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02. Resolution 5063 - Resolution of Intent & Call for PH - Old School Station SID 344>t� syy . City .:..x¢:....:n. Past c fox 1 lispel , ontana 59903 - 'rel pre (406) 75 -?0 a -- -75 8 'i kph I � IR _'E0RT To: Honorable Mayor and City Council FROM: .tames H. Patrick, City Manager SUBJECT; Special 'Improvement Districts MEETING DATE: October 31, 2005 BACKGROUND: The State of Montana (MCA -1 - 102) authorizes city and town councils to create special improvement districts for the purpose of constructing public improvements to improve the property. The City may extend the time for payment of assessments levied upon the districts for district improvements for a period not exceeding 20 years or, if refunding bonds, for a period not exceeding years. Cities may pay all expenses of whatever character incurred in making in the improvements with special improvement warrants or bonds. whenever the public interest requires, the city council may create special improvement districts for numerous reasons including the construction of streets, sidewalks, gutters{ parking, severs, water., storm sewers., landscaping, , and the construction of electric and gas lines. The city council may create special improvement districts covering projects abutting the city limits and include properties outside the city when the special improvement district abuts and benefits that property. Property owners within the proposed district boundaries outside the city may not be included in the special in the special improvement district in 0% of those property owners protest the creation of the distfict. Before creating any SID, MCA. 7-12-4104 requires the city council to pass a resolution o intention to do it.. The resolution will designate the number of the district. Deseribe the boundaries, state the general nature of the improvements and the approximate cost, and specify the method or methods by which the costs of the improvements will be assessed against the property in the district. The attached resolution of intent would be for City of Kalispell SID 3, old School Station. This SID would be created for the purpose of constructing the internal public infrastructure which would include: sewer, water, storm sewer, roads, curbs, gutters, sidewalks, gas, electric, telephone, and landscaping. These costs would then be paid by the land owners or, if approved by Council, eligible companies may qualify for TIF funds. RECOMMENDATION: Staffis recommending Council consideration of SID 344. The SID would be on area known as old School Station Industrial Park. This SID would pay for the construction of water delivery., wastewater collection, storm sewer, and road, curb, gutter, sidewalk, and landscaping. The City Tax Payer is held harmless since the assessments ardor new company purchasing the lot/parcel would pay the assessment. FISCAL EFFECTS: Taxpayers are held harmless. The long range effects are increased good paying jobs and increased tax base. ALTERNATIVES-* As proposed by Council. Respectfully submitted., . .. . . . . . . . . . ............................... ...... ..... ....... .dames H. Patrick, City Manager RESOLUTION NO. 5063 RESOLUTION RELATING TO SPECIAL IMPROVEMENT DISTRICT No. 3 4- ECIARING IT T E THE INTENTION of THE CITY COUNCIL o CREATE THE DISTRICT FOR THE PURPOSE OF UNDERTAKING CERTAIN LOCAL IMPROVEMENTS MENTS AND FINANCING THE COSTS THEREOF AND INCIDENTAL THERETO 'THROUGH THE ISSUANCE OF SPECIAL IMPROVEMENT DISTRICT BONDS SECURED IN PART BY THE C Y'S SPECIAL IMPROVEMENT DISTRICT REVOLVING FUND BE IT RESOLVED by the City Council (the "City Council") of the City of Kalispell, Montana(the `c "),as follows: Section L Bach round• Proposed 1rr rover, eats• Intention To Create District. (a) Back round. The City Proposes to undertake certain improvements (the "Improvements '1) to benefit specific property located in the City. The District. (defined below) is being established for the purpose of funding the public infrastructure improvements within the .district. The District will contain the first industrial/technology park in the City and will have 17 lots available for development. The District will be known as "old School Station." The land that comprises the District is approximately 55 acres and is currently used primarily for agricultural purposes. The District will not need to be rezoned for the contemplated use and development, The District is located just east of Highway 93 on Demersville Road approximately 1.9 miles south of Pour Corners intersection and directly east of the Rocky Cliff Road intersection. Montana venture Partners, LLQ, the developer of the District, is financing and contracting for the extension of the City water and wastewater services from the main City limits to the boundary of the District. (b) Proposed Im roven ents. The Improvements, as proposed, consist of the i design, gradina and construction of underground roux d conveyance ce lines for water, wastewater, and storm water, and ii design, grading and construction of underground utility lines for gas, electric and telephone services, and (Iii) design, grading and construction of