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Home My Public Portal AboutResolution 12-96 Adopting Policy Regarding Connections to LID ImprovementsRESOLUTION NO. 12-96 A RESOLUTION OF THE MAYOR AND COUNCIL OF MCCALL, IDAHO ADOPTING A POLICY REGARDING CONNECTIONS TO LOCAL IMPROVEMENT DISTRICT AND OTHER CUSTOMER OR DEVELOPER FINANCED IMPROVEMENTS. Whereas: From time to time, property owners are required to finance public improvements at their own expense by participating in a Local Improvement District or otherwise. Owners of adjacent or nearby property may make use of these improvements without having initially participated in their cost. r The Mayor and Council desire to establish a policy whereby such adjacent owners and developers must make equitable contributions for the costs of such improvements and said contributions are used to reduce the assessments against the original property owners or to refund an equitable portion to the original owners. NOW, THEREFORE, be it resolved by the Mayor and Council of McCall, Idaho that the policy at Exhibit "A" which is annexed hereto and made a part of this resolution as if it was contained in its entirety herein is hereby adopted. Passed and approved this 27th day of June 1996. ATTEST: Mayor City Clerk A Policy Respecting Connections to L.I.D. Financed Improvements. This policy is adopted to permit L.I.D. participants to be reimbursed for part of their costs whenever a subsequent developer requests a connection to those improvements. Definitions: Customer/Developer Financed Improvement. An improvement that is financed wholly by a developer that would not exist but for the developer's activity. L.I.D. Financed Improvement. An improvement constructed and financed as a part of a Local Improvement District created in accordance with Chapter 17, Title 50, Idaho Code. L.I.D. Participant. The legal owner of property in a Local Improvement District at the time the final assessment roll is confirmed. Subsequent Development. A development constructed subsequent to an improvement that is constructed as a part of an L.I.D. and connecting to the improvement and receiving benefits from the improvement through availability or reduced development costs. The intent of this policy is to place the subsequent developer and L.I.D. participants in the same position they would have been in had the subsequent developer been a part of the L.I.D. at its inception. Such a connection will be permitted only if in the opinion of the City Engineer that it can be accomplished using good engineering practices and that the connection will not exceed the capacity of the L.I.D. improvements. In all instances connection will be approved on the basis of this policy only if council finds the same to be in the public interest. Request for Connection Prior to Confirmation of Final Assessment Roll In this case, an L.I.D. has been formed and the project is at some stage of completion, but the final assessment roll has not been confirmed. 1. Subsequent developer will be required to join the L.I.D. waiving notification requirements and other admistrative requirements. Subsequent developer will bear all costs associated with additional public hearings, engineering, legal fees, etc. Subsequent developer will also bear all costs associated with oversizing, improvements on subsequent developer's property, etc. that were not necessary under the original plan. 2. Preliminary assessment estimates will be recomputed as if the subsequent developer were a full part of the L.I.D. using the benefits formula contained in the enacting ordinance. 3. The final assessment roll will be confirmed, including the subsequent developer as an L.I.D. participant. Request for Connection after the Final Assessment Roll but Prior to the First Installment Due Date 1. Subsequent developer will bear all costs associated with additional public hearings, engineering, legal fees, etc. Subsequent developer will also bear all costs associated with oversizing, improvements on subsequent developer's property, etc. that were not necessary under the original plan. 2. The subsequent developer will pay to the city an amount equal to the amount which would have been assessed if subsequent developer was an L.I.D. participant. This amount will be deposited into the bond fund of the appropriate L.I.D. 3. The City Treasurer will then compute a credit for the L.I.D. Participants as if the subsequent developer were a part of the L.I.D. when the final assessment roll was computed, using the same benefits formula. a. L.I.D. participants that prepaid their assessments will be paid a refund equal to the credit computed above. b. L.I.D. Participants that elected annual installments will receive credit for each future installment equal to the credit computed above divided by the number of installments. . Request for Connection after the First Installment but Before the Final Installment 1. Subsequent developer will bear all costs associated with additional public hearings, engineering, legal fees, etc. Subsequent developer will also bear all costs associated with oversizing, improvements on subsequent developer's property, etc. that were not necessary under the original plan. 2. The subsequent developer will pay to the city an amount equal to the amount which would have been assessed if subsequent developer was an L.I.D. participant. This amount will be deposited into the bond fund of the appropriate L.I.D. 3. The City Treasurer will then compute a credit for the L.I.D. Participants as if the subsequent developer were a part of the L.I.D. when the final assessment roll was computed, using the same benefits formula but subtracting accumulated Page 2 depreciation. The refund will be paid to the legal owners of the parcels in the district. Request for Connection after the Final Installment Requests for Connection after the Final Installment will be treated in the same manner as any developer requesting a connnection to the City System Page 3 MOORE St McFADDEN, CHARTERED ATTORNEYS AT LAW ONE CAPITAL CENTER• SUITE 910 999 MAIN STREET• BOISE, ID 83702 TELEPHONE: (208) 331-1800• FAX: (208) 331-1202 SUSAN E. BUXTON * MONA DOBARAN MACK JOHN J. MCFADDEN *t MICHAEL C. MOORE t CATHY L. NAUGLE PAUL A. T URCKE # *Also Admitted in Oregon t Also Admitted in Washington $ Also Admitted in South Dakota June 10, 1996 James H. Henderson City Clerk City of McCall P.O. Box 1065 McCall, Idaho 83638 Re: L.I.D. Connection Policy Dear Jim: A few weeks ago, you faxed to me a copy of the City McCall's policy (or proposed policy) regarding connections developer -financed improvements which are financed with L.I.D. of to s. The policy appears to be a fair and reasonable approach. I have only a couple of suggestions for additions: 1. Where a developer seeks to join an L.I.D. prior to confirmation of the assessment roll, the City should reserve the right not to alter the existing L.I.D. if the addition of vacant or other unimproved ground, and the spreading of assessments to include such land, would result in a reduction of the actual security for the bonds. Perhaps the City could require a cash contribution to the L.I.D. instead, thereby reducing the assessments on the original L.I.D. property without diluting the security for the bonds. 2. In those cases where a developer seeks to join after the final assessment roll, or after payment of the first installment, instead of requiring that amounts paid by the developer be deposited immediately into the bond fund (which could trigger arbitrage rebate problems unless the L.I.D. bonds could be called on the next payment date) , the City should reserve the right to hold the funds in another separate account of the City and to deposit the funds into the bond fund only when the outstanding bonds can be called. r . 4":= James H. Henderson City of McCall June 10, 1996 Page 2 The City needs to be aware that new federal tax regulations relating to "private activity bonds" are now pending, which, if issued in their proposed form, will make it very difficult for a city to do "developer" L.I.D.'s by issuing tax-exempt bonds. The proposed regulations would, generally, treat bonds which are issued to finance what a developer is required to do anyway as taxable "private activity bonds." It may still be possible to create local improvement districts for such purposes, but the interest on bonds would not be exempt from income taxation. The new regulations are expected to be issued before the end of 1996. cc: Ted Burton, City Attorney Sincerely, MOOS & cFADDEN, CHARTERED Michael C. Moore