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HomeMy WebLinkAbout01/17/1995 Regular Council Meeting MinutesPLACE AND DATE Marana Town Hall, January 17, 1995. I. CALL TO ORDER By Mayor Ora Harn. Time: 7:06 P.M. Il. PLEDGE OF ALLEGIANCE Led by Mayor Ora Harn. III. INVOCATION/MOMENT OF SILENCE Led by Mayor Ora Ham. IV. ROLL CALL COUIICIL Ora M. Harn Mayor Sharon Price Vice-Mayor Tom Clark Council Member Ed Honea Council Member Betty Horrigan Council Member Herb Kal Council Member Helen Key Council Member STAFF: Hurvie Davis Dan Hochuli doe Lizardi Marcia King Jerry Flannery Sandra Groseclose Mick Mathieu 28 Members of the Public. Town Manager Town Attorney Town Engineer Assistant to the Manager Planning Administrator Town Clerk Engineering Consultant V, APPROVAL OF AGENDA A motion was made by Tom Clark, seconded by Ed Honea and carried unanimously to approve the agenda as read with the amendment to discuss General Business Item B before Item A. VI. APPROVAL OF MINUTES A motion was made by Ed Honea, seconded by Helen Key and carried unanimously to approve the minutes of Regular Council Meeting of December 20, 1994, Special MINUTES OF REGULAR COUNCIL MEETING MARANA TOWN COUNCIL JANUARY 17, 1995 Council Meeting of December 20, 1994 and Regular Council Meeting of January 3, 1995. VII. PETITIONS AND COMMENTS Nolle VII. ANNOUNCEMENTS Leilani Schisler~ 12561 N. White Ave., Marana, AZ: Here on behalf of the Marana ftigh School Orchestra. The orchestra has been invited to play at Disncyland over spring break. Need funding or things to have a drawing with. Also Jesse McCrea has bccn invited to the Washington Conference of Journal, the end of March. She is looking for funding for this as well. Would appreciate any help with these projects. VII1. STAFF REPORTS On file at the Marana Town Ilall. No comments by Council. IX. GENERAL ORDER OF BUSINESS A. Discussion and Action of Development in Red Hawk Canyon and Formation of Community Facilities Districts. Resolution No. 95-04 - Adoption of a Development Agreement Between Marana, WCA Communities, Inc. and US Home Corporation, for th___e development of approximately 3220 acres of Red Hawk Canyon and establishment of community facilities districts, under the Tortollta Mountain Specific Plan~ North of Tangerine Road and Thornydale Road. Resolution No. 95-05 - Establishing "Red Hawk Canyon Community Facilities District No. 1" as a special taxing district, covering _approximately 620 acres of land in Red Hawk Canyon; waiving election, appointing directors and establishing boundaries. Resolution No. 95-06 - Establishing "Red Hawk Canyon Community Facilities District No. 2" as a special taxing district, covering approximately 2,600 acres of land in Red Hawk Canyon; waiving election~ appointing directors and establishing boundaries. Executive Session - Executive Sessions may be called during this agenda Item~ pursuant to A.R.S. Section 38-341.03 {Al{3} for discussion and consultation with the Town Attorney regarding this item. Ed Honea stated that he would like to go into Executive Session prior to the item being discussed. A motion was made by Ed Hones, seconded Sharon Price and carried unanimously to enter intu executive session pursuant to A.R.S. Section 38-341.03 iA}{3} for discusskm and consukation with the Town Attorney regarding this item. TIME: 7:17 P.M. Return from Executive Session. All Council Members present. TIME: 8:05 P.M. Hurvie Davis, Town Manager: Stated it has been discussed so many times and there has been a lot of negotiations going on for the last three months or so. Woukl like to compJiment Dan }tochuli for the intensive effort he has put in on this, to insure that the Town is protect to the utmost. The objective has been to 2 put in the CFDs to allow the development to take place, which was agreed upon back in 1988, 1989, 1990 and so forth. Have worked very hard to get the new consolidated development agreement in and the language for the CFDs put together. He is excited and comfortable with the project. Dan Hochult, Town Attorney: At last Council meeting where the CFDs were discussed, they did not pass. It was decided to resolve the issues pertaining to the development agreement prior to forming the districts. Prepared tonight to discuss and present the latest version of the amended development agreement. Advised the Council he is not a bond attorney and is not able to advise the Council on bond matters, we have a bond attorney, Michael Cafiso. Mr. Cafiso is unable to be here tonight. Mr. Hochuli has talked with him numerous times about the development agreement and the Community Facility Districts. As the Council knows the Town of Marana entered into a number of development agreements for various areas of the Tortolita Mountain Properties Specific Plan area, all the Westinghouse property. There was a history of pre-annexation and development agreements, goal was to put all these agreements into one agreement. Believes this has been done, with one exception. The document this evening, The Amended and Restated Development Agreement and Intergovernmental Agreement Red Hawk Canyon, superseded and replaces all of the other development agreements entered into with the exception. The one exception is the third portion of the property, or phase three. What Mr. Betts refers to as Bullwinkle's left antler, the western most part of it. The development agreement for that portion were different than the other two areas. This development plan arranges for the establishment of initially two community facility districts, Red Hawk #1 and Red Hawk #2. District #1 is the US Home district that will be roughly 620 acres, that is designed to come into existence provide the infrastructure along the Tortolita Mountain Parkway and over a period of years disappear. The other district is the rest of the middle area of the Tortolita Mountain Property project, the Westinghouse project, excluding the US Home portion. That is what is referred to as district #2, that one is designed to be an ongoing district and will fund various different projects all relating to the infrastructure. Also understand that the development agreement contemplates and sets forth future community facility districts within those areas. You'll see in a number of areas, mainly in an area referred to as the bond restrictions, where there is limitations on their bonding ability. Refers to district #1 or district #2 or any other district formed within the boundaries of the districts, actually contemplating that they may want to form Red Hawk #3, designed to facilitate infrastructure in that area. Apologized to Council for the lateness of Council receiving the document. Was prepared literally right before the meeting. He has highlighted the changes from the document included in the Council packet. The areas in gray have been added to the draft since last seen, and the areas that have a line through them have been deleted. Mayor Ora Itarn: If you would want to go through this briefly, it would be a good idea. Doesn't feel there are that many changes that you could not update the Council on the changes. What the changes mean and why they were made. Dan Hochuli: Would like to mention that the name Marana is not contained in the community facility districts any more. That is by intent and design, the Town is not responsible for the bonds of the CFDs, under the statute. The district is responsible for its own bonds. Do not want to give the impression with the name of the district that some how the Town is supporting or endorsing the sale of the MINUTES OF REGULAR COUNCIL MEETING MARANA TOWN COUNCIL JANUARY 17, 1995 bonds. Page 1 there is a lot of language that includes TMP, WCA, TMPLP, those are all various entities that were formed for various reasons by Westinghouse, as limited partnerships and limited liability corporations and the like to run the project, just different corporate entities. The entity right now is WCA, that is not a new company from the last name, which was TMP, Tortolita Mountain Properties. Tortolita Mountain Properties just changes the name to WCA, still Westinghouse, referred to as WCA. Only addressing changes. Page 5, a correction that someone caught today which corrects the name of the document. Section 3.4 on page 10, a small change. 