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HomeMy WebLinkAbout10-04-16 NURB Minutes NURB Meeting – October 4, 2016 1 Northeast Urban Renewal Board (NURB) Regular Meeting Tuesday, October 4, 2016 The Northeast Urban Renewal Board met in regular meeting at 6:30 p.m. on Tuesday, October 4, 2016, in the Conference Room, Professional Building, 20 East Olive Street, Bozeman, Montana. Present: Absent: Voting Members: Erik Nelson, Vice Chair Jeanne Wesley-Wiese Bobbi Clem Daniel Doehring Robert Pavlic Non-Voting Members: John Usher Tom Noble Commissioner Liaison: I-Ho Pomeroy Staff: Anna Rosenberry, Administrative Services Director Lanette Windemaker Brit Fontenot, Economic Development Director Robin Sullivan, Recording Secretary Guests: Shane Strong, KLJ Engineering Chris Nixon, 719 North Wallace Avenue Call to Order –Chair Erik Nelson called the meeting to order at 6:35 p.m. Changes to the Agenda – No changes were made to the agenda. Public Comment – Chris Nixon asked that the impacts to the trail connector for the depot in conjunction with reconstruction of North Wallace Avenue be discussed. Economic Development Director Brit Fontenot indicated this issue will be discussed under Neighborhood News later in the meeting. Minutes – September 6, 2016. It was moved by Bob Pavlic, seconded Dan Doehring, that the minutes of the meeting of September 6, 2016, be approved as submitted. The motion carried on a 4-0 vote. NURB Meeting – October 4, 2016 2 Discussion/Action Items – Update on bonding capacity; and update on cash flow relative to reserve for bonding. Administrative Services Director Anna Rosenberry reviewed the taxable value of properties in the district, noting that the actual bonding capacity of the district is based on those values. She reminded the Board that this district will sunset in 2020 unless debt is issued; and that debt can be for up to 25 years under state law. The Administrative Services Director stated an increase in values was anticipated; however, the valuation was actually reduced under the latest appraisal. She asked the Department of Revenue why the reduction occurred; the response was that it’s related to assessment of the Montana Rail Link property. As a result of the reduced valuation, the estimated maximum amount of debt is $1,446,000. Once she receives the total mill levies for each of the three taxing entities later in October, that calculation may be slightly adjusted. She reminded the Board that the interest rate for the bonds will impact the total amount of debt that can be incurred; and that figure won’t be known until the bond sale occurs. She stated that with the issuance of bonds through a private sale, the costs of the bond sale will be lower than if it goes through the public sale process. Administrative Services Director Rosenberry stated that the next step in the process is to develop a priority list of projects to be accomplished with the monies. It is important to ensure there are sufficient projects on the list to expend all of the proceeds from the bond sale, with the understanding that the monies may or may not be adequate to complete the last item on the list. She estimated that if the maximum amount is bonded, the annual debt payment will be $102,000, leaving $30,606 available from the annual increment to fund administrative costs and possibly other projects. Responding to Erik Nelson, Director Rosenberry confirmed that state law allows multiple borrowings. She cautioned, however, that future borrowings would be considered secondary to the initial bond sale; and it may be more difficult to find someone willing to lend those monies. Also, the interest rate and coverage requirements may increase for those borrowings. Administrative Service Director Rosenberry concluded by cautioning that it is important to pay attention to any requirements imposed by the lender on any debt incurred; and she will be closely monitoring the bonding process to ensure that restrictions imposed are appropriate. Update on bonding schedule and process; and overview of other funding mechanisms available. Lanette Windemaker reviewed her memo dated September 9, noting that it includes consideration of projects and financing options at this meeting, adopting a resolution identifying its project priorities and commitment of TIF funds to payment of bonds at its November meeting, a public hearing before the City Commission in December, and sale of bonds in January. She noted that once the Commission adopts its resolution setting the public hearing date and providing for reimbursement of funds expended, bond monies can be used for engineering costs that have been incurred within the past sixty days. Lanette Windemaker stressed that this timeline does not include the KLJ timeframe and when the design will be completed, when the Board will approve that plan, what other entities need to approve the plan and when the construction documents will be ready for bid. She cautioned that those dates could impact the schedule she has prepared for bonding. NURB Meeting – October 4, 2016 3 Lanette Windemaker turned attention to alternative funding strategies, which include using TIF monies only, a conventional loan, a reimbursement agreement, grant or loan funding, or a special improvement district. Economic Development Director Brit Fontenot stated he feels the standard bonding process, particularly through a private sale, is the best option. He noted that hitting an early spring bidding date would be most advantageous in terms of cost. Erik Nelson noted that issuing bonds is the only way to extend the life of the district under state law, and that is the process he feels this Board should pursue. Responding to Bobbi Clem, Economic Development Director Fontenot stated that the Commission is aware of this Board’s on-going discussion about issuing bonds and extending