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Agenda packet, workshop

Menifee City Council
June 7, 2023

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Agenda packet, workshop
Meeting
June 7, 2023
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Menifee City Council
Pages
4
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Text extracted from the city's file for reading and search. Open the original on cityofmenifee.primegov.com. That file is the official record.

City Council Chambers
29844 Haun Road
Menifee, CA 92586
Bill Zimmerman, Mayor
Bob Karwin, District 1
Ricky Estrada, District 2
Lesa Sobek, District 3
Dean Deines, District 4
SPECIAL AGENDA
Menifee City Council
Special Meeting Agenda
Wednesday, June 7, 2023
3:00 PM Special Meeting
Armando G. Villa, City Manager
Jeffrey T. Melching, City Attorney
Stephanie Roseen, Acting Clerk
SPECIAL MEETING (3:00 PM)

1. CALL TO ORDER

2.  ROLL CALL

3.  PLEDGE OF ALLEGIANCE

4.  WORKSHOP

4.1 City Facilities Planning Update
RECOMMENDED ACTION

1.  Receive a City facilities planning update and provide input regarding the sequencing of the City Hall, Police Department Headquarters, and Public Works Maintenance and Operations Center projects.

5. ADJOURN
Decorum Policy Notes
Public participation is anticipated and encouraged at meetings. Please turn your cell phones off or refrain from talking in the audience or outbursts that may be disruptive. Mutual respect is requested.

Staff Reports
Materials related to an item on this agenda, including those submitted to the City Council after distribution of the agenda packet, are available for public inspection at City Hall located at 29844 Haun Road or by contacting the City Clerk Department at (951) 672­6777 during normal business hours.

Compliance with the Americans with Disabilities Act
If you need special assistance to participate in this meeting, you should contact the City Clerk Department at (951) 672­6777. Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements to assure accessibility to this meeting.

Menifee Mayor and City Council

June 7, 2023
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CITY OF MENIFEE
SUBJECT: City Facilities Planning Update
MEETING DATE: June 7, 2023
TO: Mayor and City Council
PREPARED BY: Rebekah Kramer, Assistant to the City Manager REVIEWED BY: Rochelle Clayton, Assistant City Manager
APPROVED BY: Armando G. Villa, City Manager
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RECOMMENDED ACTION

1. Receive a City facilities planning update and provide input regarding the sequencing of the City Hall, Police Department Headquarters, and Public Works Maintenance and Operations Center projects.

DISCUSSION
Since incorporation in 2008, the City of Menifee has grown by 70%. Currently, Menifee is the fourth fastest growing city in California with population over 110,000 residents with predictions showing 150,000 residents by 2045. To keep pace with the population growth and to enhance municipal services in our community, in July 2020, the City established the Menifee Police Department. With this growth over all departments, the City’s existing facilities are at capacity and cannot support additional personnel. With the level of growth that is projected for the next two decades it is clear that the City’s existing facilities are not adequate to meet the long term needs.

Given the cost and complexity of the City’s facility development projects, careful consideration will need to be given to the timing of each project, particularly in relation to the three largest facilities:

City Hall, the Police Department Headquarters (PD HQ), and the Public Works Maintenance Operations Center (PW MOC).

Currently, the property housing City Hall operations within the Haun Medical Campus has a ten- year lease that extends through March 14, 2029. Additionally, there is a second lease that is housing a portion of the City’s Information Technology Department (IT) within the same complex that extends through May 2027, with a five-year renewal option. Together these two locations contain over 26,000 square feet of office space with a combined annual lease payment that is just under $800,000. Under the existing terms, the lease rate for these facilities is expected to increase to over $1.5 million by the end of the lease period.

Item Title: 4.1
City Facilities Planning Update
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City of Menifee Staff Report
City Facilities Planning Update
June 7, 2023

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The City holds two leases on the property housing the PD HQ located on Haun Road. With the renewal options, these two leases will extend into 2034. Combined, the current payment is over $520,000 per year and projected to reach just under $700,000 annually by the end of the lease terms. The newly acquired Bank of America building located on Cherry Hills Boulevard will replace the existing police substation providing an additional 7,600 square feet. This facility will allow for service expansion to meet the needs of the PD in the near term. Collectively, these three facilities provide over 28,000 square feet of space. To support PD operations the City has invested $2.1 million in facility/site improvements including added parking, security fencing, lighting, and communications equipment.

