HomeMy WebLinkAbout02-26-18 City Commission Packet Materials - A2. Resolution 4868, Creation of SID 741, S. Tracy Reconstruction ProjectCommission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Rick Hixson, City Engineer
Kellen Gamradt, Engineer II
SUBJECT: Public Hearing on Protests for Special Improvement District (SID) No. 741
and Adoption of Resolution 4868 - a Resolution of the Bozeman City Commission to
create SID No. 741 for the purpose of undertaking certain local improvements to South
Tracy Avenue between Olive Street and one half block south of Harrison Street and
financing the costs thereof.
AGENDA ITEM TYPE: Action
MEETING DATE: February 26, 2018
RECOMMENDED MOTION: After hearing all protests, and finding them to be insufficient
under law to bar further proceedings, I hereby move to adopt Resolution 4868 creating Special
Improvement District No. 741 for the purpose of financing local improvements to South Tracy
Avenue Between Olive Street and one half block south of Harrison Street.
BACKGROUND: At its January 22, 2018 meeting the City Commission adopted Resolution
4867, declaring it to be the intention of the City Commission to create Special Improvement
District (SID) No. 741 (the “District”) for the purpose of undertaking certain local improvements
to South Tracy Avenue between Olive Street and one half block south of Harrison Street 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 published in the Bozeman Daily Chronicle on
January 28, 2018 and February 4, 2018 and mailed to all property owners to be assessed. This
established the "Protest Period" as January 28, 2018 to February 12, 2018 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, one protest was filed with the City Clerk by the property owners of
one parcel, representing 1.5% percent of the total costs of the improvements to be assessed
against properties in the District, as proposed.
FISCAL EFFECTS: The total estimated costs of the improvements are $1,528,000. The City
can commit, per its policy, $1,298,800 from the Street Reconstruction Fund to reduce the costs to
the District, leaving $229,200 of the costs 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
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District for a total of $230,200. Based on the recommended method of assessment, that is, lot
frontage, for a typical residential lot with 65 ft. of frontage, the total estimated assessment would
be $3,078.14. The assessment would be financed over 20 years. At the current estimated interest
rate of 1.5%, a typical residence would be assessed approximately $178.72 annually, equivalent
to $14.89/month.
The City’s SID Revolving Fund has cash in excess of the statutorily required amount (10% of the
City’s outstanding SID debt). This excess will be used to underwrite the SID costs; the
Revolving Fund will loan the District the money, rather than have a bond sale. The City used
this type of underwriting for the Olive Street, Story Street and Wallace Avenue SIDs, also. This
has a number of benefits: 1. Lower interest rate for the District property owners, 2. Avoidance of
the costs and time-consuming work of underwriting and bond sale, 3. Revolving Fund will be
“paid back” as property owners make their payments over time, with interest.
The City’s SID Revolving Fund has total cash of $2.8 million. State law requires the fund to
have a balance of $104,053. Proceeding to underwrite this project, cash will immediately be
decreased by $230,200. Beginning in November, annual assessments will be paid back into the
fund. Over the life of the loan, the Revolving Fund will receive approximately $37,109.68 in
interest earnings. These earnings can be used to underwrite other projects in the future –
growing the City’s ability to complete SID projects.
UNRESOLVED ISSUES: None.
ALTERNATIVES: As suggested by the City Commission.
Attachments: Resolution 4868, Letter of Protest
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Page 1 of 5
COMMISSION RESOLUTION NO. 4868
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA, RELATING TO SPECIAL IMPROVEMENT DISTRICT NO. 741;
CREATING THE DISTRICT FOR THE PURPOSE OF UNDERTAKING CERTAIN
LOCAL IMPROVEMENTS IN AND ABOUT SOUTH TRACY AVENUE BETWEEN
OLIVE STREET AND ONE HALF BLOCK SOUTH OF HARRISON STREET,
FINANCING THE COSTS THEREOF AND INCIDENTAL THERETO THROUGH A
LOAN TO THE DISTRICT FROM THE CITY'S SPECIAL IMPROVEMENT
REVOLVING FUND.
WHEREAS, on the 22nd day of January, 2018, the City Commission (the "Commission")
of the City of Bozeman, Montana (the "City") adopted Commission Resolution No. 4867 (the
"Resolution of Intention"), stating its intent to create Special Improvement District No. 741 (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 reconstruction fees to the costs of the project; and
WHEREAS, on January 28th and February 4th, 2018, the City Clerk did publish a Notice
of Passage of the Resolution of Intent to Create SID No. 741 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
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Resolution 4868, Creation of SID 741, S. Tracy Reconstruction Project
Page 2 of 5
submitted to the creation of the District on February 26, 2018 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.
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 January 22, 2018, 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 February 26, 2018, 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 ended 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, one protest was filed with the City Clerk by the property
owners of one parcels, representing 1.5_% percent of the total costs of the Improvements to be
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Resolution 4868, Creation of SID 741, S. Tracy Reconstruction Project
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assessed against properties in the District, as proposed.
Section 4
Creation of the District; Insufficiency of Protests. The Commission determines the District is
hereby created 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.
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 special
improvement district revolving loan fund in an estimated maximum aggregate principal
amount of $230,200.00 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.
The Commission intends to assess the District to reimburse the special improvement
district revolving loan fund in an amount equal to the principal of the Loan of
$230,200.00 to the District plus interest at approximately 1.5% annually. Over the 20-year
term of the Loan from the revolving fund to the District, interest earnings of up to
$37,109.68 are estimated to be paid from the District property owners and deposited to the
special improvement district revolving fund. In addition to reimbursing the revolving fund
on interest the revolving fund would otherwise earn, these interest earnings are
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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 special improvement district revolving loan 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.
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PASSED, ADOPTED, AND APPROVED by the City Commission of the City
of Bozeman, Montana, at a regular session thereof held on the 26th day of February, 2018.
_________________________________
CYNTHIA L. ANDRUS
Mayor
ATTEST:
________________________________________
ROBIN CROUGH
City Clerk
APPROVED AS TO FORM:
_________________________________
GREG SULLIVAN
City Attorney
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