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HomeMy WebLinkAbout04/03/1991, C-11 - PERFORMING ARTS CENTER DESIGN SERVICES iIII��INllll�llllll�l� II � T MEETING SATE: I' ����� c� o san suis OBISPO ¢-3 - COUNCIL AGENDA REPORT 'TEM NUMBER: FROM: John Darn, City Administrative Office Prepared by: William C. Statler, Dctor of Finance/.(, SUBJECT: PERFORMING ARTS CENTER DESIGN SERVICES CAO RECOMMENDATION Approve funding in the amount of$263,000 for the City's share of working drawings for the Performing Arts Center. DISCUSSION Significant progress is being made on the design of the Performing Arts Center. In accordance with the project schedule, it is now time to proceed with the working drawings at an estimated cost of $526,000. Under the cost sharing formula of the Performing Arts Center agreement, the City is responsible for one-sixth (16.7%) of this cost, or approximately $88,000. (The Foundation for the Performing Arts is responsible for one- sixth and Cal Poly is responsible for the remaining two-thirds of the project costs.) However, as described in the attached correspondence from the Foundation(Exhibit A) and Cal Poly (Exhibit B), it is not likely that Cal Poly's share will be included in the State's 1991-92 budget, although there are several legislative proposals that would provide funding for this project on the June 1992 ballot. The Chancellor of the State University System has indicated that the State's share of the working drawings could be funded through this ballot measure (by increasing the State's share of the subsequent construction portion) if the City and the Foundation are willing to advance the State's cost share for the working drawings phase. Both the Foundation and Cal Poly have requested that the City fund this approach. As reflected in President Baker's letter (Exhibit B), there is some risk to this approach as there is no guarantee that the State will subsequently be able to fund its portion ($350,000) of the working drawings cost advanced by the City and the Foundation ($175,000 each). However, completion of the working drawings would keep the project on schedule, retain the project's current high priority, and significantly enhance the possibility of moving this project even higher on the State's priority list. Failure to proceed with working documents at this point would both slow the project down, and equally importantly, would hurt the Foundation's efforts to sustain its fund raising efforts, which to date have produced very positive results. In considering the costs and benefits of the Foundation's and State's request, it is recommended that the City fund its share of the working drawings ($88,000) as well as 50% of the State's share ($175,000) with the remaining balance to be advanced by the Foundation. Under this approach, the City and the Foundation would each contribute $263,000 towards the working drawings, with Cal Poly's share ($350,000) to be recovered at the construction phase. As discussed above, there is no absolute guarantee that the State will be able to proceed onto the construction phase, and as such, it is possible that the City C - 1 ����i�i�►►I�uIIIIIIIpU► ����p� MY Of San tins OBISPO COUNCIL AGENDA REPORT will not be able to recover its $175,000 advance on behalf of Cal Poly; it is our best assessment that the funding for Cal Poly's share will be forthcoming, and we strongly suggest proceeding on that basis, as the Foundation has committed to do. FISCAL IMPACT Sufficient resources are available to fund this request. The 1987-89 Financial Plan (page E-14) designated $450,000 for the study and design for this project. To date, $106,800 has been committed for this purpose, leaving a balance of $343,200 to fund this request. After funding the working drawings component (including the advance for Cal Poly's share), approximately $81,000 will remain for future design or project costs. CONCURRENCES The Presidents of the Foundation and Cal Poly concur with the recommended action, and a copy of the Agenda Report has been forwarded to each of them. SUMMARY In order to keep the Performing Arts Center project on schedule and retain its high priority within the State University funding system, it is recommended that the Council approve payment in the amount of $263,000 for the working drawings phase of the project. This amount represents $88,000 for the City's regular share (one-sixth) of the project's cost as well as an advance of $175,000 (which represents 50% of Cal Poly's share). An equal amount will be paid and advanced by the Foundation. Prior to