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HomeMy WebLinkAbout03-22-2010 Ericson Memo to CC Re Chap 8 Page 1 M EMORANDUM to: Charter Commission Members from: Jim Ericson, Clerk-Administrator re: Potential Amendments to Chapter 8 date: March 22, 2010 I am writing to provide a summary of issues regarding a potential revision to Chapter 8 of the Mounds View City Charter entitled PUBLIC IMPROVEMENTS AND SPECIAL ASSESSMENTS. A “Local Improvement” is defined as a public improvement financed partly or wholly from special assessments. A public improvement however is not defined in the Charter or in City Code. This chapter of the Charter articulates the manner in which an improvement utilizing special assessments is initiated—either through a resident petition or through independent action of the City Council. The Charter indicates that a project proposed by residents must also be approved by the City Council, which would mean that absent such Council support, the resident petition could not move forward. The Charter is silent on petitions for improvements that do NOT include special assessments. When a supported project utilizes special assessments, the Council orders the preparation of a feasibility report to ensure the project is necessary, cost effective and feasible. Upon receipt of such a report that confirms the project is needed, cost effective and feasible, the City Council schedules a public hearing by resolution. After the public improvement hearing is held, sixty days is allotted during which time no further work on the project proceeds, to provide opportunity for petitions against the project to circulate and be filed. If no petitions are filed against the project within the 60 days, the project may move forward. After two successive street projects failed due to the petition process, the City established a Taskforce to respond to the issues addressed by petitioners. The Taskforce focused their efforts on two specific areas--street design and financing. The Taskforce met in 2007 and after many well- attended meetings, a standard street design plan was adopted and a financing plan was approved which eliminated the 25% special assessment and replaced it with tax increment finance (TIF) dollars. Other funding sources were identified, including a ten-year across-the-board tax levy to support the Street and utility Improvement Program instead of a series of project specific street improvement bonds. After the work of the Taskforce was concluded, the City Council established a Streets Committee to help guide the development of the projects, to consider non-standard design issues, to hold neighborhood meetings and to address and respond to resident questions and concerns prior to City Council actions. Page 2 It has been suggested that the City dropped the special assessments from the street projects to avoid and prevent any subsequent petitions. This is not true. While my role with the streets Taskforce was peripheral at best, I do know that the special assessments component of the financing plan was dropped after it became clear that the City could alternatively utilize the pooled, unobligated TIF reserves. While there may have been residents who did not favor paying an annual street levy because of the availability of other funds, I am not aware of anyone objecting to the elimination of special assessments. It would seem likely that the framers of the Charter provided residents with the right to petition against projects that included special assessments due to the direct financial impact to the resident. In Subdivision 2 of Section 8.04, the Charter further provides that when benefitting residents pay less than 100% of the cost of a local improvement, the whole community can petition against the project, the assumption being that the balance of the cost would be passed on to the rest of the taxpayers as would typically be the case. Thus, even if the directly benefitting residents support the improvement, the rest of the community may object to paying their share. Such a petition, however, would need to include nearly 3,000 signatures. If the improvement is not funded with any special assessments, it is not subject to petition. It may be the case that the Charter Commission feels that since assessments were dropped from the streets financing plan, Chapter 8 should be amended to “return the power of petition” to the residents. It has been suggested that perhaps the framers of the Charter never anticipated that a street project would move forward without special assessments. While that may be true, I would suspect that it would more likely be the case that the framers simply intended that the right to petition against a project be restricted to those utilizing special assessments. Amending the Charter to allow for petitions against projects NOT utilizing special assessments is a solution to a problem which does not seem to exist. That said, I am not suggesting that the provisions of Chapter 8 could not be improved upon. One of the deficiencies of the present language, in my opinion, is that a petition against a Local Improvement is an all or nothing proposition. Consider the following example. The City proposes improvements to Silverview Pond to address localized seasonal flooding and to replace the bituminous walkway. Fifty property owners would be assessed for the project. A petition against the project is circulated because the residents would prefer an eight-foot wide trail rather than a ten- foot wide trail. The petition is deemed sufficient thus preventing the project from moving forward or being reconsidered by the Council for one year. Rather than stopping the project altogether, could there be a mechanism that would allow for an amended project to move forward? Even though residents are unable to formally petition against one of the street projects in the City’s ten-year street and utility improvement program, the City Council has gone to great lengths to “hear” from residents who may be unsatisfied with one or more of the components of a project. Whether it be street widths, mailbox groupings, locations of stormwater infiltration features, traffic calming features, sidewalks, etc., every aspect of a project is discussed and considered, in contrast perhaps with previously proposed projects. When sufficient residents object to a project component, the plans are generally revised to satisfy the majority preferences of the residents. Page 3 If it is the will of the Charter Commission to revise the Charter to allow petitions to be filed against non-assessed improvements, there would be a number of issues that would need to be addressed, such as: • The ability to conduct emergency repairs (e.g., cannot petition against a project to repair or replace failing infrastructure) • The