<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40"> <head> <meta http-equiv="Content-Type" content="text/html; charset=utf-8"> <meta name="Generator" content="Microsoft Word 15 (filtered medium)"> <style></style> </head> <body lang="EN-US" link="#0563C1" vlink="#954F72"> <div class="WordSection1"> Dear Councilmember Wallach, City Council and Hotline Followers,<o:p></o:p> <o:p> </o:p> Thank you for the questions on the CU South/South Boulder Creek flood mitigation project. Please see below. We have provided responses in italics to the flood mitigation questions we are able to answer in writing in the timeframe we have available. We can discuss further as needed during the council meeting. <o:p></o:p> <o:p> </o:p> Thanks,<o:p></o:p> <o:p> </o:p> Joe<o:p></o:p> <o:p> </o:p> <div style="border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in"> From: "Wallach, Mark" <<a href="mailto:WallachM@bouldercolorado.gov">WallachM@bouldercolorado.gov</a>> Date: Sunday, June 14, 2020 at 6:43 PM To: HOTLINE <<a href="mailto:HOTLINE@bouldercolorado.gov">HOTLINE@bouldercolorado.gov</a>> Subject: CU South Questions<o:p></o:p> </div> <div> <o:p> </o:p> </div> Obviously, the CU South project has been highly contentious, and has raised a multitude of questions that staff and Council will need to navigate in order to reach an appropriate conclusion. This is probably the most consequential – and expensive – public works project we will be asked to approve during our tenure on the Council. Accordingly, set forth below are a number of questions that I have concerning the project that I hope can be addressed in connection with the Council meeting on June 16. Some of these questions revolve around the terms of proposed annexation, rather than the selection of the most appropriate flood mitigation strategy, and to the extent that those issues are not going to be discussed on 6/16, responses can await a later date. But I do emphasize that these are all questions I will ultimately seek to have addressed, including the following: <o:p></o:p>  <o:p></o:p> DESIGN, MITIGATION, FINANCE ISSUES<o:p></o:p>  <o:p></o:p> 1) I believe that Page 3 of the staff memo misstates the nature of the OSBT position. In fact, the OSBT statement is an act by a unanimous board drawing a line in the sand and stating that they will not consider a disposal of open space land until they receive the analysis and information they have apparently been requesting since 2018. The question is: why have they not received this information, and could such information impact our own deliberations? I am aware of the desire to come to a concrete decision as to our direction on this matter (I share that sentiment), but if there is potentially important additional information to be considered (and OSBT unanimously believes this to be the case), is it not more important that we get this decision right? What would be the timetable to look at this?  <o:p> </o:p> <o:p> </o:p> The June OSBT meeting and associated tours presented the first process opportunity for current utilities project staff and board members to discuss upstream alternatives. Staff believes that preliminary design work can continue without delay on the Variant 1/100 alternative while also attending to questions on other alternatives. The process, funding and timetable to continue looking at other alternatives is open for discussion.<o:p></o:p>  <o:p></o:p> 2) How is it that we continue to use financial estimates of cost when: 1) the cost of the construction project represents an estimate whose accuracy has essentially been disclaimed by its authors (as a Class 4 estimate they are “appropriate to use for comparing alternatives, but do not typically provide reliable budgetary estimates”);  2) these estimates appear to include the  costs of open-ended commitments to CU whose full expense cannot yet be known with any certainty; and 3) the estimates are based on 2018 dollars when the likelihood is that we will be paying for the project in 2022-2024 dollars? How do we get a real handle on the cost of this project?<o:p></o:p>  <o:p></o:p> The level of detail and accuracy of the cost estimates are typical for the current conceptual design phase of the project. The costs are also sufficient as a means of comparison and decision for the three levels of flood protection. Regarding the CU items, Utilities projects typically provide compensation to property owners for project impacts. In the case of CU South, the proposed project has potential impacts to the university’s existing tennis courts, a warehouse, and South Loop Drive, among others. Compensation for these impacts will be addressed through CU South annexation negotiations and in alignment with Boulder Valley Comprehensive Plan <a href="https://www-static.bouldercolorado.gov/docs/CU_South_Principles_Rev_July_12_FINAL_CLEAN_9.8-1-201709081413.pdf?_ga=2.205043792.1973294182.1589206546-1994412311.1535160450" target="_blank">Guiding Principles</a> for the CU South property. As preliminary design and annexation negotiations proceed, costs and project schedule will be further refined. Staff believes the current cost estimates provide an accurate and reasonable sense of scale of the project based on what is currently known.