Agenda Packets - 2006/06/26 - Laserfiche WebLink

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their fee would amount to $36,000 of which $9,000 is for supervision during the construction. To take the project through bidding only, their fee is $27,000, including fees of architectural, interior design, mechanical and electrical engineering professionals. Funding for this project was discussed at the June 5th work session. A combination of funding sources could be utilized among the following: - Special Projects Fund (current balance $2,317,405) - Park Dedication Fund (current balance $1,203,023) - Internal loans with general tax levy - Internal loans repaid with increased room rentals and memberships fees - Capital bonds It is recommended that the initial expenditure for the preparation of plans and specs be borrowed from the Special Projects Fund. Should this project proceed, the next City Council actions will be to approve the final plans and specifications and authorize for the advertisement of bids. After bids are received, this project will again be presented to the City Council for approval of an award of contract. The Council may then order the project after a public hearing has been held. Market Feasibility – Ultimately, the preferred source of funding for the proposed improvements is to repay internal loans from increased revenue generated by the facility through rentals and fees. The feasibility of generating this revenue is a key question. The attached projections of revenues and expenditures prepared by City Finance Director Mark Beer indicate that the City would need to sell approximately 400 memberships of each type (i.e., single, senior, and family) to reach a break-even point. Conversely, if no memberships were sold, the City would run a deficit of $190,538. With no changes, the Community Center is expected to run a $47,002 deficit in 2006, based on current revenue. Both these numbers already include the budgeted General Fund transfer of $142,000. It is strongly recommended that the City contract for the preparation of a market feasibility study prior to proceeding with the project. This will help determine the level of revenue the City can expect from increased memberships and the business risk associated with the project. Staff has requested proposals for a market feasibility study and a cost estimate will be available on Monday. If the City chooses to conduct such a study, the preparation of plans and specifications could be delayed until the results are analyzed. Plans and specs may be prepared concurrently with a market study in order to expedite the process. However, one reason for waiting is that the City may decide to revise or modify the project based on the market feasibility study results. Recommendation: It is recommended the City Council contract for the preparation of a market feasibility study prior to proceeding with plans and specifications. If this is not desired, Resolution 6853 Authorizing the Contract for Architectural Services for