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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 06/10/2008 - I-25/SH 392 INTERCHANGE IMPROVEMENTS - PROGRESS RE DATE: June 10, 2008 STAFF: Mark Jackson WORK SESSION ITEM Chuck Seest FORT COLLINS CITY COUNCIL Pete Wray Rick Richter Denise Weston SUBJECT FOR DISCUSSION I-25/SH 392 Interchange Improvements — Progress Report on 1601 Study Process (Financial and Transportation Elements) and Proposed Joint Meeting Between Fort Collins City Council and Windsor Town Board to Discuss Continued Partnership. EXECUTIVE SUMMARY I. Progress Report on the 1601 Process A. Staff will review the 1601 Study process and proposed schedule. B. The Federal Highway Administration has approved the Request for Separate Action.This allows Fort Collins and Windsor to move forward with the 1601 Study. We have also received and signed the Intergovernmental Agreement with the Colorado Department of Transportation (CDOT). C. A consultant team has been selected and contract finalization is underway. Project staff will ask City Council in July to raise the cap on City contributions (as specified in the March 2008 IGA) by an additional $15,299. II. Update on the work of the Finance Committee for the 1601 process with regard to evaluating both the financing tools under consideration and the mix of financing tools for the proper funding scenario. III. Proposed joint meeting between Fort Collins City Council and Windsor Town Board to discuss continued partnership. The City and Town Managers agree it is important to keep the 1601 Process moving ahead. At the same time,they agree that it would be in the City and Town's best interest to schedule a special joint meeting to talk about the Interchange Improvement Project partnership. The purpose of the proposed meeting is to revisit community values and goals regarding the Joint Interchange Project. The Managers are proposing a joint session between the City Council and Town Board to: • reaffirm that I25/392 interchange is a problem that needs to be solved—and an improved interchange is important, for different reasons, for both communities. June 10, 2008 Page 2 • review the land use and gateway vision of each community for the property surrounding the interchange. • identify the values of each community in relation to the interchange problem. • affirm the commitment by each community to the interchange project and their respective goals for land use patterns and financing mechanisms. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Are Councilmembers comfortable with the information presented and/or are there any questions pertaining to the status of the 1601 Study Process? 2. Do Councilmembers have preferences and/or specific concerns regarding the usage of specific tools currently being considered for creating funding scenarios? 3. Is there any additional information that is needed prior to, or along with, agenda materials for the proposed special joint meeting scheduled for mid-summer? BACKGROUND I. 1601 Study Process Progress to Date—Action by Federal Highway Administration and Hiring of a Consultant for the Process. The 1601 process is a CDOT-mandated process for seeking approval from the Federal Highway Administration to reconstruct or modify an interchange on the Interstate Highway System. In March 2008, City Council was presented with an agreement to implement a 1601 Study for the improvement of the 125 and SH 392 interchange. 1601 Systems Level Study and Financial Committee Processes Attachment 1 shows the parallel processes required for a successful project outcome. While the Technical/Environmental Committee works to fulfill federal and state requirements mandated for the 1601 System Level Study, the Financial Committee works to develop funding scenarios and recommendations. Recommendations from the Financial Committee will be incorporated into the System Level Analysis report to be submitted to the Colorado Department of Transportation (CDOT), The Colorado Transportation Commission, and the Federal Highway Administration (FHWA). These parallel processes are necessary in order to meet an anticipated approval process in the first quarter of 2009. Outreach meetings are planned throughout the process for both residents and key stakeholders from Windsor and from Fort Collins. Project staff also plan regular written and in-person updates to the City Council and Town Board at key project milestones. June 10, 2008 Page 3 FHWA Approves Request for Separate Action The Federal Highway Administration approved the Request for Separate Action on May 7th. This allows Fort Collins and Windsor to move forward with the 1601 Study. Consultant Selection and Budget Adjustment The initial project cost for the 1601 study(presented to