streets, gutters and sidewalks, all as more fully describe in Section 5. .All Improvements will be constructed to City of Kalispell Design and Construction Standards. (c) Intention to Create District. The total estimated construction costs of the improvements are $3,294,587 as determined by Morrison Maierl.e Inc., engineers for the City with respect to the District (the "E . in ers''). The total costs of the Improvements, including the incidental costs discussed in this Resolution, is estimated not to exceed $3, 00,000. It is the intention of this City Council to create and establish in. the City under Montana Code Annotated, Title 7, Chapter 12, Parts 41 and 42, as amended (the "Act"), a special improvement district (the "District""), the purposie the formation ofthe District is to provide a mechanism `or financing costs of the improvements and paying costs incidental thereto. The costs associated with the District to he financed with proceeds of the City's special improvement district bonds (the "Bonds"), in the estimated original aggregate a.l amount not to exceed $3, 0 ,000, are; . the estimated the costs of the Improvements;(ii) the creation and administration of the District; (Ili) adeposit to the City's Special Improvement District Revolving Fund (the"Revolving Fund") to secure the Bonds; v) a deposit to a debt service reserve account 1n the District Fund (the "Reserve Account') to secure the Bonds; and the costs of issuance for the Bonds. The total estimated cost of the Improvements, including the costs listed in ii- above, is 3190000. The Bonds are to be payable primarily from special assessments to be levied against property in the District, which property will be specially benefited by the Iilro ements in an estimated amount of not less than $ ,900,000. In the event that special assessments are not sufficient to pay debt service on the Bonds, debt service on the Bonds will be payable from amounts on deposit in the Reserve Account and the Revolving Fund. Section 2. Number of District. The District, if the sarne shall be created a d established, shall be known and designated by the City as "Special Improvement ent District No. 344 or the City of Kalispell, Montana."' Section 3. Boundaries of District. The limits and boundaries of the .district are depicted on a snap attached hereto and made a hart hereof as EXHIBIT A and more particularly described on EXHIBIT B attached hereto and made a Part hereof, which boundaries are designated as the boundaries of the District. Section 4. Benefited Propert . The District and land included within the limits and boundaries described in Section 3 and as shown on EXHIBITS A, B and C are hereby declared to be the District and the land that will benefit and be benefited by the Improvements and will be assessed for the cost of the Improvements, including the incidental costs, as described in this Resolution. Those particular Portions of the District as set forth in the table below are hereby declared to be benefited by those .finds of Improvements set forth opposite such Portions of property.* Lot Parcel Tract benefited by Kind of Imrvernents SID Lot Nos..1. through 17 Grading, Utility and Surface Improvements Section 5. General Character of the Im rovernnts. The general character of the Improvement are (i) grading and utility Improvements,, consisting of planning, design. and Performing site grading for the construction within the District of Schoolhouse Loop, Schoolhouse Drive and Schoolhouse Circle (including, without limitation, potable waterrnains, and services, sewer mains and services, a storm drainage system, telephone, natural gas, and electrical utilities), and ii surface Improvements, consisting of surfacing Schoolhouse Loop, Schoolhouse Drive and Schoolhouse Circle and installing related surface improvements, such as, without limitation, curbing, aprons, sidewalks, gutters, and landscaping. Section 6. Engineer and Estimated Cost. Morrison & Maier.le Inc. shall be the Engineers for the District. The .engineers have estimated that the costs of the Improvements, including all incidental costs, but not the costs associated with securing the Bonds and the issuance of the Bonds, is $3., 2 Section 7. .Assessment Methods. 7. , Method for Proverty To Be Assessed; All properties within the District are to be assessed for a portion of the costs of the Improvements, as specified .herein. The costs of the Improvements ents shall be assessed against applicable portions of the property in the District benefiting from the Improvements, ts, based on, and as described below this Section 7, the actual area method of assessment described in Sections 7-12-4162 and 7- 2- 13 of the Act, as particularly applied and set forth in this Section 7. 