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HomeMy WebLinkAboutA 20181008 FPC from City of Neenah AMENDED AGENDA –FINAL CITY OF NEENAH FINANCE AND PERSONNEL COMMITTEE MEETING Monday,October 8,2018–6:30 p.m. Council Chambers, Neenah City Administration Building 211 Walnut Street, Neenah, Wisconsin NOTICE IS HEREBY GIVEN,pursuant to the requirements of Wis. Stats. Sec.19.84,that a majority of the Neenah Common Council will be present at this meeting. Common Council members may be present to gather information about a subject over which they have decision-making responsibility. This constitutes a Meeting of the Neenah Common Council and must be noticed as such. The Council will follow the same agenda as the committee, but will not take any formal action at this meeting. AGENDA 1.Public Appearances 2.Approval of Minutes from the September 24, 2018 Regular Meeting (minutes can be found on the City’s website). 3.Salary Plan Update Recommendations from Carlson Dettmann (attachments) H. Barber 4.Acquisition of 122 W. Peckham Street Utilizing Community Development Block Grant (CDBG) Funding (attachment) B. Schmidt 5.Ordinance 2018-17 Transportation Assessment Replacement Fee (attachment) J. Godlewski/G. Kaiser 6.Fiscal Matters: September Vouchers (attachment) M. Easker 7.Adjournment In accordance with the requirements of Title II of the Americans with Disabilities Act (ADA), the City of Neenah will not discriminated against qualified individuals with disabilities on the basis of disability in its services, programs, or activities. If you need assistance, or reasonable accommodation in participating in this meeting or event due to a disability as defined under the ADA, please call the Neenah Finance Department at (920) 886-6140 or the City’s ADA Coordinator at (920) 886-6106 or e-mail attorney@ci.Neenah.wi.us at least 48 hours prior to the scheduled meeting or event to request an accommodation. Dept. of Legal & Administrative Services Office of the City Attorney 211 Walnut St. P.O. Box 426 Neenah WI 54957-0426 Phone 920-886-6106 Fax: 920-886-6109 e-mail: jgodlewski@ci.neenah.wi.us J AMES G. G ODLEWSKI C ITY A TTORNEY DATE: October 5, 2018 TO: Chair Erickson, members of the Finance & Personnel Committee FROM: City Attorney Jim Godlewski Public Works Director Gerry Kaiser RE: Ordinance 2018-17 Transportation Assessment Replacement Fee Transportation Assessment Replacement Fee Attached is the proposed Transportation Assessment Replacement Fee ordinance, Ord. 2018-17. This ordinance would authorize the creation of the Transportation Assessment repairs and reconstruction. In addition, the ordinance provides a mechanism for paying the cost of street reconstruction against eligible parcels throughout the City. The result allows the City to continue local funding of street repairs and reconstructions, along with funding installation of pedestrian facilities (sidewalks & trails) in part with funds generated from land parcels that generate traffic, but instead of assessing large special assessments against only those parcels immediately abutting the streets under repair that year, creating very large payments by a very small portion of properties that benefit from the improvements, this ordinance creates a fee on all eligible parcels in the City spreading the cost of street reconstruction broadly to all eligible parcels. Basis of TARF TARF would be generated in a manner similar to the storm sewer assessment found at Chapter 17 Article IV. The TARF would utilize the storm water ERU to calculate the TARF fee for each parcel. The theory supporting this use of the ERU is that the more impervious surface that a parcel has not only increases the amount of run off, but also generates more traffic since the parcel is more developed (as represented by the amount of impervious surface. In addition, the TARF is designed to only replace the revenue derived from special assessments. In calculating the TARF, public works would estimate the amount needed to match the amount that would have been generated by special assessment (currently approximately $400,000 per year) and then adjust the formula found at §17-206 to generate that amount. This annual adjustment would occur during the annual operating C ITY OF N EENAH Office of the City Attorney Director of Public Works Ord. 2018-17 Transportation Assessment Replacement Fee Ordinance October 5, 2018 Page 2 budget and would be reflected in the annual Budget resolution. The result of this approach is that instead of imposing a large special assessment a very small portion of the City parcels that directly abut the transportation infrastructure previously funded by Special Assessments, the fee would be imposed on all eligible parcels on the theory that all parcels benefit from a well maintained transportation infrastructure. Revenue generated by the TARF would be deposited in a segregated fund dedicated only to fund the cost associated with the purposes for the TARF (street and other infrastructure repair and recon construction in the public right of way.). Billing and Payment of TARF Like the storm sewer assessment fee, the TARF would be an added charge on the Citys utility billings. The Water Utility is charged with the responsibility of providing billing support