AgdaPkt 2005-04-11 - Laserfiche WebLink

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L5:ztZ-/ REPORT To the Honorable Mayor and City Council From the City Manager April 11, 2005 Subject Transfer the Capital Project Funds to Redwood City Police Activities League Recommendation The Council authorizes by resolution a grant of $200,000 from the City's Capital Project Funds to the Redwood City Police Activities League (P.A.L.) Background Several years ago, PAL learned that its temporary home at the old "Way To Go" furniture store on the corner of Broadway and Jefferson was to be torn down to make way for the cinema project. PAL received $356,000 in Capital Project Funds and another $44,000 in Community Development Block Grant (CDBG) funds from the City to construct a new building. The $400,000 was a substantial contribution by the City and represented about 16% of the Total estimated final cost of the project at that time. The City has remained extremely supportive of PAL throughout its history, since it provides an array of services that bolster the City's efforts to provide a safe and nurturing environment for the youth of Redwood City. Through its collaboration with the Redwood City School District, the Police Department, and the Parks, Recreation and Community Services Department, PAL has worked to fill gaps in services where budget cuts and tough fiscal times have necessitated service cutbacks. As the project moved forward, PAL secured an ideal location on the Taft School site. Unfortunately, building on a school site added significant unforeseen and additional costs to the project with the final experiencing a shortfall of approximately 1.7 million dollars. Currently PAL is carrying a 1.5 million dollar short term loan, guaranteed by the City, on the project that was used to keep construction moving until completion. PAL is currently considering three different proposals with non-profit lenders to turn that loan into a long term loan and expects to have positive resolution on that matter in the foreseeable future. PAL owes about $250,000 to the contractor that is overdue since the project is now complete and accepted. The Police Department has identified $200,000 in operating cost savings in the current fiscal year budget that has been transferred to the Capital Project Fund. The Police Department budget savings are due to operational efficiencies in Patrol overtime during this fiscal year. PAL's current fundraising is expected to retire the additional $50,000 of debt in the future. The total commitment of the City to the PAL building would then total $600,000. Alternative 1. The City Council could elect not to support the grant offunds to PAL. This action would lean PAL, a private non-profit group, owing the building contractor approximately $250,000.