HomeMy WebLinkAbout15 E- Packet 07-09-2007_Facility Timeline and Finance Update_15
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Chris Kukulski, City Manager
SUBJECT: Facility Timeline & Finance Plan
MEETING DATE: July 9, 2007
BACKGROUND: The attached facility timeline and finance report was presented to the
commission in May 2007 and updated for our June 21 policy meeting. We were unable to work
our way through the entire report on the 21st and therefore, have placed the report on the July 9th
agenda. This report is consistent with our 2007/08 work plan and is being used as a guide in
constructing, renovating and financing all of the city’s major facility upgrades. It is my hope that
I be provided clear direction from the Commission on any changes you would like made to this
plan.
RECOMMENDATION: Please review the attached facility timeline and finance plan and
make any changes you see necessary.
FISCAL EFFECTS: Over $100 million in facility upgrades are outlined in this report.
ALTERNATIVES: As suggested by the City Commission.
Respectfully submitted,
____________________________
Chris A. Kukulski, City Manager
Attachments: Facilities Timeline and Finance report
Report compiled on July 5, 2007
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2007 – 2008 Adopted Work Plan
City Manager ‐ Present a timeline for major facility construction and funding
sources for each project (i.e. wastewater plant, fire stations, police station, city hall
and water plant)
Fiscal Years 2007 ‐ 2008
1. Library Construction Project
With the construction complete and the building open to the public, the City remains $2.558 million short in
funding the project. We expect the shortfall to be recovered from: (1) CALA funds and, (2) A donor who has
agreed to pay ½ of the deficit after CALA and, (3) the cities special project account. These three sources are
conservatively estimated to produce $2.376 million total and the remainder will come from the city’s general
fund reserve therefore eliminating the construction deficit.
(1) The City has negotiated an 80/20 slit on orphan vs. non‐orphan share through the CALA process. As a
result of this agreement with the DEQ the City will be reimbursed approx. $1.68 million from the
states orphan share account.
(2) A donor has agreed to pay one half of the remaining deficit after the CALA process has been
completed. This donation should cover approx. $439,000.
(3) The City’s special project account has a balance of approx. $286,000. These funds were paid to the
city several years ago through the sale of Valley Unit lots that defaulted into the city’s ownership.
(4) The remaining balance should be approx. $153,000 and will be paid out of the City’s general fund
cash reserve.
Until CALA funds are reimbursed to the City and/or land sales occur, the $2.558 million shortfall will continue
to be borrowed from internal funds. Interest will be paid to each of the lending funds at the market rates the
Finance Department realizes on existing investments.
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2. Library Landscaping Project and Peet’s Hill Parking Lot.
The project bid was awarded by the Commission in May with funding coming from a $1.125 Million Federal
Transportation Appropriation and approximately $300,000 in CTEP allocation. The project should be
completed by September 2007.
3. Relocation of City Hall to the former Lamme Street Library Property.
June 11, 2007 the City Commission authorized Comma Q Architects to complete the design development,
construction documents, bidding and contract administration for renovations to the Lamme Street property to
become City Hall. This opportunity represents a long‐term solution that will provide office space for City Hall
operations beyond the year 2030.
The adopted 2007 budget anticipated possible renovations to the Lamme Street property and the existing city
hall property. It included utilizing $750,000 from the Special Projects Fund that was created as a result of
property sales at Valley Unit in the early 1990’s. In December 2006, after it was concluded that neither the
current city hall or prior library sites was suitable for a Police Station, $430,000 of the Special Projects Funds
were spent to purchase an adjacent residential property that greatly enhances our ability to provide parking
and future building expansions.
Renovations to the facility are estimated at $1.65 million, including architectural costs and the replacement of
the 26‐year‐old boiler system. This project would be funded by: (1) the sale of the current City Hall site, (2)
the City’s general fund cash reserve.
(1) The current City Hall property was appraised in January 2006 and was valued at $1.4 million.
(2) The City’s general fund cash reserve has an estimated balance of $3.0 Million as of June 30, 2007.
This balance represents 16.8% of FY08 budgeted operating revenues. If $250,000 were utilized for
this construction project, the general fund cash reserve would be $2.75 Million, 15.4% of revenues at
the end of FY08.
4. Downtown Parking Garage – Construction.
For the past 18 months, the City has been working with the Federal Transit Administration to receive all the
approvals necessary for the Federal Appropriation on the project. We have received the Finding of No
Significant Impact (FONSI) that is contingent on our adoption of one additional mitigation measure – which we
are confident we can comply with.
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Bids for the construction of the Downtown Parking Garage were opened in early May 2007. Within a matter
of weeks, we expect to receive final authorization to incur costs on the project, at which point a bid will be
awarded and construction can begin. The lowest qualified bidder will allow the City to authorize phase I which
will build approx. 330 parking spaces at a cost of $9.2 Million. Phase II will add approx. 100 spaces and will be
requested for approval once the city sells the roughly 10,000 square feet of retail/office space.