3.4 originally provided that the district would reimburse the Town for the Town's expenses, including consultant fees, incurred in connection with formation of the districts. Few places in the agreement where the Town has the right to hire a bond attorney to check something out. For example, right before district itl is to disappear, the Town has the right to hire a bond lawyer and make sure the dissolution of district # 1 is being properly done. Made a change to clause 3.4 so that the district is on the hook for that. There is a couple of places under this agreement where the Town has the right to hire a lawyer to check something out, and the Town will be reimbursed for that. Page 17, one of the things that was the sticking point for all the parties involved, the Town, Westinghouse and US Home. US Homes offer that they made at the last Council Meeting where this was discussed, to guarantee the construction of the golf course. Talked earlier about a 3:1 ratio, making sure there was enough collateral to secure the bonds. Will the property be worth enough so that if there is a problem, the sale of the real estate can be used to satisfy the bonds? So the bond holders are not left holding the bag. Not because the Town will be left holding the bag, the Town is not responsible for the payment of the bonds, but lots of lawsuits tend to arise when there is a problem with the bond. Want as much security as we could get. US Home agreed to guarantee the completion of the golf course, with the idea being that if there was a problem and the property needed to be sold, the property would be worth more with the golf course. Also the feeling that the construction of the golf course by US Home would exhibit a commitment on their part and they would be less likely to walk away from the project in the event that the bottom fell out of the market, or another reason they did not want to continue. A discuss took place at to what would happen if the water infrastructure was not completed, what the timing would be, guarantee completion by, and if the infrastructure never got completed, or if the infrastructure got completed but for some reason there was not water in the pipes, what is done than. Made sure it was not a miniature golf course, it is a regulation, at least 6500 yard long, I8 hole golf course. Worked it out, is that US Home will guarantee that the golf course will be completed and the golf course improvements will be completed no later than two and one-half years after the water improvements have been completed, that is the water improvements financed by the bonds, district #1. Whatever the water improvements are that they put in, when those are done than the two and one-half year clock starts to click. If the water improvements are not done, then they are not obligated to build a golf course, but the district will not sell the bonds, unless they are sure that the water improvements will be done. And there are performance bonds issued on that, so if they sell bonds, we know that the water improvements are going to be done. Once the infrastructure is completed, whether there is water in the pipes or not, the clock starts to run. If after two and one-half years after the infrastructure is completed, the golf course is not completed, US Homes will pay three and one-half million dollars into a trust account that will be used to finish the golf course. If they have already spent two million on the golf course, so far, to get to where they are, they will spend another one and one-half million, the difference, in the trust fund to complete the golf course. That three and one-half million dollars doe not include design or engineering costs, that is hired in the ground construction costs. Not aware of an estimate on that number. The idea is that if they have not done anything on the golf course on two and a half years, they will put three and a half million dollars in a trust account. And that money will be spent by Westinghouse to construct the golf course. And then on the construction of the golf course improvements will thereafter be supervised and managed by Westinghouse, WCA. The district can't, because he has been told that the district cannot build a golf course, it's not one of the things a district can do. Did not want the Town to do it, because this is the district, not really something that the Town is involved in. We have either a golf course or three and a half million dollars, or the difference of the golf course within two and a half years after the completion of the water infrastructure. From what was heard from US Home, that is way outside, and they want to beat that. Covered also, the deal between US Home and WCA. For the land acquisition, between them, if it is not consummated and US Homes obligation as a developer go away, then those obligations to build the golf course go to WCA, so either way we get a golf course. Mr. Ruby is that correct. Scott Ruby: US Homes obligation to build a golf course or put three and a half million. If you put three and a half million in, you are right Westinghouse is then obligated to use that three and a half million to build a golf course, Dan Hochuli: The way he understands the intent of this paragraph, is if US Home does not end up developing this project, because the deal with WCA is not consummated, then WCA is obligated to construct a golf course. Scott Ruby: No, the deal is, US Home has said to the Town that they will build the golf course whether they are the developer or not. They are willing to demonstrate their commitment to the project by saying nothing can stand in the way. Dan Hochuli: Mr. Ruby is right, I was wrong. US Home will build a golf course whether they build a development or not. There was earlier talk about Westinghouse taking it over. Ed Honea: What's the enforcement tool? Dan Hochuli: For which part? Ed Honea: For any part, the $3.5 million. If they decide that this is not a good project and don't put up the money and walk away, is there any enforcement tools at all? Dan Hochuli: The enforcement tool, is the same they have against us or that we have against Westinghouse, a lawsuit for breach of contract. Could be brought by the Town or by the district, who will become a party to this agreement after its formation. Town has the ability to enforce it, under contract for money damages, or for specific performance, which means do what you promised you were going to do. If the reason US Home does not build a golf course is because US Home has filed for bankruptcy, then there is nothing we can do. There is a stay, which means we cannot file suit against someone who is under the protection of the bankruptcy court. A corporate guarantee form US Home is as good as US Home. That is common, any guarantee or indemnity that you get, its as good as the