Council as part of the three party agreement to be divided between Windsor, Fort Collins and Lauth development) was estimated at$138, 552. In April, the City of Fort Collins and Town of Windsor received a proposal from DMJM Harris to perform the SH 392 and 125 interchange 1601 Study. The interview panel was very impressed with DMJM's qualifications and experience with studies of this type. DMJM Harris was the sole applicant even though the RFP was an open posting, largely due to their prior work with the Town of Windsor interchange efforts. Staff reviewed the proposal and subsequently interviewed DMJM Harris. Their initial cost proposal was$230,898. The project team then held a scoping meeting with DMJM Harris at which time some items were eliminated such as consultant travel,reduced efforts on other items,and adjusted consultant-assigned personnel on some tasks. As a result,staff was able to reduce the proposed project cost to $199,749. In the agreement approved by Council, the City's contribution to the 1601 study is capped at $34,638. In order to proceed with a contract with DMJM Harris, this cap will need to be raised to $49,937; Fort Collins share is $15,299. The distribution of costs is reflected the table below. SH 392/1-25 1601 Cost New Cost after RFP 1601 Study in the from DMJM for Additional Funds Participation IGA 1601 Study Needed Windsor 25% $34,638 $49,937 $15,299 Fort Collins 25% $34,638 $49,937 $15,299 Metro Acquisitions $69,276 $99,874 $30,598 (developer) 50% Total $138,552 $199,749 $61,196 A revised, three-party agreement will need to be presented to Council for approval in the next few weeks. The funds for this increase will come from the General Fund Contingency Reserves. Project staff is scheduled to bring this amendment to City Council at the July 1 regular meeting. June 10, 2008 Page 4 II. 1601 Process—Update on the Financing Tools and Funding Scenarios Created by Using Those Financing Tools. A joint team, comprised of staff from both the City of Fort Collins and the Town of Windsor and tasked with developing feasible funding scenarios that represent the commitment to the interchange of both communities, has been meeting over the past two months The I-25/ SH 392 Interchange is viewed as a significant gateway for both the Town of Windsor and the City of Fort Collins. The improvement will address transportation needs in both communities. The concerns of both communities with regard to the environment and development standards are integral to the planning and design of the interchange. In a similar fashion, the financing solution should also reflect both the values and commitment of the two communities. FINANCING TOOLS: To date the joint finance team has evaluated the work contained within the draft study completed in 2007 by an outside consultant. The team is also evaluating options that have recently been presented by consultants working with a major property owner on the Windsor side of the interchange. The primary financing tools currently under consideration in alphabetical order are as follows: 1. Certificates of Participation. Either one or both communities issue certificates of participation (COPS) that pledge existing facilities as collateral for a financing that will be repaid with general fund revenues. Over time, these revenues should be generated from activity within proximity to the interchange. 2. General Fund Contributions. Both communities provide a one-time investment to be made toward the funding of the interchange. No additional financial liability is assumed by either community. 3. Metro Districts. Metro districts could be created on both sides of the interchange for the purpose of assessing mill levy on properties within close proximity to the interchange. 4. Public Improvement Fee. A public improvement fee (PIF) could be imposed at the point of sale on retail activity within close proximity to the interchange. 5. Urban Renewal Authority (URA). This tool would be utilized only on the Windsor side of the interchange and would allow for the use of property tax increment. 6. Colorado Department of Transportation(CDOT)Contribution. CDOT has committed a one-time contribution of$1.8 million for funding the interchange. Aside from the above, the joint finance team also reviewed the following financing tools that are viewed as secondary sources since they would require approval from other entities besides the City, Town,County,CDOT and the Metro District proponents. This could delay completion of the 1601 Process in the current year. However,the financing plan submitted with the completion of the 1601 Process can be amended. In addition,some of these secondary financing tools pose legal concerns and do not yield significant financial benefit to the project: June 10, 2008 Page 5 1. Impact Fees. Impact fees could be assessed on all new commercial and residential activity within proximity to the interchange. The Town of Windsor already has an impact fee that recognizes the area adjacent to the interchange and the related public improvements required in that area; the City could consider implementing a similar fee. 2. Special Assessment. A special assessment could be levied against undeveloped land on a per acre basis. As development occurred the resulting property taxes on the developed property would more than offset the raw land assessment. 