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HomeMy WebLinkAboutFEBRUARY 14,1995 1 1 I: 37:0042 CITY COUNCIL PROCEEDINGS ARE TAPE RECORDED AND ON FILE IN THE OFFICE OF THE CITY CLERK ROLL CALL CONTRIBU- TION (Arc.Hi. Sch. Consti- tution Team) (APPROVED) MINUTES CITY COUNCIL OF THE CITY OF ARCADIA ADJOURNED REGULAR MEETING (STUDY SESSION) FEBRUARY 14, 1995 The Arcadia City Council met in an Adjoumed Regular Meeting (Study Session) on Tuesday, February 14, 1995, at 5:37 p. m, in the City Council Chambers. PRESENT: ABSENT: Council members Chang, Kuhn and Young Council members Lojeskl and Margen (Council member Margen arrived at 5:48 p. m,) It was MOVED by Mayor Young, seconded by Councllmember Kuhn, and CARRIED to EXCUSE the absence of Council members Lojeski and Margen. SUPPLEMENTAL INFORMATION FROM STAFF REGARDING AGENDA ITEMS None AUDIENCE PARTICIPATION None MATTERS FROM ELECTED OFFICIALS None At the February 7, 1995 City Council meeting, the Council directed staff to place a report on the February 14, 1995 agenda relative to approving a $500 contribution to the Arcadia High School senior govemment dass "Constttutlon Team". The February 14 staff report sets forth details of the team competttion. It was MOVED by Mayor Pro tem Chang, seconded by Councilmember Kuhn and CARRIED on roll call vote as follows to APPROVE a contribution of $500 to the Arcadia High School, Senior Govemment Class Constttution Team to participate In the "We, the People the Cttlzen and the Constttutlon" competttlon In Sacramento; and APPROPRIATE $500 from the General Fund. AYES: NOES: ABSENT: Councllmembers Chang, Kuhn and Young None Council members Lojeskl and Margen At 5:41 p. m, the City Council RECESSED and RECONVENED at 5:43 p. m. In the Conference Room of the Council Chambers. 2/14/95 Ji:0043 PRESENTATION OF THE MASTER PLAN FOR PUBUC BUILDINGS, FINANCIAL PLAN AND . UBRARY RENOVATION PROJECT 1- Consideration of the "Master Plan for Public Buildings, Financial Plan, and the Ubrary Project" February 1995 reports. The City Manager opened the presentation stating, in part, that Chapter One of the report of the Master Plan for Public Buildings was prepared by Usa Sachs of Construction Controls Group and City staff. This chapter consists of a Summary Document and a Technical Support Document. Said documents contain an overview of City buildings; an evaluation of the condition of the facilities; and identify Improvements needed to mllet present and future City needs. City Manager Kelly noted that one goal, after analyzing the condition of the public facilities, Is to create a replacement fund for City buildings in the budget. This fund could be similar to the vehicle replacement fund. Chapter Two of the report, Financing, was prepared by Rauscher Pierce Refsnes, Inc. In two parts: A) A comparison of financing methods, which provides an overview or Introduction to various types of financial programs available for construction of Improvement to public facilities; and, B) A financial analysis which contains more detailed Information based on the consultant's analysis of physical improvement needs and the various ways to pay for these projects. Chapter Thrlle of the report deals specifically with the Ubrary Renovation Project. Bids for this project were opened this date, January 17. A Ubrary Bid Summary Report was prepared and submitted to the Council setting forth the name of each bidder, their base bid, and alternate bids, relative to the different architectural facade treatments and costs. Said bids will be good for ninety (90) days from the date of the opening of the bids. 1 A. MASTER PLAN Usa Sachs, Construction Controls Group (CCG), was Introduced to present an overview of FOR PUBUC her findings on City pUblic facilities. Construction Controls were directed to consider a five BUILDINGS year period of the physical plant needs encompassing: Phase A - Immediate needs; Phase B - intermediate and; Phase C - long term needs_ CGG considered maintenance and expansion Issues as well as building replacement, and attempted to create a guide for a plan to work with In the Mure. They identified all the public buildings In critical need, the majority of which are now close to fifty (50) years old. The newer buUdlngs such as the Community Center, Fire Station No.2, the Mounted Police buUdlng on live Oak Avenue, the City Corporation Yard, and the buildings at Wildemess Park, were not part of the CCG study. Details of the work of CGG are set forth In the February 1995 Master Plan report. Ms, Sachs explained In detail the procedure of CCG for analyzing the facilities which Is contained In the executive Summary of the Master Plan. Space needs, state mandate programs, new technology and electronic needs, were identified. , Ms. Sachs explained the Summary of projected Costs, Over A Five Year Period, February 1995 report. The Summary lists three alternative budgets for the physical repair/replacement of City facilities. Alternative One of the Master Plan recommends the demolition of the Armory facilities so that a new Pollee Facility could be constructed at that site. The vacated pollee facilities could then be converted Into offlces for Development Services which would free up space within current City Hall facilities. CIty Hall renovations would be required. It Is assumed that excess space would be avaUable which could then be leased out to help offset operational costs. The Credit Union Is a potential lessor. The net projected budget for Alternative One Is $23,178,650. I 2 2/14/95 I I I B. FINANCING (Public Bldg. Improve- ments) . , If \.j t, , , , ' ,'.' 