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HomeMy WebLinkAbout05-04 RESOLUTION NO. 5-04. A RESOLUTION of the City Council of the City of Port Angeles, Washington, adopting an additional strategy of focusing public infra- structure improvements to stimulate economic development and tax base growth through NICE Neighborhoods. WHEREAS, the construction of public infrastructure improvements will stimulate )rivate investment and job-producing development, and expand the public tax base; and WHEREAS, focusing these public infrastructure improvements into commercial and 'esidential neighborhoods with high development potential produces a greater return on investment )y adding an enhanced value to the community's tax base; and WHEREAS, the Capital Facilities Plan can be prioritized to reflect this project )rientation through the NICE Neighborhoods program; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Port Angeles that the strategy contained in the NICE Neighborhoods program and its respective Goals ~nd Objectives, attached hereto as Exhibit A, is hereby adopted. PASSED by the City Council of the City of Port Angeles at a regular meeting of said ~ouncil held on the 6th dayof April ,20~~)~ ~ MAYOR iTTEST: BeCky J. Ul~n, C/~ty Clerk Ir- *-- -- IS~X~s C. D~Jk~on, Acting City Attorney -1- Exhibit "A" NICE Neighborhoods PROGRAM AND STRATEGY April 6, 2004 Submitted to City Council By Michael Quinn, City Manager "NICE Neighborhoods" Program STRATEGY This program is based upon the simple strategy that the City can stimulate economic development and increase the tax base through strategic, public capital investment in areas with high development potential. In essence, capital improvements take on an additive focus that expansion and maintenance of infrastructure be directed to areas of potential growth to stimulate development and a return on capital investment. The City uses capital improvements as a way to add value to adjacent property and stimulate private sector investment and redevelopment in order to upgrade the neighborhood and increase the tax base for overall revenue generation to the community. As this tax base increases, all taxing jurisdictions receive the value of increased operational support or decreased rate of taxation. Utilizing this strategy, NICE Neighborhoods becomes another tool for the City to use in its economic development toolbox. With this strategy, NICE Neighborhoods can truly represent New _Improvements for Community Enhancement of Neighborhoods. Growth Concepts In general terms, there are two basic ways in which the City can increase its assessed value of property: (1) Expansion through new development or annexation of new property, and (2) Appreciation of growth in value through redevelopment. Both of these ways prove important to predominately built-out cities such as Port Angeles in order to develop vacant in-fill areas and stimulate redevelopment of lower value areas. It has proven that if the area is adequately served in terms of functionality of public infrastructure and services, then the area is more likely to attract new investment and redevelopment. As this occurs, the tax base increases upon which public tax revenue is generated. This concept has long been recognized in the financing mechanism applied to tax increment financing or community revitalization financing as authorized under RCW 39.89. This allows local governments to capture future increases in property Final taxes that result from public investment in ~ Va~uc infrastructure. This increase is used to pay off the T debt associated with such infrastructure, and thereafter contributes to the tax base for all taxing jurisdictions. Dollars, Existing Value Again, this is another example of the public policy Time --> > > and philosophy to encourage job-producing private development and expansion of the public tax base through public infrastructure. The NICE Neighborhoods Program differs from tax incremen[t financing in that a long-term debt instrument is not created, and we do not involve other taxing jurisdictions in contributing their incremental tax share. NICE Neighborhoods is proposed to be financed by regular appropriations to our Capital Facility Program (CFP) or other existing revenues/reserves. NICE Neighborhoods develops pay-as-you-go projects within the designated funding priorities and'strategy of the CFP. The two programs are compatible and can be coordinated to maximize the level of public infrastructure constructed. Using the future value of property to finance public improvements is a component of both programs. Growth Incentives For the last several years, the City has focused on re-shaping its policies and operations to become a municipal government that is responsive to community needs, oriented toward achieving results, and entrepreneurial in partnering with the private sector to stimulate our local economy. The closure of the Rayonier Mill in 1997 provided the City with the real impetus for re-evaluation as it became apparent that our future economy would no longer be defined by reliance on natural resource based industries like timber and fishing. Our future must be defined by a diversification of industries, business, and neighborhoods. The City must become pro-active in defining its destiny of economic development to achieve this diversity; thus we must be creative in stimulating growth and developments. The City has used more traditional approaches to entice economic development. As examples we have: 1. Reduced or Eliminated Permit Fees - Within certain criteria, this method was used to help support the relocation decision of Westport Shipyards to Port Angeles in terms of administrative costs to the City. 2. Offered Credits to Service - The Bonneville Power Administration (BPA) electrical energy credit was extended to assist Daishowa, Inc. in their energy costs. 