7.2. Actual Area Grading,Utilitv. and Surface Improvements. All of the properties in the District (described as SID Lot Nos. 1 through 1.7 on EXHIBIT C) will be assessed for their proportionate share of the costs of the grading, utility, and surfacing Improvements. The total estimated cost of the grading, utility, and surfacing Improvements, including all incidental expenses, is $3,900,000 and shall be assessed against each of SID Lot Nos. I through 17, as shown on the attached EXHIBIT C, for that hart of the costs of the grading, utility, and surface Improvements that the area of each of such tract or parcel bears to the total area of both of such tracts or parcels exclusive of streets, avenues, alleys, storm water detention po-nds and like features. The total area of the District to be assessed by way of the actual area method is 2,06 ,308 square feet. The costs of the grading, utility, and surfacing Improvements per square foot of area is estimated not to exceed $ t. 9. The total assessment for each affected lot, tract or parcel of land subjected to the actual area method of assessment for the grading, utility, and surface Improvements is shown on EXHIBIT D attached hereto and made a part hereof. 7.4. Assessment Methodologies Equitable and Consistent with Benefit. This City Council, by this Resoltio, determines that the method of assessment and the assessment of costs of the specific Improvements against the properties benefited thereby as prescribed in this Section 7 are equitable and in proportion to and not exceeding the special benefits derived from the respective Improvements by the lots, tracts and parcels to be assessed therefor within the District. 7.5. Subdivision or Partition. The City understands that none of the property identified on EXHIBIT C as SID Lot Nos. 1 through 17 is currently intended to be further subdivided or partitioned. Subsequent lots or parcels withift the District created by subdivision or partition shall be specially assessed from and after their creation and such assessment shall be charged to the then. -current owner thereof in accordance with the provisions of this Section. 7. Section 8.Payment of Special Assessments. The special assessments for the costs of the Improvements shall be payable over a term not exceeding twenty 2 gears, each in equal semiannual installments of principal, plus interest, or equal semiannual payments of principal and interest, asthis City Council shall prescribe in t o resolution autho.rizimg the issuance of the Bonds. Property owners in the District have the right to prepay assessments as provided by law. Section 9, Anticipated Method of Financing: Pled e of Revolving Fund; Findin s and Detefminations. The City has the present intention to issue the Bonds in order to finance the (1) cost of the h.provem.ents, (10 the cost of the creation and administration of the District, i1 ) 3 fund a. deposit to the .deserve Account, iv fund a deposit to the Revolving; Fund, and (v) pay costs of issuance of the :fonds. Principal of and interest on the Bonds will be paid from special assessments levied against the property in the District and such payment will be secured, in part, by the Reserve Account. This City Council finds it in the public interest, and in the best interest of the City and the District,, to secure payment of principal of and interest on the Bonds by the Revolving Fund. The City Council hereby authorizes the City to enter into the undertakings and agreements authorized in Section 7-12- 225 of the .act to use the Revolving Fund to secure the Bonds. In determining to authorize the use of the Revolving Fund to secure the Bonds, this City Council his taken into consideration the following factors.- a) Estimated .market Value of Parcels. The City has considered the estimated market value of the lots, parcels or tracts in the District as of the date of adoption of this Resolution, as estimated by the County Assessor, as well as the estimated market value of the lots, parcels or tracts after the Improvements have been completed. The City in conjunction with the Engineers, has determined that the value of the properties in particular, the undeveloped properties) in the District will be significantly enhanced by the 'Improvements. The special assessments to be levied under Section 7 against each lot, parcel or tract in the District are, as of the date of this Resolution not anticipated to exceed the increase in estimated market value of the lot,, parcel or tract as a result of the construction of the Improvements. (b) Df All of the parcels in the District are privately held parcels presently within the District and do not contain any real property improveme ts. Montana. venture Partners, LLC c rrewl y owns 14 of the, 17 lots within the District. Montana venture Partners, ITC has represented to the City that it is planning on selling all 14 lots that it owns in the District to private parties that will develop industrial, commercial and technology business facilities in the District SID Lot No. 1 is owned by Fun Wareho sers 11, LLC which is anticipated to build a distribution center for a beverage distribution business. SID Lot No. 10 is currently owned by Montana. venture Partners, LLC with a sale pending to Dennis and Al mae Bennett who are anticipated to build a facility for a wholesale Janitorial supply service. SID Lot No. 1.1 is currently owned by Montana ventures, LLC with a sale pending to Ronald Sharpe who is anticipated to build a facility for a janitorial supply service. Given the interactions between City staff and the partners