Form revised April 22, 2003

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Seattle Public Utilities	Ray Hoffman (684-5852)	Cameron Keyes (684-8048)

Legislation Title:

AN ORDINANCE relating to the construction of an electric power transmission line project through the Cedar River Watershed; authorizing the Mayor to execute an agreement with the Bonneville Power Administration establishing the terms and conditions for expansion of an existing electric power transmission right of way in the Watershed; authorizing the granting of an easement for said expanded right of way pursuant to said agreement across portions of Sections 2, 11, 14, and 23, Township 22 North, Range 7 East, W.M., and Section 35, Township 23 North, Range 7 East, W.M; authorizing the cutting and removal of trees and other vegetation from the right of way pursuant to said agreement; declaring the logs resulting from such cutting to be surplus to the City’s needs and authorizing the sale of such logs pursuant to said agreement; directing deposit of the proceeds therefrom to the Water Fund for dedicated purposes; authorizing the acceptance of deeds to certain properties located in portions of Section 26, Township 23 North, Range 7 East, W.M., Section 25, Township 22 North Range 7 East, and Section 5, Township 21 North, Range 11 East, W.M. and the receipt and deposit to the Water Fund for dedicated purposes of certain monies, together representing mitigation for the project’s impacts and compensation for the rights granted through said agreement.

· Summary of the Legislation: The ordinance authorizes the City to implement the settlement reached with BPA that establishes the safeguards, mitigation and compensation that we required as conditions of our easement allowing BPA to expand its existing electric power transmission line facilities and right of way across the lower Cedar River Watershed, and authorizes the Mayor to grant the easement.

· Background: BPA presently owns and operates an electric power transmission line across the lower watershed on a 150-foot right of way granted in 1967. Their plan to construct a second line adjacent to the first requires expansion of their right of way by an additional 150 feet. The City’s interests include protection of drinking water quality and the forest and aquatic habitat along the route from the effects and risks of BPA’s project. Following a public process required by the National Environmental Policy Act and negotiations with representatives of the City, BPA has agreed to a set of terms that provide the safeguards that the City was seeking, plus a package of mitigation for the project’s unavoidable adverse impacts on the watershed and compensation for the rights the City will grant under this ordinance.

Please check one of the following:

____ This legislation does not have any financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)

_X___ This legislation has financial implications. (Please complete all relevant sections that follow.)

Appropriations (in $1,000s): (Please only reflect the dollar amount actually appropriated by this legislation.)

Fund Name and Number	Department	Budget Control Level*	2003 Appropriation	2004 Anticipated Appropriation
Water Fund (43000)	Seattle Public Utilities	TBD	None	To be submitted as part of 04 budget process.
TOTAL

* This is line of business for operating budgets, and program or project for capital improvements

Notes: This ordinance provides no appropriations. Because of the short timeline required for approval of the agreement and because we will receive neither revenues from the sale of logs from the right of way nor the first compensation payment until late 2003, we are deferring the associated appropriation request until later in the year. However, the overall principles of the agreement are known and can be described.

There are four types of fiscal impacts set in motion by this legislation, and each one is accompanied by a revenue/reimbursement source:

1. Under the agreement, the City will carry out certain activities at its expense, such as project monitoring, certain security functions, upgrading certain roads for the construction phase and maintenance of both roads and right of way vegetation once the project is operational. Under the agreement, BPA will reimburse the City for its expenditures.

2. The City will receive all net proceeds from sale of logs resulting from clearing the new portion of the right of way. A detailed evaluation of timber volumes and types (a timber cruise) has not yet been completed so any estimate is necessarily rough. Until better information is available, we expect the net proceeds to be in the range of $1 million. The proposed ordinance declares that this right of way clearing is an allowable non-commercial purpose, as defined by Section 2 of Ordinance 121040, and directs the deposit of the proceeds to the Water Fund.

3. The City will receive a total of $6 million from BPA: $3 million in late 2003 and $3 million in late 2004. These monies are to be spent for specific purposes within the watershed including the enhancement and acceleration of existing programs for: improving and abandoning roads, for forest and aquatic restoration, as well as for watershed security improvements and water quality monitoring. The agreement provides for these payments to be directed to the Water Fund.

4. The City will also receive over a three-year period three timberland properties totaling approximately 573 acres immediately adjacent to our existing watershed ownership. One of these properties lies entirely within the drainage of the Cedar River and the other two, both of which are currently subdivided for residential development, will provide buffers at sensitive locations on the watershed boundaries. All three will require future expenditures for the establishment of boundary lines, installation of fencing and other security measures, road improvement and abandonment, and varying degrees of forest and stream restoration. These land related expenditures qualify for reimbursement from the monies received in #3 above, as they fall within the purposes specified.

Anticipated Revenue/Reimbursement Resulting From This Legislation:

Fund Name and Number	Department	Revenue Source	2003 Revenue	2004 Revenue
Water Fund (43000)	Seattle Public Utilities	Reimbursement of City’s costs of performing certain activities (#1, above) Sale of timber down from clearing (#2, above) Cash payments from BPA: mitigation and compensation (#3, above)	Presently unknown Roughly $1,000,000 $3,000,000	Presently unknown None, assuming clearing and sales complete in 2003 $3,000,000
TOTAL			$4,000,000 +	$3,000,000 +

Notes:

Total Regular Positions Created Or Abrogated Through This Legislation, Including FTE Impact:

None

Position Title*	Part-Time/ Full Time	2003 Positions	2003 FTE	2004 Positions**	2004 FTE**
TOTAL

· Fund Name and Number: _________________________________________

· Department: ___________________________________________________

* List each position separately

** 2004 positions and FTE are total 2004 position changes resulting from this legislation, not incremental changes from 2003.

· Do positions sunset in the future? (If yes, identify sunset date):N/A

Spending/Cash Flow (in $1,000s): (Please complete this section only in those cases where part or all of the funds will be spent in a different year than when they were appropriated (e.g., as in the case of certain grants and capital projects.)

Fund Name and Number	Department	Budget Control Level*	2003 Expenditures	2004 Anticipated Expenditures
Water Fund (43000)	Seattle Public Utilities	TBD	$0	To be submitted as part of 2004 budget process.
TOTAL

* This is line of business for operating budgets, and program or project for capital improvements

Notes:

What is the financial cost of not implementing the legislation? (Estimate the costs to the City of not implementing the legislation, including estimated costs to maintain or expand an existing facility or the cost avoidance due to replacement of an existing facility, potential conflicts with regulatory requirements, or other potential costs if the legislation is not implemented.) BPA has commenced formal condemnation proceedings to acquire an easement for the project as an alternative to obtaining the easement through this agreement with the City. It is highly likely that the value the City would receive under a condemnation proceeding would be substantially less than the value achieved in this agreement.

· What are the possible alternatives to the legislation that could achieve the same or similar objectives? (Include any potential alternatives to the proposed legislation, such as reducing fee-supported activities, identifying outside funding sources for fee-supported activities, etc.) None

· Is the legislation subject to public hearing requirements: (If yes, what public hearings have been held to date, and/or what plans are in place to hold a public hearing(s) in the future.) A public hearing is proposed in connection with the Council’s consideration of this ordinance.

· Other Issues (including long-term implications of the legislation): As part of the agreement, BPA has committed to no future expansions of its rights-of-ways within the watershed as well as to not exercising its condemnation authority within the watershed in the future.