HomeMy WebLinkAboutItem B - Community Safety Bldg.EUGENE CITY COUNCIL
AGENDA ITEM SUMMARY
Work Session: Community Safety Building Next Steps
Meeting Date: November 22, 2004 Agenda Item Number: B
Department: Central Services Staff Contact: Jim Carlson
www. cl. eugene, or. us Contact Telephone Number: 682-5524
ISSUE STATEMENT
This work session is to discuss next steps on implementation of the Community Safety Building project.
BACKGROUND
In 2001, the council began considering a long-range plan for replacing office space in the downtown
area. Since that time, numerous council meetings and decisions have been made to develop the long-
term plan to replace City Hall. The council action history is detailed in Attachment A.
Most recently, on July 26, the council placed a $6.79 million General Obligation Bond measure on the
November 2 ballot to partially fund implementation of the Civic Center Phase ! plan. At that time, staff
indicated that they would recommend constructing the basic Community Safety Building even if the
bond measure failed. The measure did fail, with a vote of 60% no to 40% yes.
The basic Community Safety Building is a 67,000 square foot building that is estimated to cost $28.2
million, as described in Attachment B. The building can be paid for entirely with internal City funds,
including the Facility Reserve, telecommunications funds, right-of-way revenues in the General Fund,
interest earnings on cash balances, and miscellaneous sources. The proposed financing plan is included
as Attachment C. As a result of the failure of the bond measure, no funding is currently identified for
additional space for social service agencies, additional public meeting rooms or expansion beyond 2008;
those items would need to be financed separately or in a future phase. If it is possible to include any of
these items with currently identified funding due to lower-than-estimated costs or identification of other
funding sources, that will also be considered.
If the City begins the process to design and build a basic Community Safety Building at this time, the
facility could be operable by early-2008. If the council decides to wait to construct a Community Safety
Building at a later date, the cost of the facility will increase with inflation over time. The council may
wish to address broader options for City Hall prior to moving forward with the Community Safety
Building at this time. Although a further delay would result in the Police Department continuing to
occupy inadequate space for its needs as well as resulting in the well-known seismic concerns going
unaddressed for the present, it's important to weigh all options and build community consensus.
Due to the different construction requirements for public safety services versus general office uses, staff
believes that it is most cost-effective in the long-term to construct two City buildings. This would
L:\CMO\2004 Council Agendas\M041122\S041122B.doc
include a Community Safety Building and a new City Hall. Even if the issue of rebuilding or replacing
the entire City Hall is addressed at this time, the first step still must be construction of a Community
Safety Building. City Hall could not be rebuilt until the Police are relocated to a structure that meets the
essential facility seismic level required by code. In addition, the Community Safety Building needs to
be designed for maximum flexibility, including room on the site for horizontal expansion, in order to
meet the future space need requirements of the Eugene Police as well as potential partner organizations
such as victim service agencies.
If funding is approved for the Community Safety Building either in whole or in part, the City can select
and contract with a design team for the purpose of completing conceptual design work, including a
public participation process. Completion of design to this level will establish overall design goals,
building performance expectations, and a budget for construction. When this conceptual design is
completed, staff would return to the council for a subsequent work session to present the results of the
public participation process, provide information on alternative project delivery methods (e.g. Design-
Build and Construction Manager/General Contractor), and make a recommendation as to the most cost-
effective project delivery strategy. Regardless of the project delivery method used, design of the site
and building needs to be advanced to approximately the 25-30% stage of completion prior to initiating
the next contract phase.
An alternative approach would be to develop a master plan for the entire City Hall replacement,
including a Community Safety Building, before going forward with the next construction project. This
process would address the following issues: i) public input; ii) potential co-location with partner
agencies; iii) level of consolidation of general office functions; and iv) phasing of buildings in the
development. If this approach were taken, staff would come back to the council after getting public
input to define the next steps in the design process.
When the original financing plan was developed for this project, some of the revenues were subject to
legal action. Because the Qwest v. City of Portland lawsuit was settled in October, the $10.2 million
included in the financing plan from payments of the Telecommunications Tax plus the $5.2 million of
right-of-way revenues in the General Fund that had been deferred are now able to be recognized as
revenues and used for this project. As has been mentioned at previous work sessions, staff would not
sign a construction contract for this project if the telecommunications revenues were still subject to
potential refund under a pending lawsuit. Attachment D includes a memorandum from the City
Attorney regarding the legal risk of using these funds for the Community Safety Building.
RELATED CITY POLICIES
The Community Safety Building relates to the council goals of an effective, accountable municipal
government, a safe community, and sustainable community growth and change.
COUNCIL OPTIONS
Option 1: Take no action at this time.
Option 2: Direct the City Manager to include an item in Supplemental Budget #1 that moves $10.2
million of Telecommunications Taxes and $5.2 million of right-of-way revenues in the
General Fund into the Facility Reserve, to be allocated to specific projects at a later time.
