TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Mark Leyman, Parks and Recreation Director
Erick Lee, Public Works Director
Steve Charelian, Finance Director
Talyn Mirzakhanian, Acting Community Development Director
Jan Buike, Senior Recreation Supervisor
SUBJECT:Title
Consideration of Design Updates, Cost Estimates, Naming of the Senior and Scout Community Center, and Renegotiating the Memorandum of Understanding (Parks and Recreation Director Leyman).
(Estimated Time: 1 Hr.)
A) DISCUSS AND PROVIDE DIRECTION
B) IF APPROVED, ALLOCATE $1,691,548
Line
_________________________________________________________
Recommended Action
RECOMMENDATION:
Staff recommends that the City Council discuss and provide direction on the design updates, cost estimates, naming of the Senior and Scout Community Center building and renegotiating the Memorandum of Understanding (MOU). If the project allocation is approved, as proposed in Option 1, $691,548 will be transferred from the unreserved General Fund balance to the CIP Fund in Fiscal Year 2022-2023 and the remaining $1.0 million transfer will be incorporated into the FY 2023-2024 Proposed Budget.
FISCAL IMPLICATIONS:
The City Council previously allocated $2.9 million to partially cover construction of the Senior and Scout Community Center. The funds are currently programmed in the Capital Improvement Projects (CIP) Fund. After the initial allocation of $1.0 million in 2019, the City Council approved the additional contribution of $1.9 million at the City Council meeting on May 17, 2022, and asked the Friends of the Senior and Scout House (Friends) to work with the Tomaro Design Architecture, Inc. to increase the size of the building, if possible, and use more resilient materials.
Since the May 17, 2022 City Council meeting, project costs have increased by $1,691,548 to include $486,000 for construction upgrades, which include an ADA component including 15% contingency, as well as funds for construction management, inspection, and design during construction (Attachment).
Funding Options
Staff has identified various funding options to meet the new construction estimate and funding shortfall of $1,691,548:
Option 1: Staff proposes funding the shortfall of $1,691,548 by transferring the amount from the Unreserved General Fund balance to the CIP Fund over two years in FY 2022-2023 ($691,548) and FY 2023-2024 ($1.0 million). To mitigate the impact on Unreserved General Fund balance, staff proposes reducing the General Fund Pension Policy transfer to the Pension Stabilization Fund by $1.0 million in FY 2023-2024. Based on staff’s most recent Five Year Forecast, sufficient funding is currently available in the Unreserved General Fund Balance.
Option 2: Alternatively, construction costs for the project could be financed by issuing Certificates of Participation (COPs). Issuing $5.0 million in COPs would cost the City approximately $210,000 in cost of issuance expenses. Annual debt service on the COPs would be approximately $290,000 for 30 years. The estimated true interest cost on the COPs is currently 4%, but would be re-evaluated at the time of issuance.
Friends Funding Commitment
Friends has incurred additional costs, including several new consultants, needed to complete the design phase totaling approximately $96,800. They have continued to fundraise to cover these unanticipated expenses. They now have raised a total of $2,622,000.
Friends and the Manhattan Beach Property Owners Association have transferred $2.0 million of their donations to the City for the project. $140,000 from Friends cash on hand will be transferred to the City by March 31, 2023. $150,000 from Beach Cities Health District will be transferred to the City prior to initiating requests for bids.
The Friends have approximately $286,300 cash on hand and another $60,500 in outstanding pledges for a total of $496,800 committed to the project. Friends will continue to actively fundraise to cover unanticipated expenses.
BACKGROUND:
The City Council approved a Memorandum of Understanding for the Senior and Scout Community Center and directed staff to work with the Friends group and Tomaro Architecture to increase building square footage and provide more resilient construction materials at the City Council meeting on May 17, 2022. Specifically, the City Council asked to use materials other than wood that would withstand time and weathering, such as glass.
DISCUSSION:
Design
The Friends and Tomaro Architecture redesigned the building, expanding the programmable space with an additional meeting room and increasing the size to 8445 square feet. These designs were shared with staff, and cost projections were made based upon the new floor plan and increased size. Based on new costs identified by staff after the May 17, 2022, meeting, the project estimate for the larger building is now approximately $6,870,000.
