Staff Report: New Public Safety Building Financing Options
A report from the CAO regarding funding and financing for the new Public Safety Building, including a revised finance plan and updates on the tender process.
TOWN OF VIEW ROYAL COUNCIL REPORT
TO: Council
FROM: Kim Anema, CAO
DATE: June 14, 2013
MEETING DATE: June 18, 2013
New Public Safety Building Financing Options
RECOMMENDATION:
THAT Council receive report dated June 14, 2013 from the Chief Administrative Officer titled “New Public Safety Building Financing Options”.
PURPOSE OF REPORT:
To advise Council regarding the new Public Safety Building financing options.
TIME CRITICAL:
Staff intend on beginning the tender process upon conclusion of review of the Request for Qualification submissions.
BACKGROUND:
In 2011 the Town of View Royal hired Hughes Condon Marler Architects to begin a process toward the design and ultimate construction of a new Public Safety Building.
Upon completion of the schematic design stage of the project, staff prepared a loan authorization bylaw for the construction of a new Public Safety Building in the amount of $7,990,000. An alternate approval process (AAP) was then conducted with a negative outcome.
Council responded to the AAP with instruction to staff to reduce the amount to be borrowed by $2,000,000, reducing the cost of the building by $500,000 and increasing the public engagement through a referendum (other voting) process.
A referendum was held to address the borrowing question with a resounding mandate supporting the bylaw authorizing the loan for construction of the new facility.
The revised finance plan for the new Public Safety Building project is described as follows:
| Funding Source | Amount |
|---|---|
| Borrowing | $ 5,490,000 |
| Proceeds from amenity contributions | $ 1,000,000 |
| Proceeds from the sale of the existing hall | $ 1,000,000 |
| Total project budget including debenture issue cost | $ 7,490,000 |
The 2012 Strategic Plan includes proceeding with the replacement of the Town’s Public Safety Building as a critical initiative in large part due to its deteriorated conditions vis a vis safety, health and seismic considerations.
PROJECT INFORMATION:
During the last six months the expected receipt date for source of funding from amenity contributions has been delayed on the basis of circumstances beyond the control of the Town of View Royal. As a result there have been some discussions about delays of the new Public Safety Building project pending conclusion of this issue.
The Request for Qualifications process includes a closing date of June 14, 2013 at 3:00 p.m. At the time of writing, there are a number of submissions in hand of reputable companies which have qualifications suitable for the project. It is expected that based on our current local economy the tender process will yield very competitive submissions.
Our intention at this juncture is to complete the review of the submissions received in response to the Request for Qualifications (RFQ) to establish a list of those demonstrating adequate qualifications. Our list is expected to be concluded June 19, 2013. The RFQ is written in such a way as to avoid obligations to tender once the Request for Qualifications is concluded.
The tender process including tendering period, tender site visit, and selection of the successful bidder is expected to take four to five weeks. If we begin the tender process June 20, 2013 we will be in a position to award the project before the end of July 2013 (as per schedule).
The tender process has significant history in the courts. Once the Town of View Royal tenders a project there is an expectation that if the lowest bidder submits a price within budget we will award the project and follow through with a contract describing terms of the award.
Before Council concludes a delay in the project staff recommend some consideration of other options.
Finance Options:
Tab 14 of our 2013 budget document describes the Capital expenditures for the Town of View Royal. This document demonstrates a very limited Capital program in 2014 ensuring that funds would be available to address the other priority needs of the Town of View Royal including the new Public Safety Building project. Tab 15 of the 2013 budget document shows the balances of the Casino fund and the Community Works (Gas Tax) funding sources. Upon conclusion of the budget process the Director of Finance advises that $786,000 of Casino revenue is projected to be available in 2014. It is expected that the remainder of funding can be sourced using strategies previously discussed including diverting reserve funds to this purpose as authorized or borrowing from the reserve funds as authorized by the Community Charter.
Staff have considered breaking up the project, separating the site development aspects from the remainder of the project to phase in the costs associated while still getting the project underway. This strategy does not represent any financial gains to the project and down sizes the scope of the project at tender making the project less attractive. It may still be an option to delay costs enabling a more manageable cash flow.
If Council wishes to delay the project a resolution establishing the intended length of delay would be appropriate.
RECOMMENDATION:
THAT Council receive report dated June 14, 2013 from the Chief Administrative Officer titled “New Public Safety Building Financing Options”.