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HomeMy WebLinkAbout01-13-20 City Commission Packet Materials - C7. Res. 5125, Public Hearing for MURD TIF ProjectsCommission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: David Fine, Urban Renewal Program Manager SUBJECT: Resolution 5125 calling a Public Hearing to Approve Certain Public Infrastructure Improvements in the Bozeman Midtown Urban Renewal District as an Urban Renewal Project and to Finance the Project through the Issuance of Tax Increment Urban Renewal Bonds; and Making a Reimbursement Declaration in the Event that Tax-Exempt Bond Proceeds Reimburse Original Expenditures of the City. MEETING DATE: January 13, 2020 AGENDA ITEM TYPE: Consent RECOMMENDATION: Authorize the Mayor to sign Resolution 5125. BACKGROUND: On January 9, 2020, Midtown Urban Renewal Board (the “Board”) will vote on a request that the City Commission designate several public infrastructure improvements within the Midtown Urban Renewal District (the “District”) as an Urban Renewal Project (the “Project”). The specific improvements were contained in several City Commission adopted plans including the 2006 Design and Connectivity Plan for the N. 7th Corridor, the 2015 Midtown Urban Renewal Plan and the 2017 Midtown Action Plan. The Project includes the following improvements: • Development of Aspen Street as a “festival” street, including sidewalk, street light and curb and gutter improvements, pedestrian crossing, street trees and stormwater infrastructure improvements to Aspen Street between North 5th Avenue and North 7th Avenue • Installation of angle parking infrastructure along the western edge of the Westlake BMX Park • Street, sidewalk, street light and curb and gutter improvements, pedestrian crossing, street trees and stormwater infrastructure improvements to North 7th Avenue between Durston Road and Mendenhall Street 118 • Construction of a multi-use path, allowing pedestrian and bike connectivity to the Westlake BMX Park, the Aspen Street improvements described above and a new mixed-use development in the District known as the Aspen Crossing Project Resolution 5125 signals the City Commission’s intent to consider formally designating these public infrastructure improvements as an Urban Renewal Project, which is a requirement for bonding. In order to make such a designation, it is the City Commission’s practice to hold a public hearing following public notice. The proposed public hearing for this item is scheduled for February 3, 2020 at 6:00 p.m. in the City Commission Room at City Hall, 121 N. Rouse Avenue, Bozeman, Montana. The Resolution also contains several required statutory findings related to urban renewal projects, which are easily satisfied by the proposed Project. UNRESOLVED ISSUES: None. ALTERNATIVES: As determined by the City Commission. FISCAL EFFECTS: The engineers’ estimates of probable cost for the infrastructure improvements total $5,010,000. The District has more than adequate bonding capacity to issue bonds and meet debt service coverage requirements for bonds in this amount. Issuance of tax increment revenue bonds will require Commission action including a budget amendment to provide for the expenditure of the bond proceeds. ATTACHMENTS: • Resolution 5125 119 RESOLUTION NO. 5125 RESOLUTION CALLING A PUBLIC HEARING TO APPROVE CERTAIN PUBLIC INFRASTRUCTURE IMPROVEMENTS IN THE BOZEMAN MIDTOWN URBAN RENEWAL DISTRICT AS AN URBAN RENEWAL PROJECT AND TO FINANCE THE PROJECT THROUGH THE ISSUANCE OF TAX INCREMENT URBAN RENEWAL BONDS; AND MAKING A REIMBURSEMENT DECLARATION IN THE EVENT THAT TAX-EXEMPT BOND PROCEEDS REIMBURSE ORIGINAL EXPENDITURES OF THE CITY BE IT RESOLVED by the City Commission (the “Commission”) of the City of Bozeman, Montana (the “City”), as follows: Section 1 Recitals. 1.01. Under the provisions of Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as amended (the “Act”), the City is authorized to create urban renewal areas, prepare and adopt an urban renewal plan therefor and amendments thereto, undertake urban renewal projects therein, provide for the segregation and collection of tax increment with respect to property taxes collected in such areas, and apply tax increment revenues derived from projects undertaken within the urban renewal area to pay eligible costs. 1.02. Pursuant to the Act and Ordinance No. 1685 adopted by the City Commission of the City (the “City Commission”) on November 27, 2006, as amended by Ordinance No. 1925, adopted by the City Commission on December 16, 2015 (collectively, the “Ordinance”), the City has created the Bozeman Midtown Urban Renewal District (the “District”) as an urban renewal district and has approved the Bozeman Midtown Urban Renewal Plan (the “Plan”) as an urban 120 Resolution 5126, Calling a Public Hearing for a Project in the Midtown URD, Known as the Midtown Infrastructure Improvements 2 renewal plan in accordance with the Act, which Plan provides for the segregation and collection of tax increment revenues with respect to the District. 1.03. As set forth in the Plan, tax increment financing is to be used to further the implementation goals in the Plan, which include promoting economic development, improving multi-modal transportation and improving, maintaining and supporting innovation in infrastructure, which the Plan expects may include installing signage, lighting, landscaping and sidewalk, curb, gutter and street improvements. 