Utility Funds:
Project Related
(Soft) Cost
Construction Costs
(2023 dollars)
Total:
$ 3,000
N/A
$ 3,000
Lease Revenue
(eastern public works
property):
$ 980
N/A
$ 980
306 Fund Balance:
$ 1,964
N/A
$ 1,964
Total:
$ 5,944
N/A
$ 5,944
2025/2026 CIP
Construction Phase (construction and soft costs
merged)
Utility Funds (Bond
supported):
$ 21,750
$ 21,750
Councilmanic Bonds:
$ 21,750
$ 21,750
Lease Revenue
(eastern public works
parcel):
$0
$0
306 Fund Balance:
$ 10,500
$ 10,500
11 January 2026 is the midpoint of construction. The current schedule has construction commencing
on May 1, 2025.
9
i. Bond Capacity
10
INFORMATIONAL MEMO
Page 6
Total:
$ 54,000
$ 54,000
Total Additional
$ 23,921
Funds Needed in
2026:
Possible Additional
• Enterprise Funds2: Councilmanic Bonds (General Fund)
Sources of
• Land Sales Revenue (One Time)
Revenue
• Land Lease Revenue (Ongoing, support debt service)
• Sales Tax Credit Back to Project (One Time)
• Permit Fee Credit Back to Project (One Time)
• Grants (One -Time): Federal and/or State Appropriations
• Decant Facility Capital Contribution (Ongoing or onetime)
• REET Funds
b. Debt, Updated March 21, 2023
2 Upon completion of the project, the city will true up all costs associated
with Public Works Operation's Campus.
ii. Annual Debt Service
INFORMATIONAL MEMO
Page 7
Total Long -
Year LTGO Debt UTGO Debt Term Debt Assessed Value %Change AV
2017 35,014,277 32,990,000 68,004,277 6,184,943,263 7.31%
1.5%
92,774,149
2018 48,358,749 31,875,000 80,233,749 6,685,919,176 8.10% 100,288,788
2019 71,439,055 68,405,000 139,844,055 7,351,973,382 9.96% 110,279,601
2020 72,205,534 67,035,000 139,240,534 7,883,057,562 7.22% 118,245,863
2021 73,117,643 66,335,000 142,302,643 8,010,892,032 1.62% 120,163,380
2022 70,734,706 65,375,000 138,650,706 8,970,452,548 11.98% 134,556,788
2023 64,094,790 63,595,000 129,921,790 9,374,122,913 4.50% 140,611,844
2024 59,643,954 61,615,000 123,181,954 9,795,958,444 4.50% 146,939,377
2025 55,602,406 59,210,000 116,426,406 10,236,776,574 4.50% 153,551,649
2026 51,941,964 56,565,000 109,811,964 10,697,431,520 4.50% 160,461,473
2027 48,157,300 53,660,000 102,813,300 11,178,815,938 4.50% 167,682,239
2028 44,231,450 50,485,000 95,403,450 11,681,862,655 4.50% 175,227,940
2029 40,164,314 47,025,000 87,567,314 12,207,546,475 4.50% 183,113,197
2030 36,414,928 43,290,000 79,773,928 12,756,886,066 4.50% 191,353,291
2031 32,218,328 39,270,000 71,488,328 13,330,945,939 4.50% 199,964,189
2032 28,515,314 34,950,000 63,465,314 13,930,838,506 4.50% 208,962,578
2033 24,683,322 30,315,000 54,998,322 14,557,726,239 4.50% 218,365,894
2034 20,723,662 25,360,000 46,083,662 15,212,823,920 4.50% 228,192,359
2035 16,626,052 20,075,000 36,701,052 15,897,400,996 4.50% 238,461,015
2036 12,652,810 14,440,000 27,092,810 16,612,784,041 4.50% 249,191,761
2037 8,926,072 8,440,000 17,366,072 17,360,359,323 4.50% 260,405,390
2038 5,070,838 4,335,000 9,405,838 18,141,575,492 4.50% 272,123,632
2039 1,640,000 1,640,000 18,957,946,389 4.50% 284,369,196
2040 - - 19,811,053,977 4.50% 297,165,810
2041 - 20,702,551,406 4.50% 310,538,271
2042 21,634,166,219 4.50% 324,512,493
2043 - 22,607,703,699 4.50% 339,115,555
