September 3, 2015
Medford City Hall, Medford Room
411 West Eighth Street, Medford, Oregon
The Medford City Council Study Session was called to order at 6:15 p.m. in the Medford Room of the Medford City Hall on the above date with the following members and staff present:
Mayor Gary Wheeler; Councilmembers Clay Bearnson, Chris Corcoran (via phone), Daniel Bunn, Dick Gordon, Tim Jackle, Eli Matthews, Kevin Stine, Michael Zarosinski
City Manager Pro Tem Bill Hoke; City Attorney Lori Cooper; City Recorder Karen Spoonts; Police Chief Tim George; Fire Chief Brian Fish; Finance Director Alison Chan; Facilities and Project Manager Greg McKown
Public Safety Options
Mayor Wheeler stated that this is a study session only and the public will not be invited to speak unless called upon. City Manager Pro Tem Bill Hoke stated that Council requested additional information on the public safety projects and finance to update on the potential options on how to address any of the shortfalls that we are currently facing in the projects themselves. Both Greg McKown and Alison Chan will be presenting.
Mr. McKown presented a PowerPoint presentation bringing Council up-to-date on the public safety projects, 2013 space study, 2014 program review and then up to today. We are at a 12% space study increase compared to 2013. Tom Walker from Adroit Construction explained the process pertaining to the square footage. Drawings are then presented to Adroit and go over Value Engineering (VE) options. From there they go to Design Elements (DE). The GMP number is not a take-it or leave-it number; we need to work out what Council would like to see; $908,922 to project cost if alternate façade is selected. We are over budget of $1,668,303 which covers contingency.
Pertaining to the fire station, Mr. McKown presented the budget review of the 2012 space study, 2014 program review, and the current information. Mr. Walker noted that the process is the same as that of the police station. Councilmember Corcoran questioned there is a concrete flooring for fire; Mr. Walker noted that it is concrete and more typical flooring products in the office and support portion of the building. Asphalt was to be the outside product. Currently we are $3,390,190 over budget which includes a $1,070,714 contractor and owner contingency.
The police station is 7% over budget, the fire stations are 24% over budget, and public safety projects combined at a 13.4 % over budget.
Mr. Walker provided information on the square foot of each station. The size of the project is what is taking it over budget. Station 2 is drastically different due to utility work on Stewart Avenue. This is the smallest of the fire stations although it is designed the same as the others. He further provided information on what was bringing up the price; mechanical, electrical, and plumbing (MEP). The McKenzie budget for Station 4 was going to be part remodel, part new and now it is all new. Remodels are very expensive with BOLI. Stations 3 and 4 site work costs, if you pull that out of the price, it goes down.
Pros and cons of delaying the project; Adroit is working with the designer and owner. When 100% construction documents we take that out to the street and hard bid all of the work. It will be a sealed bid. Adroit given copies of the bids. Pros to delay to step back and find out where we can save money. The same process would happen for the police station. The bids would be good for 45 days. The cons are; if we go past that, the contractors can walk away. If we delay too long we will go into the winter months. Some VE changes will require additional costs. In Mr. Walker’s opinion the pros far outweigh the cons.
- Proceed with police, place all fire projects on hold;
- Proceed with police, proceed with fire 3 & 4, re-bid station 2;
- Proceed with all projects;
- Place all projects on hold.
Finance Director Alison Chan presented funding options. The public safety fee will pay for the projects. She presented three options.
- Internally borrow estimated amount needed;
- Externally borrow estimated amount needed; (She noted banks have called her)
- Internally fund a line of credit and only borrow as needed.
She provided information on why the public safety fee is so difficult to project.
Councilmember Jackle wondered if this had to do with the 17 street projects; Ms. Chan noted that it was that and that the SDCs coming in pertaining to building are difficult to determine since we don’t know how many permits we would receive on a daily basis.
Councilmember Jackle questioned the 2018 number pertaining to the SDC trend; Ms. Chan noted she called Cory Crebbin and that information is the latest we have. Councilmember Jackle if the five month number is a confident estimate; Ms. Chan noted that Mr. Crebbin forecasts very conservatively.
