HomeMy WebLinkAbout2007/02/20 Item 10
CITY COUNCIL
AGENDA STATEMENT
~<:::. CITY OF
-~ CHUIA VISTA
2/20/07, Item ~
SUBMITTED BY:
RESOLUTION APPROPRIATING FUNDS FROM THE
PUBLIC FACILITIES DEVELOPMENT IMPACT FEE FUND FOR
THE CONSTRUCTION OF PHASE 3 OF THE CNIC CENTER
RENOVATION PROJECT (GG-300)
DIRECTOR OF GENERAL SERVICE~~_
DIRECTOR OF FINffCE ;><<' f.L- /'ltL-\.J
CITY MANAGER 1/
ITEM TITLE:
REVIEWED BY:
4/STHS VOTE: YES !81 NO 0
BACKGROUND
In July of 2001, the City Council approved a master plan for the renovation of the Civic Center.
On February 18, 2003, the City Council approved a Design Build Agreement ("Agreement")
with Highland Partnership, Inc. ("HPI") to design and construct the project. On August 3, 2004,
the City Council approved the Guaranteed Maximum Price ("GMP") of the project at
$38,346,000. The GMP reflects the amount to be paid to the design builder for design and
construction. The total project budget approved by City Council on August 3, 2004 was
$50,148,000. This action appropriates the funds to construct the third and final phase of the
project in accordance with those previous City Council actions.
Phase 3 of the Civic Center project is funded by a combination of the Public Facility
Development Impact Fee Fund (88.87%) and the General Fund (11.13%). The first two phases
of the project have been completed in accordance with the budget approved by the City Council.
The Public Facility Development Impact Fee Fund ("PFDIF") was established to fund a number
of specific projects in the City, including the Civic Center Renovations. The PFDIF funds may
only be used for those projects specifically approved by the City Council in the ordinance
establishing the PFDIF and its subsequent amendments.
Phase 3 of the project includes the renovation of the former police department building, the
demolition of the Legislative Office Building and the Community Development Building and the
construction of the additional parking and landscaped areas. The renovated former police
department building will house the Human Resources Department, Community Development
Department, Recreation Department, Information Technology Systems Department, a portion of
the Building and Planning Department and the Chula Vista Employees Credit Union.
ENVIRONMENTAL REVIEW
The project has been approved under a Mitigated Negative Declaration, IS-04-013.
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RECOMMENDATION
That Council adopt the resolution.
BOARDS/COMMISSION RECOMMENDATION
None.
DISCUSSION
Pro;ect Descrivtion
The Civic Center project has three construction phases. Phase 1 was the demolition and
reconstruction of City Hall. That phase was substantially completed in November of 2005.
Phase 2 was the renovation of the Public Services Building ("PSB"). That phase was
substantially completed in January of2007. The final phase is the renovation of the former police
department building and the demolition of the Legislative Office Building and Community
Development Building. The total project budget for the project that the Council approved on
August 3, 2004 is $50,148,000. The GMP, the portion that is paid to the City's Design Builder,
HPI, for this project, is $38,346,000. The GMP covers all design and construction related costs
of the project. The remaining funds in the budget beyond the GMP are utilized for a variety of
purposes including furniture, fixtures and equipment, project insurance, staff time, consultant
services, etc.
As stated above, the first phase of the project was substantially completed in November 2005.
The phase included the demolition of the 18,300 square foot City Hall and construction of the
new facility. The actual cost of Phase 1 was $22,233,610 which translates into $542,390 below
the approved budget.
In an effort to make the multi-year, multi-phase project as fiscally efficient as possible, the
design costs for Phases 2 and 3 and the vast majority of the project insurance costs were all
included in Phase 1. Additionally, some materials such as doors, flooring, ceiling tiles, etc. were
purchased for all three phases during Phase 1. The addition of these costs brought the total Phase
1 budget up to $25,283,854. Through January 17, 2007, the total amount expended for Phase 1
was $24,793,162. Staff is in the process of closing Phase 1 and does not expect any additional
expenditures.
