Community facilities district in Black Diamond rescinded by new City Council

The first community facilities district in the state received the thumbs up from one Black Diamond City Council and the thumbs down from the new council Jan. 5.

At a Dec. 27 special meeting the last act of the 2011 City Council was to pass a resolution authorizing the formation a community facilities district, a special taxing district, to complete 10 projects associated with the YarrowBay’s master planned development The Villages. The Kirkland developer is also planning to build a second MPD in the city, Lawson Hills.

The first vote was 4-1 with council members Bill Boston, William Saas, Leih Mulvihill and Kristine Hanson voting yes and Craig Goodwin voting no.

With the dawn of a new year and three new members in the seats at the dais, the council moved to rescind the resolution forming the district, and the measure passed unanimously.

To rescind the resolution, a member voting in the majority for the resolution had to bring the motion forward, which was done by Saas.

After the three council members — Tamie Deady, Joe May and Ron Taylor — were sworn in, Goodwin requested an amendment to the agenda to discuss rescinding the resolution which approved the CFD. Once the agenda was amended the members then recessed into executive session to discuss potential litigation.

Following the executive session each member gave the reason for voting to rescind the resolution.

YarrowBay had requested formation of the community facilities district to fund 10 projects related to The Villages including improvements to Roberts Drive and the intersection of Roberts Drive and state Route 169, a sanitary sewer lift station and storage facility. The total estimated cost rang up at about $26 million.

A CFD allows a developer the option to arrange long term financing for projects using municipal bonds that is paid for only by the property owners in the community facilities district, which in this case would be The Villages.

According to City Attorney Chris Bacha the city would not be responsible for repayment of the bond or at risk if the CFD failed for some reason. Bacha did note there is no way to state there is zero risk, but, he noted language in the resolution and supporting documentation protects the city from legal risk as much as possible.

Goodwin stated at the January meeting, “This is a very complex issue. There are lots and lots of questions. In a very short period of time it is hard to cram all of that information in your brain.”

Goodwin said he did feel all questions raised were answered.

“If you don’t know what your are getting into how can you even have a clue how to proceed and ask the questions how to figure it out,” Goodwin said.

He stated his recommendation was to form a special committee of council members, staff and YarrowBay representatives to work through the questions concerning the formation of a CFD.

Goodwin said, “The purpose of this resolution (to rescind the CFD resolution) is not to add delay upon delay. It is quite the reverse. It is to create a structure so that this council can move forward deliberately.”

Saas said after the last council meeting when he voted for the CFD, “I went home that night and I really didn’t have a peace about the decision I made. Much of that stems from not being fully knowledgeable and educated on both sides as to what I was really going for.”

Taylor noted, “I want to make it clear I am not ultimately going to stand in the way of CFDs.”

He also raised the issue of the future homeowners in The Villages development paying for the projects.

“Sometime down the road we’ve got to look those citizens in the eye and explain to them why your tax base is two or three times higher than anyone else’s,” Taylor said.

At the Dec. 27 meeting when the resolution authorizing the CFD passed, Councilman Bill Boston, who retired from office at the close of 2011, raised the question, “Whether the formation of the CFD is in the best interest of the city, or the opposition to it is only to delay the project…. Possibly. There is a lot of security for the city (with a CFD). The city is not responsible for the bond, growth pays for growth, jobs will be created, projects benefit current residents who pay nothing for them. Infrastructure is built earlier. Infrastructure has always been an issue. With infrastructure in this state and a lot of cities it has to fail before anyone does anything.”

Following the vote Jan. 5 to rescind the resolution which approved the formation of the CFD, Colin Lund, director of development for YarrowBay said he was disappointed about the vote to rescind the CFD.

“I think there is a lot of misinformation. I heard Mr. Taylor say a property owner in the CFD would have a tax rate two or three times that of anyone else in the city. That’s just not the case. Hopefully you read the information that was provided by the fiscal consultant that the city hired to review the CFD. If you didn’t I’m discouraged by that.”

Lund said YarrowBay answered all of Goodwin’s question.

He stated, “We have to learn to work together. I’m not sure why you’re not communicating with us…. I’m discouraged and I’m not sure where we’re headed with this, but we’ll figure it out in the next few weeks.”



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