2.5%
154,623,582
167,147,979
183,799,335
197,076,439
200,272,301
224,261,314
234,353,073
244,898,961
255,919,414
267,435,788
279,470,398
292,046,566
305,188,662
318,922,152
333,273,648
348,270,963
363,943,156
380,320,598
397,435,025
415,319,601
434,008,983
453,539,387
473,948,660
495,276,349
517, 563, 785
540,854,155
565,192,592
Remaining
Non -Voted Remaining
Debt Total Debt
Capacity Capacity
57,759,872 86,619,305
51,930,039 86,914,230
38,840,546 43,955,280
46,040,329 57,835,905
44,195,737 57,969,658
61,281,082 85,610,608
74,285,054 104,431,283
85,372,423 121,717,007
96,335,243 139,493,008
107, 214, 50 9 157, 623, 824
118,528,939 176,657,098
130,309,490 196,643,116
142,570,883 217,621,348
154,869,363 239,148,224
167,745,861 261,785,320
180,447,264 284,805,649
193,682,572 308,944,834
207,468,697 334,236,936
221,834,963 360,733,973
236, 538, 951 388, 226, 791
251,479,318 416,642,911
267,052,794 444,133,549
282,729,196 472,308,660
297,165,810 495,276,349
310,538,271 517,563,785
324,512,493 540,854,155
339,115,555 565,192,592
Voted debt cannot exceed the
aggregate of: 2.5% for general
purposes, 2.5% for parks and open
spaces, & economic development,
and 2.5% for utility purposes
30 Year Debt Issuance
Interest Rate
Payments Per Year
Term (Years)
5.00%
1
30
Total Bond
Annual Debt Minimum General Fund
Service Obligation
80,000,000 $5,204,115
75,000,000 $4,878,858
70,000,000 $4,553,600
65,000,000 $4,228,343
60,000,000 $3,903,086
$2,602,057.40
$2,439,428.82
$2,276,800.23
$2,114,171.64
$1,951,543.05
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INFORMATIONAL MEMO
Page 8
40 Year Debt Issuance
Interest Rate 5.00%
Payments Per Year 1
Term (Years) 40
Total Bond
Annual Debt Minimum General Fund
Service Obligation
80,000,000 $4,662,253 $2,331,126.45
75,000,000 $4,370,862 $2,185,431.04
70,000,000 $4,079,471 $2,039,735.64
65,000,000 $3,788,080 $1,894,040.24
60,000,000 $3,496,690 $1,748,344.83
iii. Interest Rate Variable
30 Year Payments, Based On Interest Rate
Total Bond
80,000,000
75,000,000
70,000,000
65,000,000
60,000,000
Interest Rate
4.50% 5.00% 5.50% 6.50% 7.00%
$4,911,323 $5,204,115 $5,504,431 $6,126,195 $6,446,912
$4,604,366 $4,878,858 $5,160,404 $5,743,308 $6,043,980
$4,297,408 $4,297,408 $4,297,408 $4,297,408 $4,297,408
$3,990,450 $3,990,450 $3,990,450 $3,990,450 $3,990,450
$3,683,493 $3,683,493 $3,683,493 $3,683,493 $3,683,493
40 Year Payments, Based On Interest Rate
Total Bond
80,000,000
75,000,000
70,000,000
65,000,000
60,000,000
Interest Rate
4.50% 5.00% 5.50% 6.50% 7.00%
$4,347,452 $4,662,253 $4,985,627 $5,655,498 $6,000,731
$4,075,736 $4,370,862 $4,674,026 $5,302,029 $5,625,685
$3,804,020 $3,804,020 $3,804,020 $3,804,020 $3,804,020
$3,532,305 $3,532,305 $3,532,305 $3,532,305 $3,532,305
$3,260,589 $3,260,589 $3,260,589 $3,260,589 $3,260,589
iv. Hypothetical Utility Annual Rent Payments
Assumes a bond of $70,000,000 per year with fixed payments. Hypothetical total base rent is
$3,000,000 per year, with the utilities responsible for half of the rent cost. As is typical with all
commercial leases, the base rent increase on an agreed upon amount. This amount would likely
be set by an industry standards.
