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Agenda Memo........... i Telephone (406) 758-7700 FAX (406) 758-7758 Post Office Box 1997 Kalispell, Montana Zip 59903-1997 e(110 a Ivl Incorporated 1892 - AGENDA MEMO - TO: Mayor and Members of Council FROM: Al Thelen, Interim City Manager RE: Council Agenda for July 1, 1996 AGENDA APPROVAL Agenda Item 2-Council Minutes Included in your packet are the minutes from your regularly scheduled Council meeting of June 17, 1996. Agenda Item 3-Approval of Claims The schedule of claims to be paid on Tuesday, July 2, 1996, have been prepared and available for Council to review. I have reviewed the claims presented amounting to $344,961.45 and recommend their payment. Agenda Item 4-Acknowledge Planning Board Consideration of the Downtown Urban Renewal Flan-TIF District Douglas Rauthe Mayor Al Thelen Interim City Manager City Council Members: Gary W. NystuI Ward I Cliff Collins Ward I Norbert F. Donahue Ward II Dale Haarr Ward II Jim Atkinson Ward III Lauren Granmo Ward III Pamela B. Kennedy Ward IV M. Duane Larson Ward IV 2 ADDRESSING THE COUNCIL Agenda Item 5-None scheduled. PUBLIC HEARINGS Agenda Item 6-Urban Renewal Plan -Downtown Agenda Item 7-1996-97 Budget ORDINANCES & RESOLUTIONS Agenda Item 8-Ordinance 1242-Creating an Urban Renewal Plan- Airport/Ballfield Complex-2nd Reading The Airport Advisory Committee has revised their budget which you received at the work session. The second reading of this ordinance which will become effective in 30 days will keep this project moving. The sale of some of the property at the airport and tax increment funds on development will provide funds to implement the airport master plan and relocate the ball field currently on airport property. Agenda Item 9-Ordinance 1243-Creating an Urban Renewal Plan - Downtown -1st Reading Several of the members of the Council have spoken to me regarding some reservations about the $12,500,000 proposed bond issue for projects within the Downtown Urban Renewal Area. Comments have ranged from financing none of the projects to elimination of 3 several and a cutback in the size of some. Specific concerns that have been expressed include: A. A desire to return tax values to the taxing districts by 2002 when the initial bond issue is scheduled to be retired. B. A desire to return some of or all of the tax valuation in the downtown increment district to the taxing district as soon as possible. C. A desire to reduce the size and amortization schedule of the proposed $12,500,000 20 year issue. It appears to me there are five potential alternatives to react to some of or part of these concerns, in addition to several different degrees of each alternative. The alternatives are: 1. Action to eliminate the downtown tax increment district by June 30,. 1997. Call the outstanding tax increment bonds in January of 1997 and close out the project, including disposition of land. This would permit the existing taxing districts to use the tax valuation created by the district in FY 1998, four years sooner than originally projected. It would have the disadvantage of not encouraging the continued progressive development in the area and give a negative signal to current and potential developers in the downtown area. The opportunity to use increment funds for public improvements, including infrastructure, in the area would be lost. 2. Alternative two would be to proceed with using all of the projects in the Resolution of Intent. The Kalispell Mall has been reduced by $603,000, and the school board is not V interested in the $670,000 project that they 'originally submitted if it delays the return of the increment tax base. The project extends the tax increment program in the downtown area by another 16 years, which is a real concern for many people. A tax return to the existing tax districts could be implemented in 1998. 3. Action to move ahead with the district as originally proposed; but limit the amortization schedule to 15 years. This would allow the City to provide maximum assistance to encourage investment in the area and a mechanism to finance needed public infrastructure and public improvements. It would delay the full return of taxable evaluation to other r taxing jurisdictions for an additional 11 years; however, it would increase the ultimate taxable value for all tax districts that includes the downtown district. A significant amount of taxable value could be returned in the year 2002 and some as early as FY 1998. 4. Eliminate the issuance of additional bonds, and use the approximately 9.5 million dollars available between now and 2002 for projects. This would require a reduction of proposed projects to an 8 million dollar level and the use of approximately 1.3 million to pay the interest and principal of the current issue over its 'projected five year life. This approach would have either the advantage or disadvantage of returning tax value to the taxing districts in accordance with original plans, but no sooner. It would require the reduction I 5 of three million dollars in project costs plus the value of any protected land sales that might lose in this type of project cut. It would also save interest costs of between $4,237,375 and $5,517,670, depending on the amount of bonds that might otherwise be issued - less the costs of temporary financing. 