Kyna Thomas, CMC Chief of Staff/Clerk of Council 434-970-3113 clerk@charlottesville.gov MEETING NOTICE Charlottesville City Council – November 12,2020 Budget Work Session NOTICE OF SPECIAL MEETING A SPECIAL MEETING OF THE CHARLOTTESVILLE CITY COUNCIL WILL BE HELD ON Thursday, November 12, 2020, FROM 6:00 p.m. TO 8:00 p.m., virtually/electronically via the Zoom platform, pursuant to the Continuity of Government ordinance passed by the Council of the City of Charlottesville on July 27, 2020, to prevent the spread of the novel coronavirus, commonly referred to as COVID-19. Registration will be made available at www.charlottesville.gov/zoom. THE PROPOSED AGENDA IS AS FOLLOWS: Budget Work Session to discuss Infrastructure and the Capital Improvement Program (CIP) BY ORDER OF CITY COUNCIL BY: Kyna Thomas, Chief of Staff/Clerk of Council DATE: November 6, 2020 Persons with disabilities may request reasonable accommodations by contacting ada@charlottesville.gov or (434) 970-3182. Sent by the City of Charlottesville Office of City Council, 605 E. Main St. Charlottesville, VA 22902 Kyna Thomas, Chief of Staff/Clerk of Council PHONE: 434-970-3113 EMAIL: clerk@charlottesville.gov www.charlottesville.gov FY 2022 Budget Development November 12, 2020 FY 2022 CIP BUDGET DEVELOPMENT WORKSESSION 1 FY 2022 Budget Development Agenda 1. Key Budget Dates 2. Long-term Financial Policies 3. CIP Spending Overview – Parking Garage Mixed Use Alternatives – Dogwood Memorial – 5th Street Traffic Improvements 4. CIP Funding Overview 5. Capacity vs Affordability 6. Other Considerations 7. Council Discussion and Decisions Office of Budget and Performance Management 2 www.charlottesville.gov/budget FY 2022 Budget Development Budget Process Update Key Dates • December 8 – Planning Commission CIP Public Hearing • March 1 - Proposed City and School Operating and Capital Budget Formally Presented to Council • March 15 - First Budget and Tax Rate Public Hearings • April 5 - Second Budget Public Hearing/Budget Approval First Reading/Tax Levy Approval First Reading • April 13 - Budget and Tax Levy Approval Second Reading Please visit www.Charlottesville.gov/budget for further details Office of Budget and Performance Management 3 www.charlottesville.gov/budget FY 2022 Budget Development Budget Process Update Scheduled Worksessions Dec 10 Budget Worksession (Budget Development) Jan 26 Budget Worksession (Budget Development) Jan 28 City Council and School Board Joint Worksession Mar 4 Budget Worksession #1 (Revenue & Expenditures) Mar 11 Budget Worksession #2 (Outside Agencies) Mar 17 Community Budget Forum Mar 25 Budget Worksession #3 (CIP) Apr 8 Budget Worksession #4 (Wrap-up) Please visit www.Charlottesville.gov/budget for further details. Office of Budget and Performance Management 4 www.charlottesville.gov/budget FY 2022 Budget Development Long Term Financial Policies 1. Maintain a minimum General Fund balance of at least 14% of General Fund budget. 2. Maintain a minimum Downturn Reserve Fund balance of no less than 3% of General Fund budget. 3. Maintain sufficient working capital in the utility funds (Water, Wastewater and Gas). 4. Stabilize all non-general funds by ensuring they have a positive fund balance. 5. Debt service as a percentage of the general fund total expenditure budget has a ceiling of 10%, with a target of 9%. 6. Transfer 1-cent of the meals tax revenue to the Debt Service Fund to be used for debt service. Office of Budget and Performance Management 5 www.charlottesville.gov/budget FY 2022 Budget Development FY 2022 CIP Budget Development Capital Improvement Plan (CIP) Overview Office of Budget and Performance Management 6 www.charlottesville.gov/budget FY 2022 Budget Development FY 21–25 Adopted CIP Summary of Current CIP Plan • $25.8M in FY 2021 • $124.1M over 5 year period • Unfunded requests of over $109M • $84M Bonds Authorized • FY 21 CIP Cash Funding Re-Programmed to General Fund as a Reserve Office of Budget and Performance Management 7 www.charlottesville.gov/budget FY 2022 Budget Development Where’s the Spending? Office of Budget and Performance Management 8 www.charlottesville.gov/budget FY 2022 Budget Development CIP Funding The CIP is largely funded by cash and bonds. In response to COVID, projects were deferred in FY 21 and cash funding was significantly reduced. Since 2010, the City’s cash or “pay go” funding has averaged about 37% annually Office of Budget and Performance Management 9 www.charlottesville.gov/budget FY 2022 Budget Development Cash Funding $8.2M or 4% of the General Fund Total Budget was the Average Annual CIP Cash Projection prior to COVID. Office of Budget and Performance Management 10 www.charlottesville.gov/budget FY 2022 Budget Development Outstanding Debt • The City currently has approximately $90 million in governmental debt outstanding. • $80 million in bonds have been authorized but not issued yet for projects approved prior to FY 22. • FY 21 -25 CIP planned for $84 million in bonds Office of Budget and Performance Management 11 www.charlottesville.gov/budget FY 2022 Budget Development Debt Service Estimates FY2022 Debt Projection** Ratio of Debt General Fund Service to Total General Debt Service Fiscal Bond Issue Annual Debt Expenditure General Fund Fund % Fund Year Amount (1) Service (2) Budget (3) Expenditures Transfer(4) $ Increase Increase Balance (5) 2016 11,125,466 9,128,798 156,391,435 5.84% 9,279,578 - 0.00% 11,962,480 2017 11,140,000 10,103,067 162,018,737 6.24% 9,817,330 537,752 5.80% 11,880,013 2018 4,610,000 10,615,335 171,657,127 6.18% 10,371,750 554,420 5.65% 11,905,368 2019 9,520,000 10,375,167 179,725,535 5.77% 11,003,348 631,598 6.09% 12,830,074 2020 - 10,771,937 188,863,920 5.70% 11,049,584 46,236 0.42% 13,255,398 2021 13,455,000 10,465,180 191,195,873 5.47% 10,608,827 (440,757) -3.99% 13,535,692 2022 32,000,000 10,983,075 194,063,811 5.66% 11,462,406 853,579 8.05% 14,140,250 2023 32,000,000 13,417,218 196,974,768 6.81% 12,312,439 850,032 7.42% 13,147,748 2024 32,000,000 15,516,769 199,929,390 7.76% 13,163,472 851,033 6.91% 10,893,817 2025 32,000,000 17,649,933 202,928,331 8.70% 14,015,526 852,054 6.47% 7,345,787 2026 32,000,000 19,293,290 205,972,256 9.37% 14,868,621 853,095 6.09% 2,994,543 2027 32,000,000 21,514,167 209,061,839 10.29% 18,461,777 3,593,157 24.17% 895 (1) Represents the amount of bonds previously issued or amounts we expect to issue in future years (2) Represents the actual and expected annual debt service payments based on projected issuance schedule (3) Assumes an annual General Fund budget growth rate of 1.5% and 2% meals tax growth in years 2022 - 2026 (4) General Fund Transfer for the payment of annual debt service (5) Funds accumulated for the payment of debt service and used to help mitigate impact on the General Fund budget **Estimates and subject to change Office of Budget and Performance Management 12 www.charlottesville.gov/budget FY 2022 Budget Development Capacity vs Affordability Debt Affordability Capacity The maximum amount of debt that could be The alignment of public issued to stay within policy and financial the parameters defined resources by the financial policy How much can we pay How much debt can we with current resources issue before reaching before having to raising the 10% max? taxes? Office of Budget and Performance Management 13 www.charlottesville.gov/budget FY 2022 Budget Development Debt Capacity Quantified Current Debt projections indicate: $160M could be issued before reaching the 9% policy target $192M could be issued before reaching the 10% policy maximum Quick Math New Debt at 10% Debt Ratio $ 192,000,000 Bonds Previously Authorized Not Issued (ABNI) $ (80,000,000) $ 112,000,000 FY 21-25 CIP Bonds Authorized $ (60,000,000) Remaining Bond Capacity $ 52,000,000 **Estimates and subject to change Office of Budget and Performance Management 14 www.charlottesville.gov/budget FY 2022 Budget Development Affordability Quantified  Debt Service is rising faster than the Payoff  Issuing Debt at the 10% max would more than double debt service requirements o $10.5M (current) to estimated $21.5M  Required Debt Service Increases Equate to $0.01 to $0.03 on the Tax Rate Office of Budget and Performance Management 15 www.charlottesville.gov/budget FY 2022 Budget Development Additional CIP Funding Considerations • School Reconfiguration Project – cost TBD • Parking Garage Mixed Use Alternatives • Dogwood Memorial • 5th Street Traffic Improvements • Comp Plan Housing Spending Recommendation • $109M in Unfunded Departmental Requests Office of Budget and Performance Management 16 www.charlottesville.gov/budget FY 2022 Budget Development Other FY 2022 Budget Considerations • City Operating Budget Needs and Unknowns • Due November 13th • Departmental Requests • Employee Compensation and Benefits • Schools Operating Budget Needs • Outside Agency Budgets Office of Budget and Performance Management 17 www.charlottesville.gov/budget FY 2022 Budget Development What are the Decisions? 