CITY COMMISSION AGENDA ITEM

Department:	City Manager’s Office		Commission Meeting Date:  Sept. 20, 2016
Staff Contact:	Diane Stoddard, Assistant City Manager
Recommendations/Options/Action Requested:
Authorize staff to finalize and the Mayor and City Clerk to execute an amendment to the interlocal agreement with Douglas County and the Economic Development Corporation of Lawrence and Douglas County and adopt on first reading, Ordinance No. 9294 and Ordinance No. 9295, waiving the special assessments on five county-owned tracts in East Hills Business Park and indefinitely deferring the special assessments on the remaining three county-owned lots.   Adopt on first reading, Ordinance No. 9293, which supersedes Ordinance No. 8258 to enable indefinite deferral of special assessments in this case.
Executive Summary:		The City is in receipt of a request from Douglas County requesting that the City release the County and Douglas County Development, Inc. (DCDI) from its obligations under an interlocal agreement which determined how certain infrastructure costs associated with East Hills Business Park would be handled.  The applicable agreement dates back to June 1989 and was subsequently amended in November 1991, and again extended in 2008.  The interlocal agreement provides for the following: The City would fund and finance 100% of the water improvements; The City would finance the street and sewer projects; The City would fund the costs associated with street improvements in excess of 27 feet in width; A benefit district would be established to fund the total remaining cost of the street and sewer infrastructure 95% of the benefit district costs were agreed to be deferred until such time the lots were sold or for a period of 20 years from the date of the consent to the levying of assessments (May 15, 2009).  Upon reaching the 20 year mark, the agreement requires the assessments to be paid.  As properties have sold within the Business Park, these costs have been captured by the City.  5% of the un-deferred costs have been paid by the County and DCDI annually.  City records show eight tracts within the East Hills Business Park Benefit district that are still owned by the County.  While the bonds that originally financed the street and sewer projects have been paid in full, the assessments on these lots were deferred and have not been paid.  The estimated value of the outstanding deferred assessments associated with these properties is approximately $415,000.36.  This amount includes accrued interest during the time that the bonds were outstanding.  The attached map delineates these properties.  It is important to note some background regarding the County’s role in the East Hills Business Park. The County originally purchased all of the land that is now the Park as part of the original partnership.  As the owner of these lots, the County has paid property taxes on the lots.  It is important to note that five of these eight tracts will never be developed.  Lots A and B of Block 1 serve as the storm drainage detention for the entire East Hills Business Park.  It would not be prudent to allow development on these lots.  Lots G, H, and I of Block 3 all have significant development challenges due to irregular shape and/or being landlocked.  Staff recommends that the special assessments on these five lots, which total $259,165.32, be waived entirely.  Staff further recommends that the outstanding East Hills special assessments on the remaining lots, in the amount of $155,835.04, be deferred indefinitely until such time the lots are sold for development.  This enables the special assessments to be paid or negotiated as needed with any new property owner.
Strategic Goal Area:		Economic Development
Fiscal Impact (Amount/Source):		The special assessments for East Hills Business Park have long since been fully paid off.  If some of the special assessments are waived, that will have an impact on anticipated revenue.  However, a number of the lots will never develop due to them serving as storm drainage for the park or due to irregular shape or being landlocked. Continued indefinite deferral of the other lots keeps them on the books when they are transferred to another party.
Attachments:		Request from Douglas County Property Map Draft 2016 Amendment to Interlocal Agreement Ordinance No. 9294 Ordinance No. 9295 Ordinance No. 9293 Ordinance No. 8258 – adopted 04/15/08