Page 1 of 7 CC LID Process Update and Next Steps oct07

Council Communication

Study Session: Local Improvement District Process Update and Next Steps

Meeting Date: November 5, 2007 Primary Staff Contact: Paula Brown 552-2411 Department: Public Works Engineering E-Mail: brownp@ashland.or.us Secondary Dept.: Finance Secondary Contact: Jim Olson (olsonj@ashland.or.us) Approval: Martha Bennett Estimated Time: 30 minutes Question: What direction would the Council like to provide to staff about changes it wants to make to City policies and practices for using Local Improvement Districts (LIDs) to fund street, sidewalk and storm drain improvements, considering the work done to date to implement the Council’s April 2007 direction on LIDs? Staff Recommendation: Staff recommends the following six items:

1. Continue to utilize LIDs as a viable and important funding mechanism for future street, sidewalk and storm drain improvements.

2. Consider further evaluation to develop the City’s funding cap and specific logic in identifying property owner approval and assessments to fund LIDs. A preliminary set of recommendations are presented for further/future discussion on page 6 of this staff report.

3. Modify Resolution 99-09 once revised assessment methodology and funding caps are determined.

4. Wait for the updated TSP (should be finished by June 2008) to prioritize the current list of LIDs for sidewalks based on sidewalks to schools, transit stops and major gathering areas (parks, library, etc.)

5. Prioritize the current list of LIDs for and road pavement based on traffic volumes and neighborhood support for the LID. See suggestions on page 5 of this report.

6. Consider utilizing LIDs to establish funding mechanisms for electric underground services, street lights and other non-traditional utility enhancements.

Background: During the April 2, 2007 Council Study Session, Council heard a staff report on the general use of LIDs (see attachment 1). The meeting minutes suggest the following review items:

Council consensus was to maintain LID's, but to review Resolution 1999-09. Request that staff prepare a memo on the ideas and concerns that have been brought forward at tonight's meeting [see bullets].

support continuing with LIDs; the resolution could use some refinement. the Council reevaluate their policy for paving all streets LIDs could be a good tool when there is a greater percentage of approval in the neighborhood need to adjust the resolution to make LIDs fairer concentrate on LIDs for areas where sidewalks are needed for school children come up with a more easily determinable policy for assessing the LIDs costs in favor of continuing to pave streets; agreed that the resolution should be looked at

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suggested staff provide a list of all LIDs with criteria in order for Council to prioritize LIDs are a useful tool, but the resolution needs to be reviewed form a subcommittee of members of the Council and Planning Commission to discuss

appropriate improvements for a neighborhood in addition, request was made for staff to bring forward a recommendation for an annual target

to be spent on LIDs

Staff has researched several cities primarily in the west (Oregon, Washington, Colorado, Virginia) that utilize LIDs as a financing mechanism primarily for transportation projects (streets and alleys), but also have been used for other infrastructure (water and sewer lines extension, street lights, underground power, parks) and Portland has used an LID for TriMet (transit) service extensions. What has been most interesting is that the majority of these cities and in some cases counties, the cost of design and construction is fully borne by the benefiting district. Formation and Remonstrance: The ability to initiate, protest and stop an LID is done in different ways typically based upon state law. Below are just a quick set of examples:

1. Poulsbo WA: A petition signed by property owners of at least 51% of the total area within the boundary of the proposed district. Public hearing then Council may approve an ordinance to create the LID then there is a 30 day period to protest. If property owners representing at least 60% of the assessed value in the LID file written objections, then the project cannot move forward. No additional appeals to the project after the 30 day period. Final assessment also has a public hearing and objections regarding the final assessments may be heard at that time.

2. Tacoma WA: The petitioner contacts all of the affected property owners. When signatures of property owners representing 50% or more of the property frontage abutting the improvement have been gained, the petition is valid for consideration. The cost of an LID assessment depends on the type of improvement requested. Some LIDs are full-cost to the property owners (street lights for example) and some improvements are at fixed rates (such as permanent street and alley paving), where the property owner pays a pre-determined amount and the City participates in all costs above the fixed rate. The size and shape of a property and its proximity to the improvement are the factors that usually determine individual assessment amounts.

