HomeMy WebLinkAbout06-04-18 City Commission Packet Materials - C17. FY18 Northeast URD Annual Report and FY19 Work Plan and Budget
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Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Brit Fontenot, Economic Development Director
SUBJECT: Northeast Urban Renewal Board Proposed FY 19 Work Plan and
Budget
MEETING DATE: June 4, 2018
AGENDA ITEM TYPE: Consent
RECOMMENDATION: Review the attached materials and acknowledge receipt
via an affirmative vote on the Consent agenda. Once acknowledged by the City
Commission, the NURB FY 19 Work Plan and Budget Proposal will be considered as part
of the City of Bozeman’s FY 19 Budget.
BACKGROUND:
At its regular meeting held on May 23, 2018 the Northeast Urban Renewal Board
approved the attached FY 19 work plan and budget. (Attachments 1 - 3) The total
amount of budgeted funds for FY 19 is $1,244,000, including carry over from previous
years.
FY 19 Proposed Budget Summary
Infrastructure $1,002,926
Parks/Trails $3,000
Planning $1,000
Staff Time $10,000
Noticing and Administrative Services $3,000
Consultant Costs $10,174
Bond Payment $93,000
Designated Bond Reserve $120,900
Undesignated Reserve $0
Overall Budget Total $1,244,000
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The Northeast Urban Renewal Board proposes a work plan and budget and
submits a report on an annual basis per Section 7-15-4237 of the 2009 Montana Code
Annotated (MCA):
(1) An agency authorized to transact business and
exercise powers under this part and part 43 shall
file with the local governing body, on or before
September 30 of each year, a report of its activities
for the preceding fiscal year.
(2) The report shall include a complete financial
statement setting forth its assets, liabilities,
income, and operating expenses as of the end of
the fiscal year.
UNRESOLVED ISSUES:
None at this time.
FISCAL EFFECTS:
At the time of publication of the FY 19 proposed budget, the estimated value of
one mill was $105,244. The ending fund balance (Fund 144), as of May 23, 2018 is
$412,514.41. (Attachment 4) Ending fund balance in the bond fund (Fund 505) is
160,419.82 (Attachment 5) If approved by the City Commission, the NURB FY 19 Work
Plan and Budget Proposal will be adopted as part of the City of Bozeman’s Annual
Budget adoption process. A map of the District is shown as Attachment 6.
ATTACHMENTS:
1. Northeast Urban Renewal District FY 19 Proposed Budget;
2. Northeast Urban Renewal District FY 19 Proposed Budget Spreadsheet;
3. Northeast Urban Renewal District May 8, 2018 Draft Minutes;
4. Northeast Urban Renewal District Revenues and Expenditures (Fund 144) as of
May 23, 2018; and
5. Northeast Urban Renewal District Revenues and Expenditures (Fund 505) as of
May 23, 2018
6. Map of the Northeast Urban Renewal District.
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Report compiled on: May 24, 2018
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Northeast Urban Renewal Board Annual Work Plan and Budget FY19 1
NORTHEAST URBAN RENEWAL BOARD BUDGET FY 2019 PROPOSAL
TO THE BOZEMAN CITY COMMISSION
In 2005, the Bozeman City Commission adopted Ordinance No. 1655 which formally enacted the
Northeast Urban Renewal Plan. The stated mission of the plan and general goals are as follows:
DISTRICT PLAN MISSION/VISION “This Plan is the City’s response to remedy the conditions of blight found in the August 2005 [Blight]
Report. The Plan also addresses other issues important to the District. The Plan’s purpose is to ensure
the vitality of the Northeast Urban Renewal District (NURD) the vitality of the NURD for generations
to come, and to make the NURD an area in which its citizens can take exceptional pride. The Plan envisions a mixed use neighborhood that is user friendly, safe, secure and healthy. While this Plan envisions a District with diversity of housing businesses and amenities, it intends to maintain the
unique ambiance and historic character of the District”.
Nine principles were developed for the plan. Each of the principles has one or more goals associated with the plan, some of which specifically relate to this work plan while others represent general objectives and directives. The Northeast Urban Renewal Board (NURB) goals are as follows:
GENERAL GOALS:
Outdated or insufficient infrastructure should be repaired, replaced, or otherwise improved.
Provide public utilities to the area efficiently in ways that are not visually or physically
obtrusive.
Encourage a land use pattern that facilitates all modes of transportation – vehicular, bicycle, pedestrian, mass transit, and commercial – for safe, efficient and convenient access for residential, commercial, and industrial uses.
Harmonize commercial and industrial development with residential quality of life.
New structures should be designed and built keeping in mind the public values of
durability, flexibility, and simplicity. Thoughtful consideration of design, materials, and massing in the construction of new private buildings will add strength and character to the built environment. To the degree that the private sector can be influenced by a
public partner in development, the community ought to strongly encourage excellence
in urban design as a basis of partnership.
Promote sustainable building practices and design within the district.
Procure new land for park and open space.
Improve landscaping in existing public spaces.
Neither the City of Bozeman nor any of its subdivisions shall use eminent domain to
take private property for private use in the implementation of an urban renewal project
or similar redevelopment plan.
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Northeast Urban Renewal Board Annual Work Plan and Budget FY19 2
Encourage the City to help ensure the success of the Northeast Urban Renewal Plan by
giving a high priority to the Northeast District in its capital improvements plan.
