Workshop Item Joe Huss, Finance Director/Asst. City Manager
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Proposed 2022 Facilities Management Fund Budget
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Background
In 2019, as part of the city’s efforts to stabilize its General levy and provide a mechanism for ensuring long-term funding of facilities improvements is in place, the City Council authorized the creation of an internal service fund to account for Facilities Management. Internal service funds are used to account for the financing of goods and services provided by one department or activity to other departments or activities of the government on a cost reimbursement basis.
The facilities managed under this fund include City Hall and attached garages, Public Works and the PW cold storage facility, the Police training facility, Mary Ann Young Center, and old fire station #5. As activity in this fund was previously accounted for in the General Fund, Council authorized a transfer from the General Fund to the Facilities Fund in 2019 to provide the new fund with a start-up balance of $250,000. This funding provided a contingency reserve for emergency or unforeseen repairs that might be needed before the fund has had sufficient time to build reserves.
Revenue
The primary funding source for the internal service fund comes from charges assessed to each of the departments in the city’s general and utilities funds. The charges are split between two different categories: maintenance and replacement. The maintenance chargeback is used for operational expenses and any repairs to the facilities maintained in this fund, while the replacement charge assists in funding capital replacement items.
For 2022, maintenance and replacement charges will increase by a combined $42,000 (4%), from $1,016,100 to $1,058,100.
Expenditures
Operationally, the Facilities Maintenance fund accounts for wages and benefits of staff related to building maintenance. Consistent with other City staff, a 3% increase in wages and a $50/month increase in benefits has been incorporated into the 2022 Facilities Budget. Other expenditures include utility fees for City Hall, Public Works, and the Mary Ann Young Senior Center, and cleaning, and pest control services.
Additionally, the fund accounts for the contract the City has for facility management and capital planning services. Previously, this contract was through McGough Companies, however, in 2021, the City solicited requests for proposals and began a new contract with Gaughan Companies effective October 1st, 2021. Gaughan will act as the City’s facility manager and assist the City in the management of maintenance and repairs at buildings covered by the fund. Gaughan’s fees are $3,560.00 per month, which is a savings of approximately $1,400.00 per month ($16,800 annually). The new contract is set for three years and maintains the same level of service or hours dedicated to these facilities as in the previous contract.
Existing contracts for cleaning services through MSI and Marsden are expected to remain in place through 2022. The rates for cleaning are increasing for the MSI contract due to the increased cleaning areas for the newly completed third floor workspace. Staff anticipates soliciting RFPs for cleaning services in 2022 to ensure the City is receiving the best value.
2022 Capital Requests
City Hall:
• A/C Units for Server Rooms ($45,135): To replace aging units that are critical for the continued operation of the City’s severs. Temperature is a key component in the effectiveness and longevity of hardware and without these units would likely cause a disruption in service to both staff and residents.
• Brick replacement - PD parking area ($55,000): To repair/replace the existing brick wall that encloses the police parking/garage area. Due to wear and tear and lack of preventative maintenance the brick needs extensive repair to avoid failure of the wall.
• Tuck pointing on brick areas ($25,000): This would be a preventative measure that would correct vulnerability in the brick areas of the City Hall building. The tuck pointing would restrict water from infiltrating the brick façade and creating damage to the exterior.
• Door access readers ($72,600): This would replace all existing door card access readers that are vulnerable to security breach. In 2020, staff discovered that the existing readers are easily susceptible to card hacking or cloning tools that are easily producible.
Public Works:
• Fuel Pump replacement ($40,000): In 2021, a new gas station canopy was installed. Prior to that, the fuel pumps were exposed to weather and the elements resulting in increased wear and tear. Because of years of exposure to the elements, the existing pumps have increasing maintenance costs. Additionally, current technology does not interface with the City’s Dossier Fleet Management System.
Other Facilities:
• LED retrofit - Cold Storage ($50,000): In 2021, staff retrofitted the Public Works building with LED lighting. This resulted in improved visibility and better electrical efficiency. Staff are proposing to outfit the cold storage facility to achieve a similar outcome. Often these buildings are accessed throughout the day and night depending on projects/weather, therefore the increased visibility would help with staff with safety and efficiency.
• Brick replacement - Cold Storage ($45,000): This is a continuation of a project started in 2021. Due to the lack of gutters or weather guard, rain and ice have been building up on the top of the brick veneer causing increasing wear on the building. To avoid further damage and water from settling behind the brick, staff are funding tin sheets to sit above the brick to move any falling/melting water away from the brick. This request would be to repair the existing damaged brick areas and complete the project.
Five-Year Outlook
The five-year outlook for the facilities maintenance fund is stable for covering ongoing operating expenditures.
Staff continues to update and refine the City’s five-year Capital Improvement plan, which includes the facilities maintenance plan. With the new facility management company onboarding in 2021, the City is expecting assistance in capital planning, projecting, and prioritizing that will aid in an effective plan for funding capital items in upcoming years.
The Facilities Maintenance fund currently encompasses a small portion of the overall capital projects related to buildings. It is expected that this fund would increase the number and types of projects it funds if the fund balance and reserves increase.
Staff Recommendation
Informational - staff is requesting Council’s review and input on the 2022 Facilities Budget.
Attachment List
2022 Proposed Facilities Fund Budget