Memorandum

City of Lawrence

City Manager’s Office

 

TO:

Mayor and City Commission

FROM:

City Manager David L. Corliss

DATE:

June 21, 2013

RE:

Capital Budget and Proposed KDOT Agreement

 

As part of the City Manager’s recommended budget, I will be presenting an updated multi-year capital improvement budget reflecting staff’s recommendation on future debt obligations for the City.   We have well managed our debt obligations in recent years and I will not be recommending a mill levy increase for the 2014 bond and interest fund which supports our property tax based debt obligations.

 

While there is a strong desire to maintain the existing mill levy in our bond and interest fund, there are a number of capital needs facing the community many of them representing unique opportunities to move forward on several City Commission and community goals.  Concurrent with the development and review of our capital needs, City staff has been in extensive discussions with staff from the Kansas Department of Transportation concerning KDOT’s desire to complete several important State highway projects benefiting Lawrence. Additionally, as the State’s highway lane-miles grows with new miles in Lawrence there is interest in considering the “turning-back” of city streets which also have State highway designations. 

 

The current focus for a turn-back is the approximately 4 mile section of West 6th Street between Iowa and K-10 which is also designated as US-40.  While the State could unilaterally make decisions on de-designation of State highways, they have a strong desire for partnership with local governments on these important decisions.  Removing the State highway designation on this portion of West 6th Street will mean that the City will have State connecting link payments reduced by approximately $40,000 a year.  (The State pays the City of Lawrence a per lane mile grant, per State law, for maintenance of these streets which function as both State highways and local streets).   City staff has sought an appropriate level of State financial assistance as part of the proposed US-40 turn-back to recognize this permanent loss of State assistance for this road.   Staff believes that this portion of US-40 is an appropriate candidate for a turn-back agreement because the road is in generally good maintenance condition and has recently been improved with a number of geometric improvements (5th lane, turning movements, etc.) which leave this road in good shape as it becomes sole City maintenance and governance responsibility.

 

The attached letter from the Deputy Secretary of KDOT reflects the proposed turn-back agreement provisions as negotiated between City staff and KDOT staff.   If appropriate, the provisions of the letter would be further established in a City/State cooperation agreement (or agreements).   In staff’s view, the proposed agreement reflects appropriate compensation for the turn-back.  It also has the benefit of freeing up additional debt capacity for other City priorities.

 

Through credits back to the City, the turn back agreement would provide approximately $3.5 million to the City, with additional benefit to the City with KDOT’s proposed traffic signalization improvements at the intersection of K-10 and West 6th Street.

The $3.5 million is illustrated as follows:

 

KDOT reimbursement to the City for the

6th and Iowa improvements

$ 1.5 million

 

 

KDOT additional participation in the

2014 improvements at 23rd/Iowa

1.0 million

 

 

KDOT agrees to proposed City/County participation

in the K-10/Bob Billings Parkway

(City $1 million, County $528,000) which is $500,000

less than the $2million requested by KDOT

.5 million

 

 

KDOT reimbursement to the City for traffic signalization

for 2 West 6th Street intersections which warrant/or will

soon warrant traffic signals (West 6th and George Williams Way and West 6th and Champion)

.5 million

 

 

Total:

$3.5 million

 

KDOT will only be responsible for reimbursing (or crediting) for the actual costs of the above eligible projects.

 

Additionally, KDOT is solely funding traffic signal improvements at 6th and K-10 (estimated $180,000) and will also allow for KLINK funding of repaving of West 6th in 2014 (estimated grant of $200,000).

 

What should also not be lost in this discussion is the significant investment the State is making in Lawrence / Douglas County in the coming months with the completion of K-10 (South Lawrence Trafficway) and the K-10- Bob Billings Parkway interchange.

 

Other City Capital Budget Impact

Significantly, the proposal provides a reduction in the City’s current debt plans because it relieves the City of long-term debt obligations for two projects: 6th and Iowa ($1.5 million) and a $1 million savings on the planned improvements at 23rd and Iowa in 2014.  (The KDOT reimbursement for the 2 new traffic signals and acceptance of a lower City/County match for the K-10 interchange are not budgeted savings to the City – they are forgone cost increases to the City.)   This gives the City additional debt obligation authority of approximately $2.5 million in the next few years which was not otherwise allocated.  I am proposing that this $2.5 million be put toward Commission and community priorities as follows:

 

City match for Santa Fe Station renovation

(recent TE grant receipt)                                                             $325,000

 

New signalization at George Williams Way

and Bob Billings Parkway – with the construction

of the interchange at Bob Billings and K-10 to start

in 2014, this intersection will need signalization upon

the interchange completion                                                           275,000

 

Fiber/broadband/ITS grant match

(see attached memorandum)                                                        400,000

 

Police Facility site acquisition/design/next steps                              1,500,000

 

My purpose in getting this proposed turn-back agreement and proposed debt budget to the City Commission prior to submission of my proposed recommended budget is to provide additional time for consideration of the many items associated with this proposal.   

 

After City Commission discussion and review these capital items, direction to City staff is requested on several fronts:

 

1)  Preparation of the necessary KDOT-City agreements to accomplish the above turn-back proposal.

 

2)  Direction for staff to communicate with Douglas County officials concerning their participation in two upcoming capital projects which are currently budgeted in 2016:  participation in the improvement of 19th Street between Harper and the former Farmland property, and the rehabilitation of Fire Station No. 1 (8th and Kentucky) see attached letters.

 

3)  Direction to work with BNSF railroad on acquisition of the Santa Fe station.  Staff Memo

 

4)  Direction to pursue site acquisition review and activities related to police facility.

 

Of course, all of these items will require additional City Commission review and ultimately approval, however discussion and direction on these items will be helpful to staff.   We look forward to our discussions.