The simple answer is that both projects include more work than just fire damage repairs.

The difference between the estimated fire-damage reimbursement and the current estimate to rebuild the existing building or construct a new building is due to numerous factors.  The most significant of these are increased construction cost resulting from the delay associated with the fire and the need to now relocate staff for the duration of either construction project.

Additionally, when thinking about renovating City Hall, there were a number of improvements that were planned and being designed, such as creating enhanced gathering places for the public, the renovation of the Council Chambers and updating the entrance and façade of the building.  Due to the fire it now makes sense to renovate them in conjunction with the repair project to save money.

When thinking about a new a City Hall, the building is proposed to be 10,000 square feet larger to accommodate future growth, will be constructed in accordance with current building and energy codes and will include significant infrastructure and site improvements to the Municipal Center Campus.

These factors account for the differences between the fire damage reimbursement amount and either the $60 million estimated cost of repairing, restoring and renovating City Hall or the $85 million estimated cost of a new City Hall.  The value proposition before the community is do we invest 70% of the cost of a new City Hall into rebuilding the existing City Hall, which will be 45 years old at the conclusion of the project, or do we construct a new City Hall, which will be more operationally and energy efficient, more safe and secure, and more customer service focused.

In the months following the fire, structural, electrical, information technology engineers and technicians evaluated the damage to the City Hall building and documented the following concerns that were shared with the City Council at the January 23, 2023, City Council Meeting:

• STRUCTURAL
  • Structural engineers determined 3,000 square feet of the second level concrete slab needs to be replaced and the slab adjacent to a mechanical room needs to be replaced. This will necessitate removal of utilities from the first and second floor mechanical rooms.
• WATER
  • Interior walls and finishes, underside of slab, and subgrade were impacted by water used to extinguish the fire.
• FIRE PROOFING
  • Material on structural elements were impacted and retained odor and must be replaced throughout much of the building.
• ELECTRICAL
  • Electrical systems and wiring were damaged by fire and corroded.
• MECHANICAL
  • All equipment replaced in 2021, and expected to be reused as part of a 2021 Bond Program renovation project, suffered smoke damage due to the fire. Cleaning the equipment will not restore it to its planned efficiency, will void the warranty and shorten the lifespan of the equipment, necessitating replacement. Additionally, ductwork in the building was damaged beyond repair.
• PLUMBING
  • Plumbing conditions were impacted by melted copper and PVC drainpipes in the area of the fire.
• AUDIO/VIDEO EQUIPMENT
  • Equipment throughout the building was damaged by heat, smoke and soot.
• BUILDING FINISHES
  • Finishes throughout the building were damaged by heat, smoke and soot.
• OTHER CONDITIONS
  • Demolition has occurred in the area most effected by the fire. There may be other unknown conditions resulting from structural, smoke, soot and steam damage revealed as restoration and repair occurs.

The City Council reviewed options to repair City Hall or to replace the building. The cost to repair City Hall is estimated at $60 million. The cost to replace City Hall with a new building is estimated at $85 million.

During a Jan. 23, 2023 City Council meeting to review City Hall alternatives, information was presented explaining cost differences between repair and replacement. The information showed repair of the damaged City Hall facility would be approximately 70-percent of the cost of a new building. Council was also presented information explaining that, in addition to a future insurance settlement, 2021 Bond Program funds raised for City Hall renovations could be applied to the option for a new facility.

At that meeting, the City Council gave direction to start the process of calling a bond election to let voters decide on whether or not to build a new facility. Council approved calling the election at its Feb. 13, 2023 meeting.

The decision was placed before voters due the unusual situation where repair, renovation and restoration costs would amount to an estimated 70-percent of the cost of a new building. Currently, the cost to repair, restore and complete previously planned renovation of City Hall is estimated at $60 million. The cost to replace City Hall with a new building is estimated at $85 million.

