$12 million for a new EOC and fire station

At last, we finally know how much it’s going to cost to realize the long-held goal of the firefighters’ union and their friends at City Hall to build a new Emergency Operations Center and fire station no. 3 on a City-owned plot of land at Grand and Buena Vista.

It’s not the $4.5 million that less than two years ago City Manager John Russo assured the public it would cost to build the EOC and fire station when he was seeking votes to pass Measure C, the sales tax increase measure.

It’s not even the $5.6 million that then Councilman Doug deHaan, a Measure C opponent, contended at the time was the real cost of building the two facilities  – only to be publicly chastised by the City Manager for “misinforming” the voters by exaggerating the expense.

No, the actual number turns out to be $12,552,712, more than double the deHaan estimate ridiculed by Mr. Russo.

Add it up:

  • $73,500 for a feasibility study;
  • $29,500 for a soils and groundwater survey;
  • $9,012 for a “record survey”;
  • $19,700 for a soils investigation;
  • $291,000 for design of the new EOC (including contingencies);
  • $4.06 million in debt service (i.e., payment of principal and interest) for construction of a new $3 million EOC;
  • $1.19 million in cash and $6.88 million in debt service for design and construction of a new $5 million fire station no. 3 (subject to adjustment after the City finds a suitable third-party lender).

That’s right, the bulk of the cost for building the new EOC and new fire station will be paid by borrowing money: for the EOC, $3 million principal amount of bonds issued in a refinancing transaction last September; for fire station no. 3, $3 million principal amount in as-yet undetermined “external financing” and $809,000 in an “internal loan” from the Equipment Replacement Fund under a financing plan approved by City Council last Tuesday.

(The source of the “internal loan” is interesting.  Previously, the City had agreed to lend $1.15 million from the Equipment Replacement Fund to the Alameda Unified School District toward the cost of repairing the Encinal High School swimming pool.  But the recently announced three-way deal between the City, AUSD, and the Housing Authority made that loan unnecessary and thus freed up funds for another use – like paying for a new fire station.  Conspiracy theorists, draw your own conclusions).

According to the staff report presented to Council last Tuesday, borrowing of this magnitude became necessary because staff had failed in its effort to tap the “optimal source of capital”: grants.  It was noble for staff to take the fall, since shaking grants out of the state Legislature for the new fire station was supposed to be the job of former State Senator Don Perata, to whom Council gave a $90,000 lobbying contract just a few months ago.  Apparently, the Don came up empty.

(But you needn’t worry about ex-Senator Perata’s nascent lobbying business.  IAFF Local 689 political director Jeff DelBono, the Pleasant Hill resident appointed to fill the City of Alameda seat on the Water Emergency Transportation Authority board, recently recommended that WETA retain Perata as its lobbyist.  And we didn’t even know the two were acquainted!)

The escalation in the cost for the new EOC and new fire station in less than two years is truly remarkable.  But what’s even more astonishing is that there has never been a staff report, or a staff presentation, about why the City needs a $3 million EOC or $5 million fire station in the first place.  Instead, Council simply has accepted without question the latest cost estimates provided by staff and approved without hesitation the action items proposed by staff to put the projects on the fast track.  And that’s where they are: the last public word was that, in Mr. Russo’s phrase, “We’ll start turning over dirt” by the fall.

Beginning with the arguments made in favor of Measure C, we have heard time and again about the inadequacy of the existing EOC located in the basement of police headquarters.  So, too, we have heard repeatedly about the inefficiency of housing a fire company in a converted private home next to a seismically unsafe fire station.  Often, the rhetoric gets ramped up to higher levels.  For example, City Planner Andrew Thomas told the Planning Board recently that a new EOC “is going to save lives.”  Getting the structure built thus is “incredibly important for the future of the City in the event of a major disaster.”

We have no reason to dispute that the location and condition of the current EOC and fire station no. 3 pose problems for coordinating emergency operations and providing fire services.  But if the City were operated like an ordinary business, the next question after identifying the problem would be:  What is the most cost-effective way to fix it?  It is this question that staff never has had to answer, because the politicians never have seen fit to ask it.

Apparently, at the time of Measure C, staff was contemplating a single building housing both a fire station and an EOC that would cost $4.5 million.  Despite the initiative’s defeat, the concept has morphed into two separate buildings, each with a multi-million dollar price tag.

