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HomeMy WebLinkAbout14-016 Adopting a Strategy for Mountain View Commons and Negotiate Lease with School District Resolution 14-016 Page I of 3 RESOLUTION NO. 14-016 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PORT TOWNSEND, WASHINGTON ADOPTING A STRATEGY FOR MOUNTAIN VIEW COMMONS AND DIRECTING THE CITY MANAGER TO NEGOTIATE LEASE TERMS WITH THE PORT TOWNSEND SCHOOL DISTRICT NO. 50 AND PREPARE AGREEMENTS AND APPLICATIONS TO SECURE FINANCING RECITALS: A. On April 14, 2014,the City Council considered a proposed strategy for the future of Mountain View presented by the City Manager. B. The proposed strategy includes the following features: 1. A 15-year term at Mountain View with a total estimated project budget of$2.6 million. 2. The $2.6 million budget pays for emergency roof repairs and new roof work and mechanical (HVAC)repairs and upgrades. 3. It allows continued City operation of the pool, however, subject to possible closure if unexpected emergency repairs occur and funding is not available to make the repairs or it is not feasible to make the repairs because the cost of the repairs is not reasonable given other potential pool costs or other needs of the City. 4. The concept allows continued operation of community nonprofit entities at Mountain View(for example, Red Cross, Food Bank, YMCA). 5. The concept maintains the Police Station at Mountain View. 6. The concept stabilizes costs to operate with no new taxes. 7. It is a limited term commitment (15 years), however, would include a renewal term at the City's option which allows the term to be rolled into a longer term if within the initial 15-year term community partnerships are created that allows continued operations. C. The budget is based on updated information relating to the cost of roof repairs and updated energy costs. The new pro-forma on the energy retrofit with the roof included showed an 8.6 year return on investment. In other words, the saving in energy and operation costs would pay for improvements in 8.6 years. These numbers were supplied to the City by Honeywell, Inc. as part of the energy program the City is contracting with Honeywell through the State of Washington Department of Enterprise Services. As part of the contract, Honeywell guarantees the savings and pro-forma for the 8.6 years. D. The $800,000 the City has in hand from grants with the State of Washington Department of Resolution 14-016 Page 2 of 3 Enterprise Services and the State Department of Ecology would be applied against the $2.6 million project budget. The remainder of$1.8 million could be financed by a voter- approved measure, a Councilmanic bond, or other funding that could be developed through partnerships. E. If funding for the $1.8 million is by Councilmanic bond, it does not require new taxes or any funding from partnerships. F. Extending the term to 15 years over the 8.6 years would result in savings on bond payments that would help restore funding of parks maintenance. G. As stated by the City Manager's Memo dated April 10, 2014: "When this is all applied to the forecast model, it showed a fiscally sustainable plan. While we do not improve, we also do not lose our financial capacity," And, "Another advantage is this scenario does provide for the City stability in the current facility while broader solutions are developed. This scenario should be acknowledged as a phase strategy. The remainder of the needed investments for value added improvements can be developed within the 15 year time frame. Essentially we stabilize the current situation and allow time for the remainder of the investments and partnerships to develop over time." H. The City Manager Memo recommends proceeding with this plan"as necessary due to emergent needs to stabilize the facility and the related costs to operate. It would be imperative to complete the roof repairs and boilers this summer while weather and energy demands are minimal. This would involve a decision to enter into an initial 15 year term lease [with the School District] with the option to renew for another 15 year term. Council would also need to authorize execution of the agreements and contracts with the state to secure the energy performance contract with Honeywell and the two grants that have been awarded. The financing of this would be secured initially through a line of credit. The Council could.choose to move forward to ask for voter approval of the amount of$1.8 million, or a request for a larger amount based upon.developments that might occur later this spring. An advantage to a delay a ballot choice asking for voter action will allow time for the partnerships to develop and to also seek other funding sources for the added value work. In the meantime executing the energy retro fit project will stabilize the situation for the initial term and not over commit the city's resources. Ultimately if the voters elect not to support a voted measure the Council can secure a 15 year Councilmanic Bond in 2015 and pay for it using the recovered Public Safety Sales Tax starting 2016." I. Using a 15 year term, the annual payments for a Councilmanic bond would be around $160,000/yr. Coverage for this payment is from amounts the City will receive from Public Safety Sales Tax (PEST)beginning in mid-2015 following expiration of an agreement with the County that provided interim funding for operations and improvements at Memorial Field and the Community Center. J. The strategy, identified as "Scenario I C" follows Council's review at a meeting on March 17, 2014 of a number of other scenarios for Mountain View that are identified as Scenarios I A (vacate Mountain View and build a new Police station in a different location with an estimated cost of$3 million) to Scenario 3B (rehabilitate Mountain View and Pool with a Resolution 14-016 Page 3 qf'3 community partner, with an estimated cost of$5.5 million, subject to voter approved funding). The various scenarios are listed in Exhibit A to this Resolution called"5-year Financial Forecast Scenarios Summary." K. Based on the above,the City Council determines it appropriate to endorse the strategy in order to effect emergency repairs at Mountain View and provide an avenue to maintain Mountain View for valuable community operations (Police Station., pool, and nonprofit community entities) for a 15-year term without overcommitting City resources. NOW,THEREFORE, BE IT RESOLVED by the City Council of the City of Port Townsend as follows: 1. The City Council i. Endorses the Mountain View strategy outlined above. ii. Directs the City Manager to negotiate and prepare a lease with Port Townsend School District No. 50 and negotiate and prepare all related documents and agreements (including financing grants and project implementation) consistent with the strategy outlined above. 2. Final approval of agreements (including, lease, grant agreements with the State of Washington Department of Energy Services and Department of Ecology) and adoption of a financial plan including authorization for a line of credit is subject to City Council approval. ADOPTED by the City Council of the City of Port Townsend at a special meeting thereof, held this 28th day of April 2014. David King, Mayor, Attest., Approved as to form: 4-1 Pamela Kolacy, MMC John P. 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