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HomeMy WebLinkAbout1991-02-12 - AGENDA REPORTS - INFRASTRUCTURE REIMBURSEMENT (2)0 AGENDA REPORT City Manager Approval Item to be presented b . John E. Medina UNFINISHED BUSINESS DATE: February 12, 1991 SUBJECT: INFRASTRUCTURE REIMBURSEMENT DEPARTMENT: Public Works BACKGROUND Staff has been pursuing a number of capital projects to expand and.improve our infrastructure system. Since traffic has been identified as the major issue by the community, we have focused on the roadway portion of this system. In our desire to complete these improvements as quickly as possible, there has been little emphasis on how we might recover some of these improvement costs which clearly benefit the adjacent properties. Recently, the Council, in approving the widening of Lyons Avenue, raised the issue regarding the recovery/reimbursement of City costs for road improvements. Staff was directed to provide an analysis of this potential cost recovery process. Generally, all capital projects are one of the following: • Maintenance of existing improvements, i.e., resurfacing of streets, replacement of damaged sidewalks, curbs and gutters, swimming pool renovation, etc. • Park improvements, City buildings, pedestrian bridges, traffic signals in existing developed areas which are of general City benefit. • First time installation of public improvements such as street widening, drainage facilities, etc., which add to the existing City's infrastructure but also benefit the properties they serve. The first two items are a City responsibility which are usually funded from gas tax or general funds. The third item lends itself to reimbursement from the property owners who benefit from the improvements installed by the City or other developers. We should focus our efforts for cost recovery/reimbursement on this third category. APPROVED Aglj'a Item: 0 0 Infrastructure Reimbursement Page 2 The adoption of a 5 -Year Capital Improvement Program (C.I.P.) now allows staff the lead time to evaluate future projects in this third category for possible full cost recovery. This will add a new dimension to our whole capital improvement program. In addition, our consultant is currently reviewing a wide range of infrastructure needs and methods to fund these needs. It is expected that a development fee structure will be completed prior to the end of this fiscal year, and we can incorporate this additional funding source in our analysis and recommendations in the 5 -Year C.I.P. Attached is a brief outline of some relative factors which relate to the three basic cost recovery methods, i.e., Reimbursement District, Assessment District, Development Fee District. The City Council direct staff to provide an analysis of full cost recovery potential for each capital project included in the 5 -Year C.I.P. ATTACHMENT Reimbursement/Assessment/Development Fee Districts /ka 0 0 DISTRICT • City or developer pays the construction costs. • Reimbursement, i.e., pay -back, only at the time the benefited property develops. • Administrative costs add 10-15% to the district. • Time to form the district 2-3 months. ASSESSMENT DISTRICT • City installs improvements. • Bonds are sold to fund the improvements. • Properties benefitting pay on an annual basis whether developed or not. • Costs are generally .25-75% greater as a result of administration, hearings, financing incidentals, etc. • Average additional time to.process district 6-9 months. DEVELOPMENT FEE DISTRICT • Fees collected city-wide when development is approved. • Projects are constructed as fees are accumulated in sufficient quantities to cover costs. • Administration adds approximately 10% to the district fees. • Projects may have significant delays awaiting the accumulation of sufficient funds.