Renovation funds in the amount of $22.4 million come from a 2021 referendum in which voters approved funding to fix a variety of security, ADA, mechanical and other issues in the current City Hall building. Renovation work was scheduled to begin this year but has been delayed due to the fire. With the current state of inflation, the project is now estimated to cost $5 million more, and cost escalation is a factor to consider in deciding the best way to move forward.

The current insurance settlement is valued at $16.5 million. The City is working with engineering and legal representatives to negotiate a fair settlement on the value of the damages to City Hall. Those negotiations are continuing with the goal to increase the settlement amount, but the results of those negotiations are not expected to conclude until this summer. The City anticipates being fully reimbursed for all fire-related damages.

If approved, the City will only sell enough debt to account for the difference between the project cost and the combination of 2021 Bond funds and insurance proceeds.

With the current state of inflation, cost escalation is a factor to consider in deciding the best way to move forward. If approved, the City will only sell enough debt to account for the difference between the project cost and the combination of 2021 Bond funds and insurance proceeds.

No, the Richardson City Hall facility was not underinsured. The City’s coverage with its insurance company (Travelers Insurance) allows for replacement cost up to the coverage limit of $262.6M.

While the coverage limit is far higher than the value of the building, the damage to the building is at a lesser value. The City is working with engineering and legal representatives to negotiate a fair settlement on the value of the damages to City Hall, and that figure is currently set to be at least $16.5 million. Negotiations are continuing to increase that number, but the results of those negotiations are not expected to conclude until this summer. The City anticipates being fully reimbursed for all fire-related damages.

The City Council reviewed two options regarding what to do with the fire-damaged City Hall building. One was to repair the facility, and the other was to build a new one.

In this case, there is an unusual situation in which there will be a future fire insurance settlement, currently valued at $16.5-million, and prior approved renovation funds ($22.4 million) that were meant to fix a variety of security, ADA, mechanical and other issues. Those can now instead be put towards a new facility, which is the option currently set to go before voters.

Repair, renovation and restoration costs would amount to an estimated 70-percent of the cost of a new building. Currently, the cost to repair, restore and complete previously planned renovation of City Hall is estimated at $60 million. The cost to replace City Hall with a new building is estimated at $85 million.

If approved, the City will only sell enough debt to account for the difference between the project cost and the combination of 2021 Bond funds and insurance proceeds.

The large pecan tree on the northern edge of the campus is regularly assessed by Certified Arborists on staff as well as third-party consultants and experts, as part of the City’s Urban Forestry program. The tree’s overall health has declined as it ages, and its future viability is uncertain. Each year, the City has scaled back the number of Christmas lights hung on the tree to reduce the weight the limbs must bear in the winter when the tree is dormant. It is likely that use of the tree would need to be discontinued in the coming years.

Under the proposed plan for a new City Hall, the pecan tree would be removed to allow the campus to be accessed directly from Arapaho. Landscape plans with additional trees for the campus will be finalized during the design phase should a new City Hall be approved. This could include the relocation of existing trees on the campus, but staff does not believe the pecan tree is healthy enough to relocate.

Additionally, while a new City Hall would take up some of the open space to the east of the fountain, the intent would be to create new areas between the Library and a new City Hall that would extend south to Belle Grove Drive.  These areas would provide additional landscaped lawns that would be better suited for community events and more accessible from parking areas.

Voters will be provided a proposition to decide on a General Obligation (GO) bond referendum that would raise $46 million to help pay for the construction of a new City Hall at the current City Hall location. The money raised would cover a portion of the costs for a new facility, with the rest of the projected costs expected to be funded by an insurance settlement and 2021 Bond Program funding.

The ballot will be prepared in accordance with Texas Election Code, and permit electors to vote “FOR” or “AGAINST” the measure and will appear on the ballot as follows:

PROPOSITION A
“THE ISSUANCE OF $46,000,000 GENERAL OBLIGATION BONDS FOR A NEW CITY HALL AND THE IMPOSITION OF A TAX SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS”