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HomeMy WebLinkAbout10/27/1994 Special Council Meeting MinutesMINUTES OF SPECIAL COUNCIL MEETING MARANA TOWN COUNCIL OCTOBER 27, 1994 MArANA PLACE AND DATE: Marana Town Hall, October 27, 1994. _L CALL TO ORDER By Mayor Ora M. Ham. Time: 7:19 P.M. IL PLEDGE OF ALLEGIANCE Led by Mayor Ora M. Ham. IlL INVOCATION Led by Mayor Ora M. Ham. IV. ROLL CALL COUNCIL Ora M, Ham Sharon Pdce Tom Clark Ed Honea Herb Kal Bey Hordgan Helen Key Mayor Vice Mayor, excused Council Member, excused Council Member Coundl Member Council Member Council Member STAFF: Hurvie Davis Sandra L. Groseciose Dan Hochuli Gerald Flannery Joe Lizardi Marcia King Roy Cuaron 7 members of the Public. Town Manager Town ~erk Town Attorney Planning Administrator Town Engineed Public Works Manager Assistant Finance Director V. APPROVAL OF AGENDA A motion was made by Hero Kal, seconded by Ed Honea and carded unanimously to approve the agenda as presented. VI ORDER OF BUSINESS A. Discussi.~Adoption Of Town Policies And Guidelines For Applications, Fees, Costs, Procedures And Limitations For The Formation Of Community Facilities Disl~cts Witflin Town Limits. Mayor Ora Ham explained that this discussion is not about specific Communibj Facilities Dis~cts (CFD's) such as Westinghouse's, but rather CFD's in general. Town Manager Hurvie Davis stated that this discussion would be like a study I workshop session. He admitted that he lacks particular experience in CFD's, however he is familiar with Imprevement DisMcts. He and Staff have had meetings on CFD's. The mason for the discussion is because of a developeffs desire for a CFD as part of a pre- annexation and development agreement. Mr. Davis introduced attorneys Mike Cafiso and Mark Reader. He stated that the Council can also set guidelines for Staff regarding applications, fees and procedures for CFD's. Mike Cafiso, law firm of O'Connor, Cavanagh, Anderson, Westover, Killingsworbh and Beshears, adviser on CFD's: he addressed the Council, pointed out several guests in attendance that may be of help in the discussion. He explained that a Community Facilities Distdct is a separate political municipal subdivision that must be contained within Town limits. A CFD is different from a Municipal Improvement Disfrict (MID). A MID is not a separate division of a MINUTES OF SPECIAL COUNCIL MEETING MARANA ToWN COUNCIL OCTOBER 27, 1994 municipality, but rather as an agency of the municipality. There have been several CFD's formed in Arizona. Referring to a book on CFD's, Mr. Cafiso went on to explain Public Infrastructure Puqoose (planning, designing, engineering, construction, acquisition, etc.) and Public Infrastructure {consists of sanitary sewage systems, drainage and flood control systems, water systems, highway, street, roadway and parking facilities, bike and equesldan paths, parks, malls, landscaping, schools, etc.). CFD's can operate, maintain and repair Public Infrastructure. CFD's provide the Public Infrastructure and maintain it. A CFD can maintain, establish and charge user fees for Public Infrastructure. A CFD can have its own staff and consultants that can pay administrative and legal costs of the CFD. A CFD can use the powor of Eminent I)omain, can use public right-of-ways and easements. Mr, Caftan stated the history of CFD's in Adzona. He explained that CFD's were created to help developers start new developments. CFI)'s help developers provide the necessary Public Infrastructure for a development. For example, a housing development would require roads, sewers, water, gas, telephone, electricity, drainage, etc. CFD's ara a way of shadng responsibility for previding the Public Infrastructure that developments require. It is a financing vehicle to provide the infrastructure. There are two ways to form a CFD: 1. A CFD can be formed by having 25% of the landowners in the CFD area (which must be completely within the Town limits) petition the Coundl to form a CFD, The Council can then adopt a resolution to form the CFD. After that, two e~eetions must be called, one for registered voters and the other for landowners. 2. A CFD can be formed if 100% of the landowners of a CFD area petition the Coundl for a CFD, An election is not required. The Council can then pass a resolution creating the CFD. Mr. Cefiso stated that a CFD must be governed by a body. ff the CFD is larger than 600 acres, then the governing body can be appointed by the Council or the Council Members can serve ex<~fflcio on the CFC board. Staff of the CFD board typically consists of regular Town staff. The CFD must have a budget and the budget beating must be published. A CFD must have regular public meetings. Typically, board meetings are held immediately following a Council meeting. Most CFD board business consists of work on financing the Public Irffrastructure. Town Ordinances, Development and Zoning codes are still in effect within a CFD. A CFD has three ways to provide financing for a project: 1. A CFD can issue revenue bonds that are repaid from some sort of munidpal enterprise. This method does not work well. 2. A CFD can issue assessment bonds by assessing landowners within the CFD a portion of the cost of the project in proportion to the benefit the landowner receives from the project. The assessments pay the debt service to the bonds. A CFD does not back the bonds it issues. Security comes either from assessments or from foreclosure of property if the owner does not pay their assessments. A CFD can also borrow money to pay interest on the bond debt. Reserve fonds can be set up to help pay the bond debt if default on assessments is a problem. 