The existing PW MOC is a City owned facility. Over $600,000 in site improvements have been made to support the PW fleet, maintenance, and operations services in the existing facility. While these investments address the immediate operational needs of the department, additional space will be required to adequately manage these services in the long term.

Table 1 below provides a summary of the existing facilities housing City Hall, PD and PW MOC operations.

TABLE 1 – City Hall, PD and PW MOC Facility Summary
Facility Size
(Square Feet)
Lease
Term
(w/Renewal
Options)
Current
Lease
Payment
Projected
Maximum
Lease
Payment
Percent
Increase
City Hall 25,032 3/14/2029 $722,424 $1,471,054
IT 1,797 5/31/2032 $61,457 $71,6811
TOTAL 26,829 $783,881 $1,542,735 96.8%
PD Headquarters (HQ) 14,749 3/31/2034 $372,701 $500,879 PD HQ Vacant Land/
Modular Buildings
5,040 6/30/2034 $151,022 $193,723
Police Substation
(Former Bank of America
Bldg.)
8,898 City
Owned

N/A N/A
TOTAL 28,687 $523,723 $694,602 32.6%
Public Works MOC 1,200 City
Owned

N/A N/A

1. Calculated through current term ending 5/31/2027. If renewal option is exercised lease will be set at market rate on 6/1/2027.

Long Term Planning
The City owns property in multiple locations able to accommodate the construction of new permanent buildings needed to house City operations. These locations include the anticipated site of the future City Hall (located on Town Center Drive and City Hall Drive), and the property at Bradley Road and Cherry Hills Boulevard, adjacent to Fire Station 7, that could support both the PD HQ and PW MOC.

In 2022, staff worked with Ferguson Pape Baldwin Architects (FPBA) to assess the current and future operational space needs for all three facilities (attached). During the City Council meeting on October 19, 2022, these assessments were presented, providing an analysis of the maximum Item Title: 4.1
City Facilities Planning Update
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City of Menifee Staff Report
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space requirements anticipated for each facility based upon the City’s growth projections for the next two decades, in relation to the size of the City owned properties capable of supporting the specified City services. This information was used to confirm that the projected size of each facility could be accommodated on the identified properties. It is important to note that these assessments were prepared as a starting point in the facility development process. The ultimate size, layout, and design elements for each facility will be developed with the next phase of each project.

The City has taken a number of preliminary steps in preparation for the development of the future City Hall project. The design of the Civic Center parking lot, located at Town Center Drive and City Hall Drive, is well under way and construction is anticipated to begin this summer (CIP 22- 24). Once completed, this parking lot will serve the future City Hall as well as Central Park and the future amphitheater (CIP 19-15). Additionally, $4.75 million has been placed in reserves for the City Hall project that could be allocated to the pre-development/design phase.

Next Steps
The City Hall, PD HQ, and PW MOC facility development projects will require significant investments in terms of human and financial capital. With this in mind, in August 2022, the City engaged Urban Futures to work with staff to evaluate available financing options and to begin to develop a financing plan to support the City’s public facility infrastructure needs. Established in 1972, Urban Futures is one of California’s leading municipal financial advisory firms serving hundreds of California cities, counties, and special districts. This includes numerous public facility projects taking place in Riverside County including the Cities of Beaumont, San Jacinto, Desert Hot Springs, Eastvale, Lake Elsinore, and Coachella.

Urban Futures provided the City with the 10-year forecast model used to develop the financial projections needed to gage capacity to support the City’s long term operational and capital needs.