37:0044 Alternative Two considers the concept of relocating City Hall, the Police Department and the Council Chamber to the four acre Foulger Ford site on Huntington Drive between Santa Clara and Morian Place, or to the County Park, a four acre area at the southwest corner of Huntington Drive and Santa Anita. Potentially, the City could sell the existing City Hall site and the option of relocating the facilities would become more feasible, according to Ms. Sachs. The net projected budget for Alternative Two is $34,045,755 without the sale 01 the existing property, or $21,230,403 W the property Is sold. Alternative Three, essentially remodels and expands both the current Police and City Hall facilities. The demolition of the Armory facilities would stili be required to provide the needed open area for police vehicle needs. This option would be the most disruptive and difficult to accomplish while maintaining ongoing City operations. The net projected budget for Alternative Three Is $15,293,464. Paul McDonald, Managing Director, Rauscher Pierce Refsnes, Inc (RPR), presented a preliminary financial overview of RPR's reports, .Comparison of Financing Methods. and .Master Plan Financial Analysis.. Said reports set forth various financial mechanisms to fund the replacement or improvements to the City's public buildings described by Ms. Sachs. Mr, McDonald briefly mentioned that, historically, income generated from Santa Anita Race Track has been earmarked for funding capital Improvements In the City. Income from the Track is now viewed as potentially unstable and declining. Other funding sources must be considered. Mr. McDonald described alternative funding options to construct Master Plan projects as follows: - General Obligation Bonds would require a two-third vote of approval by Arcadia voters. If approved, the result would be a tax on all properties within the City based upon a percentabe of assessed property valuation. General Obligation Bonds produce a built-in dedicated revenue stream, and carry the lowest cost of the financial vehicles presented, - Certificates of Participation (COP) - This Is the most common financing vehicle for cities, counties and school districts In the State of California, according to Mr, McDonald. This financing mechanism does not require voter approval. The COP financing method provides long-term financing through a lease (with an option to purchase), or an installment sales agreement which allows the public to purchase participation in a stream of lease or Installment payments related to the acquisition or construction of specific equipment, land, or facilities. The City would still have to find a revenue source for repayment ... either a new revenue source or designated from within current revenue sources which are In place. In the case of public projects, the obligations are "triple-net", requiring the public entity obligator to pay all operating and maintenance costs, taxes and Insurance on the property. COP's are basically a means for the City to borrow funds. - Mello-Roos Community Facilities Districts bond financing method requires a two-third vote of approval of the voters within the district, and approval 01 the legislative body. The Mello-Roos Act of 1982 estsblished a financing method whereby cities, counties, special districts or municipal entities may form a separate district to finance certain public facilities by levying a special tax within the district. The community facilities district, which may include areas that are not contiguous, may provide for the planning, design, purchase, construction, expansion or rehabilitation of any tangible property with an astlmated useful IWe of five years. This type of financing would levy a special tax on those properties which have a direct and special benefit from the improvement to the public facilities or acquisition 3 2/14/95 37:00~5 thereof. Melle-Roes bonds are considered more expenslve to Issue than General Obligation Bonds or CenKlcates of Panlclpatlon. I - Special Assessment Districts are similar to Mello-Roos districts. Voter approval Is not required, however, a public hearing must be held where those opposed to the proposed projects are heard. Special assessments can be levied by cttles, counties, special districts only to acquire or construct public Improvements which convey a special benefit to a defined group of propenies; the Iimtted Improvement for which the assessment Is levied must beneficially affect a well-defined and IImtted area of land, and the total assessment must be proponionate to the benefit received. In their report, RPR noted that a community- wide district would be a problem because of the nature of the facOttles