Form revised December 9, 2004

FISCAL NOTE FOR CAPITAL PROJECTS ONLY

Department:	Contact Person/Phone:	DOF Analyst/Phone:
SPU	Cyndy Holtz/386-1990	Barbara Gangwer/615-0768

Legislation Title:  AN ORDINANCE relating to the acquisition and management of real property and property interests on the Cedar River below Landsburg Dam, in King County; authorizing Seattle Public Utilities to acquire specified properties or conservation easements and to accept applicable deeds; authorizing Seattle Public Utilities to enter into an agreement with Cascade Land Conservancy for land acquisition and management services; and authorizing Seattle Public Utilities to convey easements or stewardship assignments in connection with the Conservancy’s management responsibilities.

Summary and background of the Legislation:

Background: 

One of the City’s commitments under the Cedar River Habitat Conservation Plan is to contribute $5.5 million to acquire, restore, enhance and/or protect high quality spawning, rearing or refuge habitat for anadromous fish species, and the natural features and processes sustaining such habitat, along the mainstem of the lower Cedar River below Landsburg Dam over the next two to five years.  Preservation of properties containing fish habitat is regarded as the highest priority (relative to habitat restoration) given the threat of development in the lower Cedar River area. 

Under the proposed agreement with Cascade Land Conservancy (CLC), approximately sixteen

fee-ownership or conservation easement parcels are expected to be acquired  and made available under the agreement with CLC.  CLC, on behalf of the City, will negotiate individual purchases of City-designated properties that contain high-quality fish habitat or conservation easements on those properties over the next two to five years.  The City will become the owner of the properties (or easement holder), and CLC will provide ongoing stewardship services.  With respect to each property acquisition, the City will pay CLC no more than $26,650 per parcel for acquisition services, which include CLC’s in-house expenses (such as staff time for negotiating and completing land acquisition transactions), “out-of-pocket” expenses (such as appraisal, environmental site assessment, title report and closing costs), and preparation of a “present conditions report” that documents the site conditions and describes CLC’s ongoing stewardship responsibilities.  In addition, the City will pay CLC $3,000 per year per parcel for land stewardship services. 

The City is obligated to protect these lands for the term of the HCP, which terminates in 2050.  To effectuate CLC’s stewardship responsibilities, the City at closing will convey to CLC either a conservation-stewardship easement (if the landowner has sold the property to the City) or a perpetual stewardship assignment (if the landowner has sold a conservation easement to the City).  For properties acquired in fee by the City, in consideration of the grant of a permanent conservation-stewardship easement, CLC will pay the difference in value between a permanent easement and one that terminates in 2050 (for a nominal amount) and will provide perpetual stewardship services on all properties without charge after 2050.   Therefore, after 2050, when the agreement terminates, the City will discontinue payment to CLC for stewardship, but CLC will continue to provide stewardship for the parcels

Project Name:	Project I.D.	Project Location:	Start Date:	End Date
Downstream Fish Habitat	C1607	Cedar River (below Landsburg Dam)	1^st Q 2001	4^th Q 2008

The Cedar River HCP Downstream Habitat Protection and Restoration project rolls up to the Downstream Fish Habitat program (C1607) in the Habitat Conservation Program budget control level.  Council adopted this program in the 2005 Budget, legislation is not required to create this project.

· Please check any of the following that apply:

____ This legislation creates, 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 all relevant sections that follow.) 

Appropriations:  This table should reflect appropriations that are a direct result of this legislation.  In the event that the projects associated with this ordinance have appropriations that were, or will be, received because of previous or future legislation or budget actions, please provide details in the Notes section below.  Finally, if this legislation does not directly change an appropriation, but results in budget authority being moved within a Budget Control Level, or to a Budget Control Level (up to 10%), please explain in the Notes section below.

Fund Name and Number	Department	Budget Control Level*	2005 Appropriation	2006 Anticipated Appropriation
TOTAL

*See budget book to obtain the appropriate Budget Control Level for your department.

Notes:  Appropriation has been provided through the Downstream Fish Habitat program (C1607) in the 2005 Adopted Budget in the amount of $6.508 million, of which $6.143 million is for this program.  There is $766,000 of appropriation authority carried forward from 2004.