L:\CMO\2004 Council Agendas\M041122\S041122B.doc
Option 3: Direct the City Manager to appropriate $300,000 of funding for conceptual design of the
Community Safety Building on Supplemental Budget gl. (This could be done in
conjunction with Option 2 above.)
Option 4: Direct the City Manager to include an item in Supplemental Budget gl that provides funding
for the basic Community Safety Building, as described in Attachments B and C.
Option 5: Direct the City Manager to appropriate $750,000 of funding on Supplemental Budget gl for
a master plan for development of a City Hall and a Community Safety Building. This
process would address the following issues: i) public input; ii) potential co-location with
partner agencies; iii) level of consolidation of general office functions; and iv) phasing of
buildings in the development.
CITY MANAGER'S RECOMMENDATION
The City Manager recommends a combination of Option 2, which would move $10.2 million of
Telecommunications Taxes and $5.2 million of right-of-way revenues in the General Fund into the
Facility Reserve, and Option 5, which would include appropriation of $750,000 of funding for a master
plan for a City Hall and Community Safety Building. Both of these items would be included on
Supplemental Budget gl.
SUGGESTED MOTION
Move to direct the City Manager to transfer $10.2 million of Telecommunications Tax revenues from
the Telecommunications Fund and $5.2 million of previously deferred right-of-way fees from the
General Fund to the Facility Reserve, and appropriate $750,000 for a master plan for a City Hall and a
Community Safety Building on Supplemental Budget gl.
ATTACHMENTS
A. Council Action History on the Downtown Space Plan
B. Description of Basic Community Safety Building
C. Financing Plan for Basic Community Safety Building
D. Memorandum from the City Attorney Regarding Use of Telecom Revenues
FOR MORE INFORMATION
Staff Contact: Jim Carlson
Telephone: 682-5524
Staff E-Mail: James. R. Carlson~ci.eugene.or.us
L:\CMO\2004 Council Agendas\M041122\S041122B.doc
ATTACHMENT A
COUNCIL ACTION HISTORY ON DOWNTOWN SPACE PLAN
On April 11,2001, council was presented with the concept of developing a long-range plan for replacing
downtown office space. The plan included both potential short-term and long-term actions. Council
directed staff to research a variety of ways to procure City buildings, including design/build, and report
back to council before the planning phase begins for the next new City building.
On April 25, 2001, council was offered several potential short-term actions to create a safer, more effi-
cient environment for staff located in City Hall. Council directed the City Manager to (i) develop
programming, space needs and site requirements for relocating certain police functions; (ii) develop a
long-term master plan for future use of the property in Roosevelt Yards by the Police and Public Works
Departments and a financial plan for implementation, including consideration of redevelopment options
for more efficient land use; (iii) dedicate the proceeds from the sale of four surplus properties to the
Facility Replacement Reserve; and (iv) identify and recommend an appropriate downtown site for pur-
chase for Fire Station #1, with a report back to council with final site selection prior to purchase.
On May 16, 2001, council directed the City Manager to develop a financial strategy and implementation
plan for replacing City Hall and other downtown City office space with new buildings. The council's
direction included: consideration of possible joint development with other agencies; consolidation;
locations along 8th Avenue from Oak Street to the river as well as possible sites for joint development
with other agencies; and, potential for use of some of the warehouse and historic structures east of Mill.
The 2001-2002 Council Goals included an action priority to "Develop a strategy and implementation
plan for City downtown office and public safety facilities." One of the three work items was to adopt a
policy framework for long range plans to help guide decisions on reinvestment in existing City buildings
downtown. A policy for the maintenance and preservation of City Hall and the Public Works Building
was presented to council on July 5, 2001. This policy reduced the level of reinvestment to provide for
an expected 8 to 10 years of continued use.
On September 19, 2001, council addressed near-term and long-term projects by directing that relocation
of Special Operations and EPD personnel in the basement of City Hall, and relocation of Fire Station #1
should be the first priority of projects in the Downtown Space Plan. Construction of a new Police Ser-
vices building and City Hall were the next projects, with design for the Police Services building project-
ed to begin in FY05, and a replacement of City Hall was targeted to begin design in FY08.
The September 19, 2001, council item on the Downtown Space Plan included a description of internal
and external funding sources to implement the eventual replacement of City Hall with new buildings.
Council approved the staff recommendation that the projected funding gap be met with a combination of
the dedication of additional General Fund resources and General Obligation Bonds. One of the pro-
posed internal mechanisms, the payment of market based "rent" by services that would be located in
new downtown buildings, was the topic of a work session on November 26, 2001. The "market rent"
concept was incorporated as an on-going City practice beginning in the adopted FY03 Budget.