3. North Front Range Metropolitan Planning Organization (MPO) Contribution. The North Front Range MPO does not have any funds in its current funding cycle committed to the interchange. 4. Other Grant Funding. The City and Town are both researching other funding sources. The Town has identified USDA grants that may be available to communities with a population of 30,000 or less. FUNDING SCENARIOS: The next step of the joint finance team is how to consider the optimal mix of the above financing tools to create a funding scenario. The team has assembled two conceptual scenarios. The FIRST scenario assumes that private entities finance the majority(75%) of the cost of the interchange. Scenario 1 . Funding- Private Entities i rrrr rrrrrrr rNrrrrrr 1rrlrNrrN rrrrrrrrrrrrrr rrrrrrrrrrrrrrrr Metro District - 31% ® Revenue Sharing(PIF or URA) - 44% 91 CDOT - 9% ® City of Fort Collins - 8% ® Town of Windsor - 8% June 10, 2008 Page 6 Benefits of PRIVATE Entities Serving as the Primary Source of Funding: 1. Lower up front costs for the individual governments. 2. Less financial risk to the individual governments. 3. Could be accomplished via negotiations with a single property owner. 4. Focus available City resources on ancillary impacts (environment, transit, etc). Challenges of PRIVATE Entities Serving as the Primary Source of Funding: 1. Dependent on economy and market forces. If development is slowed, interchange construction may be delayed. 2. May not yield adequate revenues in future years for City services as a portion of underlying revenues are dedicated toward financing the interchange for an extended period of time. The SECOND scenario assumes that public entities finance the majority of the cost of the interchange. Scenario 2. Funding- Public Entities I A , ® City of Fort Collins - 30% Town of Windsor - 30% El CDOT - 9% Metro District - 31 % June 10, 2008 Page 7 Benefits of PUBLIC Entities Serving as the Primary Source of Funding: 1. Not as dependent on either the economy and market forces. 2. Simplifies the financial package since the governments fund the project. 3. May generate a more stable tax revenue stream over the long term. Challenges of PUBLIC Entities Serving as the Primary Source of Funding: 1. Substantial upfront costs to the individual governments ("Writing the Check"). 2. More financial risk borne by the individual governments. The joint finance team is still evaluating the merits of both scenarios. The first scenario clearly provides a more affordable approach in the short-term and places more of the upfront financial cost and risk on private entities. The second scenario with a commitment from both communities may provide a long-term solution with greater revenues to both communities in the future,but also shifts more of the financial cost and risk of the project from the private to the public entities. III. Proposed Joint Meeting - City Council and Windsor Town Board Changing Circumstances While both the Windsor Town Board and the Fort Collins City Council committed to the 1601 Study to accelerate the planning for the interchange project, conditions have changed in the past few months: • New Town Boardmembers were elected in Windsor . • The retail market has and continues to change and the type, scope and timeframe of the developer's (Lauth) project is also changing and evolving. • Each community has different values and goals with respect to community development and maturation and it is important to review the purposes of and commitment to carrying through with the interchange project. • As part of the 2006 IGA to initiate the partnership between communities and develop a joint Plan, certain details for implementation need to be identified and agreed to by elected officials, such as Interchange Project financial commitments, revenue sharing and timing During the process to develop the Interchange Improvement Plan,the elected bodies of the City and Town attended one joint work session prior to acceptance hearings in the Fall of 2007 and early 2008. As implementation is proceeding with the supported 1601 Study process,the timing is right to meet again and discuss the ongoing partnership. While