for the TARF and the Finance Department would be charged with collecting and accounting for the TARF. Like other utility charges, delinquent TARF payments would be added to the annual property tax as a special charge pursuant to Wis. Stat. §66.0627. Exemptions from TARF The ordinance provides a mechanism for the Council to provide exemptions from the fee when the Council determines the exemption is consistent with the public interest. Exemption would be provided for by resolution. It is through this resolution that the exemption for residents special assessed for street repairs in the past 5 years would be established. Other Annual Special Assessments During the Committee of the Whole meeting, several aldermen expressed an interest in finding a mechanism to eliminate all annual special assessments in favor of a fee based system to cover those costs. The following describes the various items paid through special assessments and illustrates the difficulty in substituting fees for special assessments but also suggests potential options for the Committee and Council to consider. What makes the other improvements (sewer laterals and related improvements) difficult to translate into a fee based system is that unlike street improvements, lateral replacements only benefit a single property, whereas on street and sidewalk repairs and installations, all members of the public could conceivably use the improvements funded by the TARF. Nonetheless, the following is a summary of the current special assessment practices used to spay costs related to sewer lateral repair and replacement. Sanitary Sewer Special Assessments The City does not assess for sanitary sewer main installation or replacement except in the case of new developments, in which case that cost is typically paid directly by the C ITY OF N EENAH Office of the City Attorney Director of Public Works Ord. 2018-17 Transportation Assessment Replacement Fee Ordinance October 5, 2018 Page 3 developer. Prior to the early 2000s, the City did not work on laterals when making sewer main relays or repairs. Around that time, the City began replacing a portion of the lateral on sewer main relay projects so that there was good pipe under the street. The property owner was not assessed for that work unless they chose to extend the replacement to their building. Assessing for partial sanitary sewer lateral replacements started in 2013. The reason for the change was the recognition that the sanitary sewer lateral is considered private property from the main to the building. It is interesting to note that, on projects similar to ours, most of our surrounding communities require lateral replacement to the building and assess the property owner for the full cost. The condition of the private lateral can have a significant impact on the function of the public sewer main. In our projects, we have encouraged the replacement of clay tile laterals beyond the right-of-way because replacement to the right-of-way does not completely resolve potential Inflow/Infiltration related to a lateral. With this approach, We would like to increase that participation. Increasing participation necessarily increases the number of property owners impacted by these costs. This seems somewhat contrary to the desire to reduce cost impacts. There are a number of options to address the cost impact. The costs noted are based on the number of properties affected by construction in 2018 (135) and the typical bid price for the related work items from Contracts 1-18 and 2-18. For a comparison, the costs under our current practice are listed below. Current Special Assessment Practice. Utility Cost Impact: The utility provides the initial funding for the lateral replacement and is then reimbursed through special assessment payments, so the net cost to the Utility should be $0. Property Owner Cost Impact: For a typical property, lateral replacement to the right-of-way costs about $1,500. The cost for replacement between the right-of-way and the house varies somewhat by the replacement method but $2,000 is a good estimate. This brings the total cost for full lateral replacement to $3,500. There are several options to consider regarding sanitary sewer lateral replacement: Option 1: Have Sanitary Sewer Utility pay for the portion of the lateral in the right-of-way. Utility Cost Impact: The total annual cost impact on the utility would be approximately $203,000. The Utility would need to recover these capital costs through the sewer rate. C ITY OF N EENAH Office of the City Attorney Director of Public Works Ord. 2018-17 Transportation Assessment Replacement Fee Ordinance October 5, 2018 Page 4 Property Owner Cost Impact: For a property that replaces the sanitary sewer lateral beyond the right-of-way, the cost would be about $2,000. If the property owner chose not to replace the lateral beyond the right-of-way, their cost would be $0. Notes: The benefit of this approach goes to the property owner. As with our current approach, there is little incentive for the property owner to complete the lateral replacement other than the price benefit of doing this work through a city contract and having a payment plan. Option 2: Have Sanitary Sewer Utility pay for the full cost of lateral replacement from