HomeMy WebLinkAboutLatecomers Reimbursement Agreement with Woodbridge Development for 5 Mile Sewer~i7A CGUtiT~' R£CORf1ER
,t. CrhVlU ~f~VARR~
~ ~w.1E~Ap9n
2n0~ NO -$ P~f 2~ 46
RECORDEO-REO EST OF
EEEB
lo2i~~sar
MERIDIi4(V CI f'i
This sheet has been added to the document to
accommodate recording information.
Latecomers Reimbursement Agreement
For Five Mile Creek Sewer with O'Neill Enterprises
Woodbridge Community LLC.
Approved by Meridian City Council May 29, 2002
LATECOMERS REIMBURSEMENT AGREEMENT
For Five Mile Creek Sewer
THIS AGREEMENT, is made and entered into this 2Q day of m ~~
'LOb 2 , by and between THE CITY OF MERIDIAN, a Municipal corporation of the State
of Idaho, hereinafter referred to as "City" and WOODBRIDGE COMMUNITY LLC, an Idaho
limited liability company, hereinafter the "Water User."
Recitals
WHEREAS, Water User is the sole owner in law and/or in equity of certain real
property in Ada County, Idaho, known as Woodbridge Subdivision, and hereinafterreferred to as
the "Property"; and
WHEREAS, City provided for the installation of a sewer line which benefited the
Property; and
WHEREAS, the Property is being developed in two separate phases, known as
Woodbridge Phase I and Woodbridge Phase II; and
WHEREAS, the City and the Water User have agreed to the fee to be paid by
Water User to City for the installation of the sewer line, hereinafter the "latecomers fee."
NOW THEREFORE, in consideration of the covenants and conditions set forth
herein, the parties agree as follows:
1. INCORPORATION OF RECITALS: The above recitals are contractual
and binding and are incorporated herein as if set forth in full.
2. LATECOMERS FEE: The City and the Water User hereby agree that the
latecomers fee to be assessed to and paid by Water User to the City is the sum of One Hundred
Thirty Seven Thousand Eight Hundred Ninety Seven and 18/100 Dollars ($137,897.18).
3. ALLOCATION OF LATECOMERS FEE: The latecomers fee shall be
allocated between Woodbridge Phase I and Woodbridge Phase II as follows:
Woodbridge Phase I: $86,835.40
Woodbridge Phase II: $51,061.78
4. SCHEDULE FOR PAYMENT OF LATECOMERS FEE: The latecomers
fee is payable as follows, to-wit:
LATECOMERS AGREEMENT - 1
For Five Mile Creek Sewer
Phase I: $86,835.40, or so much thereof as is unpaid, shall
bear interest at the rate of 5.75% per annum from January 1,
2002, and shall be paid in three (3) equal, annual
installments of $28,945.13 each, plus accrued interest, as
follows:
On December 31, 2002
On December 31, 2003 and
On December 31, 2004, OR upon the sale of the
final lot in the Woodbridge Phase I development,
whichever event occurs first.
Interest shall be paid in addition to the annual installments
due.
Phase II: $51,061.78 shall bear no interest.
The City hereby acknowledges a payment made by Water
User in the sum of $27,296.00 on May 10, 2002, and this
amount is hereby credited against the sum due and owing
under Phase II.
The City hereby acknowledges a second payment made by
Water User in the sum of $23,765.78 on June 12, 2002, and
this amount is hereby credited against the balance that is
due and owing, arid with said payment it thereby causes the
sum that was due and owing to be paid in full under Phase
II. The City may now place its signature on the Final Plat
for the Woodbridge Phase II development.
5. DEFAULT: Any failure to perform under the terms and conditions ofthis
Agreement shall be a default.
6. REMEDIES: This Agreement shall be enforceable in any court of
competent jurisdiction by either City or Water User or by any successor or successors in title or by
the assigns of the parties hereto. Enforcement maybe sought by an appropriate action at law or in
equity to secure the specific performance of the covenants, agreements, conditions, and
obligations contained herein.
In the event of a material breach ofthis Agreement, the parties agree that City and
Water User shall have thirty (30} days after delivery of notice of said breach to correct the same
LATECOMERS AGREEMENT-2
For Five Mile Creek Sewer
prior to the non-breaching party's seeking of any remedy provided for herein; provided, however,
that in the case of any such default which cannot with diligence be cured within such thirty (30)
day period, if the defaulting party shall commence to cure the same within such thirty (30) day
period and thereafter shall prosecute the curing of same with diligence and continuity, then the
time within such failure may be cured shall be extended for such period as may be necessary to
complete the curing of the same with diligence and continuity.
7. NOTICES: Any notice desired by the parties and/or required by this
Agreement shall be deemed delivered if and when personally delivered or three (3) days after
deposit in the United States Mail, registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
CITY:
c/o City Engineer
City of Meridian
33 E. Idaho Ave.
Meridian, Idaho 83642
WATER USER:
c/o O'Neill Enterprises LLC
Manager
168 N. 9s' Street, Ste. 200
Boise, Idaho 83702
A party shall have the right to change its address by delivering to the other party a
written notification thereof in accordance with the requirements of this section.
8. ATTORNEY FEES: Should any litigation be commenced between the
parties hereto concerning this Agreement, the prevailing party shall be entitled, in addition to any
other relief as may be granted, to court costs and reasonable attorney's fees as determined by a
Court of competent jurisdiction. This provision shall be deemed to be a separate contract
between the parties and shall survive any default, termination or forfeiture of this Agreement.
9. TIME IS OF THE ESSENCE: The parties hereto acknowledge and agree
that time is strictly of the essence with respect to each and every term, condition and provision
hereof, and that the failure to timely perform any of the obligations hereunder shall constitute a
breach of and a default under this Agreement by the other party so failing to perform.
