PUBLIC HEARINGS

OLD BUSINESS

NEW BUSINESS

ORDINANCES/RESOLUTIONS

City / County Planning Director Bob Horne reported that Leisure Development, L.L.C., recently acquired Lot 1, Block 1, Fox Farm Addition No. 3, and had prepared plans to construct on the site a 40-unit residential condominium project titled Meadowlark Estates PUD. Upon annexation to the City in 1980, the 7.2 acre parcel comprising the privately owned property in Fox Farm Addition No. 3 was zoned "Limited" General Commercial, "D" Area District. To accommodate the planned residential condominium project, which differs significantly from the previously planned business use of the property, the current owners submitted an application to rezone subject property from "Limited" General Commercial District, "D" Area District, to "PUD" Planned Unit Development District.

The Planning Board conducted a public hearing on the rezoning on August 13, 2002. Brett and Terry Haverlandt, two of the partners in Leisure Development L.L.C., no other citizens spoke during the hearing.

The Planning Board, at the conclusion of the public hearing, passed a motion recommending the City Commission approve the rezoning of Lot 1, Block 1, Fox Farm Addition No. 3, from "Limited" General Commercial District, "D" Area District, to "PUD" Planned Unit Development District.

Mr. Horne stated that staff recommended approval, and that the project would be beneficial to Great Falls.

Commissioner Beecher moved, seconded by Commissioner Jovick-Kuntz, that the City Commission accept Ord. 2832 on first reading and set the final reading and public hearing date for 7:00 p.m., October 15, 2002.

Motion carried 5-0.
 

The owner of Lots 18-24, Block 4, Finlay's Supplement to Prospect Park, petitioned to have said Lots annexed to the City. Dana Hennen is in the process of purchasing said Lots for the purpose of building three single family dwelling units.

Lots 18-24 are located along the north side of 21st Avenue South between 16th and 17th Streets South. Each lot is 25 ft. x 125 ft. (3,125 sq. ft.) in size. The abutting portion of 21st Avenue South contains a City water main and a sanitary sewer main is located in the abutting portion of 21st Alley South. Reimbursement is owed by the applicant for his proportionate share of the costs of said utility mains. As the abutting portion of 21st Avenue South is not improved to City standards, it is anticipated the applicant would be required to waive his right to protest and agree to pay his proportionate share of paving, curb and gutter when deemed necessary by the City.

At the conclusion of a public hearing held August 13, 2002, the Planning Board recommended the City Commission annex said Lots 18-24 subject to: the applicant paying $7,553.52 owed for processing fees and reimbursements; entering into an agreement to the typical terms and conditions associated with annexation including waiving right to protest and agreeing to pay, when deemed necessary by the City, proportionate share of the costs to install standard City paving, curb and gutter in those segments of 16th and 17th Streets South and 21st Avenue South abutting Block 4, Finlay's Supplement to Prospect Park. Said conditions have been completed.

Commissioner Hinz moved, seconded by Commissioner Rosenbaum, that the City Commission adopt Resolution 9266.

Motion carried 5-0.
 

Ordinance 2833 assigns a zoning classification of "A" Residence Use, "A" Area District, to Lots 18-24, Block 4, Finlay's Supplement to Prospect Park. Subject property is located along the north side of 21st Avenue South between 16th and 17th Streets South. The area requested to be annexed is presently zoned by the County as "R-2" Low Density Residential District. The applicant requested the property be zoned "A" Residence Use, "A" Area District, upon annexation to the City. Subject property is bordered on two sides by property zoned "A" Residence Use District, on the third side by a "MH" Mobile Home District, and on the fourth side by an "R-2" Low Density Residential District. Annexation of the subject property will enhance health, safety and welfare through application of City Codes and provision of municipal services and will reduce the size of an unincorporated enclave which the City is interested in eliminating.

The Planning Board, at the conclusion of a public hearing held August 13, 2002, recommended the City Commission assign a zoning classification of "A" Residence Use, "A" Area District, to subject Lots 18-24.

Commissioner Jovick-Kuntz moved, seconded by Commissioner Beecher, that the City Commission accept Ord. 2833 on first reading and set the public hearing date for 7:00 p.m., October 15, 2002, to consider adoption of Ordinance 2833.

Motion carried 5-0.
 

