HomeMy WebLinkAboutOrd2019-011 Sponsored by: Meszaros
Introduction Date: August 12,2019
Public Hearing Date: August 12, 2019 and August 26,2019
Substitute Resolution: August 26,2019
Enactment Date: August 26,2019
CITY OF SEWARD,ALASKA
ORDINANCE 2019-011
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AMENDING TITLE 5, REVENUE AND FINANCE, TO ADOPT
CHAPTER 5.22 "DEVELOPER REIMBURSEMENT AND INCENTIVE
PROGRAM," ADOPTING A PROCESS FOR REIMBURSING UP TO 50%
OF CERTAIN DEVELOPERS' PUBLIC IMPROVEMENT
INSTALLATION COSTS ON UNDEVELOPED PROPERTY TO
INCENTIVIZE CONSTRUCTION OF HOUSING UNITS WITHIN THE
CITY
WHEREAS,the City of Seward("City")has a significant housing shortage; and
WHEREAS, it is in the City's best interest to incentivize the expansion of public utilities
to property within the boundaries of Seward to ensure public health, safety, and welfare; and
WHEREAS, reimbursing developers for up to 50% of the costs incurred when installing
public utilities on undeveloped property may incentivize developers to develop property for use
as housing within the boundaries of the City.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA HEREBY ORDAINS that:
Section 1. Seward City Code Title 5, is hereby amended to add Chapter 5.22 "Developer
Incentive and Reimbursement Program"as follows:
(Deletions are Bold Stril.c ; Additions are Bold Italics.)
Chapter 5.22 Developer Incentive and Reimbursement Program
Sections:
5.22.010 Purpose.
5.22.020 Definitions.
5.22.030 Developer Incentive and Reimbursement Program -Application
5.22.010 Purpose.
It is the intent of this chapter to permit the City, when funds are available, to reimburse
a developer for up to 50% of the costs of extending public utilities to his, her or its
CITY OF SEWARD, ALASKA
ORDINANCE 2019-011
undeveloped property assessed in a special improvement district in order to incentivize
installation of public utilities and property development within City boundaries.
5.22.020 Definitions.
In this chapter, unless otherwise provided, or the context otherwise requires will he
read consistent with all applicable terms defined in the City Charter, the following words and
phrases shall have the meaning set forth below:
"Benefiting property" means area or zone which will directly benefit by a specific
public utility extension.
"Cost of extension"means the developer's actual direct cost of constructing a public
utility extension.
"Developer" means a property owner who is located within an improvement district
subject to a special assessment.
"Program Fund" means a fund created expressly to fund the reimbursement and
incentive program.
"Public Improvement"is defined in Section 1.5 of the Seward Charter.
"Public utility"is defined in Section 1.5 of the Seward Charter.
"Undeveloped land" means tracts or parcels of land that are not part of an existing
improvement district and have no significant or substantial improvement, infrastructure,
grading, or site development related to residential, commercial, or industrial uses or
outstanding building permits. The provisions of this section specifically do not apply to tracts
within the Seward Marine Industrial Complex(SMIC).
5.22.030 Developer Reimbursement and Incentive Program-application.
a. The City may, so long as funds are available, reimburse developers for up to 50% of
the costs of installing a public utility on undeveloped land for which a special improvement
district was created. In order to be eligible for consideration, developers must complete and file
an application for reimbursement with the City Clerk. The application shall be available at
the City Clerk's office.
b. In order to be eligible for reimbursement, the application must be completed in full
and the filing fee paid in full. The Clerk will submit a Notice of Filing to the applicant and
the City Manager within 10 days of receiving the application so long as the application
CITY OF SEWARD, ALASKA
ORDINANCE 2019-011
sections have been completed, the application is signed and dated, and the application fee has
been paid in full
c. Planning and Zoning Commission shall review the application and determine if the
applicant meets the requirements for reimbursement and forward recommendations to the City
Manager's office. No more than three regularly scheduled Council meetings after receiving
the Notice of Filing and complete application from the Clerk, the City Manager shall submit a
written memorandum to Council, which shall include a recommendation to approve or deny
the application, a recommended amount of reimbursement, if any, and a statement regarding
the reasons for granting or denying the application. Council shall adopt or deny the City
Manager's recommendation by resolution. Council's decision to reject or accept the
application shall be a final decision by the City.
d. The City Manager or his or her designee may approve an application if substantially
all the criteria for reimbursement are met and funds are available in the Program Fund.
e. The developer's application shall include the following:
1. A statement of the properties owned within the special improvement district
and the total cost of the installation of the improvement to the developer.
2. An itemized report, with supporting documentation, of the actual direct cost
of the extension to the developer.
3. A statement by the developer that the City Council may reimburse all, none or
a portion of the pro-rated share of the improvements under Title 5 and the developer
accepts his, her or its obligation to pay his, her or its pro-rated share of the assessment.
4. Details regarding the purpose and use of developer's property and the ways
in which the use promotes the public interest and complies with the City comprehensive
plan.
f. The City Manager may recommend approval subject to conditions.
g. All applicants located within a single improvement district and in full compliance
with this section shall be treated uniformly.
h. No developer shall be eligible for reimbursement until the extension has been
completed.
i. In the event no funds are available for the program, a notice of the lack of funding
shall be posted on the City website.