1. For the FY 22 CIP Process  What’s the Commitment to the School Reconfiguration Project?  What’s the Commitment to the West Main Project? 2. Set Priorities  Council will need to be strategic with CIP funding decisions.  How will the remaining capacity be spent?  Re-visit past funding decisions – are they still priorities? 3. Commit to the Funding Requirements  Anticipate Tax Increases Office of Budget and Performance Management 18 www.charlottesville.gov/budget FY 2022 Budget Development Appendix Office of Budget and Performance Management 19 www.charlottesville.gov/budget FY 2022 Budget Development CIP Guidelines • Five year plan with projects costing $50,000 or more with life of 5 years or more • Funded by a combination of Cash and Bonds • Cash funding must be at least 3.0% of general fund expenditures per the financial policy Office of Budget and Performance Management 20 www.charlottesville.gov/budget FY 2022 Budget Development Debt Service Fund • Provides funds necessary to retire the City’s general government bonds used to pay for public improvements • Long Term Financial Policy – Debt service as a percentage of the GF total expenditure budget has a ceiling of 10%, with a target of 9% • FY 2021 Transfer to Debt Service Fund = $10.6M Office of Budget and Performance Management 21 www.charlottesville.gov/budget FY 2022 Budget Development The City’s Bond Ratings • Charlottesville has maintained the highest possible general obligation credit ratings: • Aaa from Moody’s Investors Service since 1973 • AAA by Standard & Poor’s since 1964 • A high credit ratings allows the City to borrow funds at the lowest possible borrowing cost and ensures more money is going toward capital projects than interest payments. • A high credit rating is also helpful in attracting economic development prospects. • The City talks with the rating agencies on an annual basis. Office of Budget and Performance Management 22 www.charlottesville.gov/budget FY 2022 Budget Development Rating Agency Factors • Rating agencies focus on four key factors: Key Financial Policies – Economy – demographics, employment base, property values Maintain a minimum General Fund and taxpayer composition Balance of 14% of General Fund Budget – Management – policies and Maintain a minimum Downturn Reserve procedures, strategic planning and Fund of no less than 3% of General Fund ability to achieve budgetary targets Budget – Financial – budget practices, investments and fund balances Maintain a debt service to operating – Debt – outstanding debt, future expenditures ratio below a ceiling of needs and pension/other post 10% with a goal of under 9% employment benefit obligations Office of Budget and Performance Management 23 www.charlottesville.gov/budget FY 2022 Budget Development The Importance of Bond Ratings • Provide independent views of an entity’s creditworthiness and the credit quality of their debt issues • Facilitates the debt issuance process • Gives investors a way of evaluating risk and determining an appropriate level of return for a variety of credits • Ratings are NOT a commentary on the quality of life in that locality; they are solely a way to judge a locality’s ability to repay their debt Office of Budget and Performance Management 24 www.charlottesville.gov/budget To be one community filled with opportunity City Council Adopted Budget FY 2021 Capital Improvement Program Fund Capital Improvement Program (CIP) Overview The Capital Improvement Program (CIP) provides funding for streets, public buildings (both governmental and school facilities), land, and other capital assets. Capital improvement projects are projects, which generally have a life of 5 years, or more, cost more than $50,000, and are non-operational in nature. City Council adopted budget guidelines and established a policy to allocate an amount no less than 3% of the General Fund budget for capital improvements. The annual capital budget is part of the City's multi-year Capital Improvement Program, which is designed to coordinate the planning, financing, and construction of capital projects. Separate funding is adopted in the General Fund budget for the smaller maintenance projects, which are handled in the Facilities Repair Fund. Many factors are taken into consideration during the development of the capital budget. For instance, the aging of public facilities and infrastructure, the need to accommodate a growing population, and enhancement of quality of life within the City. For these reasons, the City must respond to the capital needs of the community with investments aimed at improving, revitalizing, and maintaining the existing facilities and infrastructure of the City of Charlottesville. CIP Process and Timeline The City’s CIP process is designed to coordinate and align capital projects with Council’s strategic priorities while also balancing capital investments with available financial resources. The process attempts to also capture the true life cycle cost of the projects – including not only initial construction costs but also operational and replacement costs. The City’s 5-year capital improvement process officially begins in August of each year, when City departments receive the CIP submission request forms and start planning their requests for the upcoming five-year capital plan. The CIP request forms are received at the end of September by the Office of Budget and Performance Management, which organizes and prepares the submissions for review, and forwards the requests to the CIP Budget Development Committee. The Budget Development Committee consists of the City Manager, the two Deputy City Managers, the Finance Director and the Senior Budget and Management Analysts. In an effort to increase outreach and engagement with neighborhoods during the CIP budgeting process, the City began soliciting CIP submissions requests from the various Neighborhood Associations located throughout the City of Charlottesville in FY 20. For FY 21, a modified and less complex CIP request packet was distributed to the neighborhood associations asking the neighborhoods to submit capital budget ideas as part of the FY 21-25 CIP process. These requests were received by the Office of Budget and Performance Management at the beginning of October and forwarded to the departments associated with the request for review and further refinement of the request. Projects that were not already funded or requested as part of another larger project, (i.e. New Sidewalks, Bicycle and Pedestrian Improvements, Neighborhood Transportation Improvements, etc.) were added to the FY 21 – 25 CIP submissions to be reviewed by the Budget Development Committee. L-1 www.charlottesville.gov/budget To be one community filled with opportunity City Council Adopted Budget FY 2021 CIP Process and Timeline (cont.) In September a work session was held to engage and discuss capital budgeting with the City Council. This helped to guide the deliberations of the Budget Development Committee in their review of the CIP submissions. The Budget Development Committee met throughout October and November to develop a recommendation that was then presented to the Planning Commission for feedback and approval at their November work session and December Public Hearing. After the public hearing, the Planning Commission puts forth its own set of recommendations and proposed changes for City Council to consider. The revised five-year CIP, along with the proposed Planning Commission recommendations, are forwarded to the City Manager and City Council for inclusion in the annual budget. On March 16, 