Form revised December 30, 2003

FISCAL NOTE FOR CAPITAL PROJECTS ONLY

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Parks & Recreation	Donald Harris/684-8018	Marilynne Gardner/233-5109

Legislation Title:

AN ORDINANCE relating to the acquisition of real property located at 700 Queen Anne Avenue North; repealing Ordinance Number 121371 relating to such acquisition; reauthorizing acquisition of such real property for open space, park, and recreation purposes; and making a new appropriation from the 2000 Parks Levy Fund for costs and expenses related to the acquisition, all by a three-fourths vote of the City Council.

Summary of the Legislation:

The proposed legislation repeals Ordinance Number 121371 (formerly authorizing the proposed acquisition under different conditions) and authorizes the Department of Parks and Recreation (DPR) to acquire the Queen Anne Park Acquisition listed in the 2000 Parks Levy Neighborhood Park category and subsequently specified as this 12,000 square foot property by community process, authorizes acceptance of the deed, and appropriates funds from the 2000 Parks Levy Fund to pay for the purchase. The authority to acquire the property is based on the Council’s approval of the real estate purchase and sale agreement.

Background (Include brief description that states the purpose and context of legislation, the expected useful life, anticipated customers/users, assumed level of LEED or other sustainable design elements. Also include record of previous legislation and funding history, if applicable):

The 2000 Parks Levy identified the acquisition of a neighborhood park in the Queen Anne Uptown Urban Center. The Department of Parks and Recreation conducted an extensive public process from April - September 2002 to identify potential sites; study their feasibility for park, recreation, and open space uses; and narrow the possibilities down to primary and secondary sites. The 12,000 square foot vacant parcel at the northeast corner of Queen Anne Avenue North and Roy Street was the community’s top choice for further evaluation.

After extensive negotiations in the fourth quarter of 2003, the Department had reached a basic understanding on the financial terms of the purchase. However, legal counsel for the City, Union Oil Company of California (the former owner of the site) and the sellers were still negotiating the terms of environmental indemnity. The site was a gasoline service station for many years operated by Unocal and predecessors. Unocal and the current owner, Union Group LLC, have both undertaken voluntary cleanup. Unocal agreed to remain responsible for certain environmental cleanup costs and environmental liabilities at the time of the 2000 sale to the current owner. The Department has conducted environmental due diligence in accordance with the City of Seattle Environmental Due Diligence Policy. The 2003 sale was contingent on the former owner/operator, Unocal, consenting to the assignment of indemnification that Unocal previously provided to the Seller in 2000 as well as agreeing to expressly indemnify the City for all costs of cleanup in the City’s rights of way abutting the site. Ordinance 121371 required specific language in the assignment and required that a purchase and sale agreement be signed by the parties no later than December 31, 2003. Neither condition was met as the sellers were unsuccessful in negotiating the form of assignment with Unocal. In early February of this year, the sellers, Unocal, and DPR reached a compromise on the indemnification language. Therefore, it is necessary to repeal the previous ordinance and replace it with the proposed legislation. Project costs reflect expenditures for public process and environmental due diligence.

Project Name:	Project Location:	Start Date:	End Date:
Queen Anne Park Acquisition	NE corner Queen Anne Avenue North and Roy Street	January 2001	TBD

· Please check any of the following that apply:

____ This legislation creates or funds or anticipates a new CIP Project (Please note whether the current CIP is being amended through this ordinance, or provide the Ordinance or Council Bill number of the separate legislation that has amended/is amending the CIP.)

____ 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 the boxes below and all relevant sections that follow.)

Appropriations:

Fund Name and Number	Department	Budget Control Level*	2004 Appropriation	2005 Anticipated Appropriation
2000 Parks Levy Fund (33850)	Parks and Recreation	2000 Parks Levy – Neighborhood Parks Acquisition Program K723001 – (Queen Anne Neighborhood Park)	$1,900,000	$35,000
TOTAL			$1,900,000	$35,000

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

Notes:

Anticipated Revenue/Reimbursement: Not applicable.

Fund Name and Number	Department	Revenue Source	2004 Revenue	2005 Revenue
TOTAL

Notes:

Spending Plan and Future Appropriations for Capital Projects (Estimate cost of legislation over time; list timing of anticipated appropriation authority requests and expected spending plan. Please identify your cost estimate methodology including inflation assumptions and key assumptions related to the timing of appropriation requests and expected expenditures. In addition, include the projected costs of meeting the LEED Silver standard in all facilities and buildings with over 5,000 gross square feet of occupied space. Also, be sure to include percent for art and percent for design as appropriate):

Spending Plan and Budget	2004	2005	2006	2007	2008	2009	Total
Spending Plan	1,900,000	35,000	35,000				1,970,000
Current Year Appropriation	1,900,000
Future Appropriations		35,000	35,000				70,000

Key Assumptions:

The plan assumes that this acquisition closes by April 15, 2004. It also assumes, after discussions with the City’s Risk Manager, funds to investigate the purchase of an environmental liability insurance policy, provide self insurance reserves, or otherwise address environmental contingencies in 2004-2006 in addition to the assignment to the City of environmental indemnities that were provided by Unocal to the current owner. The 2000 Parks Levy also included $269,091 for development of the park. The Queen Anne community will seek to raise additional funds. Legislation to create a capital improvement project and appropriate development funding will be submitted separately.

