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HomeMy WebLinkAboutCouncil Workshop Minutes 11.13.2007 MINUTES COUNCIL WORKSHOP NOVEMBER 13, 2007 6:30 P.M. COUNCIL CHAMBERS A Council Workshop was held in the Council Chambers and called to order by Mayor Ken Olson at 6:30 p.m. on November 13, 2007. COUNCIL MEMBERS PRESENT: x Emelie Eaton _x_ Doug Poehls x Kate Hart _x_ Mark Mace x Gay Eaaton _x_ Chuck Dickerson x Alex Wilkins Norm Stamper OT~RS PRESENT: Nancy RoMe Mary Embleton Jan Faught James Caniglia Mike Zuhoski Miral Gamradt Josh Middleton Steve Zeier Public lllout (three-minute limit}: Citizens may address the Council regarding any item of City business not on the agend~ The duration for an individual speaking under Public Input is limited to three minutes. V~tile all oomments are welcome, the Council will not take action on any item not on the agenda. Josh Middleton, Superintendent of Laurel Public Schools, spoke regarding the TIFD and advocated for the school district as the council considers the TIFD for the Laurel He asked that a school or schools in the school district be considered part of the commercial area. He stated that Eighth Avenue by West School is scheduled for future repairs and First Avenue is in good shape by the high school The old middle school will continue to be used for adult education, for special education co-op, the YMCA, and the school's district office. There is no intention of abandoning the old middle school, and ho thinks its use will increase. Josh asked that consideration be given to including Graft School and the new Laurel Middle School to address some infi'astructure and mad issues. He stated that the school and city worked very well together regarding the new Middle School The school wants to do its share when it comes to Alder and Washington when the time is fight, but he asked for consideration of Gmffand the old middle school in the TIFD. Miral Gamradt - Bufldine a Canital Improvements Plan Mayor Olson stated that Miral Gamradt recently gave a presentation to the Budgct/Finance Committee regarding building a capital improvements plan. The committee recommends that the council consider approving a contract with Miral to develop a CIP for the City of Laurel. Copies of the proposal were distn~outad to the council. Along with developing the CIP, Miral has the ability to provide the financial analysis needed to establish a Capital Improvement Program that will serve as a blueprint of capital spending for five years. Miral served as the City of Bozeman's Financial Director for twenty years. Miral Gamradt explained the following proposed CIP development phases: needs assessment; prioritize projects; financial analysis; develop CIP policies; schedule projects within each fund's financial Council Workshop Minutes of November 13, 2007 capabilities; develop tentative CIP; present tentative CIP to city departments and the administration; present CIP to the city council; and finalize the CIP with city council adoption. Miral stated that a CIP includes capital items costing over $10,000, and a capital item's character does not change with use. Miml's specialty is assisting with the funding aspects ofa CIP, which are oi~en missing in a capital improvement plan. Water, sewer, and garbage operations, which are enterprise funds, could be included in the CIE However, he stated that he could not identify funding sources for a new city hall, fire station, and library, as they are not enterprise funds. There was discussion regarding how the CIP would affect impact fees. Mayor Olson stated that TischlerBise will begin a feasibility study for impact fees for the City of Laurel this week. If the council approves the contract with Miral Gamradt, he would provide the city with the electronic files for a five-year plan, which could then be updated annually. The CIP could be revised as circumstances and priorities change and the city and council decide is necessary. Miral stated that it is a plan, and council approval is still required through the annual budget process. Mayor Olson thanked Miral for his presentation. Police Department: · Resolution - Highway Traffic Safety Bureau Contract #2008-13-13-21, 2008-09-08-21 Laurel STEP Mike Zuhoski explained the contract with the Highway Traffic Safety Bureau in Helena regarding the STEP program, which is the Selective Traffic Enforcement Program for impaired driving (DUI) end seatbelts. This is the fourth year the Laurel Police Department will participate and it will be a $5,000 grant thh year. The resolution will be on the November 20th council agenda. Fire Denartment: · Resolution - Transfer of equipment to the Park City Fire Department Mayor Olson removed this item from the agenda for further review. It will be presented at the November 27th council workshop. Planning Board: · Ordinance- Annexations (information) James stated that the annexation policy will be presented to the Planning Board in December. The Board will discuss the proposed requirement for annexations to sign