Hypothetical Rent (50% of estimated rent) 1,500,000
Annual Cost Adjustment 5.00%
Year
Total Debt Service Utility Rent General Fund Obligation
1 $4,079,471 $1,500,000 $2,579,471
2 $4,079,471 $1,575,000 $2,504,471
3 $4,079,471 $1,653,750 $2,425,721
4 $4,079,471 $1,736,438 $2,343,034
5 $4,079,471 $1,823,259 $2,256,212
6 $4,079,471 $1,914,422 $2,165,049
7 $4,079,471 $2,010,143 $2,069,328
8 $4,079,471 $2,110,651 $1,968,821
9 $4,079,471 $2,216,183 $1,863,288
10 $4,079,471 $2,326,992 $1,752,479
12
INFORMATIONAL MEMO
Page 9
Staff is working on the cost share allocation with the City's utility funds (water, sewer, and
stormwater) to ensure that the utilities are paying their fair share for the improvements. This will
most likely include the utilities paying rent to the general fund indefinitely for the site. In future
years the rent would likely be higher than our debt service to reflect a change in market rent.
c. Construction Delay Costs
Construction is currently anticipated to begin on May 1, 2025, shortly after the existing tenant's
lease expires. Current estimates are that for every month in delay the project's construction
costs would increase approximately $300,000 per month.
d. Phasing of the Project
A question came up at the February 27 Finance and Governance Committee meeting regarding
a previously discussed phase 3 of the project. This comment seemed to be related to cost
management and reducing the scope of the current project.
In 2019 the City Council authorized SHKS Architects to do site design planning for the public
works shop site. A copy of the conceptual site design planning, including a three -phased total
project is shown in the attachment provided. That proposed phasing would have resulted in the
City demolishing and moving out of the Fleet and Facilities building. However, the City Council
directed staff not to pursue the three phase plan and to instead plan around the Fleet and
Facilities building remaining in its current location. The City Council also provided additional
funds to improve the seismic status of the building to be one that can be useable after an
earthquake.
Staff has taken this direction from Council and the project does not currently include a third
phase and assumes the Fleet and Facility building will remain for the useful life of the building.
Staff is working with the SOJ and Miller Hayashi to understand what, if any possible staging
might be possible to the current Phase 2 program. However, most of the significant cost items
will need to be completed early in the project. There might be some initial cost deferrals for the
delaying construction of the proposed decant facility, but these would be cost deferrals and
could result in added costs since construction costs would likely continue to rise.
13
INFORMATIONAL MEMO
Page 10
III. List of City Facilities (Due to space, this was moved as an attachment).
IV. Monetization of Surplus City Properties (Due to space, this was moved as an
attachment).
Attachment "B" is an updated list of properties that the City could monetize. If the vote to the
RFA is successful, the City would not have to budget additional fire capital equipment into the
D-20 model. This frees up land sales and leases to support other projects, such as the Public
Works Operations Campus Phase 2. There is just under $18 million in potential land sales
available to the city over the next five years.
V. Intergenerational (Teen/Senior) Center Update
Information to be added.
VI. Minkler Shops and Levee Issues
Information to be added.
VII. Public Works Phase 2 Specific Questions
a. Can Public Works Phase 2 Be Done in Stages?
b. Can spoils be located somewhere else doing design and construction phase?
c. Cost of Operations Campus To Date (Requested by CM Sharp at March 21,
2023 Council Meeting)
i. Impacts of Terminating the Project
DISCUSSION
Information to be added.
FINANCIAL IMPACT
Information to be added.
RECOMMENDATION
This is intended to be a dynamic memo to be updated throughout spring to present a
comprehensive report to the full City Council.
