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TO: |
Board of Trustees |
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THROUGH: |
Jay Fox, Executive Director |
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FROM: |
Mary DeLoretto, Chief Service Development Officer |
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PRESENTER(S): |
Daniel Hofer, Director of Capital Assets and Project Controls |
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Bill Greene, Chief Financial Officer |
TITLE:
title
2023 Capital Budget Amendment #1
end
AGENDA ITEM TYPE:
Discussion
RECOMMENDATION:
It is recommended that the Board approve this request to forward the proposed Capital Budget amendment to the Local Advisory Council for their consultation prior to the Board’s final consideration to adopt the amendment and add these funds to the 2023 Budget and the 2023-2027 Capital Plan.
BACKGROUND:
In accordance with Board of Trustee Policy Number 2.1, Financial Management, the Board of Trustees may amend or supplement the budget at any time after its adoption. This request is to supplement Project MSP185 (Ogden/Weber State University BRT) with $11 million needed to complete delivery in 2023. This is a revenue backed request using funds committed from outside partners to this project. As this request will add appropriation authority to the 2023 Capital Budget, it will also need to go before the Local Advisory Council for consideration and recommendation to proceed.
Budget Amendment
This $11M budget amendment request accomplishes two things.
1. Corrects a technical budget development error. The adopted budget understates the construction activity necessary to complete the project in 2023 by $7.5 million. This unbudgeted amount is fully revenue backed and was erroneously assumed by the project team to be in the 2023 budget request. During the development of the capital plan, the expenditure authority request understated the non-UTA revenues dedicated to the project and therefore understated the budget authority needed in 2023 to complete the project.
2. Recognizes an opportunity to purchase two right of way parcels along the alignment. Right of way negotiations for sections of two properties along the alignment are at an impasse. During negotiations with the property owners, it became apparent that it would be in UTA’s interest to buy these two parcels outright.
DISCUSSION:
This project was approved by the Federal Transit Administration (FTA) with a cost of completion estimated at $120 million. UTA was awarded a Small Starts Grant from the FTA in the amount of $78 million. Subsequently additional federal funding in the amount of $15 million was secured and awarded, bringing the overall federal participation in the project to $93 million or 78 percent. Local funds (including Right-of-Way donations) in the amount of $11.7 million were also secured, leaving UTA’s funded share at $15.3 million or 12.75%.
This existing and approved funding package is sufficient to fund the total 2023 budget amendment of $11 million. It corrects the technical error and funds the purchase of two parcels along the alignment.
The effect of this amendment would be to increase the 2023 project budget from $14,785,000 to a new total of $25,785,000, allowing completion of project delivery in 2023. This would raise the overall lifetime project budget (not including donated right of way costs) from $102.5 M to $113.5 M.
ALTERNATIVES:
These funds are necessary to complete the project in 2023 as anticipated. The alternative would result in a delay in the project.
FISCAL IMPACT:
This request can be addressed by incorporating secured federal grant and local partner contributions. This will not have a negative impact on UTA’s fund balance.
ATTACHMENTS:
2023 Capital Budget Amendment 1 - Attachment A