Phase 2 included the renovation of the 29,700 square foot Public Services Building (PSB). The
Budget that was approved for Phase 2 was $12,357,000. In addition to that, $537,823 of the
Phase 1 savings was transferred into Phase 2, bringing the total Phase 2 budget up to
$12,894,823. While there are still some outstanding bills to be paid, it appears that the final cost
of Phase 2 will be $12,807,465 which translates into $87,358 below the approved budget.
At the time that Phase 2 was financed, Council also approved the addition of some Phase 3 costs.
The financing included all of the Phase 2 costs incurred during Phase 2 and reimbursement of
some of the costs in Phase I for Phases 2 and 3 that were not part of the Phase 1 financing.
Table 1 below provides a summary of how the Phase 2 bond proceeds have been expended:
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Table 1.
Expenditure
Amount
Running
Balance
$17,183,964 Starting Balance
NIC Improvements
Phase I Reimbursements (for Phase 2 and 3)
Phase 2 Costs less reimbursement
Phase 3 Costs less reimbursement
Bond Proceeds Available to Move Forward
$0
$1,824,736
$3,046,293
$11,044,005
$263,665
$17,183,964
$15,359,228
$12,312,935
$1,268,930
$1,005,265
$1,005,265
With the substantial completion of Phase 2 in January of 2007, the City is ready to move on to
Phase 3. This phase includes the renovation of the former police department, the demolition of
the Community Development Building and the Legislative Office Building and the construction
of additional parking and landscaped areas. Housed on the first floor of the renovated building
will be the Human Resources Department, CommWlity Development Department, Recreation
Department, a portion of the Building and Planning Department and the Chula Vista Employees
Credit Union. The basement will be home to the Information Technology Services Department
(ITS), a large conference/training room, additional conference rooms, storage areas, gym and
locker room and an Wl-programmed area that will be "roughed in". This un-programmed area
will be able to be easily finished if the City finds the need to use that space in the future.
From an architectural perspective, the building will be renovated on the exterior to complement
the architecture of the new City Hall and renovated PSB. The. elevation facing the PSB will
contain the same tower and archway elements that will complete the new public open space area
in the center of the complex. The existing exterior walls of the building will be modified to
provide windows similar to City Hall and PSB.
The interior of the building will also be significantly modified. The main feature of the interior
of the building will be a 36 foot by 36 foot "atrium" in the center of the building. Above the
atrium, there is an existing clearstory, thus natural light will be able to penetrate all the way into
the basement of the building. Public access to the building will be switched from the side of the
building facing Fourth A venue to the building elevation facing City Hall.
Pro/eet Schedule
The design build agreement between the City and HPI called for a start date of February 19,
2007 and substantial completion by May 7, 2008 for Phase 3. Substantial completion means that
the building is operational and open for business. Final completion is called for by August 6,
2008. By the final completion date, the Community Development and Legislative Office
buildings will have been removed and the parking and landscape areas will be complete. It is
both staff and HPI's goal to deliver the project on schedule. It should be noted, however, that the
schedule for the completion of Phase 2 was about five weeks later than originally planned. This
was principally caused by two major factors, the presence of unsuitable soils beneath the area
where the former Council Chambers were located and the need to Wldertake a greater effort in
renovating the roof of the building. These slight delays trickle through the project into the third
phase. In an effort to recover as much time as possible, some work in the basement of the former
police department was started in January of2007. The purpose of this work was to provide some
areas for the ITS Department to relocate equipment. ,V "'" ~
Proiect Fundinz
2/20/07, Item~
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As briefly discussed above, the project has proceeded within the budgeted amounts approved by
Council on August 3, 2004. It is staffs belief that upon completion of Phase 3, the project will
have been delivered within the budget that was approved. Table 2 below provides a brief
summary of the budget status of all three phases. .
Table 2.
