HomeMy WebLinkAboutR-2006-123 Fire Station Capital Improvements / Draw under KeyBank Line of CreditRESOLUTION NO. R-2006- 123
A RESOLUTION of the City Council of the City of Yakima,
Washington, authorizing draws under its Limited Tax
General Obligation Bond, 1997 (KeyBank Line of Credit)
for fire station capital improvements.
WHEREAS, the City of Yakima, Washington (the "City"), passed Ordinance No. 97-29,
as amended by Ordinance No. 2002-31 (together, the "Ordinance"), authorizing its issuance of a
Limited Tax General Obligation Bond, 1997 (KeyBank Line of Credit), dated June 9, 1997 and
reissued on May 31, 2002 (the "Bond"), to KeyBank National Association (the "Bank") in order to
provide funds for various City capital projects; and
WHEREAS, the Ordinance authorizes the City to draw on the Bond upon receipt of
written approval from Preston Gates & Ellis LLP or any other nationally recognized bond
counsel firm; and
WHEREAS, the City now desires to draw on the Bond to renovate Fire Station No. 92
(the "Project");
NOW, THEREFORE, the City of Yakima does resolve:
Section 1. Authorization of Proiect; Draws on the Bond. The City Council hereby
finds that it is in the public interest for the City to undertake the Project. For the purpose of
paying the costs of the Project, the City Council hereby authorizes the City's Director of Finance
and Budget to make requests for draws to the Bank pursuant to the Ordinance in the amount
not to exceed $820,000. Pursuant to Section 11 of Ordinance No. 97-29, the City shall first
obtain written approval of Preston Gates & Ellis LLP with respect to such request for draw.
Section 2. The City reasonably expects to reimburse the following expenditures with
the proceeds of limited tax general obligation bonds or other tax-exempt obligations to be issued
by the City: capital improvements and renovation of Fire Station No. 92. The City expects to
issue approximately $820,000 principal amount of limited tax general obligation bonds for the
Project. The expenditures to be reimbursed from bond proceeds or other tax-exempt
obligations will be made from the appropriate capital funds.
Section 3. Effective Date. This resolution shall take effect immediately.
ADOPTED at a regular meeting of the City Council of the City of Yakima this 15th day of
August, 2006.
ATTEST:
City Clerk
-2-
CITY OF YA , WASHINGTON
By
David
er, Mayor
K:\25739\00061\ZCFlZCF R225G
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 14,
For Meeting of: August 15, 2006
ITEM TITLE: Consideration of Report from Fire and Finance regarding the Updated
Financing Plan for the Addition and Alteration of Fire Station #92.
A. A Motion to Approve an Alternative Financing Plan
B. A Resolution authorizing the draw on the Line of Credit
C. An Ordinance Amending the 2006 Budget and Creating an
Appropriation in the 332 – Fire Capital Fund
SUBMITTED BY: Dick Zais, City Manager
Dennis Mayo, Fire Chief
CONTACT PERSONITELEPHONE: Steve Scott, Deputy Fire Chief, 575-6060
Cindy Epperson, Financial Services Manager, 575-6070
SUMMARY EXPLANATION:
Background:
Upon annexation of the 72nd Ave/Congdon areas in 2002, the City of Yakima entered into
negotiations with the West Valley Fire District # 12 (the District) for the "transfer of assets" and for
a method that would be the most cost effective way to extend full-time fire service into these
areas.
Continued
Resolution X Ordinance X Other (Specify) Report Contract — Mail to (name
and address):
Funding Source:General Fund FirerC pita) Budget—Fund 332
APPROVED FOR SUBMITTAL: ._ ,r:
=_ � �� �; �\1, City Manager
STAFF RECOMMENDATION: Staff respectfully recommends the following actions by the
Council:
A. Approve a Motion to accept the alternative financing plan regarding the addition
and alteration of Fire Station #92, and;
B. Approve the Resolution authorizing the draw on the Line of Credit, and;
C. Read the Appropriation Ordinance by title only at the August 15, 2006 meeting.
Pass the Ordinance after the second reading at the September 5, 2006 meeting.
BOARD/COMMISSION RECOMMENDATION: The Public Safety Committee was briefed on
August 1, 2006, and unanimously supports the alternative financing plan. Two members
supported accepting the low bid and moving forward with the Station 92 Addition Project utilizing
the financing plan. Councilman Bonlender recommended rejecting the bids and advocated
rebidding later in a more attractive bid environment.
