TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Carrie Tai, AICP, Acting Public Works Director
Steve Charelian, Finance Director
Wolfgang Knabe, Interim Fire Chief
Prem Kumar, City Engineer
Mamerto Estepa Jr., Senior Civil Engineer
SUBJECT:Title
Consideration of the Final Design for the Construction to Replace Fire Station No. 2 and a Resolution Approving the Intention to Issue Tax-Exempt Certificates of Participation (Acting Public Works Director Tai and Finance Director Charelian).
ADOPT RESOLUTION NO. 21-0024
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Recommended Action
RECOMMENDATION:
Staff recommends that City Council consider the final design to replace Fire Station No. 2, and adopt Resolution No. 21-0024 approving the intention to issue Certificates of Participation of up to $9.5 million to fund the construction project.
FISCAL IMPLICATIONS:
The design development phase of this project was budgeted in the CIP Fund for $777,441 and supported by a General Fund transfer of $540,000 to expedite the project. While some capital projects may be funded with existing resources, larger and costlier projects with extended useful lives may require the issuance of debt to spread the costs over multiple years for affordability and to achieve intergenerational equity.
Construction costs for the Project can be funded by the City through the sale of tax-exempt Certificates of Participation (COPs). Using the construction estimate of $9.5 million, the average annual debt service cost is estimated at $454,000 per year over a 30-year term at current historically low interest rates. If bids come in lower than expected, the City will include a portion or all of the design costs within the bond issuance and recover the General Fund expenses made to initiate and expedite the project.
On February 19, 2021, the Finance Subcommittee discussed options to fund the annual debt service payments and recommended the ...
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