FINANCE COMMITTEE OF COUNCIL
CITY
HALL, 100 LOCKVILLE ROAD
WEDNESDAY,
AUGUST 9, 2006
SPECIAL
MEETING
7:30
P.M.
1. ROLL CALL. Mr. Wisniewski called the meeting to order at 7:30 P.M., with roll call as follows: Mr. Wisniewski, Mr. Hackworth, and Mr. Smith were present. Mr. Fix was absent. Others present were Mike Sabatino, Cristie Hammond, Judy Gilleland, Lynda Yartin, Linda Fersch, Tim Hansley, Steve Grasbaugh, Dan Horne, Bruce Englehart, Bill Yaple, Kaitlin Sattler, Rick Palsgrove, Sean Casey, and others.
2. SCHEDULED MATTERS:
A. Review and request for motion to approve draft ordinance authorizing the execution of a guaranteed maximum amount construction contract for the extension of Stonecreek Drive in the City. Mr. Wisniewski stated our TIF attorney, Steve Grasbaugh, is present to address this issue. Mr. Grasbaugh stated this is the second half of the story. He stated when Council passed the TIF agreement, the intent resolution and the TIF agreement, you set up the revenue source; where the money was going to come from, how long it was going to come for, and general parameters of what you would spend it on, which is basically capital improvements that benefit the plan. He stated tonight the Committee has in front of them the construction agreement, which is the specific agreement on how you will spend some of that money. He stated this agreement basically sets up that you are going to enter into a contract with Equity to build a road. He stated this is unique financing in that you are not issuing debt, you are going to enter into an agreement with Equity that says you will pay them over time as the TIF revenues are generated. He stated if they do not build anything and there are no TIF revenues, they do not get paid, but you still get the road because they are under obligation to do that. He stated there is a provision in the agreement that says you have the option at any time to finance it, but he would assume that would happen only if you were fairly certain that you would not be touching the general fund. He stated he would like to make it clear that this is not the final construction document. Mr. Grasbaugh stated this provides how the detailed construction documents happen, and there is a timeline in this document where Equity has to have the construction documents to the City for review by October 15, 2006. He stated the City then has a time period to review the documents, send back comments, and then it would be finalized. He stated further if Equity and the City can never come to an agreement on those final documents, the agreement goes away on May 31, 2007. He stated further, there is a provision that once those documents are finalized, Equity has three months to get the final plat in for approval and once that final plat is approved, they have one year to build the roadway.
Mr. Grasbaugh stated what the construction contract does do is set up the provision that the City will pay the lesser of two million dollars or the actual cost that Equity invoices at the end of the construction period. So, the maximum the City will pay Equity will be two million dollars plus interest. He stated the source of the payments will be a combination of the 2001 TIF, to a certain extent, and today’s TIF. He continued that you are promising with today’s TIF that you will use the money you receive from the TIF you are doing now first for paying Equity, and on the 2001 TIF you have reserved out amounts to pay other items that you have to pay or want to pay. So, Equity does not get all of the money from the 2001 TIF. Mr. Grasbaugh stated with one exception you do not have to pay Equity anything until the road is completed. He stated the one exception is that once the construction documents have been finalized and approved by the City, Equity is allowed to invoice the City for $50,000 and you make your payments every June 1 and December 1. He continued that the interest rate is a variable interest rate that is the lesser of the prime rate announced in the Wall Street Journal plus 1-1/4 percent or 8 percent.
Mr. Grasbaugh stated the TIF agreement, in and of itself, did not guarantee that office buildings would be built, but it was Equity’s intent to build the office buildings. He further stated the City administration wanted a little more assurance on that, so in this agreement Equity is coveting that in the space shown on Exhibit B to the ordinance that they will build nothing but office buildings. He stated that covenant goes into the real estate records so if they sell the land, it goes with the property owner. Nothing can be built there except office buildings unless the City otherwise agrees to something else at a later date. Further, Equity agrees to a time schedule for building the office space.
