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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 09/02/2003 - FIRST READING OF ORDINANCE NO. 124, 2003, AMENDING AGENDA ITEM SUMMARY ITEM NUMBER: 24 FORT COLLINS CITY COUNCIL DATE: September 2, 2003 STAFF: Alan Krcmarik SUBJECT: First Reading of Ordinance No. 124, 2003, Amending Section 22-90 of the City Code Relating to the Limit on Special Improvement District Assessments. RECOMMENDATION: Staff recommends adoption of the Ordinance First Reading. FINANCIAL IMPACT: Passage of the proposed Ordinance would not have a direct financial impact on the City. Indirectly, this change may have a beneficial effect in that it may reduce the amount of money that the City will have to contribute to street improvements and other capital projects. EXECUTIVE SUMMARY: City staff has been discussing the possible formation of a special improvement district to construct streets, intersections, and other improvements along Timberline Road from the Drake Road intersection north past the Prospect Road Intersection. Some of the property owners and developers that would be benefited by the improvements have proposed that they provide the money necessary to construct the improvements, and that the City create a special improvement district to distribute the costs among other benefited property owners through the payment of special assessments against their property. Section 22-90 of the City Code restricts the amount of assessments that may be placed on benefited properties to one-half the actual value of the property, not including the proposed district improvements. This restriction was intended to protect the City and property owners from assessments that are too high for the property to bear. As envisioned, the proposed financing structure for a special improvement district for the Timberline Road improvements would not present any financial risk to the City, because the petitioning property owners and development companies would advance the cost of the improvements and would bear the risk of default, rather than the City. Under these circumstances, relaxation of the limits on assessments would not put the City at risk and would better enable the petitioning property owners to recover the costs they advance. Therefore, staff has developed new language for Section 22-90 of the City Code which would allow the amount DATE: ITEM NUMBER: 24 of the assessment to be determined in relation to the value of the benefited property includine the value of the improvements. However, the amount assessed against the property would still not be allowed to exceed the amount that the property's value is enhanced by reason of the construction of the district improvements. Staff believes that through this amendment, the financial interests of the City would be adequately protected and that the benefits principles of special improvement districts would be maintained. Therefore, staff recommends adoption of the Ordinance. ORDINANCE NO. 124, 2003 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING SECTION 22-90 OF THE CODE OF THE CITY OF FORT COLLINS RELATING TO THE LIMIT ON SPECIAL IMPROVEMENT DISTRICT ASSESSMENTS WHEREAS, Chapter 22, Article III of the City Code authorizes the City Council to form special improvements districts and to contract for or make local improvements which confer special benefits on the real property within those districts,as well as general benefits to the City at large,and to assess the costs of such improvements wholly or in part upon the property especially benefited; and WHEREAS,Section 22-90 of the City Code establishes a limit on the amount of assessments that can be imposed upon any parcel of real property within a special improvement district and limits that amount to one-half of the property's actual value, not including the proposed district improvements; and WHEREAS, the purpose of this limitation is to protect the financial interests of the City by ensuring that,if a particular property owner fails to pay a special assessment when due and the City forecloses its special assessment lien against such property, the net proceeds of the sale of the property will be sufficient to fully reimburse the City for the property's share of the cost of the district improvements; and • WHEREAS, it is possible that the initial cost of the improvements in a particular special improvement district may be paid by one or more of the property owners to be included within the district, with the expectation that the City will thereafter reimburse those property owners for the portion of the cost that should be borne by other benefited properties in the district, which reimbursement would be funded by assessments levied against the properties of the other benefited property owners; and WHEREAS,under such circumstances, the City is not at risk if a particular property owner defaults in the payment of assessments,and the net proceeds from the sale of the property fail to fully satisfy that property's share of the cost of the improvements; and WHEREAS, the relaxation of the limit on assessments against properties within a special improvement district may be of benefit to the property owners within a district who advance the cost of district improvements, in that a higher assessment against the other benefited properties may better enable the City,through the collection of assessments,to fully repay the property owners who advanced the cost of the district improvements; and WHEREAS, the City Council believes it to be in the best interests of the City to amend Section 22-90 of the City Code to increase the maximum amount of assessment that can be levied against benefited properties within a district when the costs of district improvements are paid by certain participating property owners,rather than by the City,so long as the amount assessed against any particular property is not greater than the amount of appreciation in the value of the property resulting from the construction of the district improvements. NOW,THEREFORE,BE 1T ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Section 22-90(a) of the City Code is hereby amended so as to read in its entirety as follows: Sec. 22-90. Limit on assessments; city to pay certain costs. (a) No property in the district shall be assessed for any improvements in an amount exceeding the amount of appreciation in the value of such property which will result from the construction of the district improvements. In addition,if the cost of the district improvements is paid by the city,no property in the district shall,be assessed for such fin provenrents'm anamount exceeding one-half (1/2) of such property's actual value not including the proposed district improvements. Forthis jimpose, the VrAtie of any whict►property value shall be conclusively presumed to be equivalent to such property's actual valuation as computed from the records of the county Assessor in accordance with state statutes for the year preceding the assessing ordinance.However,if the cost of the improvements in the districtis paid by one(1) or more property owners to be included in the district, then each property in the district may be assessed for such improvements up to an amount equal to one-half (1/2)of such property's actual value including the proposed district improvements, and such value may be determined on the basis of an appraisal submitted to the City Council by a certified appraiser at or before the hearing on the assessing ordinance. The foregoing limitation(s)on assessments shall not apply to any property when all of the owners of such property expressly waive the limitation in writing and the City Council has determined that adequate collateral security exists to ensure the full payment of all assessments in the district so that a proposed waiver should be accepted by the city. Introduced and considered favorably on first reading and ordered published this 2nd day of September, A.D. 2003, and to be presented for final passage on the 16th day of September, A.D. 2003. Mayor ATTEST: City Clerk Passed and adopted on final reading this 16th day of September, A.D. 2003. Mayor ATTEST: City Clerk