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Minutes Wk Session - 11/20/2006 COUNCIL WORK SESSION MINUTES November 20, 2006 TAPE READING .:ill. DATE. COUNCIL CHAMBERS, CITY HALL, CITY OF WOODBURN, COUNTY OF MARION, STATE OF OREGON, NOVEMBER 20,2006. CONVENED. Mayor Figley convened the work session at 6:40 p.m. for the purpose of discussing the Front Street widening and reconstruction project. ROLL CALL. Mayor Councilor Councilor Councilor Councilor Councilor Councilor Figley Bjelland Cox Lonergan McCallum Nichols Sifuentez Present Present (6:50 pm) Absent Present Present Present (6:53 pm) Present Staff Present: City Administrator Brown, Public Warks Director Tiwari, Senior CE Technician Scott, City Recorder Tennant .01 Mayor Figley stated that the purpose of this workshop is to fully inform the Council on engineering design and construction issues surrounding the N. Front Street improvement project between Cleveland Street and Highway 214. Administrator Brown stated that staff will provide information on the scope of the project and financing mechanisms with the hope that the Council will be able to come to some consensus on how to proceed with this project. He stated that the project, in part, has been held up due to the need for preliminary design work done by PGE so the City could then complete the infrastructure design. PGE has now provided the preliminary design work and, as a result, the cost for this project will be substantially more than the original budget amount. The PGE undergrounding has added close to $1,000,000 to the original cost and an additional $1,000,000 for other improvement expenses. In regards to the undergrounding portion of the project, the original budget estimate provided $1,070,000 for undergrounding of lines along North Front Street to Highway 214, however, the recent PGE preliminary design shows that it is necessary to branch out the undergrounding to multiple side streets to complete the electrical connections between downtown and the surrounding area. In turn, this additional work has escalated the price of this portion of the project by approximately $700,000 and PGE has added another $200,000 for their cost that represents the cost of the system that has not been fully depreciated (lines and poles) plus additional conversion work that needs to done to take it from above-ground to below-ground at a number of different points. Another issue that has arisen is the private Page 1 - Council Work Session Minutes, November 20, 2006 "," "f" .. COUNCIL WORK SESSION MINUTES November 20, 2006 TAPE READING electrical connections in the downtown Alley necessary to bring the services to an underground connection. In regards to the project area between Cleveland and Hardcastle, additional costs will be incurred to replace the entire sidewalk rather than just make repairs to the existing sidewalk and to raise the grade at the N. Front Street and Hardcastle intersection. The revised estimate of $4,091 ,600 includes construction, engineering, and a 10% contingency for the area between Cleveland and Highway 214. This revised estimate is $1,791,600 over the original estimate to complete this project. Councilor McCallum questioned if the PGE costs are close to being the actual amount or will they be coming back to the City with a another substantial increase in the estimate. Administrator Brown felt that PGE has done a more thorough job in providing an estimate of costs now that they have completed their preliminary design work. He did state that the costs can always change based on actual bids received to do the necessary work. Public Works Director Tiwari concurred that PGE's estimate should be fairly close to the current estimate. There may be some cost changes associated with the undergrounding in the central business district but the finished project from Hardcastle Avenue north to Highway 214 will look similar to South Front Street. 14.0 Administrator Brown stated that it will take more than one year to complete the entire project. The original plan was to complete the central business district first then complete N. Front Street to Highway 214, however, the current plan is to complete N. Front Street first since the central business district will take more time to complete due to the undergrounding portion of the project. In regards to the Hardcastle Avenue intersection, Mayor Figley questioned if the angle at this intersection would be changed to make it easier for large vehicles to turn onto N. Front Street. Public Works Director Tiwari stated that Front Street would be changed in a way so that in the future if the Mill Street crossing is closed and Hardcastle is shifted, the higher grade would extend far enough to the north along N. Front Street thereby allowing large trucks vehicles turning off of Hardcastle to turn north onto Front Street. Administrator Brown reiterated that if the City is committed to doing the undergrounding of electrical lines, then we are committed to doing the sidewalk replacement in those outlying areas that will also have electrical lines placed underground. He also stated that by expanding the initial project, there will be less loan money available to property owners in the downtown area for building rehabilitation. Staff is recommending that if the undergrounding is to be done that the whole area outlined in the PGE design work be completed since the cost to underground electrical lines in the future will only increase. He also felt that undergrounding the full length of Front Street will improve the look of the downtown area and hopefully attract businesses and tourists to the area. Page 2 - Council Work Session Minutes, November 20,2006 .,.', 4Ip'<" .. COUNCIL WORK SESSION MINUTES November 20, 2006 TAPE READING 22.5 Councilor McCallum felt that the Council had laid out a plan to the public to improve the downtown area and the Council should complete the project as planned even though there is a delay in when the entire project will be completed. Administrator Brown stated that if the City is able to move quickly on this project, it may be possible to get N. Front Street done during this upcoming construction season and the portion between Cleveland Street and either Harrison or Hardcastle would be completed the following construction season. The extra year to complete the project will also give staff an opportunity to look at other grant opportunities and to accumulate additional Urban Renewal funds so that the City can be in a position to go out for urban renewal borrowing. Councilor McCallum felt that delaying the improvements to the central business district may work out to the City's advantage since the downtown plan has not been completed as of yet. Administrator Brown agreed that the downtown plan is important since it addresses parking and the overall traffic circulation. The City has received a Transportation Growth Management (TGM) grant in the amount of $95,000 from the State of Oregon to update the City's Downtown Development plan which combines land use planning with transportation facility planning. The City will be receiving a secondary grant to do some additional work outside of the downtown area and the City will be contributing a small match with the second grant. He anticipated having a completed downtown plan by the end of next year that will relate to street configuration and reiterated that the plan will not address undergrounding of electrical lines. 