an agreement that the curb, gutter, sidewalk, and all improvements will be completed within a certain amount of time. Planning Board will determine if it should be a one-year or two-year timeframe. James stated that there have been problems recently with previous annexations that were not required to complete improvements. Emelie asked if the council members have a copy of the City of Laurel's Growth Management Plan and if it is an ongoing document. Mayor Oison stated that it is a long-term guide of the city's policies for growth, and it is a living document that can be changed. Executive review: · Resolution - Contract with Miral Gamradt Mayor Oison stated that the resolution will be on the November 20t~ council agenda. · Appointments: 2 Counoil Workshop Minutes of November 13, 2007 o Laurel Airport Authority: Don Schlegelmilch to fill term ending June 30, 2012 Mayor Olson stated that the appointment will be on the November 20th council agenda~ · Council issues: o Yellowstone Historic Preservation Board issues (Emelie Eaton) Emelie distributed copies of a letter, the current Chapter 17.66 of the LMC regarding Historic Preservation, and a draR ordinance amending Section 17.66 of the LMC. Emelie stated that she has been wrestling with what to present to the council, so she wrote a letter. The letter outlined why this came to her attention and it revolves around her attempt to update the ordinances with regard to the agreement that was ongoing with the city for photographing old buildings. When she talked with Sam Painter about updating those, he Nought to her attention the fact that there are eight pages of ordinances in Laurel that really do nothing. In reading through the ordinances, it is stated that the Board is an advisory board. Laurel has no authority over the Board and it has no authority over Laurel. Emelie was looking for cooperation and was attctx~ting to cooperate with their request to amend Laurel's ordinances. She then asked them for cooperation in reducing some of the ordinances per Mr. Painter's request. This is the issue. It has come to her attention that the board could be doing more for Laurel than they are, but the board's focus is more on Billings' ordinances. She feels like she is beating her head against the wall reminding them that it is a county board, so she would like the council's direction on how to go about this. She can attend the meetings, but it seems silly that the City of Laurel has eight pages of ordinances that do no good and we occupy one seat on a board that is also doing us no good. Perhaps the city could be using its efforts in another direction. Mayor Olson stated that he admired Emelie's work on this issue. He asked Emelie if it would be acceptable to allow the council to review the information end put the item on the next council workshop agenda. Emelie agreed to do so. o Light District Assessments (Emelie Eaton) Mary explained that light districts are assessed on a square footage basis and every property owner pays the same, except that there are two districts which includes the residential and commercial districts. The commercial district has more condensed lighting and therefore is assessed a ~action higher than the residential district. Like all special assessment districts, the city must pass a resolution every year to approve the assessments, which are analyzed and set accordingly. o Pickup of Christmas trees in Laurel (Chuck Dickerson) Mayor Olson stated that staff discussed this issue today. Staff recommendation was two-fold: a collection point has been designated for Christmas trees; and picking up the trees would be labor intensive and would not fit into the existing schedule for the city crew. There were none. Review ofdraf~ council agenda for November 20, 2007: · Public Hearing: o Ordinance No. O07-11: An ordinance concerning the creation of an urban renewal area within the municipal limits of the City of Laurel and adopting an Urben Renewal Plan including a tax increment provision. {First reading - 11/06/2007) Mayor Olson asked Mary to present a worksheet of proposed TIF District calculations and analysis on impact on taxing authority for the City of Laurel. A copy is attached to these minutes. 3 Counoil Workshop Minutes of November 13, 2007 Mary stated that one of the initial questions the council asked when presented the idea of creating an urban renewal plan, which also grants the authority for tax increment financing, was what would be the financial impacts whether or not it is done. Mary prepared some calculations and projections based on both scenarios. First, she prepared some historical data regarding the taxable valuation in the City of Laurel for the last five years. The information showed the taxable values, which is the basis of the value of the mill, for each year fi.om 2004 to 2008. The next colunm showed how much of that portion is newly taxable, as defined by the Department of Revenue. The third column showed the mount of tax revenue. Citywide, this fiscal year 2008, the