08/03/2009 Council Packet - Laserfiche WebLink

Home Search

WS — Item 3 WORK SESSION STAFF REPORT Work Session Item 3 Date: Council Work Session, August 3, 2009 To: City Council From: Michael Grochala Re: 35E/CSAH 14 Interchange Funding Background As previously discussed staff has continued to work with Anoka County regarding the cost participation for the I35E /CSAH 14 interchange. At the July 6, 2009 work session staff reported that the city's share, based on a cost split of 50% of construction and 100% of land acquisition, was $7.8 million. Staff shared that the proposed cost share, was not viable from both a funding and financing standpoint. As the council is aware we have proceeded with the improvement process assuming a $5.5 million contribution. Anoka has recently proposed new parameters for the agreement that are more consistent with our position. The cost share is based on the original cost participation percentages discussed in 2005 regarding construction of both interchanges. Under this scenario the city had a 35% share of total project costs and the county had a 24% share for both the Lake Drive /35W interchange and the Main/35E interchange projects. Maintaining these same percentages and adjusting for actual costs incurred, increased construction costs and additional state and federal shares establishes a new base cost of $5.45 million for the city. The county's share would be $3.8 million. Overruns/Underruns: Since the local share of the improvements is a 60% city / 40% county split all cost overruns / underruns are proposed to be based on this same percentage. New Grants: Both the city and county have grant applications out for consideration. If any are successful the grant amounts would be based on the same percentage. Cash Flow: The county will consider carrying the note for the full term of the bond. However, this will negatively act against the county's bond capacity. It is likely that an additional interest surcharge would be added if this is in the agreement. Alternatively, the county would carry the city's share of costs for five years with the city paying interest as it accrues. 1