AGENDA #11b
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Budget Status Report and Proposed Contract Amendment – Lots 2 and 5 Project
DATE: December 6, 2004
This memorandum provides an update on the status of the consultant budget for planning the development of Town Parking Lots 2 and 5 and related sites.
The attached resolution A would authorize a contract amendment with Stainback Public Private Real Estate for tasks added to the project’s scope of work outside the Town’s original contract.
The attached resolution B would authorize Stainback Public Private Real Estate to commence work on the Request for Qualifications solicitation process and continue drafting a Request for Proposals document for Council’s consideration.
The attached budget ordinance would authorize an additional $50,000 for project costs for fiscal year 2004-2005.
REVIEW OF PROJECT BUDGET
Fiscal Year 2003-2004
On October 27, 2003, the Town Council authorized the Manager to contract with John Stainback, managing partner of Stainback Public/Private Real Estate, to provide economic development consultant services for the development of Parking Lots 2 and 5. At that time, the Council budgeted $120,000 for the first two phases of the project – the development of a market demand study followed by the development of conceptual master plans.
On November 24, 2003, the Council approved a budget ordinance amendment adding $20,000 to expand the scope of work for the market demand study being developed by Economics Research Associates working as a subcontractor for Stainback Public/Private Real Estate.
Stainback Public/Private Real Estate hired HKS, Inc., a Dallas architecture firm, in May 2004, to develop conceptual master plans showing the potential arrangement and scale of buildings on the project sites. The contract included $32,000 in architect fees plus project-related expenses such as travel and materials.
On May 24, 2004, the Council approved increasing the conceptual master plan budget by $8,000, plus up to $1,000 for the cost of additional materials, to pay HKS to develop additional concepts for developing the space atop the Wallace parking deck and the adjoining site. At the meeting the Council adopted a budget ordinance amendment allocating the $6,288 remaining in the Council’s contingency budget at that time to supplement the budget for the Lots 2 and 5 project in order to cover the additional costs. The budget ordinance amendment brought the total budget for Fiscal Year 2003-04 to $146,288.
In June 2004, Stainback Public/Private Real Estate hired McDonald-York, a Raleigh contractor, to provide construction cost estimates for a flat fee of $5,000 as specified in the Town’s original contract with the consultant.
Fiscal Year 2004-2005
On June 14, the Council adopted the Town Budget for 2004-2005, which included $266,000 for the cost estimation and financial analysis phase (Part 1C of the contract), the developer solicitation phase (Part 2 of the contract), and the development negotiation phase (Part 3 of the contract). Of this amount, $226,000 was for consultant services, and $40,000 for direct expenses.
On June 14, 2004, the Council authorized proceeding with the cost estimation and financial feasibility analysis phase. On June 30, 2004, the Council authorized the Town Manager to execute a contract amendment with Stainback Public/Private Real Estate to add tasks to the scope of work for an additional $11,826. The tasks included developing two new detailed phasing plans and schedules and an analysis of sources of financing related to the transit center and environmental mitigation. The additional costs did not require a budget ordinance amendment; the costs were covered by the available direct expense budget and by the deletion of the development of computer illustrations from the contract, which would have cost $8,000. The total consultant cost for this phase is $79,850.
As noted to the Council on June 30, in the summer and fall of 2004 the Town contracted for the following additional tasks:
· In June, Stainback Public/Private Real Estate engaged Analytical Consultants for the appraisals of Lots 2 and 5 at $1,800 each, or $3,600 total.
· In August 2004, Engineering Consulting Services produced environmental assessment reports on Lot 2 and Lot 5 at a cost of $3,400 total.
· Engineering Consulting Services in October 2004, also conducted soil borings at Lots 2 and 5 to determine the presence of rock and other subsurface conditions; the fee for this work is $9,764.
· In October 2004, Pickett-Sprouse Real Estate, for a $1,000 fee, provided the Town with an analysis of the value of Lots 2 and 5 based on the potential building program.
· The Council on November 8, also authorized Stainback Public/Private Real Estate to hire an architecture firm, at a cost not to exceed $1,500, to develop concepts for locating a potential bank building on Lot #5 for RBC.