Involved. Mr, McDonald noted also that the bonds Issued would carry a higher Interest rate than General Obligation Bonds. - Maintenance Assessment Districts provide an annual source of revenue for such ttems as installation, maintenance, or servicing of cenaln lJublic Improvements Including landscaping, public lighting, traffic signals and recreational ilT'orovements. Assessments received cannot be pledged toward the repayment of tax-exempt indebtedness, however, a maintenance assessmer.t district could free-up existing General Fund monies currenUy used for such maintenance which monies could be pledged for the repayment of tax exempt obligations. - Parcel Tax. The CaIKomla Government Code provides for the levying and coIlecllon of a special parcel tax, The tax can be for whatever purpose, duration, and amount, as can be approved by a vote of two-thirds of the voters. Tax proceeds can be used for a variety of purposes, Including operation, maintenance and capital projects. This tax Is also a means of Implementing a revenue stream. The tax cannot be directly pledged towards repayment I of tax exempt Indebtedness, however, this could enhance the financial resources of the City. 1 - Tax Allocation Bonds are Issued by redevelopment agencies to revitalize blighted and economically depressed areas of the community and to promote growth. Current law IImtts the City's ability to use these type of funds for the type of facllttles Improvements under consideration. Mr. McDonald commented that of all the financing alternatives presented, RPR has identified the two most likely .borrowlng mechanisms. to be the General Obligation Bonds and CenKlcates of Participation. The Maintenance Assessment Districts are seen as being a viable source for producing revenue. The parcel tax, tax allocation bond, special assessment and Mello-Roos could be eliminated as viable financing alternatives. Mr. McDonald noted also that other revenue sources were considered such as the .Pay as you go. option In which funds could be accumulated untU sufficlent to pay for the facUttles. City staff believe that approximately $1.0 to $1,5 million per year from Sants Anita Race Track operations could be set aside for capital projects. Using a capital cost of approximately $23 million, the CIty would have to watt 15 to 20 years to build the facUtties. Also, an Increase In the Utility User Tax from 5% to 8% would generate approximately $2,330,000 per year which would pay the annual debt service cost on the Certificates of Participation option. The lighting and landscaping districts currenUy generate revenues Insufficient to cover the City's annual expense for street lighting, trees and parkways. By pursuing a more comprehensive light and landscaping strategy, the City could Increase the charges levied to cover the annual $705,000 shortfall and free-up an equivalent amount In the General Fund. The $705,000 would represent approximately one-thlrd of the annual debt service and could be used In conjunction with other options. Mr. McDonald also noted that the Redevelopment Agency owes the City approximately $5,150,000. The $300,000 yearly I 4 2/14/95 I I I I, I ' 1 : r_' : I I' ' I; . ' ~ 37:0046 interest on the loans could be paid to the City rather than accumulating. This source of funds would be used to defray the cost of the annual debt S81Vice. Mr. McDonald commented that the concept Is, that In addition to the General Obligation Bonds, which would have an Inherent payment source, there are some other revenue sources which could be evaluated and either used separately, or In conjunction with one another, to put together a revenue stream which would be sufficient to support whatever level of projects the Council deems appropriate. Mr, McDonald briefly explained Schedule I, Comparison of Debt Service . Certificates of Participation versus General Obligation Bonds, Project Funding . Altematlve One of the February 1995 Master Plan report. This schedule reflects debt service payments from 1996 through the year 2025, with the average yearly payment on lhe debt for COP's at $2,3 million compared with the average debt payment of $1.7 million for General Obligation Bonds. Over a 30 year period the debt service payments for the COP's totaled $55,826.397. as compared to $49,614,958. for the General Obligation Bond debt S81Vice. Schedule 2, which is an analysis of all project costs funded by G.O, bonds from 1995 through 2025 was explained also. The property tax rate per $200,000 assessed valuation over 30 years averaged out at $58. a year per parcel. The Schedule 3 chart was a general Obligation Analysis for Police and Fire Improvements only, funded with G.O,Bonds. Schedule 3 Indicated a tax rate per $200,000 assessed valuation at an average of under $50 a year per parcel. C. UBRARY PROJECT MASTER The Ubrary Renovation Project was designed to provide for both the renovation of the existing 36,428 square foot facility, as well as the addition of another 12,282 square feet. Further, the City Council requested that staff seek bids on three exterior design alternatives and staff requested that the bidders Include three other options as