Item A - Nov.2004 Bond Issue - Laserfiche WebLink

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Operating and Maintenance Costs Although not part of the plan for financing the capital costs, it is important to include the esti- mated operating and maintenance costs for the new building. The preliminary estimate of the ongoing O&M costs for a new Community Safety Building would equal $1.1 million to $1.7 million, depending on the size. The City Hall is estimated to require about $3.0 million in annual O&M costs. For Option D, with both new facilities, the combined annual O&M cost would be almost $4 million. About half of the O&M cost represents daily building custodial, energy and other out of pocket costs for operating the building. The other half represents the longer-term preservation of the building, which includes preventive maintenance funded by facility maintenance rates and build- ing preservation projects funded from the General Fund capital budget. In Options B or C, the social service agencies would pay lease costs equal to the O&M, so there would be partial funding for the added cost. In Option D, where there is full City Hall consoli- dation and redevelopment, there would be some existing lease and O&M payments that could be applied towards reducing the operations and maintenance costs for the new facilities. It is esti- mated that the City current contributes about one-half of the estimated O&M cost for the new facility on existing O&M, lease payments, major maintenance and capital costs for the locations that would be vacated when a new City Hall was opened. Given the City's structural budget imbalance, there is no obvious source of funding for a new on- going commitment of General Fund dollars of any net increase in O&M costs, however. If the council decides to authorize construction of this project, and assuming no change in the health of the General Fund, a future year budget process may have to reallocate existing General Fund dollars to the net increase in O&M on this facility.