R2007-185 APPROVING EXPENDITURE PAYMENT

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Engineering & Infrastructure Memorandum NO. 2007-58 , September 27, 2007 TO: Honorable Mayor Osborne and City Council FROM: Steve Gar , City Manager ��`/�� Richard G arley, P.E.,Director of Engineering & Infrastructure SUBJECT: Reimbursement to Caterpillar,Incorporated. SUMMARY RECOMMENDATION: Staff recommends Council approve the attached resolution authorizing a reimbursement paytnent in the amount of$50,081 to Caterpillar, Incorporated for pavement improvements made to 27th Street. The reimbursement amount is judged to be a reasonable approximation of the value of public benefit resulting from the improvement of 27`h street pavement. Additionally, it is recommended that the City accept responsibility for operation and maintenance of the new traffic signal constructed as part of the proj ect. BACKGROUND: Due to continued business growth Caterpillar, Incorporated (CAT), has added many new employees and needs to build a new 495 space parking lot. The entrance to the lot is on 27th Street a short distance south of Pershing Road. As part of the entrance improvements, CAT will add a traffic signal and build turn lanes and pavement widening on 27th Street. The new signals and pavement widening will primarily benefit CAT employees. However, CAT believes the lane additions and new traffic signals will also benefit the general public. CAT has requested City reimbursement far construction of additional pavement on 27th Street estimated to cost $50,081. In addition, they have requested the City take over operations and maintenance of the new signal at the entrance to the parking lot. A copy of the request letter is attached to il this report. CAT is paying 100% of the cost (estimated to be in excess of$1 million) for all improvements on their property including the parking lot, lighting, drainage and signage. Unless a portion of the cost is reimbursed by the City, CAT also is planning to pay 100% of the cost for traffic signals, pavements, drainage features, signage and striping for improvements on 27th Street. The estimated cost for improvements to 27th Street is about $178,650. Based on discussions , with CAT management representatives, they accept the concept that that they should rightfully , a a substantial ortion of the ublic infrastructure cost because it directl benefits their , PY P p Y parking lot expansion. However, they believe a portion of that infrastructure also benefits the I public, and requests a portion of the total cost be reimbursed. Requesting reimbursement for i pavement costs in the amount of $51,081 is based on a judgment that this amount is a � reasonable approximation of the amount of public benefit. It has been the City's long standing practice to require private property owners to build and pay ' for infrastructure that is built for their benefit. Once built, the infrastructure is turned over to