main to building. Utility Cost Impact: The total cost impact on the utility would be approximately $475,000. The Utility would need to recover these capital costs through the sewer rate. Property Owner Cost Impact: For a property that replaces the sanitary sewer lateral beyond the right-of-way, the direct cost would be $0. Notes: The benefit of this approach is that the entire lateral is replaced, so a more complete effort on I/I reduction is achieved. The impact on the necessary sewer rate increase needs to be evaluated. Option 3: Assess per current practice but cost-share on full lateral replacement. If the property owner replaces a lateral to the building, the Utility waives the cost of the assessed portion of the lateral. Utility Cost Impact: If there is 100% participation, the total annual cost to the Utility would be similar to Option 1 - $203,000. The Utility would need to recover these capital costs through the sewer rate. Property Owner Cost Impact: For a property that replaces the sanitary sewer lateral beyond the right-of-way, the direct cost would be about $2,000. If the property owner chose not to replace the entire lateral, their cost would be about $1,500. Notes: This approach incentivizes the property owner to replace the entire lateral. The approach could be modified to achieve an actual 50/50 cost share. There are a few additional aspects that we need to consider to establish a final scope for the change in special assessment policy. 1. It is the position of staff that the Utility should not take over ownership of the sanitary sewer lateral regardless of any financial involvement in replacement cost. 2. It is not uncommon for lateral replacement to a building to require interior plumbing changes (connections to basement fixtures, installation of sump pits to disconnect drain tile from the sanitary sewer lateral, etc). Under option 2 or 3, those costs should not be included in the Utilit cost share. C ITY OF N EENAH Office of the City Attorney Director of Public Works Ord. 2018-17 Transportation Assessment Replacement Fee Ordinance October 5, 2018 Page 5 3. The Council needa to determine if this change should be expanded to include Utility involvement in random lateral failures that require repair or replacement during the course of the year. In addition to help from our staff in sorting through sewer lateral issues, we currently assist in a couple of other ways: a. by reducing street excavation permit charges for these situations; b. by adding replacements to open utility contracts and assessing the property owner. Storm Sewer Special Assessments The City does not assess for storm sewer main installation or replacement except in the case of new developments, in which case that cost is typically paid directly by the developer. Storm sewer laterals were not installed as standard practice until the 1980s, so we have not yet run into cases where those have needed replacement. Staff have discussed the benefits of adding storm sewer laterals streets with storm sewer main when utility work is being done. These would provide property owners with a ready option to address sump pump and yard drainage issues. These laterals would also be private property, so they should be handled in a manner consistent with the arrangement determined for sanitary sewer laterals. Water Utility Charges The Water Utility does not assess for main installation or replacement except in the case of new developments, in which case that cost is typically paid directly by the developer. Public Service Commission rules dictate the ownership and maintenance responsibilities for water services. Essentially the service is owned by the property owner but is maintained by the Utility from the main to the curb stop. The primary reason for service replacement is to eliminate lead services. PSC rules limit the ability of the Utility to participate in the cost of replacing services between the curb stop and the building. Currently, the cost for building-side water service replacement under a city contract is paid by the Utility and is included in the special assessment billing to the property owner. The corresponding portion of a property ownerpayment is provided to the Water Utility to cover their costs. Conclusion Ordinance 2018-17 creating the Transportation Assessment Replacement Fee provides an alternate mechanism for raising revenue for street repair, resurfacing and reconstruction. It also could provide funding for the construction of sidewalks and pedestrian trails authorized by the Council. It would eliminate the significant financial impact on residents by spreading the cost more broadly that the current special assessment procedure. This fee is only available to offset the costs of public infrastructure repair, resurfacing and reconstruction as well the installation of sidewalks. C ITY OF N EENAH Office of the City Attorney Director of Public Works Ord. 2018-17 Transportation Assessment Replacement Fee Ordinance October 5, 2018 Page 6 An appropriate motion would be to recommend the Common Council approved Ord. 2018-17 creating the Transportation Infrastructure Utility and the Transportation Assessment Replacement Fee for the purpose of funding transportation infrastructure installation, repair, resurfacing and reconstruction. 