HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 10/07/2014 - FIRST READING OF ORDINANCE NO. 135, 2014, APPROPRIAgenda Item 18
Item # 18 Page 1
AGENDA ITEM SUMMARY October 7, 2014
City Council
STAFF
John Voss, Controller/Assistant Financial Officer
Mike Beckstead, Chief Financial Officer
SUBJECT
First Reading of Ordinance No. 135, 2014, Appropriating Unanticipated Revenue in the General Fund and
Authorizing the Transfer of Existing Appropriations From the General Fund to the Capital Projects Fund for the
Woodward Related Transmission Line Relocation Project.
EXECUTIVE SUMMARY
The purpose of this item is to appropriate an additional $254,000 for the Transmission Line Relocation portion
of the Woodard Public Improvements Project.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
The Woodward Agreement defined 3 public improvement projects that were to be funded by DDA Tax
Increment Financing (TIF) at an estimated cost of $6.05M plus an additional $0.5M from Natural Areas
specifically to support the NA project. Individual project funding included:
Project ($ millions) Original Est Current Est
Transmission Line Relocation (TL) $1.30 $1.55
Right of Way Improvements (ROW) 1.75 1.75
Natural Areas Restoration (NA) 3.50 3.30
Total $6.55 $6.60
The natural area (NA) and right-of-way (ROW) improvements are estimated to come in at or under budget.
The transmission line (TL) work is complete and the cost is over budget by $254k. The cost overrun on the TL
was the result of additional costs associated with the footings/foundations of the towers of $332K.
Contingencies and savings in other areas of the project offset the additional funding needed to only $254K.
The original estimate on the TL was developed by Platte River Power Authority (PRPA); however, the
agreement specified that the City bears the risk of any additional costs. Section 4 of the Agreement with Platte
River Power Authority includes the following statement:
“Subject to the limitations set forth herein, Fort Collins is responsible for the reimbursement of
all reasonable costs incurred by Platte River to carry out the Work.”
Staff has worked to identify offsets in other areas of the Public Improvement projects. Early in the year, cost
savings anticipated in the NA and ROW would provide an offset to the Transmission Line additional cost;
however, the spring flood plus construction cost escalation eliminated the possible offsets. Prior to the flood in
May of 2014, the NA total cost was estimated at approximately $2.8M providing approximately $200k to offset
Agenda Item 18
Item # 18 Page 2
the TL. Staff anticipated the remaining $54K would possibly be available after final bids for the ROW work had
been received. Final bids have been received and no savings are available.
Underspend anticipated in NA cannot be used to cover the cost overrun on the TL because the final $0.5M is
from NA dedicated revenue. Section 1.4 of the IGA between the City and DDA reads as follows:
“In the event that the total actual cost for the Transmission Line Relocation and/or the Right of
Way Improvements exceeds the estimated cost for such Improvement Projects as described
in Section I.I above, any such shortfall shall come from bond proceeds allocated to pay for the
cost of the Open Space Improvements, and the amount of bond proceeds funding available for
the Open Space Improvements will then be accordingly limited by the $6,050,000 cap on
funding of the Improvement Projects. However, to the extent that the amount of bond
proceeds to fund the Open Space Improvements is less than $3,000,000, the City has
agreed to provide the additional funding necessary to complete the Open Space
Improvements. The City will backfill any shortfall in the bond proceeds available for the Open
Space Improvements using funds that are not dedicated to natural areas.”
In the agreement with Woodward dated April 16, 2013 Section 4.1 states that Improvement Projects shall be
funded in the following order; (a) Relocation of Transmission Lines, (b) Right of Way Improvements and (c)
Open Space Improvements. In effect, the cost overruns in TL are resulting in a shortage of funds needed for
NA. In the agreement with DDA dated September 16, 2013 the City agreed to backfill any shortfall in the $3M
in bond proceeds if at least $3M were needed to complete the NA Project. Therefore, this appropriation is
simply anticipating and covering now the shortfall in funds that would likely occur for the NA funding as a result
of the actual costs for the TL relocation exceeding the original budget.
Because of these requirements, the bond proceeds of $6.05M need to be reallocated as follows:
Project ($ millions)
New Funding Allocations
Bonds
General
Fund
Natural
Areas Total
Transmission Line Relocation (TL) $1.55 $1.55
Right of Way Improvements (ROW) 1.75 1.75
Natural Areas Restoration 2.75 0.25 0.30 3.30
Total $6.05 $0.25 $0.30 $6.60
FINANCIAL / ECONOMIC IMPACTS
The appropriation increases the budget on the Transmission Line Relocation portion of the Woodward Public
Improvement project by $254,000 in the Capital Projects Fund. The funding source is unanticipated revenue in
the General Fund.