· In November, the Council Committee authorized proceeding with a structural analysis of the Wallace Deck to determine whether the deck can handle four additional stories on top and additional structural support that would be required if any. Stainback Public/Private Real Estate subsequently hired Stewart Engineering of Morrisville, at a cost of $6,250 to conduct the analysis.
On November 8, the Council authorized Stainback Public/Private Real Estate to proceed with the development of draft Request for Qualifications and Request for Proposals documents for Council consideration on December 6, 2004. The consultant fees, not including direct expenses, for the developer solicitation phase total $99,350; of this amount, $15,780 is currently authorized.
The future development negotiation phase is projected to cost $50,000 in consultant fees.
DISCUSSION
The information below summarizes the project budget, expenditures, encumbrances, and anticipated costs through the development negotiation phase of the project.
Total Allocation
$ 146,288 2003-2004
$ 266,000 2004-2005
$ 412,288 Total
Total Expenditures, Encumbrances and Anticipated Costs
$ 83,681 2003-2004 Expenditures
$ 142,571 2004-2005 Expenditures
$ 226,252 Total Expenditures to Date
$ 86,506 Outstanding Encumbrances
$ 144,570 Anticipated Additional Costs
$ 457,328 Total
Total Recommended Budget Adjustment
$ 45,040 Based on Expected Costs
$ 4,960 Contingency
$ 50,000 Total
The budget for fiscal year 2003-2004 was $146,288 for the market demand study and the conceptual master plans. The budget for Fiscal Year 2004-05 allocated $266,000 for the project. This figure was based on original estimated consultant fees of $76,000 for the financial analysis phase, $100,000 for the developer solicitation phase, $50,000 for the developer negotiations phase, and $40,000 for related direct expenses. The total amount allocated for the project budget over two fiscal years is $412,288.
Expenditures to date total $226,252 for the project.
Outstanding encumbrances total $86,506. This amount includes work completed at Council’s request by the consultant not in the current contract ($24,150), and additional project direct expenses ($17,515) as listed below:
Consultant Fees
· $ 4,730 Presentations at neighborhood meetings, November 4 and 5, 2004
· $ 5,460 Time negotiating with RBC-Centura on a potential deal to acquire the bank’s property at Henderson and Columbia Streets in exchange for a building for the bank at Lot 5.
· $13,960 Additional work related to analyzing the financial feasibility of developing the Wallace Deck and the RBC-Centura property. (Neither site was included in the consultant’s original scope of work.)
$24,150 Sub-Total (Allocated expenses of 9.5% per the Town’s contract are included in these figures.)
Direct Costs
· $ 6,250 Structural analysis of the Wallace Deck
· $ 1,500 Revision of Lot 5 conceptual master plan to accommodate a potential building for RBC-Centura
· $ 9,765 Geotechnical studies at Lots 2 and 5
$17,515 Sub-Total
Anticipated additional costs of $144,570 includes:
· $133,570 Future consultant services for the remaining parts of the developer solicitation phase not yet authorized by Council ($83,570), and the development negotiation phase ($50,000)
· $ 11,000 Billed charges from HKS for which the Town has requested additional documentation
$144,570 Total
The total needed budget adjustment is $45,040. We also recommend a contingency of $4,960, for a total recommended budget adjustment of $50,000.
Summary
The total project budget allocation for 2003-2005 is $412,288. With all current and future anticipated costs taken into account, the estimated cost through the developer negotiation phase is $457,328. Therefore, we estimate the additional costs through the development negotiation phase this fiscal year is $45,040. We recommend a small contingency of $4,960 and a total budget adjustment of $50,000.
RECOMMENDATION
We recommend that the Council adopt the attached Resolution A authorizing a contract amendment with Stainback Public-Private Real Estate for tasks added to the project’s scope of work outside the Town’s original contract and not covered by subsequent contract amendments in the amount of $24,150.
We also recommend that the Council adopt the attached Resolution B authorizing Stainback Public Private Real Estate to commence work on the Request for Qualifications solicitation process and continue drafting a Request for Proposals document for Council’s consideration.
