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HomeMy WebLinkAbout06/12/2018 Study Session Meeting Minutes---------------- 4d 6.6k ................... . .... . . MARANA AZ ESTABLISHED 1977 MARANA TOWN COUNCIL STUDY SESSION 11555 W. Civic center Drive, Marana, Arizona 85653 Council Chambers, June 12, 2018, at or after 6:00 PM STUDY SESSION Ed Honea, Mayor Jon Post, Vice Mayor David Bowen, Council Member Patti Comerford, Council Member Herb Kai, council Member John Officer, Council Member Roxanne Ziegler, Council Member CALL TO ORDER AND ROLL CALL. Mayor Honea called the meeting to order at 6:40 p.m. Town clerk Bronson called roll. All Council Members were present. PLEDGE OF ALLEGIANCE/INVOCATION/MOMENT OF SILENCE. Led by Mayor Honea. APPROVAL OF AGENDA. Notion to approve by Council Member .Bowen, second by Vice Mayor Post. Passed unanimously. CALL TO THE PUBLIC. No speaker cards were presented. DISCUSSION/DIRECTION/POSSIBLE ACTION D7 Relating to Development; presentation regarding proposed changes to the community facilities district policy required by SB1480 revisions; community facilities districts and consideration of other optional changes (Erik Montague). June 12, 2018 Study Session Minutes Mr. Montague discussed some required community facilities district (CFD) policy changes as well as optional changes as a result of SB 1480. This session follows the study session of September 2017 where a basic background was provided to Council. Not long after the September session, the League of Arizona Cities and Towns became aware of a technical fix that was necessary before new CFD's could be legally established, so town staff set aside temporary changes to the policy. Staff considered larger districts with larger infrastructure needs. He noted that a CFD is a special purpose district established to fund public infrastructure that might not otherwise occur in key or strategic areas. The most common infrastructure is roads, parks, and water and wastewater projects. only landowners within the CFD are responsible for the debt. A CFD can also provide enhanced service levels such as greenbelts, parks and roads, and developers look for an overall enhanced development. Proposed CFD's include Sanders Grove, Uptown, and Villages of Tortolita - all of which halted at the recession when development activity slowed down. Some of those projects are resuming. The Council sits as the board for the formed CFD's at Vanderbilt, Gladden Phase I and Gladden Phase II, and Saguaro Springs. The Dove Mountain Resort, Red Hawk 1 and Red Hawk 2 were the first established CFD's in the town and were run by an outside board. Marana's CFD policy was adopted in 1997 and then amended in 2004. The policy makes sure that applications are consistent with the adopted policy, and ensures well- planned projects. That includes determining that the developer has the financial capacity to meet current and future obligations. The policy also includes reasonable measures to protect homeowners and businesses within the CFD. Mr. Montague then reviewed the common types of CFD debt - General obligation (Go) and Special Assessment (SA). The preferred debt is general obligation which provides an ad valorem tax on property within the district. The current target rate is $2.50 per $100 of valuation. As the home appreciates in value, so does the amount of tax pard. There are measures to protect the homeowner such as standby contribution agreements with the developer. Debt is paid by the homeowner through secondary property takes. The town also has the ability, such as with Saguaro Springs, on how to size the bonds. Important to the limitations is that policy establishes a target. our goal is to maintain a debt service of not more than $2.50. But the district enters into covenants adequate to meet our obligations. We have not issued any special assessments within a CFD. we do have one with the Tangerine Road Improvement District. Next, IIIb. Montague reviewed the changes required by SB 1480. A public hearing before the board will be required within 60 days of receiving a signed petition for CFD formation. This is a very short turnaround time. A petition does not presume that a district will be formed. However, if the board agrees to the formation, immediately after the hearing, the board must adopt a resolution declaring its intent for formation. If formation is not approved, the board must publicly indicate the reason for denial and identify changes needed for the application to be approved. If approved, the board may not increase the infrastructure elements, debt limit or duration beyond those in the .lune 12, 2018 Study Session Minutes 2 petition. The CFD shall establish and maintain an official website that is searchable and W ncludes contracts, public notices, meeting minutes, resolution and accounts showing all monies received and disbursed. Infrastructure ownership and maintenance must be accepted within 30 days of the final engineer's certification. The Application. The