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01242012CouncilMinutes CITY OF AMMON CITY COUNCIL MINUTES – SPECIAL WORK SESSION TUESDAY, JANUARY 24, 2012 AGENDA: CITY OF AMMON 2135 SOUTH AMMON ROAD CITY COUNCIL AGENDA – SPECIAL WORK SESSION TUESDAY, JANUARY 24, 2012 – 5:00 P.M. DISCUSSION ITEMS: 1. Development Discussion EXECUTIVE SESSION: 1. Personnel Evaluations - Idaho Code 67-2345 (1-b) 2. Real Property Acquisitions - Idaho Code 67-2345 (1-c) 3. Pending Litigation - Idaho Code 67-2345 (1-f) MINUTES City Officials Present: Mayor Steven Fuhriman Councilmember Brian Powell Councilmember Sean Coletti Councilmember Russell Slack Councilmember Brad Christensen City Clerk/Administrator/Planning Director Ron Folsom Deputy City Clerk Rachael Brown City Engineer Lance Bates Building Official Charlie Allen City Officials Absent: Councilmember Dana Kirkham Councilmember Rex Thompson DISCUSSION ITEMS: Mayor Fuhriman opened the meeting at 5:00 p.m. at the City building located at 2135 South Ammon Road. 1. Development Discussion: Ron explained to Council he received a call yesterday from Costco and was told they need an answer before 5:00. Ron informed them he couldn’t have an answer before 5:00 because he had to talk to the Council. Ron said he is putting something together to send to Scott Bishop so he can include it in a package he is sending to Costco. Ron said he has spoken with Jerry Mason at (Association of Idaho Cities) AIC, and spoke with an economic developer in Boise and they all say the same thing; Costco is going places and everywhere they go they ask,” how much are you going to give us to come to your City.” Ron said based on 2010 tax levies, Charlie estimated the building value at 145,000 square feet would be almost $14 million so they would pay the City of Ammon $36,975 in taxes, but the same building in Idaho Falls would pay $121,055 in taxes, so by coming to the City of Ammon they will save over $83,000 a year. Councilmember Slack asked if the schools and all the bonds become a factor in all of this. Ron said he doesn’t have the District 93 levy and that is the part that would be significant. Charlie asked if they pay taxes based on the structure. Ron said it is the total assessed value. Councilmember Slack asked if the Council really wants to throw that number out there when it might just become a debate piece for the City of Idaho Falls. Ron said yes. Councilmember Powell said they are still going to have district 91, and the Bonneville County taxes on top of that. Discussion ensued regarding the school district and the bond levy rate. Charlie said the other thing about this valuation is he based it off of the Building Safety Journal. Charlie said there is a list of dollars per square foot based off of what type of building it was, and this particular building is masonry exterior with some steel framing. Councilmember Powell asked if it was a concrete tilt. Lance said the one in Twin Falls wasn’t. Councilmember Christensen asked what the assessed value of the Sam’s Club was. Ron said didn’t know, but he thinks the Wal-Mart is assessed at $12.5 million. Ron said we are not going to give them these numbers, but we want to give them the significant difference between the tax levies. Councilmember Powell said when he was building his business, the reason he built in Ammon and not Idaho Falls was because of the 12 Council Minutes 1-24-12 Page of taxes. Ron said the bottom line number they need to look at is the mill levy rate. Ron said staff would propose waiving building permit fees, inspection fees, and connection fees. Councilmember Slack said the City is looking at waiving $94,000 in fees. Ron said Lance estimated Costco will generate 7 (Equivalent Residential Units) ERU’s. Ron said the connection fee to the Region would be $34,300. Ron said the fee would be waived, but the city would be liable for the connection fees and have to pay the Regional. Ron said Woodbury has been given regional connections and the City would want Woodbury to use their connections for this development and the City will work with Woodbury as they move forward in other things that the City can do that doesn’t cause an immediate $25,000 out of pocket. Ron said the water connection fee is $4,600 and $1,200 for the meter. Ron reported Scott and Jerry Mason said although the City is not prohibited by State Statute from waiving utility fees, the City has a long term debt on both the water and sewer, and would only be