11b Police Station Bond MeasureMEMORANDUM
TO: CITY COUNCIL
FROM: STEVEN ADAMS, CITY MANAGER @
SUBJECT: CONSIDERATION OF POI-ICE STATION BOND MEASURE FOR
JUNE 5,2012 ELECTION
DATE: JANUARY 24,2012
RECOMMENDATION:
It is recommended the City Council: 1) adopt a Resolution Determining the Need for
a new Police Station facility; and 2) introduce an Ordinance calling and giving notice
of a special election on the proposition of the issuance of bonds for construction of a
new Police Station and refinancing of the 2003 Fire Station bonds, ordering the
submission of a bond measure, and establishing specifications for the election order.
FINANCIAL IMPACT:
It is proposed to issue $6.7 million in bonds. The total preliminary estimated cost of
the project is approximately $7.5 million. The cost to retire the Fire Station bonds is
approximately $800,000, which would bring the total revenue needed to roughly $8.3
million. The architect has provided a cost range given the conceptual nature of the
plans at this stage. As a result, staff has used the high end of the range for planning
purposes.
The breakdown of projected expenses include the following:
Construction
Site Development
Contingency
Architectural and Engineering Fees
Project Inspection
Furniture and Equipment
Financing Fees
Subtotal
Retirement of Fire Station Bonds
Total Cost
Agenda Item 11.b.Page 1
CITY COUNCIL
CONSIDERATION POI-ICE STATION BOND MEASLIRE
JANUARY 26,201 0
PAGE 2
Revenues are proposed as follows:
FY 201 1-12 Local Sale Tax Funds
FY 201 2-1 3 Local Sales Tax Funds
RDA Funds (previously allocated and under contract)
USDA Loan (General Obligation Bond)
Sale of Property
Total
The funding strategy is once again based on the ability to obtain financing through
the United States Department of Agriculture (USDA). Under their current interest
rate, it would result in an annual payment of approximately $360,000. In order to
avoid any increase in the tax rate, approximately $180,000 would be paid annually
through the property tax assessment. The remaining annual amount of $180,000
would be paid from Local Sales Tax funds programmed for this project.
The cost of placing the measure on the ballot is approximately $45,000 to $50,000.
However, if it is accompanied with the State Water ballot measure, the costs of the
two measures can be shared. It is proposed to fund this cost from the Capital
Improvement Project account. It is also recommended that $5,000 be appropriated
for public education. Therefore, the total cost impact of the election to this fund will
be approximately $30,000.
BACKGROUND:
The Police Department does not have adequate space for all personnel to perform
necessary functions. The Police Station was acquired from the phone company in
1973 and was last expanded in 1989. Staffing has grown to 36 full-time and 20 part-
time from 12 full-time and 6 part-time since the facility began use as the Police
Station and from 28 full-time and 15 part-time since the facility was last expanded.
Key needs include space for the detective unit, the addition of an Emergency
Operations Center to coordinate citywide incident response activities in the event of a
disaster, evidence storage, an adequate area to house corr~puter equipnient, and
expansion of the dispatch center.
The City placed a bond measure on the June 2010 ballot to help fund a new station
at the lot acquired from the County at West Branch Street and Rodeo Drive, which
was narrowly defeated. That property has subsequently been determined as
necessary to accommodate the proposed Brisco Interchange improvements.
Staff immediately began working on identifying alternative sites and strategies, which
were reviewed by the City Council at the May 24, 201 1 meeting. Sites included: 1)
an existing office building at 1303 East Grand Avenue; 2) a portion of the NKT vacant
property at Courtland Street and East Grand Avenue; 3) the City-owned West Branch
Agenda Item 11.b.Page 2
CITYCOUNCIL
CONSIDERATION POLICE STATION BOND MEASURE
JANUARY 26,2010
PAGE 3
Street and Old Ranch Road property; and 4) a joint operation with the City's existing
corporation yard at 1375 Ash Street.
The City Council expressed the most interest in the 1375 Ash Street location at that
time. Staff was directed to prepare a feasibility study and cost estimates, which are
complete and will be presented to the City Council at the February 14'~ meeting.