This construction project will be financed with: (1) Federal Transit Administration appropriation and
anticipation notes, (2) Tax Increment Financing District bonds and cash, and (3) interest earnings during the
construction period. These sources combine for a total of $9.2 Million, which is the current estimate for the
project.
(1) The Federal Transit Administration appropriation totals $4,034,000. Because of the timing of
construction outlays, we expect to issue anticipation notes for the portion of the appropriation
that is not scheduled to be received until federal FY2008 & FY2009. Net of financing and interest
costs on these notes, we expect to have a total of $3.87 Million available for the project.
(2) The TIF District will contribute a $460,000 in cash and will issue bonds estimated at $4,800,000 to
fund the construction.
(3) Interest earnings derived by investing bond and note proceeds during the construction period
are expected to bring $130,000 for construction.
The Bozeman Parking Commission is developing operating plans for the Garage and will take on that
responsibility once the facility is open, estimated June/July 2008.
5. Fire Station #3 ‐ Design, Construct, Equip and Staff.
The 2006 adopted Fire Master Plan calls for a third fire station located in the northwest quadrant of Bozeman.
Due to housing and population growth in the area, this station needs to open as soon as possible. Designing,
constructing and equipping the station will be funded by: (1) Fire Impact Fees. Staffing and operating the
station will be funded by: (2) Voter Approved Fire Levy.
(1) Fire Impact Fees, at their current levels, are expected to total $2.3 Million by the end of FY2008, and
$2.6 Million by the end of FY2009.
a. We are finalizing an agreement to purchase land from Gallatin County at its appraised value.
Appropriation authority of $500,000 was approved in the FY2007 budget and will be carried
forward to FY2008, so a purchase will be able to be made as soon as a purchase agreement
is completed.
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b. Similar stations in Billings, Kalispell and Missoula have recently opened at a cost less than
our estimated FY2008 $2.3M impact fee account balance.
c. A Fire Engine (estimated cost $494,000) will need to be purchased in early FY2009, available
when the station opens. It is anticipated that this purchase will leave the Fire Impact Fee
Fund with a negative balance in FY2009 – recovering to a positive balance in FY2010.
(2) A Fire Mill levy will require voter approval in order to annually finance the 13 additional staff
necessary to run the station.
6. Police and Municipal Court Facility ‐ Design and Construct.
The 2006 Carter Goble Lee facility plan was adopted in June 2007, by the City Commission. It outlines the
anticipated space needs for the City’s Police Department, Municipal Court and Prosecution functions for the
next 20 years.
The facility plan calls for a five acre site and approx. 50,000 square foot facility at an estimated construction
cost of approximately $12.75 Million. Land and site development costs are not included in this estimate. The
facility would be funded with 20‐year debt, after voter approval of a Police & Court Facility Levy.
A Police Department staffing analysis was also adopted in June of 2007. Police staffing levels are not
necessarily connected to the construction of a police station. However, they are connected to service delivery
and are being considered as part of a Police/Fire Mill Levy. The staffing analysis utilized five years of internal,
service‐demand data that was specific to our department. The analysis has recommended we add six officers
to our Patrol Division immediately, and approximately 1‐2 each following year. The proposed staffing
methodology is considered a “best practice” by the International Association of Chiefs of Police (IACP). It
replaces the “1.5 Officers per 1,000 Residents” standard that is commonly quoted for police staffing.
7. City Shops Complex.
In March 2006, the City Commission authorized the purchase of the Cardinal Distributing property. All
operations currently located at Rouse and Tamarack will be relocated to the Cardinal site. We are under
contract to purchase the property at its appraised value of $3.2 million plus renovation costs. We anticipate
$1.0 million in renovations, which will be completed by the seller prior to our possession.
A new Shops Complex has been included in the City’s Capital Improvements Plan for nearly 10 years. This
project represents a substantial savings over the CIP total estimated costs of $9 Million. Funding sources for
this project are: (1) Water Utility & Wastewater Utility, and (2) Impact Fees.
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(1) The Water & Wastewater Utility will each contribute $1.4 Million.
(2) Water, Sewer, & Street Impact Fees will each contribute $465,000.
At this time Montana Rail Link has rejected Cardinal’s request to assign their land lease to the City. Nothing
can move forward until this issue is clearly resolved since approx. one third of the building is sitting on land
leased from the railroad.
Fiscal Years 2007 – 2011
8. Wastewater Treatment Plant ‐ Design and Construction of a Biological Nutrient
Removal Plant.