1.04. In addition, the Plan created the Bozeman Midtown Urban Renewal Board (the “Board”) to exercise the powers of an urban renewal agency under the Act with respect to the District and to implement the Plan. Among other things, the Board is required to prepare an annual work program and budget for projects in the District, which program and budget are subject to review and approval by the Commission. Section 2 The Project. On January 9, 2020, the Board adopted a resolution approving the design, engineering and construction of various public infrastructure improvements within the District, including (i) development of Aspen Street as a “festival” street, including sidewalk, street light and curb and gutter improvements, pedestrian crossing, street trees and stormwater infrastructure improvements to Aspen Street between North 5th Avenue and North 7th Avenue; (ii) installation of angle parking infrastructure along the western edge of the Westlake BMX Park; (iii) street, sidewalk, street light and curb and gutter improvements, pedestrian crossing, street trees and stormwater infrastructure improvements to North 7th Avenue between Durston Road and Mendenhall Street; and (iv) construction of a multi-use path, allowing pedestrian and bike connectivity to the Westlake BMX Park, the Aspen Street improvements described above and a new mixed-use development in the District known as the Aspen Crossing Project (such public infrastructure improvements, collectively, the “Project”). 121 Resolution 5126, Calling a Public Hearing for a Project in the Midtown URD, Known as the Midtown Infrastructure Improvements 3 The engineering, design and construction of the Project is expected to cost approximately $5,010,000. The Project is contemplated by and is within the scope of the Plan, and is eligible for tax increment financing under the Act. The Board has, by its resolution adopted January 9, 2020, requested that the Commission approve the Project as an urban renewal project under the Act and the Plan and issue tax increment revenue bonds, payable from tax increment revenues of the District (the “Bonds”), to finance all or a portion of the costs of the Project and, if necessary or desirable, costs of issuance of the Bonds and associated costs of the financing. Section 3 Preliminary Findings. The Commission hereby finds, as a preliminary matter, with respect to the Project as follows: a. no persons will be displaced from their housing by the Project; b. the Plan and the Project conform to the Bozeman Community Plan or parts thereof for the City as a whole; c. the Plan and the Project will afford maximum opportunity, consistent with the needs of the City as a whole, for the rehabilitation or redevelopment of the District by private enterprise; d. there is expected to be a sound and adequate financial program for the financing of the Project; and e. the Project constitutes an urban renewal project within the meaning of the Act and the Plan. 122 Resolution 5126, Calling a Public Hearing for a Project in the Midtown URD, Known as the Midtown Infrastructure Improvements 4 Section 4 Public Hearing. A public hearing is hereby called and shall be held on February 3, 2020 at 6:00 p.m. in the City Commission Room at City Hall, 121 N. Rouse Avenue, Bozeman, Montana, on the approval of the Project and the City’s proposed issue of the Bonds. Section 5 Notice. Notice of the public hearing shall be published in the Bozeman Daily Chronicle on January 19, 2020 and January 26, 2020, in substantially the form attached as Exhibit A hereto (which is incorporated by reference and made a part hereof). Section 6 Reimbursement Expenditures. 6.1. Regulations. The United States Department of Treasury has promulgated regulations governing the use of proceeds of tax-exempt bonds, all or a portion of which are to be used to reimburse the City for project expenditures paid by the City prior to the date of issuance of such bonds. Those regulations (Treasury Regulations, Section 1.150-2) (the “Regulations”) require that the City adopt a statement of official intent to reimburse an original expenditure not later than 60 days after payment of the original expenditure. The Regulations also generally require that the bonds be issued and the reimbursement allocation made from the proceeds of the bonds within 18 months (or three years, if the reimbursement bond issue qualifies for the “small issuer” exception from the arbitrage rebate requirement) after the later of (i) the date the expenditure is paid or (ii) the date the project is placed in service or abandoned, but (unless the issue qualifies for the “small issuer” exception from the arbitrage rebate requirement) in no event more than three years after the date the expenditure is paid. The 123 Resolution 5126, Calling a Public Hearing for a Project in the Midtown URD, Known as the Midtown Infrastructure Improvements 5 Regulations generally permit reimbursement of capital expenditures and costs of issuance of the bonds. 6.2. Prior Expenditures. Other than (i) expenditures to be paid or reimbursed from sources other than the Bonds, (ii) expenditures constituting preliminary expenditures within the meaning of Section 1.150-2(f)(2) of the Regulations, or (iii) expenditures in a “de minimus” amount (as defined in Section 1.150-2(f)(1) of the Regulations), no expenditures for the Project have been paid by the City before the date 60 days before the date of adoption of this Resolution. 