City of Gonzales
PUBLIC WORKS / CITY ENGINEER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: August 1, 2022
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: Carmen Gil, Interim City Manager
SUBJECT: Presentation from City Staff with Updates on the Funding and Delivery of the Community Center Complex Project
RECOMMENDATION
Receive a presentation from City staff with updates on the funding and delivery of the Community Center Complex Project and provide feedback.
BACKGROUND
The Community Center Complex will be constructed on a City-owned parcel just east of Fairview Middle School and will comprise of the following elements:
1. A Community Center, with a large multi-purpose room, indoor/outdoor stage, flexible meeting rooms, restrooms, offices, and a teaching or catering kitchen
2. Monterey County branch library relocated from the Gonzales Shopping Center
3. A Teen Innovation Center.
4. On-site parking, landscaping, and areas for outdoor activities This staff report is comprised of the following sections:
• Funding/Financing Update
• Program Management and the update on the Design/Build Selection Process
FUNDING/FINANCING UPDATES
AGENDA
ITEM
9 The Community Center Complex is estimated to cost $34,800,000 for the Base Project and $42,800,000 for the Base Project and stand-alone Gymnasium. The cost estimate includes:
• Hard costs (Construction)
• Soft costs which are expenses associated with the architect, program manager/construction manager, environmental clearance, building permit review, and legal expenses • Fixtures, furnishings, and equipment
• Contingency for unforeseen costs
• Escalation to the mid-point of construction
The table below presents the current and potential funding for the project:
SECURED FUNDING
1 Teen Innovation Center Grant $5,000,000
2 Measure X $7,500,000
3 Community Development Block Grant $800,000
4 County Library Contribution $1,800,000
5 Electric Vehicle Charging Station Grant $400,000
6 Capital Campaign Contribution $2,000,000
Total Funds available as of 8/01/2022 = $17,500,000
BASE PROJECT COST ESTIMATE = $34,800,000
FUNDING GAP = $17,300,000
POTENTIAL ADDITIONAL FUNDING SOURCES
1 Capital Funding Campaign $8,000,000
2 Proposed Tax Measures $14,000,000
POTENTIAL ADDITIONAL FUNDING = $22,000,000
To address the funding gap, City staff and the rest of the project team developed a multi-prong funding approach, which includes pursuing and applying for grants, a capital campaign for private contributions, collaboration with the County for library contributions, and most recently recommended two Tax Measures for Council consideration.
o Grants – To date, staff has pursued five grants and the City has obtained approvals of three grants totaling $6,210,000.
o County Library Contribution – City project team and Monterey County staff have been working collaboratively on the design of the new library and the County’s cost share of the library construction. At its June budget hearings, the Board of Supervisors approved $1,800,000 as the County’s cost contribution toward construction of the new Library. The County will also be responsible for all furnishings, fixtures and equipment for the new library. o New tax measures - At the April 2, 2022 Council meeting, the City Council discussed and considered 1) extending the Sunset Timeframe of both Measure K and Measure X for another 20 years, from 2044 to 2064; and 2) An additional (new) half percent (0.5%) Transaction and Use Tax Increase (Measure D). Debt financing will be required to obtain Project funds from these long-term revenue sources.
Lastly, to obtain debt financing for the project, the City project team is coordinating with the US Department of Agriculture (USDA) for a 38-year loan that would be secured by long term City revenue sources. The USDA loan program is available to rural communities and offers the lowest interest rate as well as the longest repayment period, both of which are advantageous for the City.
Project funding is currently driving the project schedule. After the results of the August and November ballot measures are known and the Funding Campaign goals are met, the USDA loan application can be submitted. This is because the USDA loan application requires the City to demonstrate its financial capacity and dedicated revenue stream to repay the loan.
CAPITAL CAMPAIGN
The capital campaign team, led by Interim City Manager, Carmen Gil and Armanasco Public Relations, is working hard to generate additional funding and support for the project. Steps that have been taken thus far by the team include:
o The establishment of a Campaign Fund through the Community Foundation for Monterey County o Establishment of a Campaign Cabinet / Committee
o Establishment of list of potential donors and interested parties o Identified naming opportunities for the center
o Developed informational materials (campaign logo, pledge forms, donor letters and donor packet and electronic flipbook, which will be added as campaign goes into public phase – when 40-50% of the target funds are raised)
o Currently engaging in a plethora of meetings with potential donors to share about the project, gain interest and generate financial support.