of Montana venture Partners, LLC, it is reasonable to conclude that the lots 1n the District will. be a desirable place to locate industrial, commercial, and technology business facilities. (c) Comparison of Special Assessments and Propert ' y Taxes and Market `value, The City has analyzed the amount of assessments and property taxes against eaeh lot, parcel or tract in the District. The City has determined that there are no industrial development bonds secured by a. mortgage against the District. The City concludes that, overall, the estimated market value of the lots, tracts or parcels of land in the District well exceeds the sung of special assessments and current assessments, with the estimated market value after the Improvements of such lots, tracts, or parcels totaling $7,225,078, 4 and the estimated sum of the current assessments and taxes (based o. the November Zoo tax bill, and accordingly, not including the Improvements) against such property totaling (d) An analysis of the amount of delinquencies in the payment of outstanding special assessments or property taxes levied against the properties in the District slows that none of the properties in the District is delinquent (e) The Public Benefit of the roveme ts. The construction of the Improvements to the District will enhance the opportunity for economic development i the City and provide for traffic circulation throughout the District. The construction of the Improvements will also provide for safe access to and from Demersvil.le Road. The Improvements is include widened road sections, curb and gutter, underground drainage in place of open ditches, sidewalks, handicap ramps, a walking path, street lighting, and street trees and other landscaping. The proposed Improvements will increase roadway efficiency. The proposed Improvements include both pedestrian facilities and automobile roadways that do not now exist or are not presently available 'in needed locations. Installation of these Improvements will promote safe and functional access to the businesses that will be located in the District, This will further increase public safety in the area and promote the public welfare. (f) Ne i Platted DeveloPment. SID Lot Nos, 1. through IT, as identified o the attached EXHUB"I , has been preli ninarily approved as a PUD and is not scheduled for further subdivision, The City, based upon information provided by Montana venturePartners', LLC,, anticipates that the properties In the District will be developed with ind st -'al, commercial and technology facilities that will compliment t the uses, and that it is realistic to expect that the area to be developed will be fully developed within four years.] Other Factors. The Improvements are anticipated to integrate the area and help to facilitate the more efficient delivery of services to the area, thereby assisting the .public at large as well as the particular properties in the District. The aesthetics, safety, and uses of the property are expected be advanced by the Improvements. Section 10. Reimbursement Expenditures. 1_ .1. Regulations. The United States Department of Treasury has promulgated final regulations governing the use of proceeds of tax-exempt bonds, such as the fonds, all or a portion of which are to be used to reimburse the City for project expenditures paid by the City prior to the date of issuance of the Bonds. The final regulations (Treasury Regulations, Section 1.150-2) (tbe "Regulations") require that the City adopt a statement of official intent to reimburse an original expenditure not later than sixty days after payment of the oral expenditure. The Regulations also generally require that tax-exempt bonds, such as the Bonds, be issued and the reimbursement allocation made from the proceeds of the tax-exempt bonds within eighteen 8 months or three 3 years, if the reimbursement bond issue qualifies .for the `~small issuer" exception from the arbitrage rebate requirement) after the later of i the date the 5 expenditureis Pai or (ii) the date the project is placed in service or abandoned, but (unless the issue qualifies for the �`srnall issuer" exception from the arbitrage rebate requirement) in no event more than three 3) years after the date the expenditure is paid. 1 ,2. Prior.Expenditures. The City has not made or paid any expenditures with respect to the District and the 'Improvements more than sixty ) days before the date of adoption of this Resolution other than i expenditures to be paid or reimbursed from sources other than the .fonds, iz expenditures constituting preliminary expenditures within the meaning of the Regulations, or iii expenditures in a "de minimus" amount, as defined in the Regulations. 10.3. Declaration of Intent. The City reasonably expects to reimburse the expenditures made for costs of the Improvements out of the proceeds of the Bonds after the date of payment of an or a portion of the costs of the Improvements. All reimbursed expenditures shall be capital expenditures, a cost of issuance of the Bonds or other expenditures eligible for reimbursement under the Regulations. 