4-step analysis of program could cost Benicia $13,000

In hopes of determining how many Mills Act contracts are suitable for a city this size, Benicia City Council will hear city employees’ recommendations Tuesday for an evaluation work plan on the topic.

In a report to the Council, Community Development Director Christina Ratcliffe wrote that the city initially approved its Mills Act program in 2003. Under the program, owners of historic properties can obtain agreements by which their property taxes are lowered in exchange for complying with specific tasks that keep the properties in condition that complies with the Secretary of Interior standards for historic preservation.

By 2012, the Council decided that the city should lose no more than $35,000 annually in property tax revenue through Mills Act contracts, and by Nov. 18, 2014 the Council had approved two more contracts that would bring losses to that cap.

At that meeting, the Council asked the Historic Preservation Review Commission to analyze the benefits of continuing the program, Ratcliffe wrote.

That step worried some property owners, who feared the city might not renew their contracts.

However, by March 26 the commission recommended the Council increase the number of contracts to 40, which would cost the city about $38,000 in tax losses. By using the number of contracts as the cap rather than tax dollars lost, the city would avoid the risk of exceeding the dollar cap through changes in property valuations.

That resolution was approved May 19. But the Council also asked for a deeper analysis of the program.

“As evidenced by public participation in the Mills Act program discussion in the spring of 2015, the community is interested in discussing changes to the city’s Mills Act program, particularly those related to the continuation or modification of existing contracts, as well as expansion of the program in the future,” Ratcliffe wrote.

She listed four work plan steps, subject to Council approval.

The first would be employees’ research of existing studies on the economic impact of historic preservation programs on those cities’ economies, and how those approaches might help Benicia.

“Staff is not proposing an independent analysis of the benefits of preservation, but rather a search of existing documents,” Ratcliffe wrote.

Another step: to introduce discussion topics at community workshops so residents could offer their points of view.

Among the topics would be eligibility or evaluation criteria for prospective properties, such as comparing rehabilitation contracts with maintenance-only pacts; inclusion of properties that don’t have a historic designation; a valuation threshold; economic hardship; level of historic significance of the property; whether ecologically sound rehabilitation should be incorporated in the renovations; whether Benicia should have a list of “appropriate improvements” for the properties; whether the city should focus on specific architectural styles or neighborhoods; and whether there should be additional fees associated with Mills Act contracts.

A third step would be a formal Historic Preservation Review Commission public hearing to consider how to make the program sustainable, and a fourth would be a City Council public hearing of the commission’s recommendations.

In addition, Ratcliffe wrote, Benicia has no mandated notification requirements when owners want to seek Mills Act contracts, though city employees have provided courtesy notifications.

It costs an applicant $550 to seek a Mills Act contract in Benicia, Ratcliffe wrote. However, no subsequent fees are required.

In contrast, San Diego charges $1,185 for the historic designation process, $590 for the Mills Act program agreement, $482 for monitoring of work (due with the initial agreement and every five years afterward) and $949 for enforcement of the agreement should a property owner violate its provision.

Public notification of the Mills Act Work Program analysis also would have costs, Ratcliffe wrote.

Emails are free; mailed notices cost $360 for notification of workshops, HPRC meetings and Council meeetings; newspaper legal notices range from $135 to $183 for the three notices, and quarter-page ads can cost $663 for the three sessions’ notices, she wrote.

Ratcliffe wrote that undertaking the Mills Act program examination could cost $13,834.07 in staff time.

Once the community and HPRC discussions are complete, a final report and draft resolution would be sent to the Council. The entire process could take up to a year, Ratcliffe wrote.

The Council will meet at 6:30 p.m. Tuesday to consider legal matters. The regular meeting will start at 7 p.m. in the Council Chamber of City Hall, 250 East L St.