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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 05/15/2001 - RESOLUTION 2001-71 APPROVING THE PRELIMINARY REPOR AGENDA ITEM SUMMARY ITEM NUMBER: 19 FORT COLLINS CITY COUNCIL DATE: May 15, 2001 STAFF: Matt Baker SUBJECT: Resolution 2001-71 Approving the Preliminary Report of the Director of Community Planning and Environmental Services for Harmony Half Acres Special Improvement District No. 92, Determining the Number of Annual Installments, the Interest Rate to Be Charged on Unpaid Installments, the Property to Be Assessed for the Improvements, the Assessment Method and the Date When the Council Will Hold a Hearing and Consider the Ordering by Ordinance of the Proposed Improvements. RECOMMENDATION: Staff recommends adoption of the Resolution. FINANCIAL IMPACT: Local street improvements are proposed for Harmony Drive in the interior of the Harmony Half Acres subdivision. The property owners will pay for the improvements through SID assessments on their properties. Subsequent creation of an SID usually involves issuance of SID bonds or j other financial instruments issued by the City. i i EXECUTIVE SUMMARY: I Property owners in the Harmony Half Acres Subdivision have petitioned the City to create a Special Improvement District (SID) for street, lighting, drainage, and curb-and-gutter improvements in their neighborhood. i Creation of an SID leads to a construction project in which the property owners are assessed for the cost of constructing the improvements that benefit their neighborhood. The first steps in i creating this SID have already been taken. The property owners have submitted petitions asking for creation of the district. Resolution 2001-14, approved by the Council on February 6, 2001, accepted the petitions and directed the Director of Community Planning and Environmental Services to draw up plans and an estimate of the improvements. At the regular municipal election on April 3, 2001 a ballot-issue relating to the issuance of bonds as a method of financing the improvements was submitted to the eligible electors in the proposed District. The ballot-issue was approved by a vote of 18-4. With the passage of the ballot issue, the petitioning property owners have asked to proceed with formation of the District. The next step in creating a District is consideration of Resolution 2001- 71 adopting the plans, specifications, estimated cost, and the method of assessment for the SID. DATE: May 15, 2001 2 ITEM NUMBER: 19 The City-approved construction plans and an Engineering Report estimating costs, indicating specifications and method of assessment, are on file in the office of the City Clerk. In addition to approving the plans and Engineering Report, this Resolution sets other parameters of the SID as required in City Code Section 22-61(a), including: 1. Any additional funds needed in addition to the assessments. There are no additional funds needed 2. The method of assessment of the costs against each lot. The property owners request an equal sharing of the cost of the District on a per lot basis. 3. The property to be assessed. The property to be assessed is included in the legal description set forth in the Resolution. 4. Reallocation procedures upon the division of any lot. Reallocation procedure are described in the Resolution, although because the District is in an established subdivision, no reallocation is anticipated. 5. The number of annual installments. The Resolution specifies not less than 15 annual installments. 6. The interest rate to be charged. The Resolution specifies that the interest rate to be charged shall be the same as the rate paid on the bonds to be issued which shall not exceed twelve (12) percent. 7. A date when Council will hold a hearing and consider an ordinance ordering the proposed improvements. The Resolution sets the hearing date as June 19, which provides adequate time to comply with notice requirements outlined in the City Code. The property owners within the proposed District are presently pursuing private individual financing for the proposed improvements because of the high costs associated with issuing bonds on such a small improvement district. If private financing is obtained, the SID will not proceed. However, if private financing is not obtained and the formation of the SID continues to be necessary, an Ordinance creating Harmony Half Acres SID No. 92 will be presented for Council consideration on June 19. After approving the creation of the SID, Council may consider an Ordinance authorizing the issuance of bonds to finance the improvements. DATE: May 15, 2001 3 ITEM NUMBER: 19 Summary of costs: Engineering Design $ 10,106.63 Survey, Traffic control, admin $ 7,374.54 Construction Cost $148,111.42 Total Construction Cost $165,592.59 There are 19 property owners sharing equally in the District. An estimate of financing costs for issuing SID bonds, including bond counsel fees, underwriter fees, issuance