The property owner is constructing a 4800 square foot addition to the building at 920 Second Street South. The building permit was issued June 3, 2002, and the project will be completed in October 2002, at an estimated cost of $210,000. The applicants are requesting approval of the tax benefits and Resolution No. 9263 has been prepared to comply with the requirement that all applications be approved by resolution. Approval of the application allows for the taxes generated from the expansion to be added to the existing taxes over a five-year period in increments of 20 percent each year.

MCA 15-24-1501, provides the local government option of giving Tax Benefits for the Remodeling, Reconstruction or Expansion of Existing Buildings or Structures. The law governing this incentive was amended in 1985 requiring that each local governing body (City and County) approve the Tax Benefit on a project by project basis. If one local government body approves the tax benefit and the other does not, the benefit will apply only to the mills levied by the approving governing body. In addition, tax benefits do not include any relief from state-wide levies and local government approval of the application must be by resolution.

The City Commission's policy regarding the approval of remodeling tax benefits was established in the late 1980s and requires that all property taxes on all property owned by the applicant be current and that the applicant be allowed to take advantage of only one City program available to provide local development assistance. This policy came about as a result of concern that certain projects were taking advantage of extremely low interest rates, City sponsored new construction or rehabilitation loan programs designed to improve building conditions, improve blighted areas and expand the tax base. After receiving the low interest loans, some developers were then applying for the reduction in property taxes, which had the net effect of canceling some of the benefits the City was supposed to derive from making the original loan.

In applying this policy to the application received from the current owners, Staff found that all property taxes were current and that the applicants had not received City financial assistance from other programs.

Commissioner Rosenbaum moved, seconded by Commissioner Beecher, that the City Commission adopt Resolution 9263.

Motion carried 5-0.
 

Fiscal Services Director Coleen Balzarini reported that the Community Enhancement Project would fund up to $1million over 20 years. Interest rates of 4.5 percent would result in annual payments of $77,000 per year. This could be characterized as an investment in the future of this community. As always, efforts are made to balance between current operating needs and capital investments. The adoption of Resolution 9265 would enable the City to make community enhancements a reality. Over the past several years through Commission and Staff discussion, there have been several projects identified for consideration such as:

A $500,000 investment ($400,000 debt financed and $100,000 other sources) would create leverage to complete a $3.5 - $4 million rehabilitation of the existing baseball stadium.

A $200,000 financing to purchase or develop land for Youth Soccer fields leverages a $1.5 to $2 million project. Soccer is a growing sport that involves many youth and their families. Currently, soccer games are played on City parkland. Development of a soccer complex would reduce the wear and tear on the parks, which were not designed for soccer play.

A $200,000 financing would provide funding for a portion of almost $1.5 million in needed improvements at the Four Seasons Arena. The main ice-floor is in need of new Dasher Boards and Ice-Floor Coverings. This would create new opportunities to increase usage and therefore revenues within the facility.

A $200,000 component was proposed for as yet to be identified opportunities related to recreation, open space, or historic site acquisition.

The enhancements would be brought to the Commission one at a time for further consideration. And then brought to the public at a Commission meeting in a public hearing. This would ensure the citizens an active voice in the community's future.

The non-voted general obligation debt financing proposed for this project is authorized by MCA 7-7-4104, passed in the 1999 legislative session. It does not result in an increase to property tax levies. The City must meet two tests before the financing mechanism can be used. First: the principal amount of the debt must be less than 10 percent of the General Fund budget in each of the two preceding fiscal years. This equates to $1,651,186 in 2001 or $1,629,410 in 2002. The $1,000,000 in improvements meets this test. Second: principal and interest payments on all such debt outstanding must be less than 2 percent of the revenues receipted into the General Fund in each of the two preceding fiscal years. This equates to $318,645 in 2001 or $308,740 in 2002. The anticipated $77,000 for this financing in addition to the $167,964 payment for the Electric City Water Park – Wave Rider Construction, or $244,964, meets this test. If another project with an identified cash flow, presented itself in the future, there is capacity to finance an additional $550,000 to $913,000. The range in capacity was dependent upon the interest rates and number of years financed. The annual payment must be less than $53,776 to meet the second test.

The sources of repayment for the Community Enhancement Project are identified as follows:

In 1997, a Tax Increment Industrial Development District was formed to finance $965,000 in public infrastructure improvements related to the construction of the Pasta Montana/General Mills properties. Total infrastructure and facility improvements resulted in a $300,000 incremental increase in property tax revenues. Those revenues have been used over the past five years to repay the financed debt. The obligation was satisfied through actual repayments or cash reserves. Future increments will be released to the City, County, School District and State taxing jurisdictions. The City's portion of that release, $60,000 and related interest earnings, could be used to pay a portion of this new debt.