well. Details of all design alternatives are set forth in the January 26, 1995 staff report. " In the report staff noted that, the Council previously approved a Ubrary Renovation Project budget of $4,928,728 (from the Facility Construction Fund) on September 7, 1993. This figure does not include the cost for fumlture, wall coverings and treatments, additional cabinetry, or an audiovisual system for the Children's Room. The total for all such additional Items is estimated to be $614,023. To address funding for these Items, the Ubrary Board is forming the Arcadia Public Ubrary Foundation, a non-profit organization whose purpose is to raise funds for fumlture, fixtures and equipment for the Ublary. The bids for the Ubrary Renovation Project were received and opened on January 17, 1995. Four bids were received with the followlng results for the base bid: 1 - Bemards Brothers, Inc. 2 . Crown City Construction Co. 3 - Merco Construction Engineers 4 - Meskell and Sons, Inc.' $3,535,000. 3,799,217. 3,846,000. 3,908,800. Along with going to bid for the construction aspect of the Ubrary project, the City went out to bid for the asbestos removal work needed for the existing facility. Of four environmental firms requested to bid, Environmental Control Systems, Inc. responded with a bid of $58,711. Additionally, the City retained the firm of Construction Controls Group (Usa Sachs) for construction management purposes. The total fee for this S8IVice Is $156,482. 5 2/14/95 37:0047 ArCh~ectural services are being provided by Charles Walton Associates for a fee of $314,020. The cost for the Ubrary Project, including the base bid from the low bidder, Bernards Brothers, asbestos removal, construction rnanagement services, arcMect, contingency, and all alternative costs totaled $4,642,667. ' At the conclusion of the Ubrary Project presentation, the AssIstant City Manager/Fire Chief Gardner, ,iated that Council direction Is requested as to whether or not the Ubrary Renovation project will proceed as presented, or proceed with just the deferred rnaintenance, safety and ADA related ~ems at a cost of $1,600,000. Chief Gardner re~erated that the bids are good for 90 days w~hln which time Council may accept the low bid or reject all of the bids. Staff noted that the decision on the Ubrary Project will have to be made before or at the April 4th Council meeting. In response to the City Anorney, Usa Sachs stated, In part, that Bernards Brothers received an exemption to bid the project as a non-prevailing wage project. Because of that, the savings to the City is over $200,000. Referring to the Master Plan for Public Buildings, the City Manager noted that there Is sufficient time to have add~lonal study sessions and consider the alternatives after Counc8 has had opportunity to absorb the Master Plan and Ubrary projects, and the financing options. ., I City Manager Kelly commented that there are a number of ways to structure the financing I of the project and be creative, and build the projects without drawing a great deal of community oppos~lon. The City Manager also re~erated the need to begin a facility replacement fund similar to the vehicle equipment fund. Councilmember Margen agreed. and commented that this fund should have been In place years ago. ~ In response to Mayor Pro tem Chang's question, staff said that Schedule 2, Master Plan,' funded by G.O. Bonds, does not include the Ubrary Project. The City Manager commented that Council could go ahead and award the contract for the Ubrary and spend the $4.6 million. The CouncU could then pass an Inducement resolution stating that If CouncU chooses to sell General Obligation Bond Issues or Certificates of Participation, the $4,6 million can be put Into the bond Issue In the Mure and the cost recovered. This Is another alternative to consider for financing the project. Considerable discussion ensued centered on the Issue of G.O. Bonds and a mix of other financing alternatives, also an Income stream for payment of the debt service on bonds or COP's, If Issued. In the dlscusslon of the Sumrnary of Projected Costs for the various alternatives to upgrade, demolish, reconstruct, enlarge and/or relocate the City Hall and Police facU~Ies, Councilmembers Chang, Kuhn, Margen and Mayor Young agreed that they preferred Alternative One, which recommends demol~lon of the Armory facil/tJes so that a new Police faCility can be constructed on that s~e; converting the vacated Police facUity Into offices for the Development Services Department; renovation of City Hall; and lease out space at City Hail. The projected cost for Alternative One Is $23,178,650 over a five year period. 6 2/14/95 I I I I ADJOURN- MENT ATTEST: I' 'I 37:0048 The' Council agreed that a study session be set for March 14 to consider a financial plan for the construction of the public buildings. as discussed. At 7:00 p, m, the meeting ADJOURNED to Tuesday, February 21, 1995 at 7:00 p,m. in the Council Chambers to conduct the business of the City Council and the Arcadia. Redevelopment Agency and any Closed Session necessary to discuss personnel. 1~lgatlon matters and evaluation of properties. J , 7 2/14/95