the life of the district for 25 years but it is important to inform them as soon as possible that the Board has taken action to move forward with the process. Erik Nelson stated he thinks the Commission would view the issuance of bonds favorably, particularly since they have been critical that infrastructure improvements have not been made to date. He noted part of the delay in moving forward is due to economic downturns. Lanette Windemaker noted that the work plan for Fiscal Year 2016-2017 includes taking on debt to complete the projects contained in it. Responding to concerns voiced by Bobbi Clem, Administrative Services Director Rosenberry stated the Commission does a lot of financial work at the end of the calendar year. John Usher asked if slowing the process would be more advantageous or less advantageous. Economic Development Director Fontenot cautioned it could be less advantageous, particularly since the Legislature is meeting this year and could potentially adopt legislation that negatively impacts TIF districts. Administrative Services Director Rosenberry noted she does not know enough about the two- year reappraisal cycles to gamble on future appraisals. Shane Strong addressed the issue of costs, noting that if the price of oil rebounds, asphalt prices will skyrocket. Since most of the projects in this district involve road projects, that could negatively impact the number of streets that could be reconstructed. Discussion regarding project priorities. Erik Nelson stated the Board should move forward with the issuance of bonds. He noted any projects within the district that could result in a higher increment are at least two and a half years from completion. He stated that if the City provides any assistance in the reconstruction of East Peach Street or East Tamarack Street, it is possible that some of the other projects could also be completed. Bobbi Clem stated she does not see the value of the East Aspen Street pedestrian bridge, particularly in light of the estimated costs. She then asked about its purpose. NURB Meeting – October 4, 2016 4 Erik Nelson responded the bridge is a component of pedestrian connectivity, noting the question is whether it is worth the cost. He cautioned that, since the champion of this project is not present tonight, he is hesitant to remove it from the list of projects at this time. He reminded the Board that a portion of the remaining increment each year after debt payment is needed for operational costs, which are approximately $15,000 per year. Responding to John Usher, Administrative Services Director Rosenberry stated the full $1.4 million in bond proceeds will be spent down on the projects in priority order because the monies will run out before the projects are completed. She stated it is important for the Board to be clear on how the projects will proceed, noting it is not bad to have more projects on the list than it is anticipated the funding will support; however, there should not be a substantial number of unfunded projects remaining. Bobbi Clem stated that since North Wallace Street has been under construction, North Ida Avenue has had a lot more traffic; and she anticipates the forthcoming reconstruction of North Rouse Avenue will have a similar impact. Responding to questions from Erik Nelson, Lanette Windemaker stated that Community Development Block Grant (CDBG) monies could be used for planning, like the feasibility of a quiet zone. She cautioned that the grant process is very competitive, and none of these infrastructure projects would score well enough to be funded. As a result of discussion, the Board agreed to revising the priority of the projects to be funded through bond proceeds as follows: East Tamarack Street, East Peach Street, North Ida Avenue, Front Street and the pedestrian bridge/East Aspen Street. John Usher asked if the engineer has cored North Ida Avenue and East Front Street and whether the estimated costs for those streets need to be adjusted. Shane Strong responded that the original proposal for East Tamarack Street and East Peach Street was for edge replacement only; and the increase was due to the determination that a full reconstruction is needed. He then stated that the original estimates for North Ida Avenue and Front Street were for full reconstruction, so those numbers did not require significant change. It was moved by Dan Doehring, seconded by Bobbi Clem, that the projects to be funded through bond proceeds be set in the following priority order: (1) East Tamarack Street, (2) East Peach Street, (3) North Ida Avenue, (4) Front Street and (5) pedestrian bridge/East Aspen Street. The motion carried on a 4-0 vote. At Erik Nelson’s request, Lanette Windemaker reviewed the original resolution proposed in March that established the priority order of projects to be funded through the bond proceeds. She stated the number on the resolution needs to be changed from 2016-02 to 2017-01, the list of projects in the initial paragraph needs to be changed, the list of projects in priority order needs to be changed in both the “Whereas” and the “Now, therefore” sections, any references to amending the work plan need to be eliminated, and the date and signature line need to be changed. Erik Nelson suggested that the language in the “Now, therefore” section be revised to state the projects will be completed in priority order to the extent funding allows. NURB Meeting – October 4, 2016 5 Economic Development Director Fontenot stated he can introduce these street improvements into the capital improvement plan discussions so that Director of Public Service Woolard can be prepared to address the utility improvements in conjunction with each one of them. It was moved by Erik Nelson, seconded by Dan Doehring, that the Board adopt Resolution No. 2017-01 as submitted by Lanette Windemaker, and direct