The Capital Campaign Committee regularly meets to discuss efforts and progress.
Funds Generated to date: Taylor Farms will make a $2,000,000 contribution to the project and Santa Fe Foods has tentatively committed to a 3-year pledge totaling $40,000-$50,000. Other potential donors have indicated interest in supporting the project and are working to identify a dollar amount that works for them.
PROGRAM MANAGEMENT AND UPDATE ON THE DESIGN/BUILD PROCESS Swinerton Program Management staff have been very proactive in supporting the City with delivering the Community Center Project. Their efforts include the following:
1. Researched and found three substantial grant opportunities:
a. Electric Vehicle (EV) Charge Stations
b. BuildingForward library grant, and
c. State Park RRT grant for courtyard and amphitheater
2. Assisted with the five grant applications, providing program information such as defining eligible scope, cost details, exhibits, resolutions, and other supplemental grant required information.
3. Researched and found USDA loan program for Rural communities and have been working with USDA staff to establish and understand the requirements and criteria for loan; Coordination with City staff and NHA Financial advisors is ongoing.
4. Developed a Grant management program to assist in the tracking of eligible expenses, cashflow, reimbursements and document management requirements for future grant audits; This complex undertaking will also be important for Program management of the Project budget and expenses.
5. Developed a detailed spreadsheet of projected expenditures and required revenue. This will be a key document for the USDA loan process.
6. Swinerton developed a comprehensive cost estimate which has been used for applications of above grants and for the Design Build procurement process and USDA loan process.
As the Council’s aware, final design and construction of the Community Center Complex will be performed under a Design/Build contract. At the February 20, 2022, Council meeting, the top three Design/Build teams were selected. Also at the February 20, 2022, Council meeting, the Design Criteria document to be used in the Request for Proposals issued to the top three Design/Build teams was approved. The Design Criteria document includes 90 plan sheets and nearly 2,000 pages of technical specifications outlining the following:
o Specific requirements of the various building spaces
o Architectural programming criteria
o Descriptive narratives for key building systems (architectural, mechanical, electrical, and plumbing engineering, and specialty systems). This includes capability of installing a roofmounted solar photo-voltaic system in the future o Acoustic requirements between distinct building uses
o Low voltage requirements for building access control, security, audio/visual and communications
o Fire alarm/fire suppression requirements
o Building code analysis, including an evaluation of essential building requirements, if Community Center is desired as an Emergency Shelter
It’s important to note that the CEQA and NEPA environmental clearance for the project was completed with the filing of a Notice of Exemption with the County Clerk on April 1, 2022.
Due to the need to have the funding in place prior to executing a contract with selected Design/Build team, staff anticipates issuing the Request for Proposals (RPF) to the three prequalified Design/Build teams after the results of the August 30th Special Election and the November 8 th Election are final.
PROJECT SCHEDULE
TASK COMPLETION BY
1. Funding for $34.8 Million Base Project is secured and committed for the project to move forward Mid-November 2022
2. Issue RFP to the three shortlisted Design/Build teams Early Dec 2022
3. USDA loan approval & Execution Late Spring 2023
4. Select and Award Design/Build Contract Late Spring 2023
5. Design and building permit (12 months) Summer/fall 2024
6. Construction & commissioning (16 months) Fall 2025
7. Grand Opening Fall 2025
How Recommendation Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.
Explain: Constructing a Community Center will provide residents with a facility for a wide variety of public and private functions, recreation programs and other activities which will enhance the quality of life of Gonzales residents.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ____ No____ N/A
Explain: Please see explanation above for the Mission..
City services will be delivered in a cost-effective, respectful and friendly manner to insure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes ____No ____ N/A Explain: See Vision explanation above.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes ____ No ___ N/A
• Housing X Yes ____ No ___ N/A
• Recreation X Yes ____ No ___ N/A
• Environment X Yes ____ No ___ N/A
• Education X Yes ____ No ___ N/A
ALTERNATIVES
Not applicable as this is a progress report on the Community Center Complex Project.
BUDGET IMPACT
There is no budget impact to this evening’s presentation.
CONCLUSION
Receive a presentation from City staff with updates on the funding and delivery of the Community Center Complex Project and provide feedback.