City of Gonzales
PUBLIC WORKS / CITY ENGINEER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: April 1, 2024
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: Carmen Gil, City Manager
SUBJECT: Resolution 2024-10 USDA Loan for Community Center
RECOMMENDATION
It is recommended that the City Council adopt Resolution No. 2024-10, Resolution of the City Council of the City of Gonzales Authorizing and Providing for the Incurrence of Indebtedness for the Purpose of Providing a Portion of the Cost of Acquiring, Constructing, Enlarging, Improving, and/or Extending Its 2023 Community Center (Library and Teen Center) Facility to Serve an Area Lawfully Within Its Jurisdiction to Serve.
BACKGROUND
The Community Center Complex is estimated to cost $34,050,000. The construction of the project will be phased due to grant funding deadlines. Phase 1 will construct the Library, Teen Innovation Center, Courtyard, parking lot and landscaping. Phase 2 is the Community Center including the community hall, fitness center, commercial kitchen, meeting rooms and restrooms.
Phase 1 will be funded by a variety of sources including the following:
• Measure X (local sales tax) expected to provide $7,500,000 of project funding. • $5.0M State Grant for the Teen Innovation Center secured by State Senator Anna Caballero. • Community Development Block Grant (CDBG FY 2023-2024 and FY 2024-2025). • $1.8M County contribution to relocate existing library from the Gonzales Shopping Center. • Two grants (Electric Vehicle Charging Station Grant from the California Energy Commission and Building Forward Library Infrastructure Grant Program). • Capital Campaign with a $10.0M goal with pledges and contributions currently totaling $6.6M.
AGENDA
ITEM
7 The City applied to the US Department of Agriculture (USDA) for a low interest loan secured by City revenue sources, including Measure X. The formal application was submitted to USDA in July 2023 and the City received an approval letter from USDA in September 2023, indicating that a Rural Development Loan in the amount of $9,825,000 was approved for Phase 1 of the Community Center Project. The USDA Loan is effective upon completion of Phase 1, so staff is obtaining an Interim Construction Loan (“Bridge Loan”) to get the project going.
Construction of Phase 1 is anticipated to begin by May 1, 2024, and be completed in December 2025.
REVIEW AND ANALYSIS
The USDA’s September 20, 2023 Loan Condition letter is attached and lists the items the City is required to satisfy for the following project phases:
1. Prior to Construction
2. During Construction
3. After Project Completion
Staff and our consultants are currently addressing the twenty “Prior to Construction” conditions which include:
• Establishment of a Debt Service reserve account
• Insurance and Bonding
• Copies of various agreements with the Design/Build team, Construction Manager, and other third parties (i.e., Lease with the County for the library)
This staff report is to address Condition #3 which is City Council adoption of USDA’s Loan Resolution which is attached to this item (Resolution No. 2024-10).
Therefore, staff recommends the City Council adopt the attached resolution.
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 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
ALTERNATIVES
There are no alternatives to this item.
BUDGET IMPACT
There is no budget impact related to this item.
CONCLUSION
It is recommended that the City Council adopt Resolution No. 2024-10, Resolution of the City Council of the City of Gonzales Authorizing and Providing for the Incurrence of Indebtedness for the Purpose of Providing a Portion of the Cost of Acquiring, Constructing, Enlarging, Improving, and/or Extending Its 2023 Community Center (Library and Teen Center) Facility to Serve an Area Lawfully Within Its Jurisdiction to Serve
Attachments:
1. USDA September 20, 2023 Letter of Loan Conditions
2. Resolution No. 2024-10