Work with neighborhoods and businesses to ensure actions taken in the district are compatible with adjacent developed areas.
Work with the City to ensure actions taken outside of the District are compatible with
projects inside of the District.
BACKGROUND In 2010, the Northeast Urban Renewal Board began implementing plans and projects reflecting their
three funding priorities: 1) Parks, Trails and Greenspace; 2) Infrastructure and 3) Neighborhood
Development Plan.
FY 2018 AT-A-GLANCE At the end of FY 2017, the City Commission took the steps necessary to authorize issuance of tax
increment financing bonds in the total amount of $1,446,000 to cover the costs of infrastructure
improvements within the district. Those improvements included, in priority order, (1) East Tamarack Street, (2) East Peach Street, (3) North Ida Avenue, (4) Front Street and (5) pedestrian
bridge/East Aspen Street.
At the very beginning of FY 2018, the first “half” of the bond proceeds, in the amount of $851,048,
was received. A majority of those proceeds were expended on engineering services for East Peach Street reconstruction, East Tamarack Street improvements and the pedestrian bridge, and for the
reconstruction of East Peach Street. The East Peach Street improvements included installation of a
stormwater system, stabilization of the street base, replacement of curb, gutter and sidewalks and
paving the roadway from Avocado Street to just west of the bridge. Replacement of segments of the
water main and the sewer main was also included in the project; and those costs were borne by the utility funds.
The designs for East Tamarack Street improvements are ready for bidding in the spring, with
construction to begin once repairs and punch list items for East Peach Street have been completed.
Timing of the East Tamarack Street project has been delayed until this fiscal year to coordinate with the Front Street interceptor sewer project, which will be funded by the sewer utility fund. The street
improvements to be covered by the urban renewal district include installation of a stormwater
system, stabilization of the street base, curb, gutter and sidewalks and paving the roadway from
Front Street to just west of the bridge.
The Regional/Urban Design Team (RUDAT) report was completed and the report issued in FY
2018. This Board voiced general support for the report, but ultimately determined its primary focus
would remain on infrastructure improvements and ensuring that any proposed development
complies with and furthers the goals of the urban renewal plan. Subsequently, a group of interested
people was formed, and they chose the name Vision NorthEast. That group, which functions independently, is being absorbed into the NorthEast Neighborhood Association; and a subcommittee
of that body will continue to look at options and events to generate interest in the northeast area and
to monitor any proposals for this area, to ensure that the existing character of this community is
preserved.
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Northeast Urban Renewal Board Annual Work Plan and Budget FY19 3
The Board has identified the benefits that a quiet zone could have for not only this district but for
the community as a whole. As a result, it has committed one-third of the estimated $21,700 cost of
a feasibility study that addresses the three railroad crossings, at North Wallace Avenue, North Rouse Avenue and Griffin Drive. It is working to generate enough community interest to fund the other
two-thirds of the study costs since only one of the crossings lies at the outside edge of this district.
The Board continued to demonstrate its commitment to preserving the District’s historic character
by monitoring any proposals that might impact historic properties. The Board is vigilant in
monitoring new proposed development within the District, to ensure its compatibility with the historic mixed use character of the area.
In February 2018, the Board adopted Resolution 2018-01, supporting the Cottonwood & Ida
Planned Unit Development concept and indicating it may be willing to consider issuance of tax
increment financing bonds at some time in the future to reimburse costs incurred for improvements to public infrastructure.
MOVING FORWARD – FY 2019
The Board continues to support opportunities to work with Montana Rail Link and Burlington Northern Santa Fe on preservation and rehabilitation projects for the passenger depot. It has also
expressed interest in working with the railroad to, as good neighbors, take necessary steps to help
preserve and potentially, down the road, participate in any rehabilitation of the depot structure. The
Board has recently been made aware of a local developer’s progress in working with the railroads to
rehabilitate the depot and make it a functioning structure in the district, thus meeting one of the district’s long time goals.
Work concerning the rail line on our north and eastern borders also includes an active promotion
related to study of, and potential formation of, a quiet zone along the rail corridor which includes
the three crossings at North Wallace Avenue, North Rouse Avenue and Griffin Drive.
In response to a City Commission directive, staff is reviewing the structure of all boards and is
submitting possible alternatives for reducing the number of citizen boards. One of the options for
urban renewal boards is the creation of an agency to oversee all of the districts and to create a single
board, with representatives from each of those districts, that administers all of the tax increment financing districts in the city.
The three-year engineering contract with KLJ will expire in August 2018; and that contract has no
option for extension. As a result, the request for proposals process will once again be undertaken
and an engineering firm selected for a new multi-year contract.
The Board is also sympathetic to viewpoints related to rehabilitation of wetlands (NorthEast Area
Wetlands) that have been expressed by both citizenry and individual board members. The subject
wetlands lie several blocks east to southeast of the district, and discussion has included the
possibility of a trail connection around those wetlands and along the railroad tracks to connect to the existing rail system. Since this project lies outside the boundaries of the district, this is a project that
may be monitored by the Board but is to be furthered by a separate committee.
In light of the fact that bonds are being issued for the top priority street reconstruction projects, this
budget and work plan focuses on only those top priorities, bond coverage and repayment
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Northeast Urban Renewal Board Annual Work Plan and Budget FY19 4
requirements, and administrative needs. Furthermore, the Board has pledged to designate future
annual tax increment payments to repay the bonds authorized by the Bozeman City Commission.
