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ECONOMIC AND URBAN DEVELOPMENT MEMORANDUM <br /> No. 04-100 <br /> July 10, 2004 <br /> TO: Mayor Paul Osborne and City Council Members <br /> FROM: Steve G , City Manager <br /> Dane g, Assistant City Manage� <br /> SUBJECT: Annexati n Agreement—The Reserve Subdivision <br /> SUMMARY RECOMMENDATION: Staff recommends approval of the attached <br /> annexation agreement for an 18 lot subdivision located along South Shores Drive. <br /> Within the agreement, it is proposed that the City reimburse up to $95,000 to extend <br /> water and sanitary sewer facilities to service the site. The developer is responsible for <br /> construction of water and sanitary sewer facilities within the site to serve individual lots. <br /> Approval of the agreement will also provide for approval of the preliminary plat of <br /> subdivision. <br /> BACKGROUND: TLR Land, LLC has requested City participation to extend water <br /> and sanitary sewer services to an 18 lot subdivision located along South Shores Drive and <br /> adjacent to Lake Decatur. The proposed subdivision would include high quality <br /> residential development lots, some with lake access. All streets are proposed to be <br /> privately owned and maintained with gated access from South Shores Drive. <br /> The cost of extending water and sanitary sewer across the South Shores Drive right-of- <br /> way is very high due to the depth of water and sewer mains beneath the street surface. <br /> Costs are expected to exceed $95,000 to complete the service connection, exclusive of <br /> any water or sewer line installation to service individual lots within the subdivision. <br /> The City's responsibility to reimburse for eligible project costs is limited to actual <br /> incremental property taxes generated by the newly constructed homes in the subdivision. <br /> Therefore, the developer will receive no reimbursement for the work until homes have <br /> been constructed and tax dollars have been received by the City of Decatur. <br /> The developer estimates average home values to be $750,000 each, generating <br /> approximately $3,000 per lot to the City of Decatur in ad valorem tax. The developer's <br /> reimbursement will be 100% of the taxes generated from the construction. While there is <br /> no set time limit for the developer to recoup the investment, 18 houses will generate a <br /> total of approximately$48,000 in taxes each year. The payoff could happen as quickly as <br /> 2 years and is not expected to take longer than 5 years. <br /> At the time the agreement was received and placed on file, some Council members <br /> questioned past practices regarding City participation in infrastructure extensions. The <br /> City has engaged in infrastructure participation in several projects over the years. While <br /> 1 <br />