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HomeMy WebLinkAbout1987-02-23 09S MINUTES OF THE MEETING OF THE CITY COMMISSION BOZEMAN, MONT ANA February 23, 1987 ************************ The Commission of the City of Bozeman met in regular session in the Commission Room, Municipal Building, February 23, 1987, at 2: 00 p.m. Present were Mayor Mathre, Commissioner Jordan, Commissioner Stiff, Commissioner Martel, Commissioner Vant Hull, City Manager Wysocki, I City Attorney Becker and Clerk of the Commission Sullivan. The meeting was opened with the PI~dge of Allegiance and a moment of silence. Minutes It was moved by Commissioner Jordan, seconded by Commissioner Stiff, that the Commission approve the minutes of their regular meeting of February 17, 1987, as amended. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Jordan, Commis- sioner Stiff, Commissioner Martel, Commissioner Vant Hull and Mayor Mathre; those voting No, none. Request for one-year extension of Preliminary Plat approval - West Park Manor Subdivision, 4th Addition - portion of Block 4 arid-aTI of Block 5, West Park Manor - 8.GS-acres - R.C. SimkinS:- Western General Enterprises ----, ' City Manager Wysocki presented to the Commission a request from R, G. Simkins, Western General Enterprises, for a one-year extension of the preliminary plat approval of West Park Manor Subdivision, 4th Addition. The plat under consideration consists of 8.65 acres and includes a portion of Block 4 and all of Block 5 of the West Park Manor, The City Manager reminded the Commission that on March 24, 1986, they reviewed the preliminary plat and voted to approve the subdivision, subject to nine conditions. He then recommended that the Commission approve the requested one-year extension, subject to those original conditions. I Commissioner Vant Hull asked for a review of the location of this subdivision and asked if there have been any changes in the area which the Commission should consider. Senior Planner Marcia Elkins stated that the subject subdivision is located along North 23rd Avenue running between West Beall Street and Durston Road. She noted there have been no new developments proposed; and there have been no major change in land use designations in the area. . It was moved by Commissioner Stiff, seconded by Commissioner Martel, that the Commission approve the request by R. G. Simkins, Western General, for a one-year extension of the preliminary plat approval for West Park Manor Subdivision, 4th Addition. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Stiff, Commissioner Martel, Commissioner Vant Hull, Commissioner Jordan and Mayor Mathre; those voting No, non.. Ordinance No. 1228 :_.?.?l~ry_prdinanc! for City Manager for Cale!lE_C!! Year 1987 City Manager Wysocki presented Ordinance No. 1228, as reviewed by the City Attorney, entitled: ORDINANCE NO. 1228 AN ORDINANCE OF THE CITY OF BOZEMAN, MONTANA, FIXING THE MONTHLY SALARY AND OFFICIAL BOND OF THE CITY MANAGER OF THE CITY OF BOZEMAN AS REQU I RED BY LAW. The City Manager reminded the Commission that they had provisionally adopted this Ordinance on February 9, 1987 and recommended that it be finally adopted at this time. I It was moved by Commissioner Martel, seconded by Commissioner Vant Hull, that the Commission finally adopt Ordinance No. 1228, establishing the salary for the City Manager for Calendar Year 1987. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Martel, Commissioner Vant Hull, Commissioner Jordan, Commissioner Stiff and Mayor Mathre; those voting No, none. Commissioner Vant Hull noted that setting of the City Manager's salary is part of his employment agreement, as well as conducting an evaluation of his performance every six months. 02-23-87 087 She reminded the Commissioners that the current evaluation process has been started but not yet completed and requested that it be placed on next week's agenda for discussion. City Manager Wysocki requested that the oral evaluation process be conducted in an executive session to ensure Individual privacy, as provided in Section 2-3-203 (2), M. C. A. Continued discussion - various elements to be contained in revised SI D policy I City Manager Wysocki reminded the Commissioners that they had discussed this item for a very limited time at last week's meeting. Mayor Mathre noted that at last week's meeting, the Commissioners had received a memo from the City Manager and Director of Finance suggesting that the Commission address four separate questions. She indicated those questions are to generate discussion on questions in the original questionnaire where responses were varied. She noted they address whether SID's should be used for raw land developments, and under what circumstances; whether the City should have more control over which engineering firm is selected for an SI D; and whether preliminary costs on non-City-backed SID's should be covered by the individuals requesting the mechanism. The Mayor suggested that the Commission first address whether it wishes to consider the use of special improvement districts