content of the application must include a petition signed by at least 25% of the landowners within the proposed district. The application must also include a description of the applicant, contacts, legal representatives and consultants, a description of the process for adding two more board members, a general plan for the public infrastructure to be acquired by the district, and the preliminary financing plan, including sources and uses of the funding, other changes to the policy include adding a description of the record-keeping process used for CFD disclosure statements and acknowledgements and clarification that the applicant is responsible for insurance and for providing indemnification. Prior to application, a District Development and Financing Participation Agreement must be in substantially final form.. This is a significant and important document and takes a lot of time from staff and consultants to frame. Because of the 60 -day requirement, we will include in a future document that we had a pre --submission or pre -application process to initiate the major deal points related to framing so that we have time prior to the application to work outside the 60 days. Application fees are limited to actual formation costs and shall not exceed $15,000. A pre -application meeting must be held prior to submission with general details for review and analysis and to ensure there is clarification of a public hearing requirement in the event that all owners of the land sign the formation petition. Mr. Montague noted that under SB1480, we cannot ask a developer for any additional financing outside the CFD. In response to a question from Council Member Kai, the $15,000 application fee will not pay for the costs to the town. However, once the district is formed, we may have a little wiggle room to ask for reasonable and necessary costs outside the actual formation. But under the Infrastructure Acceptance our hands are tied. Council Member Bowen asked what the penalties are for not making the 60 -day window. Mr. Montague stated that he was not aware of penalties but noted that the town would be in violation of statute and that would involve litigation. council Member Ziegler asked if there was an opportunity for extension. Mr. Montague noted that under the policy, there are really two main options to not take action within the 60 - day period - by mutual agreement to continue to address a deficiency or for a denial. But there is no capacity to delay without specific reason such as not meeting a requirement. Vice Mayor Post asked if we can change our process to require more from a developer so that there is more of a burden on their end instead of on the town. Mr. Montague responded that there is risk in reopening negotiations. Before we get to pre -application we need to have a series of meetings on what the process is going to look like and what reports will be generated for our consideration. With the Saguaro Springs (Bloom) CFD, one of the things that we needed to do was hire a third party consultant to give us an idea of whether the applicant's growth projections were June 12, 2018 Study Session Minutes 3 realistic. If l00% of interested individuals sign the petition we might not need a public hearing and could go directly to formation without additional costs. Using various charts, Mr. Montague then walked Council through how a general obligation bond works and the impact of general obligations bonds. We have a target of $2.50 per $100 of assessed valuation, and operations & Maintenance of. $.30 per $100 of assessed valuation. He used an illustrative example of how the calculation works as well as the overall effect of the tax rate to the homeowner. Vice Mayor Post asked if commercial properties are required to be part of a district, and Mr. Montague responded that a CFD can include commercial elements. Mr. Montague noted that the new requirements are from the effective date of the legislation. This is prospective not a change to anything already established. He then transitioned to the Financing Considerations element with specific concerns about what we do with large CFD's or large developments that are unique or have a special circumstance that are outside of the norm. Staff took the direction from. Council and staff back in September and framed a working concept. Dight now in policy, we have 7 years, but the question becomes what is the reasonable amount of time to expect or advance the overall development of a CFD so that it doesn't languish forever. In concept we are framing it for about 15 years or 75% of the development. Council Member Bowen asked what purpose it serves to expand from. 7 to 15 years, and Mr. Montague responded that the maximum amount of voter authorization is set at the time of election, so it's just the timeframe in which it can be extended. So in a scenario where there is a CFD with eligible infrastructure and less than $50M, we will look to maintain our current tax rate of $2.50 for debt, and