Medford presentation on police and fire station funding options

7/29/2019 Medford presentation on police and fire station funding options

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FUNDING OPTIONS FOR FACILITIES(Police and Fire)

Medford City Council Study SessionSeptember 12, 2013

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PROJECT HISTORY - Police FacilityEstablished NEED

Currently occupying 15,000 sq feet of space.

Built in 1967 (was supposed to be temporary location atthat time).

Space Needs Study by MacKenziepresented to City Council on March 14, 2013Study Session.

Current location does not meet seismicrequirement for Essential Facility and PublicSafety should not be housed in this City Hallbuilding.

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PROJECT HISTORY - Police FacilityEstablished NEED

Co-mingled public areas and multi-use facility

creates substantial risk to the safety of all currentCity Hall users, including the public.

Public and secure space is mixed, as is securespace with civilian employees, making it a hugesafety risk in current location. Secured space isinadequate.

Lack of operation space for report writing,interview rooms, locker rooms and storage, lack

of secured police parking.3


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POLICE NEED

Determined to be a facility of 42,423 ft with aparking structure of 223 stalls.

City-owned property on 10th St at Ivy St.

Cost of recommended facility is $21.6 Million.(including parking garageand cost of debt)

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POLICE NEED

Considerations already made: Construction on City-owned property - no cost for land

Surface parking lots and pedestrian improvements to be

paid out of budgeted funds (-$700,000)

Proposed facility allows for20-25 year growth; after thatsubstations/precincts

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August 2012 Facilities Master Plan provided by

MacKenzie and previously presented to CityCouncil.

Initial estimate for rehabilitation of Fire

Stations 2 through 6 as well as training andlogistics = $16.6 M.

PROJECT HISTORY - Fire FacilitiesEstablished NEED

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Project Costs:

Fire Station #2 $3.9 Million Fire Station #3 $4.4 Million

Fire Station #4 $2.7 Million



Training $2.4 Million

Logistics $0.7 Million

Cost of Issuing Debt $0.2 Million

Total $16.8 Million

PROJECT HISTORY - Fire FacilitiesEstablished NEED

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Fire Station #3 $4.4 Million Fire Station #4 $2.7 Million



Training $2.4 Million

Logistics $0.7 Million

Cost of Issuing Debt $0.2 Million

Total $10.4 Million

$6.4 Million Reduction

PROJECT HISTORY - Fire FacilitiesProjects Removed/Reduced:

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FUNDING OPTIONS

Police $ 21.6 Million

Fire $ 10.4 Million

$ 32.0 Million Total bond needed

What are the funding options availableand what are the estimated costs?

What are the revenue options to meet thatcost?

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SOME CONSIDERATIONS: First discuss the BOLI issue and the potential for

cost savings.

Comparison was BOLI wage rate vs AGC Union rate.

Non-Union rates are not included.10


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Not as much potential for savings as anticipated

in a non-BOLI job. The estimate is in the 3% to5% range. This type of construction is generally atunion scale, so the savings are minimal.

These types of facilities would be BOLI wage jobsunder the definition of ORS 279C.840 in standardgovernment financing (Bond Options #1 and #2).

In order to avoid BOLI, the City would have to useother funding options (NNN/Lease, Debt/Equity)that are not recommended.

CONSIDERATIONS(cont):

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FUNDING OPTIONS We reviewed/examined other funding

options: Bond Option #1 (General Obligation Bond)

Bond Option #2 (Full Faith and Credit Obligation Bond)

Lease Triple Net Option

Debt/Equity Option

63/20 Option

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FUNDING for PUBLIC SAFETY FACILITIES

Canby Urban Renewal 08/2011 08/2012

Gresham Urban Renewal 03/2013 12/2013 Keizer Urban Renewal 03/2008 early 2009

Klamath Falls Bond Measure 05/2009 07/2010

McMinnville Bond Measure 03/2007 06/2008

Monmouth Bond Measure Passed in 05/2013

Roseburg Urban Renewal 04/2008 11/2009

Sandy Urban Renewal 08/2009 09/2011

Springfield Bond Measure 02/2008 02/2009 Troutdale Bond Measure 10/2011 09/2012

West Linn Bond Measure started 09/2013

Woodburn Bond Measure 09/2005 10/2006

FUNDING CONSTRUCTION PERIOD


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FUNDING OPTIONSWe and our consultants agree that a Full Faith

and Credit Bond (Bond Option #2) is therecommended funding option:

City of Medford has bonding capacity Does not require a referendum approval

We have an identified revenue source to meetthe interest/principal payment

More timely to implement

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BOND OPTION #2 (example)

$32.0 million 30 years at 4.75%

Full Faith and Credit Obligation Bond Option #2

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Bond Option #2

Project Costs for Both Police and Fire:Police Facility

Building,Garage & Parking lot 21,900,000

Land - City owned -

Parking lot - "pay as you go" (700,000)

Cost of Issuing Debt 400,000

Amount needed 21,600,000

Fire Facilities

New Fire Station & All Renovations 16,600,000Land for the new fire station - City owned -

Some Renovations - "pay as you go" or eliminated (6,400,000)

Cost of Issuing Debt 200,000

Amount needed 10,400,000

Total Amount to be Borrowed 32,000,000$

Annual Payment 2,000,000$30 year debt - interest rate of 4.75%


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FUNDING ALTERNATIVES WITH

BOND OPTION #2

$32.0 Million Bond =

Total annual payment of $2 Million(based on 4.75% on 30 year bond)

Alternative 1 = Some combination of: % of Public Safety Facility Surcharge $

% of City of Medford Tax increase $ % pay as you go budgeted funds for a portion

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This would require a referendum by voters if tax rate increased


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(cont)

Alternative 2 = $0.35 per $1000 increase in

City of Medford tax rate.

