City grapples with new price tag for police station

ACCOUNTING FOR CONSTRUCTION COSTS — Above is a rendering of the Decatur Police Department’s new facility. The project is now estimated to cost $26.6 million. 
COURTESY/DECATUR PD

The Messenger
By Austin Jackson 
on May 09, 2023

The Decatur City Council will consider issuing approximately $15 million in bonds over the next two years to cover the increased cost of the city’s new police station and additional infrastructure projects.

Since budgeting $18.2 million to build a new Decatur Police Department facility through a $34 million bond issuance in 2022, the City of Decatur has braced for an updated estimate that reflects the recent volatility in the construction market. 

In a presentation to the council Monday, Decatur City Manager Nate Mara shared that the police building is now expected to cost $26.6 million — detailing what led to the $8 million increase and a potential path forward to cover the difference and tackle other pressing projects.

“I don’t think anyone would have thought a few years ago when we issued the certificates of obligation to build the police facility and construct the water tower that our needs would change as rapidly as they have,” Mara said. “But they have… What I have brought before you tonight are our most important projects that we need to tackle to keep on track.”

The proposed funding option is issuing $10.2 million in certificates of obligation (COs) in FY 2023 and an additional $5.2 million in FY 2024. According to the city’s projections, the issuance would bring Decatur’s tax rate to 66.7 cents per $100 valuation in 2024 (maintenance and operations, 45.9 cents; debt service, 20.7 cents), then 67.9 cents in 2025 (M&O, 47.5 cents; I&S 20.4 cents). The current tax rate is 64.528 cents (M&O, 44.3658 cents; I&S, 20.16 cents). 

“If we see the same amount of growth that we experienced last year, there’s a chance that the rate will stay completely flat,” Mara said. “It depends on what changes in the city with new construction.”

In addition to $8.4 million for the police facility, the bonds would fund a series of water projects and cover the design of Decatur Fire Department’s second station on the south side of the city. In total, the proposed package includes water line projects at Farm Road 730 ($850,000) and Farm Road 51 ($1.2 million), a water management project to increase water availability downtown ($2 million), SCADA system upgrades ($1.5 million) and fire station No. 2 architect and engineering ($1.5 million). 

“We’re committed and we do have this variation right now that we have to deal with,” said Decatur Mayor Mike McQuiston. “I feel like this is a reasonable approach to meet these needs.”

While changes in the construction market impacted the project’s 45 percent cost increase, the new price tag was also influenced by site issues and new considerations.

Decatur Police Chief Delvon Campbell said the initial plan was to build the facility on south end of the property. However, due to the topographic challenges that would have resulted in cost and feasibility concerns, the city pivoted to the northeast corner of the 7.89 acre property. This change prompted additional considerations, like building a larger retention pond and expanding Church Street. The updated cost also includes funding to seamlessly transition emergency communications and IT infrastructure during the migration to the new station.

The City of Decatur is looking at potential future uses on the property near the future Decatur Police Department station, including a park and a future city hall location.

In a breakdown comparing the two estimates, the updated projected construction costs — which doesn’t include professional services, contingencies, testing and furniture, furnishings and equipment (FF&E) — increased from $10 million to $22.8 million. 

Since the project is further along, a lot of the project’s original $6.9 million contingencies budget has been absorbed in construction costs. The FF&E budget slightly decreased from the original projection, while professional services and testing increased by a total of $1.2 million.

Members of the council appeared to be open to the proposed plan following the presentation. Council member Eddie Allen suggested that staff consider new park facilities in the list of potential projects, while Mayor pro tem Melinda Reeves praised the staff’s work to address the situation.

“I feel that staff did an excellent job of being cognizant of our taxpayers — to get them as much as we can with as little as we can,” Reeves said.

Campbell said the design phase of the project is nearly complete, with city staff and Brinkley Sargent Wiginton Architects of Dallas combing over each individual room of the facility to nail down the final cost. While the guaranteed maximum price from construction manager at-risk SEDALCO Construction is still a few months away, Campbell said the design process allowed for an accurate cost estimate to bring before the council.

“We’ve gone through every room in the building, and we’ve identified every piece of furniture we need and every piece of equipment we need,” Campbell said. “That’s where that final number came from. One of the things to understand is since we know exactly what we need, once we get the pricing confirmation complete, we know that will be the set price.”

The police facility is part of a larger vision for the property. The site plans currently map out a potential park between the police station and the Wise Heritage Museum, with a potential city hall site at the corner of State Street and Charles Street. 

The police station is scheduled to be completed in June 2025, with construction required to be finished 18 months after the maximum price approval.

The design of the new station incorporates the growing needs of the department, and will be a significant upgrade from the former Decatur Baptist College dorm rooms that it has operated from for years. The new station plans include technological upgrades, security enhancements, improved evidence storage and training facilities for the police department that recently earned its Contract Training Provider certification through the Texas Commission on Law Enforcement. 

Certificates of obligation do not require voter approval. Mara said the city’s bond counsel recommends pursuing additional capital improvements in the third or fourth quarter of the fiscal year.