Council ponders benefit district risks
Three of the five Basehor City Council members made clear their opinion Monday night of a benefit district in Basehor Town Center: It's too risky for the city.
The multimillion-dollar project proposed by Affinity Development for downtown Basehor across from City Hall is set to include new civic, residential and commercial buildings, as well as the Basehor-Linwood school district's planned new third- through fifth- grade elementary school.
For several weeks, attorneys for the both the city and Affinity have been hashing out details of petitions for two benefit districts. One benefit district would cover Basehor Boulevard, the main street through the development, along with sewer and water lines; the other is for 155th Street. Both petitions would city financing of public improvements within the districts.
"The developer wants general-
obligation bonds issued to cover the cost of the infrastructure improvements," City Administrator Carl Slaugh said. "The questions we'll answer are: Does the city want to do it? What impact does it have on our bond rating? How much risk is there? And what can we do to mitigate the risk?"
A benefit district using general-
obligation bonds provides a large advantage to the developer in that financing is less than it would be if the developer were to go through a bank, and the developer can usually defer payments for about two years while improvements are being made to the land. While the developer would then be responsible for making the payments after the improvements are made, if he decides to default, either by walking away from the project or not selling enough homes, the city would then have to take over the responsibility of payments.
Slaugh said there are already two benefit districts set up in the city - one in Falcon Lakes and the other in Pinehurst, but these were established when the housing market was healthy. There are already several developments in the city where houses are sitting empty, he said, and the number of building permits issued has decreased dramatically this year compared to last year's.
"Other cities were declining last year and we still kept up a pretty good pace," Slaugh said of building permits. "But this year, if it keeps up at this pace, we'll have half as many as we did last year."
A requirement that the developer post a letter of credit was discussed as way to lessen risk to the city, but obtaining the letter proved costly to the developer and the amount of time the letter should be good for was a compromise between the parties. There would still be risk to the city if the duration of the letter of credit proved to be too short.
The Basehor-Linwood school district was looking for approval of the benefit district to help speed up the process of construction on the new intermediate school because water lines must be established in order for construction to begin. The district was shooting for an early July start date and Superintendent Bob Albers estimated that costs would go up six figures each month the district was delayed past its target start date.
"It's going to delay us, there's no doubt about that," Albers said. "We'll have to go back and reassess our plans and what we intend to do and see what avenues we have."
Council member Keith Sifford explained that the council is not unsupportive of the school district, but that this situation was not in the best interest of the taxpayers of the city. He commented that the developer had informed the council several weeks ago that even without the benefit district, he was willing to finance the project and they should stick to that route.
"I certainly sympathize with the position the school is in," Sifford said. "We're in a situation here that is certainly not a very attractive one and I hope the school understands as a council, we have to do what's best for the city and the school just happens to be in the middle of it. The way this is going to be financed is not going to be to the benefit of the city."
In other action Monday night, the council:
¢ Mayor Chris Garcia appointed Roger McDowell to the vacancy on the city council left by Terry Thomas and council member Iris Dysart was elected the new president.
¢ Approved, 5-0, to authorize the city clerk to certify delinquent sewer and solid-waste accounts with Leavenworth County Clerk for the purpose of adding them to the tax rolls and assessments of administrative fees.
¢ Approved, 6-0, with the mayor voting, the Final Plat and Subdivision Improvement Agreement for Basehor Town Center, 1st Plat., as requested by Affinity Development
¢ Approved, 6-0, the Final Development Plan for Basehor Town Center Elementary School to be located on Lot 1 of Basehor Town Center, 1st Plat, as requested by Unified School District 458.
¢ Approved, 5-0, a letter of engagement with Gilmore and Bell for the creation of an improvement district for Basehor Town Center project.
¢ Approved, 5-0, a petition for a benefit district to finance public improvements for Basehor Boulevard, water and sewer lines as requested by Affinity Development, for Basehor Town Center.
¢ Denied, 3-2, with Jim Washington and Dysart voting in favor, a petition for a benefit district to finance public improvements for 155th Street as requested by Affinity Development, for Basehor Town Center.
¢ Approved, 5-0, a resolution requesting the Board of County Commissioners of Leavenworth County, Kansas to make certain findings regarding the annexation of the property located at 14210 Fairmount Road, also known as the Field of Dreams Athletic Complex, into the City of Basehor.
¢ Approved, 5-0, an ordinance annexing property located at 19249 158th Street into the City of Basehor.
¢ Approved, 4-1, with Terry Hill opposed, an ordinance annexing property located at 16101 Parallel Road into the City of Basehor.
¢ Approved, 3-2, with Washington and Dysart opposed, an appeal to Planning Commission determination on the lot split for Lot C-5, Pinehurst North Subdivision relating to the condition for shared access.
¢ Approved, 5-0, the purchase of pumps for Sewer District No. 12 lift station not to exceed $7,500.
¢ Tabled, 5-0, the approval of payment for repairs at 163rd Street lift station.
¢ Approved, 5-0, proposed changes to Municipal Code.
¢ Approved, 3-2, with Washington and Dysart opposed, the appointments of city officials.
¢ Approved, 5-0, changes to Lieutenant's job description.
¢ Met in executive session for 20 minutes to discuss attorney-client privilege and personnel matters.
¢ Approved, 4-1, with Dysart opposed, city administrator contract changes in regard to vacation policy, sick leave and severance pay.