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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/03/2015 - SECOND READING OF ORDINANCE NO. 018, 2015, APPROPRAgenda Item 3 Item # 3 Page 1 AGENDA ITEM SUMMARY March 3, 2015 City Council STAFF Tom Leeson, Redevelopment Program Manager SUBJECT Second Reading of Ordinance No. 018, 2015, Appropriating Prior Year Reserves in the General Fund for the Purpose of Supplementing Construction Costs Associated with the Foothills Activity Center and to Transfer Appropriations to the Cultural Services and Facilities Fund for the Art in Public Places Program. EXECUTIVE SUMMARY This Ordinance, unanimously adopted on First Reading on February 17, 2015, increases 2015 appropriations in the City's General Fund by $404,000 for the purposes of supplementing construction costs of the Foothills Activity Center to transfer appropriations to the Cultural Services and Facilities Fund for the Art in Public Places Program. This appropriation is necessary to comply with the Second Amendment to the Foothills Mall Redevelopment and Reimbursement Agreement dated August, 2014 in which the City agreed to pay up to $400,000 of the estimated additional cost to the Activity Center. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. First Reading Agenda Item Summary, February 17, 2015 (w/o attachments) (PDF) 2. Ordinance No. 018, 2015 (PDF) Agenda Item 5 Item # 5 Page 1 AGENDA ITEM SUMMARY February 17, 2015 City Council STAFF Tom Leeson, Redevelopment Program Manager SUBJECT First Reading of Ordinance No. 018, 2015, Appropriating Prior Year Reserves in the General Fund for the Purpose of Supplementing Construction Costs Associated with the Foothills Activity Center and to Transfer Appropriations to the Cultural Services and Facilities Fund for the Art in Public Places Program. EXECUTIVE SUMMARY The purpose of this item is to increase 2015 appropriations in the City's General Fund by $404,000 for the purposes of supplementing construction costs of the Foothills Activity Center to transfer appropriations to the Cultural Services and Facilities Fund for the Art in Public Places Program. This appropriation is necessary to comply with the Second Amendment to the Foothills Mall Redevelopment and Reimbursement Agreement dated August, 2014 in which the City agreed to pay up to $400,000 of the estimated additional cost to the Activity Center. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION The original January 17, 2014 Redevelopment and Reimbursement Agreement (Agreement) for the Foothills Mall Redevelopment project included a requirement for the construction of a new Foothills Activity Center (FAC) to replace the City's Youth Activity Center that was located on the Foothills Mall site, and was considered under the Agreement as an "Eligible Improvement" to be paid from the net proceeds of the Metro District Bonds. The cost of constructing the new FAC was not to exceed $5.1 million. As the construction plans and specifications for the FAC were finalized, it became clear the estimated costs of the FAC was going to be $700,000 greater than the originally estimated cost of $5.1 million as set forth in the Agreement. As part of good faith negotiations, and to keep the project moving forward, the City and Alberta Development Partners agreed to split the additional costs, with the City to pay up to $400,000 of the estimated $700,000 additional cost. This agreement was formalized in the Second Amendment to the Redevelopment and Reimbursement Agreement (Second Amendment) dated August, 2014 (Attachment 1). Although the City agreed to pay, subject to Council’s annual appropriation, up to $400,000 of the estimated additional cost, the total amount would not be known until the FAC plans were finalized. As a result, the $400,000 was not budgeted in the 2015 Annual Appropriation Ordinance because it was unknown if the City would need to pay the full amount. Now that the FAC plans and specifications have been finalized, it is known the actual cost of the FAC is to be $5.8 million. As a result, the $400,000 the City agreed to pay in additional costs as part of the Second Amendment needs to be appropriated out of the General Fund. The appropriation includes an additional $4,000 (1%) to be compliant with the arts in public places provisions in City Code Chapter 23, Article XII. ATTACHMENT 1 Agenda Item 5 Item # 5 Page 2 Staff recommends approval of the appropriation based on: 1. Consistent with the requirements of the Second Amendment 2. The FAC is an ”Eligible