Memorandum

City of Lawrence

City Manager’s Office

TO:	David L. Corliss, City Manager
FROM:	Cynthia Wagner, Assistant City Manager Matt Bond, Stormwater Engineer
CC:	Diane Stoddard, Assistant City Manager Charles Soules, Director of Public Works
DATE:	June 8, 2010
RE:	Report on Yankee Tank Dam Rehabilitation Project and Local Funding Discussions

A federal earmark has been identified for rehabilitation work for the Yankee Tank Dam - Structure No. 24 (more commonly referred to as Lake Alvamar Dam).  This earmark is to the Natural Resources Conservation Service (NRCS), an agency of the US Department of Agriculture, and is specifically to be spent on Yankee Tank.

Discussions regarding a local match for this project, currently estimated at $522,000, have been on-going since April, 2010 and have included representatives of the Wakarusa Watershed District, local property owners, KDOT, NRCS, Douglas County and the City of Lawrence.  Meetings have been facilitated by Herb Graves of the State Association of Kansas Watersheds.

The following provides a brief history of this project, an update on project cost estimates, federal match and options discussed to date regarding local funding match requirements. 

Background

The dam was originally designed and constructed through a federal Soil Conservation Service (SCS) program as a low-hazard facility but is now classified as high-hazard due to downstream development.  The construction of Clinton Parkway, K-10 highway and the athletic fields immediately downstream necessitated the reclassification from its original "low-hazard" designation to "high-hazard".  The reclassification does not reflect the integrity of the dam itself only the development downstream.  It currently meets state regulations but not federal for this designation. 

Estimated Project Costs and Federal Earmark

Based on information received from the project engineer in early May, the most current cost estimate for this project is $1,988,600.  Construction estimates total $1,172,500 – sixty-five percent (65%) of which can be matched through the federal earmark through NRCS.  Engineering, design and project administration costs are covered 100% through the earmark.  Property and easement acquisition are one hundred percent (100%) local responsibility and are currently estimated at $239,900.  However, this estimate could change significantly.  Changes to property acquisition affect the total earmark available due to the fact that, while a local responsibility, the total costs affect total construction cost and, thus the amount available in federal match.  The attached NRCS spreadsheet outlines project cost estimates and cost-shares.  As noted above, the current estimated local match is $522,000.

Consequences of No Action

The group assembled has identified consequences to various entities or individuals if no action were taken at this time. 

· Wakarusa Watershed District – if remediation to federal standards were not accomplished using the earmark, at some date in the future, the state could require remediation – with estimates for that work totaling at least the estimate for dam elimination.  No federal funding would be available if there is no action at this time.

· KDOT – risk of infrastructure damage to K10 in the event of a 100-year flood event.

· City of Lawrence – potential reductions to assessed valuations of properties facing an empty lake; risk of infrastructure damage to Clinton Parkway in the event of a 100-year flood event.

· Douglas County – potential reductions to assessed valuations of properties facing an empty lake.

· Property Owners – potential reductions to property values.

Local Funding Discussions

It has been generally agreed that rehabilitation of the lake benefits all parties.  Determining an equitable allocation of local share has been the topic of multiple meetings.  In addition to property owner participation, all discussions have included participation by the watershed district, county, city, KDOT, and the state conservation commission.

The county has explored the possibility of using the new Community Improvement District Act to form a county/resident initiated special assessment benefit district, focusing primarily on those who most directly benefit from a fully functioning lake.  Approximately 35 lots with a direct view of the lake have been identified for a potential district.  There have been discussions regarding a special assessment benefit district which would encompass more properties.  However, that discussion has stalled for fear of not attaining the necessary fifty-five percent (55%) of landowner support required for a county-initiated district. 

City legal staff has advised that the City could initiate a procedure to authorize a General Improvement District for improvements within the city limits by resolution.  Generally, the process to establish such a district would include ordering a public hearing on the advisability of the improvement.    Applicable notice requirements must be met.  After the hearing, the governing body must adopt a resolution and make findings as to the advisability of the improvement, the nature of the improvement, estimated cost, the boundaries of the district, the method of assessment and the apportionment of the cost between the district and city at large.  The improvement cannot be commenced, however, if within 20 days after publication of the resolution ordering the improvement, written protests signed by fifty-one percent (51%) or more of the resident owners of record of property within the district and the owners of record of more than half of the total area of such district are filed with the City Clerk. 

Alternatively, similar to the process for a county district, petitions may be submitted to the governing body requesting authorization of an improvement and creation of an improvement district.  A petition must be signed by a majority of resident owners or property liable for the assessment, the resident owners of more than one-half of the area liable for the assessment or owners of record, whether resident or not of more than one-half of the area liable to be assessed.

City staff and the County Administrator have reviewed watershed maps in order to identify potential boundaries for a city-initiated special assessment benefit district.  Due to the size of the watershed (extending from the lake as far north as 6^th Street in some areas) and the number of potentially affected property owners in a city district, it may be most beneficial to pursue the county benefit district option outlined above, which would assess those with direct lake view.

A potential funding allocation, which has not been reviewed by the larger working group, follows.  This allocation includes participation by all parties affected by the dam.

Property Owners (through special assessment district)                   180,000

State Water Office (Conservation Commission)                             100,000

KDOT                                                                                      75,000

City of Lawrence                                                                        75,000

Douglas County                                                                         50,000

                                                                                           $480,000

The remaining costs would be the responsibility of the Wakarusa Watershed District, the owner of the dam facility.  That cost is estimated at $42,000, however it could change depending upon the actual costs of land acquisition and construction.  The District would assume all risks and receive the benefits related to the project. 

City staff also discussed the stipulation that city involvement would include the requirement that the dam facility be annexed into the City of Lawrence.  As part of this annexation, staff also recommends that the easement elevation for the Watershed District be modified to correspond with the final design of the proposed dam height and emergency spillway elevations.  This would help to alleviate the encroachment of the residents along Burning Tree Court upon the exiting easement.    

It should be stressed that no funding requests have been made nor have commitments been made by any entity at this time.

Next Steps

In order to maintain the federal earmark, a Project Agreement between local sponsors and the NRCS to obligate the funds must be in place by the end of federal fiscal year 2011 – September 30, 2011. 

The next meeting of the group of interested parties is scheduled for Thursday, June 17, at which time it is anticipated the funding scenario outlined above would be discussed.