Form revised: December 14, 2010

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	CBO Analyst/Phone:
Seattle Public Utilities	Judith Noble/4-8078	Karen Grove/4-5805

Legislation Title: An Ordinance relating to the Natural Resource Trustees; authorizing an agreement with the Natural Resource Trustees for the assignment of a Restrictive Covenant setting out conditions under which the City of Seattle will guarantee the preservation of habitat to be created on City-owned property by Bluefield Holdings and authorizing the jurisdictional department to sign such a covenant when conceptual approval for the project is issued; and ratifying and confirming certain prior acts.

Summary of the Legislation:  The legislation would provide to three City departments authority to sign a covenant with the Lower Duwamish Natural Resource Trustees to assure preservation of habitat developed on City property under the Bluefield Holdings Masterlease; or, if the City later needs the property for City purposes, to assure the City will replace any habitat compromised by another City project.

Background: Ordinance 122729 authorizes an agreement with Bluefield Holdings to construct habitat on City-owned properties along the Duwamish River.  Bluefield Holdings can sell the resulting natural resource damages credit to entities needing such credit to satisfy liability under the Lower Duwamish Superfund Natural Resources Damages action overseen by the Federal Natural Resource Trustees.  Subsequent to City adoption of the authorizing legislation, the  trustees required a covenant be attached to each property assuring that habitat created will be preserved or, if preservation is not possible because of the needs of the City for use of the property, that the City will replace the habitat not preserved.  The Seattle Department of Transportation, Seattle Parks and Recreation, and Seattle City Light have properties included in the masterlease.  This legislation authorizes the Parks Department superintendent, Seattle City Light superintendent and Department of Transportation director, as appropriate, to sign a site-specific covenant at the time conceptual approval of a habitat project is given.

____ This legislation does not have any financial implications.

__X_   This legislation has financial implications.

There may be long-term, unquantifiable fiscal impacts associated with a covenant on City properties affected by this legislation.  These are:

1. The economic value of portions of the affected parcels not comprising a habitat project will be permanently decreased by the requirement to maintain habitat projects in perpetuity.

2. Keeping properties in habitat use in perpetuity eliminates other development opportunities, including income producing opportunities.

3. Maintaining properties in a habitat use in perpetuity may incrementally increase the costs of future repair or replacement of public infrastructure which will coexist with the habitat.

The covenant stipulates if the City of Seattle finds it necessary to disturb habitat created on City lands under the Bluefield program (and hence used to back up mitigation credits for natural resource damages) the City will repair or replace the disturbed habitat.  While no such disturbance is anticipated, it is possible such disturbance could occur in the future which would result in a financial obligation to the City. 

The example covenant attached as Exhibit A to the ordinance was drawn up to apply to SDOT properties because its properties are currently under review.  Minor and non-substantive adjustments to the covenants for Parks and City Light properties are expected.

What is the financial cost of not implementing the legislation?

Not implementing the legislation would result in the abandonment of the program authorized in Ordinance 122729 and the loss of revenue anticipated from the 10-year leases laid out in that ordinance.

Does this legislation affect any departments besides the originating department?

Yes.  Seattle Public Utilities is the department tasked with overseeing the Bluefield agreement but the departments whose property is involved are Seattle Department of Transportation, Seattle Parks and Recreation, and Seattle City Light.

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

No alternatives to a covenant have been acceptable to the Natural Resource Trustees.

Is the legislation subject to public hearing requirements?

No

Other Issues:

N/A

List attachments to the fiscal note below:

 List of Attachments to Environmental Covenant and Access Agreement (Exhibit A to SPU Bluefields Agreement ORD)

List of Attachments to

Environmental Covenant and Access Agreement

(Exhibit A to SPU Bluefields Agreement ORD)

Attachment A:  [Legal Description of Property]

Attachment B:  [Assessor’s Parcel Number]

Attachment C:  City of Seattle Ordinance No. 122729 authorizing the City of Seattle to enter into a Master Lease and Term Permit with Bluefield Holdings, and issuing a ten year Street Use Permit to Bluefield

Attachment D:  Ten year Street Use Permit

Attachment E:  [Description of Natural Resource Habitat Restoration Project]