person giving 5 it. Page 21, Section 6.7 Bond Restrictions, the changes were engineered by the bond attorneys. This contemplates the possible formation of other districts, have tried to word this so that the same restrictions will apply to those other districts. Changes are mostly in that regard. There is a requirement that there be a 1:1 ratio on the bond sale, after infrastructure. So if district # 1 issues $18 million dollars worth of bonds, which is the max amount, the property within district #1 must be appraised to be worth at least $18 million after the infrastructure is in, not before. The reason being, afterwards when the bonds are issued, there are performance bonds, know that the infrastructure will go in. If there is a problem, there will be an appraisal saying it will be a 1:1 ratio. The word wholesale was added, so that it is now an appraisal from an MIA appraiser, the wholesale appraisal will be a 1:1. Assumes by the lawyers silence that it has been read correctly. There were some changes to the indemnity language on page 23, Section O. Broaden that so that the indemnification covers not only the Town but also its agents and employees. There is a lot more about indemnity at the end of the agreement. There are a number of bond restrictions on bond sales within either of these districts or districts formed within the boundaries of these districts, that is what was just talked about. On page 24, Section V, that section is out mechanism to insure that those other things have been done. Says they will give us certain certifications that they have compiled with the provisions of all the previous bond restrictions, and we will receive that as quickly as possibly, but in no event more than 21 days. When the district is at a position where it wants to sell bonds, they don't want to be held up by 6 months of red tape by the Town, in making sure that the bond restrictions have been complied with. The improvements reimbursement, the language is almost word for word from the previous development agreement that was entered into. Page 27, dealing with the event of a 200 bed hotel complex. Some small wording changes on some pages. Page 32, where the Council can look into what the district is doing at the dissolution of district # 1. There was some discussion about who would pick the lawyer and in the spirit of working together, it will be somebody we all pick. It will be a bond lawyer, who will give us an opinion on whether district #1 can properly be dissolved at that time. Page 40, Section 19.14 - Severability Clause, deals with what happens if for one reason or another a portion of a contract is not enforceable or is deemed unenforceable, the Severability Clause deals with that. The language that is highlighted is Mr. Cafiso, those are his requested changes that the parties worked out. There are a few minor changes to 19.18 at the top of page 41, refers you to pages 42 and 43, a large gray area, which is very complex to read. It talks about who will provide a lawyer to whom in the event there is a law suite and who will pay the damages to who. And what each parties rights are in the event of such a law suit. Example, if there is a law suit as a result of something the district has done, then they will indemnify the Town, and provide a lawyer, and will pay for the lawyer and will pay the damages of the law suit if there is something as a result of that. But if the Town does something wrong, or negligent, and the district gets sued, then we need to indemnify them. It is something you see quite a bit of in severability clauses. That is Mr. Hochuli's overview of the changes. One other thing, Council received an amended Resolution 95-04, its the white one, not the pink. The change is on page 2, the last paragraph, titled approval of development agreement. The first has a clause which stated the Mayor and Clerk are authorized and directed to execute and deliver the development agreement on behalf of the municipality and substantially the form attached hereto with such additions, deletions and modifications as may be approved by the Mayor. As stated before, that is a dangerous way to adopt any kind of agreement. The Council needs to approve the agreement as written, so the Council knows exactly what they are approving, not substantially as to form, but exactly as to form. That language has been deleted, see now that the Council, if they pass Resolution 95-04 will be adopting the development agreement as it is tonight. Ed Honea: Question on page 26. Look at the Improvements and Reimbursements, 6.9. It is his understanding, reading the deleted part, the original agreement stated that the Town of Marana would pay for improvement of Tortolita Parkway, up to one-half of the sales tax collected for twenty years. This new and improved version, deletes Tortolita Parkway which was specifically listed in the original agreement and phase one improvements. Which is pretty vague and pretty vast, as far as things that we reimburse. What is the deal? The Tortolita Parkway and improvements to Tangerine Road was deleted and was replaced with the phase one improvements. Dan Hochuli: Steve Betts is the author of both the old agreement and the new one, and he may have an answer. Steve Betts, C-allagher and Kennedy Law Firm, 2600 N. Central Phoenix, AZ: The has one improvements are the improvements that are going to be done by district 1, so those are the improvements that are very specifically defined, as exactly what district 1 was going to be built. They very much approximate the Tortolita Parkway, actually to some extent it works to the community's benefit, now narrowed down the exactly what those improvements are that are going to be built. The phase one improvements are in fact defined by the terms of the development agreement as just the Tortolita Parkway and the water and sewer that go down with it, which was the related improvements that were referred to at that time. Essentially the same thing, just using a defined term now. Ed Honea: The original agreement it was improvements that were done after. Where in the agreement would I find the phase one improvements listed specifically. Steve Betts: Section 3.5. Defines the phase one improvements. This is what the US Homes District is going to build. The Tortolita Parkway and the water and sewer improvements that go with that. The General Plan was in two sections, One was the initial infrastructure, which would be completed, the sewer lines, water lines and Tortolita Parkway. Ron Dillon, Executive Vice-President, WCA Communities Inc. 4320 N. Campbell Ave. #226, Tucson, AZ, stepped up to the microphone. Ed Honea: Is fairly pleased with number 1, number 2 still has some problems. How did you come up with the $75 million dollar ticket? Ron Dillon: ls an approximation. Between the mid-range and the high range of what we will need. Ed Honea: Was a structure of costs put together, for costs and improvements. Ron Dillon: Looked at the number of units likely to be in there. And multiplied that by about $25,000 per unit of development cost that would likely be used for this mechanism. 