On February 25, 2002, council approved a resolution to fund the construction of the new Fire Station #1
through General Obligation Bonds, with City resources funding non-bond eligible capital costs.
L:\CMO\2004 Council Agendas\M041122\S041122B.doc
At a May 22, 2002, work session, council approved the location of the Roosevelt Police Facility, a
financing plan over two fiscal years using City resources from the Facility Reserve, and the use of a
Construction Manager/General Contractor (CM/GC) form of construction management. Council
adopted funding for the Roosevelt Police Facility on FY02 SB #3 and on FY03 SB #1.
On October 29, 2003, council held a work session on the Downtown Space Plan, focusing specifically
on the need for a new Police services building. Council directed staff to bring recommendations back on
the preliminary planning, cost and financing of a new Police Services building. Several councilors
asked for more information on how a new Police building would fit with future plans to replace City
Hall, and for development of a more general "civic center" concept.
On November 17, 2003, staff presented the Multi-Year Financial Plan to the Budget Committee. This
plan identified both the capital and operating needs for the entire organization over a six-year period.
The police building was listed as a high priority need in the MYFP, and replacement of City Hall was
also included as a future project.
On November 19, 2003, council held a work session on sequencing of financial measures to be present-
ed to the voters. The staff materials indicated that a bond measure for a police building would be the
next potential item to be presented to voters in November 2004. Council discussed the materials, but did
not provide any direction or make any decisions at the work session.
On February 25, 2004, council held an informational work session on the Civic Center Design Charrette
and the Mayor's Civic Facilities Visioning Committee. On April 28, 2004, a work session was held to
update council on the Mayor's Civic Facilities Visioning Committee and on financing plan options, bor-
rowing methods and construction methods that could be applied to a new police facility. On June 16,
2004, council reviewed the report of the Mayor's committee and asked that a public hearing be held on
the proposed policy principles that would guide future Civic Center development. A public information
session was held on July 8 and the public hearing on July 12.
On July 14, 2004, council held a work session on the Civic Facilities Visioning Committee Report and
adopted a revised set of Civic Center policy principles. They also determined that a City Hall and Police
Building would be located on City-owned property on 8th Avenue.
On July 21, 2004, council continued discussion of a potential bond measure for the November 2004
ballot. The council directed the City Manager to develop a resolution to place a measure on the ballot
based on an option that would combine near-term space needs with modest Civic Center amenities. On
July 26, 2004 council placed a $6.79 million bond measure on the November 2004 ballot. The measure
was to fund social service agency space, police expansion space, improvements to the parks blocks, and
improvements to make 8th Avenue a "Civic Street". On November 2, 2004, voters rejected ballot
measure 20-88 by a margin of 60% to 40%.
L:\CMO\2004 Council Agendas\M041122\S041122B.doc
ATTACHMENT B
DESCRIPTION OF BASIC COMMUNITY SAFETY BUILDING
The basic Community Safety Building is a 67,000 square feet facility that will support current Police
functions. This facility would accommodate current Police needs without expansion space and would
include a back-up 911 Center. This facility would be almost twice the size of the space currently occu-
pied by Police in City Hall.
The Police Forensic Evidence and Property Control Units (FEU/PCU) would remain at Roosevelt and
Garfield. After evaluating how operations are affected by having this function located outside the down-
town area, a future phase could bring this function back downtown if it is considered desirable.
No additional space would be provided at this time for social service agencies, additional public meeting
rooms or expansion beyond 2008, although those items could be done separately or in a future phase. If
it is possible to include any of these items during design due to lower-than-estimated costs or other fund-
ing sources, that will also be considered.
"Civic Street" pedestrian improvements to 8th Avenue would be limited to the block-long segment on
the south side of 8th occupied by the new Community Safety Building.
The project costs for this basic facility are set out in the chart below.
Basic Community Safety Building Design Components
COMPONENT Size (sf) Cost
Base building w/parking for 2008 need 65,000 $25,358,000
Back-up 911 Center 2,000 $600,000
Telecom Equipment (excluding 911) -- $163,000
Furniture, Fixtures, & Equipment -- $1,715,000
"Civic Street" improvements - 1 block -- $150,000
Moving costs -- $50,000
Finance costs $150,000
Total 67,000 $28,186,000
L:\CMO\2004 Council Agendas\M041122\S041122B.doc
ATTACHMENT C
FINANCING PLAN
The basic Community Safety Building can be paid for entirely with internal funding to come from cur-
rent and ~uture Facility Reserve resources and other one-time ~unds. According to the council-adopted
Financial Management Goals & Policies, Policy C.6., the City will use non-recurring revenues (i.e., one-
time money) on limited-duration services, capital projects, equipment requirements, or services that can
be terminated without significant disruption to the community or City organization. The one-time
resources included in the financing plan are appropriately used for a high-priority capital projects such
as the Community Safety Building under this policy.