2020, a previous version of a Proposed CIP was formally presented to City Council as part of an overall Proposed City Operating and Capital Budget. The CIP budget adopted by Council represents revisions that were made in an attempt to more accurately reflect the City’s CIP affordability based on the projected financial impacts of the COVID-19 pandemic. The adopted CIP budget includes bond funded projects or projects with revenue offsets. All cash funded projects have been deferred a year with one exception. $900,000 in cash is allocated for Supplemental Rental Assistance to continue the previous commitment by City council for housing vouchers. The remaining $6.6M previously planned for CIP cash funding for FY 21 will be held in a contingency fund in the General Fund to be used, if needed, to offset further potential impacts related to the economic downturn caused by the pandemic. City Staff and Council will be monitoring the City’s financial status closely throughout the year. Should the cash reserve not be needed, funding for projects which were deferred will be revisited. L-2 www.charlottesville.gov/budget To be one community filled with opportunity City Council Adopted Budget FY 2021 FY 2021 Capital Improvement Program Revenues and Expenditures The FY 21-25 Capital Improvement Program recommends the use of approximately $84.19 million in long-term debt to finance a portion of the $124.12 million multi-year program. The balance will be funded through transfers of funds from the General Fund, PEG (public, education and governmental) programming fees, revenue sharing funds from Virginia Department of Transportation (VDOT), contributions from Albemarle County and the Charlottesville City Schools. The Capital Improvement Program for FY 21 contains bondable projects totaling $24.56 million, along with non-bondable projects totaling $1.23 million, for a total capital improvement program budget equaling $25.79 million. FY 2021 Capital Budget Revenues Peg Fee Revenue VDOT - Revenue Sharing General Fund 0.2% Transfer 0.8% 3.9% City Schools 0.8% Albemarle County 1.9% Bond Issue 92.5% L-3 www.charlottesville.gov/budget To be one community filled with opportunity City Council Adopted Budget FY 2021 FY 2021 Capital Budget Expenditures Affordable Housing 9.3% Education 13.2% Transportation and Access 56.0% Parks and Recreation 0.4% Public Safety 5.0% Capital Improvement Program Alignment to the Strategic Plan City Council has identified five priority areas: Affordable Housing, Race and Equity, Workforce Development, Economic Development, and Safety, Security and Preparedness. The expenditures that fall under these priorities are listed first. Strategic Plan Priority Areas Affordable Housing In the FY 21 Capital Improvement Program $2.40 million is allocated for Affordable Housing projects. Charlottesville Housing and Redevelopment is to receive $1,500,000 in the FY 21 CIP for the future redevelopment of the City’s public housing sites. $900,000 is allocated for Supplemental Rental Assistance to continue the previous commitment by City council for housing vouchers. Safety, Security and Preparedness $300,000 is allocated in FY 21 to fund half of the cost new General District Court. The remaining needed funds are currently programmed in FY 22 CIP. This is for the construction of a new court as part of an agreement the City has with Albemarle County. $995,500 is allocated to replace Fire apparatus Other Strategic Plan Areas Prepare students for academic and vocational success Continues a strong commitment to the schools, providing $3.4 million in capital funding for school facility improvements, including $1.25 million for Charlottesville City Schools Priority Improvement projects. L-4 www.charlottesville.gov/budget To be one community filled with opportunity City Council Adopted Budget FY 2021 Engage in robust and context sensitive urban planning and implementation $4.0 million is allocated in FY 21, to fund a significant urban design and streetscape improvement project for West Main Street Corridor Improvements that could include changes to the street profile, green infrastructure, trees and street furniture. As part of the FY 21 CIP, Small Area Plans will receive $100,000. The Comprehensive Plan Update identified several specific areas of the city where planning and design issues or investment opportunities may warrant additional study through the development of specific small area plans in the coming years. Provide reliable and high quality infrastructure SIA Immediate Implementation will receive $200,000 in the FY 21 CIP. This funding is intended to facilitate completion of projects outlined in the Strategic Investment Area Plan. The FY 21 CIP allocates $1.4 million in funding to go towards Undergrounding Utilities. $5 million is allocated to fund the remaining local dollars needed to match the State matching funds for the replacement of the Belmont Bridge. Provide a variety of transportation and mobility options $100,000 is allocated for New Sidewalks and $500,000 for Sidewalk Repair L-5 www.charlottesville.gov/budget To be one community filled with opportunity City Council Adopted Budget FY 2021 Description of Capital Projects Bondable Projects Education In FY 21, $1.2 million is included for various City School capital improvements including projects relating to health/safety, facility asset preservation, code compliance (building & fire codes, and ADA), scheduled/periodic maintenance and quality of space/functionality. Some of the items to be covered by this appropriation include: CCS Modular Classrooms, Buford Envelope Restoration, Johnson Pedestrian lighting, School Security. $750,000 is also provided for the schools HVAC replacement plan, as well as funding of $1.25 million for City Schools priority improvement projects. Facilities Capital Projects Facilities Capital Projects is allocated $4.12 million for improvements and repairs to various City facilities. These include: CATEC roof replacement $500,000 and $2.25 million for Smith Recreation Center Indoor Air Quality Improvements. This funding also provides for the City facility HVAC replacement plan and the City/School Solar PV program projects. Public Safety and Justice In FY 21 $300,000 is allocated for the construction of a new General District Court and $995,500 is allocated for Fire apparatus replacement. Transportation and Access For FY 21, a total of $14.45 million is allocated to Transportation and Access projects which include: $100,000 for the design and construction of new sidewalks; $500,000 for sidewalk repair (including ADA ramp upgrades on streets scheduled to be paved); $4,000,000 for the West Main Improvements project; $200,000 SIA Immediate Implementation; $100,000 Small Area Plan; $2,000,000 for a new parking structure, $240,000 for ADA Pedestrian Signal upgrades;$50,000 for Blight Remediation, $200,000 for Traffic Signal Infrastructure Replacement, $50,000 for Historic Resources, $1,430,000 to go towards the undergrounding of utilities; $150,000 for State Revenue Sharing match; and $225,101 for minor bridge repairs; $200,000 for ADA improvements to sidewalks and curbs throughout the City and $5,000,000 as part of the local match for the Belmont Bridge replacement.. Affordable Housing $1.5 million is allocated in FY 21 and an additional $10.5 million is projected in FY 22 - 25 for a total of $12 million over the 5 year CIP for the redevelopment of the City’s Public Housing sites. L-6 www.charlottesville.gov/budget To be one community filled with opportunity City Council Adopted Budget FY 2021 Non-Bondable Projects Education $200,000 is allocated for the Charlottesville City Schools small capital improvement program, and is offset through a contribution from the schools specifically for this program. Parks and Recreation The Parks and Recreation Department is allocated $93,750 for Downtown Mall infrastructure repairs this funding is provided by the café permit fees paid by downtown vendors. Technology Infrastructure The Communications Technology Account/Public Access Television project is allocated $40,000 in order to allow the City to continue upgrading and improving its cable network services and programming to the citizens of Charlottesville. This item is offset 100% by PEG Fees paid