SUBJECT: QUARTERLY
STATUS REPORT ON PARKS AND RECREATION AND BRANCH LIBRARY BOND PROJECTS
(Measures O & P)
Staff recommends that the Council accept the quarterly status report on the parks and library bond projects.
After overwhelming voter approval of two bond measures to finance construction and improvements to parks and recreation facilities and neighborhood branch libraries, the City Council directed staff to prepare quarterly updates for the implementation of the approved bond projects.
This report provides the update on the status of the bond projects as of June 2001. The report also focuses on work projected during the period of June 2001 through June 2003 which is the critical start-up period for most of the Measures O & P projects and coincides with expenditure expectations for the first two bond sales as approved in the adopted 5-year Capital Improvement Program.
A schedule for all projects was presented to the Council in a March 2001 staff report and subsequently included in the adopted 2001-2006 Capital Improvement Program. All projects are currently on the established schedule.
A City staff oversight committee chaired by a Deputy City Manager has been established to insure projects are continuously monitored. In addition, the ballot measures for the bond projects also called for citizen oversight committees for the monitoring of project costs and schedules. Both the Parks and Recreation Commission and the Library Commission have accepted the
Mayor’s invitation to serve in that capacity. Both commissions have developed preliminary work plans with their departmental staff and will finalize their duties in August and forward their work plans to the Council. In the meantime, both commissions have been updated on the bond project activities. The City Auditor will also be conducting a review on the Measure O & P program.
Nine neighborhood park projects are among the first to be awarded. The projects and their construction contract award and planned groundbreaking schedules are shown below. Further detailed information on project schedules can be seen on Attachment A.
Neighborhood Parks Contract Award Planned Groundbreaking
Cahalan June 19, 2001 August 2001
Playa Del Rey June 19, 2001 August 2001
Lone Hill September 2001 October 2001
Great Oaks September 2001 October 2001
Graystone September 2001 October 2001
Houge September 2001 October 2001
River Glen September 2001 October 2001
Vista November 2001 December 2001
Parma April 2002 May 2002
Project Activity
Over the last several months, the nine neighborhood park renovation projects noted above have been under design. Construction contracts for two of the projects, Cahalan and Playa Del Rey Parks, were awarded on June 19, 2001. Design efforts on all nine projects include community meetings. To date, 26 community meetings have been conducted to solicit input and gain consensus on proposed improvements.
Design consultants are under contract and preliminary design for two multi-service community center projects is underway. The two projects are the Gardner Community Center and Camden Community Center. Current work on the two projects is focused on programming facility spaces, including site planning. Since March, meetings with advisory groups and at-large community meetings have been conducted for both projects.
In addition, five consultant master agreements were
approved by the City Council on June 5, 2001 for the design of 36 neighborhood
parks. Most of these projects are
scheduled to be under construction on or before mid-2002. The project schedules
for these parks are also shown on Attachment A.
In May 2001, a firm was selected to provide program management services for the Parks Bond Program and to provide design and construction management services, scheduling, estimating and value engineering for regional facilities and community center renovation/expansion projects. An initial master agreement for services has been negotiated. Staff anticipates that an agreement will be recommended for approval for this work by the end of August 2001.
A Request for Qualifications was advertised for project management and design services for the renovation and expansion of Happy Hollow Park & Zoo. Statements of qualification were received on June 8, 2001. A board consisting of City and external representatives will interview consultant candidates in July. It is expected that the agreement will be presented to the Council in September 2001.
Public Works and Library staff have started work on the first branch library projects. Design contracts were awarded and design has begun on the Berryessa, Blossom Hill, and Central branch libraries. A site for the new Central Branch adjacent to the Police Department’s Tully Stables was identified and an offer has been made to the owner. A site feasibility study for the Berryessa Branch and a Site Plan for the Central Branch site are underway.
Community input into the location, design, and construction of the branch libraries is an essential part of the program. So far, there have been four community meetings pertaining to the design of the Berryessa and Blossom Hill branches, with two more scheduled for Berryessa and three for the Central Branch. In addition, staff has attended numerous neighborhood and SNI meetings where the new branch libraries were discussed.
A template branch building program was completed in March. This building program is being used for the Blossom Hill Branch Library and will be the basis for the rest of the branches. It will be customized for each branch based on community input and special service area needs. An RFP was issued and interviews conducted for an environmental graphics consultant for program wide interior and exterior sign design and specifications. An RFP for systemwide data/telecommunications consultant is being developed.
As indicated in the March 29 update, staff has selected a program management firm that will provide professional services such as design management, scheduling, estimating, and value engineering.