CITY OF SEWARD,ALASKA
ORDINANCE 2019-011
j. Council shall adopt the application form and any amendments or appendices to the
general application_form via resolution.
Section 2. This ordinance shall be retroactive to January 1, 2019 and all developers
eligible for the program on or after that date shall be eligible to apply for reimbursement under
Chapter 5.22.
Section 3. The application provisions of the program adopted under this Ordinance shall
expire on January 1, 2025, unless extended by the Seward City Council via ordinance.
ENACTED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA
this 26th day of August,2019.
THE CITY OF SEWARD,ALASKA
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114
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AYES: Towsley, McClure, Lane, Osenga, Horn, Seese, Squires
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
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City Clerk
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Agenda Statement
Meeting Date: July 8, 2019
To: City Council
Through: City Manager Scott Meszaros
From: Holly Wells, City Attorney
Agenda Item: Ordinance 2019- 011,Developer Reimbursement and Incentive
Program
BACKGROUND &TUSTIFICATION:
The City Manager and Assistant City Manager have been directed by Council to enact
a reimbursement and incentive program to encourage developers to extend public utilities and
develop property within the City of Seward ("City") for use for commercial and residential
purposes. The ordinance introduces an incentive and reimbursement program that
accomplishes the intent of Council but also preserves the City administration's, and the
Council's, flexibility to approve an application that places requirements on developers that
ensuring reimbursement is awarded only when funds are available and the improvement at
issue benefits the public's interest.
INTENT:
The intent of this ordinance is to create a program that promotes Council's goals of
incentivizing development and the expansion of available housing within the City.
CONSISTENCY CHECKLIST: Yes No N/A
1. Comprehensive Plan (document source here): X
2. Strategic Plan (document source here): X
3. Other (list): X
FISCAL NOTE:
00848484.DOCX
45
Approved by Finance Department: This ordinance has not yet been submitted to the Finance
Department and still requires appropriations and considerations by administration prior to
adoption.
ATTORNEY REVIEW: Yes No Not Applicable
RECOMMENDATION: City Council refer Ordinance 2019-011 to the Finance Department for
determination of a Program Fund creation and identification of any Fund limitations.
00848484.DOCX
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MEMORANDUM
DATE: August 12, 2019
TO: Seward City Council
FROM: Scott Meszaros, City ManageEr,',,
4�
RE: Developer Incentive Program—Start-up Funds
The Seward City Council has identified the shortage of housing as a significant public need. The
administration has been asked to identify potential sources of funds to incentivize developers to
expand public utilities to properties within the City's boundaries to ensure public health, safety and
welfare, and the orderly development of public infrasttucture.
Without utilizing undesignated reserves which currently fall within the City's reserve policy band--
and which are needed to cover unforeseen needs and emergencies--there are two one-time funding
sources that the administration has identified as potential sources to seed a Development Fund. The
administration recommends developers be allowed to borrow against these funds,with repayment to
the City in the form of property assessments,including interest.This repayment stream could serve
to continue providing incentive funds for future development, depending on the number and
financial costs of projects Linder consideration,
The first source of funds would be best utilized to expand electrical utilities since the source of funds
derives from a Chugach Capital Credit received by the City in the amount of$28 1,043.46 in May
201.9. Since Chugach is a co-op,they rebate capital credits to their customers periodically, in the
form of capital credit rebates.1'his particular check is for the period 1996-2010.It is not uncommon
for the utility to receive capital credits, but this check is significantly larger than normal.
In the past, the City Council has discussed various ways to best to use these rebates. Since the
rebates relate to service provided more than a decade ago,many of our current customers may not
have been served during the period being rebated, so rebates would not necessarily apply to the
customers who"earned"the credits. Offering rebates based solely on consumption would ensure that
the largest customer classes benefit from the bulk of the credits,regardless of the customers' tenure
with the utility.
As a result of challenges to fairly allocate credits to the original users of the service, Seward Public
Utilities has,based on City Council action,handled the rebates a number of different ways: 1) SPU
has given temporary "rate holidays" to all Customers equally, around the holidays, as a way of
sharing the capital rebates with customers during the winter season;2)In years where capital hinds
were scarce, capital rebates were utilized for one-time major capital maintenance needs in the
electric utility; 3)In some years,the Council has elected to use the funds for a general goverriment
capital project to benefit all of the residents within the service area;construction of Citizens Field is
an example of this type of use;and 4)more recently,a capital credit rebate was used to extend utility
service at SMIC to incentivize development across the Bay, and that investment has shown great
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success. In short, Council can elect to use this rebate for a multitude of purposes, but the
administration recommends considering these one-time funds for the one-time purpose of seed
money for incentivizing development, since the property assessment mechanism can allow the
monies to be used multiple times to encourage utility expansion,
A second source of funds would best be used to construct roads,ditches,sidewalks and other related
public works projects related to new development.This source reflects the City's contributions to the
road improvement project, which have not been fully spent. The unspent City contributions total
approximately$3 87,000,While these monies can be utilized for remaining road improvements,the
Council may see expansion of new neighborhoods as a higher and better use for these funds.
The Water and Sewer Funds are in need of significant replacement of outdated water and sewer
lines. Therefore, it is not recommended that these funds be lapped for contributions to a
Development Fund at this time. However, this issue could be revisited during the Water and
Wastewater Classification and Rate Study,should the Council decide to roll development incentives
into a future capital funding plan for those utilities.
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