taxable value was $6,191,867. Of that, $241,947 is newly taxable property, and overall the $6 million in taxable value produced $890,000 in tax revenue. She used a trend of 2.45 percent increase in taxable value each year for the last five years and an average of about $200,000 of newly taxable value. January 1't is the general assessment date for taxation purposes. As of January 1, 2007, Wal-Mart's taxable value was for land only and was about $38,000 in taxable value. She projected using the value of the west end Billings Wal-Mart to give a basis of the value of the property when finished as it is now. She was told that the real property of the west-end value would generate about $375,000 of newly-taxable value just for Wal-Mart. That is $375,000 of increase fi.om bare land to finished building with all the improvements. Those were the established facts and basis for what was needed to evaluate. Mary stated that, if no district is formed for the tax increment financing and this $375,000 of new taxable value gets included with the city's overall tax value for Laurel, in 2009 the taxable value should be roughly $6.5 million. About $500,000 of that would be newly taxable, and that will generate roughly $980,000 of tax revenue in all funds. In fact, 75 percent of taxes go into the General Fund. The difference between the $890,000 from 2008 and the $980,000 is about a $90,000 increase in tax revenue, of which about 75 percent would go to the General Fund. There would be roughly a $67,000 increase in General Fund tax revenue if no TIFD is funded and it would roll in naturally with the rest of the newly-taxable. If the district is formed, the taxable value the city would get to generate its regular tax revenue would be about $6.3 million. That equates to about $935,000 in new tax revenue, which is an increase of about $45,000 or $34,000 in the General Fund. Mary stated that the city would be decreasing the amount of available new tax revenue by about $44,000. But the offset is that this district, with taking just $375,000 of increment, can apply the increase to all the mills, except for the university mills, that the taxing jurisdiction uses. That will produce almost $250,000 in TIFD funding for use in the district per year. It is diverting the revenue stream by not sending the revenue to the schools, the state, and the county for the leogth of time the district exists for infrastructure and improvements defined and outlined in the urban renewal plan. Mary stated that Norm Klein, who is with the Department of Administration, reviewed the nurabcrs and verified that these are solid numbers. Doug stated that, in essence, the city would gain $250,000 in round figures for the fenced offTIFD area for improvements and the General Fund would also increase $35,000 in tax revenue. Emelie asked regarding the decrease in newly-taxable values in 2006 and 2007. Mary explained that the one wild card in the equation that nobody has any control over except the Department of Revenue is how newly taxable value is determined. It is supposed to be the growth factor. In fact, it is used in the calculation process to det~mdne the floating mill. This is a yearly determination between what was the year before plus newly built property minus things that were tom down or moved out. It also includes changes in centrally assessed properties, such as the railroad, Qwest, NorthWestern Energy, MDU, and fiber optics. F~cr optics caused a bit of a nosedive in taxable values several years ago. The city even had a Department of Revenue gentleman try to explain that to the council. F~er optics are still in the ground, but it is virtually worthless because ofhankmptcy. 4 Council Workshop Minutes of November 13, 2007 Doug spoke regarding the Planning Board minutes and the discussion over the old middle school and having it encompassed within the boundaries of the TIFD. Since the old middle school is isolated and not contiguous with the rest of the TIF District, he asked if there is a way to include it in the boundaries. Steve Zeier commented that Mary presented a fantastic analysis and he learned long ago to give credit where credit is due. Steve stated that the inclusion of the middle school is possible at this time. The Urban Renewal Plan has not been adopted and is still in dral~ form~ If the council wishes to change the boundaries, it is free to do so. The code is very explicit that a TIFD can fund improvements to publicly owned buildings, which the middle school is and will continue to be. The boundaries themselves are established based on other criteria. There is no legal requirement or prohibition against having that if the council decided to flag it, mn it right up the public right-of-way, and include that property. That is an option fight now. The boundaries of the TIFD were established based on land use characteristics, and Steve would feel uncomfortable debating the merits of that right now because it would be a benefit to the City of Lanrel if, at some point, some TIFD