City Hall
Public Services Building
Former Police Facility
$22,776,000
$12,357,000
$15,015,000
$22,233,610
$12,807,465
$15,015,000
$542,390
($450,465)
$0
With respect to Phase 2, we are confident that we will receive credits on our insurance costs.
While the amount and timing of these credits are unknown as of this date, any credit will reduce
the overage depicted above. We also expect to receive rebates from San Diego Gas and Electric
for the 30kwH photovoltaic system installed on the roof of the PSB.
As described earlier, the City has already financed a portion of Phase 3 of the project with the
financing of Phase 2. Also, as discussed above, the City has already incurred some costs for Phase
3. Table 3 below provides a breakdown and the amounts and in which phase the early Phase 3
expenditures occurred.
Table 3.
Description
Design Builder Costs:
Design of Building
Design of Temp. Renov.
Development Staff Costs
D/B Fixed Fee (Design)
D/B Fixed Fee (Construction)
Construction Allowances
Demolition and Construction
D/B Costs Sub-Total
City Budgeted Allowances:
Project Insurance:
1m1t. Incurred in
. Phase 1 for Phase 3
AmI. Incurred in
Phase 2 for Phase 3
Total Amount
. Incurred in Prior
Phases
$785,000
$10,000
$83,000
$166,000
$785,000
$10,000
$83,000
$166,000
$41,175
$27,015
$202,212
$1,314,402
$167,854
$973,726
/tJ- f
$155,201
$1,199,201
$76,369
$898,726
$2,1:74,296
$41,175
$27,015
$47,011
$115,201
$91,485
$75,000
$281,686
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In terms of how Phase 3 will actually be paid for, the plan for that has changed since the beginning
of the project. Originally, the City planned to finance all three phases of the project. During the
course of 2006, the City entered into negotiations with the development community with respect to
the updating of the PFDIF. The development community was very desirous of seeing the City not
finance Phase 3. The eventual update of the PFDIF that the City Council approved in November of
2006 contemplated the City paying for Phase 3 as it went, i.e. not financing it. Based on the
November 2006 PFDIF update, Phase 3 of the Civic Center will be funded as follows:
PFDIF - 88.87% of construction and 79.27% of financing (portion financed with Phase 2)
General Fund - 11.13% of construction and 20.73% of fmancing.
Given that the total cost of Phase 3 has been approved at $15,015,000, that means that the PFDIF
share of the Phase is $13,343,830 and General Fund share is $1,671,170. As described above, some
Phase 3 costs have already occurred and a portion of the Phase 2 financing reimbursed the City for
those costs. Table 4 below summarizes the amount necessary to fully fund and complete the
proj ect.
As Table 4 below indicates, the remaining funds needed to complete Phase 3 is $12,586,744. Of the
amount, $1,005,268 of Phase 2 bond proceeds are available for Phase 3. This then requires an
additional appropriation of $11,581,476. Staff recommends appropriating the remaining PFDIF
share now. The general fund's share of this amount will be $1,337,031. Since the draw-down
schedule contemplates drawing the funds at a rate of 8.3% of the project monthly, the general fund
share will not be needed until the final 1.5 months of the project. With a final completion date of
August 6, 2008 as discussed above, the general fund component will not be required until late in
Fiscal Year 2008 or early in Fiscal Year 2009. It is anticipated that the General Fund's share will be
derived from an intemalloan from the PFDIF paid back over 20 years at an interest rate of 5%.
This type of repayment schedule would require an annual General Fund appropriation of
approximately $135,000 starting in FY 2009. This loan will be addressed during the Fiscal Year
2008 Budget process.
Table 4.