10. BINDING UPON SUCCESSORS: This Agreement shall be binding upon
and inure to the benefit of the parties' respective heirs, successors, assigns and personal
representatives, including City's corporate authorities and their successors in office. This
Agreement shall be binding on the owner of the property, each subsequent owner and each other
person acquiring an interest in the Property. Nothing herein shall in any way prevent sale or
alienation of the Property, or portions thereof, except that any sale or alienation shall be subject to
the provisions hereof and arty successor owner or owners shall be both benefited and bound by
the conditions and restrictions herein expressed.
LATECOMERS AGREEMENT - 3
For Five Mile Creek Sewer
11. INVALID PROVISION: If any provision of this Agreement is held not
valid by a court of competent j urisdiction, such provision shall be deemed to be excised therefrom
and the invalidity thereof shall not affect any of the other provisions contained herein.
12. FINAL AGREEMENT: This Agreement sets forth all promises,
inducements, agreements, condition and understandings between Water User and City relative to
the subject matter hereof, and there aze no promises, agreements, conditions or understanding,
either oral or written, express or implied, between Water User and City, other than as are stated
herein. Except as herein otherwise provided, no subsequent alteration, amendment, change or
addition to this Agreement shall be binding upon the parties hereto unless reduced to writing and
signed by them or their successors in interest or their assigns, and pursuant, with respect to City, a
duly adopted resolution of City.
13. EFFECTIVE DATE: This Agreement shall be effective at such time as
both parties have executed this Agreement.
IN WITNESS WHEREOF, the parties have herein executed this agreement and
made it effective as hereinabove provided.
CTI'Y OF MERIDIAN
.~ ~y
~' ~,r~
REAL
~~
~y~~r~Ur~s~(`l , `\\\~~
t
Mayor
:Attest:
'~~~~ ~-.
City Clerk
Cif,
LOGE COMMUNITY LLC
Enterprises LLC, its manager
EeYCk o`Nei11, menage-~'
"Water User"
LATECOMERS AGREEMENT - 4
For Five Mile Creek Sewer
STATE OF IDAHO, )
County of Ada,
ss
On this o?8'I'h day of 0 C-10 b~ in the year 2002, before me, a
Notary Public, personally appeared~e~iele0'Neill, known or identified to meto be the Manager~~'
oencK.
of O'Neill Enterprises, LLC, who executed the instrument on behalf of said O'Neill Enterprises,
LLC, and acknowledged to me that such O'Neill Enterprises, LLC executed the sameron behal~r
of 0.nd 0.s ma~nage~ o'F Woodbridge GommOni'rr 1.LC .
Sti
ore r ~
(Seal) ? * ~~.~ ~~~~ ~ ~~~
e * N Public for Idaho
I~UBL1G
'•.~~j, ~ Residing at: e~/S~
••,9TF ~F i9~.`2` Commission Expires: /02131 I0~
''•-
STATE OF IDAHO,)
County of Ada,
ss
On this ~5~ day of ~,oU~vh-~~ in the year 2002, before me,
a Notary Public, personally appeared Robert D. Come and William G. Berg, Jr., known or
identified to me to be the Mayor and Clerk, respectively, of the City of Meridian, who executed
the instrument or the persons that executed the instrument on behalf of said City, and
acknowledged to me that such City executed the same.
(Seal)
OVL6VwT 10Yv~`7W
Notary Public for~ I~dpa~h/o~~,
Residing at: /ddC~-W ~V ~(~
Commission Expires: - Z -OS
i~z:~wurkwllMa;aian~rteriaianlat~mersagreeme~torfivemi~eceu'er.aoc
LATECOMERS AGREEMENT - 5
For Five Mile Creek Sewer
r. ~ ~~ 3
~ 'CITY OF ~~~~ ~~
~_~~~1 ~Y1G~1G" ~-.-~~~ ~,, ,
n ~ - ,
~ IDAHO
tip,
/n,~T„ensut~rV~u-~~Y y/
SINCE
1903
MAYOR
Tammy de Weerd
CITY COUNCIL MEMBERS
Keith Bird
Joseph W. Borton
Charles M. Rountree
Shaun Wardle
CITY DEPARTMENTS
City Attorney/HR
703 Main Street
898-5506 (City Attorney)
898-5503 (HR)
Fax 884-8723
Fire
540 E. Franklin Road
888-1234 /fax 895-0390
Parks & Recreation
7.1 W. Bower Street
888-3579/fax 898-550].
Planning
660 E. Watertower Lane
Sui#e 202
884-5533 /fax 888-6844
Police
1401 E. Watertower Lane
888-6678/fax 846-7366
Public Works
660 E. Watertower Lane
Suite 200
898-5500/fax 895-9551
- Building
660 E. Watertower Lane
Suite 150
887-2211/fax 887-1297
- Wastewater
3401 N. Ten Mile Road
888-2191/fax 884-0744
- Water
2235 N.W. 8th Street
888-5242 /fax 884-].159
ADA COUNTY RECORDER J. DAVID NAVARRO AMOUNT .00
BOISE IDAHO 03/09/06 02:08 PM
RECORDEDe REQUEST OF ~II ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~ ~~~
Meridian Ciry 106036634
RELEASE OF AGREEMENT
LATECOMERS REIlVIBURSEMENT AGREEMENT
for
Five Mile Creek Sewer
Woodbridge Community LLC
and
CITY OF MERIDIAN
The agreement entered into May 29, 2002 by and between the CITY of
MERIDIAN, a municipal corporation of the State of Idaho, and Woodbridge
Community LLC has been satisfied by the City of Meridian. 11Ve request you
release the agreement recorded 11/8/2002 under your instrument nu~l~~~,~" ~~~ ~;> a~,,
#102131.501. / \,*~~~,~ ,,
~y~p ,
_ /' ~ t~~.
/~GL~.~ ~,,... ._
William G_ Berg, Jr- y C "
t ,,
~' , ~,r
~.