staff has been working diligently on specifics of the 1601 separate action with CDOT, this proposed special meeting provides an opportunity to reaffirm and discuss expectations of the partnership and, at the same time, keeps progress moving forward. July is the target to schedule a joint meeting. Staff is proposing a facilitated meeting with ample time to discuss common ground and differences in land use patterns in the two communities. An additional meeting between the two partners may be warranted as the project evolves. June 10, 2008 1 Page 8 Several years ago in preparing to develop new interchanges at I-25/136 and I-25/144th, the cities of Westminster and Thornton went through similar joint discussions on visions and logistics for developing these future projects together. Dann Atteber y and Kelly Arnold (City Manager/Windsor) recently met with Jack Ethredge (CM /Thornton) and Brent McFall (CM /Westminster)to discuss the important elements that enabled these two communities to partner on reconstructing the 1-25/136th and 144th interchanges. One action that was essential was a facilitated meeting(s)with both Councils. This produced strong, common support from both Councils that the interchange improvement was significant to both communities and both needed to work together to achieve the improvement. The Councils spent significant time shaping the vision and identifying each City's values related to the transportation improvements and the adjacent corridor (1/2-mile on either side of the freeway). There were differences between the two communities related to land use goals and intended land use patterns. Yet,the two communities were able to develop a financing plan that accommodated their differences while providing an equitable approach to financing the interchange improvements. These efforts were key to achieving each community's land use vision. The next step was to develop a financial package to cover the transportation improvements. While both agreed that each community would share the cost of the interchange improvements,each City's financial approaches were different. Westminster set up an Urban Renewal Area and used tax increment financing(Westminster was on a fast track to develop a large commercial area on its side of the freeway). Thornton used Certificates of Participation. Both agreed to a Revenue Sharing approach whereby each would keep two-thirds of the revenue in the specified improvement area around the interchange and send one-third of the revenue to the other city. While the financing was not precisely equal, it was close enough that both thought the financing arrangement was true to their common vision and goals. It has resulted in a win-win approach for Westminster and Thornton. Fort Collins and Windsor are embarking on their own unique partnership with this project. It is important that the elected community leaders have the opportunity to directly address these elements and shape an approach that works for each community as well as for the joint project. ATTACHMENTS 1. 1601 Study Process Flowchart. 2. Powerpoint presentation. I-251392 Interchange Approval Process ATTACHMENT 1 Executive Oversight Committee • Members Diane Jones, City of Fort Collins Kelly Arnold, Town of Windsor Bob Garcia, Colorado Department of Transportation Overall Project Team Leadership Mark Jackson, City of Fort Collins John Frey, Town of Windsor Quarterly Meetings Finance Committee 1601 Process Leadership Technical / Environmental Committee Chuck Seest, City of Fort Collins Current Members Leadership City of Fort Collins Rick Richter and Denise Weston, Fort Collins Town of Windsor John Frey and Dennis Wagner, Windsor 41 Louth Current Members Schedule/Report Format City of Fort Collins Every Other Tuesday Town of Windsor Monthly Report DMJM Harris/EDAW Colorado Department of Transportation No FederallState Regulated Process Schedule/Reporting Format (schedule to be determined) Monthly Report Federal/State Regulated Process Committee,Product Committee Product Committee Product System Level Analysis NEPA Document Financial Plan (Requires Approval from (CatEX) CDOT Transportation (Requires Approval from Commission) the Federal Highway Administration) F1Documentation required for the 601 Interchange Approval Process Final IGA City of Fort Collins,Town of Windsor, CDOT k25 / SH392 Interchange Improvements Y i k25/SH392 Interchange Improvements 1601 Systems Level Analysis • Technical Feasibility Study (operational acceptability) • Environmental Clearance ( NEPA) • Project Funding • With Town Board & City Council Approval - Report presented to CDOT Transportation Commission for Type I Approval Oversight1 -25/SH392 Interchange Approval Process Executive -11 Committee 1601 Process Committee Finance Committee SNE . , System Financial ae"Document Analysis 1601 Documentation Final IGA CNY.f roil c.ul.bk imeline of Current vs Proposed Process for SH392 Interchange Improvements Cur tact N.M FSS EIS Process LIl RM uM ma fa11 M11 Ton 1 1 1 1 II d I1 fB. 0�g11 ProPoaM ODOT 1901 Policy DlralclNa Funally 9ourpa Vnanawl xaP A01 A0a Iola My U11 fan x-0OMnIq ICOMYLETEpI xJ manlM1a Ii;nMn•. Fi:'.