3. Jackson County OR: A petition must be signed by not less than 60% of the owners of land representing 60% of the land abutting the proposed improvements. Once the cost of the improvements is determined and the estimate is mailed to each property owner, the owner has a right to make written objections. If the Board of Commissioners receives objections signed by more than 50% of the owners of land representing 60% of the amount of the assessment for the proposed improvements, the proposed improvement is declared abandoned and no new petition may be filed for a year.

4. Portland OR: Requires written petition which will be considered valid only when property owned by petition signers added to property covered by waivers of remonstrance and property owned by the City represents more than 50 percent of the property in the proposed district as measured by the proposed assessment methodology. Property owned by the City, including property owned through the Portland Development Commission, shall be counted in support of formation of a local improvement district.

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5. Ashland OR: Requires a written petition requesting the local improvement signed by the owners of property that would benefit specially from the local improvement and that would have at least 50% of the anticipated assessment. If at the hearing, the owners of two-thirds of the property to be specially assessed for the improvement, or the owners of property which will be assessed for two-thirds or more of the proposed assessment, deliver to the council a remonstrance to the improvement, then action on the improvement shall be suspended for a period of six months.

6. Oregon Revised Statute: ORS 223 provides the rules for the use of assessments and SDCs in Oregon. It discusses the assessment of public and private properties. It does not state the specific assessment valuation process. The entire ORS is attached on the City’s web site.

Current Assessment Methodologies: the cost of improvements is split in several different ways. Many agencies require the full cost of the improvements to be paid by the affected property owners. Some agencies will pay a portion of the costs. Most assessments are either front footage along the improvement (typically applies to a road improvement) or a percentage of total square footage of property within the assessment district. With complaints that front footage did not require adequate payment for flag lots, and that square footage did not discount unusable hillside or drainage swale property areas, the City of Ashland developed Resolution 99-09. Resolution 99-09 changed the assessments to potential unit method which requires the Planning Department to determine the maximum number of potential units on properties within a proposed local improvement district by taking into consideration the zoning, densities, topography, transportation, utilities and such other factors as necessary to evaluate the development potential of the properties. The current allocation of costs on a per unit method appears to work better than just front footage or total area. Current Cost Sharing: Ashland is one of the few communities that shares in the cost of all LIDs. Resolution 99-09 placed a cap on each lot within the assessment (then $4,000 and with an increase for inflation based on the ENR, the current cap is $5,251 as of April 2007; a 31.3% increase in 8 years) and required the City to participate in improvements to local streets serving a residential neighborhood at the following percentages:

8 60% of the total costs for sidewalk improvements 8 75% of the total costs for storm drain improvements 8 20% of the total costs for street surface improvements 8 50% of the total costs for engineering and administrative costs

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Project List: Staff took a look at projects and separated them into two categories; sidewalks and streets. Staff then took a stab at developing priorities so the list you see is staff’s prioritization: Sidewalk priorities were based on the need for a completed pedestrian link for sidewalks to schools, transit stops and major gathering areas (parks, library, downtown core, etc.)

As presented in the 1998 TSP: Ashland’s network of sidewalks and paths for pedestrian use in the City is not continuous, particularly outside of the downtown core. A systematic approach identified the routes most used by pedestrians to provide system-wide access, circulation and continuity. Major pedestrian corridors and trip generators include schools (elementary, secondary, SOU), parks, civic attractions and services (City services, libraries, museums), the downtown core and retail, shopping and service areas. Bus stops and bus shelters are also considered pedestrian generators. Routes connecting generators to each other and access from nearby residential areas were classified as pedestrian corridors. Certain avenues were removed from the corridor classification because other facilities served the same foot traffic or because the avenue was not in an area where many people walked.