Friends reduced the size of the building based on the escalating costs. The building size was decreased from 8,445 square feet to 6,986 square feet. The site plan, elevations and 3D model (Attachment) include the following changes:
• Reduced the programmable space upstairs by one meeting room
• Reduced the number of restroom stalls needed
• Reduced the size of the lobby and office/storage in the lobby
Items added to the project include:
• Solar panels
• Upgraded elevator
• Funding for abatement during demolition
• More sustainable and lower maintenance exterior finishes (porcelain tile vs. wood)
Project Costs:
The construction cost estimate was updated by Del Amo Construction on February 1, 2023, based on the updated building size and site plans by Tomaro Architecture dated January 25, 2023. The updated cost estimate includes increased abatement cost identified in the existing haz-mat report for the Scout House, increased cost for upgraded model of elevator, use of sustainable and resilient ceramic materials and reduction in use of wood, and a photovoltaic system for system installation. The 6,986 square footage came out to $690.36 per square foot with a total of $4,822,857 of hard costs for the project, not including any additional ADA path of travel requirements post planning entitlement review.
The project construction contingency is 15% of hard costs which to nearest thousand is $724,000, not including any additional ADA path of travel requirements that stem from Building and Safety plan check. The planning entitlement review has not been completed at the time of this report printing; and construction plans would follow approval of the planning entitlement. As such, an additional ADA path of travel requirement placeholder of 1% of hard costs and 15% contingency on top of that item has been added for a total to nearest thousand of $56,000.
The project soft costs include items such as environmental review (CEQA), plan check, permit fees, inspection, and construction project management. The environmental review includes a CEQA consultant hired by Community Development to determine environmental impacts of the project and to conduct a parking analysis, for a not-to-exceed fee of $156,754, which is an increase of $3,754 in comparison to the figure previously presented due to typographical error. In addition, there are permit fees for building and safety plan check, right of way, fire, demo, and water meter/sewer connection fees that total $59,477. The construction management fees, which are typically 12% to 15% of hard costs, are estimated at 12% for a fee to nearest thousands of $579,000. The inspection fees are typically 8% of hard costs which results in a fee to the nearest thousand of $386,000. Design support during construction is typically 2% to 4% of hard costs and for this project Tomaro Architecture assumed 2% for a fee to the nearest thousand of $97,000.
The breakdown of the costs and delta from previously approved budget are provided as an attachment.
Renaming of the Senior and Scout Community Center
Friends suggest naming the project the “Live Oak Community Center,” branded as “A Hub for All Generations.” This recommendation has been discussed thoroughly with Friends, Manhattan Beach Property Owners Association and Parks and Recreation staff and represents a joint recommendation of all parties.
Maximizing City’s Ability to Manage the Project
The MOU between the City and the Friends currently governs the partnership arrangement between the parties and details the responsibilities of each organization. In order to streamline decision making and ensure the project tasks stay on schedule, the City could explore assuming more responsibility for this project than is currently allowed for under the MOU. This could include direct work with Tomaro Design Group and more interaction with other contracted firms. Staff recommends that the City Council provide direction about the City renegotiating the MOU in order to assume a larger role in the remaining planning, design, and ultimate construction of this project.
PUBLIC OUTREACH:
Construction of the Scout Community Center has been discussed in a variety of public forums, including at least four previous City Council meetings, with senior groups, scouting groups and City staff. Further outreach was conducted by the Friends on April 20, 2022, at the Joslyn Center. Seven hundred postcards were mailed to neighbors within 1,000 feet noticing this community input meeting and the meeting was announced in the Older Adult Program’s monthly newsletter mailed to 1,000 older adults. Friends members provided an overview of the project’s history, the need, fundraising efforts, partnerships and next steps and requirements. Project Architect Louie Tomaro provided detailed plans of the proposed facility and the usage for each area. The presentation was followed by questions and answers for the 27 attendees which included neighbors, seniors, and scouts. Staff was also present to provide information on project process, current and future programs, and timeline. Staff and Friends have provided updates to the neighbors regarding the anticipated timeline, CEQA, parking, and environmental permits. Staff and the Friends representatives met on December 13, 2022, with representatives of the neighbors to provide traffic and environmental project updates, and these representatives have been notified of the discussion of this item at the March 7, 2023 City Council meeting.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed recommendations for compliance with the California Environmental Quality Act (CEQA) and has determined that the Council’s discussion of this item is not a “Project” as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. However, CEQA evaluation for the proposed development project is currently underway and will be considered along with the Planning entitlement at a later stage.
LEGAL REVIEW:
The City Attorney has worked collaboratively with the Friends Attorney to develop the MOU which was approved by the City Council. If the City Council approves the updated design, funding, building name, and renegotiation option, the MOU will be amended to reflect the changes.
ATTACHMENTS:
1. Scout House Renderings
2. Senior Scout House Cost Estimate
3. Five Year forecast - Scout House Funding Options
4. Senior and Scout House MOU with Attachments
5. PowerPoint Presentation