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HomeMy WebLinkAbout05-12-16 IFAC Memo Davis Lane Lift Station Memorandum REPORT TO: Impact Fee Advisory Committee FROM: Rick Hixson, City Engineer SUBJECT: Request to Alter the Wastewater Impact Fee Schedule to Accommodate Installation of the Davis Lane Lift Station MEETING DATE: May 12, 2016 Committee Members: The purpose of this meeting is to ask for your consideration and endorsement of two changes to the 2017-2021 Impact Fee CIP's, one for the Wastewater CIP and one for the Transportation CIP. In this memo I will provide background for the wastewater request. In a separate memo Dr. Woolard, the City Public Works Director, will provide background on the transportation request. The change being requested is to the timing of the Davis Lane Lift Station and Force Main projects. These two projects are in the current wastewater impact fee CIP but are unscheduled. Billings Clinic staff are requesting that these project be moved to the first construction season for which they would be ready, likely FY 2018. The City has received a request from the Billings Clinic to develop a medical building on property it has purchased adjacent to Westlake Road in the northwest part of town. The initial project to be constructed is a 70,000 square foot clinic building. Preliminary discussions with Billings Clinic have identified the need for substantial wastewater collection system improvements to be in place prior to occupancy of this first phase of their project. The latest update to the Wastewater Facility Master Plan proposed an interim lift station to be constructed to accommodate near term growth in this area. The Billings Clinic however is willing to construct the ultimate recommended improvement in conjunction with this first phase of their project. The amount currently budgeted for the force main portion of the project is $1.3M. The force main will connect the lift station to the Water Reclamation Facility. This requires boring under the interstate and installing a casing to carry the force main. This is in some ways the key element of the project, and its completion will facilitate development of the entire drainage zone to the south. The amount currently budgeted for the near term lift station portion of the project is $500,000.00. This interim improvement would be adequate to serve the initial phase of development but it is likely it would have to be upgraded before any further development could take place in this drainage zone (the Baxter Creek Zone). It is worth noting that property associated with the Billings Clinic has an agreement with the City that would allow them to build a minimal lift station that would tie into the 27th Avenue/Cattail Creek interceptor. Instead, Billings Clinic has offered to partner with the City to install the ultimate version of the Lift Station. The cost of the ultimate Davis Lane lift station as estimated in the Wastewater Master Plan is $5.3M, making the total estimated project cost $6.6M. Billings Clinic is willing to design and construct the entire ultimate project and pay for the non-impact fee portion. Of course these are just estimates and the actual costs won't be known until the project has been designed and bid. Engineering and Public Works staff are supporting this request. We feel that the timing and location of this proposal represent a great opportunity for the city to be in front of what will undoubtedly be a great demand for service in this drainage zone. It is propitious in the extreme that a willing partner has suggested a project that perfectly aligns with how we would have developed this drainage zone in an ideal world. It could have been very different indeed. It was just as likely that development proposals would have been received from the far upstream end of the zone (south end), requiring us to either say no to the proposals or figure out some way to finance the entire trunk main system from the beginning. This would have resulted in an enormous outlay of funds to build not only lift station and force main, but the entire trunk sewer as well, with few users to pay for the improvements until much later. Building from the downstream end of the zone and starting with the lift station and force main is the best of all possible worlds. Considering the estimates we have in hand right now it is possible that we would not even need to defer any other proposed projects and will still have a positive balance at the end of the 5 year budget window. The developer estimates the total project cost at $4.8M, and they are requesting that the city contribute $1.8M to $2.0M. Our current end of 5 year balance is $2.8M, so we would still have a positive balance of $800,000.00. I would also like to point out that Billings Clinic will be asking the City Commission to create a payback district to recover the fair share contributions from properties that will benefit from this improvement. Public Works and Engineering support this in principle and will be working with the Clinic to design the ultimate payback district.