Spending Plan and Future Appropriations for Capital Projects:  Please list the timing of anticipated appropriation authority requests and expected spending plan.  In addition, please identify your cost estimate methodology including inflation assumptions, the projected costs of meeting applicable LEED standards, and the percent for art and design as appropriate.

Spending Plan and Budget	2005	2006	2007	2008	2009	2010	Total
Spending Plan	150	1,350	1,500	0	0	0	3,000
Current Year Appropriation
Future Appropriations

Notes:  Funding for the project is included in 2005 Adopted Budget under the Downstream Fish Habitat program (C1607). Actual spending may deviate from projections because this program is based upon voluntarily sale of property from owners and does not use condemnation for acquisition, so spending projections are based upon estimates.  The remainder of the budget appropriation will fund future acquisition and restoration projects (to be developed).

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

Funding Source (Fund Name and Number, if applicable)	2005	2006	2007	2008	2009	2010	Total
TOTAL

Notes:   Water revenues and bond proceeds will pay the costs of the contract.  The water financial plan associated with the 2005 Adopted Budget anticipates the expenses for this project.

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.

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

Notes:  Water revenue bond financing already acquired to support this water CIP program.  The bond proceeds are not separately allocated to individual projects.

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	2005	2006	2007	2008	2009	2010	Total
Uses
Start Up
On-going		12,000	36,000	40,000	40,000	40,000	168,000
Sources (itemize)

Notes:  The funding source of ongoing O&M for land stewardship is the water fund revenues and SPU anticipates the authority will be included in the 2006 Proposed O&M Budget.  Acquisitions will be made throughout 2005 and 2006, and beyond, if necessary.  The stewardship costs will be prorated according to when during the year the properties are acquired.  The annual stewardship fee the City will pay to CLC is $3,000 per parcel. 

Periodic Major Maintenance costs for the project: Estimate capital cost of performing periodic maintenance over life of facility.  Please identify major work items, frequency.

Major Maintenance Item	Frequency	Cost	Likely Funding Source
N/A
TOTAL

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

Total Regular Positions Created Or Abrogated Through This Legislation, Including FTE Impact:  This table should only reflect the actual number of positions created by this legislation  In the event that positions have been, or will be, created as a result of previous or future legislation or budget actions, please provide details in the Notes section below the table.

Position Title and Department*		Fund Name	Fund Number	Part-Time/ Full Time	2005 Positions	2005 FTE	2006 Positions**	2006 FTE**
	N/A
	TOTAL

*   List each position separately

** 2006 positions and FTE are total 2006 position changes resulting from this legislation, not incremental changes. Therefore, under 2006, please be sure to include any continuing positions from 2005. 

Notes:

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

· 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):

In exchange for the implementation of the HCP commitments, the Federal Services (US Fish and Wildlife and NOAA Fisheries) issued Incidental Take Permits to the City.  These permits provide the City with assurance from the Federal Agencies that it is addressing the requirements of the Endangered Species Act (ESA) for its water supply, hydroelectric and land management activities in the watershed.  If the City chose not to meet any one of the HCP commitments, it risks losing the Incidental Take Permits, and, therefore, its coverage under the ESA.  ESA coverage is important to the City because it protects the City from potential legal action taken by agencies or private citizens. The City could pursue re-negotiating with the Services, but there would be a high degree of uncertainty about the outcome of such renegotiations.

· What are the possible alternatives to the legislation that could achieve the same or similar objectives (Include any potential alternatives to the proposed legislation, including using an existing facility to fulfill the uses envisioned by the proposed project, adding components to or subtracting components from the total proposed project, contracting with an outside organization to provide the services the proposed project would fill, or other alternatives):

The City could renegotiate, however, costs associated with renegotiating and the high degree of uncertainty about the outcome of such renegotiations is prohibitive.

· 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?)

No

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

The long-term implication of this legislation is the City’s obligation to pay CLC for providing stewardship services through the year 2050, the end of the term of the HCP.  However, were CLC not to provide stewardship for the acquired properties, the City would either need to pay another entity to provide such services, or perform them itself at a cost.  CLC has committed to provide stewardship beyond the term of the HCP at its own expense in perpetuity.

Please list attachments to the fiscal note below: