PLACENTIA
Rich Heritage, Bright Future
Study Session: Placentia Public
Safetv Center Update and
..
Funding Options
July 11, 2023
Project Timeline
• March 1, 2022: City Council reviews 35% engineering design, selects final project package, and directs staff to complete design of new facility • September 6, 2022: City Council approves funding package and schedule • November 15, 2022: Council approves contract for shooting range equipment • December 6, 2022: City Council approves contract for steel Butler Building and rejects and authorizes new bids for Phase 1 construction • January 10, 2023: City Council approves construction contract for Phase 1 • March 7, 2023: Council rejects & authorizes new bids for Phase 11 construction • June 23, 2023: Phase 1 construction substantially complete • July 11, 2023: City Council presented with updated project financing package and construction contract for Butler Building TI
• July 25, 2023: Phase 2 construction contract and bond sale presented to Council
• March 2024: Complete Butler Building
• July 2024: Complete Phase 2 Main Building Construction
City Council
Approved
Project
City Council Approved Project
•
Staff Offices
Emergency
Comm Center
Second Floor
•
m, v
25 Yard Shooting Range
Training. Conference
Center
First Floor
Immestrw-
CONVENTIONAL
CMU CQNSTRUCTIQN
Property 8
■
Evidence Storage
711 ice
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2.1410.
'OM a.gMMI
a. iv
MAIM
IMMAM
4,340 SF CMU First Floor
6,620 SF CMU Second Floor
5,265 SF Butler Building
2,560 SF CMU Gun Range
18,805 SF Total
PLACENTIA
BUTLER STEEL
BUILDING
ed and
Project Cost Increase Matrix
Original Project Cost
Estimate Submitted to
Item Council 9/6/22 Known Costs June 2023 Narrative
$185k originally based on Butler Building Project only, weather dela CM/Inspection $ 185,000 $ 448,000 order work on Phase I required extended working days.
Weather impacts to project site during Phase I construction resulted in added Geotech $ 54,000 $ 100,000 grading work, soil and compaction analysis.
Market conditions. Phase I was bid and re -bid a second time using prequalified Phase 1 Construction bidders. Retaining wall required for project. Phase I work complete and cost Contract $ 800,000 $ 1,769,921 reflects final change order amount.
Phase 2 Construction Market conditions. Butler TI improvements separated and bid twice, Main Building Contract (Butler Interior TI was bid twice, with two separate pre -qualification rounds. Final building size grew and Main Building) $ 7,960,121 $ 11,534,000 by 70 SF.
Final cost for building increased slightly after work scope finalized with manufacturer. Cost includes change order for steel staircase to mezzanine as Butler Building Cost $ 888,317 $ 973,619 required by Building Official.
HVAC costs for range included in main building budget and final cost for equipment Gun Range Equipment $ 270,000 $ 709,350 increased after work scope finalized with manufacturer.
Completion of full scope of work for IT and 911 center delayed by Motorola and CaIOES. New 911 center utilizes more consoles which required expanded server and switch capacity and is not fully covered by CaIOES as part of Next 911 upgrade.
Upgrade to new system is required regardless if new communications center is IT & Comm Center $ 324,779 $ 2,659,036 built.
Furniture $ 100,498 $ 76,018 Final furniture cost reduced ys and change
Evidence Storage Units $
Utilities
Temp Generator Fuel
Architect
Misc. Expenses
Sub -total $
40,000 $
10,622,715
City's matching grant cost share for units double than originally anticipat 360,325 additional shelving/storage units not included in original project budget.
SCE, GSWC, Spectrum, Charter costs not included in original estimate due to delays 225,000 in obtaining final design.
Power to City Yard and CNG station taken offline during Phase I construction 50,000 requiring temporary generators.
550,515 Architect/engineering costs paid for separately, not included in project bond. 37,869
19,493,653
Project contingency cost increased to 15% to cover design or field adjustments during construction, unknown conditions, City -directed extra work, unanticipated Construction Contingency $ 794,450 $ 2,123,310 increases to IT or radio equipment costs.