As a next step, the Urban Futures team has worked with City staff to evaluate the feasibility and readiness of the City Hall, PD HQ, and PW MOC facility projects. During the City Council workshop taking place on June 7, 2023, Urban Futures will include a review and discussion of the existing lease terms, projected costs, and available resources related to each of these facilities to identify the preferred project sequencing. Based upon the input received during the Council workshop, staff will work in collaboration with Urban Futures to prepare an overview of the available project delivery options for review and discussion with the City Council this fall, in keeping with the Strategic Plan objective to develop a facility development plan by December 2023. After determining the project delivery method, staff will initiate a request for proposal/qualifications process and prepare a contract award for consideration by the spring of 2024.

STRATEGIC PLAN OBJECTIVE
Community Engagement and Social Infrastructure
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City Facilities Planning Update
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City of Menifee Staff Report
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FISCAL IMPACT
There is no fiscal impact associated with receiving this report. The fiscal impact of the facility development projects will depend upon the timing of each project in combination with the selected project delivery method presented for consideration at a future City Council workshop.

ATTACHMENTS

1. Presentation

2. Menifee City Hall Needs Assessment

3. Menifee Police and MOC Needs Assessment
Item Title: 4.1
City Facilities Planning Update
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City Facilities Planning
Workshop
June 7, 2023
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2 Workshop Overview
• Introductions
• Urban Futures, Inc.
• City of Menifee Facilities
• Existing/Proposed Facilities
• Pre-Design Cost Estimates
• Project Feasibility/Readiness
• Committed Funds
• Opportunity Cost
• Construction Cost Index
• Project Sequencing
• Next Steps
Item Title: 4.1
City Facilities Planning Update
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3 Introductions
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City Facilities Planning Update
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4 • Two senior level Municipal Advisors assigned as Co-Engagement Managers • The Team also includes an experienced budget forecast consultant • Depending upon the needs of the assignment, the team will include specialists from UFI’s other professional divisions as needed
City of Menifee Municipal Advisory Team
Michael Busch, President
• Over 26 years of public finance experience including:
• Local Government
• Municipal Advisory Services
• Manages UFI’s day-to-day municipal operations
• Completed over $4 billion of municipal debt offerings • Experience with unique transaction types including the Advanced Capital Planning and inaugural public financing programs Branden Kfoury, Director
• Nearly 10 years of public finance experience including:
• Investment Banking and Bond Insurance
• Municipal Advisory Services
• Supports firm’s City and special district clients
• Analytical support for over $1 billion of municipal financings • Experience with lease revenue bonds, enterprise revenue bonds, assessment district and CFD bonds
Item Title: 4.1
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5 UFI Offers a Breadth and Depth of Services
Municipal Advisory Services
• Transactions span full spectrum of issuance size and credit types • Innovative financing structures and alternatives
• #1 Municipal Advisor in California as measured by number of transactions over past 5 years Financial Consulting Services
• All analysis & services directly provided by public finance experts with 20+ years experience • Forecast and financial modeling used by cities throughout California • Clients span the full spectrum of fiscal health
Analytics and Compliance Group
• Provide comprehensive continuing disclosure services to over 200 public agencies in California
• Integration of our Municipal Advisors ensures clients’ disclosure and compliance issues are properly and fully addressed
Established in 1972
Registered as IRMA
with SEC and MSRB
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6 • Top-ranked municipal advisory practice combined with a financial consulting practice
• Structured to deliver public finance services that are integrated, mutually reinforcing, and tailored to meet
the Agency’s objectives
• Seasoned staff with diverse public finance and
executive-level local government experience
UFI Among the Most Active MA Firms in California
Rank Firm No. of
Issues
1 Urban Futures Inc 831
2 Fieldman Rolapp & Associates 552
3 KNN Public Finance 439
4 PFM Financial Advisors LLC 411
5 Public Resources Advisory Group 252
(January 1, 2017 - Present)
Source: SDC Platinum (Thomson Reuters)
Top Municipal Advisors for CA Municipal Bonds
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7 UFI’s Public Facility Experience in Riverside County
Lake Elsinore
• MA for $23.7 million 2022 Lease Revenue Bonds
• Financed 35,000 sq. foot City Hall
• 4.57% borrowing cost
• Financial Forecast2
San Jacinto1
• Financial planning for new City Hall
• Evaluating Lease-Leaseback, Progressive Design Build
and traditional Design Bid Build delivery methods
• Financial Forecast2
Beaumont1
• Financial Planning for Police Facility Project and
municipal advisor on potential bond issuance
• Financial Forecast2
Desert Hot Springs
• MA for $16 million 2022 Lease Revenue Bonds
• Proceeds used to finance expansion of 12,000
square-foot City Hall and police facility
• Financial Forecast2
Eastvale1
• Financial Planning for various facilities
including City Hall and Police station
• Evaluating delivery methods
Coachella
• MA for $12.15 million 2016 Lease Revenue Bonds
• Financed 15,000-square-foot library project, park,
outdoor reading space, green screens, and a café
• 2.85% borrowing cost