7 Ed Honea: Time limit on the capital improvements on District 2. Not to limit the management to .30 on a hundred for watering trees and keeping medians clean and so on. No such success on the time limit? Ron Dillon: Not remember every having a time limit. Ed Honea: asked for one. We agreed to a time limit on 1, basically on the last meeting. On 2. Scott Ruby: The time limit that you will find, a close as we could get to what you were looking for last time, was an agreement to restrict the bond issues to a time period not to exceed 20 years from the time if their issuance. As you recall for District 1, it's not to exceed 15 years. In looking at this particular District, there may be some bank control or flood control required, seemed to be more appropriately allocated for the longer period of time. Ed Honea: Was 20 years listed in the agreement. Scott Ruby: Yes Sir. Ron Dillon: If that's the issue, there is a 20 year maximum on any bond issue we will do. That 20 years was also developed in conjunction with the bond underwriters, that was what they felt would be necessary. Ed Honea: Biggest problem with weighted voting. If one person moves in they have a vote. At the very first meeting once the board is set up, the Board could vote to approve the expenditures of up to $75 million dollars worth of bonds, right up front, before you ever sell a piece of property to anybody else. And the only person that would vote would be the developer. Since they are the only person that owes any property. Therefore, would remove anyone that moves in from being able to stop maybe an improvement that they didn't feel was necessary within the District. We're talking District 2, basically. Scott Ruby: The Statute provides for certain procedures to be followed, relative to the authorization of general obligations bonds only in this case. The authorization you are referring to could not necessary be a blanket authorization relative to assessment bonds, revenue bonds would come back to the Town for that approval anyway. But with respect to General Obligation bonds, the timing of that election could occur on day one after an election is called or sometime in the future. Inserted the governor, that in no event will those bonds ever cause the tax rate to increase more than//3.00 per hundred of assessed valuation. That is the industry standard for these types of issues. Committed to the $3.00 maximum. Ed Honea: If it was authorized on day one and approved, that does not mean the bonds have to be sold day one, they could be sold down the road. The Board has already approved the sale of the bonds. The District could be two thirds built out and there wouldn't have to be another vote, because the bond is already approved. Scott Ruby: Document has in it for disclosure statements to be given to potential residents about that situation. And to have them acknowledge in writing that they have received and understood that possibility. Ed Honea: Can we do something in writing on this, Mr. Hochuli? Dan Hochuli: If the question is does the Council need to sign this document the answer is no. This is what we have chosen to give the Council, but we can raise this issue. Ed Honea: The potential is there to leave the citizens of this community unprotected as far as having a say on any improvements in the future. Scott Ruby: Marcia King brought up an excellent suggestion. The basis which is in the school district statutes. The school district laws provide that no bond authorization which remains unsold shall exist any longer than six years after the time of the election date. The theory being, the voters speak as to a relative period of time as to what the needs might be during that period of time. After six years if you haven't sold bonds for the purposes for which they were authorized, it expires and you need to renew your authorization with the voters. Keeping with that type of theme and talking with Westinghouse, we would be willing to agree to again add to the list of twenty three other restrictions, a requirement that any district general obligation bond authorization shall expire five years from the date of initial voter authorization. Would propose it as an amendment to 6.7A where general obligation and revenue bond issues are addressed with respect to both districts, and would propose we add a sentence that states any District General Bond Obligation authorization shall expire five years from the date of initial voter authorization. Remembering in this context that voter includes landowner. That to would apply to both districts, although District 1 is only going to do an assessment bond deal. Ed Honea: District 1 has a time limit, no capital bonds will be sold, a limit of fifteen years, was under the impression there was a twenty year limit, actually there is a twenty year maturity of the bonds. Ron Dillon: that is right. Ed Honea: They could be issued and twenty years later paid off and more bonds issued and twenty years later more bonds issued, it could go on a hundred years, correct? Ron Dillon: Assumes so, that this is correct. Ed Honea: You cannot sell a bond that has a maturity date of more than twenty years. It's not a lock on how long capital improvements can be done within the district like there is on 1. After fifteen years there will be no capital improvements. Ron Dillon: That is exactly right. Ed Honea: And 2 really has no limit. Ron Dillon: Correct. Scott Ruby: If you look to other similar communities, they intend that there communities will have final build out, ten, fifteen, twenty years from the date they initially started. We can't figure out a way to limit because of the nature and significance of this type of project. Anticipate developing 2600 acres, with a number of uses over a long period of time. Think we have the appropriate restrictions that protect the property owners and the bond holders and the Town and the District. To limit it by that number of years, puts us in a difficult position as far as prediction. Ron Dillon: We cannot do any revenue bonds without your approval. Special assessments bonds, once the area has been developed and sold the houses, would require a vote of the people who own those lots. Would take 50% or more of those owners to agree to have the assessment put on them. You would have the approval of the voters, they would basically be taxing themselves. It would be an improvement they would want. Ed Honea: How about general obligation bonds. Ron Dillon: The general obligation bonds, once an election is held, have to use it within five years. Ed Honea: Looking at, doesn't want a hundred years from now, a hundred of these living around in the community. There maybe some time in the future where Marana would want to form a buyer district or something. If there are several CFD's floating around for infinity, it eliminates that possibility al together. Scott Ruby: One point of correction, it's some what of an overstatement to say that there may be hundreds of these floating around. Restrictions bind not only district 2, but any district that might be formed within the boundaries of district 2. Currently the only, the maximum number of districts that could be formed in district number 2 is 4.4 independent, non-overlapping kind of boundaries. Ed Honea: CFD #2, has the ability to raise capital, not maintenance money. Put some kind of a time limit on it. Scott Ruby: Remember the $3.00 limit is an aggregate limit. If you put 100 districts on this property, all those districts combined can only add up to a $3.00 limit without coming back to this Town for approval. You don't run the risk of having an overlapping debt burden created by CFD's relative to this project, which would exceed $3.00 unless you have given the OK. Dan Hochuli: Passed out maps. The brown portion is the portion we are not talking about. The yellow portion is CFD #1 and the green and purple areas is CFD #2. Ron Dillon: Both have the same concerns only from a different perspective. My concern is the ability to be able to predict how long it is going to take to develop all this property and build it out and still be able to use the mechanism. Would like t propose that we have twenty-five years to do any bond financing. After that twenty- five years, if we would want to do something we would have to come back to the Town to get re-authorization. 