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8. Ordinance 1580 - Additional Storm Drainage Assessment Rate Category - 1st ReadingPubll'c WtOrks D4�apartm%elnt :..:Post Office Box 1997, Kalispell. Montana 5 99015-1997 Telephone 8-783 1. O: Charles Hair , City Attorney FROM: James C. Hansz, '.E., Director of PublicWorks City Engi SUBJECT: Additional Street and Storm Drainage Assessment Rate ATE: 26 June 2006 The City Street Maintenance and Storm Drainage assessments were set up to fund the costs of maintaining these systems. There currently are four assessment categories w1th rates for each category that relate to the level of development of the parcel. There is a vacant land rate, with a ceiling amount, a residential rate, with a ceiling amount, and two commercial rates for .properties that are for fully developed property 1 % covered) and less than fully developed property % or less coverage). The four rates are applied to the square footage of the parcel. Until 2005 the City gave these rates to the County and they calculated the assessments and 'Included the assessment amounts on the property tax bill. There was only a modest involvement by the City with this old arrangement, and there was little ability for the City t analyze the assessment database except 1n a few naffow areas. However, last year the County changed their mode of operati.on. In 2005 the County transferred to the City full responsibility for developing and maintaining .n. the entire assessment database. In response, the City was required to develop its own assessment database management system. As a s ale benefit of this new City -developed system, the City now has the ability to perform some detailed analysis ofthe assessment database that was not possible before the change. The first result of this analysis has been to identify the need for an additional assessment rate for both street and storm drainage. Initial analysis has shown there is another category of property that 1s neither residential nor commercial. This category is comprised of properties, some fairly large, that are tax exempt. These are properties that pay no taxes, but are subject to assessments. The tax exempt properttes at issue are schools, churches, and other govenunent parcels. In general, these parcels are not as thoroughly developed as typical new commercial properties, and they have significantly more r o0€ . o landscaped area. However, they are far more completely developed than a typical residential parcel, usually include .larger structures, produce significant traffic, and have substantial parking lots. Therefore, the impact of these ta.x exempt parcels on street and storm drainage maintenance costs is much greater than the revenue generated for these services by the current assessment system. These tax exempt parcels .have, to date, been assessed at the residential rate for street and storm drainage maintenance and in most eases, because of their large size, they have been sub eet to the maximum ceiling amount for streets of $219.97 and $97.48 for stern drainage. As a reset of this,, other properties within the .residential category are effectively subsidizing a low street and storm drainage assessment for tax exempt properties. 1n order to correct this inequity, we recommend the creation of a. fifth rate category t cover tax exempt properties. This rate category would fit midway between the current residential and commercial rates. We recommend the following: CLOY 5 Storm. Drainage Rate for Tax Exempt Properties .005 12 square foot Street Maintenance rate for Tax Exempt Properties 0.01 2/square foot We believe creating this fifth category will result a more equitable spread. of strut and storm drainage maintenance costs between vacant land, residential properties, tax exempt property, and commercial properties. attached is a spreadsheet shoving the affect of adding this fifth assessment category. memo0262006,doc ORDNANCE NO. 1580 AN ORDINANCE AMENDING ORDINANCE 1476 BY CREATING AN ADDITIONAL CATEGORY FOR TAX EXEMPT PROPERTIES THAT ARE SUBJECT TO SWORN SEWER. ASSESSMENTS, MODIFYING LANGUAGE TO CLARIFY THE COMMERCIAL CATEGORIES, AND DECLARING AN EFFECTIVE DATE. WHEREAS, currently tax exempt properties that are subject to storm sewer assessments are assessed by the City of Kalispell at the rate of residential properties even though these properties are more completely developed and are more intensely utilized by the public, thereby creating more impacts upon storm sewer facilities than the typical residence; and WHEREAS, tax exempt properties subject to storm sewer assessments are not typically developed to the same level of intense use as commercial properties and therefore do not rise to the same level of impact upon storm sever facilities as commercial property; and WHEREAS it is therefore equitable to assess the tax exempt properties at a. rate higher than the residential rates, but less than the commercial rates; and WHEREAS 1t 1s the intention of the City Council that all commercial properties be included in either Category 3 or Category 4 and thereby be assessed for storm sewer maintenance costs and that the current language of the ordinance should be amended to clarify this intention. NOW THEREFORE? BE IT ORDAINED BY THE CITY COUNCIL THE CITY OF KALlSPELL,1 ONTANA, AS FOLLOWS: SECTION I. Ordinance 1476 is hereby amended at Section V. to read as follows: That Ordinance No. 862 is hereby amended as Follows Paragraph 2.01 shall be and is hereby amended to strike all of the existing language to be replaced with the following: 2.01 Application and Classification: A special storm sewer charge is hereby imposed on each lot and parcel of land within the City, except the Airport, Golf Course, cemeteries, all public parkland and all private parkland as defined by Kalispell City Code 28-3-19 and adjacent City owned areas, for services and facilities provided by the store sever. For poses of imposing the storm sewer charge, all lots and parcels within the City, except those areas as exempted hereby, shall be classified and assessed as follows: Category I Vacant Land up to Two Acres — shall be assessed at the same rate as all vacant land up to two acres. Category I Vacant Land over Two Acres — shall be assessed a total amount of no more than the assessment for two acres of vacant land. Category 2 Residential Land U to Y acre -- shall he assessed at the same rate as all residential land up to V2acre. Category 2 .residential ,hand over Y acre: — shall be assessed a total amount o o more than the assessment for 1 acre of residential land. Category 3 Commercial o o% Covered: - shall be assessed at the rate set annually by City Council. Category 4 Commercial More Than 0% Covered: - shall be assessed at the rate set annually by City Council. Fate Tax-,Lxempt Properties: -- shall be assessed at the rate set annuall City Council. Paragraphs 2. 2, 2.03 and 2.04 shall be stricken and paragraphs 2.0, 2.06, 2.0, 2,0� 2.09 shall be renumbered as 2. 2,, 2.0, 2.049 2.053 2.0respectively SECTION 2. This Ordinance shall take effect 30 days after final passage by the City Council. PASSED ANDAPPROVED BY THE CITY COUNCIL AND SIGNED] BY THE MAYOR THIS 17TH DAY OF JULY, Zoo , Pamela B. Kennedy Mayor ATTEST: Theresa White City Clerk