6.4 Exchange Federal Funds - East Magnolia Improvements
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
09/12/2011 4:00 P.M.
AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL:
6
NO:
BY:
FINAL APPROVAL:
ITEM
NO:4
BY: Daniel R. Stack BY:
Page 1
ITEM:
Authorize the City Manager to si gn the request from the Kansas Department of Transportation
(KDOT) to exchange federal funds for the East Magnolia Improvements, City Project No. 10-2808.
BACKGROUND:
On August 26, 2009, KDOT informed the City of Salina that $1.4 million had been authorized for the
East Magnolia Improvements, subject to federal funding being available. The project will involve new
and wider pavement, a center median and landscaping east of Huntington Road, underground storm
sewers, a ten foot bicycle/pedestrian path on the south side, a five foot sidewalk on the north side,
and continuous street-lighting.
On February 3, 2011, KDOT and City staff conducted a City Commission Study Session to discuss a
new funding program available to Local Public Agencies (LPA). Many LPAs find the rules and
requirements of the federal transportation dollars they receive annually to be overly restrictive,
cumbersome, and costly to administer. Although these funds help cities and counties construct major
projects, they often fall short of helping them address many important problem areas in their
transportation systems. This new program has been established to pr ovide the LPAs the option to
“sell” their federal funds to KDOT in exchange for state dollars, wh ich allows the agency to tailor
projects to better meet the local needs. This is a voluntary program which benefits the local agency
by allowing them to build their projects with less KDOT/Federal Highway Administration oversight in
exchange for 10% of the reimbursement. For this project, the City will gi ve up $140,000. KDOT
benefits by getting an additional $140,000 to spend on their own feder ally funded projects, while
Salina gets more flexibility in the use of the funds.
City staff believes this 10% loss in federal dollars would be ea sily made up by the Construction
Engineering costs typical for a KDOT administered project. KDOT figures construction engineering
(CE) at about 15% of the construction costs. For this $4.0 million construction project, the CE costs
would amount to $600,000 or 7,500 h ours of inspection at $80/hour. We anticipate this project will
take approximately 240 working days (a little more than one construc tion season), so 7,500 hours
equates to 31 hours of inspection each day, or 3 to 4 people full-time. KDOT informed us they would
typically staff a project like East Magnolia with 2 to 3 people a day and 3 to 4 when placing concrete,
which includes one person at the concrete plant.
Due to current work loads for City inspectors, staff does not anticipate being able to dedicate more
than one person full-time to the Ea st Magnolia Improvements and would have to hire at least two
consultants full-time to assist. Two consultants for 240 days at 8 hours/day at $80/hour = $307,200,
which is more than the $140,000 t he City will give up by entering this project into the exchange
program. This exchange would not make sense if the project was a fully funded KDOT 80/20
percentage, similar to past projects for the City where all inspection costs would be reimbursed.
The following table illustrates some of the past CE costs for City/KDOT/federally funded projects with
South Ninth Street being the exc eption. South Ninth Street Phas e IV (2009-2010) contained no
federal funds and was inspected by one full-time City staff inspector with part-time assistance from
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
09/12/2011 4:00 P.M.
AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL:
6
NO:
BY:
FINAL APPROVAL:
ITEM
NO:4
BY: Daniel R. Stack BY:
Page 2
another City inspector and an outside testing company. City staff believes this level of CE could be
completed again on the East Magnolia project to still produce a quality project at a reduced cost.
Construction Construction CE % of
Project Project No.
Cost Engineering Construction
North Broadway Corridor (Pacific to North Street) 03-1409 $2,149,000 $437,000 20.3%
Broadway Hageman Intersection 05-1538 $ 374,000 $ 44,000 11.8%
South Ohio (Schilling to Magnolia) 03-1402 $2,591,000 $361,000 13.9%
South Ninth Street Phase 4 (Riffel to Belmont) 06-1579 $4,700,000 $314,000* 6.7%
*Includes $50,000 in contract testing and $264,000 for in-kind City staff costs which were calculated using 3300 hours
(actual time spent) at $80/hour (same as consultant average pay per hour for comparison)
FISCAL NOTE:
The 2010-2014 Capital Improvement Program includes selling bonds to finance the balance of the
project costs above the $1.4 milli on. These costs include the consul tant design fee, construction
services, right-of-way and easement acquisition, utility relocations, testing, financing and construction
costs. The total project cost is estimated at around $4.5 million. For the exchange program, State
funds would be paid on a reimbursement basis as the LPA incurs costs.
CONFORMANCE WITH STRATEGIC PLAN:
Goal #3: The City will provide the highest quality of services, consistent with governing body direction,
available resources and staff commitment to quality.
Goal #6: The City will work to make Salina a city that has connectivity physically and socially.
COMMISSION ACTION OR RECOMMENDED ACTION:
Staff has identified the following options for Commission consideration:
1. Authorize the City Manager to sign the request from KDOT to exchange federal funds for the
East Magnolia Improvements, City Project No. 10-2808, reducing the KDOT commitment for
the project from $1.4 million to $1.26 million.
2. Continue the funding arrangement for the East Magnolia project as currently planned,
maintaining the KDOT commitment to the project at $1.4 million.
3. Provide another option or give further direction to staff.
Staff recommends Option 1.
Attachments: Request to exchange federal funds
Request for reimbursement
Federal funds exchange program pamphlet