The multi-year quest to physical expand City Hall will be before Council on August 8 with potential approval of about $70 million in bonds to finance the new construction.

Staff have said the new building is necessary to reduce long-term spending on rent and consolidate city services.

“City Hall was constructed in 1938 and in 79 years, the services that the City provides to the community has expanded and outgrown the historic building. For several decades, city divisions have been spread throughout the downtown, leasing space. With the construction of the City Services Building (CSB), the City will eliminate leases saving as much as $10 million annually and bring 240 staff under one roof,” said the staff report.

Staff said the money saved on rent would offset the cost of bond sales.

“The City anticipates using annual lease savings to offset the cost of the lease revenue bonds that would be issued to pay for the CSB.  Annual lease savings would meet and exceed the annual costs of debt service during the 30-year financing term,” said the staff report.

Work on the CSB proposal began in 2012 when Council authorized a three step (study, design, build) approach for project. In 2014 Council approved the first step and selected Hathaway Dinwiddie Construction Company for the feasibility analysis, concept design and cost estimates. In 2015, Council chose to design a building that would achieve the Living Building Challenge and finished the second step with the approval of $7,064,501 to design the building.

The plans were modified in 2016 and planning documents were revised in early 2017 to reflect the current project.

On Tuesday, Council will be asked to approve $61,843,526 plus at 2.4 percent contingency for a maximum of $70,600,507 for the CSB. The recommendation includes awarding the contract for construction management services to GKK Works.

Staff are proposing to finance the project through bond sales and in addition to approving the contracts for the CSB, council will take an additional vote/discussion on issuing the bonds.

“Staff recommends that the City Council and Public Financing Authority (PFA) approve documents required for the issuance of Lease Revenue Bonds, Series 2017 to finance the City Services Building project,” said the report. “The determination to issue lease revenue bonds is made based on the City’s intent to distribute the cost of building an essential facility over its useful life, the City’s access to low-cost financing, and the City’s low level of existing debt. Due to the high environmental standards associated with the design of the City Services Building, staff recommends that the Series 2017 Bonds carry the designation of ‘Green Bonds.’”

The Living Building Challenge is one of the highest certifications for sustainability available in the country and if achieved the building would have dramatically lower utility costs.

“The CSB is designed to meet Living Building Challenge certification and would be a net zero energy and net zero water building,” said the report. “The design would address the realities of climate change and drought, and its success would demonstrate to the region and the world what is possible by regenerative building design and construction.”

Water use would be generated through onsite wells and solar would be installed on the property for electrical usage. The project has drawn controversy for its cost and for the possible use of composting toilets as the plumbing has not been adopted widely or used in a project of this size before.

The staff report includes an analysis of potentially moving the project to the site of the old Post Office but concludes the site is too small and potentially still expensive.

The old Post Office is for sale with an estimated cost of about $30 million. Due to the building’s landmark restrictions, staff said it would not hold as many people as the proposed CSB and current entitlements only allow 54 people to work in the building.

“This represents an expensive option that would maintain the current status quo with regard to location of City staff and inefficient service delivery to the public,” said the staff report. “As such, it would not provide benefits to the community through a central Civic Campus improving customer service, operational efficiency and cost savings that would be achieved by proceeding with the City Services Building project as currently proposed.”

Council will meet on August 8 in City Hall, 1685 Main St. Closed session begins at 5:30 p.m. and open session will not begin before 6:30 p.m.

Visit www.smgov.org for more information.

editor@smdp.com

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