NORTHEAST URBAN RENEWAL PROJECTS
INFRASTRUCTURE
Poor pedestrian connectivity within the District is well documented. Lack of street improvements including missing curb, gutter, pavement and sidewalks creates an unwelcoming and potentially
unsafe environment for pedestrians and bicyclists. A lack of stormwater drainage facilities leads
to the ponding of water in public rights-of-way, encouraging pedestrians to walk in the street and
emphasizing the need for street improvements. The District has a historic mix of light
manufacturing and residential uses creating a more urban environment on the streets, especially during business hours. Modest improvements to pedestrian facilities to create safer more
welcoming routes for pedestrians will reduce conflict between users. The lack of street
delineation/improvements and stormwater facilities has caused an unknown number of
individuals to use some sections of the District as dumping grounds for unwanted appliances and
furniture. Street improvements coupled with improvements to trails and parks and the landscaping of public spaces will improve conditions for pedestrians and bicyclists and reduce, if
not eliminate, dumping in the public right-of-way.
Making improvements to sidewalks on unimproved streets comes with some difficulty especially
if elevation differences are present across the width of the right-of-way and if a need to improve stormwater drainage is warranted as well. What seems like a rather simple project turns into a
large scale street improvement project. Without additional information, moving forward on these
improvements is difficult, so survey and design is the first step. Regarding design, the Board
recognizes that creative solutions are needed to enhance the public right-of-way for two very
different user types in the District. In support of improvements to these streets, the Board has allocated a portion of the budget to the following deficient street sections in the District:
East Peach Street $ 103,426
While the majority of improvements have been completed on this roadway, there is some
outstanding work to be done. Among those is the requirement to mill and replace the asphalt on the entire length of the reconstructed roadway since the existing asphalt does not meet standards.
In light of those deficiencies and the remaining work items, this contract has not been closed out,
and it is anticipated those costs will not be incurred until after the start of the fiscal year, so the
remainder of the monies previously budgeted for this project have been included in the budget.
East Tamarack Street $ 760,000
This Board identified East Tamarack Street as the top priority project to be funded through the
issuance of bonds, and KLJ Engineering has completed the design work. This street
reconstruction is being done in conjunction with the Front Street interceptor sewer project. In
addition to the street and stormwater improvements, the Board has determined that it wishes to install fiber conduit along the street frontage; and that portion of the project will be funded through the annual tax increment financing revenues.
North Ida Avenue/Front Street $ 50,000
Improvements to North Ida Avenue was identified as the third priority for use of bond proceeds.
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Northeast Urban Renewal Board Annual Work Plan and Budget FY19 5
In light of the proposed Cottonwood & Ida development, the engineering design for the North Ida
Avenue improvements is needed to ensure that those street improvements are in conformance
with this Board’s vision and are approved by the City prior to the private development occurring. It is anticipated that those street improvements adjacent to the development will be completed in
conjunction with that development. If sufficient monies remain from the bond proceeds once the
East Peach Street and East Tamarack Street improvements are completed, construction of these
street improvements can be considered.
Improvements to Front Street was identified as the fourth priority for use of bond proceeds. In
light of the potential rehabilitation and reuse of the depot, the engineering design for that portion
of Front Street lying between East Tamarack Street and North Ida Avenue (approximately 200
feet) is needed to ensure that those street improvements are in conformance with this Board’s
vision and are approved by the City prior to reuse of the depot. Also, it is important to coordinate the design of these street improvements.
Quiet Zone Feasibility Study $ 7 ,500
The quiet zone feasibility study continues to be an important issue to the Board. It has
recognized that it can fund only one-third of the estimated $21,700 cost of the study, which includes the three railroad crossings at North Wallace Avenue, North Rouse Avenue and Griffin
Drive.
Pedestrian Bridge/East Aspen Street right-of-way between North
Rouse Avenue and Bozeman Creek $ 82,000 The City has determined that if the pedestrian bridge is constructed, pedestrian facilities along
East Aspen Street will be required; however, complete reconstruction of the street will not be.
Board members previously identified the need for a pedestrian bridge at the terminus of East
Aspen Street and the North Church Avenue trail east of North Rouse Avenue. East Aspen Street comes to an end at Bozeman Creek; and the use along this section is largely residential with a
retail store (retail) at the southeast corner of North Rouse Avenue and East Aspen Street and a
bakery further south along North Rouse Avenue. During FY11, the NURB received positive
feedback from the NorthEast Neighborhood Association (NENA) on the project and Gaston
Engineering completed a feasibility study and cost estimate; KLJ Engineering has updated those cost estimates.
Infrastructure Total $ 1,002,926
Rationale: The infrastructure improvements meet Guiding Principle 1 and Goals A & B under Principle 1 of the adopted Northeast Urban Renewal District Plan:
• Guiding Principle, “Ensure the health, safety, and security of the District”
• Goal A, “Outdated or insufficient infrastructure should be repaired, replaced or otherwise improved.”
• Goal B, “Encourage a land use pattern that facilitates all modes of transportation –
vehicular, bicycle, pedestrian, mass transit, and commercial – for safe, efficient and convenient access for residential, commercial, and industrial uses.”