able to waive fees that are attributable to operations and maintenance because every person is liable for repayment of the bond. Ron said we would also want to include broadband fiber. Councilmember Powell said he talked to Bruce about giving them unrestricted fiber for four years. Councilmember Powell said they also talked about Hitt Road improvements. Lance said he looked at this and tried to put it in perspective as close as he could. Lance said if the City looks at what they are doing on Hitt Road and the 17th Street intersection, the City’s portion is $600,000, and we are looking at twice the amount of improvements on this stretch of the road. Councilmember Powell said if the City puts up the money for those improvements, basically the City is going to gift that frontage to Costco, and as other development comes in through Woodbury to the end of their property, the other development will reimburse the City for the frontage. Ron said he would suggest that rather than doing it as a frontage fee, the City can go in and say you have this many square feet of undeveloped property, so after Costco is taken out of it, you have to this much per square foot. Council reviewed and discussed the restricted funds shown in SharePoint and determined there was 1.2 million dollars left in the Street Department Budget. Ron said he was asked to share some thoughts with the Council from Councilmember’s Thompson and Kirkham. Ron said Councilmember Kirkham said she wants to use this like an urban renewal project, but the bottom line is she is looking to bring economic development to the City and not necessarily revenue. Ron said Councilmember Kirkham said the taxes are a significant issue, but she feels what we are proposing is working on Hitt Road and participate or pay for getting Hitt Road in at no cost to Costco. Ron said Councilmember Thompson said he is pretty conservative with putting the numbers down, because if you put the numbers down with the City’s tax structure, commercial business doesn’t necessarily pay for itself. Ron said Councilmember Thompson liked the idea of having a reimbursement mechanism back from the developer, or the City paying them over a period of time. Ron said this is a summary of what both Councilmembers Thompson and Kirkham said. Councilmember Powell is good with the fees and giving them the fiber, but he is not sure about the roads. Councilmember Slack said he likes the idea of using future development to reimburse them for the road. Councilmember Slack said that way it would make it so the City doesn’t have to use its funds, but he doesn’t know if it’s a good enough of a selling point. Councilmember Powell said he would be willing to go half on the development, but they would get reimbursed for the other half with development fees. Councilmember Coletti said he is ok paying for half of the road, but he is sensitive about depleting the City’s excess amount in the Street fund, and at least put a turn lane in at 17th Street. Councilmember Powell asked Lance to look into the cost of doing a third lane th on 17 Street. Councilmember Slack said he wanted to do 17th Street like the City did on Molen Street. Lance said the problem with th putting a third lane on 17 Street like the City did Molen, is that 17th is an arterial and Molen Street is not. Lance said when you talk th about the different pavement structures of what 17 Street should be compared to Molen Street; we are talking about different operations. Discussion ensued regarding the third lane on 17th Street, and Hitt Road improvements. Councilmember Slack said he would like to see them pay for the improvements and the city reimburse them. Councilmember Slack said the City of Idaho Falls has not even had any discussion with Costco. Councilmember Powell said let’s do it with the reimbursement mechanism. Councilmember Coletti said come in with the fiber as the icing on the cake. Councilmember Coletti asked what Scott Bishop would say about the road proposal and asked Ron if he thinks he would find it favorable. Ron said he would have to talk to Scott Bishop. EXECUTIVE SESSION: 1. Personnel Evaluations - Idaho Code 67-2345 (1-b) 2. Real Property Acquisitions - Idaho Code 67-2345 (1-c) 3. Pending Litigation - Idaho Code 67-2345 (1-f) The meeting adjourned at 6:04 p.m. ___________________________________________ Steven Fuhriman, Mayor _______________________________________________ Ron Folsom, City Clerk 22 Council Minutes 1-24-12 Page of