3. A CFD can issue tax bends where the landowner(s) in a CFI) have their properiy taxed. Council Member Helen Key asked about how project costs are determined. Mr, Cafiso answ~gred that a CFD must follow the same rules as any other politicat subdivision such as a town or county and follow a competitive bidding process, A project must be planned. For a CFD consisting of only the developer's property, it woold be the developer who is assessed to pay for the debt on the bonds to pay for the Public Infrastructure. The costs can be shifted to the home buyers on the development. If a CFD borrows money to pay for a project on behaff of a developer, the bond holders do not have to pay taxes on the interest they earn. The developer gets to borrow money for a project while the CFD takes most of the responsibility for the loan. The CFD must tax as much as is required to pay the debt. Town Attorney Dan ttochuli stated that a CFD, once created, will continue until such time as it is uncreated. A CFD can persist after a project is complete, A CF[} can remain to provide maintenance and upgrade to a completed project. Mayor Ham stated that a CFD could fund the construction and maintenance of a project for a specific community within the Town which is funded only by those within the CFD. The rest of the Town is not financially responsible for the CFD project costs. MINUTES OF SPECIAL COUNCIL MEETING MARANA TOWN COUNCIL OCTOBER 27,1994 Helen Key asked about administrative costs. Mr. Cafiso replied that developers can be required to pay a fee to cover administrative costs. The developer can be reimbursed from the sale of bonds. Mr. Cafiso noted that there is a great quantity of information on CFD's that he has not covered in this discussion that is in the book. Ed Honea noted that more bureaucracy would be created along with more CFD's. He stated that he wou~J only support the creation of CFD's where the Coundl also served on the governing beards. The Council would lose much control if others were allowed to serve on the beards. A CFD should be only for finandng and not for maintenance and upgrade of a project. There should be a time limit. If the time limit is reached and the debt is not fully paid, then the developer should retire the debt themselves. Homeowners associations could then take over maintaining and upgrading the project. Mayor Ham noted that Homeowners associations have a harder time coiiec'dng assessments. Ed Honea stated that there should be ways of limiting a CFD's debt. Every CFD should have a Development Agreement that has all water infrastructure deeded to the Town at no cost. Or, at least, the Tow~ should have that option. Mr. Cafiso stated that CFD's are a relatively new creation in Adzona. He emphasized that a CFD is an independent political subdivision just like a state, county, town, school district. The CFD is solely responsible for its own debts. A speaker from the audience, Mr. Fred Roosevelt, noted that if the Council also serves on a CFD governing beard, there would be a combined unit and there could be a crossover of debt as far as accounting is concerned. Therefore the Coundl should be careful. Mr. Ron Dillon, Westinghouse Community of Adzona, 4320 N. Campbell Ave., Ste. 22, Tucson: he stated that his company has developments in eight areas where CFD's have existed from a few months to a few decades. Mr. Carlso noted that there have been over 700 CFD's in the Houston area and those GFD's made Houston the giant city if is today. Helen Key stated that she supports CFD's for the reason that only the people who benefit from a project will have to pay for it. Fred Rosenfleld spoke on Improvement Districts and noted a problem. The Town would be the contingent guarantor of the bonds for an improvement project. Good planning is important. A controlled CFD will do the job better. Jack Neubeck addressed the Council, warned against having the Council as the CFD board members as the Council is constantly changing over time and thus the board would change, too. There would not be any consistency. Recess. Time: 9:09 P.M. Back in session. All Council Members present except for Vice Mayor Sharon Pdca and Council Member Tom Clark. Time: 9:32. Dan Hochuli stated that it is very difficult to insulate the Council from legal action no matter if the Council Members are on the board or not. Someone named in a lawsuit is someone named in a lawsuit, no matter what. Having different board members from the Council would be off little legal protection. So if there is little protection, then the Council should be on a CFD board in order fo be able to control it. Mayor Ham suggested that the Council go home and review what they have learned and come back for the regular Council meeting next Tuesday. Ed Honea stated that because this issue is so big and complex, they could easily take much more time discussing the subject. Dan Hochuli sta~ed that there may be more input on CFD's from those in attendance, the develope~ and the attorneys. Mayor Ham suggested that this item be taken off next Tuesday's regular Council meeting agenda, Dan Hochuli agreed that more time should be taken to care~lly study the issue. MIN~ES OF SPECIAL COUNCIL MEETING MARANA TOWN COUNCIL OCTOBER 27, 1994 VI~I. FUTURE AGENDA ITEMS Information on the current CFD. VIII. ADJOURNMENT A motion was made by Ed Honea, seconded by 8et~y Horrigan and carded unanimously. Time: 9:50 P.M. AUOIO 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 Special Council Meeting of the Marana Town Council held on October 27, 1994, I further certify that a quorum was present. 7~L~SE, TOWN CLERK OUNCIL\1994.MINt10-27-94.spe r Colin L. Miller, 11/7/94 Meeting length: 2.50 hrs. Type is Adat, 9.5 point,