Mr. Hackworth clarified the limitation of payments is set out in Section 5.4 of the document and specifies the City will only pay them out of the TIF revenues. Mr. Hackworth further clarified the $50,000 is a one time payment. Mr. Wisniewski stated he felt this was good legislation for the City as it guaranteed office space and protects the school’s interests. Mr. Wisniewski moved to approve the draft ordinance and agreement and forward to Council; Mr. Smith seconded the motion. Roll call was taken with Mr. Hackworth, Mr. Wisniewski, and Mr. Smith voting “Yea.” Motion passed, 3-0.
B. Review and discussion regarding Economic Development Agreement. Mr. Wisniewski stated he had requested this be put on the agenda for general discussion. He stated Mr. Fix was not present this evening as he had a prior commitment at work. Mr. Wisniewski stated in 2004 an ordinance was passed for a Memorandum of Understanding with Violet Township that we would work together in economic development agreements. Mr. Wisniewski stated from that document we had a three person committee. Mr. Hackworth stated as he recalled that was specifically for the current CEDA area between Violet Township and Canal Winchester, but left the door open for other areas to be discussed. Mr. Wisniewski stated he was baffled by the comments from the Township Trustees lately regarding the two JEDDs that had supposedly been presented to Council. He stated he was wondering what was going on with these because he has not received one document nor has he been approached by a Trustee or any other member of Council regarding these JEDDs or been shown anything that resembles a formal invitation to join in specific areas. Mr. Wisniewski questioned if the City Manager has received anything to that. Ms Gilleland stated we have one development, the Dozier development, and that is one where the developer is interested in putting in some office space. She stated the property was rezoned in the Township and we were approached for annexation, a JEDD, or some sort of partnership with the City. She stated that project has actually been in the Service Committee of Council because the first hurdle to get over is whether or not we are going to serve that parcel with sewer. She stated that discussion has been tabled because we are in the middle of discussion regarding our sewage treatment plant and our sewer capacity. Mr. Wisniewski clarified no JEDD document was provided on that parcel and nothing has been presented regarding the supposed second JEDD. Mr. Sabatino stated the newspaper stated that the Township rezoned the property on Wright Road and also a parcel on Busey Road and offered the City the opportunity to form two JEDDs. He questioned if this was a true statement, and Ms Gilleland stated she has not received any information on the Busey Road JEDD, and she has no details on that project.
Mr. Wisniewski stated the Committee had received a draft version of an economic development agreement from Mr. Fix. Mr. Englehart stated his feelings on the JEDD as it relates to the Dozier development is that it should not be approved. He stated the property has already been rezoned in the Township for office space, and he felt if that is going to happen it should be annexed into the City where proper controls are in place. He stated the Township does not have the ability to control development, to watch the growth or monitor the growth and the City does. He stated the Equity development discussed earlier in this meeting was being done the right way. Mr. Englehart stated the Wright Road property is surrounded by residential, and the surrounding residents will support annexation, but they will not support a JEDD on that property. Ms Gilleland stated in a JEDD, the actual document outlines who provides what service, so it is not predetermined who would provide police protection, street maintenance, etc. She stated it is entirely possible if a JEDD were formed on the Dozier property that the City could provide all of the services, and be paid for those services.
