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Home My WebLink About35. 17-331 JUNE 27, 2017 17-331 RESOLUTION (CARRIED 6-1P LOST LAID OVER WITHDRAWN ) PURPOSE: APPROVE AMENDMENT TO 2017 CAPITAL IMPROVEMENT PROGRAM TO INCLUDE COMPREHENSIVE STREETS/UTILITY IMPROVEMENTS IN THE SAWDUST DISTRICT INITIATED BY: CITY ADMINISTRATION WHEREAS, the City Manager has prepared, submitted and recommended a Capital Improvement Program for the year 2017, wherein was listed all anticipated revenue and expenditures for said year, which program has been filed with the Common Council and the City Clerk, and is available for public inspection; and WHEREAS, it is necessary to amend the 2017 Program to add multiple projects as part of the Sawdust District Comprehensive Street and Utility Improvements. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Oshkosh that the 2017 Capital Improvement Program, on file in the City Clerk's Office, is hereby approved with adjustments as listed in attached Exhibit "2". APPROVED AMENDMENT: 03.14.17 Res 17-116 Add: Convention Center Capital Project $1,500,000.00 Funded with State Trust Fund Loan, applied for March 2017 or project contingency APPROVED AMENDMENT: 04.11.17 Res 17-191 Add: Implement People of the Water Exhibit $130,000 Funded with Donations APPROVED AMENDMENT: 06.13.17 Res 17-293 Add: Landscaping for Field Operations Facility Funded by moving $15,000 from Major Equipment to Property Improvements PROPOSED AMENDMENT 06.20.17 Res 17 -XXX Add: Comprehensive Streets/Utility Improvements Sawdust District Improvements Funding: WDEC Grant $250,000, Developer Contribution $2,530,800 Previously Borrowed Bond Proceed(s) $2,035,800 EXHIBIT 2 2017 CAPITAL IMPROVEMENT PROGRAM ADJUSTMENTS PROP. IMP. PARK PAGE STREETS TRAFFIC EQUIPMENT IMPROV SIDEWALKS WATER SANITARY STORM TOTAL $ - $ - $ 1,500,000 $ - $ - $ - $ - $ - $ 1,500,000 130,000 $ - $ - $ - $ - $ - $ 130,000 $ 1,026,900 $ 473,300 $ - $ - $ 80,000 $ 770,000 $ 66,000 $ 2,400,400 $ 4,816,600 $ 1,026,900 $ 473,300 $ 1,630,000 $ - $ 80,000 $ 770,000 $ 66,000 $ 2,400,400 $ 6,446,600 DATE: June 21, 2017 TO: Honorable Mayor and Members of the Common Council FROM: Mark Rohloff, City Manager SUBJECT: Infrastructure for Oshkosh Arena Project — TIF 31 Award of bid for public improvements; amendments to Capital Improvement Program (CIP) to fund TIF 31 public improvements BACKGROUND On February 8, 2017, the Milwaukee Bucks announced that the NBA D -League franchise would be awarded to Oshkosh. The local investors putting together the project proposed the creation and construction of an arena to house the team. Council created TIF 31 to fund public improvements and provide a pay -go TIF incentive to the developers to cover extraordinary costs associated with construction at the former Buckstaff site. Council created TIF 31 on February 28, 2017. At that time, engineering staff had not yet been authorized to begin investigation and/or survey work on this project. As a result, staff prepared cost estimates based on bid amounts and quantities for similar -sized projects. As shown in the TIF 31 plan, the construction costs estimated for the proposed scope of work was $2,530,800. In order to meet the Bucks' aggressive timeline for construction of the arena and public improvements, staff began its survey and design work after the announcement and after the creation of the TIF. Normally, such survey work is done 9 —12 months in advance. Last week, staff opened bids on the proposed construction work. Between the time staff was authorized to proceed and bid opening, the scope of the project increased. Engineering staff determined that in order to complete this work correctly, street and utility improvements needed to cover a larger area than initially imagined. Staff believes that area -wide improvements make better sense for the long-term viability of the proposed improvements. For example, the stormwater improvements were initially projected to benefit the immediate Arena area. As staff looked at the long-term stormwater needs of the area, we moved the outfall of the storm sewer from South Park Ave. to 14th Ave. This increased the size and scope of the storm sewer work. Similar adjustments were made for both water and sanitary sewer. As additional utility improvements were identified, street work was also increased in scope. Meanwhile, once staff had the opportunity to conduct a complete assessment of the soil conditions, we encountered poor soils and in some limited places, contaminated soil. While initial indications were that contaminated soil may not be a problem, staff felt that ignoring the poor soil conditions would result in additional long-term costs. As a result, additional work to remove poor soils and landfill these soils were added