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Home My WebLink About10-01-24 City Commission Agenda and Packet MaterialsA. Call Special Meeting to Order - 5:00 PM - Commission Room, City Hall, 121 North Rouse B. Pledge of Allegiance and a Moment of Silence or Mindfulness C. Changes to the Agenda D. FYI E. Commission Disclosures F. Approval of Minutes F.1 Approval of Regular Meeting Minutes: 09-10-24 City Commission Meeting Minutes (Newby) G. Consent THE CITY COMMISSION OF BOZEMAN, MONTANA REGULAR MEETING AGENDA Tuesday, October 1, 2024 How to Participate: If you are interested in commenting in writing on items on the agenda please send an email to comments@bozeman.net or visit the Public Comment Page prior to 12:00 p.m. on the day of the meeting. At the direction of the City Commission, anonymous public comments are not distributed to the City Commission or staff. Public comments will also be accepted in-person and through video conference during the appropriate agenda items but you may only comment once per item. As always, the meeting will be recorded and streamed through the Commission's video page and available in the City on cable channel 190. For more information please contact the City Clerks' Office at 406.582.2320. This meeting will be held both in-person and also using an online video conferencing system. You can join this meeting: Via Video Conference: Click the Register link, enter the required information, and click submit. Click Join Now to enter the meeting. Via Phone: This is for listening only if you cannot watch the stream, channel 190, or attend in- person United States Toll +1 669 900 9128 Access code: 933 7244 1920 Consider the Motion: I move to approve the combined City Commission minutes as submitted. 1 G.1 Accounts Payable Claims Review and Approval (Armstrong) G.2 Acknowledge Receipt of Petition to Abandon North-South Alley within Block 100 of the Northern Pacific Addition to Bozeman, Located between East Peach Street and East Cottonwood Street(Maas) G.3 Authorize the City Manager to sign Task Order No. 6, under the Professional Services Master Task Order Agreement with the firm of HDR Engineering Inc., providing engineering services for a solar installation feasibility study at the Water Reclamation Facility.(Heaston) G.4 Authorize the City Manager to Sign a Third Amendment to the Professional Services Agreement with Clean Slate Group, LLC. for Snow Removal andMaintenance Services in the Parks and Trails District(Canter) G.5 Authorize the City Manager to Sign a Third Amendment to the Professional Services Agreement with Advantage Spraying Services, Inc. for Snow Removal Services in the Parks and Trails District(Canter) G.6 Authorize the City Manager to Sign an Amendment 3 with Jacobs Engineering Group Inc. for Federal Transportation Grant Writing Services(Ross) G.7 Authorize the City Manager to Sign a Third Amendment to Architectural Services Agreement with A&E Design for Bozeman City Hall Renovation(Henderson) G.8 Resolution 5649 to Authorize Change Order One for Highland Construction for Glen Lake Rotary Park Parking Lot(Jadin) G.9 Ordinance 2168, Final Adoption, Amending Table 38.310.040.C. of Chapter 38 of the Bozeman Municipal Code to Allow Apartments as a Permitted Use with No Restrictions in Area on the Second and Subsequent Floors, and Basements of Buildings, and to Allow Lobbies on the Ground Floor When Associated with Residential Uses in the Northeast Historic Mixed Use (NEHMU) District, Application 24225(Saunders) H. Public Comment on Non-agenda Items Falling Within the Purview and Jurisdiction of the Commission I. Action Items I.1 Unified Development Code (UDC) Update Engagement Plan (Clark) This is the time to comment on any matter falling within the scope of the Bozeman City Commission. There will also be time in conjunction with each agenda item for public comment relating to that item but you may only speak once per topic. Please note, the City Commission cannot take action on any item which does not appear on the agenda. All persons addressing the City Commission shall speak in a civil and courteous manner and members of the audience shall be respectful of others. Please state your name, and state whether you are a resident of the city or a property owner within the city in an audible tone of voice for the