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HomeMy WebLinkAbout12-01-16 IFAC-MinutesImpact Fee Advisory Committee Thursday, December 1, 2016, 6:00 pm Madison Room, City Hall – 121 N. Rouse Ave. A. Call meeting to order and roll call Present were: James Nickelson – Chair George Thompson – Member Rob Evans – Member Anna Rosenberry – Member Rick Hixson – Member Chris Mehl – Commissioner Liaison Chris Saunders – Staff Liaison Craig Woolard – Public Works Director Chuck Winn – Assistant City Manager B. Changes to the Agenda. No changes were made to the agenda. C. Public Comment – Please state your name and address in an audible tone of voice for the record. This is the time for individuals to comment on matters falling within the purview of the Committee. There will also be an opportunity in conjunction with each action item for comments pertaining to that item. Please limit your comments to three minutes. No members of the public were present. D. Minutes review and approval of September 15, 2016 and November 17, 2016. It was moved Rick Hixson, seconded by George Thompson, that the minutes of the meetings of September 15 and November 17, 2016, that the minutes be approved. The motion carried. E. Action Items 1. Review and recommendation on the Water Impact Fee Capital Improvement Program FY18 to FY22. Anna Rosenberry stated the five-year average for revenue collections has been updated and reflects $1.7 million per year with a projected annual increase of five percent. She noted that no fee revision has been included in these calculations. She reviewed the projects on the schedule noting that three of them will require borrowing almost $21 million. She noted that water rates will be needed to fund those costs, so increased rates may be necessary. She stated $165 million in unscheduled projects are included on the list. Craig Woolard reviewed the approach and philosophy in developing this list of projects. He stated projects in the integrated water resource plan and the water master plan update are included in this list. He turned attention to storage facilities proposed in the project list, noting that the storage tank at the treatment plant will provide a new storage area and replacement of the facility at Lyman Creek is needed due to its current level of leakage. He stated the projects are designed to identify options for groundwater wells, enhance current natural storage in Sourdough Canyon, and maximize water resources in Lyman Creek. He addressed the unscheduled projects, which include a transmission main and a looped line around the west side of town. Chris Saunders noted that in the street impact fee schedule there is a specific line item for right-of-way acquisition and asked if that needs to be adjusted to address this issue. Craig Woolard stated that in all likelihood, this water transmission main and storage facilities will be tied to street constructions and upgrades. Responding to questions, Chris Saunders stated the City and the County have worked together on the growth policy and identifying major arterial corridors in the transportation plan. He anticipates that the water transmission line will follow some of those roadways but stated it would be important to work with the County on this specific main extension. Craig Woolard stated it is becoming more difficult to provide water to west side developments; however, he expects this transmission line won’t be constructed for at least ten years. He noted that a redundant line is proposed within the next few years to help with transmission from the treatment plant to town. He cautioned that the existing water distribution system has organically grown, and it is important to now take a more planned approach to its development. Responding to questions, Rick Hixson noted that some general locations of the west side transmission line and storage facilities have been identified, but no specific locations. Chris Saunders noted that Cottonwood Road goes all of the way south and Fowler Avenue is scheduled to extend southward, which makes the north/south route easy but the east/west connections are a little more difficult. Craig Woolard stated there are multiple options for extending lines from the treatment plant to town. Chris Saunders noted the County has been consistently notifying property owners that utility and street rights-of-way may be required in the future. Craig Woolard stated this plan is designed to optimize the existing system, mitigate high risk areas and plan for the big west extension. Craig Woolard recognized that development of a groundwater system is expensive. He identified several projects that are to be funded through water rates, noting the upgrades to storage are essential. He then cautioned that the City currently has one day of storage on a summer day. He stressed the importance of water conservation, noting he anticipates that those efforts will result in a significant reduction in demand. Craig Woolard stated the southeast reservoir is needed for water flow into town, and the Sourdough Canyon storage is a raw water storage. Responding to questions, Craig Woolard stated the well field is proposed on the west side of town. At Chris Mehl’s request, Craig Woolard reviewed the history of the Lyman Creek Reservoir, which was originally an open pond, then covered and then lined. The reservoir holds 5 million gallons, with a current leakage rate of 144,000 gallons per day. Responding to questions about bonding, Anna Rosenberry stated the City Commission will need to vote to proceed with a bond sale, and stressed that the water rates must be sufficient to cover the debt payment so it may be necessary to increase those rates. It was also recognized that water rate increases may result in water conservation. Anna Rosenberry reported that the City is working on an RFP for an analysis of the water rate structure and how the base rate and usage rate should interrelate. She stated these proposed borrowings will be incorporated into that study. Anna Rosenberry