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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 C 114 DaLuer AYES: Towsley, McClure, Lane, Osenga, Horn, Seese, Squires NOES: None ABSENT: None ABSTAIN: None ATTEST: r-t renda J. allo MMC City Clerk a: MStttialI. (Cit .'Seal) � pF SF ••s+�i�� 1. �. 0-00044 it e SEAL (why, eG ,& 4cec- OF . I 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 46 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 47 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. 48