<o:p></o:p> <o:p> </o:p> 3) The WRAB recommendation is based on a highly split board and contains a suggestion that the cost of fill may not be bondable as it is not directly related to flood mitigation. Has this been analyzed to determine if it is correct and, if so, does the City of Boulder have a spare $10MM ( or more) in its General Fund that I am unaware of to cover this expense?<o:p></o:p> <o:p> </o:p> City staff have consulted with city attorneys related to South Boulder Creek funding. It is common practice for the city to pay for items that are impacted by utilities projects. Flood project expenses are related to an ongoing CU South annexation negotiation between the city and the university. Any utility funds used will be spent in accordance with TABOR and the requirements of the City Charter.  <o:p></o:p> <o:p> </o:p> 4) WRAB also raises equity concerns relative to other flood mitigation projects that will not be funded as a result of the concentration of financial resources necessary to carry out this project. Is this a valid concern and, if so, what is the proper response?<o:p></o:p>  <o:p></o:p> WRAB does raise a valid concern about equity. Funds for flood utility needs across the city are not unlimited, and any discretionary costs applied for the South Boulder Creek Flood mitigation project would not be available for other projects.<o:p></o:p> <o:p> </o:p> 5) WRAB recommended including the cost of rehabilitating Viele channel in the calculation of project costs on the assumption that such rehabilitation will be a necessary part of the project. Is this the case? If so, what is the estimated cost of that work?<o:p></o:p> <o:p> </o:p> In order for the South Boulder Creek flood project to function correctly, the Viele channel needs to be maintained to its full capacity. The Viele channel is one of the city's 16 major drainageways that requires routine maintenance to remove unwanted debris in an ongoing effort to help maintain adequate flow conveyance in the channel. Maintenance of the channel will be funded out of separate city funds. Sometimes such maintenance projects are performed with funding assistance from the mile-high flood district, and staff is investigating the potential for such funding and is planning for maintenance to occur in the near term.<o:p></o:p>  <o:p></o:p> 6) Please explain the impact of a “climate change allowance” in the design of the dam on its size and cost. Is the state engineer the sole determinant of what is required? In addition, I believe that the CU South Guiding Principles states that we will be governed by the requirements of the State Engineer in terms of the size of the flood mitigation facility. Have we had that conversation?<o:p></o:p>  <o:p></o:p> Two separate sets of regulatory standards apply to the project, one for the floodplain and one for dam safety and design. Regulatory standards for floodplain mapping and flood mitigation do not require an allowance for climate change. However, city staff are evaluating if and how a voluntary climate change allowance might be incorporated into the design. The state engineer’s office has regulatory jurisdiction over the dam structure and does require a climate change allowance for design of high hazard dams, and such an allowance is being incorporated into the South Boulder Creek flood mitigation design. Staff has had preliminary project discussions with the state engineer. <o:p></o:p> <o:p> </o:p> 7) Can 100-year protection be coupled with any other, smaller upstream solutions to enhance and leverage the degree of protection provided by selecting the 100-year alternative? If so, what might those be, what would they cost, and what would be the extent of the additional protection provided?<o:p></o:p> <o:p> </o:p> Additional upstream storage could be provided for supplemental protection, but in order to function would require significant additional infrastructure and cost (generally similar in scale to variant 1 or past Variant 2 designs), additional property acquisition, and additional environmental impacts beyond what is proposed for Variant 1/100. The additional level of flood protection possible would need to be determined, but the analysis would not likely result in a feasible combined variant 1/upstream solution. <o:p></o:p> <o:p> </o:p> 8) Whichever alternative we select, what is the timeline for producing biddable documents, so that we can understand the actual cost of the project, not the current guesstimates? <o:p></o:p>   <o:p></o:p> The current schedule estimates bidding at the end of 2023.<o:p></o:p> <o:p> </o:p> 9) Is there any limit to our bonding capacity to construct this project? That is, if project costs escalate to $75MM, $100MM or $125MM, is the only impact the increase in Stormwater and Flood Management Utility rates needed to fund the debt service (increases which are substantial even at the projected expense level) or are there other factors that could result in a  bond financing of only some of the costs, with the balance required to come out of the General Fund? Have we spoken to our financial advisors to determine what, if any, limits or other factors could impact our bond issuance for the total project cost?