the primary or preferred mechanism to finance that debt would be through Go's. We would prefer not to issue SA bonds for routine CFD's. If there is a CFD with a unique circumstance, then for conversation purposes we could consider Go's or some combination of Go's and/or SA's, and for the Go side, we could allow for a rate different than our current tax rate. For the SA, (the value of the lien ratio is what limits it) for $3,000 or the value to lien ratio of 4:1. This illustration carne about from the conversations at the September study session. General conversation initiated by Mayor Honea was that special assessments are not preferred. Just because a development is larger doesn't mean that people have more money to pay a higher tax. Both Vice Mayor Post and council Member Ziegler expressed their distaste for CFD's. Vice Mayor Post asked what would happen without CFD's. Why not pay the developer back for the initial infrastructure through impact fees? They reflect the true cost of the home or development. A prospective buyer would know the cost of the home up front. Mr. Montague stated that if you go with the `no CFD model,' what has happened in other communities is that you get the minimum required infrastructure, thus, meeting minimal specifications and amenities from a service level. Related to the CFD's there are a number of reasons and public policy perspectives for the CFD which were outlined tonight, and one of those is for enhanced public infrastructure sooner than what might otherwise be developed. It is possible if we went through the impact fee model for a park, the town would collect the fees, but it June 12, 2018 Study Session Minutes 4 might be years before we would have the funds to build the park. So from a timing perspective, the community goes without the use, value or appreciation of that facility that was initially an enticement to purchase there. The impact fee is paid for by the builder on the value of the home. What they pay is going to reflect any appropriate credit for eligible infrastructure that the developer paid for. Protracted discussion continued on impact fees and credits. So one of the public policy benefits or decisions is that there does seem to be a benefit to using CFD's because we (the town) will get a better product within the developments. Mr. Montague asked for clarification on the direction Council wants to see when this item is brought back. If it's not possible today, we can advance the discussion to a future meeting. Mr. Mehta noted that using the Dove Mountain CFD as an example of enhanced development versus the Continental Ranch development that has no CFD, as indicated by Council Member Ziegler, shows the positive visibility of the enhancements. Without the CFD, we might not have considered doing the additional landscaping that makes the development so attractive. Also, with the impact fee, you have to consider what is going to happen over the next 10 years when the developer might not be ready to go the first year or the ninth year. So with impact fees, you take the risk of predicting the future. You start collecting fees, and then by the tenth year perhaps you don't need to build the amenity after all or you haven't collected enough money to build it. So we only use impact fees for something that is absolutely certain to happen. Borrowing is another good reason to consider CFD's. It's the borrowing that Council authorizes at the time it's absolutely needed. For a very large project, you must ask if the developer can do the borrowing on their own dime. So there are pros and cons, but the CFD has its merits. Vice Mayor Post thanked Mr. Mehta, and again noted that although most of the Council aren't fans of the CFD, they seem to be comfortable with the $2.50 limit. He has some interest in the special assessments if they can disappear at the time of sale of the home or transferred at some point. Council Member Bowen asked for clarification on the purpose or justification for suggesting a higher amount, especially for a development the size of The Villages of Tortolita. He would be interested in learning more about that. Mr. Montague responded that the higher amount could apply more to the larger developments with greater infrastructure needs. Council discussion continued to circulate around who pays for what, when and how and how much. Per Council Member Comerford, it does seem to be a matter of education and what the market will bear and who bears it. She asked how developers or the town can assist with that. Mr. Montague stated that there is continuing discussion as to what is required to be disclosed and how. There is an education component related to the developer and the production builders and their sales staff relative to ensuring that those conversations are occurring. That is combined with the normal due diligence that we are hoping everyone continues to engage in. council Member officer asked if this information could be posted on the town's website as an additional