C~ f y , w
STATE OF IDAHO ) '~•,,~"~ r"~E~,~~`~~' ~'~y
SS
County of Ada )
On this~_ day of Y1~CXJlGG~ 2006, before
me, a Notary Public, personally appeared William G- Berg, Jr., know or identified
to me to be the City Clerk, respectively, of the City of Meridian, who executed. the
instrument or the person that executed the instrument of behalf of said City, and
acknowledged to me that such City executed the same.
~ a~1 ~~"~ ~ti L.~ ~
Notary Public for Idaho
Residing at: ~'~VLc ~ ~j~ ~ ~~
Commission expires: 1 E" --I S ~ l 1
CITY HALL 33 EAST IDAHO AVENUE MERIDIAN, IDAHO 83642 "(208) 888-4433
CITY CLERK -FAX 888-4218 FINANCE & UTILITY BILLING -FAX 887-4813 MAYOR'S OFFICE -FAX 884-8119
Printed on recycled paper
Meridian City Council Meeting
May 29, 2002
Page 10 of 52
De Weerd: I think we need td share with ITD how they can get it done in a short
amount of time.
Corrie: Okay. Next is the Department Report. Finance Department. Stacy
Kilchenmann, Woodbridge.
7. Department Reports:
A. Finance Department -Stacy Kilchenmann:
3. Woodbridge Latecomers Payment Agreement:
Kilchenmann: Mr. Mayor and Council. The first item under my Department
Report for you to consider is actually a latecomer's agreement type item. I think
you'll find in your packet is a proposal by O'Neill Enterprises for the Woodbridge
Subdivision concerning a payment agreement for their latecomer's fees. I think a
representative of O'Neill Enterprises is here to give you a presentation or explain
why they'd like to have this .,particular payment arrangement with your
permission.
Corrie: Okay. Mr. O'Neill. Name and address, please.
O'Neill: Derrick O'Neill,168 N. Ninth, Suite 200, Boise. Mayor and members of
the Council, thanks for hearing me tonight. Just trying to make sure you all have
the most recent document. I sent over a document this afternoon dated May 29,
2002. Do you have the document? Did you get that?
Corrie: No.
De Weerd: I didn't pick up my mail.
Bird: I've got it right here.
O'Neill: I've got some extra copies.
Bird: I've got it right here. It's in our box.
O'Neill: First, I want to start with apologizing in taking your time tonight but a
couple of other apologies. Apparently, there was some words from an employee
or a consultant of mine, Scott Beechum, today and a couple of your employees
that I don't endorse or condone. That's why I'm sitting here tonight. I'm talking to
you as a principle of the project and speaking to you about my feelings. So, I
want to apologize to Stacy if there was anything that came across as
unprofessional. The second thing I want to apologize is that there's been some
words or maybe understandings that if we don't get what we want, we're going to
protest this whole thing. That's not the case at all. The reason I'm sitting here is,
I think there's a solution that's good for the City and a solution that is good for us.
Meridian City Council Meeting
May 29, 2002
Page 11 of 52
But, those two points, I've clarifications. Maybe I'll give you some time to kind of
scan through the letter dated May29~'. That is a revised note that gives you a
little bit of history of o ur view of where this project is and then a response to
somewhat curve ball, I guess, thrown at us a day or two ago in terms of the
Finance Department and Public Works Departments feelings. So, I'm going to
pause fora moment and let you scan that letter and then I'll walk through it.
Corrie: Derrick, I have a question on this five-year plan. Was that yours or
where did that come from?
O'Neill: That came from a discussion with Public Works and them saying we're
comfortable with the amount and if you want to put in front of Council a different
program, we're not going to stop you from doing that. That was something we
put in front of the Public Works Department and, in fact, cgmmunicated with the
Finance Department some time ago and then we also had it in front of you as
part of a packet when you reviewed Phase Two Preliminary Plat, Final Plat.
Didn't ask you to take action but it was there to inform you that we had this issue
on the table. So, that was our original proposal that we thought would make
sense and work. In the last three hours, I've reviewed the comments from Public
Works Department or the Finance Department primarily and altered that five-year
program to a program I thought was maybe more feasible for the City and
something that we could live with.
Nichols: Mr. Mayor?
Corrie: Mr. Nichols.
Nichols: Mr. Mayor, if I could ask a question of Gary? Gary, is the latecomer for
Woodbridge computed on a per acre basis or a per equivalent residential unit
basis? Maybe it's a question for Brad.
Watson: Mr. Mayor. Council Members. Mr. Nichols, it's computed on a per acre
basis.
O'Neill: It appears that you've kind of had a chance to get through that. Maybe
I'll walk through and help re-summarize it then I'll take any questions. As you
guys recall, we've b een i n f ront o f y ou a nd i is a ctually b een q uite s ome t ime
since we came in front of you with original PUD for Woodbridge. At that time, it
was still unclear of the way this latecomer's fee would be handled and whether it
would be a per acre or for etc.,etc. We, at that time, agreed that there would be
some sort of exposure and some sort of cost but we also agreed that it would be
something that we'd have to work out. Obviously, that got to be a real tough
project for the City and I can understand why. So, it took quite some time until
they even came and said here's a proposed amount. So, we're-have not been
and still are not in protest that there's some dollars that we need to contribute
towards t hat i mprovement. H owever, w hen w e s tarted that p rocess a nd e ven
went through the first phase of this, it still was not-that issue hadn't been
Meridian City Council Mee[ing
May 29, 2002
Page 12 of 52
brought to the table. I'm not sure exactly why. It's just been hard to finalize it, I
guess. So, in moving through that, I think we came up with a program where the
Public Works Department re-looked at the methodology. They re-looked at the
dollars and they came up with this per acre amount that we felt comfortable with.
