13.B.
City Council Meeting - FINAL
- Meeting Date:
- 11/19/2013
- From:
- Anja Wendel, Senior Assistant City Attorney AW
Information
TITLE:
*Consideration and Approval of (A) Settlement Agreement; (B) Authorization for Litigation: (A) Vedura Elevation, LLC (Elevation); (B) Campus Crest at Flagstaff II, LLC (The Grove Phase I) and FSL St. Francis Villas, LP (Flagstaff Senior Meadows) *MOVED FROM THE 4:00 P.M. PORTION OF THE MEETING
RECOMMENDED ACTION:
(A) Approve Settlement Agreement with Vedura Elevation, LLC;
(B) Authorize litigation to collect outstanding balance of sewer capacity fees owed for the Grove Phase I and Flagstaff Senior Meadows.
Policy Decision or Reason for Action:
The City made errors in invoicing sewer capacity and other fees for multi-family residential developments. Following discovery of the errors, in May 2013 the City issued new invoices for amounts owed. Fees are still owed for three developments: Elevation, the Grove Phase I, and Flagstaff Senior Meadows. The City has reached a settlement in principle with the developer for Elevation, and a settlement agreement will be presented at the November 19, 2013 Council Meeting. CIty staff is recommending that the Council authorize litigation for collection of fees still owed for the other developments.
Subsidiary Decisions Points: The City has development agreements for the Elevation and Grove Phase I. Pursuant to these agreements the City must engage in settlement efforts and non-binding mediation before commencing litigation.
Subsidiary Decisions Points: The City has development agreements for the Elevation and Grove Phase I. Pursuant to these agreements the City must engage in settlement efforts and non-binding mediation before commencing litigation.
Financial Impact:
City sewer capacity fees and development fees are established by City ordinance, based upon studies and following a public hearing. The fees help pay for infrastructure and services that benefit the developments and community. The developers dispute the amounts owed. In the event the fees are not collected, the City will sustain losses. If litigation is authorized, the City will incur litigation expenses. In the event these matters proceed to trial, the City may recoup attorneys fees assuming it is the prevailing party.
Connection to Council Goal:
1. Repair Replace maintain infrastructure (streets & utilities)
11. Effective governance
Has There Been Previous Council Decision on This:
The City Council has received legal advice and considered settlement offers in prior Executive Sessions.
Options and Alternatives:
1. Approve Settlement Agreement with Vedura Elevation, LLC. (Elevation)
Pros: The City will recoup approximately 90% of the fees owed and avoid time and expense of ligitation.
Cons: The City will relinquish certain rights and waive 10% of fees owed.
2. Do not approve Settlement Agreement with Vedura Elevation, LLC, and authorize litigation.
Pros: The City may be able to recover the entire amount owed.
Cons: The City will incur the time, risks, and expense of litigation. The City may recover less than 90% of the amount owed.
3. Authorize litigation for collection of fees owed for the Grove Phase I and Flagstaff Senior Meadows.
Pros: City will be further along in efforts to collect fees owed. The City to date has been unable to achieve satisfactory settlement agreements, and this is the next step (after any required non-binding mediation).
Cons: The City will incur the time, risks, and expense of litigation.
Pros: The City will recoup approximately 90% of the fees owed and avoid time and expense of ligitation.
Cons: The City will relinquish certain rights and waive 10% of fees owed.
2. Do not approve Settlement Agreement with Vedura Elevation, LLC, and authorize litigation.
Pros: The City may be able to recover the entire amount owed.
Cons: The City will incur the time, risks, and expense of litigation. The City may recover less than 90% of the amount owed.
3. Authorize litigation for collection of fees owed for the Grove Phase I and Flagstaff Senior Meadows.
Pros: City will be further along in efforts to collect fees owed. The City to date has been unable to achieve satisfactory settlement agreements, and this is the next step (after any required non-binding mediation).
Cons: The City will incur the time, risks, and expense of litigation.
Key Considerations:
The City has a fiscal responsiblity to ensure fees are collected, and that all developments pay their fair share of City infrastructure and services.
Community Benefits and Considerations:
The Flagstaff community through the City's elected officials has approved the fees for developments.
Community Involvement:
Inform
Expanded Options and Alternatives:
City staff hopes that these matters will be resolved amicably and will continue to work towards that goal.