(A) Motion was passed to approve alternate financing plan.
(B) Resolution adopted. RESOLUTION NO. R-2006-123
(C) First reading of ordinance; second reading scheduled 9-5-2006.
COUNCIL ACTION:
Fire Station #92 Agenda Statement
Page 2
(Continued)
In 2004, the first year of property tax collections in this area, the City reached a co -location
agreement with the District, whereby the District and the City would both operate from the Fire
Station located at 7707 Tieton Drive. In August of 2005, title to that Fire Station was transferred
to the City and the West Valley Fire District began a 5 -year lease with the City to share space in
that facility. Recognizing that the facility was not designed for full time staffing, let alone, sharing
space for full time staffing and the volunteer force representing the West Valley Fire District, the
City began planning for an addition to provide appropriate facilities that would meet the needs
associated with the co -location.
Because of the need to maintain the existing facility for the District's needs, the architect was
tasked with designing an addition to accommodate Yakima's full-time staffing requirements. On
May 2, 2006, the City Council approved the "Updated Financing Plan for Alteration to Fire Station
#92" that allocated $760,000 to construct the addition and effect the necessary total building
upgrades required to meet standards and comply with Codes. In the past two years, the
construction industry has experienced a significant increase in materials and building costs, partly
related to demands placed on resources due to construction efforts in Iraq, China, and areas
affected by Katrina. For example, according to industry experts, concrete has increased in price
33% in the last 4 months, gravel is up 100%, roofing materials up 45% and gypsum board is up
125%. Fuel and steel costs are contributing to the escalation in prices.
Bids:
On July 20, 2006 at 1400 hours, the bids for the Fire Station 92 Addition Project were opened and
recorded. Four contractors submitted bids ranging from $755,600 to $953,500. The low bidder is
Concord Construction, Inc. of Wapato for $755, 600, including alternates, which brings the total
cost of the project to $976,361.
Fire Station 92 Addition Project Budget/Bid
2 -May -06 20 -Jul -06
Estimated Costs Bid Price
(Concord Construction, Inc.)Low Bid
July 20, 2006 @ 2pm
Base Bid $571,038 $755,600
Sales Tax
(8.2%) $50,571 $66,916
Engineering, Permits, Architect, other cost $92,135 $93,397
8%
Contingency $45,683 $60,448
Total Project Cost $759,427 $976,361
Total Project Budget $760,000
Difference $216,361
Fire Station #92 Agenda Statement
Page 3
Updated Financing Plan:
The 2005/2006 Fire Capital Budget included a budget of $610,000 for the Station alteration
project, and $90,000 for debt service on a line of credit. Revenues related to this project include a
line -of -credit drawdown of $610,000, and a capital contribution of $120,000 from the District
(Note: This contribution was originally planned to be used to pay debt service.) The City has
recently seen an escalation in commodity/material prices in construction bids, and this project
followed that trend --the recommended bid package cost about $976,361, which is approximately
$216,000 more than the May 2, 2006 estimate.
The Public Safety Committee has unanimously advocated to fully fund this project by restructuring
the current $610,000 bond and increasing it to a $820,000 bond and Staff is recommending that
the financing plan be revised as follows:
• Increase the $610,000 Councilmanic bonds to $820,000 and
issue in conjunction with the Downtown Yakima Futures Initiative
bond issue, utilizing the Zine -of -credit for interim financing; $820,000
• Use $120,000 that will be received from Yakima County Fire
Protection District #12, West Valley as a contribution to be
applied towards the Addition Project; $120,000
• Contribution from the Law and Justice Capital Fund will pay for
Bid Alternate 5, a communications tower foundation to cost $7,700
$7,700; and
• Contribution from Fire Capital Reserves that are made available
by the contribution of $80,000 from the Yakima County Fire
Protection District #10, Fruitvale for reimbursement that will be
applied toward the purchase of a brush firefighting vehicle.
$28,300
Total Project Resources $976,000
Borrowing was originally determined to be more cost effective by drawing down the Zine -of -credit,
since the break-even point for a bond issue is about $750,000 because of the fixed costs
associated with issuing bonds (such as legal fees for the bond ordinance, underwriting fees, etc.)
