Children’s Library Expansion Project
Budget & Design Discussion
Kristen Crane, Assistant City Manager
Brian Ambrose, Community Services Director
Javier Carcamo, Finance Director
Melvin Racelis, Library Manager
Brian Crawford, Senior Program Manager
June 18, 2024
Received After Agenda Printed
6/18/2024 - Regular Meeting
AGENDA ITEM 18
Presentation
2 • Consensus on Design & Budget
• Approval of Funding Strategy
• Set priorities so that design, bidding and construction can proceed without delay
Objectives
3 • Library built in 2007 with a 2,700 square foot children’s section. • A planned Phase 2 expansion was contingent on available funding.
• California State Library’s Building Forward Grant awarded to Murrieta Public Library in 2023.
• $1,505,625 in grant funds
• $752,813 in City matching funds
History
4 • Ensure compliance with grant to expend funds by March 2026. • Maximize building program for likely final expansion of the Library.
• Financial stewardship.
• Make certain project budget is realistic & closely monitored. • Balance funding of this project with other City capital project funding needs.
Project Goals
5 Progress So Far…
June 2023 Design contract for SVA Architects
July – August 2023 Stakeholder design visioning workshops September – November 2023 Refine preliminary design and budget January 2024 Council confirms project priority & sets $6 - 6.5 million budget April 2024 SVA completes schematic design & cost estimate May 2024 SVA produces value engineering options
6 Option A
5,000 sf
$8.44 – 9.86 Million
7 Option A
8 Option A
9 10
Option B
4,500 sf
$7.05 Million
(Recommended Option)
11 Option B
12 Option B
13 Option B
14 Option C
4,200 – 4,300 sf
$6.51 Million
15 Option C
16 Project Budget (Option B)
Item Note Amount*
Bid Day Hard Construction Cost/Low Bid Includes 8% Annual Escalator $ 4,465,000 Construction Contingency 15% of Construction 670,000
Design Cost 11% of Construction 491,000
Project/Construction Management ~10% of Construction 465,000 Fixtures, Furnishings & Equipment/Technology 560,000
Existing Space Remodel 250,000
Permitting & Inspection Fees 150,000
Total $ 7,051,000
*Rounded
17 Project Funding
Funding Source Amount
Building Forward Infrastructure Grant $ 1,505,625
Grant Matching Funds (Library DIF) 752,813
Library DIF (Developer Impact Fees) 752,469
Interfund Loan 3,500,000
Private Fundraising Donations 550,000
Total $ 7,060,907
18 • Development Impact Fee Study
• Library DIF - Acceptable Funding Source
• Library Building Expansion
• Project realization
• 100% fee collection
• $100k - $130k annual revenue source
• Approximately 10 years
Project Financing
19 • Funding Sources
• Grant
• Development Impact Fees
• Private Fundraisers/Donations
• Interfund Loan
Project Financing
Project Option B
Estimated Cost 7,051,000
Funding Source
Gra nt 1,505,625 Secured
Library DIF (Grant Match) 752,813 Secured
Library DIF 752,469 Secured
Private Donations 550,000 In Progress
3,560,907
Interfund Loan (recommended) 3,490,093 In Progress 20 • Bond vs Internal Interfund Loan
• Public Sales Lease Revenue Bond
• Advantages: Minimum impact on cash flow
or reserves
• Disadvantages: Debt capacity, cost of
issuance, bond covenants
• Repayment Source: Library DIF Revenue
Terms: 30 years
Rate: 4.63%¹
Payment: $218,355²
¹ Current Bond Market Rate
²Annual payment > DIF Annual Revenue
Project Financing
21 • Bond vs Internal Interfund Loan
• Internal Interfund Loan
• Advantages: Cost-effective borrowing, lower
cost, no cost of issuance
• Disadvantages: Impact on cash flow or
reserve
• Repayment Source: Library DIF Revenue
Terms: 30 years
Rate: 1.0%¹
Payment: $130,000² (avg $136,515)
¹Long-term Investment yield
²Annual payment = DIF Annual Revenue
Project Financing
22 • Recap
• Various Funding Sources
• Advantage of external financial sources
• Grant
• Sponsorships/Donations
• Earmarked financial resources
• Library DIF (match component + debt service payment)
• Internal Interfund Loan
• Cost-effective borrowing, most advantageous
Project Financing
23 • Led by both the Murrieta Public Library Foundation and Friends of the Murrieta Library.
• Fund raising events being planned.
• Staff to approach private donors for large contributions. • Goal is $550,000, or more.
• Excess funds can used towards construction of fully designed exterior space.
• Donations must be committed by February 2025.
Fundraising
24 Next Steps
Target Completion Date Project Milestone
June 18, 2024 City Council direction to proceed with the recommended design concept July 2024 to February 2025 Development of construction and bid documents February 2025 Final City Council project design review before the bid process February to May 2025 Construction bid process
June 2025 City Council award of construction
July 2025 Estimated construction start date
March 2026 Grant funds expended on initial construction costs August 2026 Completion of construction
25 • Approve moving forward to next phase of project design for design Option B.
• Approve recommended project financing strategy, including use of inter-fund loan.
• Authorize change order for SVA Architects.
• Approve purchase order for RWBID Construction Management. • Authorize $500k of FY 2024/25 CIP Project Budget to be eligible for use effective immediately.
Recommendation
26 QUESTIONS & COMMENTS
27 • Recap
• Various Funding Sources
• Advantage of external financial sources
• Grant
• Sponsorships/Donations
• Earmarked financial resources
• Library DIF (match component + debt
service payment)
• Internal Interfund Loan
• Cost-effective borrowing, most
advantageous
Project Financing
Opportuntiy Cost A nalysis
I nvestments
Prin c ip a l 3, 500, 000
I nterest 1. 01%
Ex pected I nv Earni ngs 1, 231, 503. 63
B ond I nterest Ex p 2, 940, 650
I nter- F und L oan I nterest Ex p 595, 435
I nterest Sav i ngs 2, 345, 215
I nt Savings> I nv Earnings 1,113,711.07