City of Reno
Nevada

Resolution
11457

Staff Report (For Possible Action): Discussion and potential direction to staff to adopt a notice of hearing and intention to authorize the issuance of Medium-Term Obligations in an amount not to exceed $15 million to fund the tenant improvements to the City’s Public Safety Center and to authorize entering into consultant agreements for design and construction management and facility maintenance services.

Information

Department:FinanceSponsors:
Category:ResolutionProjects:Ensure Financial Stability, Provide Public Safety

Attachments

  1. Printout

Recommendation and Proposed Motion

Recommendation:  Staff recommends Council adopt the Resolution.

 

Proposed Motion:  I move to adopt the Resolution.

Staff Report Formal Body

Summary: Staff requests direction from Council to publish a Notice of Hearing and of Intention to Authorize the Issuance of Medium-Term Obligations. The Medium-Term Obligations would be used to finance tenant improvements for the City’s Public Safety Center.  Staff is also requesting authorization to enter into a consultant agreement for design and construction management services for the tenant improvements and to enter into a service contract to manage the building and its components.

 

Previous Council Action:  On July 24, 2019 Council authorized the purchase of a Public Safety Center at 955 Kuenzli Street to include negotiating a purchase agreement, signing of purchase documents, funding the purchase, interim borrowing, and contracting for maintenance of the property.

 

Background:  The public safety center located at 955 Kuenzli Street will provide a new Reno Police Department (RPD) headquarters with a potential to include RPD Evidence Storage, Reno Public Safety Dispatch location, secondary Emergency Operations Center, and workspace for critical social service agencies.  To get the building ready for occupancy, staff is requesting Council authorize the issuance of medium-term notes in an amount not to exceed $15 million.  In addition, staff is requesting authority to contract an architect for design and construction services and to enter into a services contract for facility maintenance.

 

Discussion:  The current RPD headquarters occupies 68,357 square feet in a building that was constructed in 1947.  A CBRE study in 2011 concluded that the useful life of this building had expired long ago and that the building is inefficient to operate, requires significant ongoing maintenance, and an alternative facility was recommended to improve the quality of space for the RPD operation and service delivery for citizens. Estimates of the repairs needed to the current facility exceed $7.8 million and do not address space needs.  Funds have been set aside for the cash purchase of the building, however the tenant improvements needed exceed available funds.  In order to complete the tenant improvements, staff is requesting authorization to issue medium-term notes in an amount not to exceed $15 million. 

 

Staff is also requesting authority to enter into a consultant agreement with an architect to provide the design and construction services needed for the tenant improvements.  This architectural consultant agreement will include the design needed for approximately 109,000 square feet of a three-story building that includes police headquarters, evidence storage and a dispatch call center. The design will implement sustainable building concepts for efficient management of energy and resources to minimize impacts to the overall environment and to enhance the building environment.

 

In addition, staff is requesting the authority to enter into a service contract with a facility maintenance service for at least one year to provide maintenance, training, and historical information and to ensure that the maintenance of the property and all components are performed.

 

Approval of this resolution will authorize staff to pursue a medium-term note to provide funding to the project.  The terms staff will seek are a loan or bond with no prepayment penalties so as the City sells excess properties or secures other funding potentially from charitable foundations, the funds can pay down the debt.  The terms will also include the ability to draw funds as needed to reduce overall costs for interest. Once identified City properties have been sold and the revenues applied to the loan, the remaining amount outstanding will be reamortized to allow for an even debt service amount going into the future.

 

Financial Implications:  The projected debt service amount for the medium term note is between $1.7 million and $1.8 million each year.  This amount will decline when all identified properties have been sold and the loan reamortized.  The cost for an architect is expected to not exceed $2,100,000 and the cost for a maintenance service contract for one year is expected not to exceed $150,000.

 

Legal Implications:  In accordance with NRS 350.087, by adopting a Notice of Hearing and of Intention to Authorize the Issuance of Medium-Term Obligations, the City will notify the public (via publication of the Notice in a local newspaper) of a public hearing to be held on its intention to issue Medium-Term Obligations. This public hearing will take place at a subsequent Council meeting, no earlier than 10 days after the publication of such Notice. Council will open the public hearing, take public comment, and then close the public hearing. After the public hearing is held, Council will move forward to the next agenda item and consider a Medium-Term Obligations Authorization Resolution for adoption.