211 Walnut Street Neenah, WI 54956 AN ORDINANCE: By Finance & Personnel ORDINANCE NO. 2018-17 Committee Introduced: October 18, 2018 Re: Amending §17-123, Definitions, and Committee/Commission Action: Creating Chapter 17, Article VIII, Transportation Infrastructure Utility and Transportation Assessment Replacement Fee A N O RDINANCE The Common Council of the City of Neenah, Wisconsin, do ordain as follows: Section 1. Section 17-123 - Definitions (introductory paragraph) of the Code of Ordinances of the City of Neenah is amended by deleting the stricken language and adding the highlighted language to read as follows: Sec. 17-123 Definitions For the purpose of this article and Article VIII, the following definitions shall apply; words used in the singular shall include the plural, and the plural, the singular; words used in the present tense shall include the future tense; the word "shall" is mandatory and not discretionary; the word "may" is permissive. Words not defined herein shall be construed to have the meaning given by common and ordinary use as defined in the latest edition of Webster's Dictionary. Section 2. Chapter 17, Article VIII of the Code of Ordinances of the City of Neenah is created to read as follows: Chapter17, Art VIII, TRANSPORTATION ASSESSMENT REPLACEMENT FEE Sec. 17-201 Findings and Purpose Sec. 17-202 Fee Established Sec. 17-203 Transportation Assessment Replacement Fee Dedicated Sec. 17-204 City to maintain local streets - Exclusions Sec. 17-205 Definitions Sec. 17-206 Fee Charges Sec. 17-207 Property Classification Sec. 17-208 New construction Sec. 17-209 Method of appeal Sec. 17-210 Special assessment authority Sec. 17-211 Disposition of fees and charges Sec. 17-212 Exemptions Sec. 17-201. - Findings and Purpose. (1) Findings. The Common Council finds, determines and declares the necessity of - of-way, street including resurfacing and reconstruction and sidewalk installation. Improvement includes such activities as are necessary in order that streets and related facilities may be properly operated and maintained to safeguard the health, safety, and welfare of the city and its inhabitants and visitors. In addition, the Common Council finds that the traditional method for partially funding street resurfacing, street reconstruction and sidewalk installation through special assessments places an undue financial burden on city residents, while not including all who benefit from the improvements in the funding of those improvements. Furthermore, the Common Council finds and determines that there is a correlation between the amount of impervious surface on a property parcel and the traffic generated from that parcel. As a result, the basis for determining the Storm Water fee in Article IV of this chapter provides a reasonable and rational method for determining the fee authorized by this Article. (2) Funding purposes. The following activities are to be funded by the Transportation Assessment Replacement Fee: costs of administering construction projects, pavement overlays including minor widening, street reconstruction, installing sidewalks repairing and installing curb and gutter, and related operations of the public works department on city streets and intersections with city streets. The Common Council further finds that bicycle and pedestrian facilities, including access for the disabled or handicapped, are an integral part of the transportation network. A portion of funds may be used for installation of bicycle and pedestrian facilities within public right of way. (3) Transportation Utility Established. The cost of operating and maintaining the City right-of-way, including streets, sidewalks and trails, and financing necessary repairs, replacements, improvements and extension thereof should, to the extent practicable, be allocated in relationship to the benefits enjoyed and services received therefrom. In order to protect the health, safety and welfare of the public, the Common Council is exercising its authority to establish a Transportation Utility and set the rates for transportation management services. The City is acting under the authority of Chapters 62 and 66 of the Wisconsin Statutes, and particularly at least the following statutes: §§62.04, 62.11, 66.0621, 66.0207, 66.0809, 66.0811 and 66.0813. Sec. 17-202. - Fee Established. Based on the Findings and Purpose of the Transportation Assessment Replacement Fee outlined above, there is created a charge for the purpose of providing funds for the improvement of local streets and related facilities under the jurisdiction of the City of Neenah. Sec. 17-203 - Transportation Assessment Replacement Fee Dedicated. (1) Segregated Fund. All fees collected by the city shall be paid into a segregated fund. Such revenues shall only be used for the purposes described in Section 17-201. (2) Other Funds. To the extent that the fees collected are insufficient to properly reconstruct or resurface streets, the cost of the same may be paid from such other city funds as may be determined by the Common Council. The Common Council may order reimbursement to such fund as additional fees are thereafter collected. Funds shall not be imposed in amounts greater than that which is necessary, in the judgment