10 TOWN CO C . JANUARY 17, 1995 Ed Honea: Wants the CFD 2, except for the maintenance abilities to die at some period in time. If you need more money to do improvements on the same area, then you can come back and apply for CFD 3. Or to ask for an extension or something. Ron Dillon: I think the attorney's are writing, that's always dangerous. Ed Honea: Thinks there needs to be an end in sight. Helen Key: In view of these changes, may we proceed. Dan Hochull: The answer is yes, the Council can adopt the development agreement as amended including the changes that will be read into the record. The problem Mr. Hochuli has is that both of the changes that have been suggested go directly to bond issues and as much as we wanted our bond attorney to be here, he is not. Could call and run this by Mr. Cafiso, if we have a recess. Philip Aries, P.O. Box G Nogales, AZ: Growth is inevitable in Pima County. Have to plan for that growth, and that current and future residents are not overly taxed for it. Feels that this has been a very thoughtful process and that everyone should be commended. The concerns that have been raised have been very thoughtful, but the community has to look at what position they are currently in and whether or not those risks are acceptable risks. Thinks that they clearly are. The Town of Marana will be greatly enhanced with this project. Ed Honea: Those two particular items brought up, make sure we have the two amendments clear and if they are acceptable. Dan Hochuli: Tried to reach Mr. Cafiso. Did not reach him, but let the number for him to call when he arrived at home. The changes that Council requested and the developer has agreed to insert into the document. Developer, document defines US Homes and WCA, developers. There are two additions that will be added into Section 6.7, which is the bond restrictions. One will read as follows: Any district general bond obligation authorization shall expire five years from the date of initial voter authorization. Neither district 2 nor any district formed within the boundaries of district 2 will .... Mr. Hochuli leaves to answer the telephone. Mayor Harn: Mr. Driscoll wanted to acquaint himself with the Council. He has left the meeting. Overall Mr. Driscoll has been a very good friend to the Town of Marana. Hugh Holub, Utility Counsel to the Town of Marana: Couple of basic concepts he wanted to share with the Council. One, there is an awful lot said about making growth pay for itself, that's exactly what this is. It's a financing mechanism to make sure that the infrastructures costs that are necessary to serve that development are paid for in that development and not by the people in the rest of the Town. There are all kinds of districts that can accomplish most of the same thing. Has been tracking the utilities. The water system is being financed by this Community Facility Distric/~. In our effort to acquire, we have told Tucson we want to acquire this water system, we don't think the Town should have to pay one 11 penny for that water system, the Community Facility District finances it. Have a very very strong argument considering the way this agreement is set up. Otherwise we would have to use water districts or something similar to it to make sure the benefiting property pays. Going to have to do a Fair Share Ordinance, which is like an impact fee. To make sure that when the other property wants to hook on to the water line, that there is a fee paid to make everybody hole in the deal. Going to have a built in mechanism, if you look at the Fair Share Ordinance draft, there is a lot of similarity about allocation of cost and benefit. Setting into motion a means to make growth pay for itself, and to try to insulate people not on this property from having to pick up the tab for Tortolita Road and for whatever goes up there. Dan Hochuli: Staff recommends approval of the Development Agreement with the following changes. Under paragraph 6.7, that's the one titled Bond Restrictions, and there are a number of small letters under that, we will add two clauses. They will probably be new subparagraphs, but not sure exactly where they will go but the language will be as follows. The first will be: Any general obligation bond authorization for District 2 or any other district formed within the boundaries of District 2, shall expire no later than five years from the date of initial voter authorization. The second change will be: Neither District 2 nor any district formed within the boundaries of District 2 shall sell any bonds after twenty-five years from the date of formation of District 2 without the Town's prior written approval. Both of those changes are recommended by Mr. Cafiso and I asked him with those two modification if he recommends approval of the Development Agreement, and he indicated that he does. And if it please the Council, the suggested motion would be to approve Resolution 95-04, has one contingency in it, which is before the Mayor and Town Clerk sign the Development Agreement we will have the signatures of US Home and Westinghouse and we will have proof of authority from the signers. Mayor Ham: Is the suggested motion on the blue sheet? Ed Honea: There are three motions that would be needed, one would be the Development Agreement motion and the two CFD motions for the package. Dan Hochuli: That is correct. A motion was made by Ed Honea, seconded by Betty Horrlgan and carried unanimously to approve Resolution No. 95-04 - Adoption of a Development Agreement between Marana, WCA Communities, Inc. and US Homes Corporation, for the development of approximately 3220 acres of Red Hawk Canyon and establishment of community facilities districts, under the Tortolita Mountain Specific Plan North of Tangerine Road and Thornydale Road. With the following changes, the changes being the two statements Mr. Hochuli read into the record. A motion was made by Ed Honea, seconded by Tom Clark and carried unanimously to approve Resolution No. 95-05 - Establishing "Red Hawk Canyon Community Facilities District 1' as a special taxing district, covering approximately 620 acres of land in Red Hawk Canyon; waiving election, appointing directors and establishing boundaries. 12 A motion was made by Ed Honea seconded by Tom Clark, and carried unanimously to approve Resolution No. 95-06 - Establishing "Red Hawk Canyon Community Facilities District No. 2' as a special taxing district, covering approximately 2,600 acres of land in Red Hawk Canyon; waiving election, appointing directors and establishing boundaries. Ron Dillon: Thanked the Council on behalf of himself and US Home, for all the time and attention given to this. All the hard work that the Town staff has put into it. B. Lower Santa Cruz River Flood Control Proiect- Discussion and update by the Pima County Flood Control District. Mayor Ham: Mr. Carl Winters is here heading up a group to talk to Council about Pima County Flood Control District. Apologized for the delay. Carl Winters. 