Archive for Wednesday, June 4, 2008

Council mulls benefit district policy

June 4, 2008

Recent discussions about benefit districts have Basehor City Council members thinking about a benefit district policy for the city.

At its May 19 meeting the City Council voted in favor of one of the two benefit district petitions for improvements in Basehor Town Center brought by Affinity Development, but denied the development agreement for the project's funding. City Administrator Carl Slaugh said this led him to believe there was a misunderstanding of how benefit districts worked and the city's options regarding the benefit district.

"What I'd like to get from the Council is feedback on reservations about benefit districts in general," Slaugh said during Monday night's meeting.

A benefit district assesses a tax on property owners within a district and that money is then used to fund improvements within that district. Establishing a benefit district with general-obligation bonds, such as the one proposed by Affinity, poses some risk to the city because if a development does not attract enough property owners, a developer can default, which would obligate the city to make the remaining bond payments.

Knowing the Council's concerns about benefit districts, Slaugh said, would allow city staff to begin crafting a benefit district policy. Such a policy would provide guidelines for both the city council and developers, telling them when a benefit district would be considered and how the logistics would be implemented.

Some council members expressed their approval of a benefit district policy, but agreed they would need more time to review the attached documents, which contained examples of benefit district policies from the cities of Paola and Lansing.

"The likelihood (of default) may be low, but that doesn't mean it doesn't exist," council member Terry Hill said. "When we approve a benefit district, there's risk. We need to be careful and know where the tax revenue to going to come from and point ourselves in that direction. It could be defaults are low because people make good decisions on where to point their benefit districts."

Council member Jim Washington analyzed the two benefit districts already established in the city - one in Falcon Lakes and another in Pinehurst - and said both caused problems in different ways. He said it would be best to develop the policy by not viewing one specific project.

"We need to avoid that sort of thing in the future," he said, referring to the city's current benefit districts.

The idea of completely avoiding the subject of benefit districts was also brought up by council member Keith Sifford.

"Our policy should be that we don't discuss benefit districts," Sifford said. "If a developer want to put in a development, they can pay for it. I think it would be better that way for everybody. In my opinion, the best interest of the city is to stay away from those things."

Slaugh said he brought the idea of a benefit district policy to the Council because Superintendent Bob Albers said the Basehor-Linwood School District is considering bringing a proposal for a benefit district petition for Basehor Town Center back to the city council. A benefit district would allow the district to establish the water lines needed to begin construction on a new school planned for the area. Slaugh said establishing a policy may provide a better understanding and allow discussions of such a proposal to be revisited.

Action Items:

¢ Approved, 4-0, with council member Roger McDowell absent, a Business and Industries Proclamation.

¢ Tabled, 4-0, the approval of equipment bids for the wastewater treatment plant expansion until more research could be completed.

¢ Tabled, 4-0, the approval of an agreement to form a Kansas Group Funded Insurance Pool in partnership with the Mid-America Regional Council Insurance Trust.

¢ Approved, 4-0, the renewal of medical insurance with Blue Cross and Blue Shield, option 1, for period July 1, 2008 to June 30, 2009.

¢ Approved, 4-0, the renewal of dental insurance with Delta Dental for period July 1, 2008 to June 30, 2009.

¢ Met in executive session for five minutes to discuss nonelected personnel.

¢ Approved, 5-0, to adjust compensation for the chief of police.

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