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HomeMy WebLinkAboutResolution No. 4374, Relating to Special Improvement District 713, Improvements to South 8th1 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Debbie Arkell, Director of Public Services Anna Rosenberry, Finance Director SUBJECT: Commission Resolution No. 4374: A Resolution of the City Commission of the City of Bozeman, Montana, Relating to Special Improvement District No. 713; Creating the District for the Purpose of Undertaking Certain Local Improvements in and About South 8th Avenue and Financing the Costs thereof and Incidental Thereto Through a Loan to the District From the City’s Special Improvement Revolving MEETING DATE: April 16, 2012 AGENDA ITEM TYPE: Action RECOMMENDATION: Adopt Commission Resolution No. 4374, Resolution to Create Special Improvements District No. 713 for the purpose of financing the identified improvements associated with the reconstruction of South 8th Avenue. RECOMMENDED MOTION: I move to adopt Commission Resolution 4374, A Resolution to Creation Special Improvements District No. 713 for the purpose of financing the identified improvements associated with the reconstruction of South 8th Avenue. BACKGROUND: On March 5, 2012 the Commission adopted Resolution No. 4368, a Resolution of Intent to Create Special Improvement District (SID) No. 713 to fund a portion of the improvements related to removal and installation of new curb and gutter, sidewalks, and pedestrian ramps associated with the reconstruction of South 8th Avenue. Following required publication and mailing of the Notice of Passage of the Resolution of Intent to the 66 property owners within the proposed SID, the Commission held a public hearing on April 2, 2012 to determine if written protests submitted were sufficient to bar the Commission from moving forward with the proposed SID. Two written protests representing approximately 3.6% of the total approximate assessed amount were received, which was significantly less than the 50% required to bar the Commission from proceeding with the final resolution to create the proposed SID. After conducting the public hearing, the Commission voted 4-0 to pass on all protests, determine the creation of the SID is in the public interest, and instructed the City Manager to bring a Resolution to the Commission to create the SID. 62 2 SID ASSESSMENT AMOUNT: At the time the Resolution of Intent was adopted, the estimated cost of the reconstruction was $2,050,700. The cost of the improvements to be funded by the SID was estimated at $255,488.00, or 12.5% of the project, which equates to $49.00 per lineal foot. Bids for the project were opened on April 3, 2012. The low bid received was $1,387.782.25, which is $660,000+ less than the engineer’s estimate. The actual bid costs related to the improvements to be funded by the SID is $184,504.00, or 12.66% of the project. The approximate costs of the improvements, exclusive of interest, to be paid by the District now shall not exceed $35.01 per lineal foot. A revised spreadsheet showing the estimated total assessment of each property owner in the District is attached as Exhibit B. UNRESOLVED ISSUES: There are no unresolved issues related to the Resolution to Create SID 713. The award of the bid for the project will follow this item on tonight’s agenda, and the project is still on track to begin on or shortly after May 7. An INTERCAP loan in the amount of $1,272,667.36 will be needed to complete the project. This loan will be paid from the street reconstruction program of the street maintenance fund. The INTERCAP Board has not yet made a decision on our loan, but because of the favorable bid price, we are no longer concerned the loan amount needed will exceed our borrowing capacity under §7-7-4104, MCA. ALTERNATIVES: The Commission could choose to: • Not create the SID and find another source of funds to pay for the described improvements; • Establish the SID for an amount less than the $184,504 proposed, decreasing the lineal foot assessment; • Establish the SID for an amount up to the originally estimated $255,488, increasing the lineal foot assessment to an amount not to exceed $49.00 per lineal foot; • Not proceed with the improvements at all (cancelling the entire South 8th Avenue Reconstruction; • As recommended by the Commission. FISCAL EFFECTS: A 5% contingency has been added to the low bid for a total financed project cost of $1,457.171.36. This project will be funded as follows: Project Cost Financing: $ 1,457,171.36 Total SID, actual BID for Curb, Sidewalk, Ramps: $ 184,504.00 12.66% Total to Finance with Loan: $ 1,272,667.36 87.34% The estimated total and annual effect to each individual lot in the SID is shown on Exhibit B. Each property owner will be assessed $35.01 per lineal foot of lot frontage. Attachments: Exhibit A – Resolution No. 4374 Exhibit B - spreadsheet showing the estimated total assessment of each property owner in the District is attached as Exhibit B. Report compiled on: April 4, 2012 63 1 COMMISSION RESOLUTION NO. 4374 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, RELATING TO SPECIAL IMPROVEMENT DISTRICT NO. 713; CREATING THE DISTRICT FOR THE PURPOSE OF UNDERTAKING CERTAIN LOCAL IMPROVEMENTS IN AND ABOUT SOUTH 8TH AVENUE AND FINANCING THE COSTS THEREOF AND INCIDENTAL THERETO THROUGH A LOAN TO THE DISTRICT FROM THE CITY’S SPECIAL IMPROVEMENT REVOLVING FUND. WHEREAS, on the 5th day of March 2012, the City Commission (the “Commission”) of the City of Bozeman, Montana (the “City”) adopted Commission Resolution No. 4368 (the “Resolution of Intention”), stating its intent to create Special Improvement District No. 713 (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 March11 and 18, 2012, the City Clerk did publish a Notice of Passage of the Resolution of Intent to Create SID No. 713 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 2, 2012 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. WHEREAS, the bids for the project were opened on April 3, 2012. The cost of certain local improvements to be funded by the District has been adjusted based on the actual bid amount. 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 5, 2012, 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 64 Resolution No. 4374, Creating SID 713, South 8th Avenue Street Improvements 2 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 2, 2012, 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, protests were filed with the City Clerk by the property owners of two parcels, representing 3.6 percent of the total costs of the Improvements to be 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 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 $184,504.00 to the District plus interest at approximately 2% annually. Over the 20- year term of the Loan from the revolving fund to the District, interest earnings of up to $40,250.00 are estimated to be paid from the District property owners and deposited to the special improvement district revolving fund. In addition to reimbursing the . 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 $184,504.00 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. 65 Resolution No. 4374, Creating SID 713, South 8th Avenue Street Improvements 3 revolving fund on interest the revolving fund would otherwise earn, these interest earnings are intended to satisfy any revolving fund contribution from the district that may be required under 7-12-4222(1)(b), MCA. 5.02. Budgetary Matters 5.03. . 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. 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 16th day of April, 2012. ___________________________________ SEAN A. BECKER Mayor ATTEST: ________________________________________ STACY ULMEN, CMC City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 66 67 68 69