Form revised May 26, 2009

FISCAL NOTE FOR CAPITAL PROJECTS ONLY

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Dept of Parks & Recreation	Terry Roche/ 3-2776	Jennifer Devore/ 5-1328

Legislation Title:

AN ORDINANCE relating to the financing of the Lake Union Park Project; authorizing the loan of funds from the City’s Consolidated (Residual) Cash Pool, or its participating funds, to the South Lake Union Trust Fund; and providing for the repayment thereof.

Summary and background of the Legislation:

The proposed legislation authorizes an interfund loan up to $5.35 million from the City’s Consolidated (Residual) cash Pool to fund construction costs related to the Lake Union Park Development (LU Park) project in order to finish Phase II of the project on schedule.

The existing Capital Improvement Program project (Lake Union Park – Development K733134) is funded by the 2000 Neighborhood Parks, Green Spaces, Trails, and Zoo Levy, (2000 Parks Levy) as well as by other City and grant funds.   The construction of the project was divided into two phases.  Phase I, which is completed, included constructing terraces, a boardwalk, and a pedestrian bridge; replacing the bulkhead; installing utilities, and preparing the park for Phase II of the project.  The scope of work in Phase II includes removal of most of the existing landscape and installs a new entrance to the park, tree grove, interactive water fountain of jets, grass, model boat pond, History Trail, boardwalk extension, parking, pathways, beach for hand launched boats, landscape, landforms, furniture, lighting systems and irrigation.  In addition, work includes shoreline stabilization and planting on the lake edge and repairing/regrading pavements to tie into existing surrounding surfaces.

In 2005, the Seattle Parks Foundation committed to raising $10 million for development of LU Park, which was in addition to a commitment of a $10 million donation from City Investors (CI), a major property owner and developer in the South Lake Union area.  Ordinance 121963 authorized the execution of the Agreement between DPR and the Foundation concerning their roles in fundraising, design, development, construction, operation and maintenance of LU Park.  In 2006, Ordinance 122084 authorized amendments to the 2005 Agreement between DPR and the Foundation. The Foundation has completed its fundraising campaign and payments are scheduled to be made to the City through 2013.   

CI donated an initial $5 million to the Foundation, which was subsequently given to DPR for development of LU Park.  CI pledged an additional $5 million for the LU Park project, payable at such time as (1) the City and the Foundation raise an additional $10 million to develop LU Park consistent with the approved designs; and (2) construct certain Valley Street improvements within one year of commencement.  CI is expected to make the final $5 million donation once all the contingencies are satisfied pursuant to the agreement.  The Agreement between DPR and CI and acceptance of CI’s initial $5 million donation was authorized by Ordinance 121902.  Ordinance 121963 (section 3.4.1) states that the City is committed to moving forward with construction of phase two of the project regardless of whether the conditions have been satisfied to secure CI’s conditional release of the $5 million donation.  This commits the City to provide these funds should condition (2) above not be met.    

Phase I of the LU Park Development Project was completed in March 2008.  Phase II is under construction and scheduled for completion in 2010. The funds necessary to complete the LU Park Project have been identified and appropriated, but may not be received at the time project expenditures are incurred, creating a temporary funding gap.  A loan from the City’s Consolidated (Residual) Cash Pool will be used for interim financing.  The Foundation will pay interest on the portion of the loan used in lieu of outstanding pledges starting in July 2010 and the City’s General Subfund will pay interest on the $5 million portion of the loan.

Project Name:	Project I.D.	Project Location:	Start Date:	End Date
Lake Union Park – Development	K733134	1000 Valley St	1^st Qtr 2002	4^th Qtr 2010

· 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 detail existing appropriations and reflect appropriations that are a direct result of this legislation If this legislation does not directly change an appropriation, but has budget impacts, please explain in the notes section below:

Fund Name and Number	Department	Budget Control Level*	Existing 2009 Appropriation	New 2009 Appropriation (if any)	2010 Anticipated Appropriation
N/A
TOTAL

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

Notes: The Lake Union Park – Development project (K733134) received appropriation in 2008 via Ordinance 122757.

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	2009	2010	2011	2012	2013	2014	Total
Spending Plan	$9,742,631	$3,707,104					$13,449,735
Current Year Appropriation	0
Future Appropriations		0	0	0	0	0	0

Notes:

Funding source: Identify funding sources including revenue generated from the project, and the expected level of funding from each source.  When applicable, make a notation indicating the source of funds is paying for debt service.

Funding Source (Fund Name and Number, if applicable)	2009	2010	2011	2012	2013	2014	Total
N/A
TOTAL

Notes:

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
N/A
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	2009	2010	2011	2012	2013	2014	Total
Uses
Start Up	$15,000	0	0	0	0	0	$15,000
On-going	$194,375	$251,726	$256,761	$261,896	$267,134	$272,477	$1,504,369
Sources (itemize)
Parks General Fund (10200)	$209,375	$251,726	$256,761	$261,896	$267,134	$272,477	$1,519,369

Notes: The O&M costs for 2009 are already included in the 2009 Adopted Budget. There are no additional O&M costs associated with this legislation.

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
Replace Cedar Decking	10-15 years	$200,000	TBD
Sidewalks – replacement	15 years	$100,000	TBD
Bulkhead – Replacement	50 years	$15,000,000	TBD
Paint Bridge	10 years	$100,000	TBD
Pump & Sand Filter System	10 years	$500,000	TBD
TOTAL		$15,900,000

Note: These costs are for the entire Lake Union Park project, not just the Phase II components.

Funding sources for replacement of project:  NA

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

Position Title and Department*	Position # for Existing Positions	Fund Name & #	PT/FT	2009 Positions	2009 FTE	2010 Positions**	2010 FTE **
TOTAL	NA

*   List each position separately

** 2010 positions and FTE are total 2010 position changes resulting from this legislation, not incremental changes.  Therefore, under 2010, please be sure to include any continuing positions from 2009.

Notes:

· Do positions sunset in the future?  NA

· What is the financial cost of not implementing the legislation: If the City does not implement this legislation, DPR may not be able to complete Phase II of the LU Park Development Plan.  In addition, DPR will not be in compliance with the Agreement with the Foundation that was approved in Ordinance 121963 and amended Ordinance 122084 or the agreement with City Investors that was approved in Ordinance 121902.

· Does this legislation affect any departments besides the originating department?  • If so, please list the affected department(s), the nature of the impact (financial, operational, etc)., and indicate which staff members in the other department(s) are aware of this Bill.

· What are the possible alternatives to the legislation that could achieve the same or similar objectives  The only alternative to this legislation that could achieve the same objective would be for the City to sell bonds at a higher rate of interest than an interfund loan or provide other currently unidentified resources to complete Phase II of LU Park.

· Is the legislation subject to public hearing requirements: In July 2008, the City Council Budget Committee held a special public hearing on this project.  The public hearing, also known as a "CLEAN!" hearing, is held for certain major capital projects on which the City spends or is authorized to spend $5 million or more in City money. 

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

· List attachments to the fiscal note below: NA