With Council's recent decision to issue a Councilmanic bond to complete the Downtown Yakima
Futures Initiative Phase 2, this amount could be added to that bond issue and these fixed costs
could be spread over both projects, thus making it cost effective to issue bonds for the fire station
project. Because the timing of the bond issue is uncertain (it may be as late as the spring of
2007), the proposal is to use the line of credit as bridge financing/cash flow as needed, to be
repaid June 2007 when bond proceeds are available.
Debt service is estimated to be $78,000 for a 15 -year term, using current anticipated rates.
Future debt service is proposed to be funded by future annexation related property tax allocation
and other general fund revenues.
Fire Station #92 Agenda Statement
Page 4
Appropriation:
The 2006 budget includes $610,000 for the project and $90,000 for anticipated debt service on a
line of credit. In the May 2 report, appropriation was also available because the brush truck
purchase was being postponed. Since then, because of a contribution from the Fruitvale Fire
District, the brush truck appropriation will be needed. Therefore, the attached appropriation
includes the balance of the project of $276,000 (from $700,000 to $976,000), and revenue
representing additional borrowing on the line of credit of $210,000 (from $610,000 to $820,000).
Summary and Future Actions:
Should Council approve this updated financing plan, the City Manager would proceed with the
Construction Bid Award and; the Architect and the Contractor would proceed with the construction
process. The bid must be awarded within 45 days of July 20, 2006 (date the bids were received),
which will be by September 2, 2006. The building permit requires construction to commence
within 180 days of the permit issuance date of April 16, 2006, which will be December 11, 2006.
Prior to borrowing for both the line -of -credit and subsequent bond issue, Council will be asked to
approve appropriate legislation.
Fire Station #92 Facility Addition
Yakima Fire Department
Yakima, Washington
Project 0419
Base Bid Amount, excluding wsst
Estimate Concord
Construction
$475,000 00 ; $663,300.00
GH Moen
Construction
$849,000.00
July 20, 2006
Prior to 2:00:00 PM
City of Yakima
Yakima, Washington
Glacier Mountain State -S-7
Construction Construction
$676,300 00 $751,000.00
Alternate No. 1 - Concrete Slab in Lieu of Lawn
$10,600.00 1 $3,800.00 $2,400.00 $4,830.00 ' $1,407.00
Alternate No. 2 - Add Back-up Generator
$15,500 00 $21,900.00 $25,100 00 $22,450.00 $22,427.00
Alternate No. 3 - Add Replacement of Existing Furnaces
$19,700.00 ° $12,200.00 $14,500.00 $25,600.00 $22,617.00
Alternate No. 4 - Add Turn -Out Room and Library
$43,700.00 ' $46,700.00 $55,000.00 $40,720.00 $56,588.00
Alternate No. 5 - Add Antenna Footing
$8,200.00 $7,700.00 " $7,500.00 $6,180.00 $6,494.00
Total
$572,700.00 „ $755,600.00 ' $953,500.00 $776,080.00 $860,533.00
Sta 92 Addition Pg 5
AN ORDINANCE
ORDINANCE NO. 2006 -
amending the 2006 budget for the City of Yakima; and
making appropriations of $276,000 within the 332 - Fire
Capital Fund for expenditure during 2006 for a construction
project at Fire Station #92.
WHEREAS, the amount of $276,000 must be appropriated within the 332 - Fire
Capital Fund for expenditure during 2006 for a construction project at Fire Station #92,
and
WHEREAS, at the time of the adoption of the 2006 budget it could not
reasonably have been foreseen that the appropriation provided for by this ordinance
would be required; and the City Council declares that an emergency exists of the type
contemplated by RCW 35.33.091 and that it is in the best interests of the City to make
the appropriation herein provided, now, therefore,
BE IT ORDAINED BY THE CITY OF YAKIMA:
Section 1. The amount of $276,000 is hereby appropriated from the
Unappropriated Fund Balance in the 332 - Fire Capital Fund to the following accounts:
Resources:
Bond Proceeds 332-332-699-0000-39110-BND ---$210,000
Expenditures:
Fire Station #92 Const. Project 332-332-122-2105-59422-650 ---$276,000
Section 2. This ordinance is one making an appropriation and shall take effect
immediately upon its passage, approval and publication as provided by law and by the
City Charter.
PASSED BY THE CITY COUNCIL, signed and approved this day of
2006.
ATTEST:
CITY CLERK
First Reading: 8-15-2006
Publication Date:
Effective Date:
ss 8/10/2006
DAVID EDLER, MAYOR