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Northeast Urban Renewal Board Annual Work Plan and Budget FY19 6
The spending of TIF funds on infrastructure improvements is allowed under Section 7-15-4288,
MCA which states, “Costs that may be paid by tax increment financing” allows the municipality
to use tax increments to pay the following costs of or incurred in connection with an urban renewal project: (1) land acquisition; (2) demolition and removal of structures; (3) relocation of
occupants; (4) the acquisition, construction, and improvement of infrastructure;… and 5) costs
incurred in connection with the redevelopment activities allowed under 7-15-4233…
PARKS, TRAILS AND GREENSPACE District Trails and Depot Pocket Park Area Maintenance $ 3,000
The original trail, landscaping and bench installation were completed in 2012. Landscaping
maintenance, including mowing and weed spraying, is on-going. Water is provided, as needed,
from an adjacent property. The Board proposes continuing the operation of the temporary irrigation system, weed control and general maintenance. Weed control and general maintenance
may also be needed in other District trail areas.
Parks/Trails Total $ 3,000
Rationale: The park, trail and greenspace improvements meet Guiding Principle 4 and Goals A & B under Principle 4 of the adopted Northeast Urban Renewal District Plan:
• Guiding Principle, “Public open space is essential to a healthy and appealing urban environment”
• Goal A, “Procure new land for parks and public open space”
• Goal B, “Improve landscaping in existing public spaces.”- to include enhancing boulevards and public rights-of-way by planting and maintaining trees where appropriate and controlling weeds
The spending of TIF funds on park and open space improvements is allowed under 7-15-4255,
Authority to provide or contract for services related to urban renewal, of the Montana Code
Annotated. Specifically, item (1b) states that “Every municipality shall have power to install, construct, and reconstruct streets, utilities, parks, playgrounds, and other public improvements”
NEIGHBORHOOD DEVELOPMENT PLANNING
Depot Rehabilitation Project $ 1,000 The Northeast Urban Renewal Board recognizes the importance of the depot within the district.
Stabilization of the depot was accomplished, and some renewed interest in reuse of the depot has
been expressed. If permission can be obtained from the railroad, the Board has expressed its
strong interest in taking any necessary steps to preserve and rehabilitate the structure. The Board
has also expressed interest is obtaining the lease for the depot if the current lessee decides to terminate his lease agreement.
Planning Total $ 1,000
Rationale: Neighborhood Development Planning meets Guiding Principle 2 and the Goal under
Principle 2 of the adopted Northeast Urban Renewal District Plan:
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Northeast Urban Renewal Board Annual Work Plan and Budget FY19 7
• Guiding Principles, “Balance commerce and livability in the District within the mixed-use framework” AND “Honor the unique character and vitality of the District”
• Goal, “Harmonize commercial and industrial development with residential quality of
life”
• Implementation Action, “Where historic structures are affected by public or private development, seek out the advice and assistance of local, state, or federal historic
preservation professionals for opportunities to renovate existing historic structures.”
This funding proposal is for Neighborhood Plan implementation activities which are meant to
encourage developers to build on parcels within the Northeast Urban Renewal District. It recognizes the complexities of redeveloping parcels which have existing substandard buildings
and infrastructure and was created to offset the costs of those complexities with grants for those
proposing work which eliminates blight and advances the implementation of the District Plan.
Board proposes to award grants to reimburse developers for costs allowable under Section 7-15-
4288, MCA, but limited to public infrastructure.
These proposed expenditures are allowable under Section 7-15-4233, subsection (1)(a), MCA,
which grants the City the power to formulate and coordinate a workable program as specified in
Section 7-15-4209, MCA, which states : (1) A municipality may formulate a workable program
for utilizing appropriate private and public resources: (a) to eliminate and prevent the development or spread of blighted areas;
(b) to encourage needed urban rehabilitation;
(c) to provide for the redevelopment of such areas; or
(d) to undertake such of the aforesaid activities or other feasible municipal activities as may be
suitably employed to achieve the objectives of such workable program. (2) Such workable program may include, without limitation, provision for:
(b) the rehabilitation of blighted areas or portions thereof by re-planning, removing congestion,
providing parks, playgrounds, and other public improvements; by encouraging voluntary
rehabilitation; and by compelling the repair and rehabilitation of deteriorated or deteriorating
structures; and (c) the clearance and redevelopment of blighted areas or portions thereof.
Additionally, Section 7-15-4288, MCA states, “Costs that may be paid by tax increment
financing” allows the municipality to use tax increments to pay the following costs of or incurred in connection with an urban renewal project: (1) land acquisition; (2) demolition and removal of
structures; (3) relocation of occupants; (4) the acquisition, construction, and improvement of
infrastructure;… and 5) costs incurred in connection with the redevelopment activities
allowed under 7-15-4233…
ADMINISTRATION
Part-time staff and other Administrative Services $ 13,000
The Board needs staff to assist with District Plan implementation. $10,000 is to be transferred to
the Economic Development Division to offset the cost of staff time used to assist the NURB with District Plan implementation. $3,000 is budgeted to cover administrative services. This money is
a permissible use under state statute 7-15-4288, (5), “costs incurred in connection with the
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Northeast Urban Renewal Board Annual Work Plan and Budget FY19 8
redevelopment activities allowed under 7-15-4233 and 7-15-4288 (7) “administrative costs
associated with the managements of the urban renewal area…” This money is also a permissible
use under state statute 7-15-4233, “Powers which may be exercised by urban renewal agency or authorized department…(f) to disseminate blight clearance and urban renewal information;”
Bond costs $ 2,000
It is not anticipated there will be many costs incurred with receipt of the second “half” of the
bond proceeds; however, it is important to include some monies to cover any unanticipated costs. Bond payment $ 93,000
The bonds have been sold and the proceeds are being received in two installments. Per the
amortization schedule, the annual bond payments are just under $93,000.