actually disbursing funds, the CAO will execute an amendment to the Performing Arts Center agreement in order to formalize the conditions of the advance as outlined in this Agenda Report and the requests made by the Foundation and Cal Poly. If conditions cannot be formally agreed upon to the satisfaction of CAO which reduce the risk of this approach to acceptable levels, no disbursement will be made, and the issues will be subsequently returned to the Council for further deliberation. ATTACEEVIENTS A. Letter from Warren Sinsheimer, President of the Foundation for the Performing Arts B. Letter from Warren Baker, President of Cal Poly AGR/PERFORMA.YPF RECEIVED A ?N FOR THE MAR 11991 PERFORMING .ARTS CENTER ADMINISTRATION SAN 4UJ$ olMa G& February 27, 1991 John Dunn City Administrative Officer P.O. Box 8100 Exhibit_= San Luis Obispo, CA 93403 Dear John: As you know, the defeat of Proposition 143 by a very slim margin means that the State's portion of the working drawing funds for the Performing Arts Center will not be included in the upcoming budget. President Baker has explored other sources of State funding to meet the University's commitment, but, as his letter of February 11, 1991 indicates, these alternatives are not feasible. To retain and possibly enhance the Center's current priority level for State higher education facilities and to keep the project on schedule for ground breaking in 1992, President Baker has asked the City and the FPAC to consider advancing funds for the University's share of the working drawings. This would call for the City and the Foundation each to contribute approximately $263 ,000 ($88 , 000 as per the original agreement plus $175,000 to cover the University's share) . The FPAC will consider this request at its regular Board meeting on March 11 , 1991. Based on previous Board discussions and conversations I have had with individual Board members, I believe the Board will vote to make the additional funds available. The Arthur Erickson firm will complete design/development work on April 15 and will be ready to begin working drawings the following month. P.O. Box 1137 San Luis Obispo California, 93406 1.11 Mr. Dunn February 27 ; 1991 Page Two. I hope that the City will join with the Foundation to keep the project moving forward. Sincerely, Warren A. Sinsheimer President WAS/eas Enclosures 6.41- '� CAL -POLY CALIFORNIA POLYTECHNIC STATE UNIVERSITY SAN Luis OBISPO, CA 93407 OFFICE OF THE PRESIDENT (805) 756-6000 February 11, 1991 ccYY�� ti Mr. Warren Sinsheimer, President G7t11�� � Foundation for the Performing Arts Center c/o 1010 Peach Street San Luis Obispo, CA' 93401 Dear Warren: With the defeat of Proposition 143, the submission of the Governor's proposed 1991-92 Budget, and growing recognition of a very difficult budget year, it is clear that the State's portion of the working drawing funds for the Performing Arts Center will not be included in the 1.991-921 Budget. We have recently learned that both Senator Hart and Assemblyman Hayden have introduced proposed general obligation bond issues for higher education capital outlay purposes. Senator Hart's measure would provide for $900 million and Assemblyman liayden's is for $1 billion. It is anticipated that one or the other of these proposals will be approved by the Legislature for placement on the June 1992 ballot. Our analysis of capital outlay proposals for higher education and the relative distribution of funds among the three segyments, combined with the relative priority of the Performing Arts Center within the California State University leads us to conclude that either of the current legislative proposals would provide sufficient funding for construction.funds for the Performing Arts Center. Shortly after the November elections when.Proposition 143 was defeated and it was recognized that capital outlay funding would become an issue, I wrote to Chancellor Ellis McCune regarding capital outlay funding priorities. I am enclosing a copy of. his January 14 response for ,your information. You will note that he has assured me that there will be no precipitous changes in priorities. Further, however, he has also indicated that if there is a wav to fund the 'working drawings, then the 1992-93 submittal for construction funding would be increased to offset the State's share of working drawing funds. Based upon the assurances from the Chancellor, 1 would like to request your consideration of fully funding the working drawings so that the proposed schedule for initiation of construction in 1992 can be maintained. While