Funding source (Identify funding sources including revenue generated from the project and the expected level of funding from each source):

Funding Source	2004	2005	2006	2007	2008	2009	Total
2000 Parks Levy Fund (33850)	1,900,000	35,000	35,000
TOTAL	1,900,000	35,000	35,000				1,970,000

Bond Financing Required (If the project or program requires financing, please list type of financing, amount, interest rate, term and annual debt service or payment amount. Please include issuance costs of 3% in listed amount): Not applicable.

Type	Amount	Assumed Interest Rate	Term	Timing	Expected Annual Debt Service/Payment
TOTAL

Uses and Sources for Operation and Maintenance Costs for the Project (Estimate cost of one-time startup, operating and maintaining the project over a six year period and identify each fund source available. Estimate the annual savings of implementing the LEED Silver standard. Identify key assumptions such as staffing required, assumed utility usage and rates and other potential drivers of the facility’s cost):

O&M	2004	2005	2006	2007	2008	2009	Total
Uses
Start Up	8,565	8,724	8,961				26,250
On-going				30,168	30,771	31,560	92,499
Sources (itemize)
2000 Parks Levy Fund	8,565	8,724	8,961	30,168	30,771		87,189
To be determined						31,560	31,560

Key Assumptions:

The 2000 Parks Levy included $269,091 for development of the Queen Anne Neighborhood Park; it is anticipated that the community will raise additional funds for development. The O&M costs for this 2000 Parks Levy (Levy) site are estimated to be approximately $8,565 per year for the site as an undeveloped acquisition and an additional $21,030 per year for the site after development (plus 2% inflation each year). The O&M cost estimate in 2007 is approximately $10,600 less than estimated in the October 22, 2003 revision to the 2000 Parks Levy fiscal note because when the estimates were developed a specific site had not yet been locked in and the development phase had not started. The $8,565 for year 2004 is not included in the Department of Park and Recreation’s Proposed 2004 Budget since this opportunity was not finalized at the time the budget was developed and will be absorbed in the Department’s 2004 Budget. Additional funding for O&M in 2005 and beyond will be requested by the Department in the 2005-2006 budget process.

The park is expected to have heavy traffic and be a very visible park due to its location. Both of these factors increase the O&M costs for a park of this size. The O&M tasks for the undeveloped site include trash/litter pickup, hardscape cleaning and maintenance, and care of any interim development. Post development tasks include trash/litter pickup; shrub bed maintenance; grass trimming and edging; and cleaning and maintenance of site amenities, structures, and hardscape.

Periodic Major Maintenance costs for the project (Estimate capital cost of performing periodic maintenance over life of facility. Please identify major work items, frequency): Not applicable.

Major Maintenance Item	Frequency	Cost	Likely Funding Source
TOTAL

Funding sources for replacement of project (Identify possible and/or recommended method of financing the project replacement costs):

As real property, this acquisition will not be subject to replacement.

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

Position Title and Department*		Fund Name		Fund Number	Part-Time/ Full Time	2004 Positions	2004 FTE	2005 Positions**	2005 FTE**
	TOTAL		N/A

* List each position separately

** 2005 positions and FTE are total 2005 position changes resulting from this legislation, not incremental changes from 2004.

· Do positions sunset in the future? N/A

· What is the financial cost of not implementing the legislation: The originating Levy ordinance (120024) set $16 million aside for the express purpose of funding neighborhood park acquisitions. Absent this proposed legislation, the Department would lack approval as well as the expenditure authority necessary to progress with these projects.

What are the possible alternatives to the legislation that could achieve the same or similar objectives Limited alternatives exist; the originating 2000 Parks Levy ordinance (120024) requires City Council approval of all acquisitions of real property and appropriation of all parks development funding. This property is the Queen Anne community’s top priority for the new Queen Anne Neighborhood Park included in the Levy. Additional sites in the Queen Anne Uptown Urban Center were identified in the public process and had some level of feasibility/community support.  However, no consensus on these sites could be reached and a large majority of the neighborhood participants supported the recommended site. If the environmental indemnity is not acceptable to the City Council, the secondary sites will need to be revisited.

· Is the legislation subject to public hearing requirements No.

· Other Issues (including long-term implications of the legislation):

The operating and maintenance costs associated with this acquisition are only funded by the 2000 Parks Levy through 2008. .