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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/19/2014 - FIRST READING OF ORDINANCE NO. 110, 2014, AUTHORIZAgenda Item 11 Item # 11 Page 1 AGENDA ITEM SUMMARY August 19, 2014 City Council STAFF Lindsay Kuntz, Real Estate Specialist Ginger Purvis, Senior Electrical Engineer Steven Catanach, Light & Power Operations Manager JR Schnelzer, Director of Parks SUBJECT First Reading of Ordinance No. 110, 2014, Authorizing the Exchange of a 9.33 Acre Portion of the Timberline Substation Property from the Electric Utility for a Comparably-Valued 3.03 Acre Site from the Parks Department. EXECUTIVE SUMMARY The purpose of this item is to authorize the exchange of portions of property at the Timberline Substation property between the Utility Department and the Parks Department. The City of Fort Collins owns a parcel of land at the southwest corner of Prospect Road and Timberline Road which is the location of the Timberline Substation (the “City Property”). The Utility Department owns 19.92 acres of the City Property of which 7.43 acres are used for substation purposes. The Parks Department desires to develop a 9.33-acre portion of the property owned by Utilities for recreation purposes and has proposed to acquire this portion from the Utility Department. The Parks Department intends to maintain the property as a disc golf course. The Utility Department has determined that the proposed conveyance and recreation use will not adversely impact the portion of the City Property used for utility purposes. In exchange, the Utility Department desires to acquire a 3.03 acre portion of the City Property which is owned by the Parks Department. This Ordinance authorizes the exchange of the properties between the Utility Department and Parks Department, recognizing that no funds will need to be paid between the departments, based on the comparable values of the two parcels, existing encumbrances on the 9.33-acre parcel, the value of all access reservations retained by the Utilities Department, the beneficial use each will realize in the land it acquires, and the value of additional services the Utility Department will provide to the Parks Department. STAFF RECOMMENDATION Staff recommends adoption of this Ordinance on First Reading. BACKGROUND / DISCUSSION The City Property was purchased in 1973 and developed for an electric power substation and transmission facility. The Utility Department owns 19.92 acres of the City Property identified as Parcels A, B, and C on the attached Property Detail Map. Of the 19.92 acres owned by the Utility Department, 7.43 acres is used for the substation, depicted as Parcel B on the attached map. In 2013, the Utility Department granted permission to the Parks Department to plan a 9.33-acre disc golf course on a portion of the property surrounding the substation (Parcel C), which property was undevelopable for Utility Department purposes. The Parks Department desires to acquire Parcel C from the Utility Department who has determined that this portion of the property is not projected for use by Utilities. Parcel C is burdened by several access easements of record and others that have been used by permission of the City, such that Parcel C has limited development potential for utility purposes. Agenda Item 11 Item # 11 Page 2 The Parks Department owns a 3.03-acre portion of the City Property, shown as Parcel D, which has previously been used for park maintenance storage purposes. Parcel D is not encumbered by access easements or reservations that impair development of the site. The Parks Department has agreed to convey Parcel D to the Utility Department in exchange for Parcel C, subject to all easements of record and a reservation of rights held by the Utility Department to cross Parcel C to access and maintain the substation facility that is surrounded by the parcel. Due to the comparable values of the two parcels, the greater usefulness of Parcel D for utility purposes, over that of Parcel C, the value of the reservation for access retained by the Utility Department across Parcel C, and the ancillary storage services the Utility Department will provide to Parks, the value of benefits granted and received by each department will net out as equal and neither department will be required to pay any funds to the other. FINANCIAL / ECONOMIC IMPACTS The estimated value of the Utility property to be conveyed to Parks is $373,000 without the reservation of access rights to be retained by the Utility Department. The estimated value of the Parks property to be conveyed to the Utility Department is $358,000. The Utility Department and the Parks Department are willing to exchange their properties recognizing the comparable values of each parcel, including the impact of all easements and reservations on the values of such properties. The Utility Department will also work with the Parks Department to provide an equivalent storage area at the Utility Service Center. Due to the shape of Parcel C and the existing encumbrances across it for access, as held by Platte River Power Authority, Public Service Company and others, the parcel has limited development potential for Utility Department purposes. Parcel D is not burdened by access easements, has a shape that will accommodate greater development than Parcel C, and can be put to a higher use by the Utility Department than that which Parks can put on the parcel. Considering the exchange of valuable property and services by the departments, the exchange proposed by the ordinance will not result in a diminution of value or services to ratepayers such that any Utilities Fund will require reimbursement as part of this transaction. Similarly, due to the improved development potential each department will realizes relative to the services it provides to the community, the resulting transaction will provide an equal benefit to each department and neither department will be required pay any funds to make the other whole in the exchange. ATTACHMENTS 1. Location Map (PDF) 2. Detail Map (PDF) ATTACHMENT 1 ATTACHMENT 2 - 1 - ORDINANCE NO. 110, 2014 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE EXCHANGE OF A 9.33-ACRE PORTION OF THE TIMBERLINE SUBSTATION PROPERTY FROM THE ELECTRIC UTILITY FOR A COMPARABLY- VALUED 3.03-ACRE SITE FROM THE PARKS DEPARTMENT WHEREAS, the City of Fort Collins is the owner of that certain real property located in Fort Collins and known as the Timberline Substation, which was originally purchased by the City for Electric Utility purposes (the "Substation Property"); and WHEREAS, the Substation Property, located southwest of the intersection of Timberline and Prospect Roads, was acquired on May 2, 1973 with Electric Utility funds and developed for an electric power substation facility; and WHEREAS, the Electric Utility currently uses only 7.43 acres at the center of the Substation Property for the electric power substation facility, shown as “Parcel B” on Exhibit "A" attached