Adjusted Phase 3
. Budget
Design Builder Costs
City Budgeted Allowances
Project Insurance
$11,057,000
$3,012,000
$946,000
$1,314,402
$167,854
$973,726
$9,742,598
$2,844,146
o
Since the project was started, there have been some changes to the uses of buildings. The main
change was the decision to have the Community Development Department housed in the former
police department instead of in the PSB as originally planned. In order to make that change work -'
from a space perspective, the original plan to have a portion of the Engineering Department located / cP --!:J
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in the former police department was changed and the entire Engineering Department is now located
in the PSB. This change occurred in early 2006 after a reorganization of the Engineering
Department. This change enabled the Community Development Department to have additional
space that it would need and also allow the Engineering Department to be kept together in the PSB.
This change has had a number of impacts on the project. First, some redesign of the interior space
plan was necessary in Phase 2 to eliminate Community Development and enlarge Engineering.
Similar redesign will occur in Phase 3. The more significant issue from a cost and logistic
perspective is that the General Services Department never anticipated having to find an alternate
location for Community Development. The plan in terms of interim moves of staff within the
complex was that the Human Resources Department would occupy the Community Development
Building and Legislative Office Building during Phase 3 construction. Those buildings would have
been vacated by the Community Development Department as they moved into the PSB. That was
the original plan.
With the change of plans, we needed to find a place to house both Community Development and
Human Resources during Phase 3. A number of options were explored including; leasing office
space off-site, utilizing the old public works center at F St. and Woodlawn Ave., scattering staff
throughout a number of areas or leasing portable office space. Based on cost, minimizing public
inconvenience and maintaining departmental efficiencies, it was determined that the best way to go
was to lease portable office space and place those facilities in the rear of the Ken Lee parking lot. It
was further determined that it would be better to relocate Community Development to that space
even though it required an additional move. The reason for this is' that Human Resources handles
significantly more public traffic than Community Development and the Community Development
Building already had a counter/public waiting area as well as public parking innnediately in front of
the building. We expect the cost of this effort to be approximately $205,000 ($45,000 for
construction and $160,000 for lease ($ I O,OOO/month). It is our goal at this point in time to not
modify the project budget for Phase 3, however, given how tight the budget on Phase 2 was, it
would not be terribly surprising if a minor budget adjustment may be necessary.
DECISION MAKER CONFLICTS
Staff has reviewed the property holdings of the City Council and has found a conflict exists, in
that Councilmember Jerry Rindone has holdings within 500 feet of the boundaries of the
property which is the subject of this action.
FISCAL IMPACT
The fiscal impact of the proj ect is as described above in the discussion regarding the split in the
costs of the project between the PFDIF and General Fund. As discussed above the general fund
share of Phase 3 will not be needed until late in Fiscal Year 2008. Staff is recommending
appropriating the full share of the PFDIF obligation at this time. It is anticipated that the General
Fund's share will be derived from an internal loan from the PFDIF paid back over 20 years at an
interest rate of 5% (approximately $135,000 annually beginning in FY09) and will be addressed
during the FY 2008 budget process.
The projected Fiscal Year 2007 fund balance of the PFDIF is $15.8 million. This amount is
sufficient to pay the costs of Phase 3 of the Civic Center as well as meet the PFDIF's existing
debt service obligations. At the end of the project there will be a remaining fund balance of $5.1
million.
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From an operational standpoint, the building will include new mechanical equipment that will be
significantly more energy efficient than the existing equipment. Also, the City is participating in
the Savings By Design program with SDG&E and is attempting to comply with the City's
energy conservation policy of exceeding California Title 24 standards by 20%.
From a maintenance and custodial perspective, once the building is complete, and the
Community Development and Legislative Office Building are removed, General Services will
attempt to analyze the demands the new building will create on those functions. It should be
noted that during the entire Civic Center proj ect, custodial and building maintenance staff levels
have remained static since one building has been out of service the entire time. Obviously, this
will not be case at the conclusion of Phase 3. Given the shifting square footages and elimination
of the two smaller, less efficient buildings, its difficult to assess what the actual demands will be
until we are actually in the remodeled building and observe how the buildings operate as a
complex. One lesson that we have leamed is that there is significantly higher demand for the use
of our buildings from outside the City given their usability, audio-visual capabilities, comfort
and attractiveness.