Totals $ 11,417,165 $ 21,616,963 Overall Project Cost Increase: $10,199,798
Construction Cost Forecasts
Swinerton Q1 2023 Market Analysis
• Building Cost Index: 7.1% annual inflation rate
• Construction Cost Index: 3.9% annual inflation rate
"Despite high inflation U.S. economy remains strong and $2 trillion in naw FArlcral cncnrlinn nn infractrUCtUra will kee demand strong for construction services."
p
Currie & Brown Q2 2023 Market Analysis
• Construction Cost Index (San Francisco Region): 5% annual inflation
"Steel costs normalizing but still 50% higher than pre -pandemic.
U.S. construction market supporting numerous mega projects, mechanical and electrical labor still in short supply."
Project Phasing and Bid/Procurement Process
• Project phased due to time constraints on lease expiration on current facility • Value -engineered prefabricated steel evidence storage building delivered as stand-alone project - $1.7 million project savings
• Contractor prequalification process utilized
• Butler Building and shooting range equipment purchased direct by City • Project Procurement:
Construction Contract #1 - Phase I Construction: Site demolition and grading, Butler Building foundation, retaining wall, storm drain and infiltration system, utilities.
Construction Contract #2 — Butler Tenant Improvements: All interior building improvements, finishes, concrete and masonry vaults, lighting, HVAC, plumbing, electrical system and main facility electrical service, fire suppression system, building access controls, security cameras.
Construction Contract #3 — Phase II Construction: Main building, shooting range, final site improvements.
IT/Comm. Equipment Contract #1 — Master purchase agreement and loan with Motorola for radio communications.
IT/Comm. Equipment Contract #2 — Master purchase agreement for servers, switches, computers, monitors and related IT equipment.
Facility Builders & Erectors
Bid Results
Phase I Bid Results — First solicitation from eight (8) prequalified contractors Contractor
Bid Amount
TTS Engineering, Inc.
Caliagua, Inc.
Legion Contractors, Inc.,
Caliagua, Inc.
Legion Contractors, Inc.
Sully -Miller Contracting Company
$580,000
$1,513,748
$1,574,823
$1,686,000
$2,061,000
Phase I Bid Results — Second solicitation from five (5) prequalified contractors ontrac
moun
TTS Engineering, Inc.
Facility Builder and
Erectors
Sully -Miller Contracting
Com • an
$1,324,000
$1,467,000
+43%
-3%
$1,630,760
+3.5%
$1,647,292
+8.8%
$2,385,000 +15%
Bid Results, cont.
Phase II Bid Results — First solicitation from three (3) prequalified contractors:
Contractor
P.H. Hagopian Contractor, Inc.
Bernards Bros., Inc.
$11,653,000
$11,693,000
$13,172,033
Phase II Bid Results — Second solicitation from seven (7) prequalified contractors (Butler Building tenant improvements removed from scope):
Contractor
Woodcliff Corporation
Macro -Z Technology Company
AMG & Associates, Inc.
Proposal Amount
$9,888,000
$10,133,000
$10,778,000
$10,788,000
Bid Results, cont.
Butler Building tenant improvement bid results — First Solicitation Ali
Contractor
E. Avico, Inc.
¥4M Developing Inc dba Construction
Masters
M.S. Construction Management Group
Harry H Joh Construction, Inc.
G2K Construction, Inc.
■
$1,452,000
$1,680,880
$1,896,039
$2,154,818
$2,462,000
$2,688,000
Butler Building tenant improvement bid results — Second Solicitation Contractor
Bid Amount
Loengreen, Inc.
MBC Enterprises, Inc.
Tovey/Shultz Construction, Inc.
G2K Construction, Inc.
PCN3, Inc.
PUB Construction, Inc.
RT Contractor Corp.