of the Common Council, to provide sufficient funds to properly improve streets and related transportation facilities. Sec. 17-204 - City to maintain local streets Exclusions. The city shall maintain all accepted local streets within city rights-of-way and city easements. The city may improve other accepted local streets, bicycle and pedestrian facilities, and intersections with county roads or state highways within or adjacent to the city. Local streets to be improved exclude private streets and streets or any other facilities not yet accepted by the city for maintenance. In addition, the cost of initial construction of local streets within City right-of-way in new subdivisions constructed by the Common Council shall not be funded by the TARF. Sec. 17-205. - Definitions. For the purpose of this article, the definitions listed at Sec. 17-123 shall apply to this Article; words used in the singular shall include the plural, and the plural, the singular; words used in the present tense shall include the future tense; the word "shall" is mandatory and not discretionary; the word "may" is permissive. Words not defined herein shall be construed to have the meaning given by common and ordinary use as defined in the latest edition of Webster's Dictionary: Sec. 17-206. - Fee Charges. (1) By this article, the Common Council is establishing the charge upon each lot and parcel within the City for the TARF The actual charges to be imposed, the establishment of formulas for calculations of the charges, the establishment of specific customer classifications and any future changes in those rates, formulas, rate charges, and customer classifications, shall be established this article will be fair and reasonable. The current rates will be on file with the City Clerk. (2) The Fee charged shall be issued to share the costs of the historic level of special assessment for street resurfacing, street reconstruction and sidewalk installation. This charge may be imposed on all property that has any developed impervious area. The ERU charge will be designed on the basis of a typical residential unit of property. Other units of property will be charged multiples of the ERU based on the impervious area. (3) The Council may make such other and customer classifications as will be likely to provide reasonable and fair distribution of the costs of the TARF. (4) The City Water Utility and Department of Finance is hereby appointed as the collection agency for the TARF. Bills shall be prepared by the City Water Utility and sent to the owner or occupant of each premise served. The Department of Finance shall allocate the actual cost of billing and collecting. (5) If there is neither city water nor city sewer service to the improved premises, a quarterly bill shall be rendered and shall become due and payable within twenty days of issuance. (6) The bills for TARF charges may be mailed to the designated utility bill recipient, but this mailing shall not relieve the owner of the property from liability for rental property in the event payment is not made as required in this article. The owner of any property served which is occupied by tenants shall have the right to examine collection records of the City for the purpose of determining whether such rates and charges have been paid for such tenants, provided that such examination shall be made at the office at which the records are kept and during the hours that such office is open for business. (7) TARF charges shall not be payable in installments. If charges remain unpaid after a period of 20 days from the date of utility bill, such bill shall become a delinquent special charge and shall become a lien as provided in §§ 66.0809 and 66.0821, Wis. Stats. Said charges shall automatically be extended upon the current or next tax roll as a delinquent tax against the property, and all proceedings in relation to the collection, return and sale of property for delinquent real estate taxes shall apply to such special charges. Unpaid charges shall be assessed a one-percent per month late payment charge to bills not paid within 20 days of issuance. (8) All delinquent special charges shall be subject to a ten percent penalty in addition to all other charges and prior penalties or interest when the delinquent special charge is extended upon the tax roll. Sec. 17-207. Property classification. (1) For purposes of imposing the TARF charges, all lots and parcel within the City are classified into the following five customer classes: a. ResidentialSingle-Family and Manufactured Home. b. ResidentialDuplex. c. ResidentialMultifamily Units. d. Non-residential. e. Tax Exempt f. Undeveloped (2) The Director shall prepare a list of lots and parcels within the City and assign a classification to each lot or parcel. (3) The average square footage of impervious area of ERU is established to be equivalent to 3,138 square feet. (4) The charges imposed for duplex residential properties shall be the rate for one- half of one ERU for each individual dwelling unit existing on the property (½ ERU rate multiplied by the number of dwelling units). (5) The charges imposed for single family, manufactured home, residential- multifamily units, non-residential, and non-profit properties as defined herein shall