FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
FFD	Kyle Joyce / 4-7154	Kathryn Ewing / 3-9580

Legislation Title:

AN ORDINANCE authorizing the Fleets and Facilities Department Director, on behalf of the Seattle Fire Department, to execute an amendment to a lease agreement with MUSREF Spokane Street, LP, a Washington Limited Partnership, for warehouse space at 3641 2^nd Avenue South in Seattle.

· Summary of the Legislation:

This legislation authorizes the Fleets and Facilities Department (FFD) to execute a lease amendment with MUSREF Spokane Street, LP to provide 13,661 rentable square feet of warehouse space at 3641 2^nd Avenue South in Seattle for a term of five (5) years.  The lease requires legislation, because the amount of warehouse space exceeds FFD statutory authority for leasing under Seattle Municipal Code 3.18.240.

· Background:

FFD has leased approximately 13,661 square feet at this location on behalf of Seattle Public Utilities (SPU) since January 1, 1999.  SPU no longer has use for this space, and SFD needs it for storage of furniture, fixtures and equipment, as well as for back-up emergency items displaced by the Fire Levy project over the next five years.  For 2009, the cost of this warehouse space is $8.57 per square foot per year. 

SFD currently leases warehouse space at 3602 2^nd Avenue South (SFD Commissary).  This space is in the same building as, and adjacent to, the 3641 2^nd Avenue South space.  This legislation will not only allow concentration of SFD storage in one location, but will also reduce the need for additional staffing and equipment to manage that storage.

__X_ This legislation has financial implications.

Appropriations: 

Fund Name and Number	Department	Budget Control Level*	2008 Appropriation	2009 Anticipated Appropriation
NA	NA	NA	NA	NA
TOTAL

Notes: 

SFD has included the total new lease rental cost (below) in the SFD 2009-2010 Proposed Budget.  FFD will seek equivalent pass-through budget authority sufficient to permit lease payments to the landlord. 

Calculation of Lease Costs (Rent+Overhead (OH)+Operating Expenses) for SFD warehouse space at 3641 2^nd Avenue South.

Table 1: Rent Payments for SFD warehouse space in 2009 and 2010 covered by this legislation.
Cost	2009	2010
Rent/month	$9,753.00	$10,045.59
Rent/year	$117,036.00	$120,547.08
FFD OH  3%	$4,215.98	$4,342.46
Annual Rent + OH	$121,251.98	$124,889.54
Annual Op Exp	$23,496.92*	$24,201.83*
Total	$144,748.90	$149,091.37
	Total 2009+2010	$293,840.27

*Estimates provided by landlord (FFD estimates 3.6% increase in operating expenses for second year of the lease.)

Anticipated Revenue/Reimbursement: Resulting From This Legislation:

Fund Name and Number	Department	Revenue Source	2008 Revenue	2009 Revenue
NA	NA	NA	NA	NA
TOTAL

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

None

Spending/Cash Flow:

Fund Name & #	Department	Budget Control Level*	2008 Expenditures	2009 Anticipated Expenditures
NA	NA	NA	NA	NA
TOTAL

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

Failure to implement this legislation will require a renewed property search for space to meet SFD’s needs and could result in higher lease rates for less desirable space.

· What are the possible alternatives to the legislation that could achieve the same or similar objectives?

The lease authorized by this legislation provides the most favorable combination of lease rate, layout and location for the City.  The fact that the space is adjacent to the existing SFD Commissary allows much more cost effective storage management than any other location.  The only viable alternative is to move to a similar warehouse space in another building at considerable expense, as noted above.

· Is the legislation subject to public hearing requirements: 

No.

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

None.

Please list attachments to the fiscal note below:

Map showing the location of the space to be leased.  Please contact the City Clerk's Office to view a copy of this map.