We recommend that the Council adopt the attached budget Ordinance budgeting an additional $50,000 for the project for fiscal year 2004-2005.
RESOLUTION A
A RESOLUTION AUTHORIZING A CONTRACT AMENDMENT FOR CONSULTING SERVICES With Stainback Public/Private Real Estate (2004-12-06/R-14.1a)
WHEREAS, the Comprehensive Plan and Downtown Small Area Plan identify Town Parking Lots 2 and 5 as key redevelopment sites; and
WHEREAS, on October 27, 2003, the Council authorized the Town Manager to execute a contract with Stainback Public/Private Real Estate to provide economic development consulting services for the future development of Parking Lots 2 and 5 in downtown Chapel Hill; and
WHEREAS, on June 14, 2004, the Council authorized proceeding with financial analysis of Master Plans for Lots 2 and 5 and the Wallace Parking Deck, with options including consideration of a Transit Transfer Center on Lot 2 and a parking structure on the privately-owned RBC Centura property; and
WHEREAS, the consultant has requested additional funds to cover costs associated with discussions with RBC-Centura, presentations at neighborhood meetings, and financial analysis of development concepts for the Wallace Parking Deck and the RBC-Centura property;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Town Manager to execute a contract amendment with Stainback Public/Private Real Estate based substantially on the terms described in the attached memorandum of December 6, 2004, to include in Part 1C, Financial Analysis, the following work:
· Two neighborhood meetings, $4,730
· Discussions with RBC-Centura, $5,460
· Financial analysis of Wallace Deck, RBC-Centura development options, $13,960
BE IT FURTHER RESOLVED that the Council authorizes the Manager to include in the contract amendment references to the additional work products as reviewed in the Manager’s memorandum to Council of December 6, 2004.
This the 6th day of December, 2004.
RESOLUTION B
A RESOLUTION AUTHORIZING COMMENCING WITH THE REQUEST FOR QUALIFICATIONS DEVELOPER SOLICITATION PROCESS (2004-12-06/R-14.1b)
WHEREAS, on June 14, 2004, the Council adopted a resolution outlining recommended development options to use as a conceptual guide by consultant John Stainback and the Council in determining the financial feasibility of the building program for Town Parking Lots 2 and 5 and the Wallace Parking Deck; and
WHEREAS, on June 14, 2004, the Council authorized proceeding with the financial feasibility analysis phase; and
WHEREAS, on September 13, September 27, and October 27, 2004, the Council held public forums on the Financial Feasibility Report and other project-related information, including review by the Downtown Economic Development Commission, the Downtown Corporation, the Chamber of Commerce, and the University; and
WHEREAS, on November 8, 2004, the Council authorized proceeding with the development of draft Request for Qualifications document for Council consideration on December 6, 2004; and
WHEREAS, Stainback Public/Private Real Estate has completed a draft Request for Qualifications document and started work on an initial Request for Proposals document;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes its consultant, Stainback Public/Private Real Estate, Inc. to commence work on the Request for Qualifications solicitation process and complete the draft Request for Proposals and evaluation criteria for the Council’s consideration.
This the 6th day of December, 2004.
AN ORDINANCE TO AMEND “THE ORDINANCE CONCERNING APPROPRIATIONS AND THE RAISING OF REVENUE FOR THE FISCAL YEAR BEGINNING JULY 1, 2004” (2004-12-06/O-7)
BE IT ORDAINED by the Council of the Town of Chapel Hill that the Budget Ordinance entitled “An Ordinance Concerning Appropriations and the Raising of Revenue for the Fiscal Year Beginning July 1, 2004” as duly adopted on June 14, 2004 and the same is hereby amended as follows:
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ARTICLE I |
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Current |
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Revised |
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APPROPRIATIONS |
Budget |
Increase |
Decrease |
Budget |
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GENERAL FUND |
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Non-Departmental |
5,413,933 |
50,000 |
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5,463,933 |
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ARTICLE II |
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Current |
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Revised |
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REVENUES |
Budget |
Increase |
Decrease |
Budget |
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GENERAL FUND |
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(appropriated fund balance) |
2,497,667 |
50,000 |
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2,547,667 |
This the 6th day of December, 2004.