recognized that there is no guaranteed revenue in the water impact fees because it is based on construction of new buildings; however, there is a stable revenue stream from water rates because all existing development is served. She noted that issues to be addressed in the future are whether to use impact fees to pay off the bonds or whether the rates paid by water customers are to be used to cover those costs. Responding to questions, Craig Woolard confirmed that the Lyman tank project is to be fully funded through impact fees. It was noted this structure is a failing one and it should be funded at least partially through water rates. As a result of discussion, it was determined the funding source should be revisited to determine if a split between impact fees and water rates would be more appropriate. Chris Saunders noted that if the new reservoir captures additional water, it will be capacity expanding. Craig Woolard stated the new structure at Lyman Creek is expected to capture the water flow with better control systems. James Nickelson noted that in the Sourdough transmission main, redundancy is part of the equation and asked if that main would be done if there were no growth. He suggested that there should be some cost share from the rate payers on this as well. Anna Rosenberry stated that if redundancy were the only benefit of the line, it wouldn’t be done. In this instance, it is a new line that is 100 percent capacity expanding in the ability to transmit water. James Nickelson responded that not all of that new capacity would be used because the line is also designed to provide redundancy. Rob Evans recognized that the existing system has not been maintained as well as it could have been over the past several years. He asked what the water rates would need to be to maintain the system or provide for capacity expansion if impact fees were not in place. Anna Rosenberry responded that water rates would need to increase by 25 percent to cover the $2 million generated in impact fees. Craig Woolard stated the water capital plan projects, which are funded by water rates, total $3.2 to $4.6 million annually. Chris Saunders noted that much of the water system maintenance provides capacity expansion, particularly in the older part of town where 2-inch or 4-inch mains are upgraded to 8-inch mains. Craig Woolard noted the Pear Street pump upgrades will result in expanded capacity; and impact fees will not contribute to those costs. James Nickelson noted that some of the projects listed are clearly capacity expanding; however, some of them are in a gray area. He then asked how the water rights and well field will be funded. Craig Woolard stated the intent is that the water rights will be funded through cash-in-lieu; however, impact fees would cover the costs of drilling the wells, transmission main and associated infrastructure. He then addressed the issue of mitigation costs, stating he anticipates those will be as high as the costs of the drilling and infrastructure. It was moved by Anna Rosenberry, seconded by Rick Hixson, that the Committee recommend approval of the water impact fee schedule with the Commission considering possible splits between impact fees and water rates on the projects talked about above. The motion carried unanimously. 2. Review and recommendation on the Wastewater Impact Fee Capital Improvement Program FY18 to FY22 Anna Rosenberry stated two projects are included in the five-year horizon, noting they total $7.5 million. These projects are also to be covered through the sale of revenue bonds which will be repaid through wastewater rates. Craig Woolard reviewed the projects, which address pinch points in the system. They include the Front Street/Frontage Road interceptor, which will allow for development to occur on the east side of town, and a main expansion to allow for development south of MSU. He noted that project will only be done if Capstone is constructed. He stated the Davis Lane lift station will serve the Cattail drainage basin and facilitate development in the area. Anna Rosenberry noted that staff has had preliminary discussions with the hospital about the main expansions, and stated they will be approaching the Commission about this issue. Craig Woolard stated the intent is to get a line extended under the interstate and to build the Davis lift station on the wastewater treatment property on the north side of Frontage Road, near the new Department of Transportation site. He characterized the lift station as a critical piece of infrastructure that opens up west side development since that area is lower than the treatment plant. Responding to George Thompson, Craig Woolard recognized that running a lift station is more costly than gravity flow; however, he stated the costs should be spread across the entire system rather than having different rates for those served by the lift station. He noted the community has been fortunate to have the vast majority of the wastewater system served by gravity flow; however, he recognized that continued growth is now resulting in the need for lift stations. Chris Mehl noted there are no unscheduled projects listed in this schedule and asked why, particularly since the water schedule has many. Craig Woolard stated the Davis lift station will allow for serving development on the west side of town for many years to come. He noted that much of the unscheduled water project costs relate to extension of the transmission main to the west side of town, and that does not have an attendant wastewater project. He stated, however, a Gooch Hill lift station that could be added to the project list even though it is more than ten years away. It was moved by Rick Hixson, seconded by Rob Evans, that the Committee adopt the recommended Wastewater Impact Fee CIP. The motion carried unanimously. F. FYI/Discussion. Chris Saunders reported the updates for the fee studies are scheduled for distribution on December 9. G. Adjournment – 7:07 p.m. James Nickelson adjourned the meeting.