be the rate for one ERU, multiplied by the numerical factor obtained by dividing the total impervious area of a residential multifamily unit and non- residential property by the square footage of one ERU. The factor shall be rounded down to the nearest one-half, i.e. ERU rate × impervious area ERU (6) The charges imposed for undeveloped properties as defined herein shall be the rate for one ERU multiplied by a factor established by resolution and then divided by the square footage for one ERU established by resolution. (7) The Director shall be responsible for determining the impervious area based on the best available information, including, but not limited to, data supplied by the City Assessor, aerial photography, the property owner, tenant or developer. The Director may require additional information as necessary to make the determination. The billing amount shall be updated by the Director based on the building permit process. (8) The minimum charges for any non-residential parcel shall be equal to the rate for one ERU. (9) All unoccupied developed lots and parcels shall be subject to the TARF. Sec. 17-208. - New customers. (1) For new development, the owner shall be liable for the TARF charges, under this article, for the improvement from the date of building permit or parking lot permit issuance. (2) Areas annexed to the city of Neenah or under contract to annex shall become subject to the Fee on the date of annexation or the date of the annexation contract, whichever comes first. Sec. 17-209. - Method of appeal. The TARF may be appealed as follows: (1) A written appeal shall be filed with the City Clerk prior to the charge due date; or (2) Within 30 days of payment, a written challenge to the charge must be filed with the City Clerk on behalf of the customer, specifying all bases for the challenge and the amount of the charge the customer asserts is appropriate. Failure to file a challenge within 30 days of payment waives all rights to later challenge the charge. (3) The Finance and Personnel Committee is assigned responsibility for hearing appeals under this sections and shall determine whether the charge is fair and reasonable, or whether a refund is due the customer. The committee may act with or without a hearing, and will inform the customer in writing of its decision. (4) The customer has 30 days from the decision of the committee to file a written appeal to the Common Council. (5) If the Council or the committee determine that a refund is due the customer, the refund will be applied as a credit on the customer's next quarterly billing, if the refund will not exceed the customer's next quarterly billing, or will be refunded at the discretion of the Director of Finance. Sec. 17-210. - Special assessment authority. In addition to any other method for collection of the charges established pursuant to this article for the TARF costs, the Common Council finds that these charges may be levied on property as a special charge pursuant to Wis. Stats. § 66.0627. The charges established hereunder reasonably reflect the benefits conferred on property and may be assessed as special charges. The mailing of the bill for such charges to the owner will serve as notice to the owner that failure to pay the charges when due may result in them being charged pursuant to the authority of Wis. Stats. § 66.0627, In addition, the City may provide notice each October of any unpaid charges for the TARF, which charges, if not paid by November 15, may be placed upon the tax roll under Wis. Stats. § 66.0627. Sec. 17-211 - Disposition of fees and charges. The fees paid and collected pursuant to this ordinance shall not be used for general or other governmental proprietary purposes of the city, except to pay for the equitable share of the cost of replacement and reconstruction of the street network and related facilities for which the city has maintenance responsibility. Sec. 17-212 - Exemptions. The Common Council may, by resolution, exempt any class of user when they determine that the public interest deems it necessary and that the contribution to street use by said class is insignificant. In addition, property owners subject to special assessments for street repairs resurfacing and reconstruction within the past five (5) years from the effective date of this Article shall be exempted from the TARF. Section 3. Severability. In the event any section, subsection, clause, phrase or portion of this ordinance is for any reason held illegal, invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision, and such holding shall not affect the validity of the remainder of this ordinance. It is the legislative intent of the Common Council that this ordinance would have been adopted if such illegal provision had not been included or any illegal application had not been made. Section 4. Repeal and Effective Date. All ordinances or parts of ordinances and resolutions in conflict herewith are hereby repealed. This ordinance shall take effect from and after its passage and publication. Approved: Moved by: Dean R. Kaufert, Mayor Adopted: Approved: Attest: Published: Patricia A. Sturn, City Clerk THIS INSTRUMENT WAS DRAFTED BY: City Attorney James G. Godlewski 211 Walnut Street Neenah, WI 54956 State Bar No. 1005210