Cost of project continue to climb
Money to pay for higher construction costs and environmental features for the indoor recreation center was approved Wednesday by the City Council on a 3-2 vote, but the project will get no extras for contingencies – yet.
A staff report had requested $1.2 million to add to the $15.4 million already reserved for building the center on Edmundson Avenue next to Community Park. Mayor Dennis Kennedy said he wanted to consider the $500,000 contingency later.
“An increased budget doesn’t give us the incentive to hold the line,” Kennedy said. “Create a budget and it will be filled. Instead, we should wait until the bids come in and leave the $500,000 out now.”
A construction contingency fund allows for a certain amount of extra costs without having to get council approval for each charge. A $461,600 escalation contingency added to the original budget has been used up, said Mori Struve, city deputy director of Public Works.
Council was offered the chance to eliminate the gymnasium from the 52,000 square-foot recreation center but rejected that path. The project has been subjected to cost cutting and reduction as the design process went on and costs escalated. Landscaping and parking has been reduced or consolidated.
The gym was chosen, architect Janet Tam told the council, because it would have been the easiest to remove. Its mechanical systems are independent of the center.
Councilman Greg Sellers said removing the gym would defeat the intent of the center and reduce its chances of paying for its own operations and maintenance.
“We’re at the point where the integrity (of the center) is threatened,” Sellers said. “Two components are vital: the desperately needed senior/youth facility and the recreation components – the natatorium (indoor pool), the fitness area and the gym. Removing the gym would affect our ability to offer programs.”
Costs are escalating, Struve told the council, because of the high demand from China for production steel and because contractors have not staffed back up after the dot.com bust in 2001.
“The (extra costs) are neither a cost overrun or within the project team’s control,” Struve said.
Councilwoman Hedy Chang, back on the dais for her final meeting after a seven-week recovery from surgery, said she not only wanted to vote for the money, she wanted it taken from the general fund reserves. And, she said, she had contacted incoming Councilman Mark Grzan for his opinion.
“He said he trusted my judgment on this,” Chang said.
Grzan said Thursday that he trusted Chang to do the right thing but that he wasn’t aware reserves would be involved.
“I told Hedy that she was still a member of the Council and she should vote accordingly,” Grzan said. “I trust her to do the right thing. She has been an excellent council member for this community…”
Councilmen Steve Tate and Larry Carr voted against approving the funds.
“I can’t support the motion until we’ve proved it can come from the general fund and not general fund reserves,” Tate said.
The general fund pays for police and fire protection, recreation services and some city government costs. The reserves, at $9 million, are slowly being used to fill recent gaps in city revenue.
Carr said he objected to selecting the reserves.
“That’s short-sighted,” Carr said. “I don’t want to limit our possibilities tonight.”
Other possibilities included the general fund, remaining money in the Redevelopment Agency fund and private sponsorships. It was the possible use of RDA funds that brought out a cadre of new library supporters to insist that the recreation center not infringe upon any extra funds.
They were somewhat satisfied when promised that the extra money would not cut funds that might be needed if the library’s $17 million budget was exceeded and needed a fresh infusion of cash. Several people spoke, annoyed that council had approved several recreation center budget increases but said previously that the library must be built with $17 million or reduce the building’s size.
“We can do both,” Kennedy assured them.
The total construction cost is $16.2 million and the entire center is now estimated at $26.1 million.
“But we really won’t have a better idea until the bids are opened,” said City Manager Ed Tewes.
On the current schedule, bids are scheduled to be awarded on April 6 and the center would open in August 2006.
Grzan, who will be sworn in at the Dec. 1 council meeting, said Thursday that he has concerns about the recreation center being able to sustain itself without city subsidies.
“I know of no local public recreation department who has such a facility and has been able to offset facility expenses solely on the basis of user fees, Grzan said.
He agrees with (city consultants) The Sports Management Group, that the center must be marketed aggressively to other cities to avoid being a drain on city funds. The city will operate the center, but will invite the YMCA to offer classes.
Carol Holzgrafe covers City Hall for The Times. She can be reached by e-mail at ch********@*************es.com or phoning (408) 779-4106 Ext. 201.