Needed pedestrian projects were identified wherever adequate sidewalks did not exist on both sides of the street in a pedestrian corridor. Projects associated with street improvements were assumed to be constructed in conjunction with their associated street projects. The remaining pedestrian projects were prioritized: sidewalks serving elementary schools, middle schools and high schools were top priority (years 1-5); routes of high pedestrian use, sidewalks along existing and future transit routes were secondary priorities (years 6- 10), followed by all remaining projects (years 11-20). Only 4 of the original 16 “first 10 years” projects have not been completed.

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Current unpaved streets were prioritized based on traffic volumes and the current understanding of neighborhood support for an LID. SUMMARY OF GRANITE SURFACED STREETS

Length ROW Proposed Estimated Estimated Est w/CMAQ Street Feet Width Impr Width Cost 1998 $ Cost 2008 $ Cost 2008 $

C Street 300 70 36 $53,400 $82,770 $186,233 design CMAQ 2007 Eureka Street 400 50 28 $61,200 $94,860 $213,435 design CMAQ 2007 Beach Street 500 40 28 $76,500 $195,075 $438,919 design CMAQ 2008 Monte Vista 640 23.5 20 no SW $66,560 $103,168 $232,128 design LID 2008 Schofield Street 700 40-60 28 $107,100 $166,005 $373,511 design LID 2008 Plaza Avenue 650 45 28 $99,450 $154,148 $346,832 design CMAQ 2009

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Peachey Road 150 40 28 $22,950 $35,573 $80,038 design JaCo 2009 CMAQ Almond Street 1700 40 22 $236,300 $366,265 $824,096 partial Manzanita to Church Ashland Loop Rd 1045 40 20 no SW $108,680 $168,454 $379,022 partial Terrace to Glenview Fork Street 1750 40 20 no SW $182,000 $282,100 $634,725 Vista to Glenview Glenview Street 6400 40-60 22 $889,600 $1,378,880 $3,102,480 180 ADT with mixed uses Granite Street 1600 40 22 $222,400 $344,720 $775,620 440 ADT highest Terrace Street 750 40 20 $101,250 $156,938 $353,109 220 ADT Walnut Street 1400 40-47 28 $214,200 $332,010 $747,023 Liberty Street 500 40-60 22 $69,500 $107,725 $242,381 planned LID Nevada Street* 1500 60 28 $229,500 $355,725 $800,381 partially done Clay Street 500 60 36 $89,000 $137,950 $310,388 JaCo involvement Pioneer Street 2600 45-50 20 no SW $270,400 $419,120 $943,020 A

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Pinecrest Terrace 750 47 28 $114,750 $177,863 $400,191 Alaska Street 150 40 28 $22,950 $35,573 $80,038 Black Oak Way 850 41-50 28 $130,050 $201,578 $453,549 Elkader Street 400 40 28 $61,200 $94,860 $213,435 Fox Street 600 40 22 $83,400 $129,270 $290,858 Larkin Lane 150 50 28 $22,950 $35,573 $80,038 Mae Street 350 40 28 $53,550 $83,003 $186,756 Meade Street 450 40 20 $60,750 $94,163 $211,866 Mohawk Street 250 60 28 $38,250 $59,288 $133,397 Pine Street 450 20 Partial 18 $46,800 $72,540 $163,215 Prospect Street 300 40 20 $40,500 $62,775 $141,244 Ridge Road 500 25 20 no SW $52,000 $80,600 $181,350 Ross Lane 430 20 28 $65,790 $101,975 $229,443 Need extra ROW for 28’ Tamarack Place 450 47 28 $68,850 $106,718 $240,114 no

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Wildwood Way 300 25 20 no SW $31,200 $48,360 $108,810

TOTAL Cost to improve Granite Surfaced Streets $3,992,980 $6,265,619 $14,097,643

If even counted, most ADTs below 100

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Recommended Revisions: 1. Construction costs are increasing dramatically, especially over the last several years. When

Resolution 99-09 was adopted, the City’s cost share of each project was estimated at 40%. Due to the cap for property owners, the City is now paying roughly 60-75% of many projects. There has been concern that the tax payers of the City are paying for more than their share of other LIDs that do not directly benefit them this way.

