Form revised October 26, 2007

FISCAL NOTE FOR CAPITAL PROJECTS ONLY

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Department of Parks and Recreation	Kevin Stoops / 684-7053	Jan Oscherwitz / 684-8510

Legislation Title:

 AN ORDINANCE related to the Seattle Art Museum, authorizing the execution of an agreement  between the Seattle Department of Parks and Recreation and the Seattle Art Museum, concerning their roles in the planning and design of the restoration of the Seattle Asian Art Museum in Volunteer Park, modifying the City’s obligations under the Construction and Finance Agreement between the said parties for work on public park property associated with Olympic Sculpture Park, and amending the Seattle Department of Parks and Recreation 2007 Adopted Budget, including the 2007-2012 Capital Improvement Program, by modifying appropriations to various budget control levels.

Summary and background of the Legislation:

This proposed legislation authorizes the Superintendent of the Department of Parks and Recreation to execute an agreement between the City of Seattle (City) and the Seattle Art Museum (SAM) for designing the restoration of the Seattle Asian Art Museum (SAAM) in Volunteer Park.  This agreement allows SAM to serve as the City’s agent in restoration of SAAM through the permitting process.  It also modifies the City’s obligations under the Construction and Finance Agreement between the City and SAM for work on public park property associated with Olympic Sculpture Park (OSP), and transfers appropriations from the OSP Projects to the SAAM Restoration project.

The City and SAM have had a long-term relationship and operating agreement regarding the museum building in Volunteer Park currently known at the Seattle Asian Art Museum (SAAM). As part of a 1931 agreement authorized by Ordinance 61998, SAM (formerly the Art Institute of Seattle) agreed to provide funds to build and operate the museum and the City agreed to fund utility costs and janitorial services and keep the facility in good repair.  The building was completed in 1933 at a cost of more than $250,000.  Additions were constructed at City and SAM expense in 1947, 1954, 1959, and again in 1969.  The agreement between the City and SAM was most recently amended in 1981 through Ordinance 109767.  In that agreement, the parties agreed to cooperate in assessing the need for capital improvements and in seeking City funding as well as public and private grants for those improvements.  In the last 20 years, the City has spent about $3.2 million on capital repairs and improvements to SAAM.

In 2006, SAM commissioned a study by LMN Architects, McKinstry Essention, Inc., and Sellen Construction that recommended replacing SAAM’s original 1933 boiler and related ductwork, adding a chiller plant and humidification and air handling systems to reduce energy costs, and making significant structural improvements to the building to address seismic concerns at an estimated cost of $23.2 million.  The Department of Parks and Recreation (DPR) anticipates hiring a consultant to critique this work with funds provided through the 4^th Quarter Supplemental Ordinance.

With the approval of this legislation and after completion of DPR’s technical review, SAM will continue design work on mutually agreed upon renovations and act as the City’s agent to secure permits and other regulatory approvals.  Funds from the work will come from a transfer of City money originally pledged to OSP.  SAM has recently been awarded $2 million of additional funds from the Kreielsheimer Remainder Foundation, freeing up City funds for use at SAAM.  The Board of Trustees of SAM has agreed to reduce the amount of City financial obligation for OSP by $2 million, conditioned on the City re-appropriating those funds for exclusive use in planning and pre-construction activities associated with the SAAM restoration project (see Attachment 1 – letter from SAM Board Chair, Jon Shirley).

This legislation does not commit the City or SAM to the construction of improvements at SAAM.  These will be negotiated in a future agreement and will be considered in future legislation or as part of a future budget process.