But, given the fact that this process had been going for three or four years, we
felt that it would be reasonable to be able to have some terms to pay that. When
we go get a project financed, we usually try to put those things up front in
financing a project and when you don't know what that exposure is or what the
dollars is, it's very difficult to do that. As you guys are probably aware, when you
put a project in, there's a ton of dollars that go in up front and we don't see a
return for quite some time. So, from a cash flaw standpoint, $130,000 hit is a big
hit to us when we don't have it financed or a plan to pay for it. So, thus came the
five-year payment program that we've put in front of you. We actually made a
payment towards that. We had discussion with the Finance Department. Not
with Stacy. A couple of days ago they e-mailed and said that it looked like an
agreement that would make sense but the City Council, obviously, had to review
it. We understood that all along. I didn't want to put Public Works or the Finance
group in a position where they had to make a decision. I realized fully that they
were going to put it to you guys and you were going to look at it and make the
decision. As of yesterday, they came back and said, you know, maybe we ought
to look this a little differently and so I've tried to react quickly to put in front of you
a program that I think is a win, win position. I understand this has been
extremely difficult for you guys in terms of latecomers fees now and in the past. I
think this is not setting precedent. I think it has got some unique circumstances
associated with it and it's a project that was put in quite some time ago. The full
methodology and fee calculation wasn't done absolutely up front so I could
probably go on and on but I think you understand the element of what I'm
proposing. I do think it's a good thing. It may not be a great thing but I think it's a
fair thing for the City. It's a fair thing for us and we're prepared to do it. I guess
I'd stand for questions and we can move forward.
Corrie: Okay. (inaudible) discussion?
De Weerd: Mr. Mayor?
Corrie: Mrs. De Weerd.
De Weerd: Well, it looks like on the Woodbridge or O'Neill Enterprises has
moved their proposal from the five-year to the three-year and from what I read in
the memo dated May 23`d, the City has entered into a couple of three-year plans.
Is that correct, Gary, or Brad or Stacy? I don't know who's the appropriate
person to answer.
Kilchenmann: Mr. Mayor. Members of the Council. According to Reta, there
have been two occasions in the past where the City has entered into a payment
plan. I can't recall the exac# developments. They were smaller developments.
It's not a typical precedent of the City to enter into a payment plan but there have
Meridian City Council Meeting
May 29, 2002
Page 13 of 52
been two occasions where it has been done. We have actually never agreed on
any particular payment plan because that's not an area of our responsibility.
That's your responsibility. I think an assumption was made that perhaps
payment would indicate acceptance and I don't think either Public Works nor
Finance ever purported-or that we could sign an agreement plan. We did make
a suggestion-a member of my staff suggested to Mr. Conger a few weeks ago
that maybe we can consider an accelerated payment plan with three payments
and she was told that he would not even present that proposal to his client. Any
discussions of alternate payment-and I actually have a record of phone calls
and dates. We were told that would be an alternative.
De Weerd: It looks from this letter that now it is.
Kilchenmann: As of about 4:30 today, it did become one.
De Weerd: Is this something that is along the lines of what you were thinking
and would this be agreeable?
Kilchenmann: Obviously, it is in the best interest of the City to have the
latecomer fee paid sooner rather than later. So, that really, is something that I
think the Council and the Mayor need to make a decision about.
Bird: Mr. Mayor?
Corrie: Mr. Bird.
Bird: Gary, usually on latecomers fee, when you-the-somebody puts the trunk
line through and then when you bring your development in, you pay up front or
pay as you get your development, not on payment plans normally, is it? I mean,
it's usually you pay if you get a unit of 80 acres, you pay for the 80 acres at that
point.
Smith: Mr. Mayor. Council Members. Councilman Bird. We started recently a
policy of requiring that where the total Final Plat acreage pays the latecomer's
fee at the time that the plat is signed. That's for each development lot. Cost per
lot. In the past, we've collected latecomer fees at the building permit stage.
Each time a building permit comes in, we get the latecomer fee. We changed
that policy so that we could recover the money faster for the developer that
extended the line to serve the properties that were subject to the latecomer fee.
This was an item that was discussed with the process improvement group. I
think it was acceptable to everyone at that time.
Bird: Mr. Mayor?
Corrie: Mr. Bird.
Meridian City Council Meeting
May 29, 2002
Page 14 of 52
Bird: On these latecomer's agreements, Gary, I know they're a real hassle but,
you know, the money is either put upfront by us or another developer to get it out
there and neither one of us are really bankers or in the banking business. I don't
know if Woodbridge-I'm sure that when they started selling their property in
2000 or-I'm sure it was the first of 2000 that this sewer trunk line fee was all
figured in all their lots. I don't know how many lots they've sold, how many
houses they've built or anything like that but I have a real problem of a five-year
payment deal.
De Weerd: That's not the request anymore.
Bird: No. I know. They're requesting the three. Now I have a problem with that.
I have a problem with latecomer's fees, period. I absolutely have a problem with
it. I just don't think-we've put the money out. We have paid for it or some of
their developer has. I don't know who put in the Five-Mile. Did we put in the Five
Mile Trunk?
Smith: Yes, sir, we did.
Bird: Okay. We put it out so that's our money out. This development, this 80
acres, is getting the benefit of it right now. Am I not right?
Smith: Yes.
Bird: I just have a real problem with a payment plan but if its been a policy in the
past, we might have to live with if. But I think once the Final Plat comes in that
the trunk line fee is either paid and I hope that before long that we have a
different system so that we don't have to worry about latecomer fees.
Nary: Mr. Mayor?
Corrie: Mr. Nary.
Nary: I'm curious as to what discussion was had between December from this
letter up to Brad in May when this $27,000 payment was made. Was there some
ongoing discussion as to what was-going on or how this was going to get paid or
how did that evolve?
Kilchenmann: Mr. Mayor. Members of the Council. Councilman Nary. The first
time Finance was aware of it, we had invoiced the latecomer fee as we typically
do and it had gone through our accounts receivable system.
Nary: Is that the $120,000 invoice that's attached for Phase One?
Kilchenmann: Yes. Then when the charge was lowered, we sent a credit memo.
Then we got the letter saying that it was going to be a five-year payment plan
and it had been approved by Public Works and the Council. Since we did not
Meridian City Council Meeting
May 29, 2002
Page 15 of 52
have a record of that agreement, we asked Public Works and they said they had
not made that agreement. That was basically the discussion and then we got a
payment for the first payment and we went to Mr. Nichols and said we need
some sort of formal or some sort of agreement between ourselves and the
developer to do a payment plan that would be signed by both sides because we
don't have collateral or anything. He said you've got to go to Council to have it
approved. There was some discussion between my staff member and different
people representing the development about what the credit memo was for and
concerning that they weren't able to make the payment as we invoiced it.
Bird: Mr. Mayor?
Corrie: Mr. Bird.
Bird: Stacy, it says we have refunded $68,000. In other words, we credited. We
didn't refund a check to 'him, did we?
Kilchenmann: Mr. Mayor. Members of the Council. Councilman Bird. We
literally refunded in cash. The other people that-
Bird: Oh, the other people.
Kilchenmann: Right.
Bird: Not this developer.
Kilchenmann: Correct.
Bird: Excuse me.
De Weerd: Mr. Mayor?
Corrie: Mrs. De Weerd.
De Weerd: So, was it why this was prolonged for so long, was it we did not have
a clear policy. You know, I can understand what Mr. O'Neill is saying. If you
don't b udget it, it's not there. I f they were not clear that t hey had to pay the
whole amount up front and then it was delayed because the fees needed to be
recalculated-did we not have a clear policy and now we have tightened that up
and so now we do have a clear policy? Is that what I'm understanding?
Smith: Mr. Mayor. Council Members. Councilwoman De Weerd. We've always
had the policy. The policy that we've had in the past has been payment of the
latecomer fees at the time the building permit is taken out. We did not have an
actual and accurate number for the latecomer fee per lot for the Five Mile Trunk
extension at the time the development came, the time Woodbridge came in.
Woodbridge was aware that there would be a latecomer fee for the sewer. They
Meridian City Council Meeting
May 29, 2002
Page 16 of 52
were made aware of that at the time the plat was being processed. There wasn't
an accurate number given to them at that time. I do not recall what kind of
estimated number there was given to them but a number was given to them.
De Weerd: So, Gary, did they pay then per lot?
Smith: No.
De Weerd: Then i t w asn't for t he t otal a creage o r for t he first b uilding permit
issued, they paid for the whole acreage. I'm just trying how to understand how it
was done versus now how we are doing it.
Smith: As I understand it, the invoice that was sent to the Woodbridge
developers was for the entire first phase of the subdivision.
Nary: Mr. Mayor?
Corrie: Okay. Are you through, Gary?
Smith: I don't know if that answered the question. Historically, we've-
Nary: Well, I'm looking at it and it says it was sent approximately sometime after
January 31St and was received on February first by O'Neill Enterprises for
$120,656. I h ave a h and t ime-I u nderstood w hat you s aid, M r. O'Neill, but I
have a hard time believing that on February first you didn't think that we had
accepted that five-year proposal of that letter to Brad Watson. On February first,
we s ent you a b ill f or $120,000 a nd n othing g of d one. O r d id i t? Was there
something mare done?
O'Neill: I can have a response to that (inaudible). If you want to just keep asking
questions, then I want to respond to each of the comments because I think there
are some responses to it.
Corrie: All right.
Bird: Mr. Mayor?
Corrie: Mr. Bird.
Bird: A follow-up to Gary. Gary, between the time that they started getting
building permits and we sent them out a latecomer's bill or whatever you want to
call it, had they been charged some of the fees that supposedly that we have
been charging in the past on building permits for the latecomer or for the trunk
line? And had they purchased any?
Smith: Mr. Mayor. Council Members. Councilman Bird. They were not charged
on the per lot basis for the latecomer fee. Stacy said that the first invoice was
Meridian City Council Meeting
May 29, 2002
Page 17 of 52
sent in September of 2001. Brad indicates that he understood or remembers that
it was a condition of the approval of the plat that the latecomer fee would be paid
for the total plat.
Bird: That's what I'm thinking. I think that is 100 percent right and there was
nothing mentioned on payments on that. It was to be paid at the plat.
O'Neill: I think I can maybe try to respond because I think there's a lot of other
information and I think it's important that the information is clear. I agree with
Councilman Bird 1 00 percent. I don't I ike I atecomer's fees. I'd rather h ave i t
figured up front. I'd rather deal with it. However, we're in an unfortunate
situation where we worked hard to try to deal with and it took the City over two
years to come up with a fee and a way to charge that fee and we agreed and
understand that there would be a fee paid but we didn't know what that was and
it took them an awful long time to come to a conclusion on what the total cost or
how the fee would be and go through that process. So, I think, this is a little bit
different circumstances than the usual situation. And B, I think that prior to the
new policy, we had processed Phase One plat and the approval and that was
before t he p olicy of c harging i t a II u p front. S o, I think that i s a l ittle d ifferent
circumstance as well. If it was based on the building permits, I think, at the time,
we would have been able and agreed to do that but it wasn't at the time.
Bird: That's what I'm saying. We had the agreement that you would pay that at
the plat time instead of the building permits. When you didn't pay it at the plat
time and it wasn't taken out on the building permits, you should have realized
that you had-and I realize it's three different prices-
O'Neill: There are some different phases, too. There was Phase One of
Woodbridge, which is 164 home sites. That was prior to any of this agreement
ever t alked about i n t erms of t he s pecific fees. A nd t hen P hase T wo, w e d id
realize and the condition read that we would either pay the fee or we would come
to an agreement with Council on a fee and a payment program. That's really
why we're sitting here with you today. If it would have been just the condition
that said we were to pay the fee and I agreed to that, I wouldn't be sitting in front
of you. But it said we had the opportunity to put in front of you a program that we
would think is fair and you guys could decide on that. So, it isn't as clear cut as
just saying that we agreed to pay the fee at the time of the Phase Two final plat.
That's not how it read. I do think it's a little different and I agree and understand
your frustration but I think this is a little bit different circumstances. In terms of
Mr. Nary's question, in September, we received a bill and it was based on a
methodology-
***End of Side One***
O'Neill: --and the Public Works Department and the Finance Department didn't
discuss that we were still working on a fee that we were comfortable with, that
they were comfortable with, that they could stand behind and so a number came
Meridian City Council Meeting
May 29, 2002
Page 18 of 52
out that was a number you guys hadn't even approved because you didn't
approve the sewer latecomer's thing until January. So, we got a bill in
September that was based on something that you guys hadn't even agreed could
be billed. So, I think that is a different issue. So, therefore, we said if the City
Council hasn't even approved it, we're not completely comfortable with the bill.
Then, come January or February, we got another bill and that was at the time
that the City Council had approved the fee amount and it said that the fees have
been changed and adjusted and here's a credit based on those formulations. At
that time, we did know clearly, Mr. Nary, that there was going to be some sort of
payment but we also were relying on our condition for Phase Two that prior to the
City Engineer signing the Final Plat, you guys would have in front of you this
decision to make. And you could either decide that we pay Phase Two fees at
once or we could work out a payment program and, therefore, I proposed a
payment program. As it relates to Tammy's question, do we have a clear policy?
Absolutely not. That's why it was such a frustrating process to go through.
There wasn't a clear policy. It was building permits and it was -we're in the
middle of something, we don't have it figured out, so we don't have a policy, so
we'll work through the process. So, we were getting moved all over the board.
The building permit issue was there but the City didn't that. The Finance
Department didn't like it because it's very hard to measure and monitor and
check if you're getting the fees in or not. That policy changed in mid-stream
while we were going through the project. Gary did make us aware that there was
a fee and we definitely understand that. So, I guess, I feel like we're thrown in
the barrel a little bit. Fully understand as a developer going into a city, if there
are improvements that are serving your property that have been put in by
someone else, you should get reimbursement for that. In fact, we have had a
request in front of the City to get reimbursements for oversized sewer line and
water line we put in as Woodbridge for over eight months. We have not had any
response to that request. The water is helping serve the Police Department and
there are three lots in that subdivision that are being served by the sewer from
the oversized line in Woodbridge. We haven't had any feedback so we're on the
other side of it in that case and want to move that process forward. This is not a
good thing. I understand it but I think there's a point where we can work
together, should be able to work together. Just one other thing. I got an a-mail
and partly that's why we would be moving down the direction of thinking that
there was the ability to do this. This is an e-mail from Reta in the Finance
Department to Brad. It said, I just talked to Mr. Conger about the Woodbridge
latecomer payments and told him we were going to agree to the five-year
payment terms. This is based on 1,706 an acre for 80 acres, 136 with a 4%
interest. I wanted to let you know that we did in fact receive the first payment last
Friday so it looks like everything should be a go.
Bird: What's the date?
O'Neill: The d ate on it was May 14th. And I didn't make that payment at all
constituting the fact that that would mean the City's acceptance. I know full well
that you guys are going to have to deal with this issue.. That led us down the
Meridian City Council Meeting
May 29, 2002
Page 19 of 52
track that's a little wrong and it just hasn't been a good situation. I think there's a
situation here that works.
Bird: Mr. Mayor?
Corrie: Mr. Bird.
Bird: This question is for you. Were you aware of this?
Corrie: No. I-
Bird: This five-
Corrie: I see the a-mail, yes.
De Weerd: We've had this one for several months.
Bird: Which one?
De Weerd: Requesting afive-year plan.
Bird: Well, yes, I know but have you seen the a-mail?
Corrie: The e-mail from Rita to Brad-
Bird: May 14~h
Corrie: Just talked to Mr. Conger and told him we were going to agree to the
five-year payment term. Is Brad here?
Bird: Yes.
Corrie: Brad, did you get this memo?
Bird: E-mail.
Corrie: Stacy?
Watson: Mr. Mayor. Council Members. I have one similar to it. I don't think I
have that exact one in front of me. But from what l understand, they weren't-
well, obviously, Finance doesn't have the ability to enter into a financial
agreement on behalf of the City but from Public Works prospective, from the very
beginning, the payment schedule was not up to us. We figured out the fee and
finally came to an agreement with O'Neill Enterprises once we did that. We had
told them, subsequent to Derrick's letter to me, that any payment plan was up to
the Finance Department and the City. This memo, this e-mail, was probably
precipitated by me because I have Woodbridge Number Two Plat in my office for
Meridian City Council Meeting
May 29, 2002
Page 20 of 52
signature right now. One of the conditions that you approved was that they had
to make final payment or payment of latecomer fees or come to an agreement on
a paymeht plan prior to me signing that. So, that's why I was acquiring at the
Finance Department whether those payments or arrangements had been made.
Kilchenmann: Mr. Mayor and Council. Reta, shortly after she sent this e-mail,
she was notified that she did not have the authority to agree to a payment plan
and we did immediately notify the developer that it would have to go before
Council.
Corrie: I see that, yes, you did.
O'Neill: I certainly am aware that it was going to come in front of you guys.
Bird: Mr. Mayor?
Corrie: Mr. Bird.
Bird: Brad, I didn't recall on this second phase as that was the agreement, too,
on the plat that we would finalize the latecomer's fees or the fees. Whatever you
want to call it. So, what is your recommendation, Public Works?
Nichols: Mr. Mayor? If I may interrupt?
Corrie: Go ahead.
Nichols: While we were considering their response, if I may ask some questions
of Mr. O'Neill?
Corrie: Okay.
Nichols: Mr. O'Neill, in the first phase, did I hear you say there were 146 lots?
O'Neill: I said 164.
Nichols: 164 lots. How many of those lots have been sold?
O'Neill: I don't know how many of them have been sold. I think probably
somewhere in the neighborhood of sixty.
Nichols: Okay.
O'Neill: And that would be sold to a builder not to a consumer. Probably sixty
permits but I'm not sure if that's what you're looking for.
Nichols: In the second phase, how many lots were there.
Meridian Ci[y Council Meeting
May 29, 2002
Page 21 of 52
O'Neill: I think there's 113 or 114. Brad would probably know better. I think 114.