record and limit your comments to three minutes. Written comments can be located in the Public Comment Repository. Consider the Motion: I move to approve the engagement plan. 2 I.2 Resolution 5643 Approving a Project in the Northeast Urban Renewal District, known as Wallace Works, as an Urban Renewal Project; Making Findings with Respect Thereto and Approving the Use of Tax Increment Revenues to Reimburse Eligible Costs Thereof and Approving a Related Development Agreement(DiTommaso) I.3 Review and Approval of the 2024 Impact Fee Service Area Report for Fire/Emergency Medical Services(Saunders) I.4 Resolution 5651 Adopting the 2024 Service Area Report for Fire/Emergency Medical Services Impact Fees and Establishing an Effective Date(Saunders) I.5 Ordinance 2169 Provisional Adoption, Revisions to Chapter 2, Article 6, Division 9 Impact Fees, Bozeman Municipal Code to Revise Definitions, Reorganize Division Structure, Clarify Relationship To The City's Capital Improvement Program, Update Provisions For Impact Fee Refunds To Conform To Recent Changes In State Law, Strike Certain Exemptions, Update Processes For Approval Of Impact Fee Credits And Custom Fee Studies, Update Processes For Appeals, And Providing An Effective Date(Saunders) J. FYI / Discussion K. Adjournment Consider the Motion: I move to Approve Resolution 5643, a Project in the Northeast Urban Renewal District, known as Wallace Works, as an Urban Renewal Project; Making Findings with Respect Thereto and Approving the Use of Tax Increment Revenues to Reimburse Eligible Costs Thereof and Approving a Related Development Agreement. Consider the Motion: Having reviewed and considered the staff presentation, draft service area report, public comment, and all information presented, I hereby find the 2024 service area report for Fire/EMS meets all requirements and accept the report. Consider the Motion: Having reviewed and considered the staff presentation, public comment, and all information presented, I hereby adopt the findings of Resolution 5651 and adopt Resolution 5651 with an effective date of November 1, 2024. Consider the motion: Having reviewed and considered the staff report, draft text, public comment, and all information presented, I hereby adopt the findings presented by the Staff and provisionally adopt Ordinance 2169. City Commission meetings are open to all members of the public. If you have a disability that requires assistance, please contact our Acting ADA Coordinator, Max Ziegler, at 406.582.2439. Commission meetings are televised live on cable channel 190 and streamed live on our Meeting Videos Page. 3 Memorandum REPORT TO:City Commission FROM:Alex Newby, Deputy City Clerk Mike Maas, City Clerk Jon Henderson, Assistant City Manager SUBJECT:Approval of Regular Meeting Minutes: 09-10-24 City Commission Meeting Minutes MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Administration RECOMMENDATION: Consider the Motion: I move to approve the combined City Commission minutes as submitted. STRATEGIC PLAN:1.1 Outreach: Continue to strengthen and innovate in how we deliver information to the community and our partners. BACKGROUND:In 2013, The Clerks' Office identified goals related to the Commission’s priority of Improving Technology Utilization and Proficiency. Improvements included: • Live streaming broadcast of the City Commission Meeting • Meeting efficiency• Better access of meeting information for staff and the public • Time savings • Streamlined approach to citizen involvement and public comment In addition to the City Commission, many City Boards utilize the system as well. Beginning January 5, 2021 meetings in the Granicus platform have been closed captioned. Those captions are searchable using the advanced search option on our video view page. Users are always welcome to contact the City Clerks' Office at 406.582.2320 or email BozemanClerksDepartment@bozeman.net for assistance. UNRESOLVED ISSUES:None. ALTERNATIVES:As determined by the Commission. FISCAL EFFECTS:None. Attachments: 09-10-24 City Commission Meeting Minutes.pdf Report compiled on: September 12, 2024 4 Bozeman City Commission Meeting Minutes, September 10, 2024 Page 1 of 8 THE CITY COMMMISSION MEETING OF BOZEMAN, MONTANA MINUTES September 10, 2024 Present: Terry Cunningham, Joey Morrison, Jennifer Madgic, Douglas