270 N. Church Ave. Tucson, AZ: Here tonight representing Granite. Granite came before Council some months ago with a specific plan, and ran into some trouble. One of the major issues was the concern over the possibility of flooding. Mr. Winters got together with Granite over §ettin§ a levee built. Dave Smutzer, Pima County Flood Control District, 201 N. Stone, Tucson, AZ: Since the last time before he was in front of the Council, there have been a few status changes. Mostly related to the replace of Avra Valley Road bridge, has a few more facts to provide to the Council tonight. Went over the map given to Council, with attention to the alignments. The new Avra Valley Road bridge is expected to be about 640 feet long. Most important, the funding and the schedule. There was some state appropriations last legislative session that appropriate $1.25 million for the bridge project. Another appropriation of $500,000 specifically for flood control purposes in conjunction with the bridge replacement. Schedule for the brid§e is tied in very closely with the design and ultimate construct/on of the levee project. The driving force behind the construction of the bridge will be in the legisIation there is sunset clause, which if we don't utilize the money by that date, obviously we can try to go back to legislature and ask for an extension of that sunset clause, or we will lose that appropriation. For the record, that sunset clause is July 1, 1997. Time frame, the Department of Transportation is working on is to have that bridge completed by July of 1997. Looking at starting construction in the late spring of 1996, anticipating it will be about a 12 month construction period. During the construction of the new bridge, the old bridge will remain in service. There will not be a closure of the existing structure until the new structure has been completed and tied into the road approaches on both sides of the river. The old bridge will then be demolished and removed. The other factor associated with the bridge that ties into the levee project is, under the original concept and the old ali§nment, assumed that the old bridge would remain in place. What that meant was the Town would have a levee situation that would actually cross the road. Part of the bridge project and the levee project will be channelization of the Santa Cruz River, from rou§hly the new bridge location upstream to where it would tie in then to the down stream previous works that were completed with Continental Ranch. In terms of the levee situation, still working on plans to design the entire first phase of the levee, which goes from Continental Ranch down to Sanders Road. Still working on some revised cost estimates for that part of the levee, still estimating around eight to nine million dollars to construct phase one A of the levee project. 13 Funding sources are the same ones that were presented last time, $2.5 million, still negotiated with the Bureau of Reclamation, as a result of the impacts created by the CAP siphon outlet. Also a million dollars from the State, the Town of Marana was the leader on obtaining that special appropriation specifically for that project. Have about $3.5 to $4 million dollars. Last year recommended, just under $4 million of levee money, when you add in the State and Federal appropriations, that by the Board of Supervisors to finance the construction of the Tanque Verde Road bridge. Marana needs to show commitment to the project, which it has. Talk with property owners. Any efforts the Town can make to committing or working with the District to have some sort of a fee associated at the time there's a redevelopment of a vacant piece of property, some sort of benefit that would pay some sort of contribution towards the project would help to show support. When staff, back in 1990 made the presentation to the Board of Supervisors, on the project we called the Comprehensive Lower Santa Cruz River Flood Control Project, which incorporated many other items beyond flood control. Mayor Harn: When the Town talked in 1990 about what the owners participating that would receive benefits from this flood protection, the County has had time with considering it was going to have to buy hundreds of acres of land. The County was going to have to do all the trucking, buy all the materials, and any number of things. We are talking about a sizable contribution from the Community. The people who are making the contributions consider it a financial benefit for this project. Doesn't know of any other area that has been asked to make huge local contributions to these programs. The Community doesn't mind going out and asking for local contributions. Also MTC does say that they will contribute something to the project. Finds is kind of disconcerting after the effort that the Community has made to make a Community contribution to the project, my feeling is that you are saying that we are not doing enough. And want to know if this is a misunderstanding. Doug Smutzer: Roughly eight to nine million dollars does not include any costs at all for right-of-way. That is an assumption that there would be no additional fees. We would acquire right-of-way through the Town's effort. Only what is necessary for the actual maintenance and construction of the project. The initial concept ~vas to purchase the entire flood plain, that has been removed from the project. Mayor Harn: Would you not consider that a contribution from the Community? Doug Smutzer: Standard practice has been, when someone comes in and wants to finance a project, or participate in a project, there are two components always requested of them. Number one, they provide the right-of-way at no cost. And two, they pay for 50% of the project. The people who are going to donate the right-of- way is only one component of the overall project, there are many acres behind the project that are benefiting. While some of those have agreed to make some sort of a contribution, either materials or products at cost. There are stilling many vacant benefiting property owners that need to be contacted, need to contribute towards the project. Mayor Harn: What was contributed to the County for the Canada Del Oro bank protection project? Doug Smutzer: That was primarily State funding and District funding. 14 MINUTES OF REGULAR COUNCIL MEETING MARANA TOWN COUNCIL JANUARY 17, 1995 Mayor Harn: Was there any local contribution? Doug Smutzer: There was right-of-way. At that time it was still in an unincorporated area. It was actually constructed outside the Town of Oro Valley's limits, at that time. Mayor Harn: We're discussing this not as part of Pima County, talking about now because we are an incorporated area? Doug Smutzer: Whether in an unincorporated area or an incorporated area, the requirements for having the land donated and then trying to obtain 50% contribution is a standard practice we applied across the board. Mayor Harn: Wants one other project that has had a contribution from the jurisdiction for a project that was put in by the flood control district? Doug Smutzer: Not by jurisdiction, by benefiting property owners. The District is willing to advance the funds, need to have some assurance that some of it will be paid back over time. Only those projects that have the most amount of contributions from outside sources really help support the District coming up with a difference. Mayor Harn: Of the $8 million, was it not the Town of Marana that went to the State and asked the State for a million dollars, actually a $1.5 million, .5 of which we are going to use on bank protection in there. Then the Town went to the Feds and was able to get $3 million for this project. The Town went out and acquired about $4.5 