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HomeMy WebLinkAbout04-17-17 City Commission Packet Materials - A1. Resolution 4772, Creation of SID 740 - North Ferguson and West Oak (Megabuild) Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Rick Hixson, City Engineer Craig Woolard, Director of Public Works SUBJECT: Public Hearing on Protests for Special Improvement District (SID) Number 740 and Adoption of Resolution 4772, Creation of Special Improvement District (SID) Number 740 for the Purpose of Undertaking Certain Local Improvements to North Ferguson Avenue between West Oak Street and Baxter Lane and to West Oak Street between Davis Lane and North Ferguson Avenue and Financing the Costs Thereof AGENDA ITEM TYPE: Action MEETING DATE: April 17, 2017 RECOMMENDED MOTION: After hearing all protests, and finding them to be insufficient under law to bar further proceedings, I hereby move to adopt Resolution 4772, creating Special Improvement District Number 740 for the purpose of undertaking certain local improvements to North Ferguson Avenue between West Oak Street and Baxter Lane and to West Oak Street between Davis Lane and North Ferguson Avenue and financing the costs thereof. BACKGROUND: At its March 20, 2017 meeting the City Commission adopted Resolution 4771, declaring it to be the intention of the City Commission to create Special Improvement District (SID) No. 740, for the purpose of undertaking certain local improvements to North Ferguson Avenue between West Oak Street and Baxter Lane and to West Oak Street between Davis Lane and North Ferguson Avenue and financing the costs thereof. In accordance with Montana Code Annotated (MCA) Title 7-12 Part 41, notice of the passage of this Resolution was made on March 26, 2017 and April 2, 2017. This established the "Protest Period" as March 26, 2017 to April 10, 2017 at 5:00 PM. Pursuant to Section 7-12-4113, MCA, no further proceedings may be taken on creation of a Special Improvement District if the Commission finds protest has been made by the owners of property in the district to be assessed for more than 50% of the cost of the proposed work. Within the Protest Period, protests were filed with the City Clerk by the owner of the only property within the special improvement district, representing 100% percent of the total costs of the improvements to be assessed against properties in the District, as proposed. It is the city’s position that the protest is invalid on the basis that a waiver of right to protest creation of a special improvement district was executed by the property owner in consideration of receiving approval for annexation of the 117 property on October 19, 2001. The property owner specifically waived for itself, and its successors and assigns, the right to protest the creation of one or more special improvement districts for street improvements including paving, curb/gutter, signals, sidewalk, and storm drainage facilities to Baxter Lane, Davis Lane/Fowler Road, Deadman’s Gulch Road, Ferguson Road and Oak Street; trunk water main and appurtenances to serve the property; trunk sewer mains and sewage lift stations to serve the property; or to make any written protest against the size or area or creation of the district to be assessed in response to a duly passed resolution of intention to create one or more special improvement districts which would include the property. FISCAL EFFECTS: The total estimated costs of the improvements are $2,525,667. The City has committed $1,062,138.50 from the Street Impact Fee Fund and Flanders Mill Subdivision has committed $401,390.62 for its share of the improvements to North Ferguson Avenue through a separate agreement with the city, reducing the costs to the SID. The remaining $1,062,138.50 is to be funded by the district. In addition, the district will be responsible for an estimated $1,000 in incidental costs related to the creation of the district for a total of $1,063,138.50. Based on the recommended method of assessment, that is, lot frontage, the estimated assessment would be $222.18 per foot of frontage. These costs would be financed over 3 years at 2.5% annually. The City’s Arterial & Collector District Fund will underwrite the proposed special improvement district. In addition, the city will utilize its SID Revolving Loan Fund excess cash to avoid charging the SID an additional 10% “principal contribution.” This internal financing provides a savings to the district of 10%, or $106,200. After funding the East Olive Project, the City’s SID Revolving Fund has total cash of $2.8 million. State law requires the fund to have a balance of $126,125. Proceeding with this project will require the fund to have a balance of $232,380 in