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HomeMy WebLinkAbout05-21-18 City Commission Packet Materials - A5. Resolution 4907, Intent to Dissolve SID 740 - N. Ferguson and W. OakPage 1 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Greg Sullivan, City Attorney SUBJECT: Adoption of Resolution No. 4907, a Resolution of Intent of the Bozeman City Commission to Dissolve Special Improvement District (SID) 740. AGENDA ITEM TYPE: Action MEETING DATE: May 21, 2018 RECOMMENDED MOTION: I hereby move to adopt Resolution No. 4907 declaring it to be the City's intention to dissolve Special Improvement District (SID) No. 740. BACKGROUND: The City Commission created SID 740 (the “District”) on April 17, 2017. The boundaries of SID 740 include the Gallatin County Regional Park property fronting West Oak Street and North Ferguson Avenue. The boundaries of the District and the improvements to be assessed to SID 740 were more particularly described in Resolution No. 4771, the resolution of intent to create the district. Shortly after creation of SID 740, Gallatin County, the sole property owner within the District, sued the City alleging the City’s creation of the SID was improper.1 The City Commission has not yet levied the assessment for SID 740. There is no statutory time frame within which the City is required to levy and assess the District. Construction of the improvements is now complete and final costs are now known. The final costs of construction are significantly lower than the estimated costs when SID 740 was created. The share of actual costs attributable to the District is $902,424.65, or $160,713.85 lower than the 2017 estimate of $1,062,138.50 described in Resolution No. 4771. This amounts to a 1 The District Court dismissed the County’s complaint without prejudice on February 9, 2018. In doing so, the Court did not reach the merits of the County’s arguments. Instead, it declined to exercise its jurisdiction to enter a declaratory judgment because the County has an adequate remedy available to it under the SID statute -- after it receives its tax bill containing the assessment, it can pay the bill under protest and then challenge the lawfulness of the tax. 557 Page 2 reduction of more than 15%. Because of this significant difference in costs, and because the County has not yet been assessed under SID 740, I recommend dissolving SID 740 and creating a new SID that accurately reflects the costs to be assessed. Should the Commission determine to dissolve SID 740 the costs of improvements attributable to the real property included within the District cannot be levied without creation of a new special improvement district. Creation of a new SID would also allow the City to address the County’s concerns related to the manner in which the City created SID 740. The purpose of Resolution No. 4907 is to inform the public of the City's intention to dissolve the SID. This resolution does not dissolve the SID. Should this resolution be approved, notice of passage of the resolution will be published and mailed to the property owner pursuant to state law. The City Commission will then hold a public hearing to pass upon any protest received. The proposed schedule for dissolution of SID 740 is as follows: Resolution of Intent to Dissolve SID 740 May 21, 2018 Publish Notice of Public Hearing May 27 and June 3, 2018 (15-day protest period begins upon first publication of the notice of passage of the resolution of intent) End of Protest Period June 11, 2018 Public Hearing June 18, 2018 Resolution of Dissolution June 18, 2018 FISCAL EFFECTS: Project Costs: When SID 740 was created, the total estimated cost of the proposed improvements was $2,525,667. The City committed $1,062,138.50 from the Street Impact Fee Fund and the developer of the Flanders Mill subdivision committed $401,390.62 for its share of the improvements to North Ferguson Avenue. The remaining $1,062,138.50 was to be funded by the special improvement district. In addition, the district would 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. As described above, actual costs of construction are significantly lower. The final cost breakdown is as follows: FERGUSON AVENUE – BAXTER LANE TO OAK STREET Final cost of improvements $946,255.70 City Share (1/3 of improvements) $299,246.98 SID Share (1/3 of improvements) $299,246.98 Flanders Mill Subdivision Share $347,731.74 (1/3 of improvements + 100% of cost of asphalt trail) 558 Page 3 WEST OAK STREET – FERGUSON TO NEW HOLLAND Final cost of improvements $1,206,355.34 City Share (50% of improvements) $603,177.67 SID Share (50% of improvements) $603,177.67 TOTAL cost of improvements (Oak & Ferguson) $2,152,611.04 TOTAL SID share of improvements (Oak & Ferguson) $902,424.65 UNRESOLVED ISSUES: If the Commission determines to dissolve SID 740, to have authority to levy taxes against the real property benefitting from the improvements and which was included in the boundaries of SID 740, the Commission must create a new special improvement district. ALTERNATIVES: 1. Do not dissolve SID 740 and proceed with a resolution levying the assessment for SID 740. A bill for the assessment would then be sent to the property owner in the regular course. 