6.3. Declaration of Intent. The City reasonably expects to reimburse the expenditures made for costs of the Project out of the proceeds of Bonds in an estimated maximum aggregate principal amount of $5,010,000 after the date of payment of all or a portion of the costs of the Project. All reimbursed expenditures shall be capital expenditures, a cost of issuance of the Bonds or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Regulations. 6.4. 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 Project, other than pursuant to the issuance of the Bonds. 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. 6.5. Reimbursement Allocations. The City’s Finance Director shall be responsible for making the “reimbursement allocations” described in the Regulations, being generally the transfer of the appropriate amount of proceeds of the Bonds to reimburse the source of temporary financing used by the City to make prior payment of the costs of the Project. Each allocation shall be evidenced by an entry on the official books and records of the City maintained for the Bonds or the Project and shall specifically identify the actual original expenditure being reimbursed. 124 Resolution 5126, Calling a Public Hearing for a Project in the Midtown URD, Known as the Midtown Infrastructure Improvements 6 PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 13th day of January, 2020. ___________________________________ CHRIS MEHL Mayor ATTEST: ___________________________________ MIKE MAAS Interim City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 125 CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE I, the undersigned, being the duly qualified and acting recording officer of the City of Bozeman, Montana (the “City”), hereby certify that the attached resolution is a true copy of a Resolution No. ________ entitled: “RESOLUTION CALLING A PUBLIC HEARING TO APPROVE CERTAIN PUBLIC INFRASTRUCTURE IMPROVEMENTS IN THE BOZEMAN MIDTOWN URBAN RENEWAL DISTRICT AS AN URBAN RENEWAL PROJECT AND TO FINANCE THE PROJECT THROUGH THE ISSUANCE OF TAX INCREMENT URBAN RENEWAL BONDS; AND MAKING A REIMBURSEMENT DECLARATION IN THE EVENT THAT TAX-EXEMPT BOND PROCEEDS REIMBURSE ORIGINAL EXPENDITURES OF THE CITY” (the “Resolution”), on file in the original records of the City in my legal custody; that the Resolution was duly adopted by the City Commission of the City at a regular meeting on January 13, 2020, and that the meeting was duly held by the City Commission and was attended throughout by a quorum, pursuant to call and notice of such meeting given as required by law; and that the Resolution has not as of the date hereof been amended or repealed. I further certify that, upon vote being taken on the Resolution at said meeting, the following Commission members voted in favor thereof: ; voted against the same: ; abstained from voting thereon: ; or were absent: . WITNESS my hand and seal officially this 13th day of January, 2020. (SEAL) __________________________________ ROBIN CROUGH City Clerk 126 Resolution 5126, Calling a Public Hearing for a Project in the Midtown URD, Known as the Midtown Infrastructure Improvements A-1 EXHIBIT A NOTICE OF PUBLIC HEARING TO APPROVE CERTAIN PUBLIC INFRASTRUCTURE IMPROVEMENTS IN THE BOZEMAN MIDTOWN URBAN RENEWAL DISTRICT AS AN URBAN RENEWAL PROJECT AND TO FINANCE THE PROJECT THROUGH THE ISSUANCE OF TAX INCREMENT REVENUE BONDS NOTICE IS HEREBY GIVEN that the City Commission (the “Commission”) of the City of Bozeman, Montana (the “City”) will hold a public hearing on February 3, 2020 at 6:00 p.m. in the City Commission Room at City Hall, 121 N. Rouse Avenue, Bozeman, Montana on the approval of the following project in the Bozeman Midtown Urban Renewal District as an urban renewal project: the design, engineering and construction of various public infrastructure improvements within the District, including (i) development of Aspen Street as a “festival” street, including sidewalk, street light and curb and gutter improvements, pedestrian crossing, street trees and stormwater infrastructure improvements to Aspen Street between North 5th Avenue and North 7th Avenue; (ii) installation of angle parking infrastructure along the western edge of the Westlake BMX Park; (iii) street, sidewalk, street light and curb and gutter improvements, pedestrian crossing, street trees and stormwater infrastructure improvements to North 7th Avenue between Durston Road and Mendenhall Street; and (iv) construction of a multi-use path, allowing pedestrian and bike connectivity to the Westlake BMX Park, the Aspen Street improvements described above and a new mixed-use development in the District known as the Aspen Crossing Project (such public infrastructure improvements, collectively, the “Project”). The Project is expected to cost approximately $5,010,000. It is proposed that the City will issue and sell its urban renewal tax increment revenue bonds to finance all or a portion of the costs of the Project and, if necessary or desirable, to pay costs of issuance of the bonds and associated costs of the financing. Any interested persons may appear and will be heard or may file written comments with the City Clerk prior to such hearing. DATED this 13th day of January, 2020. 127 Resolution 5126, Calling a Public Hearing for a Project in the Midtown URD, Known as the Midtown Infrastructure Improvements A-2 ______________________________ MIKE MAAS Interim City Clerk Publication Dates: January 19, 2020 January 26, 2020 128