On February 25, 2008, the City of Sparks City Council granted approval to Ordinance 2391 which ammended Chapter 13 of the Sparks Municipal Code to impose an additional sewer use fee and connection fee for River Flood Protection Purposes.  The ordinace set a river protection rate of $5.41 per month on each dwelling unit or or residential unit and $0.64 per 1000 gallons of water usage to each industrial/commercial discharger. Additionally, Ordinace 2391 imposed a river flood connection fee of $200 on each new dwelling unit or residential unit and $9.24 per weighted fixture unit to each new industrial/commercial discharger. The ordinance included an effective date for charging the river protection use and connection fees of April 1, 2008. The purpose of the fee was to provide for financing of the North Truckee Drain Relocation Project. All fees collected since the effective date have been deposited in a special account titled the Riverflood account.

Upon imposition of the fee, the City of Sparks retained professional engineering services for design of the project.  The design was completed and construction drawings and bid documents were prepared during the fall of 2013.  At this time the cash balance in the Riverflood Account was not enough to construct the entire project.  In an effort to innitiate the work and spend down the Riverflood cash balance, the project was divided into 3 phases (see attached project phasing plan).

On December 9, 2013 the City of Sparks City Council granted approval of a contract in the amount of $9,165,013 to Q&D Construction, Inc for construction of Phase 1 of the North Truckee Drain Realignment Project. On March 10, 2014 the City Council granted approval of change order #1 in the amount of $3,396,029.25 to Q&D Construction, Inc for construction of Phase 2 of the project. Construction of Phases 1 and 2 of the project are complete while Phase 3 remains to be built. (See attached project phasing plan)

At the February 24, 2015 City Council Workshop, Community Services staff presented a draft of the Capital Improvements Plan (CIP) for fiscal years 2016 through 2020. Included in the CIP was $25 million of budget authority for construction of Phase 3 of the North Truckee Drain Relocation project for fiscal year 2016. During the workshop, staff informed the City Council that adequate cash reserves would not be available in fiscal year 2016 and that the majority of the project construction cost would need to be financed.

Staff estimates that construction costs for Phase 3 of the project will be approximately $25 million. Staff also estimates that construction drawings, bid documents, permitting and easements costs for Phase 3 of the project will be approximately $1.5 million. The cash balance in the Riverflood account (as of June 30, 2015) is $6.8 million.  As such, approximately$18 to $20 million will need to be financed prior to public bid and award of the Phase 3 construction contract.

1.  The City Council could direct staff to seek financing options for construction of Phase 3 of the North Truckee Drain Realignment Project.  Such options would be brought to the City Council at a future council meeting for consideration.

2. The City Council could direct staff to not seek financing options at this time and provide further direction to the City Manager.

"I move to direct staff to seek financing options for construction of Phase 3 of the North Truckee Drain Realignment Project"