$1,646,000
$1,841,888
$1,865,052
$1,980,000
$2,080,000
$2,530,000
Previously Approved Project Financing
Structure September 6, 2022
Source of Funds
Unrestricted Fund Balance Reserves
Delay City HaII/PD HVAC Project (CIP Fund)
Property Sales
Total Down Payment
Total Construction Fund Bond Deposit
Amount
Total Project Budget
Total
$3,000,000
$2,000,000
$550,000
$5,550,000
$5,900,000
$11,450,000
PLACENTIA
Proposed Updated Project Financing
Structure- Option 1
Source of Funds
Total
Unrestricted Fund Balance Reserves —Approved in FY22/23 & FY23/24 budgets
Federal Earmark OR Unrestricted Fund Balance Reserves
Delay City Hall/PD HVAC/Roof Project
(CIP ARPA Funds) to FY 24-25
$4,000,000
$2,600,000
$2,650,000
Asset Forfeiture $1,000,000
Legal Settlement
$630,000
CaIOES Grant Next Gen 911 Upgrade $250,000
Total Down Payment (City Funds)
$11,130,000
Motorola Financing (Dispatch radio equipment)* 1,197,159 Total Bond Amount
$9,289,804
Total Project Budget $21,616,963
Proposed Updated Project Financing
Structure- Option 2
Source of Funds
Unrestricted Fund Balance Reserves—Approved in FY22/23 & FY23/24 budgets
Federal Earmark OR Unrestricted Fund Balance Reserves
Delay City Hall/PD HVAC/Roof Project
(CIP ARPA Funds) to FY 24-25
$3,000,000
$2,600,000
$2,650,000
Asset Forfeiture $1,000,000
Legal Settlement
$630,000
CaIOES Grant Next Gen 911 Upgrade $250,000
Total Down Payment (City Funds)
$10,130,000
Motorola Financing (Dispatch radio equipment)* 1,197,159 Total Bond Amount
$10,289,804
Total Project Budget $21,616,963
Financing Assumptions
• Tax exempt Lease Revenue Bonds (public use facility)
• LRB tax exempt rates est. -4.5%* for a projected 30 -year amortization - not to exceed 5.5% and $10 million
• City assets leased to Placentia Public Financing Authority; PFA leases assets to City
• PFA issues bonds backed by City lease payments
• Upon completion of construction and occupancy, City
assets released and replaced by the new Public Safety
Facility.
*Estimates only; subject to final bond structure and market rates at time of bond sale, returning July 25, 2023, with bond package approval.
Future Market Rate Lease Cost for Current Building
MEM 1
2023
Annual Lease Payments
$156,512
2024 $473,748
2025
$492,698
2026 $512,406
2027
$532,902
2028 $554,218
2029
$576,387
2030 $599,442
2031-2073
Total
Average Annual Lease
Payment over 50 years
$68,427,412
$72,325,725
$1,446,514
Per current property owner, lease costs based on current market rate value of $1.85/SF for the City's current leased facility and 4% annual escalator.
Total
Principal
and Interest
(30 years)
Financing Cost Summary & Comparison
Construction
Fund Gap
Estimated
Costs of
Issuance*
Estimated
Total Bond Issue
Proceeds
Estimated
Average
Annual
Debt
ervice
1 $9,289,804
$447,848
$9,737,652
$581,342 $17,690,872
2 $10,289,804 $467,873 $10,757,677 $641,221 $19,546,647 Total amount spent on lease payments on existing facility over 50 years: $72,325,725 Total project cost plus bond interest over 30 years (Optionl ): $29,570,183 Anticipated savings over 50 years: $42,755,542
It is important to note that the useful service life of the new facility is 80 years. The financing cost summary noted in the table above reflects the first 30 years of service which coincides with the bond repayment term.