there is some risk involved, completion of the working drawings would assure retaining the relative priority for the Center and could enhance that priority significantly. There are currently 17 projects in the CSU priority listing ahead of the Performing Arts Center for which working drawing or working drawing and construction funding were proposed and are not included for funding in the THr CALIRORNIA SrAl'h Mr. Warren Sinsheimer February 11, 1991 Page Two Governor's 1991-92 Budget. If these other projects are not able to identify other sources of funding prior to consideration of the 1992-93 budget, and if working drawings for the Performing Arts Center-are completed, I believe that a "construction only" funding request would move the Center to near the top of the system's priority list for project construction funds. Other alternatives that have been discussed regarding the fundin, of the working drawings include asking the City to participate in the additional advance funding, or asking the Cal Poly Foundation to advance the University's share. Based on preliminary discussions, it would appear that the City is not able to advance the funds. The difficulty in considering the Cal Poly Foundation is that the University cannot legally borrow money and would have no mechanism for repaying the Cal Poly Foundation. If ,you have questions, or if there is additional information you need in considering this issue. I would be pleased to provide it. I look forward to hearing from you. Sincere y. Warren J. Baker President Enclosure cc: .John Dunn Jim Jamieson✓ THE CALIFORNIA STATE ' UNIVERSITY sr�r JLV W^ • CND)O • DOM&NGIIlZ SILLS • i9@q • FULLERrON . HAYWARD • HOI=br WNG BEACH . L -ACRAMSMO • SMI URNAYDMO • SAN • . 4 2 OB—.� • NOYt10101G6 • POMONA D6C0 SMI tQANOBCO SMI JOsi • BAN LD®OB190 SAN MAYC09 SiONOMA . ST•'^M.Ue X n c OFFICE OF THE CHANCELLOR (213)590- 5501 January 14, 1991 Dr. Warren J. Baker President California Polytechnic State University, San Luis Obispo San Luis Obispo, California 93407 Dear President Baker: Performing Arts Center California Polytechnic State University, San Luis Obispo Your stated concerns as expressed in your letter of November 20, 1990, regarding the funding priority for the working drawings for your Performing Arts Center and funding for the CSU Capital Outlay Program in general, have been echoed in letters from a number of presidents with similar situations. I agree with your comment concerning the need to involve the presidents in any discussion as it pertains to any proposed revisions of the Capital Outlay Program. This process was initiated at our December meeting and will continue throughout the 1991-92 budget cycle. Because the City of San Luis Obispo (City) and the Foundation For The Arts (Foundation) have made major strides in fundraising for both planning and construction as their share of the necessary project funds, you may wish to explore with them the potential for their funding the total amount for working drawings. This will allow the project to continue on schedule and be ready for construction funding in the 1992-93 fiscal year, thus avoiding any delay caused by the failure of Proposition 143. In addition, at the time the 1992-93 program is submitted, we would request an increase in the State funded construction amount, commensurate with the amount contributed by the City and Foundation, for the State's portion of the working drawings. Although we cannot guarantee that this approach will be approved, it seems to be logical in light of the present supplemental language which fixes the state share of the total project cost at $15,643,000 at ENR 4828. Included in this amount are $345,000 for working drawings. 400 GOLDEN SHORE, LONG BEACH, CALIFORNIA 90802-4275 • INFORMATION: (213) 590-5506 • TELEFAX: (213) 590-5749 Dr. Warren J. Baker January 14, 1991 Page Two Please have your staff contact Mr. J. Patrick Drohan, Principal Planner, if you plan to proceed in this fashion. My staff also suggests that your staff work carefully with them to avoid cost overrun problems similar to those experienced with the Performing Arts Center at CSULA. We have made a major breakthrough in acquiring a state funding base.for these types of facilities. It is extremely important that our cost estimates be realistic and within budget or, that a commitment for donor funds be in place to pay for enhancements above the state base funding level. Sincerely, Ellis E. McCune Acting Chancellor EEMcC:sf cc: Mr. D. Dale Harmer Mr. Jon H. Regnier Mr. George P. Dutra Mr. J. Patrick Drohan