LA council aims to finalize budget for Hillview overhaul

The Los Altos City Council was scheduled this week to discuss and determine a final budget for rebuilding Hillview Community Center.

At Tuesday’s meeting, held after the Town Crier’s press deadline, councilmembers were set to vote on a staff recommendation of $30 million for the new 24,500-square-foot facility, which would replace the dilapidated old campus.

At its Sept. 26 meeting, the council, buoyed by the prospect of healthy revenues, increased the community center budget from the initial $25 million to $34.7 million. The 11-resident Hillview Community Center Project Task Force and Noll & Tam Architects proceeded with a conceptual plan based on the updated figure. The task force’s chosen design would cost an estimated $36.9 million to build.

During a Nov. 14 study session reviewing the city’s 10-year financial forecast, staff recommended that the council lower the community center budget to $30 million, citing some competing budget obligations. Councilmembers requested more detail on the staff’s budget assumptions. Consultant PFM Group prepared an updated budget model for Tuesday’s meeting, confirming the staff’s findings. Built into the model were assumptions that included a projected annual growth rate of 4.15 percent, property-tax growth at 6 percent per year, sales tax projected at 1 percent annually, 2 percent growth in salary expenditures and an anticipated increase in unfunded pension liabilities.

Staff selected the $30 million figure from three options. The two others were going with the initial $25 million estimate (a “fiscally cautious approach,” staff said) or staying with the $34.7 million figure.

Sharif Etman, the city’s administrative services director, cautioned in his report that it is “likely the city will need to take on debt to complete the project (at $34.7 million). It is unlikely that other city facilities will be improved for the foreseeable future, unless private funding is raised.”

Under the $30 million option, “some of the enhanced features for the new community center will have to be eliminated or scaled back, but the design team should be able to prepare a plan that meets most of the community’s needs within this budget,” Etman wrote. “Although the city may need to take on some debt, it will be a small amount.”

Complicating the council’s decision – as it did for the task force – was uncertainty over the Children’s Corner preschool’s presence at the new center. School officials expressed interest in a long-term lease. The school needs 3,000 square feet of indoor space as well as additional outdoor space. The task force incorporated the additional square footage into the conceptual plan. The arrangement could require the city to front $1.5 million in additional construction costs, along with a $1 million contribution from the preschool. Children’s Corner would pay back the city over seven years, with annual payments in the $200,000 range.

Los Altos Mayor Jean Mordo, a proponent of retaining the preschool at Hillview, said last week he was hopeful the $34.7 million figure would stick. The preschool is a potential revenue source that could make up the difference between available city money and project costs.

“(We) will likely come back to the council (regarding Children’s Corner) after the council has had the opportunity to set the final budget for the new community center and the design team can modify the design, if necessary, to meet that budget,” said City Manager Chris Jordan. “After that, the council can consider the Children’s Corner proposal and understand how it impacts the rest of the community center.”

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