Those don't include common lots but those are the-I think there's a total of 279
for the whole project.
Nichols: Okay. Thank you. When you sold these first 60 lots, did you build in a
price based on some sort of estimate of the per lot portion of the latecomer fee
even though you didn't know exactly what it was.
O'Neill: You know, we didn't. We built in the price as soon as we came to the
conclusion on the total amount so we now have built them in there but at the time
when we first sold them, we didn't built it in the price because we had no clue
whether it would be 100 or 500 or 2,000.
Nichols: Did you build in that price in December when you sent the first letter or
was it-when did you build the price in?
O'Neill: I think it was December. It was right around that time, December,
January, probably.
Nichols: So, the 60 lots that have been sold, how many have been sold since
December?
O'Neill: That, I don't know. Twenty.
Nichols: Okay.
Bird: Mr. Mayor?
Corrie: Mr. Bird.
Bird: Stacy, on this latecomer's fee, three years at 4%, do we recoup our costs
back? I mean, we're based of 1996 dollars.
Nichols: I think the dollars were adjusted in the fee calculation.
Bird: I don't think when it comes from 26 down to 17, I don't think it's adjusted. I
have a hard problem. I can't figure out why we all of a sudden lose $900 an
acre. I don't know. We need to decide something instead of sit here and argue.
Corrie: Mr. Nary.
Nary: Did we get an answer to that? I mean, at 4%, are we getting any-I mean,
are we spending more money to collect it? Is that a fair interest rate? I mean,
it's-
Kilchenmann: Mr. Mayor. Members of the Council. I'm going to let Brad answer
that because he knows what the actual costs were.
Meridian Cily Council Meeting
May 29, 2002
Page 22 of 52
Watson: Mayor. Council Members. The latecomer's agreement that you
approved in recent months was based on actual dollars in 1996, 1997 once the
project was closed out. The $1,706 per acre fee that is calculated in that
latecomer agreement is the initial. Those fees increase by 4% each year for ten
years in the agreement that was approved. Back to your original question, I don't
know that we necessarily recover all our costs if we're only-we're starting five
years later with $97.
Corrie: So, no.
Watson: I'm not an economist but I would guess, no.
Corrie: Thank you.
De Weerd: I don't even think he has to be an economist for that one.
Bird: Mr. Mayor?
Corrie: Mr. Bird.
Bird: Mr. O'Neill, I know you told Mr. Nichols that you had not collected on your
first lots but I'm sure the cost of your lots included some latecomer's fee. It might
not have been the right amount but I'm sure that the businessmen that you and
your dad are, you have that figured in. That's not the question right now. We
need to determine how we can get this settled. I think-I, for one, don't like
payment plans but on the same token, I don't like being unfair to the developer
either. If he was under the agreement that there would be a latecomer payment
plan, I think we have to take a look at that.
Nary: Mr. Mayol?
Corrie: Mr. Nary.
Nary: I think that, I guess, the concern to me is it appears to me, Mr. O'Neill, that
for Phase One, clearly we hadn't come to any real consensus at the time that plat
was approved. So, I do think probably getting a bill in February for $120,000 is a
little shocking because you really hadn't had an opportunity to really factor that
into the sale. But I think you did for Number Two. I think for Phase Two, we're a
lot closer to where we're at and you haven't even sold those lots.
O'Neill: Correct.
Nary: I think, at least, from the wording that you've said was approved, all it said
was that we'd discuss is. I mean, you had to factor in the possibility we'd just say
no and you're going to have to pay it. So, I guess, to me what's proposed by
Finance, athree-year payment plan for Phase One and that Phase Two be
Meridian City Council Meeting
May 29, 2002
Page 23 of 52
consistent with the rest of the plats that we do now. That they all be paid up
front. At least, it's consistent on our part and really doesn't-it may not be what
you like but it doesn't put you really behind the eight ball. You knew that going in
with those conditions that that may not necessarily-you may not get a payment
plan. Now we could be-your proposal, basically, is that you essentially pay
about 25%, 30% in this year for-you're asking us to pay 30% this year and then
pick up the other in the next two years. So, basically, you. paid this year and
you're done and then you won't have to pay another one until next year. This
$58,000 and then $56,000 the year after. That's for both lots, right?
O'Neill: Yes. I don't suppose I would have a problem if it's to pay the fee up
front if the $27,000 that we've paid currently could be applied towards the Phase
Two fee and then you give us three years to pay the remainder for the Phase
One. I don't have it planned. I didn't get it budgeted. A check that's coming out
of cash is not coming out of the project's cash flow and you could say tough luck
but I mean, that's reality. I'm going to have a hard time doing it so I would agree
to say take that $27,000 we've paid and apply it to the remainder of fees, too,
and I'll write the additional check for Phase Two but then allow us the three year
plan on the Phase One.
Bird: On the $86,000.
O'Neill: Yes. Exactly.
Nary: One of those years will be this year, not 2003. It would be this year, 2003
to 2004.
O'Neill: Yes, if you give us until the end of this year, I guess, that would make it
a lot easier for me.
Bird: That would be about $30,000 a year.
O'Neill: If you could make that to the end of this year. Give us until the end of
this year to do that, I could do that.
Nary: You seem to have left that a little bit open in your memo. Is that going to
work?
Kilchenmann: Mr. Mayor. Members of the Council. I did leave it open and up to
your discretion but I completely agree with what you said. We did delay and we
have to take some responsibility for not getting them the cost for Phase One but
Phase Two should have been pretty clear what was going on so that we get
payment for Phase Two now and then do a three year payment plan for Phase
One.
Nichols: Mr. Mayor?
Meridian City Council Meeting
May 29, 2002
Page 24 of 52
Corrie: Mr. Nichols.
Nichols: Mr. Mayor, Iwould-if you agree to enter into a payment plan on Phase
One, I think there needs to also be some-we could work on some language to
tie in the payments to the number of lots sold because it wouldn't do us any good
or Mr. O'Neill any good to have all the lots in Phase One sold in a strung out
payment agreement past the time that those lots are sold.