<o:p></o:p> <o:p> </o:p> Staff has consulted with financial advisors on this topic. All Stormwater and Flood Management Utility capital projects are funded primarily by monthly user charges, with additional funding from Plant Investment Fees and the Mile High Flood District (MHFD) – the city’s regional funding partner. Projects with costs that exceed the cash reserves in the Stormwater and Flood Management Utility fund are typically funded through 20-year term revenue bonds. The annual debt service payments associated with such bonds are costs factored into utility rates through the annual budget process. Therefore, broadly speaking, the city’s bonding capacity is limited by the city’s willingness to approve utility rate increases that result from bond debt services payments. <o:p></o:p> <o:p> </o:p> 10) Are environmental mitigation costs with respect to endangered species included in our overall project cost? If they are, please specify the amount budgeted for that work. If not, should not this expense be added in? In addition, I believe there have been previous and unsuccessful efforts to simply relocate endangered species to a new location. If that is the case, what is our fallback plan for achieving such protection? <o:p></o:p> <o:p> </o:p> An estimate of environmental mitigation costs for federal regulatory requirements is included in the overall project cost estimates. Environmental mitigation costs range from $1.34M to $1.89M for federal regulatory requirements including compliance with the Threatened and Endangered Species Act. These environmental mitigation costs may change based on the permitting requirements from the regulatory agencies and the project concept selected. There may be additional environmental mitigation costs for open space impacts that have not yet been specified. <o:p></o:p> <o:p> </o:p> With regard to relocating endangered species, the project team and OSBT agree that onsite mitigation (not involving relocation) is preferable to off-site mitigation and the project is committed to minimizing impacts and providing mitigation as close to the disturbed area as possible. Specific mitigation measures will be determined through both regulatory agencies and requirements imposed by the OSBT and council to compensate for impacts to city open space land and resources. <o:p></o:p>  <o:p></o:p>  <o:p></o:p> ANNEXATION ISSUES (responses to be addressed at a later time)<o:p></o:p>  <o:p></o:p> There are many components of the draft Annexation Agreement that represent beneficial terms for the City of Boulder, and should be readily and happily accepted. In particular, the development restrictions to which CU has agreed are helpful in moving towards a final agreement. However, there are also some terms that range from problematic to extremely problematic, and will need to be discussed in connection with any possible annexation. In this regard it is extremely disappointing to have CU representatives candidly admit (as they did at our February meeting) that their unwillingness to consider a discussion of flood mitigation apart from annexation is based on their calculus of the political pressures being brought to bear on this Council, and their belief that they can cut the most favorable deal for CU as a result of those pressures. This is not merely my opinion, this was their testimony under direct questioning. For all of the discussion of the partnership between CU and the City of Boulder – and there should certainly be such a partnership – it is unseemly and inappropriate for the city to be strong-armed in this fashion. In my experience, this is not how partners deal with one another.<o:p></o:p>  <o:p></o:p> In any event, here are my current issues relating to annexation:<o:p></o:p>  <o:p></o:p> 1) The concept that CU must be provided with 129 acres of land for development has been accepted as a given, to the extent that it is incorporated into the Guiding Principles for the project. What is the genesis of this requirement, particularly in the absence of either a concept plan or a site plan for CU South? Is there a principle that dictates the need for 129 acres other than the philosophy that more is better? As this requirement has driven many of the other terms of the proposed annexation, it would be useful to understand where it comes from, and why it was agreed to. It appears to be a magic number, untethered to any design or other consideration that I can discern. <o:p></o:p>  <o:p></o:p> 2) There are a number of open-ended and cost indeterminate elements of the proposed Annexation Agreement that are potentially troubling, including the following:<o:p></o:p>    i) How firm is the calculation of the actual amount of fill that will be required to be provided, if we were to agree to do this? At each level of flood mitigation what is the potential variance in the amount of fill that might actually be required?<o:p></o:p>    ii) The City is responsible for the cost of access and egress road improvements satisfactory to CU. How firm is our understanding of these costs?