to the City through the Comcast franchise agreement. Affordable Housing Non Bondable housing projects are allocated $900,000 for supplemental rental assistance vouchers. L-7 www.charlottesville.gov/budget To be one community filled with opportunity City Council Adopted Budget FY 2021 Capital Improvement Program FY 2021-2025 Adopted Projected Projected Projected Projected 5 Year Total FY21 FY22 FY23 FY24 FY25 Revenues 5.62% 3.86% 4.56% 4.08% Transfer from General Fund 900,000 10,943,663 7,616,543 9,150,200 8,292,570 36,902,976 Transfer from General Fund - Mall Vendor Fees 93,750 95,000 95,000 95,000 95,000 473,750 Contribution from Albemarle County (CATEC) 500,000 90,000 62,500 0 0 652,500 Contribution from Schools (Small Cap Program) 200,000 200,000 200,000 200,000 200,000 1,000,000 PEG Fee Revenue 40,000 40,000 40,000 40,000 40,000 200,000 VDOT - Rev Share Hyrdraulic 150,000 0 0 0 0 150,000 VDOT - Rev Share East High Signalization 50,000 500,000 0 0 0 550,000 CY 2021 Bond Issue 23,861,092 0 0 0 0 23,861,092 CY 2022 Bond Issue 30,533,296 0 0 0 30,533,296 CY 2023 Bond Issue 0 9,587,755 0 0 9,587,755 CY 2024 Bond Issue 0 0 13,096,486 0 13,096,486 CY 2025 Bond Issue 0 0 7,110,575 7,110,575 TOTAL AVAILABLE REVENUES $25,794,842 $42,401,959 $17,601,798 $22,581,686 $15,738,145 $124,118,430 Expenditures BONDABLE PROJECTS EDUCATION Adopted Projected Projected Projected Projected 5 Year Project FY21 FY22 FY23 FY24 FY25 Total Lump Sum to Schools (City Contribution) 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000 6,000,000 City Schools HVAC Replacement 750,000 750,000 750,000 750,000 750,000 3,750,000 City Schools Reconfiguration Design and Planning 0 0 0 0 0 6,250,000 City Schools Priority Improvement Projects 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 7,570,000 Charlottesville High School Roof Replacement 0 120,000 1,200,000 0 0 1,320,000 SUBTOTAL $3,200,000 $3,320,000 $4,400,000 $3,200,000 $3,200,000 $17,320,000 FACILITIES CAPITAL PROJECTS Adopted Projected Projected Projected Projected 5 Year Project FY21 FY22 FY23 FY24 FY25 Total Lump Sum to Facilities Capital Projects 1,545,491 1,045,491 1,045,491 1,045,492 1,045,491 5,727,456 City Facility HVAC Replacement 250,000 250,000 250,000 250,000 250,000 1,250,000 City and Schools Solar PV Program 75,000 75,000 75,000 75,000 75,000 375,000 Smith Recreation Indoor Air Quality Corrections 2,250,000 0 0 0 0 2,250,000 SUBTOTAL 4,120,491 $1,370,491 $1,370,491 $1,370,492 $1,370,491 $9,602,456 PUBLIC SAFETY AND JUSTICE Adopted Projected Projected Projected Projected 5 Year Project FY21 FY22 FY23 FY24 FY25 Total General District Court 300,000 6,062,028 0 0 0 6,362,028 Replacement Fire Apparatus 995,500 0 0 1,152,415 0 2,147,915 Replacement EMS Apparatus 0 377,553 0 0 0 377,553 SUBTOTAL $1,295,500 $6,439,581 $0 $1,152,415 $0 $8,887,496 TRANSPORTATION AND ACCESS Adopted Projected Projected Projected Projected 5 Year Project FY21 FY22 FY23 FY24 FY25 Total Undergrounding Utilities 1,430,000 0 0 0 0 1,430,000 New Sidewalks 100,000 100,000 100,000 100,000 100,000 500,000 Sidewalk Repair 500,000 500,000 500,000 500,000 500,000 2,500,000 West Main Improvements 4,000,000 4,000,000 0 0 0 8,000,000 SIA Immediate Implementation 200,000 200,000 200,000 200,000 200,000 1,000,000 Small Area Plans 100,000 100,000 100,000 100,000 100,000 500,000 Street Milling and Paving 0 1,000,000 2,000,000 2,000,000 2,000,000 7,000,000 Parking Structure 2,000,000 8,000,000 0 0 0 10,000,000 ADA Pedestrian Signal Upgrades 240,000 240,000 240,000 240,000 240,000 1,200,000 Minor Bridge Repairs 225,101 231,854 238,810 245,974 253,353 1,195,092 Citywide ADA Improvements - Sidewalks and Curbs 200,000 200,000 200,000 200,000 200,000 1,000,000 Traffic Signal Infrastructure Replacement 200,000 228,000 757,120 787,405 818,901 2,791,426 Historic Resources 50,000 0 0 0 0 50,000 Blight Remediation 50,000 0 0 0 0 50,000 Hydraulic/250 Intersection Turn Lane - VDOT Rev Share 150,000 0 0 0 0 150,000 East High Street Signalization - VDOT Rev Share 0 1,000,000 0 0 0 1,000,000 Belmont Bridge - Local Match 5,000,000 2,500,000 0 0 0 7,500,000 SUBTOTAL $14,445,101 $18,299,854 $4,335,930 $4,373,379 $4,412,254 $45,866,518 PARKS AND RECREATION Adopted Projected Projected Projected Projected 5 Year Project FY21 FY22 FY23 FY24 FY25 Total City/County Joint Parks - Darden Towe 0 193,370 0 0 0 193,370 SUBTOTAL $0 $193,370 $0 $0 $0 $193,370 AFFORDABLE HOUSING Adopted Projected Projected Projected Projected 5 Year Project FY21 FY22 FY23 FY24 FY25 Total Public Housing Redevelopment - (CRHA) 1,500,000 1,500,000 3,000,000 3,000,000 3,000,000 12,000,000 SUBTOTAL $1,500,000 $1,500,000 $3,000,000 $3,000,000 $3,000,000 $12,000,000 TOTAL BONDABLE PROJECTS $24,561,092 $31,123,296 $13,106,421 $13,096,286 $11,982,745 $93,869,840 L-8 www.charlottesville.gov/budget To be one community filled with opportunity City Council Adopted Budget FY 2021 NONBONDABLE PROJECTS EDUCATION Adopted Projected Projected Projected Projected 5 Year Project FY21 FY22 FY23 FY24 FY25 Total School Small Capital Improvements Program 200,000 200,000 200,000 200,000 200,000 1,000,000 SUBTOTAL $200,000 $200,000 $200,000 $200,000 $200,000 $1,000,000 ECONOMIC DEVELOPMENT Adopted Projected Projected Projected Projected 5 Year Project FY21 FY22 FY23 FY24 FY25 Total Economic Development Strategic Initiatives 0 150,000 150,000 150,000 150,000 600,000 SUBTOTAL $0 $150,000 $150,000 $150,000 $150,000 $600,000 PUBLIC SAFETY AND JUSTICE Adopted Projected Projected Projected Projected 5 Year Project FY21 FY22 FY23 FY24 FY25 Total Police Mobile Data Terminals 0 405,344 202,667 0 0 608,011 Police Portable Radio Replacement 0 75,000 75,000 75,000 75,000 300,000 Fire Portable Radio Replacement 0 75,000 75,000 75,000 75,000 300,000 Sheriff Portable Radio Replacement 0 40,000 40,000 40,000 40,000 160,000 SUBTOTAL $0 $595,344 $392,667 $190,000 $190,000 $1,368,011 TRANSPORTATION & ACCESS Adopted Projected Projected Projected Projected 5 Year Project FY21 FY22 FY23 FY24 FY25 Total State Bridge and Highway Inspections 0 40,000 60,000 80,000 100,000 280,000 CAT Transit Bus Replacement Match 0 134,000 139,510 114,400 114,400 502,310 Intelligent Transportation System 0 180,786 450,000 100,000 100,000 830,786 City Wide Traffic Engineering Improvements 0 150,000 150,000 150,000 150,000 600,000 Neighborhood Transportation Improvements 0 50,000 50,000 50,000 50,000 200,000 Bicycle Infrastructure 0 150,000 150,000 150,000 150,000 600,000 Right of Way Appurtenance 0 129,000 129,000 129,000 129,000 516,000 Traffic Sign Retro Reflective Compliance 0 122,762 63,222 0 0 185,984 ADA Ramp Corrections 0 134,930 138,978 0 0 273,908 SUBTOTAL $0 $1,091,478 $1,330,710 $773,400 $793,400 $3,988,988 PARKS & RECREATION Adopted Projected Projected Projected Projected 5 Year Project FY21 FY22 FY23 FY24 FY25 Total Parks and Recreation Lump Sum Account 0 200,000 200,000 200,000 200,000 800,000 Parks and Schools Playground Renovations 0 112,000 112,000 112,000 112,000 448,000 Urban Tree Planting 0 75,000 75,000 75,000 75,000 300,000 Parkland and Trails Acquisition and Development 0 250,000 125,000 125,000 125,000 625,000 Refurbish Parks Restrooms 0 50,000 0 0 0 50,000 Downtown Mall Infrastructure Repairs 93,750 95,000 95,000 95,000 95,000 473,750 SUBTOTAL $93,750 $782,000 $607,000 $607,000 $607,000 $2,696,750 TECHNOLOGY INFRASTRUCTURE Adopted Projected Projected Projected Projected 5 Year Project FY21 FY22 FY23 FY24 FY25 Total Communications Technology Account/Public Access 40,000 40,000 40,000 40,000 40,000 200,000 City Wide IT Strategic Infrastructure 0 250,000 250,000 250,000 250,000 1,000,000 SUBTOTAL $40,000 $290,000 $290,000 $290,000 $290,000 $1,200,000 AFFORDABLE HOUSING Adopted Projected Projected Projected Projected 5 Year Project FY21 FY22 FY23 FY24 FY25 Total Supplemental Rental Assistance 900,000 900,000 900,000 900,000 900,000 4,500,000 Housing Rehabilitation 0 500,000 500,000 500,000 500,000 2,000,000 Friendship Court Infrastructure Improvements 0 2,000,000 0 2,500,000 0 4,500,000 Friendship Court Redevelopment - Phase 1 0 394,841 0 0 0 394,841 Friendship Court Redevelopment - Phase 2 0 3,250,000 0 0 0 3,250,000 Friendship Court Redevelopment - Phase 3 0 0 0 3,250,000 0 3,250,000 SUBTOTAL $900,000 $7,844,841 $1,400,000 $7,150,000 $1,400,000 $18,694,841 