09/08/2009 Council Packet (2) - Laserfiche WebLink

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WS — Item 7 WORK SESSION STAFF REPORT Work Session Item 7 Date: Council Work Session, September 8, 2009 To: City Council From: Michael Grochala Re: 35E /CSAH 14 Interchange Funding Background As directed at the August 3, 2009 council work session staff has continued to work with Anoka County on the interchange improvement funding. Since that meeting Anoka County has been informed of an additional $2 million dollars being provided by Mn/DOT from the American Recovery and Reinvestment Act (ARRA). Attached to this report is a draft Joint Powers Agreement (JPA) which provides the structure for the city's cost share participation. As currently proposed the city's share of the project is estimated at $4,221,000. This is approximately a $1.3 million reduction from what was discussed in August. Anoka County's share of the estimated $22 million project is $3,017,334. As noted in the agreement the city share of construction and land acquisition, after application of federal and state funds, will be 60% and the county 40 %. Any cost overruns or underruns will be based on this same percentage. Additionally, any additional funding received would be applied consistent with this formula. While reduction in the city's share of costs is extremely helpful, financing the improvement continues to be the largest impediment. Nearly 80% of the proposed assessment amount is expected to by deferred because the land falls into one of the following categories: 1) green acres; 2) senior citizen; or 3) unplatted /undeveloped land. This severely limits the revenue stream necessary to fund any debt issued for the project. As a result staff has requested that Anoka County carry the debt on the project with no limitation on the timeline for city payment of our obligation. Based on our recent discussions it does not appear the county is in a position to accommodate this request. As noted in the JPA under section III.F.5 the county is proposing the carry the debt for 5 years with the city responsible for interest and service charges accrued to that date. To accommodate this funding scenario the city would need to identify a interim revenue stream to meet the debt obligations until assessment revenue is received. Springsted Inc., the city's financial consultant, is evaluating the availability of our state aid street revenues as an interim financing source. In absence of an interim financing source and 1