$53 per year for an assessed $150,000* homegenerates $2 Million per year.(deductible/tax advantage)

* Average assessed value for Medford residence

* This would require referendum approval if tax rate increased

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BOND OPTION #2


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(cont)

Alternative 3 = Public Safety Facility Surcharge(recommended option)

$2.00 per month per residential/business unit willgenerate an estimated $0.9M per year.

When the Street Fee surcharge is removed, increase

the Public Safety Facility Surcharge to $4.82. Thiswill generate an estimated $2.5M per year.

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BOND OPTION #2


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In approximately 60 months, the Transportation

Projects surcharge will end.

For SFR (single family residence), that will result in$2.82 decrease in the Street Fee.

Public Safety Facility Fee Surcharge could beginat $2.00 and increase to $4.82 at the time the

Street Fee portion expires in approximately 2018.

SURCHARGE STRUCTURE OPTIONS:

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Sewer

Street

Storm

Water

Public

Safety

Parks

Pub Safety

Surcharge

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$15.85 $15.85 $15.85 $15.85 $15.85 $15.85

$8.45 $8.45 $8.45 $8.45 $8.45$5.63

$7.71 $7.71 $7.71 $7.71 $7.71$7.71

$12.15 $12.15 $12.15 $12.15 $12.15$12.15

$2.60 $2.60 $2.60 $2.60 $2.60$2.60

$2.95 $2.95 $2.95 $2.95 $2.95$2.95

$2.00 $2.00 $2.00 $2.00$4.82

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

Current

Fees

Initial

Fees

2015 2016 2017 2018

Total: $49.71 $51.71 $51.71 $51.71 $51.71 $51.71

Current & Proposed Monthly Utility Charges - SFR


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UTILITY FEE RATES COMPARISON

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Medford has a very low utility fee rate which includes the street fees.

With the $2.00 per month increase, we are still at the same ranking

for utility fees.

$51.71


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Sewer

Street

Storm

Water

Public

Safety

Pub Safety

Surcharge

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15.85 15.85 15.85 15.85 15.85 15.85 15.85

8.45 8.45 8.45 8.45 8.45 8.455.63

7.71 7.71 7.71 7.71 7.71 7.717.71

12.15 12.15 12.15 12.15 12.15 12.1512.15

2.60 2.60 2.60 2.60 2.60 2.602.60

2.95 3.63 3.63 3.63 3.63 3.633.63

2.00 2.00 2.00 2.00 2.004.82

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

Total: $49.71 $52.39 $52.39 $52.39 $52.39 $52.39 $52.39

Current & Possible Monthly Utility Charges - SFR

Parks

Current Fees 2013 2014 2015 2016 2017 2018

This includes a proposed Public Safety Facilities Surcharge ($2.00) and possible Park fee increase ($0.68)


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Storm $1.23 in 2014 $0.63 in 2015

Street $0.80 in 2014 $0.46 in 2015

Sewer $1.60 in 2014 $0.81 in 2015

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POSSIBLE STREET, STORMAND SEWER INCREASES :


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15.85 15.85 17.4518.26 18.26 18.26 18.26

8.45 8.459.25 9.71 9.71 9.71 6.89

7.71 7.71

8.949.57 9.57 9.57

9.57

12.15 12.15

12.1512.15 12.15 12.15

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2.60 2.60

2.602.60 2.60 2.60

2.602.95 3.63

3.633.63 3.63 3.63

3.632.002.00

2.00 2.00 2.004.82

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

Sewer

Street

Water

Parks

Pub Safety

Surcharge

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Total: $49.71 $52.39 $56.02 $57.92 $57.92 $57.92 $57.92

Current & Additional Possible Monthly Utility Charges - SFR

Current Fees 2013 2014 2015 2016 2017 2018

Possible increases:(included in graph)

Parks $0.68 in 2013Storm $1.23 in 2014 and $0.63 in 2015Street $0.80 in 2014 and $0.46 in 2015

Sewer $1.60 in 2014 and $0.81 in 2015

Public

Safety

Storm


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PUBLIC SAFETY FACILITIESCOMPARABLE CITIES BOND DEBT

Snapshot June 30, 2012

Bend Gresham Springfield Medford

General Obligation Bonds $0 $0 $25.8M $ 3.1M

Full Faith & Credit Bonds $64.4M $74.1M $0 $49.7M

(minus URA) ($23.6M) ($20.9M)

Renewal Bonds $15.0M $8.3M $30.8M $25.9M

(minus URA) ($ 5.0M)

Total Bond Debt

minus URA$79.4M $58.8M $56.6M $52.8M


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Move forward with the proposed Public Safety

Facility Surcharge plan.

Come back to Council in the next 60 days with afinalized plan to implement the code change.

Council direction.

RECOMMENDATIONS:

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Thank you

Documents

Medford presentation on police and fire station funding options