OTHER GOVERNMENTAL PROJECTS Adopted Projected Projected Projected Projected 5 Year Project FY21 FY22 FY23 FY24 FY25 Total Home Energy Conservation Grant Program 0 125,000 125,000 125,000 125,000 500,000 Citywide Fee Study 0 200,000 0 0 0 200,000 SUBTOTAL $0 $325,000 $125,000 $125,000 $125,000 $700,000 TOTAL NONBONDABLE PROJECTS $1,233,750 $11,278,663 $4,495,377 $9,485,400 $3,755,400 $30,248,590 TOTAL PROJECT EXPENDITURES $25,794,842 $42,401,959 $17,601,798 $22,581,686 $15,738,145 $124,118,430 L-9 www.charlottesville.gov/budget To be one community filled with opportunity City Council Adopted Budget FY 2021 Operational Impacts When deciding to construct or purchase an asset, consideration is given to the allocation of the resources (both people and funding) necessary to sustain the operations and maintenance of the investment. The operational impacts of projects in the FY 2021 – 2025 CIP are discussed below. Operational Impacts FY 2021-2025 CIP Public Works Operational Operational Operational Operational Operational Impact Impact Impact Impact Impact 5 Year Project FY21 FY22 FY23 FY24 FY25 Total Operational Impacts City Schools HVAC Replacement - - - - - - Utility use reductions can be assumed for most projects, but that will vary. The fact that utility rates will inevitably rise typically offsets the energy use reductions, making the operational impacts of the projects budget neutral. City Facility HVAC Replacement - - - - - - Utility use reductions can be assumed for most projects, but that will vary. The fact that utility rates will inevitably rise, will result in offsetting the energy use reduction making the operational impacts of the project budget neutral. City Solar PV Program (134,590) (144,590) (154,590) (164,590) (174,590) (772,950) Cumulative savings achieved through reduced utility cost through utilization of solar energy. General District Court - - 37,118 152,925 152,925 342,968 Exact amount of operational impacts are unknown at this time. Until such time as a design concept is agreed upon and finalized, and a cost sharing agreement negotiated, this estimate – based on design alternatives currently under discussion – should be considered provisional. Operational cost increases in utilities, maintenance, and custodial services are anticipated in all design scenarios. FY 23 amount assumes 3 months of operations. Public Safety Project Bypass Fire Station 31,096 32,273 33,499 34,504 35,539 166,912 Exact amount of operational impacts are unknown at this time. Costs represent estimates based on proposed square footage until such time as a design concept is fianlized. Operational cost increases in utilities, maintenance, and custodial services are anticipated in all design scenarios. Neighborhood Development Services Project New Sidewalks 22,538 23,215 23,911 24,629 25,368 119,661 Increased maintenance and lifecycle replacement costs, approximately $40 per linear foot of new sidewalk constructed. It is estimated that it would be 10 years before maintenance is necessary on a newly constructed sidewalk, and this will vary based on location, weather, damage, proximity to trees, initial construction, etc. Operational estimates are based upon additional sidewalks previously constructed. West Main Improvements 0 450,455 224,780 229,275 233,861 1,138,371 Based on current phasing in the proposed CIP operational costs are anticipated to begin in FY 21. Costs include maintenance efforts from Parks and Rec. and Public Works. Maintenance of area would require 3 new FTE's once completed. Does not include additional cost for other areas such as an increased public safety presence. SIA Immediate Implementation - - - - - - Depending upon which projects are selected there could be an operational impact but until the exact projects to be completed are selected by Council, potential operational increases/savings will not be known. L-10 www.charlottesville.gov/budget To be one community filled with opportunity City Council Adopted Budget FY 2021 Operational Operational Operational Operational Operational Impact Impact Impact Impact Impact 5 Year FY21 FY22 FY23 FY24 FY25 Total Operational Impacts Small Area Plans 59,425 60,614 61,826 63,062 64,324 309,250 In the Comprehensive Plan twelve areas are recommended for Small Area Plans. Until the exact area to be examined is identified and plans are completed, the full operational increases/savings will not be known. Operational expenses shown here represent estimated additional staff time required for plan completion. Neighborhood Drainage 13,516 13,921 14,339 14,769 14,769 69,667 Operational cost include maintenance of new drainage structures. Transit Operational Operational Operational Operational Operational Impact Impact Impact Impact Impact 5 Year Project FY21 FY22 FY23 FY24 FY25 Total Operational Impacts Transit Bus Replacement Match - - - - - - Will be some minor maintenance savings once the buses are delivered (normally 18 months from when they are ordered), but savings amount depends upon the maintenance record of the buses being removed from fleet. Parks and Recreation Project Parks and Recreation Lump Sum Account (2,060) (2,122) (2,185) (2,251) (2,319) (10,618) Decreased utility costs resulting from facility modernization. Parkland and Trail Acquisition and Development 28,450 30,844 33,257 35,690 35,690 163,931 Increase in seasonal maintenance costs - both supplies and temporary employees - associated with improved trail system. Urban Tree Preservation and Planting - 20,388 20,796 21,211 21,636 84,030 Increase in seasonal maintenance costs - both supplies and temporary employees - required to maintain newly planted trees. In additon to these costs there was $50,000 added to the Parks Mainteance budget in FY19 to keep up with increased mainteance demands of our mature trees throuhgout the City. Riverview Park Restrooms 2,910 9,181 9,456 9,740 10,032 41,320 Increase in maintenance costs - both supplies and temporary employees - associated with new restroom facilities. TOTAL PROJECTED OPERATIONAL 21,286 494,179 302,206 418,965 417,235 1,653,870 EXPENDITURES ALL PROJECTS L-11 www.charlottesville.gov/budget To be one community filled with opportunity City Council Adopted Budget FY 2021 L-12 www.charlottesville.gov/budget Bonds Authorized vs Bonds Issued by Project as of November 2020 2021 Bonds Authorized Acct Code Project but not Issued P-00127 Undergrounding Utilities 4,430,000 P-00335 New Sidewalks 630,000 P-00336 West Main Streetscape 18,250,000 SH-070 City Schools HVAC Replacment Plan 3,358,640 P-00511 Old Lynchburg Road 1,000,000 P-00207 McIntire Park - Master Plan Implementation 1,998,632 P-00436 Belmont Bridge Replacement - City Match 9,500,000 P-00770 Martha Jefferson Neighborhood Streetscape 800,000 P-00768 Market Street Park Retaining Wall 240,000 P-00818 SIA Implementation 1,200,000 P-00819 Small Area Plans 650,000 P-00777 Tonsler Park 2,100,000 CP-071 City Facility HVAC Replacement 800,000 P-00868 800MHz Radio System Upgrade (ECC) 3,141,341 CP-082 Citywide ADA S&C 400,000 P-00817 Meadow Creek Valley Master Plan 175,000 P-00916 CHS Field House 100,000 P-00919 General District Court 800,000 SH-017 Schools Lump Sum FY17 845,491 SH-018 Lump Sum to Schools - FY18 944,462 P-00939/SH-004 CCS Priority Improvements 1,250,000 P-00943 ADA Pedestrian Signal Upgrades 860,000 P-00944 Route 250/Emmet Street Bridge Repairs 1,337,500 P-00942 Penn Park Tennis Court Renovations 295,000 CP-018 Facilities Lump Sum FY18 1,045,491 CP-019 Facilities Lump Sum FY19 1,045,491 SH-019 Lump Sum to Schools FY19 409,162 P-00985 Downtown Pedestrian Lighting 188,000 PR-003 City/County Joint Parks - Darden Towe and Ivy Creek 1,669,051 CP-020 Facilities Lump Sum 1,045,491 SH-020 Lump Sum to Schools 700,000 P-01012 City Schools Reconfiguration and Design 3,000,000 P-01013 Energy Performance Audit 150,000 P-00988 Bypass Fire Station 3,700,000 P-00214 Minor Bridge Repairs 443,646 P-01004 State Revenue Sharing 413,218 P-01017 Riverview Park Restroom 245,000 P-00937 Public Housing Redevelopment 4,500,000 SS-012 Sidewalk Repair 500,000 CP-021 Fac Lump Sum FY21 1,545,491 P-00484 New Historic Surveys 50,000 P-01011 Smith Center IAQ 2,250,000 P-01036 Traffic Signal Replacement 200,000 P-01038 VDOT Hydraulic/250 150,000 SH-021 School Lump Sum FY21 