Item B: Use of Facility Reserve - Next Steps on Police Patrol Facility

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and a more competitive bidding environment. By using a City-owned site (thus eliminating site acquisition costs), reducing contingencies, and eliminating two years of cost escalation, it may be possible to reduce the cost of the Patrol Facility to approximately $16 million. Moving forward with the project now would result in savings for the City compared to waiting until 2012, and it would pump millions of dollars into the local economy over the next 18-24 months while sup- porting the council goal of contributing to downtown development. The incremental cost for ongoing operations and maintenance for the Police Patrol Facility in the General Fund was estimated in the CIP at $235,000 annually beginning in 2013. Moving ahead with design and construction now would require funding for operations and maintenance to begin in the second half of FY11 or the start of FY12. Funding for the Police Patrol Facility Funding for a new Police Patrol Facility could come from the Facility Reserve, which was origi- nally created to fund projects related to City Hall, with the intention of reducing the amount asked from voters to pay for a portion of the projects. The Facility Reserve is expected to have a balance of about $22 million in FY10, after taking into account a $1 million transfer for street operations and maintenance projects as directed by the Budget Committee last year. Funds remaining in the Facility Reserve could be retained for future improvements to space for Municipal Court, emergency and necessary repairs to City Hall in keeping with the council’s 2001 policy, and related uses supporting the City Hall Master Plan. Specific appropriations for use of the remainder of the Facility Reserve will be brought to the council and the Budget Committee as future decisions are made on these topics. During the FY09 budget process, the Budget Committee adopted recommendations to the coun- cil for potential alternate uses for the Facility Reserve. The Budget Committee recommenda- tions, included in Attachment D, diverged from previous council direction to minimize reinvest- ment in the existing City Hall and maintain the Facility Reserve for the purpose of funding Downtown Space Plan (i.e., City Hall Complex Master Plan) projects. The council did not take any action on the Budget Committee recommendations. The staff recommendation is that the council continue with the previous direction given as a result of the City Hall Complex Master Plan discussions. RELATED CITY POLICIES The City Hall Complex Master Plan relates to the council values of effective, accountable municipal government; a safe community; and sustainable development. The council identified a continuing goal in 2007 to adopt an implementation plan for a parallel process for the con- struction of a new City Hall and police facility. The approved City Hall Complex Action Plan identifies key issues that must be addressed as work toward the goal progresses. COUNCIL OPTIONS 1.The council can choose to include an appropriation of $16 million from the Facility Reserve in the FY10 budget to fund the design and construction of a new Police Patrol Facility. The council can also direct that existing City Hall Complex Master Plan funds be used for L:\CMO\2009 Council Agendas\M090211\S090211FacilityReserves.doc