for installation of improvements in raw land developments. She then noted the Commissioners have received copies of a draft policy for the City of Billings, which does address the use of SI D's for raw land development. City Manager Wysocki noted that Commissioner Jordan had requested minutes from the meetings of the Billings City Council at which this policy was discussed. He indicated that a discussion with the Director of Finance from the City of Billings revealed that the Council has not yet discussed the policy; therefore, no minutes are available. The Mayor noted that several options are available, including the use of SID's to fund a specified percentage of the total cost of installing improvements; allowing the use of an SID for paving, with the developer using private funding for installation of water and sewer services; I or possible use of a letter of credit or other method of security if more than a specified amount of the improvements is installed through the special improvement district mechanism. Commissioner Stiff asked how the Commission can be sure that the developer has sub- stantially invested in the property and is not just "betting on the come." Director of Finance Gamradt reminded the Commission that the cost of improvements generally runs four to five times the original purchase price for the land when a raw land development is proposed. He noted that, although a developer may own the land outright, that initial investment is minor in relation to the total cost of the project. He then noted that if the developer is required to bear half of the costs of installing the improvements, he has sub- stantially more invested, thus reducing the risks and potential cost to the City. Commissioner Jordan stated he also feels that the developer must have some equity in the project, as Commissioner Martel indicated at last week's meeting. Commissioner Stiff noted that the City must determine what type of value it would consider on a subject parcel. He cited the Smith property as an example, noting that the cost of that land was significantly low because the family had owned it for many years. He then noted that several different valuations can be placed on a parcel; and the Commission should define what value would be considered in reviewing an SID proposal. Commissioner Jordan expressed support for the process used by the City in the Annie Subdivision, which was to discount the appraised valuation of the property by a specified percentage, thus allowing the City to sell the property quite rapidly if the developer defaulted. Mayor Mathre stated she is concerned about the comparative risk to the City and the tax- I payers created by sponsoring of special improvement districts. She noted that to sponsor an SID for one-half of the improvements would be to reduce the amount of risk involved and asked if that is what the Commission wishes to do. The City Manager noted the Commission could set a ceiling for the amount of SID's it would support for one development, with the developer providing the rest of the equity. He then reminded the Commission that every time this mechanism has gotten into trouble, it has been "because somebody bit off more than everybody could chew." 02-23-87 093 Planning Director Lere suggested that phasing of developments could also help, noting that Phase I in Valley Unit was much larger than it needed to be, and much larger than phases in recent projects. Commissioner Stiff noted that the policy should not eliminate the small developer from using this mechanism. Commissioner Jordan stated he feels each request should be considered on its own, with a determination being made on whether it is in the public interest. He then indicated that he I feels the mechanism should be maintained, but with more controls. He stated that he feels the individuals involved in an SID request should be required to provide accurate and current financial information as a part of the review process. The City Manager noted that to require the developer to install water and sewer services or to bear one-half of the improvement costs will require him to seek conventional financing; and that should create a more viable project. Commissioner Stiff noted that to review a balance sheet and determine the profit and loss for an applicant is easy; however, developing an accurate pro forma projection is much more difficult. He further noted that those projections should be conservative; and developers are not conservative by nature. Mayor Mathre noted that the City of Billings' policy contains the requirement for an tlscrow account if more than 50 percent of the improvements are to be installed through the SI D mechanism. She then asked the Commissioners if they are interested in such a requirement, if the bond counsel issues a statement that such escrow requirements can be established. Commissioner Vant Hull stated she still feels that the developers should be allowed to phase in streets in a development, rather than fully constructing them prior to any development within the subdivision. She