Form revised March 16, 2004
FISCAL NOTE FOR NON-CAPITAL PROJECTS
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Department: |
Contact
Person/Phone: |
DOF Analyst/Phone: |
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Legislative |
Christa Valles/684-5336 |
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Summary of the Legislation:
This legislation transfers
$200,000 from the Seattle Department of Transportation’s budget to the
Legislative Department. The $200,000
will pay for a Special Benefits Study for a potential Local Improvement
District. It is related to the planning
for a capital project, but does not pertain to the actual construction of the
streetcar. SDOT can seek reimbursement
for the $200,000 through the grants it has received for the South Lake Union
Streetcar or the funds can be recovered through a Local Improvement District,
should one be formed.
Background:
At the May 25, 2004
Transportation Committee meeting, a panel of experts in Local Improvement
Districts (LIDs) briefed committee members on different property assessment
methods for LIDs. The May 25th
committee discussion focused on a potential South Lake Union (SLU) streetcar
LID. The panel of experts strongly
recommended to committee members that the City conduct a Special Benefit Study
to determine property LID assessments in South Lake Union. The panel recommended this approach for the
following reasons:
1) Other approaches that use formula/mathematical
methods may not provide for an equitable method of assessment and thus, leave
the City open to legal challenges.
2) The streetcar line is different than typical street
improvement projects and a formula method of assessment does not account for
the unique nature of a streetcar line relative to other LID projects that a
City might undertake.
3) A Special Benefit Study looks at the market value
that an improvement project confers on a property while a mathematical method
is based on square footage or some other area measurement. A Special Benefit Study would take into
account the underlying zoning, land use restrictions, and other market
conditions that impact the development potential of various parcels.
4) A Special Benefit Study would enable Council to assess whether a $25 million LID
is a fair assessment and is apportioned correctly among property owners.
·
Please check one
of the following:
____ This legislation does
not have any financial implications. (Stop here and delete the remainder of this document prior to saving and
printing.)
__X__ This legislation has financial implications. (Please complete all relevant sections that follow.)
This legislation
appropriates $200,000 to the Legislative Department from the Seattle Department
of Transportation’s (SDOT) Transportation Fund. SDOT has received federal and state grants to undertake planning
activities related to the streetcar.
SDOT can either apply for reimbursement for the $200,000 from the
grantors (the Legislative Department will work with SDOT to provide the
necessary paperwork) or the $200,000 can be reimbursed through the Local
Improvement District, should one be formed.
Appropriations:
|
Fund Name and Number |
Department |
Budget Control Level* |
2004 Appropriation |
|
General
Subfund (00100) |
Legislative |
Legislative
Department (G1100) |
200,000 |
|
Transportation Fund (10310) |
Seattle Department of
Transportation |
Policy, Planning, and Major Project Development (18310)
Project TC366260 |
(200,000) |
|
TOTAL |
|
|
0 |
Anticipated Revenue/Reimbursement:
Resulting From This Legislation:
SDOT may seek reimbursement from the grant
monies that it has received or, it can obtain reimbursement through the LID
should one be formed.
Spending/Cash Flow: This table should be completed only in those
cases where part or all of the funds authorized by this legislation will be
spent in a different year than when they were appropriated (e.g., as in the
case of certain grants and capital projects).
Details surrounding spending that will occur in future years should be
provided in the Notes section below the table.
|
Fund Name and
Number |
Department |
Budget Control
Level* |
2004 Expenditures |
2005
Anticipated Expenditures |
|
General
Subfund |
Legislative |
Legislative Department (G1100) |
50,000 |
150,000 |
|
TOTAL |
|
|
50,000 |
150,000 |
Notes: The legislative Department will hire an appraiser to conduct a Special Benefit Assessment. It is not clear at this time how long it will take to conduct the study, but if it is not completed before the end of the year, the payment to the appraiser will likely happen in 2005.
·
What is the
financial cost of not implementing the legislation?
The City could be liable for legal challenges
associated with the formation of the LID, in which case, it would need to hire
an appraiser and request legal assistance from the City’s Law Department.
·
What are the
possible alternatives to the legislation that could achieve the same or similar
objectives?
A limited appraisal of
different types of parcels could be conducted or, as the Executive has
proposed, an appraiser could be hired to evaluate the Executive’s proposed
method of assessment. The Executive’s
appraisal method is based on proximity to the streetcar and square feet. A
Special Benefit Study entails an investigation of the physical and economic
characteristics of each parcel, including a base study that reviews pertinent
market data and environmental, economic, governmental, and social forces
influencing the subject area. An
appraiser also considers zoning, land use trends, existing building
improvements, highest and best use and other factors influencing market value
for each property type or ownership—without and with the LID project. A Special Benefit Study is more likely to
withstand legal challenges because it does not apply the same formula to
different parcels with different zoning and market value and thus, can provide
a more equitable way to assess special benefits than a formula method.
·
Is the
legislation subject to public hearing requirements: No
·
Other Issues
(including long-term implications of
the legislation):