Over the course of three public meetings, Lompoc City Council members have questioned aspects of a proposed new 23,373-square-foot, $14-million fire station to be built on land at the Lompoc Airport to replace aging Fire Station No. 2.
Since the proposed station was rejected by a 3-2 vote in December, public discussions have involved numbers for call volumes, types of service calls, call response times and whether the city should purchase the land where the station will be built rather than commit to a perpetual lease with the Lompoc Airport.
But new financial data released late last week is expected to focus Tuesday night’s council discussion on a different set of numbers — the amount of cash in the city’s operating reserves.
The data released by staff shows that paying for the proposed new fire station — at a total cost of $29.8 million over a 30-year period — will deplete city general fund reserves for a period of six years, from 2020 through 2025, according to Dean Albro, the city’s accounting revenue manager.
To balance the budget in those years, the city anticipates it will need to dip into a $2 million Economic Uncertainty Fund, a permanent cash reserve created in 1994 to be used for “the continued operations of the city when severe economic conditions deem it necessary.”
For three years, 2022 through 2024, staff projects the city will have less than $500,000 in cash reserves if the proposed project is approved, Albro confirmed.
The dip into general fund reserves to balance the city budget is largely due to factors unrelated to the construction of new fire station.
State-mandated payments to CalPERS, the state’s underfunded public employee pension plan, are expected to increase every year until 2021, when they are scheduled to level out.
By the year 2025, the use of reserves to balance the budget should begin to diminish, Albro said.
In 2011, a previous city council established a target goal of setting aside operating funds for two months in reserve. The city is currently using that general fund reserve to pay the increased CalPERS payments imposed by the state in 2013, according to a staff report.
Adding the cost of the new fire station will extend the period of time before reserves return to their target level by another five years, or until the year 2030, according to Brad Wilkie, the city’s management services director.
Mayor Bob Lingl said he continues to support the project as proposed and has confidence that Wilkie and City Manager Patrick Wiemiller have prepared conservative budget forecasts that demonstrate building the new station is feasible.
“I believe our city staff have done their homework,” Lingl said. “ I am concerned, but I’m confident that we will be able to build the station and we will not bankrupt the city.”
Council members Jim Mosby, Dirk Starbuck and Victor Vega, who cast no votes on the project in December, have balked at the cost at three previous council discussions.
“The size and cost of this station is scary,” Starbuck said. “If we commit to this project in its entirety, it will never allow us to move forward in the next few years with what the police need.”
Mosby said he wants to look at phasing new construction over time when the city can better afford the cost.
“I’m looking for something toned down. I believe we can meet the No. 1 objective to meet emergency needs,” he said.
“I am not opposed to a new fire station. What I’m becoming opposed to is taking our reserves down to a few days.”
Wiemiller said the challenge for city staff was to find a way to fund the cost of a replacement fire station — identifying improved fire services as the most pressing need facing the city — without seeking tax increases for residents.
The proposed project would be developed as a public-private partnership with Public Facilities Investment Corp. (PFIC), with the private company fronting all construction costs and assuming the risk of cost overruns.
Beginning in 2020, after construction is completed and the two-story station is operational, the city would begin paying annual lease payments to PFIC ranging from $799,000 to more than $1.2 million per year for 27 years.
“The price made us all swallow very hard. No doubt this is a lot of money for any city, it’s a lot of money for this city,” Wiemiller said.
“That’s why (we) made sure that we cash flow this in such a way that we are not compelling us toward a path of financial peril, but make it coexist with the other challenges ahead of us. If we don’t do it now, when do we do it? It’s not going to get any cheaper, I can guarantee you that,” he said.
“This is our best opportunity to move this project forward that the city so desperately needs.
“This isn’t just about dollars and cents. This is about things like response times which leads to lives being saved which sometimes makes the difference on whether there is a survivor or not in a given situation.”
Vega agreed with the need for a new station, but said the council needs to be fiscally responsible.
“The main purpose here is to determine, do we want the station? Can we afford it? Are we being fiscally prudent? That’s why we’re here.”
The financing and payment schedule agreement with PFIC expired earlier this month, and will need to be reconfirmed or renegotiated, adding another wrinkle to the council’s decision.
The council meeting begins at 6:30 p.m. Tuesday in council chambers at 100 Civic Center Plaza.
— Noozhawk contributing writer Carol Benham is a longtime local journalist who lives in Lompoc. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.