1,000,000 GO/CIP Total 79,356,107 Bond Contingency 353,583 Total with Contingency 79,709,690 11/13/2020 Memo TO: John Blair, Interim-City Manager FROM: Chris Engel, Director of Economic Development DATE: 10/14/2020 SUBJECT: Mixed-use Development Consideration in Conjunction with 7th Street Deck The City has plans to construct a parking structure on a one-acre assemblage of property it owns at the intersection of Market Street and 7th Street. A conceptual design study indicates that a four level structure of approximately 300 parking spaces and 12,000 square feet of street front commercial space is feasible on the site and such a structure is permissible by-right within the City’s current zoning ordinance. The City is using a design/build delivery method for the project due to the efficiencies it provides. Given the high costs of land in the City and the variety of public and private needs, the following question was recently raised: Should the City invest additional funds now so that the necessary infrastructure is in place to support additional development above the parking structure at a future date? This is a logical question and one that staff and the design consultant spent considerable time evaluating before arriving at the recommendation to proceed with constructing the four level parking structure. This memo details the reasoning leading to that decision. Background The primary driver for this project is the December 2018 Memorandum of Agreement with Albemarle County to jointly develop a new Courts building in historic Court Square. A key provision of the agreement is a guarantee by the City to provide the County with 90 parking spaces for their exclusive use in a new downtown garage to be in operation by November 30, 2023. Doing so is expected to be achievable within that timeframe and within the estimated $10M price tag for the parking structure. The City has programmed $10M across the FY21 and FY22 CIP years for this purpose. The design concept and cost estimates were derived from work performed by Kimely-Horn acting as a consultant to the City. KH has significant experience in design and development in urban areas as well as parking facility development. As part of the engagement in November of 2019, the City requested a white paper outlining the impacts of a mixed-use garage. The full paper is attached and summarized herein. Mixed-use Parking Garages Mixed-use parking facilities that incorporate ground level retail, restaurant or office space are common as evidenced by several such structures in Charlottesville (e.g. Market Street Parking Garage and Water Street Parking Garage). However, adding another occupancy type such as residential to the top of a garage is not very common as it adds considerable cost and complexity. Accounting for and allowing for future addition of other occupancy types to the initial facility construction presents additional challenges. These challenges are summarized as: 1. Additional Structural Reinforcement: This may involve either a reconfiguration of column layout or the use of a transfer slab or podium. The increase cost is in the 15% to 25% range. 2. Service Requirements: The need for elevators, stairways, loading docks and trash removal are very different for a mixed-use parking garage. 3. Utilities: Parking garages have much simpler electrical, fire protection and plumbing needs than either residential or office space. 4. Garage Closure: Additional construction at a later date will have serious impacts on the operation of the garage to include at a minimum the closure of the roof level and removal of any installed solar arrays. 5. Garage Design Efficiency: Based on the need to accommodate items 2, 3 and 4 above, the design efficiency of the actual parking area of the garage is typically reduced and the cost per space increases by 40% or more. With structural costs and loss of design efficiency the typical cost of building the needed infrastructure to accommodate any future construction is estimated to be at least 50% more than the otherwise planned construction cost. In the case of this facility, with an estimated standalone cost of $10M, that translates to roughly $5M in additional funding requirements. Cost/Benefit considerations of Additional Development To better assess the benefits of additional vertical development above the parking structure, a rough determination of the buildable envelope (assuming a Special Use Permit is granted) must be calculated. The zoning designation for the property assemblage is ‘Downtown’, which has a minimum height of 45 feet and a maximum of 70 feet along the streetwall. Above 45 feet, a 25 foot stepback is required along the primary street. A Special Use Permit allows up to 101 feet in height. The property assemblage is nearly 1 acre, but is long and narrow in configuration at 380’ by 90’. This presents challenges for any type of vertical development, but is particularly difficult for parking and residential uses in which efficiencies are gained with double loaded aisles/corridors. The stepback requirement of 25’ from the primary street above 45’ severely reduces the buildable area on this site by nearly one-third. It is assumed for purposes of this analysis that a Special Use Permit for height up to 101’ and considerable relief of the 25’stepback requirement is granted. While it is conceivable that there could be a number of uses for the additional development, a residential use is assumed for this analysis. Below are four concepts that demonstrate options for development of the site. The first, Concept A, is the basic parking structure with ground floor commercial space. Concepts B, C & D include parking, commercial space and some amount of residential above that. These three concepts all require a special use permit and considerable additional investment in infrastructure to support the added vertical development. Concept A - Parking Structure w/306 spaces, 12,000 SF Commercial 51' Parking Parking Parking Parking Commercial 0' Concept B - Parking Structure w/222 spaces, 12,000 SF Commercial, 12 Residential Units 93' Residential Residential Residential 51' Parking Parking Parking Parking Commercial 0' Concept C - Parking Structure w/214 spaces, 12,000 SF Commercial, 24 Residential Units 93' Residential Residential Residential 51' Parking Parking Parking Parking Commercial 0' Concept D - Parking Structure w/199 spaces, 12,000 SF Commercial, 36 Residential Units 93' Residential Residential Residential 51' Parking Parking Parking Parking Commercial 0' Notes: Floor Heights Level 1 (Parking and Commercial) – 15’, Parking Levels – 12’, Residential Levels - 14’. Units are all 1,000 SF and are allocated 1 parking space. All concepts are general approximations and are only intended to demonstrate the relative differences in various levels of development. Concept A fits within the by-right zoning and does not require a special use permit. This concept was developed by the City’s consultant and forms the basis for the other concepts. After accounting for all internal parking requirements, this concept yields a surplus of 117 spaces (see Summary of Parking Demands chart below). Concept B exceeds the by-right height and does require a special use permit. This concept adds 3 floors of residential on the primary corner at 9th Street along the eastern side of the site. It yields 12 residential units. After accounting for all internal parking requirements and the reduced efficiency created by the additional supporting infrastructure this concept yields a surplus of 21 spaces. Concept C exceeds the by-right height and does require a special use permit. This concept adds 3 floors of residential on the primary corner at 9th Street and extending west along more than two-thirds of the Market Street frontage of the site. It yields 24 residential units. After accounting for all internal parking requirements and the reduced efficiency created by the additional supporting infrastructure this concept yields a surplus of 1 space. Concept D seeks to fully maximize the developable area and exceeds the by-right height and does require a special use permit. This concept adds 3 floors of residential along the entire Market Street frontage of the site. It yields 36 residential units. After accounting for