Designated bond reserve $ 120,900
TIF bonds are required to have 130 percent of the projected annual payment held in reserve.
Based on the budgeted amount for the annual payments, $120,900 will be needed annually to
fund the bond reserve.
Engineering consultant services $ 8,174
While it is anticipated that most of the engineering consultant costs will be charged against
specific projects, the consultant attends Board meetings and provides other assistance to the
Board; and there is a potential that the consultant will be asked to provide additional services
during the upcoming year that are not specific to any of the projects listed above. When that occurs, costs will be charged against this line item.
SUMMARY: FY 19 PROPOSED BUDGET URBAN RENEWAL PROJECTS
Infrastructure $ 1,002,926 Parks/Trails $ 3,000 Planning $ 1,000 Staff Time $ 10,000
Noticing and Administrative Services $ 3,000
Consultant Costs $ 10,174 Bond Payment $ 93,000 Designated Bond Reserve $ 120,900 Undesignated Reserve $
Overall Budget Total $ 1,244,000
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Revenues:2018-19 Budget TIF Bonds
Estimated Beginning Balance $520,000.00 $400,000.00 $120,000.00
FY2019 Tax Increment $139,500.00 $139,500.00
Delinquent Increment
State Shared/Entitlement
Interest $1,500.00 $1,500.00
Bond Proceeds $583,000.00 $583,000.00
Total Estimated Revenues $1,244,000.00 $541,000.00 $703,000.00
Expenditures Budgeted:
Maintenance
Trails Maintenance $3,000.00 $3,000.00
Subtotal - Maintenance $3,000.00 $3,000.00 $0.00
Infrastructure
East Tamarack Street $760,000.00 $160,426.00 $599,574.00
East Peach Street $103,426.00 $103,426.00
Pedestrian Bridge/East Aspen Street $82,000.00 $82,000.00
Front Street
North Ida Avenue $50,000.00 $50,000.00
Quiet Zone Feasibility Study $7,500.00 $7,500.00
Public Arts Program
Subtotal - Infrastructure $1,002,926.00 $299,926.00 $703,000.00
Neighborhood Development Planning
Depot Rehabilitation Project $1,000.00 $1,000.00
Subtotal - Neighborhood Dev Planning $1,000.00 $1,000.00 $0.00
Administration
Bond Costs $2,000.00 $2,000.00
Staff Support $10,000.00 $10,000.00
Administrative Services $3,000.00 $3,000.00
Bond Repayment $93,000.00 $93,000.00
Engineering Consultant (KLJ)$8,174.00 $8,174.00
Subtotal Administration $116,174.00 $116,174.00 $0.00
Reserves
Designated Bond Reserve $120,900.00 $120,900.00
Undesignated Reserve
Subtotal Reserves $120,900.00 $120,900.00 $0.00
Total Expenditures $1,244,000.00 $541,000.00 $703,000.00
Northeast Urban Renewal District
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NURB Meeting – May 8, 2018 1
Northeast Urban Renewal Board (NURB) Regular Meeting Tuesday, May 8, 2018 The Northeast Urban Renewal Board met in regular meeting at 6:30 p.m. on Tuesday, May 8,
2018, in the Conference Room, Professional Building, 20 East Olive Street, Bozeman, Montana.
Present: Absent:
Voting Members:
John Usher, Chair Bobbi Clem Dan Doehring
Robert Pavlic Jeanne Wesley-Wiese Non-Voting Members: Nolan Campbell Ethan Barlow
Dalton Brink Commissioner Liaison: I-Ho Pomeroy
Staff: Shane Strong, KLJ Engineering Brit Fontenot, Economic Development Director Robin Sullivan, Recording Secretary
Guests: Chris Nixon, 719 North Wallace Avenue Maurice Quanbeck, 520 North 11th Avenue
Erik Nelson, 33 North Black Avenue
Brian Caldwell, 33 North Black Avenue Call to Order – Chair John Usher called the meeting to order at 6:30 p.m.
Changes to the Agenda – No changes were made to the agenda. Public Comment – No comment was received under this agenda item.
Minutes – April 3, 2018. It was moved by Jeanne Wesley-Wiese, seconded by Dan Doehring, that the minutes of the meeting of April 3, 2018, be approved as submitted. The motion carried
on a 5-0 vote.
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Discussion/Action Items – Continued presentation of the Cottonwood & Ida Project. Due to a conflict of interest, Nolan Campbell removed himself from the table during this agenda item.
Erik Nelson gave an overview of changes made between their last presentation and this meeting, noting that the second portion of the discussion will include consideration of a request to use tax increment financing monies for some portions of the project.