dollars could be used for improvements to that particular facility. Kate stated that the middle school issue is an interesting one that she wishes would have bmnght up earlier. She is in the Lincoln Center every Week, and it is a benefit to that whole area in Billings. Including the middle school would help offset the issue of the schools not receiving part of the $33,000 in tax. Kate asked whether, in the long term of the TIF District itself, it is feasible to add that and have noticeable results or if it would just be a tokem Steve stated that it would be driven solely on the scale of the improvements that would be made. There was further discussion regarding improvements in the old middle school and the use of the facility for community groups, non-profits, organizations that do serve a public need and perhaps would have trouble finding space at market rates. If it is included now, it will be for the duration of the TIF District. If it is not included now, it would completely offset any advantages to the TIF District because if it were included at a later date, the TIF District would be redrawn and the original TIFD would be ended and another would be formed. There was further discussion regarding the fact that the old middle school is not contiguous to the proposed TIFD boundaries, the overall taxable value would not be changed much because it is a public entity, the city would not he obligated to put TIFD fimds into the facility, the lack of public input on this matter so far, and the school district's cooperation in the process. Mary stated a question regarding the timing issue. She stated that public notice was mailed to all property owners within the district to notify them of this. The boundary was defined prior to notification to the public. She questioned if it is still o.k. to change the boundary at this point. Steve agreed that this was a good point. Notification of a public hearing requires ten days. If the boundaries are changed tomorrow, the council would basically be resetting the public hearing, which would push back the second reading and adoption of the urban renewal plan into December. That would not allow for the December timeline and negate the projected increment. Doug mentioned that the entity involved is already aware of the public hearing already, so he questioned if the ten-day notice is required. Just going up the public right-of-way would not affect property owners on either side of the public right-of-way on Colorado Avenue. He asked for legal counsel regarding this, and Mayor Olson said that it would he researched as quickly as poss~le. 5 Council Workshop Minutes of November 13, 2007 There was further discussion regarding adding to the proposed boundaries. Statutes require that the district is contiguous. Steve stated that the reason it has been proposed as a flag is to not encumber any residential property in the TIF District. This district was proposed as a commercial TIFD. Mary stated that three different scenarios for boundaries were proposed early in the process to see which would fit best with the overall goal of the urban renewal project. She suggested the need to step back and focus on the council's intentions for urban renewal. The main focus was the downtown and commercial district. That is the signal that staffwas given from prior comments for the creation of the whole project. The most logical boundary to establish was the commercial zoning district and to focus on the things outlined in the resolution and the ordinance to be addressed with the urban renewal plan. She stated that it seems like the focus on urban renewal has been lost and the focus is on the means to fund it. The TIFD is simply a means to fund it, but the overall goal is a generalized urban renewal plan of the downtown and business district to promote more economic growth. She likes the idea of having a facility, but questioned if it really fits with the initial goal of urban renewal. There was further discussion regarding other entities and individuals that want to be included in the TIFD for their benefit and the suggestion to find another location in the downtown area for a similar facility. Mayor Olson thanked Steve Zcier. David Oberly, 1620 DeNittis Lane, addressed the council David serves on the City-County Planning Board and had some issues to bring to the council's attention. First, he spoke regarding the inclusion of the middle school in the TIFD. He stated that from the first time that the tax increment district was proposed to the City-County Planning Board, the board was 100 percent in favor of including the old middle school in the proposal. That goes back to the summer before James was on board. Second, as far as looking at the definition of the Growth Management Plan, the City-County Planning Board feels that the inclusion of the old middle school fits into the plan. The board does not look at community development as specifically just commercial development. In order to grow a community, which this community is growing, and