all internal parking requirements and the reduced efficiency created by the additional supporting infrastructure this concept yields a deficit of 26 spaces. Summary of Parking Demands Concept A Concept B Concept C Concept D Total Spaces 306 222 214 199 Residential 0 12 24 36 Commercial 36 36 36 36 Courts 90 90 90 90 1 Replacement 63 63 63 63 Surplus or Deficit +117 +21 +1 -26 1 Thereare 63 surface spaces on the property now that are part of the downtown inventory. The project needs to replace these spaces to prevent an erosion of available capacity. The additional infrastructure needed to allow the opportunity to construct any units above the parking structure is estimated to be $5M. At 36 units, that translates to $138,888 per unit of added cost before any units are actually constructed. This surcharge puts any unit constructed under this scenario at a distinct disadvantage from an affordability standpoint when compared to others on the market. In addition, due to the nature of this type of mixed-use development there would typically be management fees or common area maintenance item expenses over and above a sale price or monthly rental cost. Also, while the zoning regulations would require at least one parking space per unit be included in the building, there is typically an additional monthly fee associated with that use. Under this scenario, the minimum estimated starting price for a 1,000 SF unit with a basic level of finishes including a pro rata share of all building costs (land, site development, infrastructure, labor and materials, parking and maintenance) is $500,000. At $500 per square foot, the market in Charlottesville will simply not support this pricing structure and thus the private sector would not pursue this project (the median price per square foot of homes sold in the area is in the $175 - $200 range). Summary Major developments with multiple use types within them are complicated to design, finance, build and operate. The additional costs and complexities multiply when this is attempted on constrained sites, with undefined ownership and in multiple phases. Furthermore, the loss of efficiency on the parking levels coupled with the added demand from the residential levels place the facility in a deficit situation from the start when considering all program needs. From a market-based perspective, the cost benefit analysis reveals that the return on investment is not sufficient when considering the added costs of the additional infrastructure. The opportunity cost (i.e. the missed opportunity when comparing investments) would be significant in scenarios B, C and D likely leading decision-makers to choose to invest the $5M elsewhere. MIXED-USE PARKING GARAGES It is common to create mixed-use parking facilities in an effort to maximize a given downtown site. This can be achieved by adding ground level uses, such as retail, restaurant, or office space. Ground level mixed-use often activates the street frontage and has some, albeit minor, impacts to the initial design of the parking garage. In contrast, providing another occupancy type, such as office or residential, on top of a parking garage adds a level of complexity that should be fully evaluated; however, there are many precedents where this has been successfully accomplished. Many of these projects are in dense, urban locations. The contractual mechanism, such as leasing air rights, varies from project to project, but the overall impacts to the built structure is similar. External influences such as land use codes, zoning, height restrictions, local policy, and local market factors will likely have significant impact on the viability of building a mixed-use structure. Aside from these, understanding some of the impacts to design and construction that comes with a mixed-use garage, when compared to a stand-alone parking garage, will help an Owner / Developer make an informed decision as to what is the right solution for a given project. DESIGN AND CONSTRUCTION SUMMARY • Occupancy Type – early identification of the occupancy on top of a garage keeps costs lower; need to factor in additional parking demands • Parking garage efficiency and functional design – building on top of a garage typically lowers the efficiency (and increases cost as you have to build more to get same parking yield) as compared to a standalone garage; this can be minimized with long span construction but that comes with additional cost of transfer level. • Structural – adding levels to a parking garage has impacts to both the gravity and lateral loads that must be carried by the structural system. This can add anywhere from 15% to 25% to the garage costs. • Stairs / elevators – The number, size, capacity, location, and security of stair and elevator towers changes depending on the building occupancy type. Building on top will increase the requirements and costs. • Service requirements – Service requirements, such as loading/unloading and trash is impacted by the type of building. This may add costs to the project. • Utilities –Mechanical, electrical, plumbing, and fire protection requirements are increased for a mixed-use building as compared to a stand-alone garage; increasing costs. • Additional Cost Notes – Initial construction cost of the parking garage would be higher where a building is designed above a garage. In addition, long-term maintenance costs should be evaluated. • Construction – There are two primary ways to construct a mixed-use facility. Either construct the full building at one time or construct the garage and then complete the building above at a later time. Both approaches have been done successfully but building at a later date likely adds closures to the existing facility and is costlier for the building above. kimley-horn.com 421 Fayetteville Street, Suite 600, Raleigh, NC 27601 919 677 2000 Page 2 DESIGN AND CONSTRUCTION CONSIDERATIONS A mixed-use facility is oftentimes required to make compromises in an effort to blend multiple occupancies. For example, a stand-alone garage can maximize all aspects of the facility to best meet the needs for a garage, such as setting up the column grid to park most efficiently. Similarly, a stand- alone office building or residential building can optimize its layout. When combined, sometimes a compromise is required with one or both building types. The following list describes several key elements that impact the facility design and construction when planning for a mixed-use structure, especially an occupied use (office or residential being the most typical) over a parking garage. • Occupancy Type – it is most economical to plan for a specific occupancy type early in the design phase. Trying to design for an “unknown” future building on top of a structure becomes significantly more inefficient as conservative decisions begin to compound on one another to accommodate any scenario. o Office Occupancy vs Residential – Each of these will have different requirements and needs as further described below. In general, Residential occupancy has a few more restrictions and requirements as compared to office occupancy. o Parking demand – Occupancy type will impact the parking demand within the parking structure below. Therefore, the parking supply planned for the site must account for any external parking needs from surrounding sites in addition to the parking demand generated by the building above. Residential parking often comes with reserved parking which must be factored in. • Parking garage efficiency and functional design – as noted above, a stand-alone garage is typically most efficient as that is the primary and only use. When an occupied building above is added, additional columns, piping, mechanical shafts, elevators, stairs, etc. are required to penetrate the parking levels. o A typical, above grade, stand-alone garage might have an efficiency of approximately 325 sf/space assuming long span construction, double loaded bays, park-on ramps, and end bay parking. o A typical, above grade, mixed-use parking garage with a building on top could have parking efficiencies closer to 450 sf/space due to the columns, chases, and other impacts. This 35% loss in efficiency shows up most prominently in cost per space metrics. For example, using $65/sf (varies by