Title
Approve leases of the Goddard, Derby and Haysville Fire Stations to Sedgwick County Fire District #1.
Body
Recommended Action: Approve the leases.
Background: In 2004 the fire district adopted a plan to relocate five fire stations in response to changing population densities throughout the portions of the county served by the district. The plan called for:
1. a new station, #32, in the north central part of the county that also would serve as the new headquarters of the district, replacing the headquarters in Bel Aire;
2. a new station #33 in the Maize area that would replace an existing station in Colwich, which is not inside the district;
3. a new station #39 near Garden Plain that would replace an existing station in Goddard;
4. a new station #35 south of Goddard that would replace an existing station in east Wichita; and
5. a new station #36 east of Derby that would replace an existing station on the north edge of that city.
At the same time a funding strategy was adopted to pay for the relocation plan with a combination of cash and bond proceeds. The first three stations were to be funded with district cash, and the final two were to be funded with debt. The BOCC, acting as the governing body of the fire district, subsequently adopted budgets that included revenue from increased fire district property taxes, and allocated the increased revenue to pay for the costs associated with the relocation plan.
In the years since the plan originally was adopted it was revised and expanded as follows:
1. the station in east Wichita, Station #38, was not closed when its replacement was completed; it continues to serve the eastern part of the county; and
2. renovations of the existing station #34 near Haysville were added to the plan, and then before the renovations were initiated the station was replaced by a new station in Haysville.
The original funding strategy also was revised in two ways:
1. because station designs were to a higher standard than originally contemplated and stations were built several years later than originally planned, costs were higher than had been contemplated. This necessitated a greater use of borrowed funds than had been planned.
2. in 2012, the BOCC determined that instead of selling bonds to provide the requisite borrowed funds, the financing would be provided by Sedgwick County from its cash reserves; the financing would be repaid with interest by the district through lease payments to the county.
Of the six stations included in the revised plan, four have been completed, one is scheduled to be completed in September, and one is scheduled to be completed early in 2014. Expenditures, including amounts under contract but not yet paid to vendors, have been as follows:
|
Expenditures |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
Totals |
|
32 - North |
|
8,340 |
172,190 |
275,452 |
2,569,015 |
36,580 |
|
|
|
3,061,577 |
|
33 - Maize |
|
251,336 |
475,051 |
56,011 |
934,504 |
|
14,120 |
|
|
1,731,022 |
|
34 - Haysville |
|
|
|
29,819 |
3,018 |
|
1,000 |
86,699 |
1,865,741 |
1,986,277 |
|
35 - Goddard |
35,900 |
|
240,714 |
50 |
259 |
1,207,574 |
628,182 |
3,439 |
|
2,116,118 |
|
36 - Derby |
|
|
|
|
|
|
|
558,860 |
598,012 |
1,156,872 |
|
39 - Garden Plain |
|
|
|
75,933 |
1,532,280 |
60,512 |
14,593 |
7,041 |
|
1,690,359 |
|
Design |
73,500 |
143,650 |
57,500 |
32,800 |
58,776 |
24,095 |
4,682 |
39,687 |
28,690 |
463,380 |
|
Totals |
109,400 |
403,326 |
945,455 |
470,065 |
5,097,852 |
1,328,761 |
662,577 |
695,726 |
2,492,443 |
12,205,605 |
The district has provided $6,512,623 of cash to pay for the relocation plan, and the county has provided $5,692,982. The county owns Stations #35 south of Goddard and #36 east of Derby, and will own Station #34 in Haysville. The leases grant the fire district usage rights to these stations in return for lease payments that will restore the county cash balances, and at the end of the lease terms, ownership will transfer to the district.
Alternatives: The district could issue long term debt and use the proceeds to buy Stations #34, #35, and #36 from the county. This would restore the county's cash balances more rapidly, and require the district to incur transaction costs associated with debt issuance in addition to interest cost.
Financial Considerations: The leases are for 20 year terms starting July 1, 2013 for the Goddard and Derby stations and January 1, 2014 for the Haysville station. Lease payments will be received quarterly. Total lease revenue for the two quarters of 2013 that two stations will be leased will be $101,622. For 2014 - 2032, total yearly lease payments for the three stations will be $397,000. For 2033, the final year of the leases, when those for Goddard and Derby will end on June 30 and the Haysville station lease will end on December 31, total lease payments will be $295,378. The total revenue received by the county over the entire 20 year lease terms will by $7,940,000. This lease revenue has been incorporated in the county's long term financial forecast.
Legal Considerations: The leases have been drafted and approved as to form by the County Counselor's office.
Policy Considerations: N/A
Outside Attendees:
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