Erik Nelson noted that the overall project has not changed from the concept plan previously submitted. The buildings will be clustered, with a public plaza space provided off the Misco Mill building. Access points will be provided from East Cottonwood Street and North Ida Avenue; and access to the underground garage will be from East Aspen Street. The goals of the project
have also not changed, with the intent to provide both attainable units and affordable housing units at HUD standards of 70 percent AMI, or approximately $36,000 a year for Bozeman. The project is designed to provide opportunities for employment and to create opportunities for artists through the inclusion of makers units on the ground floor. He concluded by stating that
superior urban design strategies are being incorporated into the project. He noted that the design and height of the buildings take into consideration their relationship to existing houses and their viewshed. Erik Nelson stated the project includes 93 residential units, with 18 for sale and 75 for rent with
20 percent, or 15, of those being at an affordable level. The project also includes 18,000 square feet of commercial leasable space and 4500 square feet of makers spaces. The underground parking garage will contain 178 parking spaces with 60 of those being public spaces. Also, 24 on-street parking spaces will be provided and over 100 bike spaces in various locations on the
site. Nearly 50,000 square feet of open space is included, with 11,000 square feet in the public plaza and almost 30,000 in landscaping within the site and on the perimeter. He stressed that this represents roughly 50 percent of the site.
Brian Caldwell highlighted the issue of superior urban design, noting that in a normal development, over 50 percent of the site would be asphalt and parking. In this proposal, they have provided the parking underground. Erik Nelson reviewed the locations and preliminary designs for each of the five new buildings on
the site. He stated all of the buildings are three stories with the exception of a pop-up on one of the buildings. He noted that Building 1 has one-bedroom and studio units, with a bike room for the residents. Building 2 is also residential in a progressive co-living format with six small studio apartments sharing a larger common kitchen and laundry area. While Building 3 looks like
traditional townhouses, it is not. Building 4 includes makers spaces on the ground level plus 5 one-bedroom units and 12 two-bedroom units. Building 6 will house some type of office use. Building 5 is the existing one-story building on the site. Erik Nelson stressed that there will be no retail spaces or restaurants within this development.
The underground parking will be located below the public plaza; and the residential parking will be separated from the commercial parking. Storage lockers for all of the residential units will be provided on that side of the garage.
Erik Nelson turned attention to how this project aligns with the goals of various plans, including the growth policy, design objectives plan, urban renewal plan, economic development strategic plan, Vision NorthEast plan, and the unified development ordinance. He noted that it meets
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NURB Meeting – May 8, 2018 3
most of the goals in each of those documents and is designed for a broad mix of demographics that is reflective of the northeast area.
Erik Nelson stated that tax increment financing monies are being requested for 60 parking spaces in the underground garage, off-site infrastructure improvements and impact fees. He estimated the increment from this project will be $352,000 a year, which he anticipates will cover the payments for a $3.1 million bond issue at an interest rate of 4.5 percent for a 20-year
period. He stressed that it would not be possible to do this project without the assistance of tax increment financing and noted that all funding tools available will be needed to ensure the project’s success. Erik Nelson showed renderings of the various buildings, recognizing that additional detail work
will be needed in the final plans. Responding to questions from Bobbi Clem, Erik Nelson stated that East Aspen Street is a dedicated street right-of-way. He noted that the City Engineering Department is not receptive to
the optional street section previously submitted but is requiring a standard street section. Jeanne Wesley-Wiese questioned why the City is not willing to look at an alternative street section for this short street.
Brian Caldwell responded it is their intent to continue pushing for an alternative street section as they move through the review process. Erik Nelson stated the planned unit development process is ongoing; and he anticipates the
submittal will be made within the next one and one-half months. He indicated that this Board’s support of the project and its commitment to consider the issuance of tax increment urban renewal bonds is essential to its success.
Responding to questions from Bob Pavlic about the groundwater level on this site, Brian Caldwell stated the public plaza will be ramped up to podium level to accommodate the parking below grade. He then stated a number of test points have been established on the site to determine the groundwater level. The concrete and waterproofing will be designed based on that information.
Responding to additional questions from Bob Pavlic, Erik Nelson stated there will be some graded earth on the site to accommodate the underground parking and some will be at current grade.
Brian Caldwell stated the underground parking structure will be completely ventilated. He noted that any grading on the site will be at a walkable grade so that all buildings can be easily accessed.
Further responding to Bob Pavlic, Brian Caldwell stated detention swales will be provided throughout the site; and the water will be allowed to percolate back into the ground. He stressed that runoff can be easily accommodated on the site, particularly since it will include a minimal amount of hard surfaces.
Bob Pavlic asked about staging for development of this site, particularly in light of it being done in a single phase.
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Erik Nelson responded that they will not be closing any streets and there will be no stacking of materials on anyone else’s private property. He then indicated that staging will probably occur on the Idaho Pole site.
Responding to questions from John Usher, Brian Caldwell stated that the floor to ceiling height of this underground parking garage will be similar to the one located on West Mendenhall Street behind the old John Bozeman’s Bistro; however, the grade of the incline will be significantly
less. He indicated that he has asked the designers to provide an 8 foot 6 inch clearance for the parking structure. Responding to questions from Bobbi Clem, Erik Nelson stated the utilities for this site will be underground.
Discussion of NURB Resolution 2018-02 and draft Memorandum of Understanding for the Cottonwood & Ida Project. Brit Fontenot reminded the Board that in February, they
adopted Resolution No. 2018-01, which indicated general support for the concept of the Cottonwood & Ida planned unit development. He stated that Resolution 2018-02 encourages the Commission to approve the Memorandum of Understanding and indicates the Board may consider the issuance of tax increment urban renewal revenue bonds in the future to reimburse the costs of infrastructure improvements constructed in conjunction with this project. He briefly
highlighted some of the provisions within the Memorandum of Understanding, stressing that it is not binding on the Department of Community Development or the City Commission to approve the project. He indicated that, while the Memorandum of Understanding does not obligate anyone to anything, it does indicate general support for portions of the project and indicates that
it generally meets the goals of the district. He indicated that this resolution is based on the previous resolution of support and includes some of the language from the Memorandum of Understanding. He indicated that these documents are scheduled for discussion only at this time, with action to be taken at a future meeting.