million and then talking about contributions from others. Ed Honea: The primary reason for trouble with flooding in the Marana North area is because of the effluent in the river. When Chuck Huckleberry came to the town in the 70's or 80's and wanted to run effluent through the Santa Cruz River, I asked about all the trees and bushes that would grow. He said he would take care of it. Maybe we could file a lawsuit against Pima County for running their effluent down the river throughout our Town, and growing huge trees in the river, when the flood in 1983, there were Cottonwood trees sixty foot high and three feet across, growing in the channel, by Berry Acres. There are trees going in the channel now, directly attributed to the effluent. If the effluent was not in the river, which the County put in there, and told the Town it would not cause any problems. Which is on tape with Mr. Huckleberry making that statement. We would not have this problem. Basically Pima County is dumping their sewage in the Town's backyard, and telling us we have to pay to lux it. Pretty sad sort of affair. Hurvie Davis: We are in the process of developing a Fair Share Ordinance. Perhaps this Ordinance may come into play on this type of thing. Mr. Holub is here, who is the author of the draft document. The City of Tucson is getting flood control dollars to the tune of about $30 million over five years or so. That was about $250,000 that was contributed by one property owner towards the cost of bank protection, out of $30 million. The flood control district taxes all the property in Pima County, about 70 square miles within the Town of Marana. The Town needs to answer the question, Where is that money going now? The taxes being generated on that 70 square miles, notwithstanding the benefiting properties of the Santa 15 Cruz Levee, be more importantly, where will those revenues go in the future, when the property is developed and it generates much more tax for the flood control district. Hugh Holub: 90% of the effluent in the river is owned by the City of Tucson, not just Pima County. Fair Share Ordinance as a mechanism. Set a mechanism so at the point of development a share of the project can be recaptured. Will have to recognize the contribution by these property owners. The real issue here is what is the fair share. Carl Winters: Have talked to Town staff and the Council, so that he can be of better assistance to the Town. When private and public work together to go to the County or State or whatever, a lot of times jointly is more effective. Marana worked to get the million dollars of State money and they are not being given any credit. The project would have started last year except for the project on the Tanque Verde bridge. Would like to work together, Granite and the Town. Reintroduce Ted Hayworth, the General Manger for Granite. Ted Hayworth, General Manager of Granite: Granite is friend and not foe. Been in Tucson for 15 years, employs 275 - 300 people in Southern Arizona. Produce a lot of construction materials. Been searching for a material site operation in the Northwest side of Town. In 1991, they say an ad in the Territorial for a piece of property to be sold by the State. We saw the opportunity to develop this into our facility on the northwest side of Town. Our only other bidder was Pima County, who we bid against for several hours. We have about 300 acres of ground that basically surrounds the landfill. We own the property but are unable to use it, until your permission. Which is part of waiting for the bank protection to go into place. This is a classic opportunity for industry and government to work together, promote a partnership on this project. CalMat and Granite have both stepped forward to offer materials. Granite has also volunteered right-of-way. Ready, willing, able and prepared to participate in this project. Mayor Ham: Did Pima County actually put a bid in on this property? Ted Hayworth: Bid for approximately 2 hours against Pima County. Kind of a frustrating experience for Granite. Cost $50,000 extra to bid against the County. Hurvie Davis: Clarified that in his statement he had stated erroneously, that there was a request by the Town of Marana for Granite to acquire the property. Believes that was incorrect, that the Town has never made an official request to Granite to purchase the property. Ted Hayworth: Knows that the Town was very please that Granite got title to that property because of the landfill situation. Mayor Harn: Was very surprised to learn that Granite had out bid the County on that land. Hurvie Davis: A number of property owners in the area have indicated that they would be willing to make a contribution. It's a lot better than putting assessments on properties. In addition, much of Phase One A is not in the Town of Marana, it is 16 in the County. What would be do about those properties, we don't have any mechanism to assess properties that are not in the Town, would the County? Dave Smutzer: What we request of you should be requested by the County. If you are a beneficiary of a publicly financed flood control project, policy is to ask you to do two things. #1 is donate right-of-way and #2 is pay your fair share. Which is equated to be about 50% of the project cost. Hurvie Davis: The majority of that area in Marana between the Interstate and the Santa Cruz River, it's all in the flood plan and would benefit from the levee. Mayor Harn: Wants to keep up dialog, it is very important. Would like to see progress as well. Had 10 years or more of dialog, like to see a little digging. Try to come to some kind of common agreement on this. Tom Clark: Concerning the new Avra Valley Road bridge, have a concern with the weight limit that is being placed on the old bridge and all the traffic that's routed through Continental Ranch and Silverbell Road. If the old bridge is going to be demolished, what can't you route traffic through the old bridge, if it tears it up, it going to be demolished anyway. Can relieve the congestion on Continental Ranch and Silverbell Road. Dave Smutzer: Would create a difficult traffic hazard of splitting off traffic at two locations. Not sure it would be a very safe condition. Limiting the weight will hopefully prolong the life of the bridge. Tom Clark: Would like to find some mechanism to relieve some of the pressure on Silverbell Road and Continental Ranch. Dave Smutzer: If you wanted to design the bridge to be able to handle the weight limits to service the mine, for example, you are doubling the cost of the bridge. Tom Clark: The bridge will not even support the heavy traffic going to CalMat, the gravel pit? Dave Smutzer: Not the large equipment. It's called an H-20 loadings. A standard design for weight in what they consider a rural bridge structure. It's not design to handle trucks with large weight limits. Tom Clark: the traffic will have to go through Rattlesnake Pass? Dave Smutzer: I believe so. Not sure with a large loading limit if it can handle all the tandem trucks you are talking about. That is a transportation design issue, just relating what information they provided him. If the Town has that issue, they may want to bring that up to the department as well. Hurvie Davis: Will check on that and bring it back to the Council. C. Selection of Proiects for Community Development Block Grant Programs for 1995. Mayor Harn stated to Council any issues that has the Marana Health Center involved in it, she will neither discuss those issues or vote on any of those issues, because of a conflict of interest. 