FY18. Beginning in November, annual assessments will be paid back into the Arterial & Collector District fund. Over the life of the loan, if the property owner makes scheduled payments, the Arterial & Collector District Fund will receive approximately $46,993 in interest earnings. UNRESOLVED ISSUES: None. ALTERNATIVES: As suggested by the City Commission. Attachments: Resolution 4772 - Creation of SID 740 Letter of Protest 118 Page 1 of 5 COMMISSION RESOLUTION NO. 4772 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, RELATING TO SPECIAL IMPROVEMENT DISTRICT NO. 740; CREATING THE DISTRICT FOR THE PURPOSE OF UNDERTAKING CERTAIN LOCAL IMPROVEMENTS IN AND ABOUT NORTH FERGUSON AVENUE BETWEEN WEST OAK STREET AND BAXTER LANE AND WEST OAK STREET BETWEEN DAVIS LANE AND NORTH FERGUSON AVENUE, FINANCING THE COSTS THEREOF AND INCIDENTAL THERETO THROUGH A LOAN TO THE DISTRICT FROM THE CITY'S ARTERIAL & COLLECTOR DISTRICT FUND. WHEREAS, on the 20th day of March, 2017, the City Commission (the "Commission") of the City of Bozeman, Montana (the "City") adopted Commission Resolution No. 4771 (the "Resolution of Intention"), stating its intent to create Special Improvement District No. 740 (the "District") to finance the costs of various improvements within the District as described therein (the "Improvements"); and WHEREAS, as set forth in the Resolution of Intention, the Commission committed other revenue sources from street impact fees to the costs of the project; and WHEREAS, on March 26th and April 2nd, 2017, the City Clerk did publish a Notice of Passage of the Resolution of Intent to Create SID No. 740 in accordance with Sect. 7-12-4106, MCA, and mailed said notice to each person, firm, or corporation or the agent of the person, firm or corporation having real property within the proposed District; and WHEREAS, the Bozeman City Commission conducted a public hearing on protests submitted to the creation of the District on April 17, 2017 and did pass on all such protests having found the written protests not sufficient to bar the Commission from proceeding with creation of the District. 119 Resolution 4772, Creation Of Sid 740 - North Ferguson Ave between West Oak Street and Baxter Lane and West Oak Street between Davis Lane and North Ferguson Ave Page 2 of 5 NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, as follows: Section 1 Passage of Resolution of Intention. This Commission, on March 20, 2017, adopted the Resolution of Intention, pursuant to which this Commission declared its intention to create the District, under Montana Code Annotated, Title 7, Chapter 12, Parts 41 and 42, as amended, for the purpose of financing costs of certain local improvements within the District described generally therein (the "Improvements"), and paying costs incidental thereto, including costs associated with the creation and administration of the District, and the funding of a Loan from the City's Special Improvement District Revolving Fund (the "Loan"). Section 2 Notice of Passage of the Resolution of Intent and Public Hearing on Protests. Notice of passage of the Resolution of Intention was duly published and mailed in all respects in accordance with law, and on April 17, 2017, this Commission conducted a public hearing on written protests submitted by property owners against the creation of the District and the making of the Improvements. The public hearing occurred on the date of the first regular meeting of the Commission following the expiration of the period ending 15 days after the first date of publication of the notice of passage of the Resolution of Intention (the ''Protest Period"). Section 3 Protests. Within the Protest Period, protests were filed with the City Clerk by the only property owner within the district, representing 100% percent of the total costs of the Improvements to be assessed against properties in the District, as proposed. The Commission hereby finds that the protest is invalid on the basis that a waiver of right to protest creation of a special improvement district was executed by the property owner in consideration of receiving approval for annexation of the property on October 19, 2001. The property owner specifically waived for itself, and its successors and assigns, the right to protest the creation of one or more special improvement districts for street improvements including paving, curb/gutter, signals, sidewalk, and storm drainage facilities to Baxter Lane, Davis Lane/Fowler Road, Deadman’s Gulch Road, Ferguson 120 Resolution 4772, Creation Of Sid 740 - North Ferguson Ave between West Oak Street and Baxter Lane and West Oak Street between Davis Lane and North Ferguson Ave Page 3 of 5 Road and Oak Street; trunk water main and