1. Ongoing engagement

2. Non-Municipal Advisory service
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8 City of Menifee Facilities
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City Facilities Planning Update
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9 Existing Facilities
• City Hall/Information Technology (IT) Offices
• City Hall – 10-year lease through March 2029
• IT Facility – 5-year lease through May 2027 (option to renew for five years through May 2032)
• Police Department (PD) Facilities
• PD Headquarters Leases – 5-year leases through 2024 (two five-year renewal options through March/June 2034)
• $2.1 million investment in facility/site Improvements including added parking, security fencing, lighting, and communications equipment required to support police operations
• $2.2 million allocated for acquisition of Bank of America Building to serve as police substation
• Public Works Maintenance Operations Center (MOC) Facility • City owned facility
• $632,332 investment in facility/site improvements
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10 Facility Location Size
(Square Feet)
Lease Term
(w/Renewal Options)
Current Lease
Payment
Projected Maximum
Lease Payment
City Hall 29844 Haun Road 25,032 3/14/2029 $722,424 $1,471,054 IT 29826 Haun Rd. 1,797 5/31/2032 $61,457 $71,6811
Total City Hall/IT 26,829 $783,881 $1,542,735
PD Headquarters (HQ) 29714 Haun Road 14,749 3/31/2034 $372,701 $500,879 PD HQ Vacant
Land/Modular Buildings 5,040 6/30/2034 $151,022 $193,723 Police Substation
(Former Bank of America Bldg.)
26800 Cherry Hills
Blvd 8,898 City Owned N/A N/A
Total Police 28,687 $523,723 $694,602
Public Works MOC 27860 Bradley Rd 1,200 City Owned N/A N/A

1. Calculated through current term ending on 5/31/2027. If renewal option is exercised lease will be set at market rate on 6/1/2027 with annal CPI increase through 5/31/2032.

Existing Facilities
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City Facilities Planning Update
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11 Proposed Facilities
Facility SF Cost Estimate*
City Hall 65,948 $59,685,000
Police Department
Headquarters (Police Station)
54,626 (Station)/
3,000 (Garage) $58,199,000
Public Works Maintenance
Operation Center 16,253 $12,630,000
Total $130,514,000
*Preliminary cost estimates
• City owns property in multiple locations to accommodate new permanent buildings needed for City operations
• Space Needs Assessments completed for City Hall, Police Station, and Public Works MOC
• Rough order of magnitude completed by C.W. Driver in Fall 2022 Item Title: 4.1
City Facilities Planning Update
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14 Project Readiness/Feasibility
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15 City Hall Project Readiness
Committed Funds & Development
Impact Fees
Civic Center parking lot in
design/construction scheduled to
start August 2023
Design phase does not commit
City to construction
• $4.75 million committed for City
Hall
• Sufficient for phase I (pre-
development/design)
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16 • Opportunity Cost
• Current City Hall/IT Facilities
(26,000 SF)
• Avg. City Hall annual rent
increase 13.27% since 2019
• $722,424 current City Hall
payment
• 30-year financing (65,000 SF)
• $4.3M est. annual payment1
• Breakeven
• 15 years (current facility)
• 8 years (65,000 SF Lease)
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20Millions
City Hall/IT Lease Payments vs. Financing Payment1
City Hall/IT (Current Lease) City Hall/IT Facility (65,000 SF) Est. Financing Payment (New Facility) Lease Economics/Opportunity Cost
City Hall lease renewal (2029)