ATTACHMENTS
1. Powerpoint presentation (PDF)
1
Woodward
Public Improvements Projects
October 7, 2014
ATTACHMENT 1
2
Included 3 Specific Public Improvements - $6.55M
1. $1.3M - Relocation of High Voltage Transmission Lines
2. 3.5M - Restoration of 31 acres of Natural Areas
3. 1.75M - Right of Way improvements along Lincoln and Lemay
Funding Sources
• $6.05M of DDA Tax Increment
• $1.3M PRPA to relocate transmission lines
• 3.0M natural areas restoration
• 1.75M for street improvement
• $.5M of additional Natural Areas Funding
Woodward Incentive Agreement
Two Funding Sources for Three Projects
3
City & PRPA IGA dated 15 April 2013 – Section 4:
“Fort Collins acknowledges that Exhibit B is an estimate of anticipated
costs, and that actual costs may vary. Subject to the limitations set forth
herein, Fort Collins is responsible for the reimbursement of all reasonable
costs incurred by Platte River to carry out the Work. In the event that Platte
River discovers conditions or circumstances that are expected to lead to costs
in excess of the estimates contained in Exhibit B, Platte River will promtly
notify Fort Collins in writing of such conditions or circumstances and will
discuss with Fort Collins such cost impacts and possible mitigation. If the
reimbursable costs of the Work exceed $2M, Platte River will credit Fort
Collins all “PRPA Project Management” expenses, presently estimated to
amount to $168k”
Financial Obligations
City’s Obligation to Fund Additional Costs if Needed
4
City & DDA IGA dated 16 September 2013 – Section 1.4:
“In the event that the total actual cost for the Transmission Line Relocation
and/or the Right of Way Improvements exceeds the estimated cost for such
Improvement Projects as described in Section I.I above, any such shortfall
shall come from bond proceeds allocated to pay for the cost of the Open
Space Improvements, and the amount of bond proceeds funding available for
the Open Space Improvements will then be accordingly limited by the
$6,050,000 cap on funding of the Improvement Projects. However, to the
extent that the amount of bond proceeds to fund the Open Space
Improvements is less than $3,000,000, the City has agreed to provide the
additional funding necessary to complete the Open Space Improvements.
The City will backfill any shortfall in the bond proceeds available for the
Open Space Improvements using funds that are not dedicated to natural
areas.”
Funding Restrictions
Natural Areas Project to Receive a Minimum of $3M if Needed
5
Current Costs
Contract Requirements and Additional Costs Associated with the
May 2014 Flood Limit Funding Options
• Transmission relocation final costs $254k over budget
• Construction costs exceeded budget by $332K offset by contingency
• In March, Staff anticipated using the remaining funds in Natural Areas
& possible savings in Right of Way
• Natural Areas cost estimated at $2.8M prior to the May flood
• Remaining $200k NA funding cannot be used on transmission cost
• Right of Way proposals received in September on budget
Project ($ millions)
Original
Estimate
Current
Estimate
Transmission Line Relocation $ 1.30 $ 1.55
Natural Areas Restoration 3.50 3.30
Right of Way Improvements 1.75 1.75
Total $ 6.55 $ 6.60
6
Supplemental Appropriation Request
Staff Requests $254K of
General Fund Reserves to cover the
Additional Transmission Line Relocation Cost
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ORDINANCE NO. 135, 2014
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING UNANTICIPATED REVENUE IN THE GENERAL FUND AND
AUTHORIZING THE TRANSFER OF EXISTING APPROPRIATIONS FROM THE
GENERAL FUND TO THE CAPITAL PROJECTS FUND FOR THE WOODWARD
RELATED TRANSMISSION LINE RELOCATION PROJECT
WHEREAS, pursuant to Ordinance No. 055, 2013, the City, the Downtown Development
Authority (“DDA”), and Woodward Inc. (“Woodward”) entered into an agreement which
provides that Woodward will advance up to $6.05 million to the DDA to fund certain public
improvements, to be made on or near the former Link-N-Greens Golf Course in connection with
the redevelopment of that property (the “Woodward Site”) and the City will act as either the
project manager or construct the public improvements; and
WHEREAS, the public improvements include the following projects: (1) the relocation
and installation of a Platte River Power Authority transmission line ($1,297,080) that currently
crosses the Woodward Site, (2) right-of-way improvements ($1,750,000), and (3) open space
restoration ($3,500,000), for a total cost of $6,547,080; and
WHEREAS, Woodward has agreed to advance funds in the amount of $6,047,080 for
these public improvements in the priority order stated above, and the Natural Areas Fund is
providing an additional $500,000 for the open space restoration; and
WHEREAS, the relocation and installation of the power transmission line has been
completed and the actual cost is higher than the original estimate by $254,000; and
WHEREAS, the agreements for funding the public improvements related to Woodward
specify that the City bears the risk of any additional costs for them and that in the event of any
shortfall in funding for these projects, the shortfall is not to reduce the budgeted funding for the
open area restoration; and
WHEREAS, this appropriation is therefore for the purpose of anticipating and covering
now the shortfall in funding for the open space restoration that will likely occur as a result of the
actual costs for the transmission line relocation exceeding the original budget; and
WHEREAS, the General Fund has unanticipated sales and use tax revenue that is
available to fund the additional transmission line cost; and
WHEREAS, Article V, Section 9, of the City Charter permits the City Council to make
supplemental appropriations by ordinance at any time during the fiscal year, provided that the
total amount of such supplemental appropriations, in combination with all previous
appropriations for that fiscal year, does not exceed the current estimate of actual and anticipated
revenues to be received during the fiscal year; and
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WHEREAS, City staff has determined that the appropriation of the revenue as described
herein will not cause the total amount appropriated in the General Fund to exceed the current
estimate of actual and anticipated revenues to be received in the General Fund during any fiscal
year; and
WHEREAS, Article V, Section 10, of the City Charter authorizes the City Council to
transfer by ordinance any unexpended and unencumbered appropriated amount or portion thereof
from one fund (project) to another fund (project), provided that the purpose for which the
transferred funds are to be expended remains unchanged.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS that the sum of TWO HUNDRED FIFTY-FOUR THOUSAND DOLLARS
($254,000) from unanticipated revenue in the General Fund is hereby appropriated for transfer to
the Capital Projects Fund - Woodward Public Improvements-Transmission Line Project and
appropriated therein.
Introduced, considered favorably on first reading, and ordered published this 7th day of
October, A.D. 2014, and to be presented for final passage on the 21st day of October, A.D. 2014.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 21st day of October, A.D. 2014.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk