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HomeMy WebLinkAbout05082023 City Council Special Meeting Packet - DRP Program Seward City Council Agenda Packet SPECIAL MEETING Monday, May 8, 2023 at S:3Op.m. Council Chambers, City Hall All public is invited to attend. City of Seward �� �, City Manager's Office PO Box 167 Janette Bower, City Manager Seward, Alaska 99664 Phone: 907-224-4012 X(XkAStar&mors... Email: jbower@cityofseward.net April 27, 2023 Brenda Ballou, City Clerk City of Seward Re: May 8, 2023, Special City Council Meeting Madam Clerk, Please consider this my written request as required by Seward City Code 2.10.030 (a)(2) for a special meeting on May 8, 2023, at 5:30 pm, for the following item: Seward City Code Chapter 5.22 Developer Incentive and Reimbursement Program Please note the format is a special meeting with a committee of the whole. Thank you, ?4111-WA� Janette Bower, City Manager SPECIAL MEETING NOTICE Pursuant to Seward City Code 2.10.030 (2), this is to serve as the written notice calling a City Council Special Meeting on Monday, May 8, 2023 at 5:30 p.m. for the purpose of: Seward City Code, Chapter 5.22 — Developer Incentive and Reimbursement Program. The meeting will commence in the City Council Chambers, City Hall, 410 Adams Street, Seward. All interested persons are invited to attend the meetings. ALL PUBLIC IS INVITED TO ATTEND. Posted: Friday, April 28, 2023 City Hall bulletin board U.S. Post Office Harbormaster's Building Seward Community Library Museum The City of Seward, Alaska Special City Council Meeting Monday, May 8, 2023 5:30 p.m. Council Chambers Sue McClure 1. CALL TO ORDER Mayor Term Expires 2025 2. PLEDGE OF ALLEGIANCE John Osenga 3. ROLL CALL Vice Mayor Term Expires 2024 4. CITIZEN COMMENTS ON ANY SUBJECT EXCEPT THOSE ITEMS SCHEDULED FOR PUBLIC HEARING Liz DeMOss [Those who have signed in will be given the first opportunity to speak. Time Council Member is limited to 3 minutes per speaker and 36 minutes total speaking time for this Term Expires 2023 agenda item.] 5. APPROVAL OF AGENDA AND CONSENT AGENDA Mike Calhoon [Approval of Consent Agenda passes all routine items indicated by asterisk Council Member (*). Consent Agenda items are not considered separately unless a council Term Expires 2024 member so requests. In the event ofsuch a request, the item is returned to the Regular Agenda] Randy Wells Council Member 6. NEW BUSINESS Term Expires 2025 A. Other New Business Kevin Finch Council Member 1. Seward City Code, Chapter 5.22 — Developer Incentive and Term Expires 2025 Reimbursement Program. Robert Barnwell 7. CITIZEN COMMENTS Council Member 8. COUNCIL AND ADMINISTRATION COMMENTS & Term Expires 2023 RESPONSES TO CITIZEN COMMENTS 9. ADJOURNMENT Janette Bower City Manager Brenda Ballou City Clerk Brooks Chandler City Attorney City of Seward, Alaska City Council Special Meeting Agenda May 8, 2023 Page I City of Seward Developer Incentive and Reimbursement Program Seward City Code Chapter 5.22 Developer Incentive and Reimbursement Program Description The Developer Incentive and Reimbursement Program's goal is to help promote residential development through the shared cost infrastructure extension (roads, water, sewer, and electric) between the developer and the city. The City will share up to 50% of the eligible infrastructure extension costs. The benefits to the city are that they get new property development (property tax), new residents (sales tax), increased utility infrastructure at half of the cost, and gain new utility customers. The benefit to the developer is that it lowers the cost of the development (with many costs being high) and makes it worthwhile for them to pursue. The benefits to the community are that it creates more housing and lowers the costs of the housing. Process The Developer fills out an application for the Program. Application materials include the properties to be benefitted and estimates for the needed improvements. Eligible improvements include surveying, engineering, water, sewer, and electric — materials and installation. The application then goes before city council for approval and funding appropriation. The City has a Developer Reimbursement Fund / Account that is used to pay the expenses. The City is also able to use ARPA Funds for water and sewer portions of the development. There are two different methods or pathways that the developer can choose to take: 1 . The Developer can pay for all of the improvements up front and then can bring the receipts and the City will reimburse for half of the eligible expenses. 