Councilmember Gordon questioned if we could set up a borrowing plan internally to get a better rate and questioned where we are pertaining to debt service. Ms. Chan noted that she didn’t think the $282 would come until Jan of 2018. Councilmember Gordon questioned we would not have enough money to pay off the debt. Are you saying that because of increase that we would need to debt service; Ms. Chan noted that there is flexibility with internal debt service. Does not anticipate drawing on the loan.
Councilmember Stine questioned where the internal loan was coming from: Was it the utility fee? Ms. Chan indicated that the internal loan can be borrowed from another fund as long as you have a plan to pay it back, with interest, within 10 years according to the state law. She indicated MURA has money and there are several other funds that have a fund balance also. Councilmember Gordon noted the MURA money is separate from the City and not appropriate business practice if we don’t have our MURA hat on. Councilmember Bunn noted we can raise the money if needed but we need to talk about the construction portion.
Councilmember Matthews noted that we need to look at the options presented by Mr. McKown. He questioned if we can get the 7% lower on the police station. What options do we have to bring the numbers down? Mr. Walker stated yes it is possible, but we need to determine what has to stay and what can go. We would need to go back and brainstorm between the various teams and review what can be cut. Mr. Walker indicated that anywhere from 0% to 7% is possible.
Mr. Corcoran appreciates Mr. Walker’s comments in order to proceed and doesn’t know what is functional. He is in favour of putting a stop sign to all projects rather than completing the work on the police station, even if that means postponing the ground breaking of the fire station.
Mr. McKown noted that we would stop and continue to VE before we would proceed with the project.
Councilmember Bearnson asked why we would rebid Station 2; Mr. Walker noted that we look at cost per square foot. The other stations were close to the original cost per square foot. Because there were so many projects bidding at the same time it may help to reduce the cost if we rebid it.
Councilmember Bunn thought we need to hold the fire station but not the police station as we added square footage and that is what we needed. He questioned if we needed to make a decision on the garage façade. Mr. Walker noted there is a structural steel element to it and we would need to know that now.
Councilmember Bearnson questioned what is the harm of not building one of the fire stations. Councilmember Gordon. Medford Fire Chief Brian Fish would have to look at it with his operations staff. He will work with what he has. Pertaining to the fire apparatus we are working with Medford Rural Fire Protection #2 and through that process we are saving $60,000 per unit which may affect them if it is not approved.
Councilmember Corcoran questioned Mr. Fish if he would rebuild Bear Creek at its present location or would he propose it to be downtown. Mr. Fish indicated a center station that can go every direction in the City would be good, but he would have to look at the numbers.
Mayor Wheeler thought options 1 and 2 are better than 3 and 4. We need to check this out and is not happy with putting everything on hold. Option 2 seems to be the best alternative.
Councilmember Zarosinski though we should look at what we can eliminate on fire to get it back in budget. He was okay with proceeding with police.
Councilmember Bunn questioned staggering the construction times; Mr. Walker noted that could help. Councilmember Gordon agreed with option 1. He would like to rebid on a more traditional basis more conventional to get a fixed bid. Fire Station 2 has always been one that has been needed and is the number one problem. He talked about how we cut corners and it has cost us on the Barnett fire station. He talked about the 5,000 extra square feet on the police project.
Mr. Fish noted that the Barnett fire station was designed by an architect and talked about the issues to save money. He doesn’t want to do any station unless it is done right.
Councilmember Bunn noted that we need to give Adroit some time although Councilmember Gordon had a good suggestion. Councilmember Gordon agreed but commented about the recent increase that was fine April 2.
Councilmember Jackle agreed with option 4 so we could look at all to determine costs.
Councilmember Stine noted that we need to talk about the fire apparatus; he did not think that it was appropriate to delay on the fire apparatus as that money was allocated to the apparatus.
The meeting adjourned to the regular City Council meeting at 6:57 p.m.
Karen M. Spoonts, MMC