ATTACHMENTS
• SHKS Architects Phasing Outline
• Attachment "A," Current Conditions and Overview of Key City Facilities
• Attachment "B," Surplus Property Sale Opportunities
14
PHASE 1
HEISER RENOVATION I DEMOLISH LANDSCAPE * COFFEE SHOP I
POLICE IMPOUND I SITE WORK I COVERED SPOILS
• '<
- /
PHASE 2C
DEMOLISH HEISER PAINT BOOTH I OFFSITE SPOILS REQUIRED
PHASE 3B
DEMOLISH HEISER BUILDING OFFSITE SPOILS REQUIRED
41 1 FAT Mast, Puri - Phang
PHASE 2A
DEMOLISH UPS BUILDINGS I SITE WORK
4 MASTER PLAN
PHASE 28
ADMIN + SHOPS BUILDING I COVERED M,VERIAL STORAGE
INTERIOR + COVERED PARKING I POLICE IMPOUND I SITE WORK
PHASE 2D PHASE 3A
COVERED PARKING I SITE WORK I OFFSITE SPOILS REQUIRED
PHASE 3C
DECANT + BRINE TANKS I COVERED STORAGE I SPOILS I SITE WORK
FLEET MAINTENANCE BUILDING I SITE WORK
OFFSITE SPOILS REQUIRED
•
•
DEMOLITION
RENOVATION
NEW CONSTRUCTION
LANDSCAPING
SITE WORK
UNCOVERED PARKING
TUKWILA PURI IC WORKS
O)
Attachment "A", Current Conditions and Overview of Key City Facilities
DRAFT, March 13, 2023, March 21, 2023
Campus
Building
Name
Year
Built
Building
Sq. ft.
Land
Sq. ft.
Primary Use
Secondary/Backup
Use
Seismic
Risk
Flood Risk
Tls and Capital
Costs (Last Ten
Years)
Can be
surplus?
Major Needs
Notes
City Hall
City Hall
1979
25,159
117,774
Administration
and City Council
N/A
N/A
6300 Building
1980
33,230
67,417
Administration
(DCD, PW, TIS,
City Council
meetings, and
Administrative
Services.)
Sound Cities
Association (tenant)
Possibly, if
City Hall
campus
operations
were
consolidated
into other
city facilities.
Major
Parks
Facilities
Tukwila
Community
Center
557,568
35,260
Parks and
Recreation
offices; teen and
senior activities;
and meeting
space.
Emergency shelter.
N/A
HVAC system
needs to be
replaced.
Foster Golf
Club House
2004
14,656
N/A
Club house and
restaurant for
Foster Golf Links
N/A
N/A
Parks
Maintenance
Facility
2,900
N/A
Parks
maintenance
shops and
offices.
N/A
N/A
C>o Attachment "A", Current Conditions and Overview of Key City Facilities
Public
Safety
Buildings
Justice Center
2021
123,859
Police, Court,
and Emergency
Operation's
Center
Community meeting
space.
N/A
Fleet and
Facilities
2022
23,397
127,125
Public Works
Operations, Fleet
and Facilities
N/A
N/A
N/A
Minkler
Shops
1972-
1975
7,480
484,823
Public Works
Streets and
Utilities.
N/A
Yes, was part
of the D-20
financing
model.
N/A
Site also
includes the
P-17 Pond.
King County
and King
County
Flood
District have
expressed an
interest in
acquiring the
property.
Fire Station
51
2021
11,240
246,878
Fire Station
Community space.
N/A, will be
turned over
to the RFA,
assuming a
successful
annexation
vote.
N/A
Fire Station
52
2021
14,650
108,904
Fire Station
Community space,
backup emergency
operation's center.
N/A, will be
turned over
to the RFA,
assuming a
successful
None
identified,
new
construction
Will be
transferred
to RFA.
Attachment "A", Current Conditions and Overview of Key City Facilities
annexation
vote.
Fire Station
53
1961
5,390
38,860
Fire Station
N/A
N/A, will be
turned over
to the RFA,
assuming a
successful
annexation
vote.
Fire Station
54
1997
5264 111,064
Fire Station
N/A
N/A, will be
turned over
to the RFA,
assuming a
successful
annexation
vote.