17 MINUTES OF REGULAR COUNCIL MEETING MARANA TOWN COUNCIL JANUARY 17, 1995 Dan Groseclose, CDBG Coordinator, 14200 W. Imogene Pl., Marana, AZ: Had a conversation with A1 Cohen, with Pima County, asked him to indicate about how much money the Town could expect in this funding period. Could expect to receive the same amount as last year. Last year was $230,000. There are three programs that are actually very close to that, the total amount or exceed that amount. One other program listed in the request, #7 the Emergency Home Repair Program, their is about $16,000 available in that program right now from 93-94 funding, requesting an additional $10,000. Mayor Harn declares a conflict of interest, passes gavel to Vice Mayor Sharon Ham, and steps down from the dais. Ed Honea: Some of these projects are so large that they would take up the entire issuance of the CDBG funds. The Marana Vista neighborhood streets is $225,000. Dan Groseclose: Yes sir, worked with Joe, those figures are based on roads, curbs and sidewalks for the Marana Vista neighborhood. Ed Honea: Take item #5 and item #11 and item #13, some of these items are far more money then we are going to receive. Thinks all three items could be taken off, and not even ranked. The County is not going to give the entire allotment to do streets and sidewalks in one neighborhood. Look at this on a full scale. The only major, high dollar project that would benefit every person in the community is # 12. The big project, like the community building, if we ask for $275,000, if we put it as a very high priority, they will probably give us half or something like that. Possibly the County and even the Town of Marana could contribute, since so many people on the County would benefit from a community building. Would like the Council to look at that as a primary project, could upgrade the Community and the park. Dan Groseclose: Would like to identify part of the conversation he had with A1 Cohen from Pima County. He did tell me that if the Council selected the $275,000 that they would probably go with that project, if it was a single project. If the Council were willing to submit a 50% payment and the Town a 50% payment, they could probably go with that and we could fund some of the other projects. In talking to staff, pointed out to him that the Council has approved a five year capitals improvement program. The have not put anything into that program yet. If he were to make a recommendation to Council, he would recommend that you place this on the Town's five year capitals improvement aspect, and then request the funding of what we can get to help supplement the Town's payment of it. The second choice, a $72,000 Marana Resource and Wellness Center, if approved by the Council, to be used as a modular building, similar to the building the DEA is in. If funded, there are some other alternatives to look at later down the line. Putting that into a Community Center, they have shown a great desire and agreement to into that community center. Ed Honea: Council Member Horrigan and myself talked with Kim Holloway who is the Principal and works with the Wellness Group and that part of the school system. She was very receptive of working the Wellness Center out of a community recreation center. 18 MINUTES OF REGULAR COUNCIL MEETING MARANA TOWN COUNCIL JANUARY 17, 1995 Dan Hochuli: When Council is ranking these projects, basically just taking a roll call vote. If the Mayor has declared a conflict of interest in certain issues. The problem is that the way we vote, Mr. Groseclose totals the numbers. And if the Mayor does not vote on two of the issues, that's the same as her ranking those two issues last. So she is voting on those two issues, she is voting them last. Because of her abstention, it hurts the issue which is not proper under the conflict statutes either. So he suggested to Mr. Groseclose, when he scores what ever items she abstains on, he takes the number he gains from the six remaining voters and increases that by 1/7. So that it sits on equal standing with the other issues. Mayor Ham returns to the dais. D. Call of Special Recall Election - The Council will discuss and set a date for the Special Recall Election for the recall of Council Members Ora Ham and Sharon Price. Mayor Harn and Vice Mayor Price step down from the dais. Mayor passed gavel to Council Member Ed Honea. Sandy Groseclose, Town Clerk: There has been petitions that have been submitted, and there is sufficient signatures to have a special recall election, for the recall of Sharon Price and Ora Ham. The State Statues require that at least 100 days, not more than 120 days from the official filing, which was January 10, 1995. The dates to look at would be, the earliest would be April 20, 1995 and the latest date would be May 6, 1995. Town Clerk's recommendation would be April 25, 1995, close to being midway between the primary and general election. A motion was made by Betty Horrigan, seconded by Tom Clark and carried unanimously to approve Resolution No. 95-07 - establishing a date for the Special Recall Election for the recall of Council Members Ora Harn and Sharon Price. Mayor Ora Ham and Vice Mayor Sharon Price return to the dais. Dan Hochuli pointed out that Resolution No. 95-07 calls for the signature of Mayor Ora Harn. she cannot sign that, nor can the Vice Mayor. Recommends that Councilman Ed Honea, who was acting as Chair of the meeting sign Resolution No. 95-07. E. Council Action on final ranking of the 1995 CDBG programs for 1995. A motion was made by Tom Clark, seconded by Betty Horrigan and carried unanimously to approve the following ranking to be submitted to Pima County: 1. Marana Park Summer Youth Program 2. Marana After School Program 3. Town Community Building 4. Emergency Home Repair Program 5. Marana Park Parking Lot Addition 6. Marana Park Parking Lot Rehabilitation 7. Senior Citizens Prescription Program 8. Marana Family Resource &, Wellness Center 9. Marana Municipal Water System Improvement 10. Housing Rehabilitation 19 1 1. Marana Park Improvements 12. Marana Health Center Parking Lot 13. Wentz Road Improvement 14. Silverbell Road Improvements 15. Marana Vista Neighborhood Streets Projects 16. Adonis Road Improvements Ranking Sheet Attached F. Mayor's Report Written Report. Mayor Harn added thatthe Opening House ~rthe new Police Substation-Town Hall Annex has been set Mr February lst, 10:00 a.m.. Hurvie stated that February 1st is on a Wednesday, the Town is hoping to occupy the facility on that Monday. If Council prefers another time, it's OK with him. Ed Honea would like to attend the function and is concerned about the open house being in the middle of the day when working people can not attend. G. Town ManaEer's Report Written Report. Hurvie Davis expanded on report. Made reference to the GLHN report, Contract Roadway Design Work. Projects are currently under design. Passed out a sheet from Joe Lizardi Town Engineer, regarding road work. Mayor Ham commented that she is pleased, because the condition of Moore Road is bad. XI. FUTURE AGENDA ITEMS None XII. ADJOURNMENT A motion was made by Ed Honea, seconded by Tom Clark and carried unanimously to adjourn. TIME: 12:00 A.M. AUDIO TAPES OF THE MEETING ARE AVAILABLE AT THE MARANA TOWN HALL CLERK'S OFFICE. CERTIFICATION I hereby certify that the foregoing minutes are the true and correct minutes of the Regular Co}lncil Meeting of the Marana Town Council held on January 17, 1995. I further ceffftify that a qll~n~ ~,.s present. Tow 2O