appurtenances to serve the property; trunk sewer mains and sewage lift stations to serve the property; or to make any written protest against the size or area or creation of the district to be assessed in response to a duly passed resolution of intention to create one or more special improvement districts which would include the property. Section 4 Creation of the District; Insufficiency of Protests. The Commission hereby creates the District on the terms and conditions set forth herein and otherwise in accordance with the Resolution of Intention, as modified hereby. The protests against the creation of the District or the making of the Improvements filed during the Protest Period are hereby found to be insufficient. The findings and determinations made in the Resolution of Intention, including, without limitation, those relating to benefits conferred, costs associated with the borrowing of funds from the City's special improvement district revolving fund, and for the creation and administration of the District, are hereby ratified and confirmed. The Commission finds the Improvements preserve public safety and provide public benefit by expanding the transportation system, improving transportation system connectivity and traffic flow, providing pedestrian ramps and traffic control signage, and providing through lanes and drive approaches for those who reside along these streets or use these streets to access their residences, businesses, places of work and recreation, and benefits the property in the District by providing for the construction of all arterial street facilities required by the Bozeman Municipal Code. Section 5 Reimbursement Expenditures. 5.01. Declaration of Intent. The City reasonably expects to reimburse the expenditures made for costs of the Improvements out of the proceeds of the Loan from the City's Arterial & Collector District Fund in an estimated maximum aggregate principal amount of $1,063,138.50 after the date of payment of all or a portion of the costs of the Improvements. All reimbursed expenditures shall be capital expenditures, a cost of issuance of the Loan, or other expenditures eligible for reimbursement. 121 Resolution 4772, Creation Of Sid 740 - North Ferguson Ave between West Oak Street and Baxter Lane and West Oak Street between Davis Lane and North Ferguson Ave Page 4 of 5 The Commission intends to assess the District to reimburse the Arterial & Collector District fund in an amount equal to the principal of the Loan of $1,063,138.50 to the District plus interest at 2.5% annually. Over the 3-year term of the Loan from the revolving fund to the District, interest earnings of up to $46,993.76 are estimated to be paid from the District property owners and deposited to the Arterial & Collector District fund. The City’s Special Improvement District Revolving fund currently has money in excess of the statutory required minimum. The excess amounts are intended to satisfy any revolving fund contribution from the District that may be required under 7-12-4222(l)(b), MCA. 5.02. Budgetary Matters. As of the date hereof, there are no City funds reserved, allocated on a long-term basis or otherwise set aside (or reasonably expected to be reserved, allocated on a long- term basis or otherwise set aside) to provide permanent financing for the expenditures related to the Improvements, other than pursuant to the Loan from the City's Arterial & Collector District fund. The statement of intent contained in this resolution, therefore, is determined to be consistent with the City's budgetary and financial circumstances as they exist or are reasonably foreseeable on the date hereof. 5.03. Reimbursement Allocations. The City's financial officer shall be responsible for making the "reimbursement allocations" described in the Resolution of Intention being generally the transfer of the appropriate amount of proceeds of the Loan to reimburse the source of temporary financing used by the City to make prior payment of the costs of the Improvements. Each allocation shall be evidenced by an entry on the official books and records of the City maintained for the Loan or the Improvements and shall specifically identify the actual original expenditure being reimbursed. PASSED AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 17th day of April, 2017. ___________________________________ CARSON TAYLOR Mayor 122 Resolution 4772, Creation Of Sid 740 - North Ferguson Ave between West Oak Street and Baxter Lane and West Oak Street between Davis Lane and North Ferguson Ave Page 5 of 5 ATTEST: ________________________________________ ROBIN CROUGH City Clerk APPROVED AS TO FORM: ___________________________________ KAREN STAMBAUGH Assistant City Attorney 123 124