Adopt Resolution #15-03-074 Approving Joint Powers Agreement for Highway 10 & Armstrong Boulevard Interchange; Improvement Project 14-22

Purpose:
The purpose of this case it to adopt Resolution #15-03-074 approving the attached draft Joint Powers Agreement between Anoka County and the City of Ramsey for the Highway 10 & Armstrong Boulevard Interchange; City Improvement Project 14-22.

Background:
The Highway 10 & Armstrong Boulevard Interchange project, City Improvement Project 14-22, will reduce congestion and increase safety at the intersection of Highway 10 & Armstrong Boulevard (CSAH 83) by replacing the existing at-grade intersection with a grade-separated interchange, by providing a grade-separated crossing of Armstrong Boulevard (CSAH 83) over the Burlington Northern Santa Fe (BNSF) railroad tracks, and through the addition of traffic signals, designated turn lanes, and a pedestrian trail.
 
Anoka County is the lead agency for this project and requests that the City of Ramsey approve the attached draft Joint Powers Agreement (JPA) defining the terms of agreement between Anoka County and the City of Ramsey for constructing and maintaining the proposed improvements.  The JPA defines the project purpose and understanding, method of delivery, estimated costs, cost sharing obligations, disbursement of funds, maintenance considerations, and agreement termination options for both parties.  Upon approving the draft JPA, the City will be providing municipal consent for the project thereby allowing Anoka County to move forward with the project in 2015 and to take full advantage of all local, State and Federal funding sources that have been obtained for the project.
 
Costs for the proposed improvements have been estimated at $26,500,000 for the purpose of completing the draft JPA.  Total project costs, including right of way acquisitions and other soft costs, have been estimated at $49,000,688.  Attached is a project funding exhibit showing the total cost participation for each of the project partners based on available funding sources.  Per the attached exhibit, the estimated cost participation for both the City and the County is $2,807,744.
 
The intent of the JPA is for the City and County to equally share in all local costs for the project including, but not limited to, preliminary and final design, land acquisition expenses, environmental, building demolition, property appraisals, and construction.  After a contract is awarded both the City and the County will therefore provide their respective local costs for the project based on the awarded bid.  And then upon completion of the project, both agencies will provide and compare all final project costs to determine if either agency is required to provide additional payment or is due a refund.
 
This project is currently out for bids, which are due March 31^st.  Construction is proposed to begin this spring and be completed this fall.  Monetary incentives have been built into the project specifications to allow for additional compensation when specific construction activities are completed by target deadlines, which could impact overall project costs.  Based on the available incentives, the earliest anticipated completion date for this project is mid-September, while the latest anticipated completion date is mid-November.  However, project completion dates are also influenced by inclement weather and other unforeseen conditions.

Observations:
The City's ultimate share of the project costs will be based upon actual construction costs, and local costs are intended to be shared equally between the City and the County.  The estimated local cost share amount of $2,807,744 is not a capped amount but rather the high end of an anticipated amount.  This amount could be higher if bids come in higher than anticipated, but Anoka County does have the right to reject bids and re-bid the project should the bids be significantly higher than anticipated.
 
If Council approves the attached draft JPA, three original agreements will need to be executed and returned to Anoka County in a timely manner for approval and execution by the County Board.

Alternatives:
Alternative #1 – Motion adopting Resolution #15-03-074 approving the draft Joint Powers Agreement between Anoka County and the City of Ramsey for the Highway 10 & Armstrong Boulevard Interchange improvements as attached.

Alternative #2 – Motion denying adoption of Resolution #15-03-074 at this time.

The City's share of the local project costs for the proposed improvements are estimated to be $2,807,744 but will ultimately be based on actual construction costs following project completion, which could be more or less than this estimate.
 
To date, the City’s local costs for this project have included:
 

• $940,000 for acquiring the 14590 Armstrong Boulevard (Wiser Choice) property which was funded through TIF District 4 and includes no taxes, demolition or relocation fees.
• $1,038,368 for acquiring the 14540 Armstrong Boulevard (Oasis Market) property which was funded through TIF District 2 and the Equipment Fund and includes no taxes or demolition fees.

 
The City’s remaining costs based on the current estimate are $829,376 which is proposed to come from TIF District 2 funds which have a balance of approximately $1.3M.

Staff recommends selecting Alternative #1.

Staff does not support Alternative #2 since this could negatively impact the project start date and/or ability to deliver this important improvement project in 2015.

Approve or deny adoption of Resolution #15-03-074 at this time.