Factsheet released offers general financing information for the massive Sacramento Zoo relocation project to Elk Grove




With a timeline posted on the city of Elk Grove's website showing a scheduled approval this spring, details of the massive $400 multi-phase relocation of the Sacramento Zoo to Elk Grove were revealed on Friday.

The factsheet posted on the city's zoo webpage shows the initial stage, phases 1A and 1B, of the $400 million project will cost $302 million. Costs for the other phases were not listed. 

The opening statement of the financing plan says, "As a regional project, funding will be sourced from the City of Elk Grove and regional partners" and claims, "The Financing Plan is feasible and realistic to help make the proposed New Zoo a reality and would create a state-of-the-art civic amenity for the Elk Grove community and broader Sacramento region."

However, the staff report prepared for the April 4 Elk Grove Planning Commission meeting says, "This Financing Plan does not seek to specifically identify the donors or regional collaborations but rather identify the Project needs" and "This Financing Plan focuses on the cost and needs for Phases 1A and 1B. Future phases (1C, 2, 3, and 4) will require additional financial planning."

There are four general categories for the funding for the initial phase. They are:
  • Developer Fees - five percent.
  • Community Partnership - 26 percent. The partners will provide $75.52 million. These partners include "Funds secured through zero emissions partnerships including state and federal grants, animal care program partners, and the city's partnership with the Sacramento Zoological Society (SZS), private donations and corporate sponsorships, among others (see slide above).
  • City of Elk Grove Reserve Funds - 31 percent. The zoo project will take $93.62 million from current and future reserves.
  • Issuances of Bond - 38 percent. Income tax-exempt bonds $114.76 million.
The $302 million will be spent in four areas.
  • Construction - $202 million
  • Contingency - $31 million
  • Soft cost estimate - $48 million
  • Escalation - $20 million 
The definitions of these costs are listed below. 

Of the $302 million, Elk Grove taxpayers share is $172.14 million for the initial phase. The plan also says Measure E money will not be used for the project, and promises there will be no annual taxpayer subsidy when the zoo is operational.

The fact sheet says, "The ongoing operation and maintenance costs of the New Zoo would be the sole responsibility of the Sacramento Zoological Society" and that "A detailed Business Plan for Zoo operations can be found at elkgrovecity.org/zoo." 

We will report further analysis of aspects of the financing plan in the coming days. 

Cost Definitions:

• Construction Costs are the costs involved in constructing the improvements. These include materials and labor, which are generally paid to the construction contractor. 
• Contingency is an additional budget identified to account for changes in the design or other costs associated with the Project that have been unidentified when the estimate was prepared. Contingency is calculated as a percentage of the construction cost estimate. Early in the design process, a high contingency percentage is utilized; as the design is finalized and more details are resolved, the construction costs are refined (and may increase), and the contingency percentage is reduced. At the current Schematic Design stage, a 15-30% contingency is utilized, depending upon the project component. 
• Soft Costs are non-construction-related and include design fees, construction management services, fees paid for plan review and inspection or by governmental agencies or impact fees for shared infrastructure, and expenses for furniture, fixtures, and equipment to outfit the Project. In some cases, soft costs are based upon a percentage of the estimated construction costs; in others, they are based upon an estimate of fees or charges expected based on the best available information when the estimate is prepared. 
• Escalation is anticipated increases in construction costs due to inflation or other increases in labor or material costs from the time the estimate is prepared until, generally, the mid-point of construction. The escalation factor utilized is based upon the category of the improvement (i.e., on-site, off-site) and the anticipated timeframe before the improvement can be constructed (e.g., 

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2 comments

Juan Trippe said...

Boy oh boy, the Zoo people better have a damn big bake sale and sell lots of bags of peanuts to feed the elephants!

Deejay Blutarsky said...

Unless I see a pro forma peer-reviewed by an independent third-party consultant, then I will view this project as being built on smoke and mirrors--concocted by government officials with no real business experience and their chosen paid-to-order consultants. 

Construction is one thing--operation and maintenance is another. To suggest that the "ongoing operation and maintenance costs of the New Zoo would be the sole responsibility of the Sacramento Zoological Society" is laughable and disingenuous to the taxpayers.

At least the bond investors will enjoy a tax exemption, with the zoo property and the City's General Fund as collateral. And oh yes, a few animals will enjoy a home on the range!

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