Responding to questions from John Usher, Brit Fontenot stated the Memorandum of Understanding was drafted by an attorney from bond counsel Dorsey Whitney and was reviewed by the City Attorney. He indicated the document identifies those projects that would be eligible for reimbursement from tax increment financing monies.
Further responding to John Usher, Brit Fontenot confirmed that the parking spaces identified as public parking spaces in the underground garage would be added to the City’s inventory and would be administered by the City.
Erik Nelson stated the intent is for the parking spaces to be leased like they are in the downtown parking garage. Brian Caldwell stated that, if there are not adequate monies in the bond issue to be funded by
this project, reimbursement for the parking spaces is the lowest priority. Responding to questions from John Usher, Erik Nelson stated that the estimated annual tax of $352,159 is based on 1 percent of the total estimated project cost. He stated that the taxes
from the existing Tin Works will go to the ordinary taxing authorities; however, the remainder of
the taxes will go to the tax increment financing district. He then noted that only a portion of the tax increment may be used to service the bond debt; and a portion of the monies would then be
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available for other projects in the district. He stressed that the increment would be spent entirely within the district.
Responding to questions from John Usher, Brit Fontenot stated that the State, County, School District and City get their portion of the taxes based on the year that the tax increment financing district was established; and any amount above that portion stays in the district. He noted that this Board has just bonded for $1.4 million but is now out of money. He stated this project could
help to meet some of the remaining goals of the district. Responding to John Usher, Brian Caldwell stressed that their intent is to build the project, which will then be assessed and, at that time, they will seek reimbursement for qualifying portions of the project through issuance of bonds. He acknowledged that if the State does not value the
project as anticipated, the amount of the bond issue would be impacted. Responding to Jeanne Wesley-Wiese, Brit Fontenot stated that approval of this request does not commit this Board to issue bonds for every developer. He noted that bonds are to be issued
for improvements that have a public benefit and meet the goals of this Board. Brian Caldwell stated it is important to have this Board’s endorsement for the project, recognizing that it reflects the principles and goals of the District.
Jeanne Wesley-Wiese observed that the current traffic on North Wallace Avenue is insane, especially around its intersection with East Peach Street. She voiced concern that no other place in town feels so congested as this area. She noted that this development, along with development of other sites in the district, will further compound the problem.
John Usher stated that he, too, is concerned with the traffic that already exists and the impacts that additional development will have. He then expressed appreciation for the transparency of this project, particularly in light of other development that has occurred within this district.
Responding to Bobbi Clem, Erik Nelson asked that the Board consider the resolution at its next meeting. Jeanne Wesley-Wiese noted that this project would double the annual increment after servicing
the bond issue for it. She then stated people in the area are concerned that a Black/Olive type project could be proposed and approved for this site if this project is not pursued. Erik Nelson responded that they want to build a community, not “be a lesser of evils”.
Chris Nixon asked if there will be a parkland dedication or cash-in-lieu for the residential portion of this project. Erik Nelson responded that they will be paying cash-in-lieu. They have also requested that this
money be earmarked for parks in this area, but they cannot require it. Brian Caldwell stated they can brainstorm with a landscape architect to identify a project that could be done within this district for the amount they pay in cash-in-lieu in an effort to keep the
monies within this district.
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Review of bids for East Tamarack Street project. Shane Strong reported that the City Clerk was not available to open bids today, so it has been delayed to 2:00 p.m. on Friday. He indicated that, once the bids have been opened, he will prepare a bid tab and get the
information out to the Board. Brit Fontenot noted that, during installation of the sewer pipe under the creek, the access off East Tamarack Street to Lattice Materials will be closed and asked if access for deliveries and
employees can be provided off East Aspen Street. Chris Nixon responded that vacation of the East Aspen Street right-of-way included an agreement that access will be provided to the Lattice Materials site as needed. He noted that it is simply a matter of unlocking the gate but observed that some encroachments on the Lattice
Materials site will need to be removed to allow vehicles to enter. Responding to questions from Bob Pavlic, Shane Strong stated that the project is to be completed in a single phase. He then noted that the Vice President of Lattice Materials has
expressed concern about how the noise and vibration might negatively impact their operation. As a result, he has issued an addendum to restrict that type of work to the days when Lattice Materials is not growing crystals, which is Thursday through Sunday. He cautioned the result will be an increase in the total cost.
Chris Nixon asked if improvements to the depot will generate more increment for the district. Bobbi Clem responded that the developer plans to buy the building and lease the property, which should result in an increase in the increment. She then noted that the developer is
interested in providing parking at the northwest end of the depot, particularly since the parking lot can be accessed from the end of the improvements made under this project. Updates on current projects. Shane Strong reported that the new superintendent for
JR Civil will be in town on Monday, May 14, to complete the East Peach Street improvements. There are fourteen calendar days remaining on the contract, after which penalties will begin. He stated that the improvements include milling and paving of the entire length of the project as well as smaller remaining items. As a result, he asked that the Neighborhood Coordinator
disseminate JR Civil’s work schedule once he receives it. Staff updates on items of interest to the Board. Brit Fontenot stated he has no
additional report at this time. Update on financial status of NURB fund. Robin Sullivan distributed copies of the revenues and expenditures for Fiscal Year 2017-18 and the spreadsheet showing expenditures
from the bonds. She noted that the major expenditure for this month was for engineering services on the East Tamarack Street project. Shane Strong estimated the remaining costs for the East Peach Street project at $97,000.