Recommend that the City’s share be capped at 40% with the affected property owners responsible for their share at 60% of the total project costs with no cap on the individually affected property owners.

2. Recommend that the “administrative” cost portion of all LID projects be expanded to include all design, engineering, construction management, legal and other administrative costs incurred by the City.

3. If the cap is not removed for affected property owners (see recommendation #1), then it is recommended that any deferred street improvements (LIDs formed prior to start of any subdivision construction; i.e.: Waterline Road) have an initial assessment that is also adjusted annually for inflation. This would allow some property owners to fully pay for the LID at a potentially lower rate and the City would “bank” those funds for future improvement.

4. Recommend the City require written petition which will be considered valid only when property owned by petition signers, added to any property within the proposed district owned by the City, represents more than 67 percent of the property in the proposed district as measured by the proposed assessment methodology. Property owned by the City shall be counted in support of formation of a local improvement district at the same per unit rate.

5. Recommend remonstrance language be specific to only those property owners within the proposed district.

6. Recommend Council extend the remonstrance period from 6 months to one year, and that after that time it is incumbent upon the original petitioners to re-engage the Council for renewed consideration for the project (13.20.050 C.). Action on sidewalks or on improvements unanimously declared by the council to be needed at once because of an emergency shall not be subject to suspension by a remonstrance of the owners of the property to be specially assessed.

7. Recommend the boundaries of the specific local improvement district be defined by the City Engineer in consultation with the Planning Director so that the proposed improvements meet all City standards, have a measurable impact on improving the air and water quality, and include immediately adjacent properties that directly benefit from the proposed improvements. It is further recommended that the proposed LID first gain acceptance by the new Transportation Commission prior to the initial petition going to the City Council for approval.

8. Recommend that there be no requirement for “signed in favor” agreements. All property owners within the proposed district boundaries have the right to request or object to an LID without any City required prior agreement to sign in favor of paving.

9. Although staff is encouraged to plan ahead for LIDs, it is recommend that the Council allow only one LID for sidewalk improvements and one LID for street improvements in any fiscal year and that this be determined during the budget and CIP process.

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Related City Policies: AMC 13.20 Local Improvements and Special Assessments City of Ashland Budget and Capital Improvement Plan Ashland 1998 Transportation System Plan; W&H Pacific (on the web) ORS Chapter 223 — Local Improvements and Works Generally (on the web) Council Options: The discussion of Local Improvement Districts is always on of controversy. Council, if you continue to move forward with the use of LIDs to be used as a funding mechanism for future street, sidewalk, storm drain and for perhaps other utility improvements to include street lighting, under grounding electrical utilities, and even transit, will always incite some level of controversy.

Council options include: 1. Continue the discussion regarding LIDs and how to best rewrite Resolution 99-09 and support

staff recommendations. 2. Decline to use Local Improvement Districts as a funding mechanism in the future. 3. Forego decision at this time and ask staff to bring this back for discussion at a future time or at

Council’s discretion. Potential Motions: Council’s options following the logic above are as follows:

1. Council recognizes the value of continuing to utilize Local Improvement Districts as a viable funding mechanism for public infrastructure improvements and moves approval of staff recommendations as presented on page 1:

a. Consider further evaluation to develop the City’s funding cap and specific logic in identifying property owner approval and assessments to fund LIDs. Staff’s preliminary set of recommendations as shown on page 6 of this document should be further reviewed unless there is time for specific elements to be discussed at this meeting.

b. Request staff brings back a modified Resolution 99-09 once revised assessment methodology and funding caps are determined.

c. Request staff ensures the updated TSP includes a prioritized of LIDs for sidewalks based on sidewalks to schools, transit stops and major gathering areas (parks, library, downtown core, etc.)

d. Accept the loosely prioritize list of LIDs for and road pavement based on traffic volumes and future neighborhood support as suggested on page 5 of this report.

e. Consider utilizing LIDs to establish funding mechanisms for electric underground services, street lights and other non-traditional utility enhancements.