The 2006 adopted Wastewater Facility Plan calls for the construction of a Biological Nutrient Removal (BNR)
Plant to be opened by 2011. Phase I of the project is currently under design, expected to take nearly 24
months. Construction is expected to begin in FY2009 and last nearly 24 months, as well. Phase I design and
construction costs are estimated to total $33.1 Million.
I am using utility rate studies and impact fee studies to ensure that adequate funding exists for this large
project. The Commission has recently adopted the rate study and will be considering the impact fee study for
adoption in July. Wastewater revenue bonds with a 20‐year term will be issued in FY2009 & FY2010.
• Fiscal Year 2007 Design ‐ $3.9 million
o 67% Wastewater utility cash = $2.61 million
o 33% Wastewater impact fee cash = $1.28 million
• Fiscal Year 2009 and 2010 Construction ‐ $29.2 million
o 67% Wastewater utility bonds = $19.5 million
o 33% Wastewater impact fee cash = $9.7 million
Future construction phases are based on estimated development and population growth. If development
meets or exceeds our projections, Phase II will likely break ground in 2012.
Fiscal Years 2008‐2012
9. Water Treatment Plant ‐ Design and Construction of Membrane Filter Plant.
The 2006 adopted Water Facility Plan calls for the construction of a 22 Million Gallon Membrane Filter Plant,
to be opened by 2013. Pilot testing of the membrane technology will begin in FY2008. The design process,
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expected to last 24 months, will begin in FY2009. Construction is expected to begin in FY2010 and last nearly
24 months, as well. Currently the project is estimated to cost $33.2 million.
Again, I am using utility rate studies and impact fee studies to ensure that adequate funding exists for this
large project. The Commission has recently adopted the rate study and will be considering the impact fee
study for adoption in July. Water revenue bonds with a 20‐year term will be issued in FY2011 & FY2012.
• Fiscal Year 2008 Pilot Testing = $200,000
o 67% Water utility cash = $133,000
o 33% Water impact fee cash = $67,000
• Fiscal Year 2009 &2010 Design = $3.0 million
o 67% Water utility cash = $2.0 million
o 33% Water impact fee cash = $1.0 million
• Fiscal year 2011 and 2012 Construction = $30 million
o 67% Water utility bonds = $20 million
o 33% Water impact fees = $10 million
Fiscal Year 2010
10. Outdoor Aquatics Facility ‐ Design and Construct.
Given the high community‐participation in swimming programs and the age of our existing outdoor pool, it is
recommended that the City consider constructing a new Outdoor Aquatics Facility.
Bogert Pool, the city’s only outdoor swimming facility, was constructed in 1939 and serves over 45,000
patrons each summer. In 2006, 11,827 kids’ visits were recorded at the pool for swimming lessons and 2,400
individual children participated in swim lessons. At the Swim Center, 35,634 youth participated in swimming
lessons, not counting swim teams and synchronized swimming programs.
Over the past 68 years, numerous changes and improvements have been made to the outdoor pool. Some
recent changes include:
• In 1974 the bulkhead was installed between the 2 pools and the pool was entirely renovated, new
piping, new shell, etc. These repairs were expected to extend the useful life approx. 20 years.
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• In 1980 we did cement work, gutter repairs and began painting the pool shell. In the 1990’s we
added about 12 feet to the west deck and later about 20 feet to the south deck.
• The slides were added approximately 4 years ago. The pipes in the filter room and the heat
exchanger have been recently replaced, and about every 10 years we need to replace the pool
circulation pump and trash/vacuum pump.
The cost to construct a new aquatics facility is unknown. In 2003/04 Kalispell constructed an outdoor aquatics
facility and skate park in an existing park for $3.567 million (total cost inclusive of finance).
The location of this facility has yet to be determined. There have been extremely preliminary discussions
regarding two locations, one in the northwest quadrant and one in the south quadrant of the city. Both
locations are excellent.
Funding for this project would require a voter approved bond levy and possible private fundraising. The town
of Whitefish was able to utilize some private donations for the construction of an indoor pool facility in recent
years.
Fiscal Year 2011
11. Fire Station #4 ‐ Design, Construct, Equip and Staff.
The 2006 adopted Fire Master Plan calls for the construction of a fourth fire station in the southwest quadrant
of Bozeman. This station is dependent on growth in the area and could be needed as soon as 2011. The land
for Fire Station #4 was deeded to the City in 2006. This two acre parcel is located at the corner of South 19th
and Graff.
Similar to Station #3, designing, constructing and equipping the station will be funded by: (1) Fire Impact Fees.
Staffing and operating the station will be funded by: (2) Voter Approved Fire Levy.
(1) Depending on impact fee collections over the next four years and construction cost, the construction
and equipping of Station #4 could be funded by fire impact fees. Because growth will drive the need
for this facility, we anticipate that impact fee dollars will be available at the time necessary.
(2) A Fire Mill levy will require voter approval in order to annually finance the 9 additional staff necessary
to run the station.
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