costs, and capitalized interest is an additional $85,000. In addition to these up-front financing costs, the bonds are expected to carry interest payments of approximately 7%. BACKGROUND: As Fort Collins grows, existing County subdivisions are being annexed into the City. These existing County subdivisions are often not built to City standards. It is City policy to provide only minor maintenance to annexed streets until they have been upgraded to City standards. County developments that are annexed into the City typically consist of rural gravel roads with no curb and gutter, and a system of borrow ditches for drainage. The City can help the residents of these subdivisions improve their streets through the Special Improvement District (SID) process. SIDS are the preferred method of funding these annexed subdivisions, and are an element of the "Choice Streets" ordinances adopted by Council in 1998. Harmony Half Acres is a County subdivision created in 1971 as a rural, large-lot subdivision. The subdivision was built with gravel roads, roadside drainage ditches, and no street lighting. The neighborhood was involuntarily annexed in 1989 after it was surrounded by City development. The City took over minor maintenance of the gravel streets, which consists of regular blading with a motor grader, and some minor additions of gravel base. The neighborhood residents have expressed an interest in upgrading the streets and drainage system to City standards, including paving, installing curb-and-gutter, and installing and upgrading street lighting. City staff had several meetings with the neighborhood homeowners' association to explain the SID process and explore additional options for building the improvements. The neighborhood decided to petition the City Council to create an SID to facilitate the construction of the improvements. Thirteen (13) of the 19 assessable lots (68%) submitted petitions. The non-petitioning owners have indicated that they do not have strong objections to the creation of the SID. Improvements will consist of approximately 1700 feet of 24-foot wide, rural residential street; 300 feet of storm drain piping, two catch basins, and street lighting. The "Policies and Standards for Maintenance and Improvement of Annexed Infrastructure", adopted by the Council as a part of Ordinance No. 182, 1998, lists an SID as an option available to property owners on a voluntary basis. The City of Fort Collins Policy GM-2.1 Annexation Policy of the City Plan Principles and Policies, outlines the following standards for upgrading County infrastructure which has been annexed into the City: I I __1 DATE: May 15, 2001 4 ITEM NUMBER: 19 Infrastructure standards. Developed land, or areas seeking voluntary annexation, must have their infrastructure improved (e.g., streets, utilities and storm drainage systems) to City standards, or must have a mechanism (e.g. a special improvement district, capital improvements program or other type project) in place to upgrade such services and facilities to City standards before the City will assume full responsibility for future maintenance. As annexed areas continue to develop, population density goes up, and traffic levels increase, it becomes increasingly important that the street system be brought up to City standards. Using an SID as a mechanism to achieve these standards works to both the City's and the property owners' advantage. The property owner is able to use the City's technical resources, and to make installment payments for the project, and the City is able to upgrade street systems at the property owners' expense. SID criteria and policies adopted by Council, and set forth in the "Special Improvement Districts Manual, Section II, Policies", are as listed below. 1. All public improvements as described in Chapter 16 of the City Code shall be eligible for inclusion in an Improvement District. However, the City may exclude certain improvements when it deems such improvements are not in the best interests of the City. 2. The City reserves the right to deny the creation of any District. 3. The proposed District should be consistent with the Maser Street Plan and other planning documents of the City. The District should have an approved Master Plan. An approved Preliminary Plan may be required if local street or utility improvements are to be included within the District. The City may also require a Storm Drainage Plan to be submitted. 4. The total cost of the District should not exceed the appraised value of the improvements and the land to be included in the District. 5. The amount of encumbrances on the land in the District including the assessments of the District should not exceed 90% of the value of the land including the improvements without being acknowledged by subordinate lien holders, or the posting of a surety from a recognized company for 100% of the principal and interest of the construction cost of the District. 