Wetland
located in
rear of
property.
Other
Buildings
Old Fire
Station 51
1975
15,519 181,000
Currently being
used for police
vehicle evidence
storage.
None.
Yes, was part
of the D-20
financing
model.
N/A.
Old Fire
Station 52
3,330
1971 50,530
Vacant
None
No, deed
restrictions
limits the
City's ability
to sell or
lease.
N/A
Building is
on the same
lot at old
City Hall and
Hazelnut
Park.
Old Fire
Station 53
(Allentown)
1930
4,608 21,042
Storage
None
Yes, was part
of the D-20
financing
model.
Property is
not
connected
sewer.
Attachment "A", Current Conditions and Overview of Key City Facilities
George Long
1965
17,700
166,439
Vacant, some
storage
None
Yes, was part
of the D-20
financing
model.
Attachment "B", Surplus Property Sale Opportunities
Updated, March 21, 2023
Council
Direction
Property Name
Status
Estimated
Value
Contract or
Final Sales
Price
Notes
Budget Allocation
Property
Sold or
Under
Contract
HealthPoint
Under contract with
HealthPoint
N/A, under
contract.
$3,850,000
HealthPoint has
already paid the
City $2,500,000.
The final payment
of $1,350,000 is
due by June 30,
2023.
In Fund 302 —
Urban Renewal:
$1.85 million to pay
off line of credit for
Urban Renewal and
TIB redevelopment.
$1 million for ERP
system,
$1 million
unallocated
Travelers Choice
Sold, closed October
26, 2021
N/A, sold.
$665,000
Part of mitigation
measures for
impacts with the
Justice Center
siting.
$400,000 was
budgeted to urban
renewal/TIB
redevelopment and
$265,000 to the
Public Safety Plan
(Fund 305)
Council
Authorized
Purchase
and Sale
Agreement
George Long
In progress.
$3,225,000
N/A
Council authorized
the Mayor to enter
into purchase and
sale agreement with
King County. Still
working to finalize
Council
Previously
Briefed on
Likely
Surplus
Old Allentown
Fire Station
Not yet started.
$200,000
N/A
Updated, March 15, 2023
Attachment "B", Surplus Property Sale Opportunities
Updated, March 15, 2023
Longacres
Parcel
Begun preliminary
discussions about
bringing property to
market.
$2,000,000
N/A
Previously
allocated to Public
Safety Plan; should
annexation to the
PSRFA occur these
funds would not be
needed for the
Public Safety Plan.
Not budgeted since
Council has not
given direction.
Old Fire Station
51
On hold.
$2,300,00
N/A
Police is currently
using the building
for vehicle evidence
storage.
Previously
allocated to Public
Safety Plan; should
annexation to the
Newporter
Not yet started.
$1,000,000
N/A
PSRFA occur these
Minkler Shops
Have had preliminary
discussions with King
County Flood District
$4,200,000
N/A
Cannot be sold until
decision is made
regarding Public
funds would not be
needed for the
Public Safety Plan.
Works Phase 2.
Not budgeted since
Council has not
given direction.
Additional
Properties,
No Council
Direction Yet
Old Fire Station
52
N/A
N/A
N/A
Deed restriction on
property limits the
City's option with
the property;
required to stay in
community use.
Building will likely
need to be
demolished and the
City will look at city
other opportunities
Updated, March 15, 2023
Attachment "B", Surplus Property Sale Opportunities
with the property to
expand Hazelnut
park.
6300 Building
Not yet started.
$4,000,000
N/A
Council has not
previously been
briefed on possible
surplus of 6300
building. Until staff
can be consolidated
into other buildings,
the City cannot
surplus. Staff has
been looking for
tenants to lease
vacant office space.
Funds have not
been allocated,
decision would
need to be made
regarding
consolidation of city
staff into City Hall
or other City facility.
Star Nursery Site
On hold
$880,000
N/A
This property was
purchased for the
relocation of Fire
Station 54, but
construction of the
station was
deferred. The site
was also identified
as a possible site
for a future
teen/senior center.
Funds have not
been allocated.
Updated, March 15, 2023
24