City of Gonzales
PUBLIC WORKS / CITY ENGINEER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: September 19, 2022
FROM: Patrick Dobbins, Acting City Manager
THROUGH: Carmen Gil, Interim City Manager
SUBJECT: Update on the Funding and Delivery of the Community Center Complex Project
RECOMMENDATION
It is recommended that the Council receive a presentation from City staff with updates on the funding and delivery of the Community Center Complex Project, and provide any feedback.
BACKGROUND
The Community Center Complex will be constructed on a city-owned parcel at Gabilan Court/Fifth Street, just east of the 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, fitness room, 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 The project will be designed and constructed through Design/Build contracting. Last summer and fall, after undergoing a robust community engagement effort by City staff, Swinerton and Group 4 Architects, a building and site program was developed, reflecting input from the Community and Council. In addition, Swinerton, took the lead in the coordination efforts with Monterey County Free Library staff, for development of the new library program, library cost estimates for cost sharing, state and private grant applications, scoping of improvements so library can also function as a Community Emergency Shelter.
The product of these effort resulted in the approved Design Criteria documents comprised of 98 sheets of plans, a three-volume set of technical specifications and other guidance documents.
AGENDA
ITEM
18 At the February 22, 2022, Council Meeting, the Design Criteria Documents were approved and the three top ranked Design/Build Entity teams out of the seven DBE teams that submitted Statement of Qualifications were “short-listed” to receive the Request for Proposal.
This staff report is comprised of the following sections:
• Funding/Financing Updates
• Consideration to Phase Construction of the Project
FUNDING/FINANCING UPDATES
The Community Center Complex is estimated to cost $34,800,000 for the Base Project consisting of the Community Center, Teen Innovation Center, County Library and all site work. An additional $8,000,000 is the estimated cost for the stand-alone Gymnasium. Design & construction of this significant project will be funded by a variety of sources including the following:
• Measure X (local sales tax)
• $5.0 M State budget earmark from State Senator Anna Caballero • Community Development Block Grant (CDBG FY 2022/23 and FY 2023/24) • County contribution to relocate existing library from the Gonzales Shopping Center • Various grants
• Capital Campaign with a $10.0 million goal
The details on some of these funding sources are as follows:
Local Sales Tax Measures - Measure X is the local 0.5% sales tax approved by Gonzales voters in November 2020. Measure X is expected to provide $7,500,000 in funding. At the April 2, 2022, meeting, the Council approved placing a new sales tax increase (Measure D) on a special election held on August 30. Measure D was a dedicated sales tax that required 66.7% voter approval to pass and unfortunately, Measure D didn’t receive the supermajority needed to pass. A 20-year extension of Measure X is on the November 8 ballot and if successful by a simple majority, could generate up to $3,500,000 additional funds for the project.
$5.0M State budget earmark from State Senator Anna Caballero – This grant is for the Teen Innovation Center. On February 22, 2022, the City Council adopted Resolution 2022-17 to accept the State grant funds and the grant agreement was fully executed on August 31, 2022.
Grants – To date, staff with very proactive support from Swinerton staff submitted for five grants and the City has obtained approvals of two grants totaling $2,111,955. The successful grant applications are:
• Electric Vehicle Charging Station Grant from the California Energy Commission - $400,000 of the $1,041,955 grant is for the Community Center, the remaining grant funds are for EV charge stations at City Hall and 5th Street/US 101 Shopping Strip. • Building Forward Library Infrastructure Grant Program - On September 12, 2022 we learned the project was approved for a $1.07M grant from the Building Forward Library Infrastructure Grant Program.
This table 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 $810,000
4 County Library Contribution $1,800,000
5 Electric Vehicle Charging Station Grant $400,000
6 Building Forward Library Grant Program $1,067,430
7 Capital Campaign Contribution $3,500,000
Total Funds available as of 9/15/2022 = $20,077,430
Base Project Cost Estimate = $34,800,000
Funding Gap = $14,722,570
POTENTIAL ADDITIONAL FUNDING SOURCES
1 Capital Funding Campaign $6,500,000
2 Measure X Extension (November 8 election) $3,500,000
3 City Development Impact Fees (assumes 1,000 new homes) $4,811,000 Potential Additional Funding = $14,811,000
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.
After the results of the November ballot measure is known and the Funding Campaign goals are met, the Final 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.
CONSIDERATION TO PHASE PROJECT CONSTRUCTION
Given the current funding gap and current funding commitments for the Teen Innovation Center and Library, as well as time limitations for the respective grants, there is a compelling reason to move forward with a phased project approach. The Teen Innovation Center, Library, community room, courtyard and a portion of the parking lot can be designed and constructed as Phase 1, at a cost estimate of $21M to $22M. Funding for Phase 1 can be anticipated by this December, through voter approval of the Measure X extension for 20 years. Additional financing and phasing details for the entire project will be included in the staff presentation.
PROJECT SCHEDULE
TASK COMPLETION BY
1. Funding for $21 Million for Phase 1 – can be secured with passage of Measure X extension 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 (8-9 months) Summer 2024
6. Construction & commissioning (14-16 months) Spring/Summer 2025
7. Grand Opening of Phase 1 Late Summer 2025
REVIEW AND ANALYSIS
Explain Recommendation and How it 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 ensure 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 Yes X No N/A
• Housing Yes X No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: See above.
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
It is recommended that the Council receive a presentation from City staff with updates on the funding and delivery of the Community Center Complex Project, and provide any feedback.