SIDNEY — Sidney City Council discussed city assistance for the Shelby County Land Bank during Monday’s meeting.
The Shelby County Land Reutilization Corporation (commonly known as the Shelby County Land Bank), recently approached the city to ask for assistance with costs that are not reimbursable from its operational grant.
During council’s March 5 workshop session, Doug Ahlers, director of the Shelby County Land Bank, provided an update on the organization, and told council it has been running into deficits. He said unless they can “find ways to fix” the issue, the land bank may have to leave the largest properties stand.
The land bank’s goal, is to “stabilize property values by removing and greening or rehabilitating blighted one to four family residential properties in Shelby County,” Ahler told council in March.
At the end of his presentation, council admitted that Sidney will continue to have a problem with run-down houses after the land bank is finished with its work, and vowed to look at ways to help with costs.
The land bank’s funding originally came from the city of Sidney, county villages and county commissioners’ donations, Ahler said in March. Since then, it derived from a Housing Improvement Program grant and a portion of the Delinquent Tax and Assessment Collection Fee (DTAC) from the county.
The maximum reimbursement amount is $25,000 per residential property address that can only be used to acquire properties, for approved demolition, or remediation, and to green the site. The land bank cannot be reimbursed for payment of utility bills, taxes or any assessments.
The grant expires on Dec. 18, 2018, at which time the land bank must have everything acquired they intend to acquire and have 75 percent of it torn down, or loose the remaining money.
City staff thoroughly examined various ways to help the land bank with various costs, including, utility bills for the Inflow & Infiltration (I&I) program, utility bills not paid by the previous property owner, sewer inspection cost and replacement, the need for bond/surety on demolitions and demolition costs in excess of $25,000.
City Manager Mark Cundiff said the “I&I Program, etc., is set up under the premises that each landowner will pay their fair share and that if these costs are waived, either the repayment of city debt will be impacted, or the fees to other paying landowners will have to be increased.” These fees currently total $21.82 per month, with $16.56 being the I&I fee, and the rest being the minimum monthly fee for water of $2.84, sewer of 49 cents and stormwater fee $1.93.
The outstanding utility bills come to $16,963 on 12 of the 23 land bank properties that were not paid by previous property owners.
Cundiff said I&I and utility bill costs can continue to be accrued; however, the existence of these liens or refusal to provide services could have a negative impact on the land bank’s ability to convey ownership to others who return the property back to a tax and utility-paying status. And, the land bank has already indicated it will not pay these fees, Cundiff noted.
Therefore, city staff recommended for council to consider for the city to hold collection of fees in abeyance on both I&I and utility bill costs until redevelopment occurs and then make a decision whether to collect or abate the charges depending upon the circumstances.
Staff did not recommend to waving the sewer inspection costs and replacement fees that is part of the I&I program, but rather, for houses that are to be demolished, require installation of inspection port and block lateral and build this cost into its demolition specifications. Cundiff said this should allow for better budgeting.
The cost of this installation, including materials, labor, and recording fee, is estimated around $400. Cundiff said this could potentially save $4,000 to $5,000 in repair costs of the lateral that is in the public right-of-way, which would now be the responsibility of the city. This also would save inspection costs of $300-$500 since the private sewer lateral would be abandoned.
And also to require a notation be placed on the deed by which the land bank takes title, or other means of recordable public notice, that the property is no longer a buildable lot. This would not require a new plat to be prepared, so expense to the land bank is minimized, he said.
The requirement for a performance bond, estimated to cost $1,000, was recommended to be waived by city staff. Cundiff said as long as an acceptable surety is provided, it does not necessarily need to be a cash bond. He said in staff’s opinion, the city is receiving an acceptable surety since the demolition costs of these houses are essentially “bonded” by way of the grant funding attributable to each project.
For houses estimated to cost more than $25,000 for demolition, staff recommended a $5,000 maximum per unit cost be established, which Cundiff can authorize without council’s approval. Staff also recommended a maximum $50,000 annual amount that Cundiff can authorize. Amounts over $5,000, as well as exceeding the $50,000 annual expenditure, will require council’s approval.
Cundiff noted the current budget has $50,000 allocated for revitalization opportunities, which staff feels this situation qualifies as.
Council praised city staff for their hard work and agreed with their recommendation to financially assist the land bank with help Sidney get rid of dilapidated houses in the city. Vice Mayor Mardie Milligan recommended bringing forth next year’s revitalization budget of $50,000 to provide the land bank with additional help since their grant is set to expire at the end of this year.
Council will formally vote on the recommendation as a resolution at the next regular council meeting on May 14.