further suggested that waivers of protest for the creation of SI D's could be required for paving of the street to City standards at some time in the future. Commissioner Jordan stated that when all of the improvements have been installed ini- tially, the homeowners know the costs. He noted that if improvements are made after they have purchased homes, they may not be able to make those payments, citing the paving of West Villard I Street as an example. The Commissioner further noted that people purchasing homes within the city limits Expect City services to be provided, including water, sewer and paved stret:ts. Mayor Mathre noted that, although the developer may have signed a waiver of protest, often the homeowners are not aware of that, which can create problems for the City when it tries to enact that waiver. Commissioner Martel suggested that type of information could be included in a notation on the plat map when it is filed. Planning Director Lere cautioned the Commission that an individual purchasing a home often does not review the plat map and thus would not be aware of such a waiver. He noted that the realtor would need to make that type of information available to a potential buyer. City Manager Wysocki noted that when individuals purchase a house, they often expect that in three to five years, they will be making more money and often extend their finances as far as possible, He then stated that if the developer installs the improvements through private financing, he will add those costs to the price of the home; and the mortgage payments are then spread over a thirty-year period rather than the standard twenty.,..year period for SI D's. Break - 3:00 to 3:10 p.m. Mayor Mathre declared a break from 3:00 p.m. to 3:10 p.m.. in accordance with Commission policy established at their regular meeting of March 14, 1983. Continued discussion (continued) - various elements to be contain~d in revised SI D policy I Mr. Paul Kinshella, Sanderson/Stewart/Gaston Engineering, Inc., noted that the City of Billings' draft policy provides for full funding of off-site improvements; and he feels that could be particularly beneficial with the arterial streets involved in some of the recently-approved subdivisions. He then suggested that the Commission consider adding a section addressing multi- owner developments. He noted that if three or four adjacent developers wish to develop small phases on each of their parcels, it might be beneficial to create one large SID rather than several small ones. He suggested with the diversification of owners, the City could allow more 02-23-87 099 than 50 percent, but less than 100 percent, of the improvements for each parcel to be funded through the SID mechanism. Mayor Mathre asked if the Commission is interested in splitting the special improvement districts into off-site and on-site improvements for raw land developments, patterned after the City of Billings' draft policy. Commissioner Stiff stated he feels that the policy which has been drafted for the City of I Billings is a good one to use as a basis for Bozeman's policy. The City Manager reminded the Commission that the policy they adopt can be changed at any time, depending upon economic circumstances and those serving on the Commission. Mr. Jim Syth, Bridger Builders, stated that they had considered using the special im- provement district mechanism for installing improvements in their twenty-lot development, however, the City's escrow requirements caused them to seek private financing. He noted that they got excellent bids, substantially lower than estimates through the SID process, for the work, partially because the contractors could get the monies as soon as the work was done, rather than having payment delayed as it went through the necessary channels. He then noted that he feels there is a lack of good building lots in the city; and many people want the amenities and city services. He stated that people need to know in advance how much their payments will be for the house and improvements to the lot, since they often cannot afford additional costs after the initial purchase. City Manager Wysocki noted that during the break, City Engineer Phil Forbes suggested the possibility of requiring the developer to seek conventional financing for the installation of improvements, converting the financing to a special improvement district after the improvements have been installed. He noted that process would require the project to undergo careful review by a banking facility, which should assure that the project is sound. Mr. Paul Kinshella reminded the Commission that the first 8 percent of the special improvement district costs are paid to the City for administrative costs and the SID Revolving Fund, which immediately increases the costs of installing the improvements. He also noted that I the prevailing wage is set forth in contract documents when an SID is utilized; and the con- tractor is required to pay those wages, thus increasing the cost of the project. He further noted that if the Commission