The following chart summarizes the proposed financing plan. Note that the specific amounts are esti-
mates and are subject to change.
Basic Community Safety Building Financing Plan
Source Amount
Facility Reserve $11,223,000
Telecommunications Funds
1X$ from Settlements 10,200,000
On-Going Telecom Funds 763,000
ROW Revenues in General Fund 5,200,000
Interest Earnings on Cash Balances 750,000
Other Miscellaneous Sources 50,000
Total $28,186,000
Funding Sources
The specific funding sources included in the financing plan are described below.
Facility Reserve Balance: The City has been setting aside funds for replacement of City Hall for sev-
eral years. As a result, the FY05 budget includes a balance in the Facility Reserve of a little over $7.5
million. It is anticipated that approximately $3.9 million of additional funds will be added to the reserve
during FY06 through FY09 from capital replacement charges and repayment of the Risk loan. There-
fore, just over $11 million is available for funding of the Community Safety Building. Because Facility
Reserve amounts are relied on beyond the end of the construction date, the City will have to enter into
interfund loan agreements in order to pay the construction costs and repay the loans when future Facility
Reserve amounts are available.
Telecommunications Funds: In December 2003, the Oregon Supreme Court ruled in favor of the City
affirming the City's right to collect the 2% telecommunications tax on non-local exchange revenue. In
April 2004, the City received roughly $9 million representing Qwest's interpretation and calculation of
payment of the tax and interest on revenues earned from July 1997 through December 2003. This pay-
ment represents the last of the large expected past period payments/settlements of the telecommunica-
tions tax. After consulting with the City Attorney, accountants and auditors, and based on Qwest's
L:\CMO\2004 Council Agendas\M041122\S041122B.doc
assertion that their payment was contingent on the resolution of a separate legal challenge, recognition
of this payment was also deferred until that case was decided by the 9th Circuit Court of Appeals. Now
that the court has ruled in the City' s favor, these revenues have been recognized and are available for
appropriation. The City is also expecting about $800,000 from Qwest during FY05. The total of these
two amounts, $10.2 million, is included in the financing plan for the Community Safety Building. The
City Attorney has opined that the risk of having to refund these fees to Qwest is "very unlikely".
Nevertheless, staff would not sign a construction contract until the legal issues surrounding these
revenues are finally resolved.
While past council direction has devoted funding from the telecommunications tax to telecommuni-
cations projects of community benefit, the settlement payments provide a unique opportunity to fund a
large portion of the Downtown Space Plan projects. This large one-time resource is also appropriately
used for a high-priority capital project under the City's financial policies. The figures shown in the
financing plan represents the deferred revenue amounts plus the amount needed for telecommunications
projects within the building.
Right-of-Way Revenues in the General Fund: The City has been the subject of legal challenges to the
imposition of right-of-way revenues in the General Fund. In addition, the City has been performing
audits on some of the payers of the right-of-way fees. The largest of these revenues is related to the
Qwest lawsuit. Qwest appealed the US District judge ruling favoring the City and the 9th Circuit Court
ruled in the City's favor in October 2004. Consistent with the City's practice of deferring recognition of
contested revenues, the City had deferred recognition of these revenues while awaiting the decision of
the court. As of June 2004, the City recognized approximately $3.9 million and an additional $1.3
million was expected to be received during FY05. The sum of these amounts equals the $5.2 million
included in the financing plan. As mentioned above, the City Attorney has given an opinion that the
chance that Qwest would be successful in any attempt to have these fees refunded is "slim". Staff
would not, however, sign a construction contract based on these revenues until the legal issues are
resolved.
Interest Earnings on City Cash Balances: As cash sits in City coffers until it is needed for design or
construction cost, interest will accrue. For City cash funded projects, it is appropriate to include a con-
servative amount for estimated interest earnings.
Other Miscellaneous Funds: A number of other miscellaneous funding sources could be applied to this
project. For instance, it might be possible to sell energy tax credits, to receive EWEB energy rebates, or
to receive grants from other levels of government for the project. A small placeholder is shown in the
financing plan for these kinds of items.
Operating and Maintenance Costs
Although not part of the plan for financing the capital costs, it is important to consider the estimated
operating and maintenance costs for the new building. The preliminary estimate of the ongoing O&M
costs for a basic Community Safety Building would equal $1.1 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 mainten-
ance funded by facility maintenance rates and building preservation projects funded from the General
Fund capital budget. There will be a reduction in the amount needed to maintain any space that is no
L:\CMO\2004 Council Agendas\M041122\S041122B.doc
longer occupied by Police in the current City Hall, and those freed-up funds can be used to offset some
of the maintenance costs of the new facility. In addition, the building preservation portion of the O&M
costs could be phased in over time.
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 author-
izes 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 pay for the net increase in O&M
on this facility.
L:\CMO\2004 Council Agendas\M041122\S041122B.doc