1. 30-yr financing of City Hall based on current cost estimate of $59.685 million/market conditions as of May 2023
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17 Project Feasibility Building Cost Index
Building Cost Index (BCI)
• Time is not on your side
• YTD 2023* - 9%
• Building Cost Index increased
nearly 44% in last 5 years
*As of May 2023
Source: Engineering News-Record
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18 Recent Public Facilities Projects
Start/
Completion Date
Murrieta 2005 - 2008 $14.5 34,000 $426
Temecula 2008-2010 $45.8 96,000 $477
Desert Hot Springs 2017 – N/A $10.1 12,000 $844
South San Francisco 2020-2021 $76.0 83,000 $916
Eastvale1 Ongoing $52.0 50,000 $1,000
Salinas 2018 - 2020 $52.0 71,000 $732
South San Francisco 2020-2021 $53.8 43,300 $1,242
Beaumont2 Ongoing $50.0 52,000 $962
Campbell 2020 - Ongoing $20.1 32,000 $625
Eastvale1 Ongoing $33.6 24,000 $1,400
Mountain View3 Ongoing $134.0 60,000 $2,300
Oceanside Ongoing $130.0 N/A [$850]
Rialto Ongoing $64.0 70,800 $904
Riverside Ongoing $44.0 44,000 $1,000
Police Facilities
City Total Cost
($ mil.) Square Feet Est. Cost per
Square Foot
City Hall/Civic Center Facilities

1.Estimate provided by City March 2023

2. Estimate provided by City May 2023

3. October 2021 Estimate
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19 Recent Public Facilities Projects (cont’d)
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20 Project Sequencing & Next Steps
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21 City of Menifee
Population of 150,000 projected by 2045
Staffing increased in all areas to keep pace with growth/serve the needs of the community
Additional operational facility space is needed to serve residents Item Title: 4.1
City Facilities Planning Update
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22 Proposed Project Sequencing
Begin with City Hall
• Services cannot meet space requirements in existing City Hall facility • Civic Center parking lot in design/construction scheduled to start August 2023 • Reserve funds designated for project sufficient to initiated phase I (pre-development/design) Police Department Headquarters (Police Station)
• Favorable lease terms and facility/site improvements made to existing headquarters facility • Acquisition of Bank of America building (26800 Cherry Hills Blvd) serving as police substation/allows for service expansion Public Works Maintenance Operations Center (PW MOC)
• City owned
• Facility/site improvements made
Initiate Design for Police Station/PW MOC in Latter Phase of City Hall Construction Item Title: 4.1
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23 Next Steps
Timeline Achieves Strategic Plan Objective
Return to Council for Award Consideration (Spring of 2024) Evaluate Proposals (45-Days)
Solicit Proposals (60-Days)
Draft Services Delivery RFQ / RFP (60-days)
City Council Workshop (Fall 2023): Alternative Project Delivery Options Establish Facility Priorities
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Questions/
Discussion
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FLAT SCREEN
PROJECTION SCREENCLOSED SESSION CONFERENCE ROOM (20 SEATS)450 SF16' - 0"FLAT SCREENMEDIUMCONFERENCE ROOM (8-10 SEATS)192 SF 13' - 0"LARGE CONFERENCE ROOM (12-14 SEATS)300 SF12' - 0"FLAT SCREENCITY MANAGER'SCONFERENCE ROOM(16 SEATS) 400 SF Item Title: 4.1
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13' - 5"
10' - 8"10'-0"12' - 0"12' - 0"
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City Facilities Planning Update
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City Facilities Planning Update
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City Facilities Planning Update
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City Facilities Planning Update
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City Facilities Planning Update
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City Facilities Planning Update
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City Facilities Planning Update
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City Facilities Planning Update
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City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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Item Title: 4.1
City Facilities Planning Update
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