� .FNWA Jusl.rtation for Separate Action approval (CO.PLETED) x-5 mort s .CDOT Trans. Commission conditional approval ® 64 months FNWAICOOT Environmental approval '® 5.1 months Definiliona: as morons DEIS = Draft Environmental Impact Statement ♦Councllle. CWT. Developer approve financial plan FEIS • Final Envlronemental Impact Statement ROD = Record of Decision St months IDA = Intergovernmental Agreement JSA = Justification for Separate Action . Proyarry, owners approve Bland formation IAR = lntamignge Access Request ♦ Councllle approve distinct formation NEPA - Nagooal Environment Policy Act months ♦COOT approves construction "me ^ u-la mpnlm City of Ford Collin 4 2 CDOT 1601 Policy Directive Process 1 . MPOITPR Board Trans- Approval System portation Conceptual Design 1601 and Level Commis- 2. NEPA Approval Financial Analysis sion 3. FHWA Interstate Final IGA Update Study Approval Access Approval Approval i Council Council Council Council Final Work Work Hearing Work Council Session Session Session Hearing Today July Aug Oct Nov Dec Jan 2009 NOV Public Outreach Meeting DIAMONDTIGHT -25/SH392 Project Funding Finance Committee ' s Directives 1 . Determine feasible funding scenarios for the 1601 Process . 2 . Evaluate financing tools used to create funding scenario . 3 . Evaluate a scenario focused on the development efforts of a single property owner. 4 . Consider alternative funding scenarios . Y i -25/SH392 Project Funding Evaluate FINANCING TOOLS : FINANCE TOOL OPTIONS : Special Assessment License Surcharge Property Tax Metro District Urban Renewal Authority Impact Fees General Fund Public Improvement Fee State Grants Real Estate Transfer CDOT Contribution Lodging Tax Federal Grants Certificates of Participation Utility Fee North Front Range MPO Contribution RTA -25/SH392 Project Funding Identify Primary FINANCING TOOLS : Metro District Urban Renewal Authority General Fund Public Improvement Fee CDOT Contribution Certificates of Participation 1 . Generate Significant Funding 2 . Input primarily from local governments and property owners . Y i I -25/SH392 Project Funding Funding - Private Entities (Primary) Fort Collins . . I -25/SH392 Project Funding Funding - Public Entities ( Primary) Metro District DO Fort Collins Windsor 0 . Y i I -25/SH392 Project Funding Comparison Of WIT Scenarios : 1 . Who Pays the Majority of the Interchange Costs ? 12 Whoever (private or public entities) provides the majority of funding. 2 . Who Assumes Most of the Financial Risk? Whoever (private or public entities) provides the majority of funding. -25/SH392 Interchange Improvements Proposed joint meeting between Fort Collins City Council and Windsor Town Board to discuss continued partnership . Vtoo- Y i 1 -25/SH392 Interchange Improvements The purpose of meeting is to revisit Community Values and Goals regarding the Joint Interchange Project, including : • Reaffirm 125/392 Interchange problem needs to be solved • Review the land use and gateway vision adjacent to Interchange for each community • Identify the values of each community • Assure the commitment by each community to partnership and implementation actions to achieve project I -25/SH 392 Interchange Improvements Changing Circumstances : • New Windsor Town Board members elected • Retail market has and continues to change • Type, scope and timeframe of the developer's project is changing • Details for implementation need to be identified and agreed to by elected officials Y i CDOT 1601 Policy Directive Process 1 . MPOITPR Board Trans- Approval System portation Conceptual Design 1601 and Level Commis- 2. NEPA Approval Financial Analysis Sion 3. FHWA Interstate Final IGA Update Study Approval Access Approval Approval Council Council Council tbd Final Work Work Hearing Council Council Session Session Work Session Hearing Partnership Meetings (between Council & Town Board) I -25/SH392 Interchange Improvements Questions for Council 1 , Are Council members comfortable with the information presented and/or do you have any questions pertaining to the status of the 1601 Process? 2 , Do Council members have specific concerns or a high degree of comfort regarding the usage of specific tools that the Finance Committee has evaluated and brought forward ? 3 . Is there any additional information that is needed prior to the proposed special joint meeting scheduled for mid - summer? Y