STAFFING
PRNS
Five positions were approved by City Council to support the Parks Bond Program. One is filled and the other four will be filled by September.
Libraries
Three of the four Library positions authorized at mid-year are filled. There are two additional positions authorized to begin in the 2001/02 fiscal year.
Public Works
Twelve positions were approved by the City Council in January to support the Parks Bond Program. As of June 2001, six of the twelve positions are filled. The remaining six positions are posted and advertised, and interviews are underway for four of the positions. Public Works anticipates filling all six vacancies by the end of July 2001.
In addition, Public Works has filled three of the five positions authorized at mid-year for the library projects. Three additional inspector positions, two of which are funded 50-50 by parks and library bonds, are authorized to begin in the 2001-02 fiscal year.
Currently, all projects are on schedule. As noted, Attachment A provides overall schedule information. Attachment B provides more detailed information on both activities and projected expenditures for the projects beginning work within or before FY 2001-2002.
In total, 77 library and parks projects will be underway
in FY 2001-2002 valued at $177 million with an additional 17 projects starting
in FY 2002-2003 valued at $49 million.
The schedule calls for completion of 60 of these projects by June
2003. Project groundbreakings by
calendar year are shown on Attachment C.
PROJECT
FINANCING AND EXPENDITURES
We had a very successful General Obligation (GO) bond sale on May 23, 2001 for the City’s first series totaling $71 million to fund library and parks projects. Of the bonds, $31 million constitute libraries bonds, with $180.7 million remaining in Measure O voter authorization, and $40 million constitute parks bonds, with $188 million remaining in Measure P voter authorization. The City expects to issue additional GO bonds under the Measure O and Measure P authorizations over the next succeeding five to eight years.
The GO bonds were marketed as a competitive sale with the winning bidder providing the lowest interest rate. The winning bid for this first series of GO bonds was UC Bancorp Piper Jaffray at 4.9639% (true interest cost). Due to the City’s strong credit ratings, there was significant interest in the general bond market. As a result, the City received nine bids. The next lowest bidder was at 4.9709%. The high/low spread between the lowest and highest bidder was only .069148%. This is a very tight spread and gives an indication of the quality and strength of the City’s credit.
The winning bid was lower than projected, which will result in even lower interest costs to the City that translates into lower property tax rates for the City’s property taxpayers. Bidders had
the option to purchase bond insurance, however given the City’s strong credit rating, the bidders chose not to purchase insurance.
By comparison, Santa Clara VTA sold 25-year bonds at $200 million an hour previous to our bidding. They received five bids, we received nine. They are rated AA (S&P), AA (Fitch) and AA3 (Moody’s), while we are rated AA+, AA+, and AA1. Their lowest bid was at 5.07%.
Furthermore, the bond measure analysis used at the time the City’s voters authorized the issuance of the bonds assumed a 7.00% interest rate on all bonds to be approved by the voters. The actual interest cost obtained for the bonds is more than 2.00% lower and will save taxpayers more than $21 million in interest cost from what was originally projected. As an example, a homeowner with an assessed valuation of $200,000 will see a reduction in average taxes of approximately $441 over the life of the bonds.
It is projected that all of the $40 million and $31 million in bonds that have already been sold for parks and library projects respectively will be encumbered or expended by June 30, 2002.
An additional $92 million in new bonds to be sold in late 2002 are projected to be encumbered or expended by June 30, 2003. This would make the grand total of projected encumbrances or expenditures for both parks and library projects $162 million through June 30, 2003. Future reports will track and update the Council on the actual versus projected expenditure rate.
Graphs of the cumulative projected expenditures are shown on Attachments D & E.
IMPROVEMENTS TO PROJECT MONITORING AND
DELIVERY PROCESSES
Staff is currently reviewing opportunities for improving the City’s project monitoring and delivery system. Several actions are on the near horizon: establishing a more focused, results driven project monitoring and reporting process that will give project teams better project management tools while setting high expectations for accountability and on time/on budget performance; expanding the Measure O & P Council quarterly report to include all CIP projects; developing a single, reliable database for all CIP projects; aligning staffing and database information to provide accurate, readily accessible project status information to the Mayor, Council and public on a daily basis; establishing a quality annual report to the public regarding CIP accomplishments and upcoming projects.
A more detailed review of the program enhancements and schedules will be reported to the Council this fall.
CONCLUSION
All of the
Measures O & P library and parks projects are currently on schedule. This will result in a total of 94 projects
valued at $227 million being underway between now and June 2003. Of these, 60 projects are scheduled to be
completed by June 2003 and an additional 17 projects to be completed by June 2004. Staff will provide an additional update to
Council in September 2001.
DEL BORGSDORF
City Manager