AGENDA #4c
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to: |
Mayor and Town Council |
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from: |
Roger L. Stancil, Town Manager |
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subject: |
Budget Amendment for Downtown Economic Development Initiative |
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date: |
May 7, 2007 |
The purpose of this amendment is to budget additional funds needed to carry out the implementation of the Lot 5 project for the remainder of this fiscal year and in fiscal year 2007-2008.
On February 12, 2007, the Council authorized the Manager to execute a Development Agreement with Ram Development Company, and to negotiate additional items related to energy efficiency, parking for affordable housing, and environmental site considerations. As recently announced, negotiations are completed, and the Town Manager has signed the Development Agreement.
We had proposed appropriating $364,000 in the General Fund for the 2007-08 costs related to the Downtown Initiative in the Status Report of March 28, 2007. If the Council approves the attached budget amendment, which includes all currently planned costs for the Downtown Initiative through 2008, we would eliminate the budget for the Downtown Initiative for 2007-08, and make an offsetting reduction in fund balance available for 2007-08.
We estimate the following budget is needed to continue carrying out the implementation of the Lot 5 project in accordance with the Town’s responsibilities under the Development Agreement through June 30, 2008:
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Environmental Remediation |
$240,000 |
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Construction Management Services: |
150,000 |
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Professional Services: |
65,000 |
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Peer Review Honorarium: |
5,000 |
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TOTAL: |
$460,000 |
Environmental Remediation: The Town recently commissioned a Phase II Environmental Assessment for the Lot 5 site. Based on the report by Environmental Consulting Services dated April 2, 2007, we estimate the cost to the Town for environmental remediation is about $240,000. Under the terms of the Development Agreement, the Town would pay for the marginal cost of removal of contaminated soil; that is, those costs related to environmental remediation above and beyond Ram Development Company’s normal construction cost of hauling soil off-site.
Construction Management Services: In accordance with the Manager’s recommendation to Council on February 12, 2007, the Town would contract for services related to design review and construction management of the parking deck and public plaza to be constructed on Lot 5. We would potentially hire someone in the fourth quarter of 2006-07 to undertake detailed plan review. Work would continue through initiation of construction, estimated to occur in summer, 2008, and completion of construction, estimated to occur in 2010. We estimate a budget of $150,000 would be needed for these services.
Professional Services: We estimate a budget of $65,000 is needed for additional professional services, including environmental testing and legal services.
Additional environmental testing is related to the Town’s environmental remediation responsibilities in the Development Agreement. In addition to the Phase II environmental assessment, we would expect to engage a geologist during excavation to monitor soils. The requested budget would give flexibility to undertake additional tests or studies. We estimate additional funds will be needed for legal services related to negotiation and implementation of the Development Agreement through June 2007, and for additional limited services in FY 2007-2008.
Peer Review Honorarium: We propose an honorarium of $5,000 for Dean Marvin Malecha’s work related to the peer review of Ram’s proposed designs. The Town’s original letter of agreement with Dean Malecha contemplated such an arrangement (please see Attachment 1). To date, the Dean has led nine peer review sessions with Ram Development Company. Written reports accompany his pro bono work. We anticipate he will conduct one additional session later in the project design process. The honorarium would go into a scholarship fund at the NC State School of Design.
We recommend the Council enact the attached ordinances [2007-05-07/O-1a and 2007-05-07/O-1b] budgeting an additional $460,000 for the implementation of the Town’s responsibilities under the Development Agreement, for the period through June 30, 2008.
1. Letter from W. Calvin Horton to Dean Marvin Malecha, September 29, 2005 (p. 6.)