Mr. Wisniewski stated he felt we were trying so hard, and making so many concessions, to try and get together with the Township, and we don’t have a vision set. He stated he did not feel this document was helping us get to that point because it is too much, too fast, too soon. Mr. Wisniewski stated he felt we needed to do a comprehensive plan and try and figure out what is going to happen with these areas. Mr. Sabatino stated he did not feel we should overlook Mr. Englehart’s comments. He stated when this was going through the Township process, the residents had a lot of concerns and they were ignored. Mr. Wisniewski stated he just wanted to start discussions on this and set some timelines, and understand how we got to this point. Mr. Wisniewski stated he felt we went wrong having one council member doing discussions on behalf of all of Council. Mr. Wisniewski stated negotiations on behalf of the City should be done by the City Manager, the law director, or a designee that has been appointed and is a non-elected official. Mr. Hackworth stated earlier this evening we saw the second of a series of documents this Committee approved to move on to Council. He stated the original TIF document was the outshoot of a debt policy we did a few years ago, and that policy had a section on TIFs and what we would and would not accept. He stated he felt we needed to develop some sort of similar development policy so Council can give direction to our professional staff. He stated they have done an excellent job on the TIF agreement, and he felt they would also do an excellent job on this agreement as well. He stated further he felt we need to discuss further where we want to go with development and whether we want to emphasize within our borders or whatever. He stated he did not like the feel of the whole document that had been presented. Mr. Wisniewski stated he felt some things have gone wrong and he would like to correct those in some manner. Mr. Wisniewski stated he felt we needed to consider our resources, because if we entered into an agreement like this, our personnel can be very busy outside of our borders. He continued we need to determine how we are going to expend our resources; who is going to make the determination about that, where staff is going to get their direction from, how are they going to execute in a manner that is not a council person’s pet project or something else, etc. Mr. Wisniewski stated he felt we needed further discussions. Mr. Sabatino stated he continues to ask that Council, as a group, have deliberations on this topic that are open to the public before going out in any direction since it affects the residents. He stated he felt we needed to get to the point of understanding what Council’s wishes are in coming up with a policy that we want staff to go out and follow through with in reference to economic development, and however much time it takes to get there we need to spend if we want to end up with something that is worthwhile. Mr. Sabatino stated further Council needs to get to the point where there is a consensus on the direction we want to go. Mr. Sabatino continued that he felt this is too important to let one individual steer us in any direction. Mr. Hackworth asked Ms Gilleland if she could provide samples of development policies from other cities for Council to review. Mr. Hansley stated most cities do have development policies or development statements. Mr. Sabatino stated he felt a difference now is that we have a professional in-house to deal with development regarding our city, and we did not have that a couple of months ago. He further stated he felt our Development Director would be the individual to provide recommendations to Council to develop a policy.
Mr. Wisniewski stated with regard to a development agreement, he would like to get this back into staff, by direction of Council, for doing any further negotiations. Mr. Smith stated he did not know if he would characterize what has been going on as negotiations yet. He stated he felt we were working on a draft to put before Council and then we can negotiate. He stated Council has not had anything put before them yet. Mr. Sabatino stated he did feel we have had negotiations, and Mr. Wisniewski stated he thought we were in a fact-gathering phase, but when he got a document that was put together by our law director that contained draft language regarding an ordinance, then he viewed that as negotiations. Mr. Wisniewski stated his personal feeling was, if we were to that point, then the law director should be involved and that has a cost value. He further stated he felt the City Manager and Development Director should also be involved. Mr. Smith stated Council has not given any direction on any document at all. Mr. Smith stated Council has never had a JEDD document to consider, however, there has been all kinds of talk about a JEDD document, and he would like to see something before Council so there is something specific to discuss rather than a concept.
Mr. Wisniewski stated he is attempting to draw this into Council’s hands and get it out of individual negotiations. He stated at the next Finance Committee he would like to have everyone give input to Mr. Fix and then we can move it into a professional stance. Mr. Sabatino stated he had a problem with continuing to use a Council member when we have a professional on our staff. Ms Gilleland stated she liked the idea of Council developing a policy and then staff working from there.
3. ADJOURNMENT. There being nothing further, Mr. Wisniewski moved to adjourn; Mr. Smith seconded the motion. Mr. Hackworth, Mr. Smith, and Mr. Wisniewski voted "Aye." Motion carried, 3-0. The Finance Committee Special Meeting adjourned at 8:48 P.M., August 9, 2006.
RESPECTFULLY SUBMITTED:
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