2. Proceed with an alternate financing method to fund the County’s share of the cost of improvements to West Oak Street and North Ferguson Avenue adjacent to the Gallatin County Regional Park pursuant to the Annexation Agreement executed and recorded when the subject property was annexed to the City. 3. As determined by the Commission. Attachments: Resolution No. 4907 – Resolution of Intent to Dissolve SID 740 559 Page 1 of 4 COMMISSION RESOLUTION NO. 4907 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, RELATING TO SPECIAL IMPROVEMENT DISTRICT NO. 740; DECLARING IT TO BE THE INTENTION OF THE CITY COMMISSION TO DISSOLVE THE DISTRICT. WHEREAS, the City Commission created Special Improvement District No. 740 (“SID 740” or “the District”) on April 17, 2017 by Resolution No. 4772 for the purpose of undertaking certain road improvements to North Ferguson Avenue between West Oak Street and Baxter Lane, and to West Oak Street between Davis Lane and North Ferguson Avenue (“the Improvements”) pursuant to its authority under Montana Code Annotated, Title 7, Chapter 12, Part 41; and WHEREAS, the Resolution of Intention to create SID 740, Resolution No. 4771, describes the boundaries of the District and the particulars of the Improvements to be undertaken; and WHEREAS, the District’s share of the estimated cost of the Improvements as stated in Resolution No. 4771 was $1,063,138.50; and WHEREAS, the Improvements have been completed and the District’s share of actual costs of the Improvements are now known to be $902,424.65; and WHEREAS, Gallatin County, owner of 100% of the property within the District boundaries, protested the creation of the District; and WHEREAS, the City Commission found Gallatin County’s protest invalid because the previous owner of the property within the District waived the right to protest creation of a special improvement district in consideration of receiving approval for annexation of the property to the 560 Resolution 4907, Resolution of Intention to Dissolve SID 740 Page 2 of 4 City on October 19, 2001 and such waiver was a covenant running with the land and binding on successors in interest including Gallatin County; and WHEREAS, after the District was created Gallatin County filed a lawsuit in District Court seeking a declaration the District was void ab initio and alleging defects in its creation; and WHEREAS, SID 740 has accumulated no assets and no property owners within the boundaries of the District have been assessed any fees pursuant to the creation of the District; and WHEREAS, the Bozeman City Commission desires to dissolve SID 740 in order to accurately assess the property within the District for the costs of the Improvements and to address the alleged shortcomings in the creation of SID 740. NOW, THEREFORE, BE IT RESOLVED by the City Commission (the “Commission”) of the City of Bozeman, Montana (the “City”), as follows: Section 1 Intent to Dissolve. It is the intent of the Commission to dissolve SID 740; meaning, SID 740 will no longer have any force or effect. Section 2 Boundaries of District. The limits and boundaries of the District to be dissolved are depicted on a map attached as Exhibit A hereto (which is hereby incorporated herein and made a part hereof) and includes all the properties within the boundaries of the District, the legal description of which is contained in Exhibit B hereto (which is hereby incorporated herein and made a part hereof), which boundaries are designated and confirmed as the boundaries of the District. A listing of the District Property is shown on Exhibit C hereto (which is hereby incorporated herein and made a part hereof). 561 Resolution 4907, Resolution of Intention to Dissolve SID 740 Page 3 of 4 Section 3 General Character of Improvements; Estimated Cost; Method of Assessment. The general character of the Improvements which were to be made pursuant to SID 740, the estimated cost thereof, and the method of assessment by which the Improvements were to be assessed against property in SID 740 is as described in Resolution No. 4771, the resolution of intention to create SID 740. Section 4 Public Hearing; Protests. At any time within fifteen (15) days after the date of the first publication of the notice of the passage and approval of this resolution, any owner as defined in Section 7-12- 4112(4), MCA, of real property within the District to be dissolved who was liable to be assessed for the cost of District’s share of the Improvements may make and file with the City Clerk until 5:00 p.m., MT, on the expiration date of said 15-day period (Monday, June 11, 2018), written protest against the dissolution of the District. Such protest must be in writing, identify the property in the District owned by the protestor and be signed by all owners of the property. The written protest must be delivered to the City Clerk, who shall endorse thereon the date and hour of its receipt. The Commission will, at its next regular meeting after the expiration of the fifteen (15) days in which such protests in writing can be made and filed, proceed to hear and pass upon all such protests so made and filed; which said regular meeting will be held on Monday, the 18th day of June, 2018, at 6:00 p.m., in the Commission Meeting Room, Bozeman City Hall, 121 N. Rouse Avenue, in Bozeman, Montana. Section 5 Notice of Passage of Resolution of Intention. The City Clerk is hereby authorized and directed to publish or cause to be published a copy of a notice of the passage of this resolution as provided in Section 7-12-4106, MCA, in the Bozeman Daily Chronicle, a newspaper of general circulation in the county on May 27, 2018 and June 3, 2018 in the form and manner prescribed by law, and to mail or cause to be mailed a copy of said notice to every person, firm, corporation, or the agent of 562 Resolution 4907, Resolution of Intention to Dissolve SID 740 Page 4 of 4 such person, firm, or corporation having real property within the District listed in the owner's name upon the last completed assessment roll for state, county, and school district taxes, at the owners last-known address, on or before the same day such notice is first published. PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 21st day of May, 2018. ___________________________________ CYNTHIA L. ANDRUS Mayor ATTEST: ________________________________________ ROBIN CROUGH City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 563 564 565 EXHIBIT C Ferguson Avenue & West Oak Street SID ADDRESS OWNER 1 OWNER 2 OWNER ADDRESS CITY STATE ZIP ASSESSABLE LOT FRONTAGE Ferguson Ave (Lineal Feet) ASSESSABLE LOT FRONTAGE West Oak St (Lineal Feet) Total Assessment 1705 Vaquero Pkwy Gallatin County 311 W Main Street, Rm 304 Bozeman, MT 59715-4574 2255.42 2529.59 1,063,138.50$ 566