For the EOC taxpayers will end up with what Planning Board member John Knox White called “this giant monolith sitting in the middle of this sea of asphalt” at a cost of $4.06 million in borrowed money.  Absent an earthquake or other emergency, the building will be used about once a month.  Likewise, for the $8.07 million (most of it in borrowed money) spent for the new fire station, taxpayers will get a facility with two side-by-side, drive-through apparatus bays that “will accommodate one truck company, one engine company, and one ambulance.”  The new station will provide living quarters for eight full-time firefighters.

Or at least that’s what the “initial study” recently presented to the Planning Board says.  It doesn’t exactly match what the City Manager and former IAFF Local 689 president and current fire chief Mike D’Orazi told the public at a budget workshop last April.  At that time, both declared that the City simply intended to move one company (three firefighters plus a captain) and one fire engine to the new fire station.  Indeed, Mr. Russo denounced as a “shibboleth” the suggestion that the new station would require any additional staff or equipment.

The Merry-Go-Round scoured the public record to see whether any Councilmember ever publicly pressed staff to justify building such expensive edifices using so much borrowed money in such a short time.  Nothing of the sort occurred:

Since the defeat of Measure C in June 2012, the new EOC has been on Council’s agenda three times and the new fire station once.  (The facilities also have been mentioned in passing at other meetings).

Two of the meetings involving the new EOC related to the bond refinancing.  At those sessions, Council was content simply to confirm – and then re-confirm — that the refinancing would pay the entire cost of building the structure.

The other meeting dealt with a no-bid design contract for the new EOC.  Fleetingly, it seemed as if Vice Mayor Marilyn Ezzy Ashcraft wanted to begin a conversation – as the politicians would say – about why things were moving so quickly.  But it turned out that all the Vice Mayor was concerned about was that the City would be entering into a written contract with the architect “like we did for the library.”  Having been promised this was so, the Vice Mayor pronounced herself satisfied.

Nevertheless, Public Works Director Bob Haun assured Ms. Ashcraft that a new EOC was a “great necessity” because the existing one was “functionally inadequate.”  Councilwoman Lena Tam urged him to elaborate.  Mr. Haun replied that the “great necessity” arose from the “urgency of constructing this new EOC as soon as possible at this site.”  Having been thus enlightened, Council approved the contract.

Staff also had an opportunity at a later Planning Board meeting at which the site plan was discussed to make the case why the City needed a $3 million EOC.  Indeed, as we have previously noted, Mr. Knox White all but invited an exegesis on this topic.  “I guess there is a part of me that wonders whether this is the right building in the right place,” Mr. Knox White said.  “It’s not that that we don’t need it, but it seems like we’re building this really large thing that’s not gonna have that much use.” But neither City Planner Thomas, nor Public Works Director Haun, nor Fire Chief D’Orazi took him up on his invitation.

Thus far, the only meeting at which the new fire station was on the Council agenda occurred last Tuesday.  Mayor Gilmore introduced the item about the financing plan by asking Fire Chief D’Orazi to confirm “rumors” that the existing fire station needed a new roof.  The most the Chief could muster was that, “I would guess it’s probably due for a quite a few upgrades,” including the roof.  This was definitive enough for the Mayor to bemoan the “potential” for putting “huge capital improvements” into a building that is “barely adequate to house modern apparatus.”

The sole public speaker – all right, it was former Golf Commission chair Jane Sullwold – questioned why, given the City’s enormous unfunded liability for retirement benefits, the City should take on more debt to build a new fire station.  In response, Councilwoman Lena Tam – who relishes lobbing softballs to staff whenever fire issues arise —  called upon City Manager Russo and Fire Chief D’Orazi to explain the “urgency” of the project.

Mr. Russo did his part by arguing that the City was exploiting favorable conditions in the financial markets and construction industry that wouldn’t last for much longer.  (We’ll add economic prognostication to the list of Mr. Russo’s many talents).  Then it was the Chief’s turn.

Chief D’Orazi’s main argument was that the current situation had gone on for too long.  “It has been 14 years,” he said.  “It’s hardly a temporary station any longer.”  It apparently didn’t occur to the Chief that, if the existing arrangement has provided adequate protection to the public for all those years, there might be no compelling reason to change it even if the status quo falls short of ideal.