hereto and incorporated herein by this reference; and WHEREAS, in 2013 the Electric Utility granted permission to the Park Department to develop a recreational use on portions of the Substation Property that could not be developed for utility purposes; and WHEREAS, the City of Fort Collins also owns a 3.03 acre parcel of land adjacent to the Substation Property, which was purchased with Parks Department funds (the "Parks Property"), shown as “Parcel D” on Exhibit "A", and as more specifically described on Exhibit “B”; and WHEREAS, the Parks Department currently uses only a portion of Parcel D for storage of park maintenance materials and equipment, including mulch and soil amendments; and WHEREAS, City staff has determined there are beneficial uses for the unused portions of the Substation Property and the Parks Property that will not materially impact Utility or Parks operations; and WHEREAS, Utility Department staff has identified 9.33 acres of the Substation Property that is not projected for use by the Electric Utility due to its configuration and the existence of access easements across the property held by Platte River Power Authority, Public Service Company, and others, “Parcel C” on Exhibit "A", and as more specifically described on Exhibit “B” (the "Utility Property"); and WHEREAS, Parks Department staff has determined that Parcel C offers greater usefulness and access for recreational uses than does Parcel D; and WHEREAS, Electric Utility staff has determined there is greater usefulness and access to Parcel D than that available on Parcel C for utility uses; and WHEREAS, the estimated fair market value of the Utility Property, Parcel C, as of March 2014 is approximately $373,000; and - 2 - WHEREAS, the estimated fair market value of the Parks Property, Parcel D, as of March 2014 is approximately $358,000; and WHEREAS, in order to avoid interruption of utility services, Utility staff has requested that the Electric Utility, and its permittees and assigns, retain a reservation of all rights to access the substation facilities via the access road identified on Exhibit "A" as “Substation Drive”, and those existing access alignments for the benefit of the Utility across Parcel C, reflected on Exhibit “A” as “Secondary Access Road and Entrance”; and WHEREAS, for any access alignment depicted on Exhibit “A” that is not of record, the City shall file with the Larimer County Clerk & Recorder’s Office a Notice describing such access alignment; and WHEREAS, Parcel C, as transferred to the Parks Department, shall remain encumbered by all easements and access alignments of record, including those for the benefit of Platte River Power Authority (“Platte River”), Public Service Company, and Western Slope Gas Company; additional creation and/or transfer of easements will be subject to City Council approval by ordinance; and WHEREAS, Parcel C, as transferred to the Parks Department, shall remain subject to the right of Platte River to obtain access to Parcel B, pursuant to the Amended Contract for the Supply of Electric Power and Energy, dated September 1, 2010, as amended from time to time, between Platte River and the City; and WHEREAS, upon exchange of the real property interests as described herein, the Electric Utility shall provide and maintain available for Parks Department purposes at a separate location secure storage space comparable to that available on Parcel D, as well as inventory control for the storage of park maintenance materials and equipment; and WHEREAS, staff has recommended that the City Council consider and treat the exchange of interests in Parcels C and D to be an equivalent transaction, and require no additional remuneration, due to the comparable values of the parcels; the value of the access reservation of rights retained by the Utility Department; their greater development and use potential upon exchange, relative to the services each department provides; and additional benefits the Parks Department and Electric Utility will each realize by the exchange; and WHEREAS, approval of a separate shared access easement with the Public Service Company across a portion of Parcel C is coming before Council under a separate action item; and WHEREAS, Section 23-111 of the City Code provides that City Council is authorized to sell, convey or otherwise dispose of real property owned by the City, provided the Council first finds by ordinance that any sale or disposition of real property owned by the City will not materially impair the viability of any City utility system as a whole of which the property is a part, will be for the benefit of the City's citizens, and will be in the best interests of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: - 3 - Section 1. That transfer of “Parcel C”, as reflected on Exhibit “A” attached hereto, by the Electric Utility to the Parks Department, in exchange for the Parks Department transfer of “Parcel D” to the Electric Utility under the terms listed above will not materially impair the viability of any City utility system of which such property is a part, will benefit the City's utility customers, and is in the best interests of the City; and Section 2. That, based on the comparable real property values of the respective parcels, the greater development and use potential of the parcels upon exchange, relative to the services each department provides, the value of the reservation of rights retained by the Electric Utility, the Electric Utility’s provision of secure storage and ancillary services for the Parks Department, and the mutual benefits to each department that would be achieved by the exchange, the exchange will be deemed an equivalent transaction and no monetary compensation will be required to make either department whole; and Section 3. That the City Manager is hereby authorized to execute such documents as are necessary to complete the transfer of the 9.33 acre Utility Property to the Parks Department, and the transfer of the 3.03 acre Parks Property to the Electric Utility, on terms and conditions consistent with this Ordinance, together with such additional terms and conditions as the City Manager, in consultation with the City Attorney, determines to be necessary and appropriate to protect the interests of the City and effectuate the purposes of this Ordinance, including but not limited to any necessary changes to the legal descriptions of the subject parcels and reservations of access alignments. Introduced, considered favorably on first reading, and ordered published this 19th day of August, A.D. 2014, and to be presented for final passage on the 2nd day of September, A.D. 2014. __________________________________ Mayor ATTEST: _______________________________ City Clerk - 4 - Passed and adopted on final reading on the 2nd day of September, A.D. 2014. __________________________________ Mayor ATTEST: _______________________________ City Clerk &YIJCJU# 1BHFPG &YIJCJU# 1BHFPG &YIJCJU# 1BHFPG &YIJCJU# 1BHFPG &YIJCJU# 1BHFPG