staff to proceed with bond counsel on the appropriate documents to present to the City Commission, recognizing that the priority list may be reconsidered at the Board’s November 1 meeting if necessary. The motion carried on a 4-0 vote. Erik Nelson asked Shane Strong to provide an update on how engineering components fit into the schedule for bonding submitted by Lanette Windemaker at the next Board meeting. Updates on current projects and updated project cost estimates – KLJ Engineering. Shane Strong gave an update on the North Wallace Avenue project, noting the project has been held up by a City project and some rain days. He anticipates the costs will not go over budget except for the subgrade stabilization, although he has not yet received the most recent pay request. He stated this district’s portion of the project is $101,052, which is an 11 percent increase over the $91,189 original assessment; however, it is almost $50,000 below the original estimate. Shane Strong stated that by the end of the week, the contractor should be working on the base material between East Peach Street and East Tamarack Street, with curb and gutter to be poured and paving to follow. Work on the north section will then begin. Bob Pavlic noted that the pedestrian crossing was very expensive, given the work that MRL did on it. He noted that four slabs of prefabbed concrete were delivered and then installed between the tracks; and that is the extent of the work done on that crossing for a cost of $50,000. Staff updates on items of interest to the Board. Economic Development Director Brit Fontenot reported that the City Commission unanimously ratified this Board’s bylaws at its meeting two weeks ago. Update on financial status of NURB fund. Recording Secretary Robin Sullivan distributed copies of the revenues and expenditures for Fiscal Years 2015-16 and 2016-17. She noted that the books for Fiscal Year 2015-16 have now been closed, so all expenditures are occurring in Fiscal Year 2016-17. She drew attention to the balance carried forward to this fiscal year, noting it is lower than projected because the North Wallace Avenue assessment was taken out of last year’s budget. She noted the additional costs will be taken out of this year’s budget, but will be lower than the amount budgeted. Responding to John Usher, Recording Secretary Sullivan stated tax increment financing monies have been budgeted for the quiet zone feasibility study. Set agenda for November 1, 2016 meeting or cancel meeting. Items to be included on the November 1 agenda, in addition to the standard agenda items, are: review of priority NURB Meeting – October 4, 2016 6 project list in Resolution 2017-01, quiet zone in work plan, and discussion on possibly directing staff to initiate CDBG application process. FYI/Discussion (formerly Neighborhood News). Chris Nixon noted that none of the diagrams presented to the Board included impacts on the trail connector for the depot; and that has resulted in changes to the trail improvements previously constructed by the neighborhood with grant monies from the Department of Fish, Wildlife and Parks. One tree has been cut down and some of the shrubbery has been removed. After neighbors raised concerns about the actions being taken, alterations have been made, and rerouting of the trail will be done to a lesser degree than originally planned with more of the vegetation being preserved or relocated. Bob Pavlic stated he also talked to the engineer about the proposed moving of the picnic table. Erik Nelson asked if the neighbors are satisfied with the outcome of the meeting on Thursday; Chris Nixon responded he believes so. Shane Strong referred to an aerial image of the area with the pond footprint and trail realignment depicted. He is waiting for the City’s arborist to identify the species of vegetation to be planted, and will include that information on the plan when he receives it. He stated the trees and shrubbery will be planted next spring, and the pond will be seeded this fall. Shane Strong noted that the meeting with the neighborhood was pretty contentious. He stated KLJ was not aware of the grant monies and sweat equity that had gone into the site; and they were responding to the City’s direction to include the retention pond at this location since it is already a low depression area owned by the City. Chris Nixon noted that when the grant was received, there was a natural spring coming up on the site; and it was always wet. When the City proposed a water line through the site, the neighbors wrote a letter expressing concern that it would change the water flow. Instead, the City put the water line in East Tamarack Street; and it cut off the water flow so the water feature no longer exists. He expressed concern that the proposed improvements will encourage the water to go away from the site, thus preventing the natural spring from once again creating a wet area. Economic Development Director Brit Fontenot acknowledged that communication could have been better, but there was no institutional memory about the pocket park. He then recognized presentations focused on the road components and not the retention components of the project. Chris Nixon acknowledged that better communication could have resulted in saving the tree and could have alleviated or prevented the hurt feelings and anxiety. Responding to Erik Nelson, Shane Strong stated the picnic table is to be moved back a few feet. Erik Nelson asked what the detention area is designed for; Shane Strong responded it is designed for a two-year event and has a slotted drain with a pipe at the bottom of the pond. Adjournment – 8:54 p.m. There being no further business to come before the Board at this time, Chair Nelson adjourned the meeting. NURB Meeting – October 4, 2016 7 Erik Nelson, Chair Northeast Urban Renewal Board City of Bozeman