The Chief wasn’t finished.  A new fire station was needed, he went on, to “house the modern fire apparatus we’re purchasing these days.”  (Maybe that’s why it’s going to have two apparatus bays).  In addition, a new fire station would enable firefighters to drive their equipment straight in to the building (rather than have to back it in).  Likewise, it would provide a dedicated area for firefighters to perform equipment checks (rather than having to do them on the sidewalk).  Finally, prompted yet again by Councilwoman Tam, the Chief added that, with a new station, firefighters no longer would have to walk down stairs and go out of one building and into another when a call came in.

No doubt, each of these features of the new fire station will make it easier for the firefighters to do their jobs.  But are those benefits worth $8.07 million?  Somehow, we can’t help but think of the parent whose teenager wants a new car.  You’re right, Mom says, the old Honda Civic has 50,000 miles on it and it doesn’t get to 60 mph very quickly.  But that’s no reason for me to buy you a BMW M6 to replace it.

Our City Council, of course, shows no such compunction.  It is tempting to speculate that the politicians have personal reasons for seeing construction started on the new EOC by the fall.  The firefighters’ union probably expects no less from the two incumbents running for re-election whom it endorsed in their last races, Mayor Gilmore and Councilman Stewart Chen.  (Check next Thursday’s Alameda Sun for more about how the pols have taken care of their pals).

With the new EOC and new fire station, our politicians have demonstrated once again how they’ve managed to turn the old Rolling Stones lyric on its head: if you’re an IAFF Local 689 honcho, you’ll always get what you want — even if it’s sometimes more than what the City needs.

Sources:

Staff reports to City Council: 2013-07-23 staff report re financing EOC; 2013-09-17 staff report re refinancing COPs; 2013-10-15 staff report re architect for EOC; 2013-10-15 staff report re bond sale; 2014-03-18 staff report re financing FS 3

Staff report to Planning Board: 2014-01-27 staff report to PB re EOC

Offering statement for COPS refinancing: Final official statement for 2013 COPs

“Initial study” for fire station no. 3: 2014-01-27 Ex. 4 to staff report to PB – Initial Study for FS3& EOC

About Robert Sullwold

Partner, Sullwold & Hughes Specializes in investment litigation
This entry was posted in Budget, City Council, Firefighters and tagged , , , , , , , , , , , . Bookmark the permalink.

9 Responses to $12 million for a new EOC and fire station

  1. Steve Gerstle says:

    Alameda lacks emergency shelters for its homeless. Since the Emergency Center will seldom be used, it should be used to provide emergency housing and medical care to those most in need. For the homeless, every day is an emergency. Providing these services would greatly enhance the value of the facility.

  2. maria says:

    What a wonderful idea, Steve G. Previous studies showed no need for a fire station on Grand St anyway…

  3. Thanks for another great article on our city government! Keep up the good work.

  4. Dennis says:

    WETA was bought about by, none other than Don Perata! One thing that can be said about Don is, he plans ahead. Not for the citizens but for old Don himself. Let’s see, he is now getting 90K a year from the city coffers, not to mention his expenses. How much will he receive form WETA? And are there other government organizations that are paying good Ol Don off. I’ll bet that it is much more than a pretty penny!!!!

  5. notmayberry says:

    [to the tune of: “A Mighty Fortress is Our God, ]
    A Mighty Fortress is Our E-O-C, A bulwark never failing
    Our help in quake, or fire or flood…Sea Level Rise prevailing

    But still the great Russo…..Doth seek to work us woe
    With bonds and taxes great… which we will come to hate
    For State Grants we must equal

    • The Luther original or the Bach arrangement?

      • notmayberry says:

        I don’t know one from the other. I’m talkin’ about the one we sing in church [yes, even Catholic: 2014 Music Issue Missalette]. Here’s a good one:

        This hymn just started playing in my head, once JKW called it a “fortress”. Any crusade needs an Anthem [remember the Kingston Trio’s “MTA”?]. It’s gotta be something the people can sing. Nowadays too many people put more faith [& money] in the hands of Public Safety than the Almighty.
        I’m working on the rest of the lyrics. They seem vulnerable to parody.
        Sorry, Mark.. can’t do much with your suggestion..

    • Mark Meyewords says:

      I prefer this. You can decide who in City Hall gets to play which character.

  6. notmayberry says:

    Every Crusade needs an Anthem. Remember the Kingston Trio’s “MTA”?

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