Project Name:	Project I.D.	Project Location:	Start Date:	End Date
Seattle Asian Art Museum Renovations	K732369	Volunteer Park	2007		TBD

· Please check any of the following that apply:

____ This legislation creates, funds, or anticipates a new CIP Project

____ This legislation does not have any financial implications.

__X_ This legislation has financial implications.

Appropriations:  

Fund Name and Number	Department	Budget Control Level*	2007 Appropriation	2008 Anticipated Appropriation
Cumulative Reserve Subfund - Real Estate Excise Tax II Subaccount (00161)	Department of Parks and Recreation	Parks Infrastructure (K72441)	($600,000)	$0
Cumulative Reserve Subfund - Real Estate Excise Tax II Subaccount (00161)	Department of Parks and Recreation	Building Component Renovations (K72444)	$600,000	$0
Cumulative Reserve Subfund - Real Estate Excise Tax I Subaccount (00163)	Department of Parks and Recreation	Parks Infrastructure - (K72441)	($1,400,000)	$0
Cumulative Reserve Subfund - Real Estate Excise Tax I Subaccount (00163)	Department of Parks and Recreation	Building Component Renovations (K72444)	$1,400,000	$0

Notes:  This legislation transfers funds from the OSP - Olympic Sculpture Park Devel./Alaskan Way Improvements Project K731006 in the Parks Infrastructure BCL to the Seattle Asian Art Museum Restoration Project K732369 in the Building Component Renovation BCL.  The $2 million transferred from the Parks Infrastructure BCL to the Building Component Renovations BCL can only be spent on the SAAM Restoration Project unless authorized by future legislation.

Spending Plan and Future Appropriations for Capital Projects:

Spending Plan and Budget	2007	2008	2009	2010	2011	2012	Total
Spending Plan		$2M
Current Year Appropriation	$2M
Future Appropriations			TBD	TBD

Notes:  The $2 million of funding covers the design and permitting phase of the SAAM Restoration Project.  If costs exceed this amount, SAM is responsible for additional expense, unless the City at its sole discretion chooses to add funds to this effort.  There is no current commitment to funding the construction phase.  If both parties wish to proceed to construction, this will be negotiated in a future agreement and the City’s share of funding will be considered in future legislation or as part of a future budget process.

Funding source: N/A

Funding Source (Fund Name and Number, if applicable)	2007	2008	2009	2010	2011	2012	Total
TOTAL	N/A

Notes:  N/A

Bond Financing Required:  N/A

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

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

O&M	2007	2008	2009	2010	2011	2012	Total
Uses
Start Up	N/A	N/A	N/A	N/A	N/A	N/A	N/A
On-going	N/A	N/A	N/A	N/A	N/A	N/A	N/A
Sources (itemize)

Notes:  The City currently pays for utility costs for the Seattle Asian Art Museum as part of the existing agreement with SAM.  Savings or additional costs related to the cost of improvements will be calculated and considered as part of the construction agreement.

Periodic Major Maintenance costs for the project:

Major Maintenance Item	Frequency	Cost	Likely Funding Source
TOTAL

Notes: The City currently pays to keep SAAM in good repair as part of its existing agreement with SAM.  Future major maintenance costs as a result of the improvements will be calculated and considered as part of the construction agreement.

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

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

Position Title and Department*	Position Number for Existing Positions	Fund Name and Number	Part-Time/ Full Time	2007 Positions	2007 FTE	2008 Positions**	2008 FTE**
TOTAL

Notes:  N/A

· Do positions sunset in the future?  N/A

· What is the financial cost of not implementing the legislation:  Due to funds from the Kreielsheimer Remainder Foundation made available in 2007 for the Olympic Sculpture Park, the Seattle Art Museum is willing to forgo $2 million of the $2.1 million City obligation for Boulevard Improvements as required by the Construction and Finance Agreement between the City and SAM that was most recently amended through Ordinance 122141 if those funds are dedicated to the planning and design of the Seattle Asian Art Museum in anticipation of a future restoration of that facility.  If this legislation is not passed, the City would forego the opportunity use funds on a City-owned building that would otherwise be obligated to SAM for the Olympic Sculpture Park.

· What are the possible alternatives to the legislation that could achieve the same or similar objectives  The City could fund planning and design of renovations to SAAM out of future major maintenance funds.

· Is the legislation subject to public hearing requirements: No.

· Other Issues:  This legislation does not commit the City to the construction phase of the SAAM Restoration Project.  However, due to the facility’s age, condition and level of investment of major maintenance funds over the last twenty years it is likely that some significant repairs and renovations will be inevitable in the not-too-distant future.

Please list attachments to the fiscal note below:

Attachment 1:   Seattle Art Museum Board of Trustees letter to Council, dated October 31,        2007.