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Continued discussion on draft Work Plan and Budget for Fiscal Year 2018-2019. Robin Sullivan noted that she had e-mailed the revisions to the draft work plan and budget to the Board members and distributed hard copies of the plan just prior to the meeting. She
indicated that the changes are in red so they can be easily identified. Responding to questions from Jeanne Wesley-Wiese, Brit Fontenot stated that the paragraph added under “Moving Forward – FY 2019” is an acknowledgement of his notifying the Board a
few months ago of the Mayor’s direction to identify ways to streamline all of the existing boards. He noted that some communities have an agency that oversees all of the tax increment financing districts in the community, with a single board rather than multiple boards. Brit Fontenot suggested that under “FY 2018 at-A-Glance” a paragraph be added to reflect that
the Board adopted Resolution 2018-01 expressing support for the Cottonwood & Ida project; the Board agreed to the addition. John Usher guided the Board through the draft Work Plan, asking for Board comment on each
of the proposed revisions in the May 8 version of the plan. The Board agreed with the changes except for one minor wording change. Robin Sullivan briefly highlighted the changes in the proposed budget, noting that those changes result in a balanced budget and will adequately cover the costs of the various line
items based on historic expenditures. It was moved by John Usher, seconded by Jeanne Wesley-Wiese, that the Board approve the Work Plan and Budget for Fiscal Year 2018-2019 as revised. The motion carried on a 5-0 vote.
Brit Fontenot reported that this work plan and budget will be submitted to the Commission on the consent agenda for its June 4 meeting. He then stated that, in the future, budget presentations are to be made to the Commission by the Chair of the Board.
Set agenda for June 5, 2018 meeting or cancel meeting. To be included on the June 5 agenda, in addition to the standard agenda items, are a decision on the resolution for the Cottonwood & Ida project, a presentation from Bridger Builders regarding rehabilitation of the
depot, and possibly discussion with the Recreation and Parks Advisory Board regarding wetlands and cash-in-lieu of parkland monies.
FYI/Discussion (formerly Neighborhood News). There was no discussion under this agenda
item.
Adjournment – 8:45 p.m. There being no further business to come before the Board at this time, Chair Usher adjourned the meeting.
John Usher, Chair Northeast Urban Renewal Board
City of Bozeman
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505 NEURD Fund 144
Fiscal Year 2018 (as of 05-23-2018)
Revenues:
144-0000-301.10-00 REAL PROPERTY TAXES / CURRENT PROPERTY TAXES 86,928.71$
144-0000-301.20-00 REAL PROPERTY TAXES / DELINQUENT 1 YEAR
144-0000-331.30-00 GRANTS / OTHER GRANTS
144-0000-333.80-00 STATE SHARED / STATE ENTITLEMENT SHARE 676.74$
144-0000-361.00-00 INTEREST INCOME / INTEREST INCOME 1,738.67$
TOTAL REVENUES 89,344.12$
Expenditures:
144-8210-459.20-10 SUPPLIES AND MATERIALS / OFFICE SUPPLIES -$
144-8210-459.50-10 CONTRACTED SERVICES / CONSULTANTS & PROF SERV 5,699.50$
144-8210-459.50-20 CONTRACTED SERVICES / MAINTENANCE CONTRACTS
144-8210-459.50-50 CONTRACTED SERVICES / ENGINEERS
144-8210-459.50-99 CONTRACTED SERVICES / GENERAL
144-8210-459.60-10 TRAVEL/TRAINING / IN-STATE
144-8210-459.70-10 OTHER / ADVERTISING 155.00$
144-8210-459.70-40 OTHER / POSTAGE
144-8210-459.70-60 OTHER / TAXES & ASSESSMENTS
144-8210-459-80-90 CAPITAL / IMP:INFRASTRUCTURE+IMPROV
144-8210459.95-10 LOANS/PRINCIPAL 30,004.95$
144-8210-459-95-20 LOANS/INTEREST 15,995.05$
144-8210-459.99-10 OTHER FINANCING USES / TRANSFERS TO OTHER FUNDS 10,000.00$
TOTAL EXPENDITURES 61,854.50$
Beginning Fund Balance 385,024.79$
Plus Revenues 89,344.12$ -$
Minus Expenditures (61,854.50)$ -$
Ending Fund Balance 412,514.41$
311
505 NEURD Fund 505
Fiscal Year 2018 (as of 05-23-2018)
Revenues:
505-0000-392.10-00 PROCEEDS-LONG-TERM DEBT/SALE OF TIF BONDS 851,048.50$
TOTAL REVENUES 851,048.50$
Expenditures:
505-8210-459.5010 SUPPLIES AND MATERIALS / OFFICE SUPPLIES 26,000.00$
505-8210-459.7010 OTHER / ADVERTISING 168.00$
505-8210-459.8090 CAPITAL/IMP:INFRASTRUCTURE+IMPROV 623,285.11$
TOTAL EXPENDITURES 649,453.11$
Beginning Fund Balance (41,175.57)$
Plus Revenues 851,048.50$ -
Minus Expenditures (649,453.11)$ -$
Ending Fund Balance 160,419.82$
312
313