Town Center Project

Project Funding Summary - September 27, 2018

Value Engineering the Town Center Project

When the bids for the Town Center Project were returned in mid-2018, the costs were 40% higher than we anticipated. This was largely due to the construction market at the time. The Project Management Team and City Council reviewed and approved a number of value engineering options to reduce the scope of the facility without compromising the basic functional needs.

The Project Architect is now revising the plans and specifications based on the value engineering selections made by the City Council. Once complete, the plans and specifications will be returned to the City Council for approval and authorization to rebid the project. Staff estimates that the redesign will be complete in December 2018 and the project will be rebid by January 2019.

Value Engineering the Library

For the Library, the Town approved $2.7 million in value engineering options including, but not limited to: window changes, elimination of the Microgrid, elimination of portions of decking, reduction of fencing and other materials, and separating out the demolition of the current library from the main project.

Value Engineering City Hall/Police

For the City Hall and Police Building, the Town approved $4.4 million in value engineering options including, but not limited to: window changes, changes to roofing material, hydroseed in lieu of planting, deletion of the changes to the corporation yard, reduction of fencing and other materials, and deferral of the new Council Chambers.

Library Funding

The Library portion of the project is funded by the 0.032% Library Property Tax. The Library Property Tax is collected by the County of San Mateo and used to fund local library services through a Joint Powers Agreement with member agencies. The Town has approximately $13 million in funds set aside for the new Library accumulated through the savings of excess library taxes each year. Each year, the Town receives approximately $1.5 million in excess Library tax funds. These are funds received in excess of the cost to operate the Town's library. The County has committed to bringing the new Library online and has authorized the use of future revenues to do so. As a result, the Library is fully funded. It is estimated that the cost of the new Library will be approximately $22.8 million. The County has committed to advancing all additional excess tax revenues needed to meet the funding need. Once the new Library is operational, excess library tax revenue (revenues over and above expenditures) are to be split with the County. Excess funds to the Town must be spent on local library services. Excess funds to the County must be spent on regional library services.

City Hall/Police Funding

The City Hall/Police portion of the project is funded in part by donations raised by Atherton Now; but largely the Town's General Fund. Atherton Now raised $6.5 million toward the project. Approximately $2 million of that total has been spent on design costs thus far. The remaining $4.6 million is to be spent on construction. The Town has approximately $16.7 million in funds set aside for the project accumulated through savings over the years. Each year, the Town receives Educational Revenue Augmentation Funds (ERAF) from the State. These funds are set aside each year for one-time capital projects or long-term obligations such as pensions or healthcare. It is estimated that the Town will receive another $4.8 million in ERAF funds during the course of the project. In addition, the Town's conservative operations and rising property valuations result in approximately $1 million each year in revenue over expenditures. It is estimated that the Town will receive $4 million in excess revenues during the course of the project. These revenues total approximately $30.1 million. It is estimated that the cost of the new City Hall and Police Building will be approximately $28.3 million.