IV.4. Subordinate Funding Agreement 02 – Southwest LRT; Elverum (CR2016-097)September 12, 2016 Council Report 2016-097
SUBORDINATE FUNDING AGREEMENT 02 - SOUTHWEST LRT
Proposed Action
Staff recommends adoption of the following motion: Move to approve Subordinate Funding
Agreement (SFA 02) between the City of Hopkins and the Metropolitan Council.
With this motion the Subordinate Funding Agreement will be executed.
Overview
As a city involved in the design and construction of the SW LRT project, Hopkins is an interested
party in how the line is developed. Throughout the planning and design, the City of Hopkins has
recommended items that are necessary to fully connect and enhance the project’s benefits. Some of
those items were not included in the project base budget and were identified as Locally Requested
Capital Investments (LRCIs).
The Master Funding Agreement (MFA) provides a mechanism for the transfer of SW LRT project
funds from the City to the Project for non-project components, including LRCIs, through the execution
of a Subordinate Funding Agreement (SFA). The City of Hopkins approved one LRCI to date, the
extension of water and sanitary sewer under the 17th Avenue extension. The second LRCI would
allow for the design of an irrigation system at the Downtown Hopkins Station plaza and other changes
to the plaza design, yet to be determined.
The not-to-exceed cost estimate for this item is $20,000. This estimate includes the cost of design
plans, environmental documentation, and cost estimating of the irrigation system ($12,000) with the
balance reserved for additional design services associated with the plaza. If no additional design
changes are found to be needed, the City of Hopkins would not be billed for this additional amount.
The design plans will be included in the bid package as a bid alternate, and the City will have the
option of moving ahead with the work. This would require a commitment to fund the construction and
the execution of a subsequent construction SFA, estimated at $116,000.
Primary Issues to Consider
• Why is the SFA being recommended?
• Has the City Attorney reviewed the agreement?
Supporting Information
• Subordinate Funding Agreement (SFA 02)
___________________________
Kersten Elverum
Director of Planning & Development
Financial Impact: $20,000 Budgeted: Y/N __N__ Source: PIR
Related Documents (CIP, ERP, etc.): _______________________________________
Council Report 2016-097
SFA 02
Page 2
Analysis of the Issues:
• Why is the SFA being recommended?
The Downtown Hopkins Plaza is being constructed, in most part, under the SW LRT project budget
including the replacement of all irrigation lines currently serving the area. The project will not pay for
items deemed as non-typical, which includes the additional irrigation needed to fully serve the plaza
area. For ease of maintenance and to assure the health and appearance of the plaza plantings, staff
is recommending the installation of a complete irrigation system.
Staff is also recommending that the agreement cover any additional plaza design services found to
be desirable as we move closer to a final bid package to streamline the process.
Due to the federal requirements of the project, including the adherence to the National Environmental
Policy Act of 1969, the work must be incorporated into the project at this time—before the project has
received the Full Funding Grant Agreement. That exposes the City to the risk that if the project does
not move forward, the City would still be required to pay for the cost of design and environmental
clearance.
• Has the City Attorney reviewed the agreement?
The agreement is in the same form as the previous SFA, which was reviewed by the City Attorney.
SFA 02 has also been reviewed by the current City Attorney.
Alternatives:
The Hopkins City Council has the following alternatives regarding this issue:
• Approve SFA 02 as presented
• Elect not to enter into an SFA for the plaza irrigation project. This will preclude the work from
happening as part of the SW LRT project.
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Reference Numbers:
SWLRT Project: 61001
Metropolitan Council: 14I059B
City of Hopkins: ___________
PROJECT: SOUTHWEST LIGHT RAIL TRANSIT PROJECT
MASTER AGREEMENT: Master Funding Agreement – City of Hopkins
PARTIES TO AGREEMENT: • Metropolitan Council (“Council”)
• City of Hopkins (“City”) SUBORDINATE FUNDING AGREEMENT
City of Hopkins - SFA 02 (New Scope LRCI Design)
This Subordinate Funding Agreement (“SFA”) Number 02 is entered into by and between the above
named Parties.
WHEREAS:
1. The Parties entered into a Southwest Light Rail Transit Project (“Project”) Master Funding
Agreement (“MFA”), effective April 1, 2015. The Parties subsequently amended the Master
Funding Agreement (“MFA”) on May 14, 2015.