10.4. Bud atary.....Matters. As of the date of this Resolution, there are no City funds reserved, allocated on a long-term basis or otherwise set aside r reasonably expected to b 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 issuance of the Bonds. The statement of intent contained in this Resolution, therefore, is consistent with the City's budgetary and financial circumstances as they exist or are reasonably foreseeable on the date hereof. 1.0.5. Reimbursement Allocations. The finance officer of the City will be responsible for making the "reirnburserne t allocations"' described in the Regulations, being generally the transfer of the appropriate amount of proceeds of the Bonds to reimburse the source of temporary financing used by the City to make prior payment of the costs of the Improvements. Each allocation will be i evidenced by an entry on the official books and records of the City maintained for the Bonds or the Improvements and (ii) shall specifically identify the actual original expenditure being reimbursed. Section 11. Publication of Passage. and Adoption of this Resolution of Intention. y this Resolution, the City Clerk is authorized and directed to publish notice (the "Notice") of passage and approval of this Resolution and the intention of the City to create the District. The Notice shall be published in the Daily Inter Lake, a newspaper of general circulation in Flathead County, on October 18, October 25 and November 1, 2005, all in accordance with the requirements of Section 7-12-41.06 of the Act and Montana Code Annotated, Section -1-121, as amended. The form of the Notice currently on file with the City Clerk 1s hereby approved. The City Clerk is also authorized and directed, as rewired by Section -1.2- 1 ( of the Act, to mail or cause to be mailed a copy of the Notice to every person, firm, corporation, or the agent of such person, firm, or corporation having real property within the District listed in their name upon the last completed assessment roll for state, county, and school district taxes, at the last - known address, on or before the same day the Notice is first published. rol Section 12. Protests of the Resolution of Intention. Section 7-1.2-4-1. 0 of the Act sets fort. the req �-en ents for a protest against the proposed Improvements or against the extent or creation of the District, or loth. Any owner of real property within the District subject to assessment and taxation for the cost and expense of making the Improvements may, until 5:00 p.m., M.T. within fifteen 1.5 days after the date of the first publication of the Notice (the "Protest Period""may make and file with the City Clerk a written protest against the proposed Improvements or against the creation of the District ,or loth., The Protest Period ends at :oo p.m. M.T. on November 2, 2005. Upon receipt of one or more written protests during the Protest Period, this City Council will, at its next regular meeting after the expiration of the Protest Period, proceed to hear all protests properly made and filed with the City Clerk. The first regular meeting for the City Council after the end of the Protest Period is scheduled to be held on November 7., 2005, at 7:00 p.m., in Council Clambers at City Hall, 312 1st Avenue .fast, in .dais, Montana. PASSED AND ADOPTED by the City Connell of the City of Kalispell, Montana, as of the 3rd day of October, Zoo . ATTEST: ............ Theresa white City Clerk 7 Pamela :1 B. Kennedy Mayor EXHIBIT A MAP OF SID 344 5tbdim-30c mw Of OLD SCHOOL STATION -lk�lkm 33%,T2EN R21w, pm-, M, 14 LOT 3 .......... . . . ...... ... ........... . ............. .......... EXHIBIT DESORPTION OF SID 344 BOUNDARIES The District is located just east of Highway 93 on Demersville Road approximately 1.9 miles south o Four Corners intersection and directly east of the Rocky Cliff Road intersection and is legally described x Assessors Tract 2 or Parcel A. of Certificate of Survey No. 16337 in Section 33, Township 28 North, Range 21 West, P.M.M., Flathead County, Montana B- EXHIBIT LIST OF SID LOTS AND OWNERS SID 344 Lot No. Pry ert Owner Property Owner's Address 1 FUDWarebousers II,LLC 1190west, A li , � r Lana Montana Venture ,partners, LLC P.O. Box 1477, Kalis ell, MT 9 - .477 Montana Venture Partners, LLC P.O. Box 1477, Kalispell, MT -1477 Montana Venture Partners, LLB -P.O.� 1477, a iel, MT� �-17 Montana Venture Partners, LLC P.O. Bay 7 Montana Venture Partners, LLC P.O. Box 1.477, Kalispell, MT - .477 8 Montana Venture Partners, LLC P.O. B1477, 9 MontanaVenture Partners, PLC . . Box 1477, I a�� e� , �T �-� 47 10 Montana Venture Partners, LLC witb a sale pending to Dennis and Alrnae Bennett P.O. Box 1477, Kalispell, MT 5 3-1477 1896 Aimort Road, Kalispell, ell, Montana. 59901 . Montana Venture Partners, .PLC with a sale pending to Ronald Syr e P.O. Box 1477, Kalispell, MT 59903-1477 P.O. Box 7516, Kalispell, Montana 59904 1.2 Montana Venture Partners, LLC 1 s Montana Venture .Partners, LLC 14 M nta .a Venture Partners, LLC 15 Montana Venture Partners, LLC Montana Venture Partners, LLC �..— JF7Montana Venture Partners, �,1� , C-1 EXHIBIT LISTING OF PROPOSED ASSESSMENTS Lot No. Pro €used Assessment Amount 1 2 3 5 6 7 8 10 11 12 13 14 1.5 Ifi 17 � 29iv.