Fischer, Emma Bode Absent: None Excused: None Staff at the Dias: Interim City Manager (ICM) Chuck Winn, City Attorney (CA) Greg Sullivan, Deputy City Clerk (DCC) Alex Newby A) 00:03:50 Call to Order - 6:00 PM - Commission Room, City Hall, 121 North Rouse B) 00:05:32 Pledge of Allegiance and a Moment of Silence or Mindfulness C) 00:06:25 Changes to the Agenda D) 00:06:31 FYI Mayor Cunningham highlighted the Ribbon Cutting at Fire Station 2 on Montana State University Campus. E) 00:08:07 Commission Disclosures There were no Commission Disclosures. F) 00:08:15 Approval of Minutes F.1 Approve the Regular and Special Meeting Minutes: 08-19-24 City Commission Special Meeting 08-27-24 City Commission Meeting 08-19-24 City Commission Special Meeting Minutes.pdf 08-27-24 City Commission Meeting Minutes.pdf 00:08:20 Motion to approve the regular and special meeting minutes from 08-19-24 City Commission Special Meeting and 08-27-24 City Commission Meeting. 5 Bozeman City Commission Meeting Minutes, September 10, 2024 Page 2 of 8 Jennifer Madgic: Motion Douglas Fischer: 2nd 00:08:54 Vote on the Motion to approve the regular and special meeting minutes from 08-19-24 City Commission Special Meeting and 08-27-24 City Commission Meeting. The Motion carried 5 - 0. Approve: Terry Cunningham Joey Morrison Jennifer Madgic Douglas Fischer Emma Bode Disapprove: None G) 00:09:13 Consent G.1 Accounts Payable Claims Review and Approval G.2 Ratification of City Manager signature on National Opioid Settlement with Pharmacy Chain Kroger Signed Kroger Participation Form.pdf G.3 Authorize the City Manager to Sign a Memorandum of Agreement for Cooperative Performance Based Planning Measures and Targets with the Montana Department of Transportation and Gallatin Valley Urban Transportation District to Cooperatively Develop and Share Information Related to Transportation Performance Measures and Targets Gallatin Valley MPO Performance Based Planning Agreement with Montana Department of Transportation and Gallatin Valley Urban Transportation District.pdf G.4 Authorize the City Manager to Sign a Joint Funding Agreement with the U.S. Geological Survey for the Continued Operation of the Real-time Streamflow Gaging Stations on the East Gallatin River and Hyalite Creek for Federal Fiscal Year 2025 FY25 USGS Joint Funding Agreement.pdf FY25 USGS JFA Cost Breakdown.pdf G.5 Authorize the City Manager to Sign a Construction and Maintenance Agreement with the Montana Department of Transportation for the 5th and Main Residences Project MDT Maintenance Agreement_5th and Main Residences for signature.docx Attachment_A_MDT_Nondiscrimination&Disability_Accommodation.pdf Attachment B - 5th and Main LANDSCAPE SITE PLAN.pdf G.6 Ratify the City Manager's Signature on the Professional Services Agreement with Granicus, LLC for Subscription Services Granicus PSA 8-26-24.pdf Granicus Exhibit A.pdf Granicus Exhibit B.pdf G.7 Authorize the City Manager to Add a Subscription Agreement with Granicus, LLC for a Boards and Commissions Module Addition to the Agenda and Streaming Platform Bozeman, MT - Boards and Commissions Proposal.pdf G.8 Authorize the City Manager to Sign Professional Services Agreement with Greenspace Landscaping, Inc. for Continued Downtown Tree Replacements 6 Bozeman City Commission Meeting Minutes, September 10, 2024 Page 3 of 8 Est_3359_from_Greenspace_Landscaping_Inc._7484-8-24.pdf PSA_Tree Project_Greenspace2024-8-24.pdf G.9 Authorize the City Manager to sign a Professional Services Agreement with the firm of TD&H Engineering to provide geotechnical engineering services for the Phase I Rehabilitation Improvements to the City's Sourdough Water Storage Tank PSA_Sourdough Tank Ph 1 Rehab Geotech_TD&H.pdf G.10 Authorize the Interim City Manager to Sign a Professional Services Agreement with Raftelis for Integrated Water Resource Plan Engagement and Communications Services 0542MT23.01_Proposal_v3_DRAFT.pdf PSA IWRP.pdf G.11 Authorize the City Manager to Sign a Task Order with Water and Environmental Technologies, LLC for Fiscal Year 2025 Characterization and Monitoring at the East Gallatin Landfill Task Order 001- East Gallatin Landfill FY 2025 Characterization and Monitoring G.12 Authorize the City Manager to Sign an Amendment to the Professional Services Agreement for the Engineering Review Fee