public. service. June 12, 2018 Study Session Minutes 5 In response to Council Member Ziegler's question as to who proposed this legislation, Mr. Cassidy noted that it was a person by the name of Carter Froehlich, who is not a legislator but who is came up with the language. He also came up with the previous bill that went to the Governor but was vetoed the year before. That bill would have made CFD's completely automatic and completely out of the control of a city or town council. Steve Smith was the legislator who introduced and carried the bill. Council Member Bowen stated that he does not need additional information on a higher rate for larger CFD's; he backs the consensus of $2.50. Mr. Montague stated that the reason for the additional follow up is when we bring something before Council for either consideration or conversation, we just want it to be consistent with what Council is looking for/Council direction and changes will be incorporated into an amended CFD policy. we are under no specific time requirement to have these approved, although we will want to time the adoption of any policy to occur before we receive our first application, whenever that might occur. council Member Ziegler asked if we should have a public meeting with developers prior to adopting a final policy. Mr. Mehta stated that, taking all of the discussion points into consideration, staff will likely bring an amended CFD policy to council at a future study session to confirm what Council thinks it should be. That could include any stakeholders interested in bringing forward CFD's. D2 Presentation and discussion of proposed comprehensive revisions to the Town of Marana Sign Code, currently found in Title 16 (Signs) of the Marana Land Development Code, and proposed to be replaced by Chapter 17-10 (Sign Regulations) of the Marana Town Code (Brian Varney and Frank Cassidy). Mr. Cassidy noted that this is staff's opportunity to introduce Council to the new draft sign code, review the schedule, give a sample some of the provisions and get some feedback from Council on the initial process as well as some of the substantive provisions. while he will provide some of the legal background, Brian Varney is also available to give his view from the Planner's perspective. Mr. Cassidy began by noting that town staff was already in the process of seeking business input regarding the sign code a couple of years ago, when in June of 2015 the U. S. Supreme Court came out with a decision on the church signs in the right of way in Gilbert, AZ. The Court favors being able to read time, place and manner provisions how big, illumination, etc. in order to regulate. The Court favors that over a sign just being content- based. Staff is planning to bring the sign code forward earlier than the bulk of the rest of the Land Development Code. Staff had an initial study session with the Planning Commission and we will have another study session at the end of June to get into greater detail. After that session, we will go out for some public and stakeholder input. we could be back in front of Council in October with the public Baring. There are a few new approaches and new terms such as the "sign premises". In residential areas this means not just the property itself but if the property owner has a license agreement to use the right of way (ROW), the premises goes out to the ROW. In June 12, 2018 Study Session Minutes 6 non-residential areas, it means the entire shopping center or industrial center where the sign is located, plus the adjacent ROW used by the sign premises owner or owners under a license from the town. Sign property means the lot of parcel where the sign is placed or erected. The reason for this is that the town has huge rights of way. As an example, along Cortaro Road are in the ROW. If you wanted a bank sign that's visible to traffic, it has to be in the ROW. And those are done with ROW licenses. Right now there is nothing in our sign code that explains that, so the new sign code will explain that. That will be an on -premise sign. There is also an idea of sign property, such as location. You have to get the property owner's okay to put up the sign. There is also something in the new code that certain kinds of signs where you can enlarge the sign a bit if you have a better design. We have tried to identify the elements that make for a better sign. So there is a variety of options that explain what an exceptional design is. For some signs, you can get up to a 25% increase in the size of the sign if it's an enhanced design. In general, based on the Supreme Court decision, we have eliminated sign types that are obviously content -based. Instead, we are focusing on physical description types of signs. A lot of them we have already had, and we kept them. We are modifying some provisions such as if you wanted to do a subdivision sign you had three different choices - now we've said let's define one sign type. We have signs where we kept the sign but removed the content