However, staff has determined this option to be cost prohibitive. As a result, an
additional alternative concept utilizing the property at West Branch Street and Old
Ranch Road has been prepared and will also be presented at the February 14'~
meeting.
ANALYSIS OF ISSUES:
Staff has determined that the West Branch Street and Old Ranch Road property
provides the most cost effective and feasible alternative. However, as you know, this
property has been reserved for a recreation center. The City Council previously
approved a lease and development agreement with the 5 Cities.Community Services
Foundation (Foundation) to construct a recreation center to be funded through their
fundraising efforts. A feasibility study prepared by the Foundation has raised
questions regarding the ability to fund the scale of project proposed. 'Therefore, to
address and increase the feasibility of both projects, the proposed concept includes a
joint police building and scaled down recreation facility.
Due to the project cost and budget constraints, staff has determined that a bond
measure is necessary to fund a portion of the Police building project costs without
impacting funding for other high priority capital irr~provement needs. Therefore, it is
recommended to place another Police Station bond measure on the June 5, 2012
ballot. Placing the measure on the June ballot will help avoid confusion for voters
that would occur if included along with a long list of controversial State and Federal
items anticipated for the November general election ballot.
Qualifying for USDA funding is a key component of the proposal to make the project
cost feasible given the interest rates provided through their Community Facilities
Program loan program. Based on feedback from representatives from the USDA,
staff believes it is important to proceed as quickly as possible since the future
availability of this program is unknown.
To meet the deadlines required to place the measure on the ballot for the June 5,
2012 election, it is necessary for Council to introduce the Ordinance at the January
24'h meeting in order consider approving it at the February 14'~ meeting. Staff hopes
to concurrently have the items necessary to amend the lease with the Foundation
ready for Council consideration at the February 14'~ meeting. If outstanding issues
are not resolved by that time, or the Council does not support the proposed project
concept, the Council can simply decline to adopt the Ordinance at that meeting. If
Agenda Item 11.b.Page 3
CITY COUNCIL
CONSIDERATION POLICE STATION BOND MEASURE
JANUARY 26,201 0
PAGE 4
either the Foundation or Council determines more time is needed, the measure could
be reconsidered in a few months for the November 6, 2012 general election.
The bond measure will require a 213 vote and would generate additional annual
revenue of approximately $180,000. As with the first measure, this can be
accomplished without raising the annual tax rate by proposing 30-year bonds that will
also retire the 2003 Fire Station bonds and be partially paid with Local Sales Tax
funds. It is recommended to allocate $5,000 for the distribution of public education
materials to the public regarding the proposed measure.
ALTERNATIVES:
The following alternatives are presented for consideration:
Approve staffs recommendations;
Delay the bond measure to the November 6, 2012 general election;
Delay consideration of the bond measure until all site alternative issues are
resolved;
Direct staff to not proceed with a bond measure;
Provide other direction.
ADVANTAGES:
The proposed strategy provides the most cost effective and probably only feasible
alternative to address the Police Department's facility needs without negatively
impacting the City's ability to address other critical capital improvement needs.
Including the measure on the June ballot will facilitate community education efforts on
the measure since the City won't have to compete with many other proposals that will
likely be under way during the November 6, 2012 general election.
DISADVANTAGES:
Staff does not believe there are any disadvantages involved with introducing the
Ordinance at this time because it maintains the ability to proceed, but Council can
always decline to adopt the Ordinance if concerns exist after public comment and
additional information is presented at the February 14'~ meeting.
ENVIRONMENTAL REVIEW:
Environmental review is not required for action on the proposed ballot measure.
Environmental review associated with the project has been prepared and will be
presented with the project proposal at the February 14'h meeting.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted in front of City Hall on Thursday, January 19, 2012 and on
the City's website on Friday, January 20, 2012. No comments were received.
Agenda Item 11.b.Page 4
RESOLUTION NO.
