MEMORANDUM

AGENDA #2e

MEMORANDUM

TO: Mayor and Town Council

FROM: W. Calvin Horton, Town Manager

SUBJECT: Town Operations Center – Project Ordinance Amendments

DATE: June 20, 2005

The attached project ordinances would amend two budgets: a) the Transit portion of the Town Operations Center, prepared on November 22, 2004 and b) the Public Works and Housing portion of the Town Operations Center, prepared on November 24, 2003. The attached ordinances increase the budgets from $18,960,465 to $22,430,236 for the Transit portion of the Town Operations Center and from $24,586,677 to $29,227,277 for the Public Works and Housing portion of the Town Operations Center.

BACKGROUND AND DISCUSSION

A project ordinance for the Transit portion of the Town Operations Center had been prepared on October 27, 2003 and amended on November 24, 2003, June 14, 2004, June 30, 2004 and November 22, 2004. At the time the budget ordinance was prepared, the exact amount of some grants was unknown. The attached project ordinance amendment updates the amount for the outstanding grants and other revenues for the Transit portion of the Town Operations Center and includes a total of revenues sufficient to cover the costs of all the construction bids submitted to the Council for approval on June 20, 2005, for a total project cost of $22,430,236.

A project ordinance for the Public Works and Housing portion of the Town Operations Center was prepared on October 27, 2003, and amended on November 24, 2003, June 25 2003 and January 12, 2004. The attached project ordinance amendment updates the revenues based on current information and updates the construction costs in accordance with the construction bids received. The total project budget for the Public Works and Housing portion of the Town Operations Center is $29,227,277. A portion of the additional revenue needed to finance the project in excess of the original budget comes from interest income from the financed funds (before the funds are needed for construction) ($580,000) and a portion comes from the expected premium on the bond sale ($1,570,000). The premium is the result of additional funds investors must pay when the market rate of interest is below the stated rate of interest, that is, investors pay more than the face value of the bonds.

While these budgets reflect increased construction costs, we still anticipate that the debt repayment for the Public Works and Housing portion of the Town Operations Center will be approximately $1,750,000, the amount we have budgeted for the debt repayment on the Public Works and Housing portion of the Town Operations Center in 2005-06. However, we cannot know the exact amount until the bonds are sold, since interest rates vary on a daily basis.

RECOMMENDATION

That the Council enact the attached project ordinances.

AN ORDINANCE TO AMEND THE CAPITAL PROJECT ORIDNANCE FOR A NEW TRANSPORTATION OPERATIONS CENTER (2005-05-20/O-1)

BE IT ORDAINED by the Council of the Town of Chapel Hill that, pursuant to Section 13.2 of Chapter 159 of the General Statutes of North Carolina, the following grant project ordinance is hereby amended as follows:

SECTION I

The grant project as authorized by the Town Council is for the construction of the Transit portion of the Town Operations Center. Funds available for this project include local contributions from the Town’s Transportation Capital Reserve Fund and grants and agreements from the Federal Transit Administration and the North Carolina Department of Transportation.

SECTION II

The Manager of the Town of Chapel Hill is hereby directed to proceed with the implementation of the project within the terms of the grant agreements executed with the Federal Transit Authority and the North Carolina Department of Transportation within the funds appropriated herein.

SECTION III

Revenues anticipated to be available to the Town to complete the project are hereby amended as follows:

SECTION IV

Amounts appropriated for capital projects are hereby amended as follows:

SECTION V

The Manager is directed to report annually on the financial status of the project in an informational section to be included in the Annual Report. He shall also keep the Council informed of any unusual occurrences.

SECTION VI

Copies of this project ordinance shall be entered into the Minutes of the Council and copies shall be filed within 5 days of adoption with the Manager, Finance Director and Town Clerk.

This the 20^th day of June, 2005.

AN ORDINANCE TO AMEND A CAPITAL PROJECT ORDINANCE FOR A NEW PUBLIC WORKS AND HOUSING OPERATIONS CENTER (2005-06-20/O-2)

BE IT ORDAINED by the Council of the Town of Chapel Hill that, pursuant to Section 13.2 of Chapter 159 of the General Statutes of North Carolina, the following project ordinance is hereby amended as follows: