FISCAL NOTE FOR CAPITAL PROJECTS ONLY

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Fleets and Facilities	Dave Barber / 684-0400	Candice Chin / 233-7014

Legislation Title:

An ordinance relating to the Department of Parks and Recreation, authorizing the Superintendent to accept an assignment of the P-Patch Trust’s rights to purchase land in Block 3,  Hillman City Division No. 3, according to the Plat thereof, Recorded in Volume 11 of Plats, Page 38, records of King County, Washington; authorizing the purchase of said property; authorizing the Superintendent to grant a conservation easement and covenant with respect to such property in exchange for a conservation easement and covenant on adjacent property of the P-Patch Trust and the P-Patch Trust’s payment of a part of the purchase price of the property being acquired by the City; authorizing the operation of such property as a P-Patch; and ratifying and confirming prior acts.

Summary and background of the Legislation:

Summary:  This legislation authorizes the Department of Parks and Recreation to purchase three adjacent lots from the Findlay Street Christian Church at a cost to the City not to exceed $240,000.  The properties are currently in use as part of the Hillman City P-Patch and would continue to be part of that P-Patch.  The P-Patch would be under the jurisdiction of the Department of Parks and Recreation, and the Superintendent of Parks and Recreation would have the option of authorizing the Department of Neighborhoods to manage daily P-Patch operations.

This legislation also authorizes the City to grant a conservation easement and covenant in favor of the P-Patch Trust, agreeing to keep the three lots in community garden or open space in perpetuity.  The P-Patch Trust would do likewise by granting a conservation easement and covenant in favor of the City, agreeing to keep Trust owned lots, currently used for the Hillman City P-Patch, in community garden or open space in perpetuity. 

Background:  The Hillman City P-Patch is located at the corner of 46^th Avenue South and South Lucile Street in the Rainier Valley.  This P-Patch consists of a total of six lots.  The P-Patch Trust owns two of the lots; these lots are located next to one another at the west end of the P-Patch and are designated as Lots 21 and 22 on the attached Hillman City P-Patch map.  The remaining four lots (Lots 17 through 20 on the map) are owned by the Findlay Street Christian Church and leased by the Church to the Department of Neighborhoods (DON).

The Findlay Street Christian Church wishes to sell its Rainier Valley properties, including the four lots (Lots 17 through 20) currently leased by DON, in order to relocate the Church.  The Church recognizes the importance of the P-Patch to the surrounding community and has offered to sell those four lots to the City and/or the P-Patch Trust in order to keep the P-Patch intact.  The offering price for each lot is $100,000.  The City has evaluated that price and found it to be no greater, and possibly less, than current market value. 

The P-Patch Trust wishes to purchase either Lot 20 or Lot 17, which lot yet to be determined.  The City wishes to purchase either Lots 17, 18, and 19, or Lots 18, 19, and 20 (the remaining three lots).

Most of the total $300,000 purchase price to the City for these three lots has already been appropriated under previous ordinances.  Ordinance 121882, effective September 15, 2005, appropriated a total of $100,000 from the Cumulative Reserve Fund, REET I Subaccount, to help purchase the lots.  Ordinance 121991, effective December 30, 2005 (the 2006 Budget Ordinance) appropriated an additional $140,000 from the Cumulative Reserve Fund, REET I Subaccount, to further fund the purchase. 

The P-Patch Trust has agreed to provide the remaining $60,000.  As provided for in the two Purchase and Sale Agreements between the Church and the Trust, this funding must be deposited before closing.  The target closing date is on or before September 30, 2006.  The money will be deposited in an escrow account established by the P-Patch Trust.  

The Findlay Street Christian Church and the P-Patch Trust have signed two Purchase and Sale Agreements for the four lots (Lots 17 through 20), and the proposed legislation authorizes the City to accept an assignment of buyer’s rights under those Agreements and purchase three of those lots for the City.  The P-Patch Trust is purchasing the fourth lot.  Granting the reciprocal conservation easements and covenants previously mentioned will satisfy provisions in each of the Sale Agreements.

Project Name:	Project I.D.	Project Location:	Start Date:	End Date
Hillman City P-Patch	K732286	46^th Avenue S and S Lucille Street	April 30, 2006	Dec. 31, 2006

__X_ This legislation has financial implications.   Minimal – See note under Uses and Sources

                                                                                       for Operation and Maintenance Costs

Appropriations:  Not applicable.

Fund Name and Number	Department	Budget Control Level*	2006 Appropriation	2007 Anticipated Appropriation
TOTAL

Notes:    By Ordinance 121882, effective September 15, 2005, the City appropriated $100,000 from the Cumulative Reserve Fund, REET I Subaccount, for this project.  By Ordinance 121991, effective December 30, 2005 (the 2006 Budget Ordinance), the City appropriated $140,000 from the Cumulative Reserve Fund, REET I Subaccount, for this project. 

Uses and Sources for Operation and Maintenance Costs for the Project:

O&M	2006	2007	2008	2009	2010	2011	Total
Uses	P-Patch	P-Patch	P-Patch	P-Patch	P-Patch	P-Patch	P-Patch
Start Up	N/A	N/A	N/A	N/A	N/A	N/A	N/A
On-going	$600	$620	$640	$660	$680	$700	$3,900
Sources User fees deposited to the General Subfund (DON Budget)	$600	$620	$640	$660	$680	$700	$3,900

Notes:   The Hillman City P-Patch currently supports 45 garden plots, currently generating $580 per year in user fees (before inflation adjustment, if any) that almost totally offset the City’s total annual cost for water and maintenance.  The number of plots may increase slightly over time and cover the modest increase in maintenance cost caused by inflation.  No major additional operating costs are anticipated over the next several years, because the three lots being acquired by the City have already been developed as a P-Patch and are currently in P-Patch use.

User fees are deposited to the General Fund.  The P-Patch property is already real estate tax exempt due to Church ownership.  

· What is the financial cost of not implementing the legislation?

The cost to establish a new P-Patch of this size, in this neighborhood, is estimated at $115,000 per lot, for a total market price of $690,000 for six contiguous lots.  Even if this cost were offset by a transfer of $230,000 in land value (for the two lots owned by the P-Patch Trust)

from this site to the new site, the estimated net $460,000 cost to establish the new P-Patch would be $220,000 more than the $240,000 already appropriated to acquire three lots as proposed under this legislation.    

· What are the possible alternatives to the legislation that could achieve the same or similar objectives?   None

· Is the legislation subject to public hearing requirements?   No

· Other Issues

Please list attachments to the fiscal note below:

• Map: Hillman City P-Patch