3. Streamlined Regulations - The City reduced certain roadway and drainage requirements to developers via low-impact/cost standards; and has formulated a proposal to allow more flexibility in parking regulations. 4. Utilized Grant and Public Improvements - The City has long used available funding from outside resources to construct public improvements to aid community development such as the downtown watermains, etc. While these methods have created success, they have done so on the periphery of development, and have been predominately oriented toward commercial rather than residential development. Thebasic commodity for development is still real property that has adequate infrastructure and is available for a reasonable value. Obstacles such as inadequate public infrastructure create pinch points in utility and transportation systems that prevent the concentric expansion of such systems. For developers to build on undeveloped land beyond such pinch points creates significant off-site improvements costs which may be financially fatal to the proposed development project. Examples of such pinch points are the lack of sewer capacity in neighborhoods like Campbell and Park avenues; and the lack of adequate roadway width in certain neighborhoods like along Milwaukee Drive. This is where our strategy of NICE Neighborhoods can be utilized to orient and focus our infrastructure investment toward those areas, both commercial and residential, that offer growth in value and tax base. It must also be emphasized that this strategy does not abandon maintenance of existing infrastructure that serves neighborhoods as well. After all, this infrastructure must be kept adequate to support our goals of redevelopment in existing neighborhoods as one of the key ways to increase the community's assessed value. Funding Process Essentially, NICE Neighborhoods becomes a strategy and policy of the City to comprehensively coordinate and direct our public infrastructure improvements in such a way that assures a portion of such capital cost stimulates new development and increases tax base to our community. However, this strategy is unable to achieve results without the commitment of funding to public infrastructure. The Capital Facilities Plan (CFP) budget process would become the funding process and would be reviewed to assure that we are incorporating considerations for infrastructure funding to stimulate such economic and community development. Consultation with private developers, financial institutions, community associations and others will aid staff in determining the neighborhood areas which best meet the goals and objectives of the NICE Neighborhoods program. In the current 2004 Budget, the CFP has appropriations totaling $100,000 for a project termed Residential Infrastructure Development. This was established as aplace-holder for funding, pending the NICE Neighborhoods program development. Depending upon the chosen project to receive this capital improvement, the City may have to amend or supplement this appropriation to achieve results in 2004. Like other capital projects, resources from other sources can be used to supplement capital funding. These sources could be public through grants or other appropriations, or private through impact fees, connection charges, owner participation, etc. The central point is that the City may elect to finance the public improvement to achieve the future development growth, and factor their rate of return on investment via various resources as they are available to the City. Staff will review the current infrastructure needs and factor in the known areas for new development potential and develop recommendations for Council review in the CFP process each year. Considering the need for development and infrastructure improvement, it is anticipated that the need will likely exceed available resources for several years and the City will have several potential projects from which to choose for CFP priority in NICE Neighborhoods. Goals & Objectives To recap the NICE Neighborhoods strategy, the following goals and objectives are incorporated: Goal: To stimulate economic development and increase the community tax base through strategic, public capital investment in neighborhoods with high development potential. Objectives: · Increase tax base through Public Capital Improvements and Infrastructure · Maximize Return on Public Investment through Strategic Placement of Infrastructure · Prioritize Improvements toward neighborhoods of high development potential · Emphasis of eligible improvements on frontage and off-site public infrastructure and facilities. · Focus on removing existing inadequate infrastructure obstacles to future development, especially those off-site. · Allow for supplemental, financial participation and leverage from outside resources, grants, latecomer connections, impact fees, LID's and other sources. · Authorize the capture of incremental property tax value for designated projects as a calculated funding source for public improvements to be dedicated as necessary to the NICE Neighborhoods Program. · Incorporate an on-going program appropriation in the CFP for NICE Neighborhoods contingent upon need and available resources. · Emphasize economy of scale whereby preference is given to attract larger or higher value development over smaller and lower value development. · Communicate with the development and financial community interests to determine needs for project selection. Through the adoption of the above goals and objectives, the City anticipates that this strategy of public capital investment will enhance our community. It will not only make our neighborhoods nice for living, but our community prosperous and dedicated toward improving our quality of life.