Staff is requesting City Council:

• Approve the transfer of the Warnick Property from the Pleasant Grove Drainage Basin Fund to Environmental Utilities (Waste Services Operations Fund) to support future utility operations.
• Adopt an ordinance to approve a budget adjustment to transfer $3,650,000 (the appraised value of the Warnick Property) from the Waste Services Operations Fund and the Water Operations Fund via the Environmental Utilities (EU) Land Acquisition project to the Pleasant Grove Drainage Basin Fund ($1,159,344) and the Strategic Improvement Fund ($2,490,656). 

Several City departments and divisions operate out of the Corporation Yard on PFE Road. This facility, constructed in 1993 on 40 acres, is near capacity in building space, parking, and equipment storage.  

Current regulations, including organics-processing mandates (SB 1383) and new water efficiency standards, will impact EU space and staffing needs. In late 2018, EU contracted with HDR to analyze data, evaluate Roseville growth, anticipate regional impacts, and hedge the City's interest against non-compatible uses near utility operations. HDR focused on waste services operations and water utility growth while considering other City departments.

At the May 5, 2021, City Council meeting, Council directed staff to move forward with EU land acquisition to provide reliability and space for continued utility operations. EU has identified a City-owned site for this purpose. The “Warnick Property”, located on Phillip Road on the City's border with Placer County to the northwest, is well-situated for EU’s future operational needs.

In November 2004, the City purchased 418.9 acres of land for $1,673,800 via the Pleasant Grove Drainage Basin Fund to construct a floodwater retention basin. Staff subsequently determined that the retention basin would only require 175.5 acres of this land, leaving 243.4 acres vacant and available for repurposing.

In October 2020, the City obtained an appraisal of $3,650,000 for the vacant 243.4 acres. EU has identified this parcel as a suitable site for future operational requirements. EU has adequate funds appropriated for this property in its EU Land Acquisition project, consisting of $2,920,000 from the Waste Services Operations Fund and $730,000 from the Water Operations Fund.

To use this property for any purpose other than a retention basin requires that the proportional purchase price plus interest ($1,159,344) be transferred to the fund that initially funded the purchase - the Pleasant Grove Drainage Basin Fund. Staff recommends that the remaining balance of $2,490,656 be transferred to the Strategic Improvement Fund for future initiatives.

This recommended budget adjustment will recognize interfund transfers from the EU operating funds to the Pleasant Grove Drainage Basin Fund ($1,159,344) and the Strategic Improvement Fund ($2,490,656).

Details regarding specific future use of the site are as yet unknown.  Following completion of the proposed fund transfer, EU will begin the process of identifying optimal uses of the parcel relative to utility operations, and conduct environmental review as necessary to comply with the California Environmental Quality Act (CEQA).

The EU Land Acquisition project, with a remaining budget of $14,870,338, will cover the cost of this $3,650,000 property purchase. The Waste Services Operations Fund will contribute $2,920,000 and the Water Operations Fund will contribute $730,000. The Pleasant Grove Drainage Basin Fund will receive transfers totaling $1,159,344 for the original proportional purchase price of the property plus interest and the Strategic Improvement Fund will receive transfers totaling $2,490,656 for the difference between the property purchase price of $3,650,000 and the amount going to the Pleasant Grove Drainage Basin Fund.

Property maintenance costs are included in the FY2021-22 Water Operations Fund and Solid Waste Operations Fund budgets. Upon completion of this transfer, EU will determine the improvements for the property and come back to Council with additional requests as needed.

The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment, or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA Guidelines §15060(c)(3) and §15378.

The interfund transfer and budget adjustment meet the above criteria and are not subject to CEQA. No additional environmental review is required.  Any potential future development of the site will be subject to compliance with CEQA.

_____________________________
Dominick Casey, City Manager