TO: Mayor and City Council
THROUGH: Krishna Namburi, Interim City Manager
FROM: Josh Eggleston, Chief Financial Officer
SUBJECT:
title
Use of Salem Safety and Livability Bond Premium for additional expenses related to the Civic Center Seismic retrofit project.
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance; Safe, Reliable and Efficient Infrastructure.
end
SUMMARY:
summary
As recommended by the Bond Oversight Committee during its May 22, 2025 meeting, the City Council is being asked to approve the use of bond premium to pay for $1,078,540 in additional Civic Center improvements.
Public Works Engineering staff have been working on elements related to the Civic Center project which includes seismic upgrades, accessibility, building system improvements, restrooms and interior spaces. As the project has developed, there have been additional components identified that would be beneficial for the project. Most of these components have not been approved. However, a small grouping of these potential improvements were identified as high priority for a funding request. This list prioritized updates mandated by code, customer facing benefits, and improvements that are much more economical during construction while the building is unoccupied.
end
ISSUE:
Shall City Council approve the use of $1,078,540 in bond premium to pay for additional expenses related to the Civic Center Seismic project?
RECOMMENDATION:
recommendation
Approve the use of $1,078,540 in bond premium to pay for additional expenses related to the Civic Center Seismic project.
body
FACTS AND FINDINGS:
As the Civic Center Seismic Retrofit project has progressed, there have been a series of additional needs and opportunities that have arose with the project. By taking advantage of the opportunity the project and bond funding provides, these items will greatly impact the result of the project and set the Civic Center up for greater resiliency and efficiencies for the future. The full list of identified improvements total over $4.8 million. Below is a list of the items that were prioritized for consideration by the Bond Oversight Committee and City Council:
Code Required Changes
• Add an emergency generator: $226,559
• Replace emergency power distribution: $133,680
Customer Facing Benefits
• Permit Application Center Counter : $12,745
o Allows for additional line queuing space
• Permit Application Center Pony Wall with glass separation: $112,736
o Consistent customer experience throughout the City service counters
o Provides level of safety and security for City staff
• Increase in Court Lobby: $60,218
o Provides additional staff service points to facilitate more efficient customer service
o Allows for additional line queuing space
o Provides space for security check point
• Storefront Doors Demolition / Infill: $47,180
• Signage and wayfinding allowance: $150,000
Opportunity Cost Benefits
• Conference Rooms and office improvements / Audio-Visual: $228,000
o Rough in only, allows for seamless future installation of AV technology
• Court and sharing meeting space / Audio-Visual: $27,414
o Rough in only, allows for seamless future installation of AV technology
• Conduit pathway from IT closet to new security cameras: $80,000
o Rough in only, allows for seamless future installation of security video technology
Financial Implications
As shared with the Bond Oversight Committee, when the Salem Safety and Livability Bonds were sold in February of 2023, there was over $7.2M in bond premium that the City was awarded. Bond premium is essentially financial incentive to make a proposal of a financial institution who wishes to purchase our bonds more appealing. The monies are restricted in their use like the bonds themselves, but can and are used by issuers when a project needs additional funds or to do additional projects as outlined in the bond language.
Since the receiving of that bond premium, the dollars have increased with interest earnings, less administrative expenses related to the bond, have resulted in a balance of just over $13.5M. Due to the one-time opportunity to make the improvements to Civic Center at current costs as outlined above, staff believes the use of this bond premium is prudent.
BACKGROUND:
The Salem Safety and Livability Bond was approved by Salem voters in 2022 to fund several different project types across the City. Of the $300M approved by voters, $39.45M was approved for Civic Center Seismic improvements, with an additional $3M in other City funding to bring the total project budget to $42.45M. The additions proposed to be funded with bond premium were recommended for City Council consideration by the Bond Oversight Committee at their May 22, 2025 meeting.
Kelli Blechschmidt
Management Analyst II
Attachments:
1. None.