2. The City will pay for the improvements up front and then the benefitting properties will be assessed through a special assessment district for half of the cost of the improvements. If the amount owed on the properties is not paid off within 6 months, the property assessment is applied with a prime +4% interest rate. (Our experience is that the developers pay the city back before the properties are actually assessed.) There are guarantees by the developer that are included in the subdivision agreement — for installation standards and warranty of work. Chapter 5.22 -Developer Incentive and Reimbursement Program 5.22.010—Intent. It is the intent of this chapter to permit the city,when funds are available,to reimburse a developer for up to 50 percent of the costs of extending public utilities to the developer's undeveloped property 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 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 person who owns undeveloped land located within the City. 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. Special improvement district means an area established under Seward City Code Chapter 5.20. 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. 5.22.030 General. Upon application to the City and approval by the City Council, electric, water, and wastewater utility services may be extended by the City or by a private developer along a public right-of-way and/or easement. The methods by which utility extensions may be accomplished are as follows: A. Special improvement district. 1. Extensions may be completed by a private developer through the creation of a special improvement district as described in 5.22.020. 2. Reimbursement for the utility extension shall be to the city through the special improvement district language listed in subsections 5.22.020 and 5.22.025. B. Private financing. 1. Extensions may be completed by a private developer who privately finances the utility extension under the terms of an agreement with the City. 2. The agreement with the City may provide for reimbursement to the developer for up to 50 percent of the costs of installing the utility extensions on undeveloped land. 3. A developer is not eligible for reimbursement until the extension has been completed. 5.22.040 Special improvement district. When the determination has been made that a city utility infrastructure extension will benefit the community through expansion of residential housing or will benefit the utility system, the City may, at its discretion, and pursuant to Seward Charter Chapter 8 and Chapter 5.20 of this Code, create a special improvement district and levy assessments against real property benefited by the improvement. 5.22.050 Special improvement district—reimbursement through partial assessment. A. The City may compute assessments for extensions approved under this Chapter at less than the actual cost of the improvements and may levy this partial assessment against the benefiting properties in the special assessment district using the procedures for apportionment and preparation of the assessment roll set forth in Chapter 5.20. B. The partial assessment may be for fifty percent or more of the cost of acquiring, installing, designing and/or constructing capital improvements. C. The partial assessment will be a lien on the benefitting property and shall be paid to the City when the property is sold. 5.22.060 Utility extensions by developer. The following process shall be followed by a developer desiring to extend or expand a City utility system: A. Written request. The developer shall file with the City a written request to extend or expand a City utility system. B. Agreement. The developer is required to sign an agreement that has been approved by the city manager and addresses the following provisions for construction of the utility extension: 1. Design and construction costs. If the proposed utility extension is approved, the developer shall provide and pay for all design,professional engineering, labor, materials, equipment, full-time inspection services by a professional engineer, and other costs related to the design and construction of the requested utility extension. All plans, specifications and construction contracts shall be subject to approval by the City and shall comply with all applicable city standards. 2. Bond required. a. The developer shall post performance and payment bonds to assure completion of the project, free of all encumbrances and shall, before acceptance of the utility system by the City, post a bond for assuring a one (1) year guarantee against defects in workmanship or materials. b. During the one (1) year guarantee period, the City shall notify the developer of any defects, and the developer shall make timely corrections or repairs as needed,provided, however, that in the case of emergency repairs, the City may make repairs and be reimbursed by the developer. c. Repairs made by the developer during the one (1) year guarantee period shall be guaranteed by the developer for one (1)year from the date the repair is made. 3. As-built drawings required. a. As-built construction drawings shall be submitted by the developer to the City within thirty (30) days of completion of construction, and prior to acceptance of the project. b. The as-built drawings must be in electronic format as specified by the City and shall be verified by field survey by an Alaska-licensed professional engineer at the developer's expense. c. During the course of construction, City personnel are to be provided site access for the purpose of observation and inspection. 