the school district is also growing, there needs to be a comprehensive overview as far as alternatives and offerings for the community for all types ofpcople. The middle school is not being used because it has inadequacies. The structure itself and the property are an asset to the community. There are sound foundations. You have the public property, and there are unknowns for the future and needs for the future. David is a retired 35-year administrator primarily fi.om the Billings schools and the State of Montana. He has had the experience of before, during, and after the Lincoln Center and the tax increment district processes in Billings. He can tell how the transformation of what the Lincoln Center did for Billings is going to have where the middle school has the same potential. This town is growing. This school district has unknown needs. He can guarantee, as a long-time school administrator, there are going to be needs with adult education, GED, and special education. The schools will grow in size and will need to have alternative space on an interim basis or a full-time basis to handle and accommodate those needs. The middle school has an auditorium, which brings possibilities for cultural activities into this community. The proposal the Planning Board discussed from day one was to go up Colorado, wrap amand the school, and come back down to Colorado on the opposite side of the street and include that. Then in the future, based on the board, whether or not there are needs and proposals, which would be automatically there. It would not be necessary to go through and have an emergency to include a segment into tho existing plan. Billings modified their plan when the CTA firm was going to choose to relocate their site by either going up to Shiloh Road or going downtown. Billings went down an alley, wrapped around a building, back down the alley so that tax increment process could enhance that building to keep business downtown. The middle school is a valuable asset to this community and needs to be enhanced and have the flexfoility for that for unknown future needs. Mr. Middleton may or may not be looking at that as a need at the current time. There is a brand new Middle 6 Council Workshop Minutes of November 13, 2007 School now, but ten years from now, he questioned what the situation would be for Laurel. He thinks the schools will be bursting from the seams with all the subdivisions and activity coming into town. As an individual and as a Planning Board member, he can say that at last Thursday night's meeting in this mom., all members present were 100 percent in favor of including the middle school. Chuck asked if the Planning Board met on October 4th to review the Urban Renewal Plan. David said there was a meeting and discussion, but there was not a quorum present. There were meetings in August, September, and October. He did not have the agendas, but the board had discussions during those meetings about this proposal. They did not have quorums and could not act officially until last Thursday's meeting. He does not know if there was something unofficial passed on to the council, but he knows officially that the board did not act. Chuck stated that it is unfortunate that the Planning Board did not have a quorum because the council takes some guidance fi~m the Planning Board. He understood that it was begged that the Planning Board have a quorum in November to discuss this issue. He feels it is very unfortunate that this could not have been brought before the council two or three months ago. David stated that there are some extenuating circumstances. One, the Planning Board did not have a planner on board when this started. The board had three meetings where there were not quorums and there was a gap. He can honestly say that the people around the two tables were in favor of that. The unfortunate thing is that the board could not act officially. That was very fix~strating to those present and especially the chairperson, Gerry Shay. He can reflect what the minutes say and also as an individual person in this community. He has a lot of passion to see where there is a lot of potential here to bring pride to this town and this community. There was further discussion regarding limiting the TIFD to the downtown area, the opportunity to encourage growth by including the old middle school, the poss~ility of encouraging economic growth in other areas of Laurel, and the future impact on Laurel schools as a result of growth within the community. Wal-Mart used the old middle school for training purposes prior to the opening of the store, and other businesses could also use the facility as needed. Kate stated that this discussion could be a moot point, and she wants to know if the middle school could be included in the TIFD without rescheduling the public hearing and changing the timeline. If no, she does not want to jeopardize the TIF District. Gay spoke regarding the expansion at the funeral home, the medical clinic, the realty business, and two