considers implementing the requirement for a five-year escrow account, similar to that contained in the City of Billings' draft policy, the upfront costs will be a major portion of the total costs; and that requirement could eliminate the use of special improvement districts entirely. Mr. Kinshella then stated that the City of Billings' policy suggests use of a letter of credit; and that mechanism would create less cost to the developer than the requ i rement for a cash escrow account. Mayor Mathre turned the discussion to the second point contained in the list of four questions, which addresses whether engineering costs should be included in the special improvement district and whether a ceiling should be placed on those costs. She noted that question also includes whether the City should be involved in selection of the engineering firm for an SID. The City Manager noted that at the present time, the developer incurs preliminary engineering costs to see if a proposed project is viable. He stated that the developer usually requests that the same engineering firm be retained throughout the process, thus avoiding duplication of engineering efforts and costs. He then stated that he feels the Commission should possibly consider this point, and whether the existing practice is in the best interests of the City. The Commission briefly discussed this point, concurring that if the City has had problems with a specific engineering firm, it should so indicate when the developer submits a I proposed engineer for the project. Otherwise, the developer's choice should be supported whenever possible. The Commission reviewed the fourth question contained in the memo, concurring that the developer should bear all preliminary costs on non-City-backed SI D proposals. The City Manager stated he has several ideas and points to be included in a draft revision of the existing SID policy. He suggested that the staff be given an opportunity to review those comments and submit a proposal back to the Commission as soon as possible. 02-23-87 . 100 Claims City Manager Wysocki presented to the Commission a listing of the claims for the last two weeks. He then recommended that the Commission approve payment of the claims as listed. Mayor Mathre indicated that she will abstain from voting on the claims as listed because one of those is to the agency for which she works. It was moved by Commissioner Vant Hull, seconded by Commissioner Jordan, that the Commission approve the claims as listed and authorize and direct the Director of Finance to I issue payments therefor. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Vant Hull, Commissioner Jordan, Commissioner Stiff and Commissioner Martel; those voting No, none. Mayor Mathre abstained. Discussion - FYI items City Manager Wysocki presented to the Commission the following "For Your Information" item s . (1) The Zoning Commission agenda and packet for the February 24, 1987 meeting. (2) A copy of the complaint recently filed against the City in District Court by John Vipperman. (3) The City Manager stated that he attended the Chamber of Commerce legislative day held last Tuesday. (4) The City Manager indicated that public hearings on the resort tax bill and the hotel/motel tax bill sponsored by the League will be held on Wednesday, March 4. He noted that he plans to attend those public hearings. (5) Commissioner Stiff noted that the Saturday edition of the Billings Gazette indicated that the City of Billings recently took $475,000 from its reserves to cover the costs of an adverse suit. He then requested that the Commission be provided an update on the City's reserves to determine if they are adequate should this type of situation arise locally. He further requested that a copy of the State Statutes be provided to the Commissioners for their review. I It was moved by Commissioner Stiff, seconded by Commissioner Martel, that an update on the status of the City's reserves be placed on the March 9 agenda. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Stiff, Commissioner Martel, Commissioner Vant Hull, Commissioner Jordan and Mayor Mathre; those voting No, none. (6) Commissioner Vant Hull noted that the Commissioners have received a letter from Ben H. and Patty-Rae Slothower, Sylvan Springs Condos, concerning the zoning regulations in the linear park. She then asked about the status of the zoning for the linear park, noting that the emergency zoning ordinance adopted by the Commission does expire in mid-March. The City Manager stated he will check with the Planning Department on the status of the permanent zoning regulations for the linear park. Adjournment - 4:25 p.m. There being no further business to come before the Commission at this time, it was moved by Commissioner Jordan, seconded by Commissioner Stiff, that the meeting be adjourned. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Jordan, Commissioner Stiff, Commissioner Martel, Commissioner Vant Hull and Mayor Mathre; those voting No, none. JUDITH A. MATHRE, Mayor I ATTEST: Clerk of the Commission 02-23-87 .