CITY OF ATLANTIC BEACH - Public Safety - Revised (3).docxCITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM: Public Safety Building projected funding
DATE: March 14, 2011
SUBMITTED BY: Nelson Van Liere
BACKGROUND: As the design phase of the Public Safety Building project moves forward, it is time to examine some of the options for funding the construction. At this time there is no
funding budgeted specifically for the construction of this project. However, various options have been discussed in previous meetings. The cost estimate below does not include the
proposed bridge or demolition and remodeling of the existing building.
The original cost estimate for the construction of this project is as follows:
Construction $3,802,110
Furnishing Allowance 199,185
Bidding and Construction Supervision 100,139
Total Construction Estimate: $4,101,434
Project Related Accessories under consideration
Covered Bridge $370,927
Covered Walkway 393,468
Site Lighting 20,700
Generator Upgrade from 400 kW to 750 kW 121,250
Renovation of the Old Police Building 356,000
Total Accessories: $1,262,345
Total Construction Estimate PLUS all accessories added: $5,363,779
The projected fund balances available at the end of 2011 are as follows:
Governmental Capital Projects $2,019,277
Half Cent Sales Tax Fund 100,000
Unreserved General Fund Balance (Ten Year Plan) 500,000
Total projected fund balance: $2,619,277
Projected Funding Shortfall Range: $1,482,157 to $2,744,502
There are three options for funding the remaining balance as follows:
1. Pay Cash Now– The advantage of paying cash is that there would be no additional debt to the City and therefore no future interest cost, closing costs or any other future obligations
created. The General Fund reserves would be depleted far below 25% reserve and would it would be difficult to replenish it. The best source of funding is the Discretionary Half Cent
Sales Taxes, ( Better Jax ) but this cannot be used to replenish the General Fund Balance unless a formal loan agreement is executed. This option would have to be further researched
by legal counsel if desired. The General Fund Balance, as of September 30, 2010 included $1,600,000 unrestricted and $2,600,000 operating reserves that could be drawn down. The long
term cash projection indicates that the unrestricted cash balance fluctuates over the next ten years and over time diminishes to around $500,000. This is the number I have shown as
available in the above schedule.
2. Pay Cash Later – The project could be postponed until enough Half Cent Sales Taxes have been accumulated to pay cash. This would keep the City from adding to our debt and would maintain
our fund balance reserves in the General Fund. The time required to save the funds would depend on the actual cost of the project considering changing economics and the selection of
the accessories to accompany the project. This option would defer the construction at least 6 to 10 years depending on the cost. This is exactly the type of project these funds were
intended for.
3. Bank Loan - A short term bank loan pledging Discretionary Half Cent Sales Tax proceeds for a period of 6 to 10 years or longer depending on the project costs with payments of about
$300,000 per year. This would include issuance costs, interest expense and other debt covenants but would not deplete the General Fund reserves. Short term interest rates are very
low at this time. The amount financed would be the net of the project costs and the accumulated funds in the Capital Project Fund.
ATTACHMENTS: Half Cent Sales Tax Long Term Cash Projection
INFORMATIONAL REPORT:
CITY MANAGER APPROVAL____________________________