A RESOLUTION OF THE ClTY COUNCIL OF THE ClTY OF
ARROYO GRANDE DETERMINING THE NEED FOR A NEW
POLICE STATION FACILITY AND A REFINANCING OF 'THE
FIRE STATION BONDS
WHEREAS, the Police Station facility for.the City's Police Department is inadequate and
in need of replacement to ensure the health and safety of the occupants and users of
the facility and to enable the City's Police Department to provide increased safety and
emergency response services to the residents of the City; and
WHEREAS, the City Council has previously studied the need for an expanded and
improved or a new Police Station facility; and
WHEREAS, it is determined that a new Police Station facility is a "municipal
improvement" within the mearring of California Government Code Section 43601 and
may be financed in part using proceeds of general obligation bonds; and
WHEREAS, in conjunction with the funding of the construction of the new Police Station
facility, the City Council also desires to refinance the City's outstandirlg General
Obligation Bonds, Series A of 2003 (Fire Station Project) ("Fire Station Bonds") and
utilize a portion of the new general obligation bonds to call and redeem said Fire Station
Bonds.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo
Grande as follows:
1. The above recitals are true and correct.
2. Pursuant to California Government Code Section 43607, the City hereby finds
and determines that the public interest and necessity demand the construction of
a new Police Station facility for the City's Police Department and the refinancing
of the Fire Station Bonds in conjunction therewith.
3. In the judgment of the City Council, it is advisable to provide for the funding and
refnancing of such community safety needs by means of general obligation
bonds.
4. The Mayor, the City Manager, the City Attorney, the City's Bond Counsel, Rutan
& Tucker, LLP, or any other staff or consultant of the City are hereby authorized
and directed to do and cause to be done any and all acts and things necessary
or proper for carrying out the transactions contemplated by this Resolution.
5. The City Clerk shall certify to the adoption of this Resolution and thenceforth and
thereafter the same shall be in full force and effect.
Agenda Item 11.b.Page 5
RESOLUTION NO.
PAGE 2
On motion of Council Member , seconded by Council Member
, and on the following roll call vote, to wit:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted on this 24' day of January, 2012.
Agenda Item 11.b.Page 6
RESOLUTION NO.
PAGE 3
TONY FERRARA, MAYOR
ATTEST:
KELLY WETMORE, ClTY CLERK
APPROVED AS TO CONTENT:
STEVEN ADAMS, ClTY MANAGER
APPROVED AS TO FORM:
'TIMOTHY J. CARMEL, ClTY ATTORNEY
Agenda Item 11.b.Page 7
ORDINANCE NO.
AN ORDINANCE OF THE ClTY COUNCIL OF THE ClTY OF ARROYO
' GRANDE, CALIFORNIA, CALLING AND GIVING NOTICE OF A
SPECIAL MUNICIPAL ELECTION ON THE PROPOSITION OF
WHETHER BONDS SHALL BE ISSUED AND SOLD TO FINANCE A
NEW POLICE STATION AND REFINANCE THE CITY'S 2003 FIRE
STATION BONDS, AND ORDERING THE SUBMISSION OF A
MEASURE TO THE QUALIFIED VOTERS OF THE ClTY AT A
CONSOLIDATED SPECIAL MUNICIPAL ELECTION AND
ESTABLISHING SPECIFICATIONS FOR THE ELECTION ORDER
WHEREAS, the City Council of the City of Arroyo Grande, California (the "City") has
determined that the present facility for the City's Police Department is inadequate to
ensure the health and safety of the occupants and users of the facility and to enable the
City's Police Department to provide increased safety and emergency response services
to the residents of the City; and
WHEREAS, the City Council has determined that the public interest and necessity
demand the construction of a new police station facility ("Police Station") and that it is
advisable to provide the funding for the new Police Station by means of general
obligation bonds; and
WHEREAS, in conjunction with the funding of the construction of the new Police
Station, the City Council also desires to refinance the City's outstanding General
Obligation Bonds, Series A of 2003 (Fire Station Project) ("Fire Station Bonds") and
utilize a portion of the general obligation bonds to call and redeem said Fire Station
Bonds; and
WHEREAS, the City Council desires to call and give notice of a Special Municipal
Election on the proposition of whether bonds shall be issued and sold for the purpose of
constructing a new Police Station and refinancing the Fire Station Bonds; and
WHEREAS, Section l(b) of Article XlllA of the California Constitution excepts from the
general one percent (1%) of full cash value limitation those ad valorem taxes used to
pay for debt service of any bonded indebtedness for the acquisition or improvement of
real property approved on or after July 1, 1978, by two-thirds (213) of the votes cast by
voters on the proposition; and
WHEREAS, in the judgment of the City Council, it is advisable to call a Special
Municipal Election on the question of whether bonds shall be issued and sold and ad
valorem taxes be levied for the purposes set forth below.
