Memorandum

City of Lawrence

Public Works

TO:	Thomas M. Markus, City Manager
FROM:	Charles F. Soules, Director of Public Works
CC:	Brandon McGuire
DATE:	April 16, 2018
RE:	Queens Road Benefit District

On June 6, 2017, the City Commission held a public hearing on the creation of two benefit districts to finance improvements to Queens Road from 6^th Street to Eisenhower Drive and for intersection and signalization improvements at 6^th Street and Queens Road, as described in the table below.  After much public input the City Commission deferred adoption of a resolution to establish the benefit districts and asked staff to look at alternative methods of assessment and funding options.

Project Summary	QUEENS ROAD	SIGNALIZATION OF 6TH STREET
Project Limits	6th Street to Eisenhower Drive	Intersection of 6th Street and Queens Road
Description of Roundabout Improvements at Overland Drive	- 2-lane road with median and turn lane at intersecting streets - Roundabout at Overland Dr. - Bike lanes - Sidewalk and multi-use path	- Signalization of intersection - Mast arms, signals - Controller box - Pedestrian crossing ADA ramps - Pre-emption and video detection equipment - Pavement markings
Method of Assessment	Square footage	Square footage
Apportionment of Costs	100% of costs assessed to Benefit District except City will pay for additional street width for bike lanes (estimate $226,000) and additional width for multi-use path (estimate $122,250)	100% Benefit District 0% City at Large
Estimated Cost	$4,830,760 (City Share = $348,250)	$450,000 (City Share = $0)

The previously proposed benefit districts included the properties identified in the attached maps.

At the public hearing on June 6^th there were many question that focused around how and why the boundaries are established for a benefit district. Below is a brief summary of certain legal considerations involved in creating a benefit district.

• The statute (KSA 12-6a01 et seq.) defines “improvement district” as “An area deemed by the governing body to be benefitted by an improvement and subject to special assessment for all or a portion of the cost of the improvement.”  (KSA 12-6a01(f))

• A governing body is vested with broad discretion in establishing an improvement district, and its determination is not subject to review in the absence of showing fraudulent or arbitrary conduct (Giddings v. City of Pittsburg, 421 P.2d 181)

• Assessments must impose a substantially equal burden of the costs of the improvement upon property within the improvement district that is similarly benefitted (KSA 12-6a08(a))

• If property that does not abut a proposed street improvement is included in the benefit district, then property abutting such improvement must be included in the district (Kansas Attorney General Opinion No. 2000-13)

• Property situated similarly to other properties that are included in the improvement district must be deemed benefitted (Kansas Attorney General Opinion No. 2000-13)

Staff reviewed with bond counsel alternative methods of assessment, but these alternative methods are not recommended because they are either not explicitly authorized by State law or similar assessment methods have been treated negatively by Kansas courts.   Below is a listing of alternative methods of assessment explored by staff:

- A sliding scale that would decrease the percentage of participation as you move further away from Queens Road.  This would increase the proportionate share of those properties that are closest to the road.

- Expansion of the benefit district to potentially include properties such as Walmart.  Attached is a map of the benefit districts that include the properties from George Williams Way to Folks Road.  Properties such as Walmart and the Bauer Farm Development have paid for streets that have benefitted their developments. 

- Staff also approached the property on the west side of Queens and north of the Links (1677 E 1000 Road).  This property is outside the city limits but within the project limits. The owner was asked to annex this property to within the city limits and then could become part of the benefit district.  The owner was not interested at this time. 

This property will benefit from the improvements.  The property also currently enjoys the benefit of receiving City water service (charged at an outside City water rate).  The City can include this property within the benefit district by either annexing the property unilaterally or requesting the County Commission to adopt a Resolution agreeing to allow this property to be included within the benefit district. 

- Assessing a higher percentage for increased density of an area.  Assessments must impose a substantially equal burden of the cost of the improvement upon property within the improvement district that is similarly benefitted, regardless of the current use of the property

- Alternative method of assessment such as appraised value.  We looked at a small-scale test run of assessing properties based on appraised value using the County’s website for land values.  Based on a handful of randomly selected lots, residential land owners would pay a higher assessment using this method (as compared to the Links Development would pay a lower amount).

Attached are responses to questions submitted through email, from the Westwood Hills Homeowners Association, and the public hearing.

It should be noted:

• Agreements relinquishing any right to protest the construction of streets and sidewalks by benefit district, under K.S.A. 12-6A06, were recorded for each subdivision and development included in the proposed benefit district. Those agreements are attached.
• 52% of the benefit district based on square footage is on the west side.
• Based on cost, 68% is paid by “commercial” development, 7% city, 25% residential.
• Links Development is constructing Wakarusa from George Williams Way to Queens Road, including the intersection.  They are contributing $1.4 million (31%) to the benefit district.  They are also paying their share of sewer connection fees of $1,033,528 and system development charges in the amount of $1,043,455.

Bond Counsel has provided a review of the creation of the benefit district (Executive Summary attached).

Summarizing the options available for the creation of the benefit district.

• Staff would recommend expanding the benefit district boundary to include 1677 E 1000 Road and thereafter proceeding with the creation of the benefit district.

• As an alternative, should the Commission not desire to annex 1677 E 1000 Road and want to reduce the amount of the assessments to the benefitted properties, the City Commission will need to increase the City’s participation and determine which project in the CIP will not be completed or will be postponed. The Commissions’ action in this case would be to direct staff to create the benefit district as previously proposed with additional City at Large funding.

Respectfully Submitted,

Charles F. Soules, P.E.

Director of Public Works