2. Council moves to eliminate the future use of Local Improvement Districts. 3. Council requests staff bring this discussion back at a future time and will take no action at this

time. Attachments:

1. Council Communication, April 2, 2007; General Discussion on the Future of Local Improvement Districts (with attachments)

2. Resolution 99-09

RESOLUTION NO 99 O

A RESOLUTION RELATING TO LOCAL IMPROVEMENT DISTRICTS

LIDs AND ESTABLISHING THE CITYSPARTICIPATION IN LIDsTHE POTENTIAL UNIT METHOD TO DETERMINE ASSESSMENTSTHE MAXIMUM ASSESSMENT FOR RESIDENTIAL LOTS ANDREQUIRED PROCESS TO INCLUDE NEIGHBORHOODS IN LID

PLANNING

THE CITY OF ASHLAND RESOLVES AS FOLLOWS

SECTION 1 City Participation in LIDs

A Except as provided in paragraph B the city shall contribute the followingamounts to reduce assessments in any local improvement district LID formed after

the date of this resolution to improve local streets serving a residential

neighborhood

60of the total costs for

75of the total costs for20of the total costs for50 of the total costs for

sidewalk improvementsstorm drain improvementsstreet surface improvements and

engineering and administrative

B Unless the council so directs by further resolution no contribution will be

made by the city under this section for LIDs formed after the date of this resolution if

the LID improvements are required to be made by an owner or developer as a

condition of approval for a subdivision or partition

SECTION 2 Potential Unit Method to Be Utilized In determining the method to be

utilized for charging assessments against benefitted properties in LIDs formed after

the date of this resolution to improve local streets serving a residential

neighborhood the potential unit method rather than the frontage foot method shall

be the preferred method The potential unit method is that method which determinesthe maximum number of potential units on properties within a proposed local

improvement district by taking into consideration the zoning densities topographytransportation utilities and such other factors as necessary to evaluate the

development potential of the properties The planning department shall be

responsible for initially determining the potential units for each property within a

proposed LID

SECTION 3 Maximum Assessment on Residential Properties

A The maximum amount any residentially zoned lot may be assessed as a

benefitted property within an LID to improve local streets serving a residential

neighborhood and which is formed after the date of this resolution is4000 plus4000 for each potential unit within such residentially zoned lot This maximumamount shall be increased to account for inflation annually on April I st based on the

PAGE 1 RESOLUTION FUSERPAULORDIidreso98wpd

Engineering News Record Construction Cost Index ENR Index for SeattleWashington The current index is established at 599077

B There shall be no maximum amount however on lots owned by the city or

on lots where the LID improvements are required to be made by an owner or

developer as a condition of approval for a subdivision or partition

C Prior to the adoption of the assessment resolution levying final

assessments as provided in AMC 1320060E

1 Any owner may pay the estimated assessment on the lot and potentialunits plus ten percent or

2 Any owner not subject to subsection B above may pay the lesser of theestimated assessment on the lot and potential units plus ten percent or the

maximum amount described in subsection A above

Upon such payment the assessment shall be deemed satisfied and the final

assessment resolution shall reflect that the assessment has been paid

SECTION 4 Neighborhood Planning Process Prior to the formation of an LID citystaff shall notify the residents of the affected neighborhood of the possibility of the

LID formation Residents shall be given the opportunity to comment and make

suggestions on initial street design and potential units Minimum street standardsshall be maintained however unless the council by resolution specifically authorizes

specific changes for a particular project

This resolution was read by title only in accordance with Ashland Municipal Code

day of 1999

Barbara Christensen City Recorder

SIGNED and APPROVED this Jday of C2r 1999

Catherine M Shaw Mayor

Paul Nolte City Attorney

PAGE2RESOLUTION FUSERPAULORDIidreso n98wpd