From the perspective of other departments in the complex there should not be any fiscal impact
as their staffing levels are not materially impacted. It is hoped, that given the new equipment,
shared counter spaces and more logical placing of departments that there will be increased
efficiencies among the departments in the complex. Whether those efficiencies will be able to be
quantified in terms of cost savings is something that those resident departments will have to
analyze once they've had sufficient time to become accustomed to the finished complex.
Prepared by: Jack Griffin, Director afGeneral Services
Maria Kachadoorian, Director of Finance
M:\General Services\GS Administration\Council Agenda\Civic Center\Phase III GO 300\Civic Center Phase 3 fina1.doc
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RESOLUTION 2007 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA APPROPRIATING FUNDS FROM
THE PUBLIC FACILITIES DEVELOPMENT IMPACT
FEE FUND FOR THE CONSTRUCTION OF PHASE 3
OF THE CIVIC CENTER RENOVATION PROJECT
(GG-300)
WHEREAS, on August 3, 2004, the City Council approved the Guaranteed
Maximum Price ("GMP") of the project at $38,346,000; and
WHEREAS, the total project budget approved by City Council on August 3, 2004
was $50,148,000; and
WHEREAS, this action appropriates the funds to construct the third and final
phase of the project in accordance with those previous City Council actions; and
WHEREAS, Phase 3 of the project includes the renovation of the former police
department building, the demolition of the Legislative Office Building and the Community
Development Building and the construction of the additional parking and landscaped areas; and
WHEREAS, the project has been approved under a Mitigated Negative
Declaration, IS-04-013; and
WHEREAS, with the substantial completion of Phase 2 in January of 2007, the
City is ready to move on to Phase 3; and
WHEREAS, the design build agreement between the City and HPI called for a
start date of February 19, 2007 and substantial completion by May 7, 2008 for Phase 3.
Substantial completion means that the building is operational and open for business. Final
completion is called for by August 6, 2008; and
WHEREAS, originally, the City planned to finance all three phases of the project
but as a result of the 2006, PFDlF update the City decide not to finance the third phase of the
project; and
WHEREAS, based on the November 2006 PFDlF update, Phase 3 of the Civic
Center will be funded as follows:
PFDlF - 88.87% of construction and 79.27% of financing (portion financed with Phase 2)
General Fund - 11.13% of construction and 20.73% of financing.
,7
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WHEREAS, given that the total cost of Phase 3 has been approved at $15,015,000,
that means that the PFDIF share of the Phase is $13,343,830 and General Fund share is $1,671,170;
and
WHEREAS, the remaining funds needed to complete Phase 3 is $12,586,744; and
WHEREAS, of the amount above, $1,005,268 of Phase 2 bond proceeds are
available for Phase 3. This then requires an additional appropriation of $11,581 ,476; and
WHEREAS, staff recommends appropriating the remaining PFDIF share now; and
WHEREAS, the General Fund's share of this amount will be $1,337,031, the
appropriation of which will be requested when the funds are needed; and
WHEREAS, it is anticipated that the General Fund's share will be derived from an
intemalloan from the PFDIF paid back over 20 years at an interest rate of 5% (approximately
$135,000 annually beginning in FY09); and
WHEREAS, the projected Fiscal Year 2007 fund balance of the PFDIF is $15.8
million. This amount is sufficient to pay the costs of Phase 3 of the Civic Center as well as meet
the PFDIF's existing debt service obligations; and
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula
Vista does hereby appropriate funds in the amount of $11,581,476 from the Public Facilities
Development Impact Fee fund for the construction of Phase 3 of the Civic Center Renovation
Project (GG-300).
Presented by
Approved as to form by
-
2:L, dJ v(/'L tLJ~'-epu1 jjc.d~C.....
Ann MoJe
City Attorney
Jack Griffin
Director of General Services
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