2. The Parties provided in the MFA that certain aspects of funding for the Project or components
related to but not part of the Project would be determined in subsequent SFAs.
3. The Parties desire to enter into this SFA to transfer City funds to reimburse the cost for Council
activities for professional services and the Council’s administrative fee to produce design plans,
and develop engineer’s construction cost estimates for proposed new scope components related
to, but not part of the Project referred to as Locally Requested Capital Investments (“New Scope
LRCI’s”).
4. The Parties acknowledge that the planning of the Project will require numerous federal, state and
local processes, approvals and funding commitments. The processes for the Project are ongoing
and the Project is subject to change to address those processes. The outcomes of those processes
may affect whether the components requested in this SFA will ultimately be constructed.
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NOW, THEREFORE, in reliance on the statements in these recitals, the Parties hereb y agree as
follows:
1. Maximum Amount of Authorized Funding. The cost for the Council’s professional services
and administration activities authorized by this SFA shall not exceed $20,000 unless authorized
in a subsequent agreement or an amendment to this SFA.
2. Project Budget. The budget for the Council’s activities described in this SFA is provided as
Exhibit A. City funds provided for this SFA may only be used for reimbursing the Council’s
costs for activities directly incurred within the described Specific Description of Funding
Authorization and as detailed in the MFA.
3. Specific Description of Funding Authorization. The activities to be performed by the Council
and reimbursed by the City include the development of design plans and engineer’s construction
cost estimates for various New Scope LRCIs identified in Exhibit A. If authorized by the City,
the new scope LRCIs are anticipated to be constructed by the Project.
The Council will incorporate the design plans for the New Scope LRCIs in the proposed Project
construction bid documents if: a) the environmental review of the Project allows for
construction; and b) the Project is permitted to proceed to construction. The construction
specifications for the New Scope LRCIs will be incorporated in the overall specifications within
the Project construction bid documents; no separate or standalone specifications will be created.
At least one month prior to the Council opening the bids, the City is required to enter into
subsequent SFAs authorizing the Council to construct specific LRCIs and reimburse the Council
costs. Failure to enter into subsequent SFAs will result in the Council excluding or removing the
specific LRCI from the bid documents through an addendum and ending any further obligation
by the Council. The City acknowledges that the engineer’s construction cost estimates may not
be completed in time to negotiate and execute an SFA authorizing construction of a New Scope
LRCI prior to the bid opening; if the City chooses to authorize construction through an SFA, the
cost of the New Scope LRCI would be determined through a change order.
4. Property Acquisition. It is not anticipated that property rights will need to be acquired to
construct the proposed New Scope LRCIs. However, if acquisition of property rights are needed
to construct any of the New Scope LRCIs a subsequent agreement must address property access,
acquisition, disposition, and other real property matters needed for the New Scope LRCI, beyond
what is required to construct the Project.
5. Project Activity Periods. The project activity period for the purposes of this SFA shall be
effective upon execution and shall terminate on the date all costs under this SFA have been
reimbursed, unless terminated earlier consistent with the terms of the MFA.
6. No Guarantee of Construction. This SFA describes terms requiring the City to reimburse the
Council’s cost for design activities associated with the New Scope LRCIs. It does not guarantee
that any of the New Scope LRCIs will be constructed. The City and the Council acknowledge
that nothing in this Agreement shall require the Council to take any action or make any decision
that will prejudice or compromise any review or decision-making processes required under state
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and federal environmental review laws, regulations or rules. The Parties intend this Agreement
to be interpreted consistent with statutory and other legal authorities, including but not limited to
the Minnesota Environmental Policy Act and the National Environmental Policy Act. The
Parties agree that this SFA does not limit the alternatives or mitigative measures that the Council
may undertake in the development and construction of the Project. The Council retains the right
to make decisions and necessary approvals associated with Project requirements.
7. Incorporation. The terms, conditions, and definitions of the MFA are expressly incorporated
into this SFA.
CITY OF HOPKINS METROPOLITAN COUNCIL
By: By:
Its:
Its:
Date: Date:
By:
Its:
Date:
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Exhibit A
SFA Budget - New Scope LRCIs
Item Scope Cost1
Professional Services
Irrigation at Civic Plaza
Expand the existing irrigation
system to serve the Civic Plaza at
Downtown Hopkins Station area
with drip type system and other
potential design elements
$20,000
Maximum Amount of Authorized Funding $20,000
1Estimated cost includes the Council’s 3% contract administration fee