homes that should be on the Historical Register. He is enthused about the middle school because he knows the building and what could be done there. He would like to go slowly and make sure that all bases are covered for commercial expansion. R was emphasized that the public hearing could not be changed in order for the TIF District to be approved. The only way to include the Middle School is if it has already been included in the notification process. The council has thirty days alter the second reading of the ordinance for it to become effective before December 31~t. Mayor Olson stated that he wished Mr. Oberly had stayed at the meeting. He commented directly to the fact of why this did not come forward f~om the Planning Department earlier. Mr. Oberly's statement was that the city did not have a planner aboard. Mayor Olson stated that the issue was formally brought forward on September 6th, and the city's planner was on board at that time. Laurel was also in a contract 7 Council Workshop Minutes of November 13, 2007 with the City of Billings to have a representative from its City-County Planning Board available. He believes the city's obligation was fulfilled. Mayor Olson stated that he understands the cautiousness to make sure that as much property as possible is included in the TIFD, but several presentations were made to the council regarding the boundaries of the TIFD. For whatever reason, the council elected not to say much about the boundaries. Steve Zeier and Mayor Olson talked about it and hoped that the council would become more engaged in the boundary discussion, but it never did come forward. Mayor Olson stated that it is incumbent to realiT~ the importance of the remaining time. There may be an opportunity with the old middle school, which will be determined by legal counsel, but if the council wants to keep going forward with the assessment of the boundaries, the TIFD may be jeopardized. He asked the council to focus on the options and information, make a determination and decision, and then go forward. Attendance at the November 20a council meeting: Gay Easton will not attend the council meeting. All other council members present will attend. Announcements: Emelie asked Mayor Olson to introduce the legal counsel. attorney with Elk River Law Office. Mayor Olson introduced Nancy Rohde, an Mayor Olson asked the council to consider scheduling a retreat with Dr. Ken Weaver on Saturday, December 1st, from 9:00 to 1 I:00 ~m. for a transition report regarding the charter. Council members should inform the council secretary soon if the date is acceptable. Mayor Olson stated that an open house will be held at his home on Sunday, December 9', from 1:00 to 5:00 p.m. for council members and spouses and department heads to celebrate the holiday season. The council workshop adjourned at 8:22 p.m Respectfully submitted, Cindy Allen Council Secretary NOTE: This meeting is open to the public. This meeting is for information and discussion of the Couneli for the listed workshop agenda Rems. 8 PROPOSED TIF DISTRICT CALCULATIONS AND AN.~ YSIS ON IMPACT ON TAXING AUTHORITY FOR THE CITY OF LAUREL Historical Data: Year Taxable Value Newly Taxable Dollars 2004 5,615,446 54,506 730,149 2005 5,696,745 176,227 762,655 2006 5,884,935 232,730 803,074 2007 5,996,447 170,313 839,562 2008 6,191,867 241,947 889,498 Use a trend of 2.45% increase in TV based on last 5 years for projection. Use an average of $200,000 newly taxable for projection~ As of 1/1/07, Wal-Mart's taxable value was for land only:. $38,036. Using the West End Billings Wal-Mart taxable value for purposes of this analysis: real propet~y (including land) = $332,626 TV and personal property = $78,358 TV for a total of $410,984 TV, less the Laurel land value, gives a net TV of $372,948. Round up to $375,000 TV increase. IF, no district is formed, and using the $375,000 TV increase applied directly to 2008's TV, and using a net increase of $500,000 newly taxable (to account for decreases in some classes of property in determining the value of newly taxable property), the projection for 2009 is: Year Taxable Value Newly Taxable Dollars 2009 6,566,867 500,000 979,738 This results in an increase of $90,250 in taxes, of which 75% or $67,690 is General Fund. IF the district is formed, and using the 2.45% increase trend, and the $200,000 average for newly taxable, the projection for 2009 is: Year Taxable Value 2009 6,343,568 Newly Taxable Dollars 200,000 935,354 This results in an increase of $45,855 in taxes, of which 75% or $34,395 is General Fund. HOWEVER, this also results in an increment of $375,000 which will provide the following: 2007-2008 total mills for SD7 -- 664.18 mills, less 6 university mills -- 658.18 mills $375,000 X .65818 = $246,820 in TIF funding for 2009. These projections are estimates based on historical and other data available at this time. Due to the nature and complexity of the property tax laws, it is difficult to predict the exact impact of the district on the City of Laurel.