<o:p></o:p>    iii) With respect to the services the City is to provide (power, water, stormwater, waste water), the City is to cover “any additional costs caused by the flood mitigation project to access those services.” What does this mean? How will that determination be made? What are the potential costs to the City?<o:p></o:p>    iv) If the University cannot locate its ballfields within the flood detention area (who decides? what are the criteria for determination?), they may build them on OS-O land, contiguous to its developable parcel “in a location chosen by CU Boulder in its sole discretion.” Really? No matter what the environmental consequence might be?<o:p></o:p>    v) The City is responsible for any utility upgrades necessary as a result of the flood mitigation project. Do we know what these are, what is the likelihood that they will be necessary, and, if so,  what they will cost?<o:p></o:p>    vi) Apparently, the University has an expectation that there will be an “aesthetically pleasing finish” to the flood wall, the expense of which will be borne by the City. Has the cost of this been calculated? What constitutes an aesthetically pleasing finish?<o:p></o:p>    vii) Do we anticipate realigning Dry Creek Ditch #2? If so, what is that expense, and is it part of the overall calculation of cost?<o:p></o:p>    viii) For those of us not intimately familiar with the Water and Wastewater Agreement of 1997 (my hand is raised), what are the implications and potential costs, if any, of stating that CU South will be subject to this agreement?<o:p></o:p>  <o:p></o:p> 3) What is the theory on which Boulder has agreed to provide enough fill at its expense, in order to achieve the 129 acres demanded by CU? In addition, in the draft Annexation Agreement dated January 16, 2020, CU has offered to SELL us the potential fill from the berm, which I assume would be material used to raise the level of CU’s land in order to take it outside of the flood zone. As I read this, CU is suggesting that we should pay them for the very dirt that could be used to  elevate their property, and thereby enhance its value. I will be charitable and describe this position as incongruous. <o:p></o:p>  <o:p></o:p> 4) What will be the protection against creating an entitlement for development via annexation, and then having CU sell the land for another use or to another user? Particularly now, in light of the pandemic, all plans and projected plans must be regarded  as a bit fluid. It is one thing to annex the land for CU (desirable); it is another to do so and end up with Bob Jones University on the site (not so much). Will there be any reversion to the City of Boulder in the event that financial considerations make it impossible for CU to actually build the campus? If not, and in the event of CU’s election not to proceed (presumably based on financial capability), what is the protection for the City of Boulder against the sale of the property to another educational institution, or even a non-educational user? Since annexation will occur without reference to a site plan, even a conventional “successors and assigns” clause will not protect us from potentially dramatic changes to whatever development we would have expected from CU.<o:p></o:p>  <o:p></o:p> 5) From the perspective of the City of Boulder, a core element of this transaction has been the creation of student/faculty housing. CU’s commitment to this core value has been less than uniform. CU has committed to housing (the original draft Annexation Agreement), rescinded its commitment (January16, 2020 revised Annexation Agreement) and later rescinded its rescission (subsequent explanatory letter) to the obligation to provide housing. What is the current state of their commitment? Assuming that annexation occurs with a commitment to provide housing and CU alters its view yet again, what will be the enforcement mechanism to ensure compliance? What if the 2021 CU Campus Master Plan cuts the housing units from 1100 to 500? Will Boulder have a right to sue for specific performance? What other enforcement mechanisms will we have to ensure compliance?<o:p></o:p>  <o:p></o:p> 6) I am a bit confused by the obligation to prevent any increase in the 100 or 500-year FEMA floodplain arising out of the construction or operation of the dam and/or the removal of the berm. Does not FEMA make its own flood mapping decisions? And if FEMA were to revise the maps, what would be the remedy for this default by the City? Are there any dollar limitations to Boulder’s potential financial exposure in such event?<o:p></o:p>  <o:p></o:p> 7) When can we expect a revised draft Annexation Agreement for our review?<o:p></o:p>  <o:p></o:p> Please forgive the length of this email, and I want to thank staff for the  time and effort they have committed to this project. I know the foregoing is a lot to deal with, but we really do need to understand the details and nature of our commitment as we move forward to provide appropriate flood protection for our vulnerable communities. <o:p></o:p>  <o:p></o:p> </div> </body> </html>