4. Ownership. a. Ownership of all utility lines and facilities within the easements or rights-of-way shall become the property of the City after construction of the utility system has been completed and the City has accepted the project. b. The system(s)will thereafter be maintained by the City,subject to the one(1)year bond against defects in workmanship and materials. 5. Testing. a. The City shall witness the testing of any utility installation. b. The City shall assess a fee for witnessing the testing of the utility installation on the basis of time and materials. c. In the event repeated tests are necessary to approve and certify the system, a fee to witness the tests shall be charged to the developer on the basis of time and materials for each additional test. d. The City shall also assess a fee for any additional inspection which is done by the City in connection with the utility system installation. 6. Marketing. The developer shall offer all lots to which utilities have been extended for sale upon City acceptance of the utility extensions. 7. Reimbursement. a. Subject to the prior appropriation or approval of the city council, the agreement may contain a provision providing for reimbursement of design and construction costs up to a specified amount not to exceed a maximum amount of fifty (50%)percent of design and construction costs from a program fund. b. Reimbursement shall only be included in the agreement if the utility extension is to Undeveloped Land. c. Reimbursement shall be conditioned on proof of compliance with all provisions of this Chapter. C. Expanded capacity. 1. The City may, at its discretion, require the developer to install higher capacity water or sewer lines or facilities than are required to serve just the developer's needs. 2. If the City requires a higher capacity line or facility than is needed by the developer, the City shall reimburse the developer for the additional costs associated with the larger line. 5.22.070 Application required. A. In order to be eligible for consideration for reimbursement, the developer must submit the required application prior to beginning work on any utility extension to the undeveloped property. B. The application must be completed in full and the filing fee paid in full. C. The clerk will submit a notice of filing to the applicant and the city manager within ten days of receiving the application so long as the application sections have been completed, the application is signed and dated, and the application fee has been paid in full. 5.22.0680 Application content. The developer's application shall include the following: A. A statement of the properties owned by the developer. B. The total estimated cost of installation of the improvement. C. Disclosure of any outstanding liabilities owed to any public utilities, contractors or other persons on or regarding the property. D. Disclosure of any violations regarding safety, health, or land use laws applying to the subject property. E. 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. 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. G. The Council shall adopt the application form and any amendments or appendices to the general application form via resolution. 5.22.090 Approval process. A. 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 includes 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. B. Along with the written memorandum, the city manager shall prepare a resolution for council consideration. The legislation provided to council shall include: 1. The reimbursement amount; 2. The estimated project amount; and 3. Appropriation of funds. C. Council shall adopt, change the amount of reimbursement, or deny the city manager's recommendation by resolution. D. Council's decision to reject or accept the recommendation shall be the final decision by the city. 5.22.100 Completion report. Following project completion, the developer shall submit a completion report that includes an itemized report,with supporting documentation, of the actual direct cost of the utility extension to the developer. 5.22.110 Reimbursement. A. No more than two regularly scheduled council meetings after the city manager receives the completion report from the developer, the city manager shall submit a reimbursement request to the finance department for the amount listed in the approved resolution. B. If the final amount of the project exceeds the amount listed in the approving legislation, the city manager shall prepare a second piece of legislation for council consideration. The legislation shall include: 1. The final project amount; and 2. An additional appropriation of funds. C. Council shall adopt or deny the city manager's recommendation. D. Council's decision to reject or accept the recommendation shall be the final decision by the city. 5.22.120 Notice of lack of funds. In the event no are available for the program, a notice of the lack of funding shall be posted on the city website.