to the estimates. Once these additional items were added to the project, the bids came in at approximately $3.975 million. With landfill tipping fees, engineering, and traffic costs included, the project totals $4,814,800, leaving a $2,284,000 gap for this project. ANALYSIS Of the $4,814,800 needed to complete this work, we have a contractual commitment from the Oshkosh arena investors to contribute $2,530,800 for the project. To fund the additional costs, staff proposes to fund these improvements in the following manner: • WEDC GRANT: Within the last few weeks, we were notified that the Wisconsin Economic Development Corporation (WEDC) awarded a $250,000 grant towards this project. These costs were not counted in the initial TIF plan. These funds will go towards pedestrian and street improvements to improve pedestrian safety in and around the area. • WATER UTILITY CIP FUNDS: Originally, staff had hoped that the TIF would be able to cover the cost of the water main improvements. Due to the scope of work increasing, staff is now proposing to fund these water main capital improvements as we typically do, that is, replacement of existing water mains are paid for by the utility. As a result, staff is proposing that the entire $768,900 cost of water improvements be paid for by the water utility. If the Arena project was not taking place, these same improvements would be necessary and would be assumed by the water utility. Cost savings in the 2017 Water CIP will be used to fund these costs. • WASTEWATER UTILITY CIP FUNDS: Similar to water improvements mentioned above, the proposed sanitary sewer improvements are also warranted to be paid by the wastewater utility. The cost of $65,300 is proposed to be funded through the utility funds. Cost savings in 2017 Sewer CIP will be used to fund this improvement. • STORMWATER UTILITY CIP FUNDS: The watershed that serves the arena and surrounding area is a project that had been identified for long-term improvements by Public Works. In order to cover the full costs of the additional storm sewer necessary to properly drain this area, staff is proposing that we reduce the budget for the Wetland Mitigation Bank project. These funds have already been included in the city's 2017 borrowing. It is proposed that $749,800 of the $1.4 million Wetland Bank budget be transferred to the Arena infrastructure project for stormwater improvements. • STREET/SIDEWALK IMPROVEMENTS CIP IMPROVEMENTS FUNDS: Based on bids we received so far this season, staff has identified $450,000 in savings for street and sidewalk projects that may be applied to the arena project to cover the balance of the street and sidewalk improvements for the Arena. The above five sources of funds will generate the $2,284,000 necessary to complete this project. Given the fact that the Engineering Division was given three months to create this project from concept to bid award, I feel that the short time frame adequately explains the need to increase the scope of work. I hope that the Council understands that the increased scope recommended by staff is in the best long-term interests of the city and in achieving the overall development goals of the Sawdust District. FISCAL IMPACT In addition to the above funding sources, the capital improvement plan requires an increase of $2,780,800 to cover the additional funds being provided by the developer ($2,530,800) and the WEDC grant ($250,000). In addition to the proposed increase, $2,034,000 will need to be transferred from the CIP project areas listed above to the arena project, as follows: $768,900 from various 2017 water CIP projects; $65,300 from sanitary sewer CIP projects; $450,000 from street and sidewalk CIP projects; and $749,800 from the stormwater utility CIP/Wetland Bank project to the new arena project. This CIP amendment will cover all costs associated with the revised scope of work, yet still provide adequate funds for the remaining 2017 CIP projects. I appreciate Council's patience as we prepared a capital improvement project from scratch in a short amount of time in order to meet the aggressive schedule of the arena project. The change in the scope fixes known infrastructure problems, independent of the Arena, that the City would need to fix, sooner rather than later, resulting in overall cost savings. I believe that the city is getting a good value from these public improvements and that this work will have significant benefits for the city in the long run. For these reasons, I recommend the bid award as recommended by staff, the amendments to the capital improvement program, and the necessary budget transfers within the capital improvement program to fund the $4,814,800 in improvements for the arena area. Respectfully submitted, rk A. Rohloff City Manager