Form revised May 5, 2009

FISCAL NOTE FOR CAPITAL PROJECTS ONLY

Department:	Contact Person/Phone:	DOF Analyst/Phone:
SDOT	Ethan Melone/4-8066	Stephen Barham/3-9084

Legislation Title: AN ORDINANCE relating to the Seattle Streetcar, authorizing an agreement with the Central Puget Sound Regional Transit Authority for implementation of the First Hill Streetcar Connector Project.

Summary and background of the Legislation:

Project Name:	Project I.D.	Project Location:	Start Date:	End Date
First Hill Streetcar	TC367100	Various	2Q/2009	4Q/2013

The ST2 System Expansion Plan adopted by the Sound Transit Board and approved by the voters on Nov 2008 states that ST2 “…includes a new streetcar connector line between Downtown Seattle, First Hill and the future Capitol Hill light rail station.”  The ST Plan provides for Sound Transit to make a capped capital contribution of $120 million in 2007 dollars, and to fund annual operations and maintenance costs of up to $5.2 million in 2007 dollars.  The City and Sound Transit completed a letter of intent in February 2009, providing for Sound Transit funding and City of Seattle implementation of the project.  This legislation authorizes an agreement that formalizes the terms of the letter of intent, including identification of roles and responsibilities, eligible costs, and a payment schedule for Sound Transit funding and City of Seattle design, construction and operation (via interlocal agreement) of the First Hill Streetcar.

· 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.)

The First Hill Streetcar CIP project was created by Ordinance 123006 (the First Quarter 2009 Supplemental Budget Ordinance).

____ 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
TOTAL

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

Notes:  This legislation does not appropriate funds, but authorizes an agreement that will establish the source of funds for the project.

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		3,080	28,202	51,178	40,820	7,000	132,780
Current Year Appropriation	2,500
Future Appropriations		3,080	28,202	51,178	40,820	7,000	132,780

Notes:

2009 current year appropriations have been authorized through Ordinance 123006.

The spending plan is presented in year of expenditure dollars.  Note that the maximum funding available through the Interlocal agreement is in 2007 dollars; therefore, additional contingency funding is available if the project budget increases beyond the current spending plan.

The spending plan and budget include project expenditures of $125.8 million through 2013, representing the preliminary capital cost estimate, inclusive of escalation and contingencies.   $7 million in 2014 represents a supplemental contingency.  See Attachment A to the Fiscal Note, Preliminary Capital Cost Estimate.

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
Interlocal [477010]	2,500	3,080	28,202	51,178	40,820	7,000	132,780
TOTAL	2,500	3,080	28,202	51,178	40,820	7,000	132,780

Notes:

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
Operations & Maintenance					1,210	4,450	5,660
Sources (itemize)
Intergovernmental					1,210	4,450	5,660
Sponsorship Revenue					330	330	660
Total					1,540	4,780	6,320

Notes:

Start-up costs are included in the capital project spending plan.

O&M Cost above assumes operations begin fourth quarter 2013.

O&M Cost above includes $625,000 annual contribution to a Depreciation Fund.

For operating assumptions, see Attachment B to the Fiscal Note.

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
Brake & wheel replacements	5-7 years	600	Depreciation Fund Included in O&M Costs
Vehicle overhaul	10-15 years	3,000	Depreciation Fund & Federal Funds (FTA Preventative Maintenance)
Traction Power System Overhaul	15-20 years	5,000	Depreciation Fund & Federal Funds
New vehicles	25-30 years	24,000	Depreciation Fund & Federal Funds
TOTAL	25-30 years	32,600

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

The project will not require replacement if major maintenance activities are performed as described above.

Total Regular Positions Created, Modified, Or Abrogated Through This Legislation, Including FTE Impact:  This table should only reflect the actual number of positions created by this legislation  In the event that positions have been, or will be, created as a result of previous or future legislation or budget actions, please provide details in the Notes section below the table.

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

*   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:

SDOT anticipates that it can manage this project with existing positions.

· Do positions sunset in the future?  (If yes, identify sunset date):

· What is the financial cost of not implementing the legislation: (Estimate the costs to the City of not implementing the legislation, including estimated costs to maintain or expand an existing facility or the cost avoidance due to replacement of an existing facility, potential conflicts with regulatory requirements, or other potential costs if the legislation is not implemented):

If the legislation is not implemented, the City will not receive a capital contribution of up to $132.8 million (in year of expenditure dollars) and operating revenue of up to $5.2 million (in 2007 dollars) for the implementation and operation of transit service, and the First Hill Streetcar connector project may not be built.  This could create further demands on the existing transit network

· 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.

Yes.  Utility relocations will primarily affect Seattle Public Utilities.  Seattle City Light will have some involvement in providing new electrical services and with likely modifications to streetlighting; some minor SCL utility relocations are also possible, though no significant conflicts have been identified to date.  Key SPU contacts are Betty Meyer and Aziz Alfi.  Key SCL contacts are Darnell Cola and Stephen Byers.

· What are the possible alternatives to the legislation that could achieve the same or similar objectives (Include any potential alternatives to the proposed legislation, including using an existing facility to fulfill the uses envisioned by the proposed project, adding components to or subtracting components from the total proposed project, contracting with an outside organization to provide the services the proposed project would fill, or other alternatives):

There is no existing or planned transit service that would accomplish the objectives of the First Hill Streetcar and no fund source for transit improvements other than the First Hill Streetcar connector funding approved by voters as part of the Sound Transit expansion plan.

· Is the legislation subject to public hearing requirements: (If yes, what public hearings have been held to date, and/or what plans are in place to hold a public hearing(s) in the future?)

No.

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

The agreement protects the City from fiscal risk associated with the construction and operation of the project.  The agreement provides that, should construction bids or the negotiated Maximum Allowable Construction Contract exceed funds available to the City, the City may reject the bids or the MACC and defer further action unless and until supplemental funding has been secured.  The City’s risk is limited to cost overruns during construction, but the City can choose not to proceed with construction if available construction contingencies are not considered sufficient to cover possible overruns.  The agreement addresses the issues raised by the City Council Transportation Committee in their May 5, 2009 letter to the Director of Transportation.   The agreement provides that the City is not obligated to operate all of the planned service described in Section 1.0 if the cost of providing all of the planned service would exceed total resources available to the City from the Sound Transit, the advertising and sponsorship revenues, and any grant funding that may be obtained from other Federal, State or local sources.  The agreement provides that Sound Transit’s financial contribution to operations and maintenance will include depreciation expenses, to be retained by the City in replacement reserve fund.  Finally, the agreement includes termination provisions consistent with the objectives expressed by the Committee.

Please list attachments to the fiscal note below:

Attachment A—First Hill Streetcar Preliminary Capital Cost Estimate

Attachment B—First Hill Streetcar Preliminary Operations Plan