Reserve Fund Balance History
23,000,000
18,000,000
13,000,000
8,000,000
3,000,000
-2,000,000 �ti� �ti� �■ \ti� ��ti %��
ti� ti`' ti� ›. b Q›.())\ 'L° titi ,ti,Q (b\>a
<Z°911'1'\
� roti
■ Total Fund Balance
• Unassigned Fund Balance
PLACENTIA
Impacts to Reserve Levels
FY23/24 Adopted Option 1- $4M Reserves Option 2- $3M Reserves Budget -$4M plus up to $2.6M plus up to $2.6M
Reserves* additional contribution additional contribution Reserve
goal -
25%
34%
*The FY23/24 Adopted Budget includes $1 Million reserve contribution in addition to a $3 Million reserve contribution approved in FY22/23 that will be carried over. Total of $4 Million included in 40% reserve calculation.
Project Benefits
Next Gen 911
Communications Center
New center provides
expanded space for increasing
call volume due to population
and housing increases.
Built to Essential Facility
Standard — only City essential
facility rated for disasters.
Provides extra space for
supervisors, training and
group meetings.
Ensures stand-alone
capabilities in the event of
citywide system outage.
Aids with recruitment and
retention.
EOC/Training Room/Office
Spaces
Shooting Range
Provides sufficient space to
host large regional meetings
(POST).
Provides space for arrest and
control techniques training.
(Reduces OT)
Provides new workspace that
relieves overcrowding in Police
Station and City Hall.
24/7 access for mandated
practice and proficiency
(Reduces OT).
Ability to combine classroom
training with range
applications in same facility.
Will generate rental fees .
EOC can be utilized as Designed to allow the use of
command post for major training props and scenarios
incidents/disasters (Only City and non -lethal application essential facility). training.
Provides added workspace for
special units in partnership
with other agencies.
Aids with recruitment and
retention.
Additional Project Benefits
• Extends useful service life of city hall and police
station by several years (currently over capacity).
• Allows expansion of women's locker room in police
station to meet personnel needs and legal
requirements.
• Allows for expansion of police records and watch
commander's office space.
• Provides expanded office spaces, conference rooms
in City Hall and ADA compliant employee restrooms.
Summary of Options
Option 1: Increase Reserve Fund contributions and
bond financing debt to cover the project cost.
Option 2: Increase Reserve Fund contributions by
a lesser amount ($1 million) and increase bond
financing debt by $1 million.
Alternative Options
Alternative 1: Cancel Phase II Main Building and Shooting Range
1. Reduced General Fund Reserve
contribution to project.
2. Eliminates annual bond debt
service.
1. Guaranteed loss of Federal
Earmark.
2. Loss of shooting range revenue
from outside agencies.
3. Loss of reduction in overtime costs
for range qualifications.
4. Loss of expanded office space
needed for PD/City operations.
5. Emergency Communications
continues to operate in cramped
conditions.
PLACENTIA
ill
Alternative Options, cont.
Alternative 2: Delay construction of Phase II Main Building and Shooting Range
1. Potential for reduced project cost if
deep National recession impacts local
economy.
1. Guaranteed loss of Federal Earmark.
2. Unknown interest rate environment.
3. Construction costs will likely be higher
in 1-2 years.
Recommended Actions
1. Receive and file the presentation.
2. Select a preferred Financing Structure or consider both alternatives.
Staff recommends completing Phase 11 construction under financing Option 1 (Larger reserve contribution)
3. Should the City Council elect to construct the balance of the facility, direct Staff to return to the City Council with the construction contract for Phase 11 construction as well as the lease revenue bond package to fund the balance of the
project budget.
Next Steps & Timeline
July 11, 2023: City Council review and consideration of revised financing package and provide policy direction to staff July 25, 2023: If revised financing package is approved, City Council considers approval of construction contract for Phase II, bond documents and resolutions and directs staff to proceed with bond sale August 2023: Bonds are sold
July 2023 — July 2024: Phase II main building construction period February- March 2024: Move property and evidence operations into Butler Building
July 2024 — September 2024: Move-in/occupy main building
Questions?
...)
PLACENTIA
Rich Heritage, Bright Future