On August 20, 2002, the City Commission approved the refinancing of debt obligations related to the Urban Renewal Tax Increment District. This would result in $53,000 in annual debt service reductions. Related investment earnings and $10,000 would be available to pay the remaining portion of this new debt. The remaining savings will be released to the County, School District, and State taxing jurisdictions.

Commissioner Jovick-Kuntz moved, seconded by Commissioner Beecher, that the City Commission adopt Resolution 9263.

Motion carried 5-0.
 

CONSENT AGENDA

Commissioner Beecher moved, seconded by Commissioner Jovick-Kuntz, that the City Commission approve the Consent Agenda as printed.

Mayor Gray asked if anyone in the audience had anything that they would like to discuss on the consent agenda. Mr. Gary Shampeny with Turf Care and Specialty Products out of Billings addressed the Commission. He asked the Commission to delay the decision on item number 10 (Bid award for a 2003 Rotary Mower) on the consent agenda and to redirect Staff to review the specifications with Turf Care. Turf Care was the low bidder on the item, but asked for seven exceptions. Jim Rearden, Public Works Director stated that there were seven exceptions total that did not meet specifications. And that one of the items was a "no exception" item. Commissioner John Rosenbaum asked to whom the design was acceptable, industry standards or Turf Care. Mr. Shampeny said it was Turf Care. Jim Rearden then stated that the specifications had been reviewed in detail with Staff that would be using the equipment. Commissioner Hinz then stated that safety above all else, was the main concern.

Motion carried 5-0.
 

BOARDS AND COMMISSIONS

NEIGHBORHOOD COUNCILS

CITY MANAGER

City Manager John Lawton asked City Attorney Dave Gliko to report to the Commission on the status of the Waste Water Treatment Plant lawsuit. Mr. Lawton stated that this report was not the City's argument of the case, and it was not a request for strategy guidance.

Dave Gliko reported that the suit was filed on July 26, 2002 by alleged employees of the Contactor for the Waste Water Treatment Plant contract and perhaps subcontractor. Mr. Gliko stated that the nature of the suit was a wage claim.

Mr. Gliko then offered the following background information. State statute requires that all public works contracts contain provisions designating and establishing prevailing wage rates. State Statute also requires that the Commissioner of Labor and Industry must determine those wage rates that are applicable in all public works contracts. This is also restated in the Rules of Administrative Procedure for the Department of Labor. Mr. Gliko reported that there is at least one State Supreme Court decision affirming that.

On July 18, 2001, our consultant, who was in the process of creating our contract documents, made contact with the Department of Labor and Industry, described the project and requested the appropriate standard prevailing wage rate. Mr. Gliko stated that the reply came the same day by email. Mr. Gliko then read the reply to the Commission. The reply was as follows: "From review of the information provided, the Building rates can be used for the project overall. However, if there is the offhand chance that payment of the site work under the building rates would cause some concern, then payment for this work under the heavy rates could certainly be done."

Mr. Gliko said that, that was the direction of the State Department of Labor and Industry. Following that direction our consultant inserted building rate in the contract documents. The contract was approved and executed on October 16, 2001. Construction work ensued. The complaint was filed on July 26, 2002, alleging that heavy construction rates should have been the applicable wage rate in the contract documents as opposed to building rates. Mr. Gliko filed a response to the complaint with the court denying that the heavy construction rates were proper and stating that based on the direction of the State Department of Labor and Industry and on the expertise of our own consultant inserting the building rates in the contract documents that they were the appropriate rate.

Mr. Gliko then reported that he filed a third party complaint against: State Department of Labor and Industry, the Contractor and our Consultant, that is in the nature of the complaint against each of those parties alleging that if the court should determine that heavy construction rates apply that the State Department of Labor and Industry should be responsible for their error, and or our consultant should be responsible for their error, and or the contractor should be responsible for their error as payor of the employees. Mr. Gliko stated that, that was as far as litigation had progressed with the exception of some discovery work on both sides. Mr. Gliko said that he could not presume to address the merits of the criteria regarding the appropriate classification for the wage rates, that is either heavy construction or building rates because that is in the expertise of the State Department of Labor and Industry and/or our Consultant Engineer. Mr Gliko asked if the Commission had any questions. The Commission did not pose any questions, and thanked Mr. Gliko for his report.
 

ADJOURNMENT