project) results in a typical garage cost increasing from $21,000/space to $30,000/space simply due to loss in efficiency. Part of this may be mitigated depending on structural grid as discussed below. • Structural – adding levels to a parking garage has impacts to both the gravity and lateral loads that must be carried by the structural system. kimley-horn.com 421 Fayetteville Street, Suite 600, Raleigh, NC 27601 919 677 2000 Page 3 o Loading – The extent of additional loading is a function of the number of levels on top of the garage. In general, parking garage live loads per level are lower than residential and office live loads per level. o Framing approach – There are two approaches to framing a mixed-use garage; long-span vs short-span. ▪ Long-span construction for the parking levels would result in more efficient parking levels and negate some of the loss in parking efficiency. However, the challenge is how to handle the office or residential building which will likely have more closely spaced columns than the parking garage below. Therefore, the transfer level (roof of the parking garage and floor of the building) becomes more expensive. ▪ Short-span construction allows for the column grid to be more controlled by the building above, maximizing its efficiency and not requiring as robust a transfer level. However, those added columns impact the parking efficiency of the garage below. o Columns and Foundations – Columns and foundations would also be required to be increased to carry the added loads from the building above. However, increasing the size and reinforcing slightly can typically accommodate these added loads. Since a large part of column and foundation costs are associated with mobilization, forming, etc., the increase in costs for the additional capacity is likely not more than 10% to 15%. • Structure Type – Materials used to build the parking garage would likely be impacted by whether or not a building would be constructed on top. A stand-alone garage can be evaluated for either precast or cast-in-place in most situations. For mixed-use buildings, the typical construction type is cast-in-place concrete. However, depending on the layout, precast can be an option but needs to be carefully designed and constructed. The material used for the building above also needs to be considered as it will impact the design loads for the garage structure below. Structural steel, cast-in-place concrete, and potentially precast concrete are all possible types for an office or residential building. o Horizontal separation – Garages below other occupancy types require a horizontal separation between uses. This fire separation is effectively the roof of the garage and the floor of the building above. The cost of this elevated floor must be accounted for in one of the two building estimates. • Stairs / elevators – The number, size, capacity, and location of stair and elevator towers changes depending on the building occupancy type. o Location of stair/elevator towers impacts design ▪ Parking garages typically put stair and elevator towers in the unused corners of the garage. This location is also driven by how the users access the building; they want to head to the perimeter to leave and be presented with a stair tower upon return. kimley-horn.com 421 Fayetteville Street, Suite 600, Raleigh, NC 27601 919 677 2000 Page 4 ▪ Office buildings often locate stairs and elevators on the interior to maximize the building corners and perimeter for the tenants. ▪ Residential buildings can locate stairs and elevators in the middle or on the ends with the preference being more inboard to preserve exterior facing rooms. ▪ Office and residential stair/elevator towers often have lobbies at the ground floor, further impacting the parking functional layout of that level. o Requirements for the number of stairs and elevators are fairly limited in a parking garage. In contrast, additional size and capacity of both the stairs and elevators are required in a mixed- use building due to the occupancy type. o Security and access must be considered as well. Trying to isolate public spaces from office or residential spaces often results in duplication of stairs and elevators, thereby adding to the cost of the building. Otherwise, security access controls would be required at all doors and floors to prevent unwanted access to occupied spaces. • Service requirements – Service requirements, such as loading/unloading and trash is impacted by the type of building. A parking garage does not have these service requirements typical to an occupied building. These elements would have to be evaluated as part of the site planning process and may impact the lowest level, depending on the site. • Utilities –Mechanical, electrical, plumbing, and fire protection requirements are increased for a mixed-use building as compared to a stand-alone garage. o Stand-alone garages need water for wash-down hose bibbs, dry standpipe fire protection, power for lighting and elevators, and typically no sanitary sewer. Mechanical systems are limited to small HVAC units in various rooms of a garage. o Mixed-use buildings, by contrast, require water service, automatic fire suppression, power for the building, sanitary sewer, and HVAC systems for habitable spaces. Many of these systems have to travel up to the building through the parking garage. ▪ It is noted that in some configurations, such as office on top of a garage, that the garage may not be required to be sprinklered. However, if a residential occupancy type is built over a parking garage, the entire building must be sprinklered; adding to the cost of the parking garage. • Cost Items – Initial construction cost of the parking garage would be higher where a building is designed above the garage. In addition, long-term maintenance costs should be evaluated. o Initial construction cost increases are primarily a result of increased foundations, increased structural capacity of columns/walls, increased utility requirements, and the transfer level. o Long-term maintenance costs should also be agreed upon as part of the development agreement. A clear understanding of what is a parking garage cost (i.e. lights on the parking kimley-horn.com 421 Fayetteville Street, Suite 600, Raleigh, NC 27601 919 677 2000 Page 5 floors), a building cost (i.e. fire suppression), and a common element cost (i.e. shared stairs) is critical to the long-term maintenance plan. • Construction – There are two primary ways to construct a mixed-use facility. Either construct the full building at one time or construct the garage and then complete the building above at a later time. Both approaches have been done successfully. o The more economical, and lowest impact is to design and construct the mixed-use building at the same time. This allows items such as construction access, cranes, mobilization, etc. to be handled one time. o If the parking garage is designed to accommodate the future mixed-use building above, then it is possible to delay that construction to a future time. Again, it is recommended to go ahead and fully design that building above to eliminate overly conservative designs. A delayed construction of the building after the garage is open might have the following impacts: ▪ Site access could be extremely limited based on surrounding parcels and roadways now that a garage is occupying the site. Locating a crane could become more challenging based on the site. That crane is also not as efficient as it now has to “reach” over an existing built garage. ▪ If the transfer level is not constructed as part of the original garage construction, then 2 to 3 floors of the existing garage would likely be impacted for some period of time to allow forming and shoring of the transfer level above. ▪ If the transfer level is constructed as part of the original garage construction, it may be possible to allow full use of the garage for a majority of construction, ▪ Stair and elevators would likely be shut down for some period of time as they are vertically extended. Please do not hesitate to contact me, Adam P Cochran, P.E. adam.cochran@kimley-horn.com 919- 678-4072 with any questions about the information presented above. kimley-horn.com 421 Fayetteville Street, Suite 600, Raleigh, NC 27601 919 677 2000