HomeMy WebLinkAboutBackgroundBACKGROUND REPORT FOR THE RESOULTION APPROPRIATING UP TO
$300,000 FROM KIMBALL TOWER REPLACEMENT RESERVES FOR NUTRITION
CENTER UPGRADES, REPAIRS AND BUILDING CODE RENOVATIONS
The significance of this request is that it requests approval to use Replacement Reserve
funds from Kimball Tower to pay for repairs, upgrades and renovations to the Nutrition
Center portion of Morgan Tower. The reasoning behind this request is twofold. First, the
Replacement Reserve fund for Morgan Tower is a HUD restricted fund that contains, as
of June 30, 2012, approximately $375,000 of which $225,000 is currently budgeted in
the CIP program for roofing and HVAC replacement on Morgan Tower itself and, from a
Capital Needs Assessment performed in April 2011, another $175,000 is projected to be
needed in the near future to replace the aging boilers which supply hat water to the
entire building. In addition, HUD requires a margin be kept in the Replacement Reserve
account and diminishing the account for the repairs listed below for the Nutrition Center
would not pass HUD scrutiny.
Secondly, and most importantly, the Replacement Reserve account for Kimball Tower
has, as of June 30, 2012, a balance of $1,203,000 and those funds are not restricted by
HUD since Kimball Tower is not under any regulatory agreements constraining the use
of those funds. The use of these funds for the Nutrition Center will not diminish the
Kimball Tower Replacement Reserve account to the extent that there would not be
enough funds for significant emergency repairs to be performed if the need arises while,
at the same, programming for future capital repairs.
The following items represent the major expenditures related to extending the life of the
Nutrition Center well into the future and limiting ongoing, un-programmed maintenance
and repair costs.
Significant Structural Problems Unrelated to Flood Damage Exposed During Flood
Remediation Work:
• Significant moisture damage to a structural steel post and adjacent metal studs
and base plate on the wall between the boiler room and kitchen where the
freezer and refrigerator are and moisture damage to metal studs and base plate
on the wall between the kitchen and the manager's residence. Estimated Cost
is $22,000.
• Mold on the back side of the drywall along the wall between the kitchen and the
manager's residence. Estimated cost is $4,000.
• Bad waste line fitting from dishwasher behind wall in location above. Estimated
cost is included above.
Replacement of Obsolete HVAC and Refrigeration Equipment:
• The walk-in refrigerator is original equipment and over 30 years old and well past
its Iifespan and should be replaced. A similarly aged freezer was replaced in
2010. Upon discovering the structural problems noted above when walls were
opened up after the flood it was obvious that condensation leaks from the
freezer, prior to its replacement in 2010, had contributed to the structural damage
and that the refrigerator had a contributory impact which will probably grow over
time as its condensers and motors continue to wear out. Estimated cost is
$40,000.
• The roof mounted ventilation unit (which also is part of the fire suppression
system) is also over 30 years old and should be replaced. Estimated cost is
$8,000.
• The roof mounted HVAC unit is over 30 years and should be replaced.
Estimated cost is $9,600.
Nutrition Center Roofing Replacement
• The roofing on the Nutrition Center is past its lifespan and should be replaced as
a part of any Nutrition Center Upgrade. Estimated cost is $17,000.
Building Code Required Upgrade
• The waste disposal piping does not meet current building codes and National
City ordinances related to disposing of kitchen generated grease into the sewer
system and will require a major renovation to include the installation of a grease
interceptor device and re -plumbing of a toilet waste Tine to avoid contamination of
recoverable/recyclable grease. The estimated cost (provided without benefit
of design parameters) is $65,000.
General Kitchen Equipment Upgrade Allowance
• Based on a cursory review of the age and condition of the current kitchen
equipment (stoves, ovens, fryers, dishwasher, faucets, steam tables, drink
dispensers, etc.) there should, pending a complete review, an allowance for
replacement and repair. The estimated cost is $28,500.
First Phase Temporary Emergency Fire Sprinkler Line Installation and Ancillary Costs
• In the immediate aftermath of the July 31, 2012 flood there were several costs,
most notably the installation of the emergency fire sprinkler line, related to
providing for the safety and security of the tenants of Morgan Tower. These
costs are approximately $26,000.
Permanent Replacement of Fire Sprinkler Line
• The estimated cost to replace the failed fire sprinkler line is $40,000.
*The total estimated cost for these items, including a 15% contingency, is
$300,000.*