CITY AQUATIC CENTER;
FUNDING RECOMMENDATION
AND OPTIONS
CITY COUNCIL
FEBRUARY 21, 2023
BACKGROUND
• Jan/Feb 2020: Community workshops and City Aquatic Center conceptual design developed. Due to pandemic, potential bond funding was not considered for the November 2020 ballot.
• August 2020: Recreation & Parks Commission recommended the conceptual design, including an indoor pool.
• Feb 2022: City Council discussed pools and provided general direction to staff to pursue ways to fund both a City Aquatic Center and fund 50% to renovate Emma Hood Swim Center.
• For FY 2022-23, City Council allocated up to $7.5 million to fund 50% equal cost sharing with AUSD to renovate the Emma Hood Swim Center at Alameda High School.
• October 2022: City Council recommended a City Aquatic Center, located on the western side of Sweeney Park with funding 50% from the General Fund reserves and financing the remaining 50%.
AQUATIC CENTER BENEFITS
•Addresses continued pool space deficiencies in Alameda. •Allows consistent aquatic offerings and increased number and types of year-round, all-day programming both recreational and competitive.
•Creates adequate pool space to serve all youth who want to participate in community aquatic teams.
•Opportunity to build out remaining area of Sweeney Park in cost effective way – community garden, open space areas, seed/tool lending library and moving the fence to city property line.
AQUATIC CENTER FUNDING
•Estimated Cost: $30 million
•Conservative estimate with goal to include funding completion of the park
• Final scope depends upon the economy and construction costs over the next few years.
•City Council approval to fund 50% from Unassigned Residual General Fund Balance in Excess of Reserve Policy; remaining 50% from COP financing
•Funding Options
• Certificate of Participation
• General Obligation Bond
COPS FUNDING MECHANISM
•Certificate of Participation (COPs) – estimated interest rate 3.95% •Long-term financing through a lease agreement that does not require voter approval.
•Payments funded by General Fund and any available aquatic program revenues.
Annual Debt Service Estimate
Note: interest rates are estimated for
discussion purposes and likely to change
Financed Project Funds Estimated Annual General Fund Debt Service Payment for 30-year COPs
$15 million $1.04 million
$20 million $1.38 million
$30 million $2.06 million
GO BOND FUNDING MECHANISM
•General Obligation (GO) Bond – requires 2/3 voter approval with earliest ballot being November 2024 and possibly Nov. 2026 •Funded by annual levy of residential property and does not impact the General Fund. Estimated interest rate 3.85%
•Most secure financing option and lower interest rate than COPs.
Finance Amount Levy Estimate per
$100,000 AV
Annual Levy for 30 Years Based on
$558,170 Median Residential Property AV
$15 million $3.23 $18.03
$20 million $4.31 $24.06
$30 million $7.36 $41.08
FINANCING COMPARISON
Comparison of Financing Types
Considerations Certificates of Participation
(COPs)
General Obligation
Bond
Requires voter approval No Yes, earliest date to
ballot is Nov 2024
Creates new revenue to
fund debt service No
Yes, funds come from
ad valorem property tax
Shorter time to
construction
Yes, as this option does not
require voter approval, COPs
allow for construction to start
sooner.
No
FINANCING COMPARISON
Funds Needed to Construct
the Aquatic Center
$15,000,000 $20,000,000 $30,000,000
Funding from Residual
General Fund Balance
$15,000,000 $10,000,000 $0
Certificate of
Participation
Est Annual Debt
Service paid by
General Fund
$1,040,069 $1,379,648 $2,057,800
General
Obligation
Bond
Est Annual Debt
Service paid by
Ad Valorem
Property Tax
$940,014 $1,253,352 $1,869,424
UNASSIGNED RESIDUAL GENERAL FUND
BALANCE ABOVE RESERVE POLICY
Fiscal Year Unassigned General Fund Balance Above Reserve Policy
FY 21-22 $40.22 million
FY 22-23 $33.59 million (FYE estimated)
Net of Council appropriations of $8.86 million including $7.5M for Emma Hood Swim Center
Forecast $18.59 million
Assumes $15 million appropriated toward Aquatic Center
Balance Totals shown are in addition to the 20% General Fund reserve and one-time policy transfers toward OPEB and pension.
ONGOING COSTS
•Current aquatic programming and rentals = 64% cost recovery • Includes with limited times and interrupted use
•Aquatic Center estimated to increase cost recovery to 80% or more • Strong potential for $3 million annual revenue after initial start up years Estimated Annual Total Expense
Facility Operations $ 700,000
Staffing and supplies $ 1,330,000
Replacement (“sinking”) fund $ 250,000
Expense total $ 2,280,000
GENERAL FUND OPERATIONS
NET EXPENSE
Cost
Recovery
Total Annual Net
General Fund
Operating Expense
COP Est Annual
Payment Based on
$15M Financed
Annual Est Total
70% $ 684,000
$1,040,069
$1,724,069
80% $ 456,000 $1,496,069
90% $ 228,000 $1,268,069
100% $ 0 $1,040,069
Total annual expense does not include payments to the Alameda Unified School District (AUSD) for 50% of operation and maintenance costs for the Alameda High and Encinal High Swim Centers under the City/AUSD Joint Use Agreement.
RECOMMENDATION
Fund the City Aquatic Center, conservatively estimated at $30 million with $15 million from the Residual General Fund Balance in Excess of Reserve Policy and finance the remaining project construction costs from COPs
NEXT STEPS
•Final approval by City Council on funding mechanism tonight •Next steps include:
1) Issue a Request for Proposals for a project manager
2) Issue a Request for Proposals for a design/build team 3) Bring that design/build contract to City Council for final approval 4) Community input process on design
5) Design, permits, and construction
6) Allocate operation and maintenance budget
7) Open a City Aquatic Center to the Alameda community
•Project is approximately 3 years from start to completion