5. The issuance of bonds in an amount between $8,000,000 and $9,000,000, with $8,000,000 being used for current project costs for a 15 year period. This would have the major advantage of permitting a return of a portion of the increment dollars to property.taxing districts in 1998. Based on projections from Kreg Jones of D. A. Davidson, this approach would allow the City to return $952,570 beginning in 1998 - four years prior to the current time table. Exhibit #1 (at end of memo), which is based on the FY 1996 tax levies, illustrates the percentage of return to each taxing district and the .amount each would receive based on a one million dollar, distribution. This, option would be similar to the one being used in Great Falls and Billings. The Council would still have to cut approximately three million in projects. The bond issue would be in the amount of $9,000,000 to cover necessary reserves and issuance cost one million dollars of projects would be funded from the 1997 fiscal year budget from funds now earmarked for the pay off of the current bond issue. Three million dollars worth of projects would have to be cut. 0 It appears to me that one, or a combination, of these alternatives could meet a majority but certainly not all the concerns that were identified above. To be sure, no decision should be made until after you have the input at the public hearing; however, due to the ultimate time table of reaching a point where a bond closing can be met no later than September 9, it is almost imperative that you pass an ordinance on First Reading on July 1, 1996 if bonds are to be reissued. On July 15, 1996, the ordinance can be amended to permit you to dwell on the information provided at the hearing for a couple of weeks. It is my suggestion that you review each project and decide to include the project at a specific amount or eliminate them altogether. We will be prepared to amend and rewrite the ordinance at the meeting so it can reflect your best collective judgement on July 1 and, like any other ordinance, it can be amended on July 15 to meet your collective judgement at that time. The ordinance as included in your packets includes the projects and numbers included in the Resolution of Intent. We have a better figure on the Kalispell Mall, which is now $2,624,000, $603,000 less than the figure in the original resolution and the school board has indicated that they do not want the $670,000 project but want to accelerate the schedule for returning valuation to their districts so this $1,223,000 can be the first things cut. Agenda Item 10-Ordinance 1244-Samaritan House -Text Amendment -Allow Shelter in RA-1 Zone-Ist Readincx F7 The Samaritan House has requested a text amendment to the zoning ordinance that would allow "shelters" as a conditional permitted use in the RA-1 zone and that parking requirements for "shelters" be changed from one parking stall for each two beds to one stall for each five beds. The Planning Commission, by a vote of 5 to 0, recommends this change and added the RA-2 and RA-3 zones to zones where a shelter would be allowed as a permitted use in their recommendation. Agenda Item'11-Resolution 4274a-Create Airport Authority This resolution as drafted extends the time that the City Council will exercise the powers of an airport authority until January 1, 1997, at which time an independent airport authority will be t_ created. The Council agrees to continue to use the Airport Advisory Board and to review and approve the Board's business plan so that the advisory board can implement. A motion to approve the resolution is in order. BUSINESS FROM MAYOR & COUNCIL Agenda Item 12-Solid Waste Board Appointment Gary Nystul's term.on this board expired on June 34th, Norb Donahue attended their special meeting on June 26th. The Council needs to make a recommendation to the County Commission for the vacancy. N Agenda Item 13-City Attorney Evaluation A committee composed of Collins, Kennedy and Haarr was appointed by the mayor to make this evaluation; Collins will make a report and recommendation at the Council meeting. BUSINESS FROM MANAGER Agenda Item 14-Agency on Aging-Interlocal Agreement This proposed Interlocal Agreement between Flathead County and the City provides that the County through its Agency on Aging will provide limited municipal bus services within the City of Kalispell and the City will provide an annual payment for the service as determined each year in the annual budget. (It is currently set at $10,000 in the preliminary 1997 budget.) The agreement is for one s year and will be automatically renewed unless one of the parties gives written notice to discontinue 30 days before the annual renewal date. It is recommended that you approve this Interlocal Agreement. Agenda Item 15-Ellsworth-Lawrence Park Request Thomas Ellsworth on behalf of Montana for Clean Water has requested the approval to use Lawrence Park for a benefit program on July 14, 1996 from 12:30 p.m. to 11:00 p.m. It is estimated that from 200- 300 people will be in attendance. He has requested a permit to sell beer and wine at the event. The police chief has requested that (2) officers be hired to assist with security. The Parks 9 Director recommends use of porta potties as the new restroom will not be available. Agenda Item 16-Bid Awards Curbs & Sidewalks This bid was requested primarily for residents and businesses wishing to take advantage of the annual sidewalk and curbing program. Sandon Construction submitted the lowest bid and it is recommended that the bid be awarded to Sandon Construction. Lawrence Park/North Main ISTEA Trail Two bids were'received on the Lawrence Park/North Main ISTEA Trail project from A-1 Paving and Pack & Co. It is recommended that the award be made to the low bidder, Pack & Co. Agenda Item 17-Authority to Bid -Windward Way Reconstruction The City Staff has requested authority to bid the Windward Way street project. It is a major improvement project included in the 1997 budget. A motion to proceed with the bid invitation is in order. Agenda Item 18-Traffic Signal Maintenance Agreement/Flathead County The County has requested an agreement whereby the City would maintain the traffic signals and flashing lights in the County and bill the County for our actual costs. It is recommended that you approve this agreement and authorize the mayor to sign the same. 10 WE WILL BE MEETING AT 6:00 TO CONTINUE BUDGETS. EXHIBIT #1 EXAMPLE OF DISTRIBUTION OF $1,000,000 OF TAX INCREMENT FUNDS. 1995 % $1,000,000 Tax Levy of total levy distribution COUNTY 0.049105 9.86% $98,589 WEED 0.001417 0.28% $2,845 SHERIFF 0.025000 5.02% $50,193 MOSQUITO 0.000366 0.07% $735 HEALTH 0,004150 0.83% $8,332 subtotal county CITY 0.108000 21.68% $216,834 GEN SCHOO 0.090290 18.13% $181,277 H.S. 0.050890 10.22% $102,173 ELEM. 0.112500 22.59% $225,868 subtotal schools UNIVERSITY 0.006000 1.20% $12,046 STATE AID 0.040000 8.03% $80,309 FVCC 0.010360 2.08% $20,800 TOTAL 0.498078 100.00% $1.000-QQQ $160,694 $509,318