DATE: February 2, 2015
TO: Board of Mayor and Aldermen
FROM: Eric Stuckey, City Administrator
Vernon Gerth, ACA - Community and Economic Development
SUBJECT:
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*Consideration of Resolution 2015-10 "A Resolution Directing the Appropriation of Funds to the Franklin Housing Authority (FHA) for the Purpose of Reducing the Development Fees Associated With Phase II of the Reddick Property Redevelopment Project."
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Purpose
The purpose of this memorandum is to provide additional information to the Board of Mayor and Alderman (BOMA) in further consideration of a request made by the Franklin Housing Authority (FHA) for a financial commitment to assist with off-setting a portion of the Sanitary Sewer and Water Development Fees (Access, System Development, Tap, And Effluent Fees) For Phase II of the Reddick Property Redevelopment Project (Continued from 1/13/15 Worksession).
Background
During the January 13 BOMA Worksession Derwin Jackson from the Franklin Housing Authority informed the Board of Mayor and Aldermen that the FHA is finalizing their financing for Phase II of the Reddick Property Redevelopment Project. Phase II of the project includes the construction of sixty-five public and tax credit dwelling units. Mr. Jackson explained the current property, when developed in the 1960's was served with a master water meter and that because the City's current development regulations no longer allow master meters, the sanitary sewer and water development fees associated with extending individual sanitary sewer and metered water services to each building is approximately $195,000 greater than if a master water meter was allowed. Mr. Jackson requested consideration of an appropriation to help off-set these development fees.
The current appropriation for the Franklin Housing Authority in the FY 2015 budget is $8,460. During the Worksession on January 13 discussion arose about the potential of appropriating funds from the Housing Reserve. The Housing Reserve is the account developers, who have elected to pay fees-in-lieu of building affordable housing within their developments for those planned developments approved prior to 2010 received later approval for increased density. As of January 30, 2015 the balance in the Housing Reserve is $ 270,976.30.
Tywater (Parish Park) May 24, 2012 $ 30,626.00
Amelia (Reunion) July 24, 2012 45,750.00
Through the Green August 10, 2010 14,125.30
(Shadow Green)
Through the Green September 9, 2014 112,875.00
(Shadow Green)
Ladd Park August 16, 2013 67,600.00
(Shadow Green)
Total (as of January 30, 2015) $ 270,976.30
Financial Impact
Should the BOMA decide to make an appropriation to the Franklin Housing Authority it recommended the funds be appropriated from either the Housing Reserve, General Fund, or a portion from both the Housing Reserve and General Fund. If an appropriation is made it would be used solely for the payment of development fees. As such, the Sanitary Sewer and Water Enterprise Fund model used to establish these fees would not be compromised by allowing deductions or waivers that were not contemplated. In other words, the development fees assessed to this redevelopment project will be no different than assessed to any other development.
To summarize the cost difference between a master meter design versus individual sanitary sewer and metered water services is estimated to be $ 194,162. The Sanitary Sewer and Water fees based on individual metered services $ 373,412. The Sanitary Sewer and Water fees based on master meter is estimated to be $ 179,250.
Recommendation
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Staff recommends supporting the Franklin Housing Authority's redevelopment activities that provides additional public and workforce housing in the City of Franklin. Resolution 2015-10 offers several options for the aldermen as follows:
1. Consider increasing their General Fund Appropriation to the Franklin Housing Authority on a one time basis in the FY 2016 budget.
2. Consider making an appropriation from the Housing Reserve.
3. Consider making an appropriation from both the General Fund and Housing Reserve.
As discussed previously, the Housing Authority has requested $194,162 to be used toward sanitary sewer and water development fees. Their current appropriation in the FY 2015 budget is $8,460.