30.2 It was the consensus of the Councilors present that the City will pursue the undergrounding of electrical lines in the downtown area and on North Front Street as laid out on preliminary design provided by PGE. Administrator Brown reviewed the revenue sources for this project which includes the Urban Renewal fund, eligible funds within the City's Capital Improvement programs (CIP), STP Exchange for fiscal years 2006-07 and 2007-08 (federal funds transferred to the State for distribution to cities for street projects), City gas tax and street resurfacing funds, and additional system development funds which are available for capacity expansion on the North Front Street portion of this project only. Even with the additional revenues identified, there is still a need for $1,102,160 to be acquired over the project time period. Councilor Bjelland questioned what other sources of funds would be available to fund the anticipated shortfall. Administrator Brown stated that grant funds may be available and he will be searching through a variety of grant sources in an effort to find additional funds for this type of project. He will be pursuing Community Development Block Grant (CDBG) funds since they do provide grants for up to $300,000 for urban renewal/downtown revitalization Page 3 - Council Work Session Minutes, November 20, 2006 .~'" "f" .. COUNCIL WORK SESSION MINUTES November 20,2006 TAPE READING projects and the next opportunity to apply for these funds will be in January 2007. Another source of funding for the Council to consider is requiring PGE to do the undergrounding as allowed for within the City's franchise agreement and PGE would, in turn, absorb the $279,000 conversion cost. He had tried to get PGE to absorb the cost of the conversion but PGE stated that they would absolutely not absorb the cost. Under current law, PGE can then make their own decision as to whether or not to file a rate increase with the Oregon Public Utility Commission (OPUC) to recover their conversion cost from ratepayers within the City. If the rate surcharge as determined by PGE is submitted to and approved by the OPUC, a rate adjustment could be in effect for 5 or more years. He stated that the ratepayer bills from PGE would have a separate line item showing the additional charge. He also provided examples of payback scenerios for the purpose of giving the Council an idea as to how much a residential ratepayer could expect to pay monthly ifPGE does receive approval from the OPUC for a surcharge. He also stated that the City could generate any amount up to the total forced undergrounding project cost but he felt that $300,000 using this mechanism for generating a revenue source would be more affordable to the ratepayers. Discussion was held regarding potential impact ofPGE passing a portion of the forced undergrounding cost onto the ratepayers and how ratepayers will react to this additional fee. Councilor Bjelland felt that the 1 O-year repayment plan is the logical approach since the projected surcharge is minimal to the residential customer. He, along with other Councilors, suggested that the $300,000 figure be increased to $500,000 for the purpose of providing some of the additional funding source needed to cover increased undergrounding costs for this project. Administrator Brown reminded the Council that the franchise ordinance allows the City to make PGE underground their electrical lines but it does not say that PGE has to pass this cost onto the ratepayers. The decision to pass on the cost to the ratepayers is a decision at the PGE corporate level to maintain the investor's investment in their company. He also brought to their attention that the City would make the initial payment to contractor for the full cost of the undergrounding and the City would only get reimbursed for the conversion cost from PGE once they have collected funds from the ratepayers. He was still investigating this issue through PGE and was unsure ifPGE reimburses the City in a lump sum amount once they receive the approval from OPUC or if they make payments to the City over the years they collect the rate adjustment. 51.9 Administrator Brown stated that if the CDBG grant funds and $300,000 or more in conversion funding through PGE is acquired, then the balance necessary to complete the project is a more manageable amount of budget resources to come up with over the next couple of years. Page 4 - Council Work Session Minutes, November 20,2006 ''t' ~'l ... COUNCIL WORK SESSION MINUTES November 20, 2006 TAPE READING Richard Jennings stated that while he was Mayor, he had heard a lot of complaints from the public about the overhead electrical lines in the downtown area. However, with the passage of Urban Renewal, he has not heard those comments since there is an expectation that the lines will come down as part of downtown revitalization. Brief discussion was held regarding the need to make the public aware of what will be happening if PGE pursues, and receives, a utility rate adjustment for the conversion cost. It was noted that, depending upon PGE methodology used to determine the payback for the conversion costs, a utility bill could see about $.30 per $100 (0.3%) on a monthly bill. 56.4 Administrator Brown stated that in one construction season, all of the undergrounding will be completed and the City will try to get the streets and sidewalks done from the High School south to Harrison Street. Assuming the funding issues have been resolved, the next second construction season would involve the remainder of the area from Harrison Street to Cleveland Street. Under this construction plan, North Front Street will make the downtown area more accessible and hopefully attract more people to the area. In regards to the undergrounding, Administrator Brown stated that if the Council elects to force PGE to move forward with the undergrounding, then formal Council action will be necessary at either the first meeting in December 2006 or in January 2007. 64.1 Administrator Brown also mentioned that it will cost about $100,000 to install private electrical boxes and staff will be proposing that businesses pick up one-half (Yz) of the cost through a local improvement district (LID) process. There will also be some costs incurred for paving the downtown Alley which may involve a cost share utilizing the LID process. Further discussion on this issue will be brought up before the Council next spnng. 70.8 Mayor Figley obtained a consensus from the Council members present to go ahead with the Front Street project which includes the forced undergrounding of electrical lines as outlined in PGE's preliminary design work. 71.5 The meeting concluded at approximately 7:48 p. ATTEST /1,11 C'-<- Mary Te ant, Recorder City of Woodburn, Oregon Page 5 - Council Work Session Minutes, November 20, 2006 ''-'' "f'''' ..