element. Some provisions have nothing to do with the change in law. Some are just modernizing rules such as for electronic signs. We are recommending that electronic message portions of signs can be the whole sign in some instances. In general, we have basically reduced the height of signs but allowed them to be a little larger - just for an aesthetic which is better supported in our community. Some signs that are proposed to be a bit more restrictive such as reduced -size wall signs, freeway interstate signs are more restrictive as to where they can go. There has been a 500 foot setback from the railroad ROW, and we are reducing that in most instances to 250 feet. That will all come back to Council after stakeholder feedback. Some types of signs are proposed to be a little less restrictive, such as more temporary signage at more times and more locations. Our new measurement standards give a bit more size because we don't count as much of the white space on a sign. Because of some of the push going on at the legislature lately, such as the real estate industry trying to get a bill through that would have forced us to allow more signs in the ROW. We feel that they will probably keep pushing that. Trying to get ahead of that, we are proposed some right to have real estate signs in the ROW. Once you allow the real estate signs, then other directed event signs must be allowed as well as non-commercial signs, so it's a bit of a slippery slope. Attached to the Council materials is the current draft of the new sign code and the existing sign code. A lot more temporary signs would be allowed such as balloon type of signs a few times a year for brief occasions because of demand. June 12, 2018 Study Session Minutes 7 Mayor Honea asked about temporary A -frame signs, noting that Council has fought a huge battle over these signs when we annexed the Ina/ orange Grove/ Thornydale area. There were about 150 of them in about a half mile stretch, and we basically outlawed the A -frame sign. Will the new sign code loosen up the use of A -frame signs? Mr. Varney stated that they will be allowed with a permit. The only options we have for A -f rames is the legislation staff brought to Council at the end of 2016 pertaining to businesses that are adjacent to significant road construction, and we allowed A -frames to be used as long as they were within 20 feet of the public entrance to the building. With the new code, we are proposing that all business to have the option of using one A -frame sign within 30 feet of the entrance to their building at any time to direct people, once they get to a commercial site, it's not to pull people off of the roadway. Essentially, we anticipate the A -frame signs to be used in the downtown area. We envision them to be used so people can see about special sales events when they are still in their car, or walking or biking, when they can still see where special events are occurring. But we don't want these on or near the ROW where they could become wind-blown projectiles and serve as traffic hazards. So we are proposing them to be used in a limited capacity and only during hours of operation. We are considering not having a per use permit; there could be an annual permit issued. But we do need to have some control over what is being placed out there because we do have standards for the height, the area, the materials. The sign must be professionally constructed of semi-permanent materials, with a hinge in the middle and also maintained in good condition. It must have some kind of weight to it to mitigate wind issues. Mayor Honea said he felt his concerns were related more to A -frame signs in the ROW rather than under the new proposed guidelines. Mr. Varney added that related to the inflatable signs, staff is proposing three days per display period, twice per year. EXECUTIVE SESSIONS Pursuant to A.R.S. § 35-431.03, the Town Council may vote to go into executive session, which will not be open to the public, to discuss certain matters, E1 Executive Session pursuant to A.R.S. §38-431.03 (A)(3), Council may ask for discussion or consultation for legal advice with the Town Attorney concerning any matter listed on this agenda. FUTURE AGENDA ITEMS Notwithstanding the mayor's discretion regarding the items to be placed on the agenda, if three or more Council members request that an item be placed on the agenda, it must be placed on the agenda for the second regular Town Council meeting after the date of the request, pursuant to Marana Town Code Section 2-4-2(B). ADJOURNMENT. Motion to adjourn at 8:04 p.m. by Vice .Mayor .Post, second by Council Member .Post. .Passed unanimously, June 12, 2018 Study Session Minutes 8 CERTIFICATION I hereby certify that the foregoing are the true and correct minutes of the study session/ presentation of the Marana Town Council held on June 12, 2018. 1 further certify that a quorum was present. ronson, Town Clerk June 12, 2018 Study Session Minutes 9 Cc= MARANA AZ F.STABI-115HFL) t977