6. The cost to be borne by the City in a District must be currently available or minimized and/or deferred through credits or other mechanisms. 7. The City has the option to require property owners within the District to manage construction of the improvements themselves or through Professional Engineers where it is to the City's advantage to do so and the proposed managers can demonstrate experience and competence. 8. The City has the option to require privately-managed Districts to bid and award contracts for construction of the public improvements when provided for in the District's Master Agreement and performed in conformance with the City Charter. DATE: May 15, 2001 5 ITEM NUMBER: 19 9. Construction activities of District improvements should not cause extraordinary inconvenience to properties choosing not to be a party to the District. 10. Should a default in the assessment payments of a District occur, the City shall have the right to immediately proceed with all legal remedies including a tax deed and sale of the affected land. 11. The City Manager may establish administrative policies and procedures for the Improvement District process and may recommend appropriate fees to the City Council. I 12. Proposed improvements should be of benefit to the City within a reasonable time frame. The City Manager has established administrative policies and procedures for the Improvement District process and may recommend appropriate fees to the City Council. The procedural steps required for the SID process are outlined in Chapter 22 of the City Code and in the "Special Improvement Districts Manual". SUMMARY: It is in the City's best interest to encourage County-approved subdivisions to improve their own streets and drainage systems after annexation, through the use of an SID. Property owners have the option of hiring a private contractor themselves, but payment is often required in advance. imposing a financial burden on homeowners. Using the SID process allows property owners to spread payments out over a number of years, making it a much more viable tool for constructing improvements in existing subdivisions. In addition, the SID process also allows property owners to draw upon the expertise of City staff, eliminating the need for outside consultants. The proposed Harmony Half Acres SID No. 92 will meet all of the adopted Council policies regarding Special Improvement Districts. STAFF RECOMMENDATION: Staff believes that construction of the improvements in the Harmony Half Acres subdivision benefit the neighborhood by improving the current gravel street with a City Standard Local Rural Residential Street. Staff recommends adoption of the Resolution. RESOLUTION 2001-71 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROVING THE PRELIMINARY REPORT OF THE DIRECTOR OF COMMUNITY PLANNING AND ENVIRONMENTAL SERVICES FOR HARMONY HALF ACRES SPECIAL IMPROVEMENT DISTRICT NO. 92, DETERMINING THE NUMBER OF ANNUAL INSTALLMENTS,THE INTEREST RATE TO BE CHARGED ON UNPAID INSTALLMENTS, THE PROPERTY TO BE ASSESSED FOR THE IMPROVEMENTS, THE ASSESSMENT METHOD AND THE DATE WHEN THE COUNCIL WILL HOLD A HEARING AND CONSIDER THE ORDERING BY ORDINANCE OF THE PROPOSED IMPROVEMENTS WHEREAS, Chapter 22, Article III of the City Code empowers the City of Fort Collins, Colorado (the "City") to establish special improvement districts, and sets forth procedures and requirements for forming and organizing special improvement districts and providing for the improvements to be constructed thereby and for the assessment of costs associated with those improvements; and WHEREAS,heretofore the City Council(the "Council")of the City began proceedings to establish Harmony Half Acres Special Improvement District No. 92 (the 'District") by the acceptance of the Petitions of affected property owners in the area (the 'Petitioners") through its adoption of Resolution 2000-14,on February 6,2001, which directed the Director of Community Planning and Environmental Services toprepare and present to the Council preliminary plans and specifications for the proposed District improvements, an estimate of the probable total cost of those improvements, and a map of the District; and WHEREAS, the Director of Community Planning and Environmental Services, pursuant to Resolution 2001-14,has made his report and has presented the details and specifications for the proposed District to the Council on the 15th day of May, 2001 (the "Report"); and WHEREAS, the Council has examined such plans, estimate_of costs, maps and other documents, and has found and does hereby find the same to be sufficient; and WHEREAS, the Council desires to proceed with the process for the formation of the District. NOW,THEREFORE,BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the Report, including the plans and specifications, map and estimate of the probable total cost as prepared by the Director of Community Planning and Environmental Services and heretofore filed with the City Clerk and presented to the Council