Malibu Surfside News

Malibu Surfside News - MALIBU'S COMMUNITY FORUM INTERNET EDITION - Malibu local news and Malibu Feature Stories

Wednesday, January 30, 2013

Subcommittee Reviews Report on the Completion of Malibu City Hall

• Administration and Finance Picture Is Complicated One

BY BILL KOENEKER

The city’s Administration and Finance Subcommittee comprised of Mayor Lou La Monte and Councilmember John Sibert met on Monday this week to discuss the completion of Malibu City Hall improvements.
The city acquired the building in 2009 at a price of $15 million and proceeded to use what are called certificates of participation, or COPs, to purchase the property and make improvements.
Assistant City Manager Reva Feldman, in her staff report, indicated that during the course of construction many deferred maintenance items with the building were discovered that were unknown at the time of the approval of the construction contract.
“Items included the replacement of the main sewer line, the need to replace the electrical conduit in the theater, the addition of electrical safety switches, the addition of fire-rated ceilings in the theater, the removal of vines and the panting of the exterior of the building,” wrote Feldman in her staff report.
The city took occupancy in May 2011, with additional expenditures necessary in order for the building to operate as a city hall, according to the assistant city manager.
The final project cost is $6.2 million, which includes $580,000 in unanticipated costs. There is another $170,000 of additional items that need to be completed.
Of the $7.4 million appropriated, the amount spent is $6.2 million, leaving a balance of $1.2 million.
Feldman is recommending that $384,751 be applied to debt service for City Hall; another $634,698 kept in the undesignated general fund; $170,214 be used to complete additional items of repair; while keeping an another $18,000 in the undesignated general fund.
The price tag for ongoing maintenance of City Hall is                                                               $50,000 per year for custodial, $3000 a year for elevator maintenance, $5000 a year for generator maintenance and propane, $25,000 a year for HVAC maintenance, $6000 a year for landscaping maintenance and $5000 a year for onsite wastewater maintenance, according to Feldman.                                  
The financing was complicated. The city authorized the issuance of $22 million of COPs that provided $15 million for the acquisition.
“Due to the timing of the 2009 COPs issuance, the payment for the acquisition and the combined public and private uses of the building, the city deposited funds into escrow, including $1.7 million from the City Hall designated reserve. The city received a reimbursement of $15 million when the COPs were sold and the $1.7 million from the City Hall Designated Reserve was deposited into a construction fund with Deutsche Bank, the city’s trustee, for improvement to the building,” wrote the assistant city manager.
At the same time, the city entered into a contract with LPA, Inc on August 2009 for the design of the improvements of City Hall and appropriated general funds for the design of the project.
The total general fund appropriation for the agreement with LPA, Inc including a subsequent amendment was $640.415.
By February 2010, the city authorized the issuance of $7 million of COPs that provided $5 million in proceeds for improvements to City Hall.
The $5 million was deposited into the construction fund with the Deutsche Bank, the trustee for improvements to the building bringing the total of the construction fund to $6.7 million “when combined with the General Fund contribution of $640,415, the total project was $7.4 million.”

Links to this post:

Create a Link

<< Home