O'Neill: I don't have a problem with agreeing. By the time the last one is sold, if
we don't have full and paid, we'll pay it for sure. That's fine.
Nichols: We could figure in something that would tie it in so that-absolutely-
and it's not a reflection on. Mr. O'Neill. With some developers, if we had to do this
sort of thing, those building permits, availability is the one hammer that we have.
I'm not saying that you're that type of developer but if alf the lots are sold and
there's money owed, some developers could disappear.
O'Neill: I don't have a problem with that at all, if you want to add that as a
condition.
Nary: Mr. Mayor?
Corrie: Mr. Nary.
Nary: So, essentially, Mr. Nichols, what you're suggesting is that we tie this three
year payment, not just to a fixed time period but also some relationship to the
number of lots that are sold. The number of building permits that are taken.
Bird: Or when the first phase is filled. The last lot. Then it has to be paid and if
that's a year, if it's two years. But it can't exceed three years.
(inaudible)
O'Neill: If we do that in six months, I'd be happy to write you a check for that
because that means (inaudible)
Nary: My only concern is that I don't want to string this out to 2005. I want to
make sure that one third of this payment is paid this year.
Bird: He's agreed to that.
Nary: As long as we do that in that time period and only accelerate it at the other
end, I think that's pretty reasonable.
Bird: And the $27,000, as I understand, that he's paid already, will be credited
towards Phase Two, which he will bring a check in to pay Phase Two and then
Meridian City Council Meeting
May 29, 2002
Page 25 of 52
we'll set up a payment plan on the $86,000 at 4% interest with the stipulation that
if before three years all the lots are sold, that it will be paid. Is that right?
O'Neill: That's fine. Absolutely.
Bird: Is that fair?
Nichols: Mr. Mayor?
Corrie: Mr. Nichols.
Nichols: Mr. Mayor, what I had in mind would be to-I'll just throw this out as a
possibility-if there were 40 lots that had been sold in the first phase before
December, that left a hundred and-let's just use 120 lots-left to sell in Phase
One as of December when the first numbers were starting to be used, we could
tie this in to the end of this year, December 315, 2002 or upon the xnumber-
well, let's see. If he'd sold-basically, a certain number of lots sold, which ever
occurs first and then on December 31St, 2004 or upon the, you know the
hundredth lot which it, you know-basically, would take the number of lots left to
sell at the end of last year and divide that by three in the first phase. So, if you
had 120 lots, you divide by three. So, you sell down to where you've got 80 lots
left, that's when the first payment is due or December 31St of this year. Which
ever occurs first. Then the next year, if you're down, let's say in July, you've sold
down to where you have only 40 lots left, then the payment would be due then.
Then the final year when either the last lot is sold or the end of the year, which
ever occurs first.
O'Neill: I wanted to look at something like that. I would-we'll break the back on
this thing in probably the end of 2003. Prior to that, all of our money is going to
the bank so to tie it too close, I'd rather have a little bit more flexibility and I'd
rather make you put a more stringent cap on me that says by a certain date you
will have it done or a certain number of permits. In the next. six to eight months,
every lot that comes in, we're still writing a check to the bank so we have no cash
flow to fund something like that. So, I'd rather have a little more flexibility that
you know for sure you're going to get 100% payment of the Phase One fee by
the day we have the last permit issued or the last lot closed. If we can goose it
up somehow in 2003, I'm willing to do that but I would prefer 2002 not to end up
in a situation where it-
Nary: I guess, for my purpose, it doesn't matter to me if we tie it to the individual
lots or that we just make a December 31st, 2002, December 31St, 2003 and once
the last lot is sold or December 31St, 2004-
O'Neill: That's great. That's perfect.
Bird: That's fine.
Meridian City Council Meeting
May 29, 2002
Page 26 of 52
De Weerd: That's good.
Bird: I'm afraid we'd have a hard time-I was just going to ask who's going to
track the lot sales?
Nary: I can certainly make a motion. Mr. Mayor?
Corrie: Mr. Nary.
Nary: I would move that we credit the $27,296 that's been paid by O'Neill
Enterprises for Woodbridge Subdivision that they be credited towards Phase
Two. O'Neill Enterprises will pay the remainder upon signature of the Final Plat.
That the City enter into a payment agreement for the latecomer's fees for Phase
One to be p aid i n three i nstallments. The first i nstallment for one t hird o f t he
amount due, at a 4% interest rate of the one third of the amount due, on
December 31St of 2002. The second payment due on December 315` of 2003
and the third payment due December 315` of 2004 or sooner if the last lot or
building permit is sold for that subdivision that all the payments will due at that
juncture if it's prior to December 3151, 2004.
Bird: Second.
Corrie: Okay. Motions been made and second. Any further discussion?
Hearing none, roll call vote, Mr. Berg.
Roll Call: Bird, aye; Nary, aye; de Weerd, aye; McCandless, aye.
Corrie: All ayes. Motion is carried. So be it. Thank you.
O'Neill: Thank you, members of the Council. Sorry to put you through that.
Corrie: Stacy, your number two Finance Report.
1. Finance Report:
Kilchenmann: Mr. Mayor. Members of the Council. Moving back to the
financial statement, this won't take too long. It's pretty much good news, good
news. On the investment side, interest rates are, at last, leveling off and not
dropping. Hopefully, that means they'll eventually begin to angle up. The
general fund continues to earn more interest than budgeted in spite of interest
rates because we were just keeping the minimum amount of money in operating
and pushing the rest to the Idaho pool or to our investment advisor. Enterprise is
doing a little less than budgeted simply because their fund balance is so
dependant upon the interest rates. They have so much of that invested. On my
financial statements, the first ones are the Wastewater and the Water on the
Enterprise side. When you look at those, I just want to continue to remind you
that we've made some changes. The interest income in 2001, we had all of it in