threshold of signatures needed (e.g., 25% of votes cast in last presidential election • The threshold of project cost (e.g., cannot petition something that will cost less than $250,000) • The ability to revise a project rather than kill it altogether • Limit petitions only to general fund projects? The Charter Commission has also been considering a change to the Charter which would provide residents with the right to initiate projects absent special assessments. This is not a right presently granted by the Charter. There are a number of concerns associated with this consideration that I will attempt to address later in this memo, but first I want to review Section 8.04 which outlines the process for assessed projects initiated by the residents. The Charter does not specify how much time the Council has to react to a petition initiating a project, and there is no requirement that the Council even support such a project. If the Council does support the initiated project, it shall seek an estimate (feasibility report.) The Charter indicates that once the Council receives the estimate for the improvement, it shall, by resolution, set a date for a public hearing on the proposed improvement. The problem is, what if the estimate indicates the project is not feasible, necessary or cost-effective? The Charter also requires that the resolution calling for the public hearing be noticed in the Mounds View Matters, which could delay the hearing by as much as three months. The Commission has prepared a draft flowchart (see attached) to graphically represent how Chapter 8 could function to allow for residents to petition for projects, with language similar to that of Chapter 5 of the Charter. The “initiative” process in Chapter 5 however relates to code amendments, such as, an ordinance amending how many dogs are permitted per household. Initiatives that appropriate money, levy taxes or deal with administrative issues are not allowed. Since most public improvements—with or without special assessments—involve the expenditure of public dollars, the initiative process cannot be used for purposes of proposing public improvements. Thus, resident petitions FOR improvements, with or without special assessments, should not be referred to as Initiatives. The concerns I have with a Charter amendment that would allow residents to petition for a public improvements can be boiled down to three specific issues—timing, cost and feasibility. As to the issue of timing, it would be difficult to explicitly assign a limit to the period of time necessary to conduct a feasibility analysis, unless it were overly broad, such as, six to twelve months. (Refer to Box 13 in the Commission’s flowchart.) Assuming there was support for the project, the proposed flowchart indicates the project must move forward within one year. (Refer to Box 15.) Within one year of what? What if it takes many months to prepare the plans and specifications, order the project, advertise for bids and award the contract--what if the contractor cannot perform the work in what remains of the year deadline? Page 4 Relating to cost, what if funds are not available to support the project? What if taxes need to be raised to accommodate the work? The issue of cost should be of paramount concern. A large improvement may require many months of financial analysis once it is determined what the cost of actual improvements would be. Should the project be financed with general fund dollars? Enterprise funds? Tax increment? Park dedication dollars? Should bonds be issued? While all these same questions would need to be answered for any resident-initiated Local Improvement, at least with petitions involving special assessments, the City Council can simply resolve that the project is not feasible from the beginning, or if the project is desired, it would be not be hamstrung by arbitrary deadlines and timeframes. Another issue relating to cost is the feasibility report itself. There is a cost involved in determining whether a proposed project is feasible, cost-effective and necessary. Naturally, the amount varies based on the specific project, but a feasibility report for a large project could cost as much as $50,000. Who pays for that? Generally speaking, an unplanned expenditure of that magnitude would require a Council approved budget amendment and would necessitate that staff coordinate a process that it might not have time to coordinate. The City goes through a fairly comprehensive and detailed five-year financial plan every year, one of the components of which is the five-year capital improvement plan. The identified projects are analyzed and ranked by need and estimated by cost and determined how each would be paid. If residents feel a certain project or improvement is needed, it would seem more appropriate to attend the annual five-year financial plan public hearing (or any City Council meeting, for that matter) and make the suggestion. To allow resident petitions for improvements without special assessments—regardless of the signature or cost thresholds— would seem to undermine the extensive work put into the five-year financial plan. The final concern involves residents petitioning for projects that are simply not viable. There are seemingly countless examples of impractical, unfeasible improvements, and one would like to think that most residents would not circulate or sign a petition for a project that makes no sense. However, it would not be difficult to imagine someone circulating a petition for a well-intentioned improvement that other residents might support, only to find that the project cannot be accomplished due to financial constraints or factors completely outside the City’s control or authority. If the Charter is amended to allow for resident petitions for improvements without special assessments, a clause should be included to permit the Council to resolve that the petitioned project is either frivolous or not feasible as submitted, or not feasible after a feasibility study has been conducted. As proposed in the draft flowchart (see Box 14), if the Council does not support a petitioned project, it would be forced to add the project as a ballot measure—even if the improvement is impractical, unneeded or fiscally imprudent. In conclusion, there are many projects the City undertakes that are not specially-assessed to benefitting property owners. With the exception of emergency repairs and minor maintenance, all of these projects are identified in the City’s five-year financial plan. Amending the Charter to allow petitions against such non-assessed improvements and allow petitions for non-assessed improvements would seem to be an unwarranted revision and an unnecessary constraint on the ability of the City to function efficiently and effectively.