Agenda Item 11.b.Page 8
ORDINANCE NO.
PAGE 2
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE,
CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. The above recitals are true and correct.
SECTION 2. Pursuant to the laws of the State of California, the City Council
hereby calls a special election and orders the submission to the qualified voters of the
City the question of:
SECTION 3. The estimated cost of constructing a new Police Station and
refinancing the Fire Station Bonds is $6,700,000, including costs authorized pursuant to
California Government Code Section 43610.1(a) and (b) which may be paid from the
proceeds of the sale of the Bonds.
CITY OF ARROYO GRANDE
MEASURE -
Shall the City of Arroyo Grande fund construction
of a new Police Station and refinance the 2003 Fire
Station bonds by issuing 30-year bonds not to
exceed $6,700,000 provided that the tax rate is
maintained at or below the existing tax rate for the
Fire Station Bonds and a portion of the bond
payments will be paid by revenues from the 2006
Local Sales Tax Measure?
SECTION 4. The maximum amount of the Bonds shall not exceed $6,700,000.
BONDS - YES
BONDS - NO
SECTION 5. The maximum number of years any series of Bonds shall run shall
not exceed thirty (30) years. The maximum rate of interest to be paid on the Bonds shall
not exceed six and one-half percent (6.5%) per annum. The actual rate of interest on
any series of Bonds shall be determined at or prior to the time of the sale of such series.
SECTION 6. The date of the Special Municipal Election shall be June 5, 2012.
SECTION 7. The election shall be consolidated with such other elections to be
held on June 5, 2012 under State law within the territory of the City, and shall be held
and conducted, and all other proceedings incidental to and connected with the election,
shall be regulated and done, in accordance with the provisions of law regulating
regularly scheduled elections. The precincts, polling places for said precincts in the
County of San Luis Obispo, and persons appointed and designated to serve as election
officers for said election will be those determined, designated, and appointed pursuant
to State law by the Registrar-RecorderICounty Clerk of the County of San Luis Obispo
(the "Registrar"). The City, by Resolution, has requested that the election be
Agenda Item 11.b.Page 9
ORDINANCE NO.
PAGE 3
consolidated with the Statewide Primary Election and that the Registrar conduct the
election as well as perform various other services required by law on behalf of the City.
SECTION 8. The Director of Legislative and Information ServicesICity Clerk is
hereby designated the City's Elections Official for any and all purposes.
SECTION 9. 'The City Elections Official shall, not later than 88 days prior to the
date of the election, cause a certified copy of this Ordinance to be filed with the County
Clerk-RecorderIRegistrar of Voters.
SECTION 10. The City Elections Official is hereby directed to publish this
Ordinance pursuant to California Government Code Section 4361 1.
SECTION 11. Notice of the time and place of holding the election is given and the
City Election Official is authorized, instructed and directed to give further or additional
notice of the election, in time, form and manner as required by law.
SECTION 12. In all particulars not recited in this Ordinance, the election shall be
held and conducted as provided by law for holding municipal and general obligation
bond elections. The City Elections Official shall make this Ordinance readily available
for public inspection within thirty (30) days of the date this Ordinance is adopted.
SECTION 13. Upon its second reading and adoption, the City Clerk shall certify to
the adoption of this Ordinance and thenceforth and thereafter the same shall be in full
force and effect.
On motion of Council Member , seconded by Council Member
, and on the following roll-call vote, to wit:
AYES:
NOES:
ABSENT:
the foregoing Ordinance was adopted this - day of February, 201 2.
Agenda Item 11.b.Page 10
ORDINANCE NO.
PAGE 4
TONY FERRARA, MAYOR
ATTEST:
KELLY WETMORE, ClN CLERK
APPROVED AS TO CONTENT:
STEVEN ADAMS, ClN MANAGER
APPROVED AS TO FORM:
\
TIMOTHY J. CARMEL, ClN ATTORNEY
Agenda Item 11.b.Page 11
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