on this 15th day of May, 2001, for the District, are hereby accepted, approved, and adopted. Section 2. That the nature and location of the District improvements (the "Improvements")to be assessed against property in the District shall be as set forth in the Petitions, Resolution No. 2001-14, and the Report. Section 3. That the estimated total cost of the Improvements in the District, including without limitation the cost of acquiring,planning,engineering,and constructing the Improvements (but excluding legal and advertising costs, interest during construction and until assessments are made by ordinance against the properties benefitted,financing costs,and other incidental costs to the District), as shown by the estimate of probable total cost,made by the Director of Community Planning and Environmental Services,is One Hundred Sixty-Five Thousand Five Hundred Ninety- Three Dollars ($165,593). Section 4. That the property to be assessed in the District(the"Property")shall include the following: All of the property located within the plat of Harmony Half Acres,a plat of record with the Clerk and Recorder of Larimer County, located in the Southeast Quarter of Section 31,Township 7 North,Range 68 West of the Sixth Principal Meridian, City of Fort Collins, Larimer County, Colorado, excluding Lot 20 and Lot 21. Section 5. That the total actual cost to the District, upon the completion of the Improvements, shall be apportioned in an assessment roll against each lot, tract, or parcel of land to be assessed, which assessment roll shall include the cost of the Improvements together with additional assessments for legal and advertising costs, interest during construction and until assessments are made by ordinance against the properties benefitted, financing costs, and other incidental costs to the District. Assessments shall be levied by an assessing ordinance. Such assessments shall be a lien until paid in the several amounts assessed against each lot, tract or parcel of land. The cost of the Improvements, together with all costs incurred in formation and financing of the District, shall be assessed in equal amounts against all lots, tracts or parcels of lands in the District,irrespective of the size of each such lot,tract or parcel,or the amount of street footage adjacent to the same. The total of all aggregated assessments shall be sufficient to cover the portion of the total costs of the District to be defrayed by such special assessments. Section 6. If any such lot, tract or parcel is divided into smaller parcels or other property interests, the assessment against such lot, tract or parcel shall be reallocated, so that the assessment against each such smaller parcel or other property interest shall bear the same ratio to the original assessment against such lot, tract or parcel as the size of such smaller parcel or other property interest bears to the original size of the lot,tract or parcel. The entire unpaid principal of such assessment or reallocated assessment, as the case may be, together with interest accruing thereon to the next assessment interest payment date,except to the extent that interest on the bonds to be issued by the City for the District have been capitalized through such date, shall be immediately due and payable by the seller or transferor thereof prior to the sale or transfer of any such lot, tract or parcel, or portion thereof, if such lot, tract or parcel shall have been divided as aforesaid,unless the purchaseror transferee thereof shall acknowledge,in writing,receipt of notice that the seller or transferor is not paying such assessment or reallocated assessment in full prior to such sale or transfer and that such assessment or reallocated assessment against such lot, tract or parcel, or portion thereof, as the case may be, shall continue to be a lien thereon. Section 7. Said assessments shall be payable in not more than fifteen(15)equal annual installments with the interest on the unpaid installments to be the same as the interest rate payable on the bonds which interest rate shall not exceed twelve percent(12%) per annum. Section 8. That on the 19th day of June, 2001, at the hour of 6:00 p.m. or as soon thereafter as the matter may be heard in the Council Chambers of the City Hall of the City of Fort Collins at 300 LaPorte Avenue in Fort Collins, Colorado, the Council will consider the ordering by ordinance of the proposed improvements and hear all complaints and objections that may be made and filed in writing concerning the proposed Improvements by the owners of any real estate to be assessed and any other interested persons. Passed and adopted at a regular meeting of the Council of the City of Fort Collins held this 15th day of May, A.D. 2001. Mayor ATTEST: City Clerk �u,NT FA t6 GEMSTONE CT Pk SUMMERSTONE CT W INf£R�ONE CZ w z MO't'Y�R ONgY PINE CT N TIMBERLINE LN I I Proposed Harmony Half Acres Special Improvement District NN 300 0 300 Feet / City of Fort Collins !!!///���