Improvement” under the Agreement 3. Funding for this appropriation is supported by YTD revenue received from the mall of $1.4M from use tax and fees. 4. A short discussion at Council Finance on the topic occurred at the December meeting but did not get included in the minutes. CFC concurred with moving forward with the appropriation. The $400,000 will be paid to Alberta Development Partners as reimbursement for costs incurred on the FAC project similar to the reimbursement methodology currently being utilized for the rest of the project, and not paid in full until the FAC construction is complete. CITY FINANCIAL IMPACTS The Ordinance increases 2015 appropriations in the City's General Fund by $404,000 for the purposes of supplementing construction costs of the Foothills Activity Center. ATTACHMENTS 1. Second Amendment to Redevelopment Agreement (PDF) - 1 - ORDINANCE NO. 018, 2015 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING PRIOR YEAR RESERVES IN THE GENERAL FUND FOR THE PURPOSE OF SUPPLEMENTING CONSTRUCTION COSTS ASSOCIATED WITH THE FOOTHILLS ACTIVITY CENTER AND TO TRANSFER APPROPRIATIONS TO THE CULTURAL SERVICES AND FACILITIES FUND FOR THE ART IN PUBLIC PLACES PROGRAM WHEREAS, the original Redevelopment and Reimbursement Agreement dated January 17, 2014 (the “Agreement”) for the redevelopment of the Foothills Mall (the “Mall”) included a requirement for the construction of a new Foothills Activity Center (the “FAC”); and WHEREAS, the original construction cost for the FAC was to not exceed $5.1 million dollars; and WHEREAS, the final construction plans and specifications for the FAC increased the final construction cost to $5.8 million, an increase of $700,000; and WHEREAS, in the Second Amendment to the Redevelopment and Reimbursement Agreement dated August 18, 2014 (the “Second Amendment”), the City and Walton Foothills Holdings VI, LLC, (the “Developer”) agreed to split this additional cost with the City to pay, subject to Council’s annual appropriation, up to $400,000 of the $700,000 additional cost and the Developer to pay the remaining amount; and WHEREAS, staff requests a total appropriation of $404,000, $400,000 of which is to be from prior years General Fund Reserves to be used to reimburse the Developer for the additional constructions costs for the FAC as provided in the Second Amendment; and WHEREAS, $4,000 of the remaining requested amount represents one percent (1%) of the appropriation for the FAC to be transferred to the Cultural Services and Facilities fund for a contribution to the Art in Public Places (APP) program under City Code Chapter 23, Article XII, with $3,120 reserved for the APP artwork acquisition and $880 reserved for the maintenance of the artwork and operations of the APP program; and WHEREAS, funding for this appropriation is supported by year to date revenue received from the Mall project of $1.4 million from use tax and fees; and WHEREAS, Article V, Section 9 of the City Charter permits the City Council to appropriate by ordinance at any time during the fiscal year such funds for expenditure as may be available from reserves accumulated in prior years, notwithstanding that such reserves were not previously appropriated; 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. - 2 - NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That there is hereby appropriated for expenditure from prior year reserves in the General Fund the total sum of FOUR HUNDRED THOUSAND DOLLARS ($400,000) to fund additional construction costs for the Foothills Activity Center. Section 2. That the unexpended and unencumbered appropriated amount of THREE THOUSAND ONE HUNDRED TWENTY DOLLARS ($3,120) in the General Fund is authorized for transfer to the Cultural Services and Facilities Fund and appropriated therein for the APP program. Section 3. That the unexpended and unencumbered appropriated amount of EIGHT HUNDRED EIGHTY DOLLARS ($880) in the General Fund is authorized for transfer to the Cultural Services and Facilities Fund and appropriated therein for the APP program maintenance and operations. Introduced, considered favorably on first reading, and ordered published this 17th day of February, A.D. 2015, and to be presented for final passage on the 3rd day of March, A.D. 2015. __________________________________ Mayor ATTEST: _______________________________ City Clerk Passed and adopted on final reading on the 3rd day of March, A.D. 2015. __________________________________ Mayor ATTEST: _______________________________ City Clerk