 

Ordinance or Resolution

RESOLUTION CALLING A HEARING ON THE CITY’S INTENTION TO ADOPT A RESOLUTION AND THE ISSUANCE OF MEDIUM-TERM OBLIGATIONS FOR THE PURPOSE OF FINANCING TENANT IMPROVEMENTS TO CITY’S PUBLIC SAFETY CENTER; AUTHORIZING THE PUBLICATION OF THE NOTICE OF SUCH HEARING; PROVIDING OTHER MATTERS RELATED THERETO; AND PROVIDING THE EFFECTIVE DATE HEREOF.

 

WHEREAS, the City Council of the City of Reno, Nevada (the “Council,” “City,” and “State,” respectively) proposes to incur medium-term obligations of the City in an amount up to $15,000,000 (the “Obligations”) pursuant to Nevada Revised Statutes (“NRS”) Chapter 350, in order to finance tenant improvements to City’s Public Safety Center (the “Project”); and

 

WHEREAS, NRS 350.087 requires that a notice of intention to authorize medium-term obligations be published not less than 10 days prior to the consideration of a resolution authorizing the Obligations; and

 

WHEREAS, to properly provide for design and construction services related to the tenant improvements being funded with the medium-term obligations, the City will enter into a consultant agreement with an architect; and

             

WHEREAS, to ensure successful operation of the new facility, the City will enter into a service contract to manage the building and its components.

 

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF RENO, NEVADA:

Section 1.              This resolution is hereby designated by the short title the “2019 Medium-Term Police Headquarter Tenant Improvements Notice Resolution” (the “Resolution”).

 

Section 2.              Notice of the Council’s intention to adopt a resolution authorizing the Obligations shall be published in the Reno Gazette-Journal, a newspaper of general circulation in the City, at least 10 days prior to the date on which the Council will consider the resolution authorizing the Obligations.  Such notice shall be substantially in the following form: 

NOTICE OF HEARING AND OF INTENTION TO AUTHORIZE THE ISSUANCE OF MEDIUM-TERM OBLIGATIONS BY THE CITY OF RENO, NEVADA

NOTICE is hereby given that the City Council (the “Council”) of the City of Reno, Nevada (the “City”), will hold a public hearing at a regular meeting to be held on  Monday, September 23, 2019, at the hour of 10:00 a.m. or as soon thereafter as is practicable, in the Reno City Council Chamber, One East First Street, Reno, NV 89501, to act upon a resolution authorizing the issuance of medium-term obligations of the City, in an aggregate principal amount not to exceed $15,000,000, in order to finance tenant improvements to City’s Public Safety Center.

The medium-term obligations are not proposed to be repaid in whole or in part by the levy of a tax which is exempt from the limitations on ad valorem taxes, but are anticipated to be repaid from other legally available funds of the City, including, without limitation, monies in the City’s General Fund in the estimated annual amount of $1,700,000 to $1,800,000, for a period of not more than 10 years.

 

The form of the resolution authorizing such medium-term obligations, to be considered by the Council after such hearing, and other information concerning such medium-term obligations and the purpose for which they are proposed to be used, may be examined in the office of the City Clerk of the City at One East First Street, 2nd Floor, Reno, NV 89501. Prior to the hearing, written comments may be filed with the City Clerk at the aforementioned address.

 

Section 3.              The City’s Finance Director is hereby authorized and directed to take all action necessary to effectuate the provisions of this Resolution, including, without limitation, hiring professionals to assist City staff with the authorization and issuance of the Obligations.

 

Section 4.              The City’s Public Works Director is hereby authorized to enter into a consultant agreement for design and construction management services in an amount not to exceed $2,100,000 to assist with the design of the tenant improvements.

 

Section 5.              The City’s Public Works Director is hereby authorized to enter into a service contract for one year in an amount not to exceed $150,000 to manage the building and its components and to train City staff on the inner workings of the building and its components.

 

Section 6.              All resolutions, or parts thereof, in conflict with the provisions of this Resolution, are hereby repealed to the extent only of such inconsistency.  This repealer shall not be constructed to revive any resolution, or part thereof, heretofore repealed.

 

Section 7.              If any section, paragraph, clause or other provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or other provision shall not affect any of the remaining provisions of this Resolution.

 

Upon motion by Council Member _________________, and second by Council Member ___________, the foregoing Resolution was passed and adopted this 11th day of September, 2019, by the following vote of the Council.

AYES:                                         

NAYS:                                         

ABSTAIN:                             ABSENT:                           

APPROVED this 11th day of September, 2019

             

HILLARY SCHIEVE

MAYOR

ATTEST:

             

ASHLEY D. TURNEY

CITY CLERK