Study with BerryDunn PSA 1st Amendment - Infrastructure Review Study Exhibit A - Scope of Services -Infrastructure Fee Study G.13 Authorize the City Manager to Sign a Professional Services Agreement First Amendment with Clean Slate Group, LLC for 2024-2025 Sidewalk Snow Removal Services PSA_-_23-24_Sidewalk_Snow_Removal__2_.pdf PSA Amendment Clean Slate Group FY 25 (signed).pdf G.14 Authorize the City Manager to Sign a First Amendment Portable Toilet Agreement with TLC (TLC Septic & Excavation Inc.) for Portable Toilet Services at Select Urban Camping Areas in the City of Bozeman City of Bozeman Neighborhood Services Program Extension 2024 First Amendment PSA.pdf City of Bozeman Neighborhood Services Program Professional Agreement 2024.pdf G.15 Authorize the City Manager to Sign a Professional Services Agreement Amendment Number 2 for the Engineering Design Standards Update with Morrison Maierle PSA Amendment Exhibit A -Amendment Phase 2 Engineering Standards G.16 Authorize the City Manager to Sign a Task Order 10 with Economic and Planning Systems for a Financial Review of the Wallace Works Tax Increment Finance Request Task Order 10 - Wallace Works with exhibit.pdf G.17 Resolution 5639, Resolution of Adoption to Adopt the SRX II Growth Policy Amendment to Amend the Future Land Use Map from Urban Neighborhood to Community Commercial Mixed-Use. The Property is Located Northeast of South 19th Avenue and Graf Street; Application 24195 24195 SRX II GPA Resolution of Adoption 5639.pdf 001 - GPA MAP.pdf G.18 Resolution 5640, Authorizing the City Manager to Sign Change Order 1 with CK May for the Installation and Connection of the Fire Line at 33 South Tracy Resolution 5640 33 S Tracy-CO1 .pdf Change Order Proposal 01_S. Tracy Ave (33 S. Tracy Fire Line)_08.21.24.pdf 33 S TRACY F 1.0 CIVIL.pdf Owner Spreadsheet (inc Site Breakout) 240725.pdf sprinklers updated - langlas.pdf 7 Bozeman City Commission Meeting Minutes, September 10, 2024 Page 4 of 8 Notice of Award CK May 2024 Street and utility Improvements proj.pdf G.19 Ordinance 2167, Final Adoption of the MSU Innovation Campus Planned Development Zone Map Amendment Rezoning 41.97 Acres from BP, Business Park, to Planned Development Zone Base Zone of B-2, Community Business District; the Property is Generally Located Between West College and Garfield Streets and Centered on Invention Drive, Application 24216 Ordinance 2167 MSU Innovation Campus 24216.pdf 007 MSUIC PDZ District Zone Map Amendment.pdf 004 - C2_1 Concept Plan.pdf G.20 Ordinance 2170, Provisional Adoption, Rezoning A Tract of Land in the SW 1/4 NW 1/4 of Section 24, Township 02S, Range 05E from R-1 (Residential Low Density District) and R-2 (Residential Moderate Density District) to REMU (Residential Emphasis Mixed Use District) Containing 9.26 Acres, and B-2M (Community Business District Mixed) Containing 9.12 Acres; the South Range Crossing II Zone Map Amendment, Application 24196 Ordinance_24196 - SRX II ZMA.pdf 24196_SRX II - ZMA Map.pdf 00:09:19 ICM Winn presented the Consent Agenda highlights 00:11:28 Public Comment on Consent There were no public comments on consent. 00:11:56 Motion to approve all twenty Consent Agenda items as presented. Douglas Fischer: Motion Joey Morrison: 2nd 00:12:12 Vote on the Motion to approve all twenty Consent Agenda items as presented. The Motion carried 5 - 0. Approve: Terry Cunningham Joey Morrison Jennifer Madgic Douglas Fischer Emma Bode Disapprove: None H) 00:12:38 Public Comment on Non-agenda Items Falling Within the Purview and Jurisdiction of the Commission 00:13:47 Anthony commented on the topic of police brutality. 00:17:03 Noah ten Broek commented in opposition to endless growth. 00:20:25 Stephanie commented on Bozeman's National Community Survey. 8 Bozeman City Commission Meeting Minutes, September 10, 2024 Page 5 of 8 I) 00:23:36 Action Items I.1 Ordinance 2162, Provisional Adoption, Revising Speed Limits on West Graf Street, West Oak Street, West Kagy Boulevard Ordinance 2162_Revising Speed Limits on West Graf Street, West Oak Street, and West Kagy Boulevard.docx 2023_City of Bozeman_Kagy Blvd_Speed Study.pdf Kagy Blvd_Approval and Signing Memo.pdf 2023_City of Bozeman_Oak St_Speed Study.pdf Oak St _Approval and Signing Memo.pdf 00:23:40 ICM Winn introduced Action Item I.1 Staff Presentation 00:24:08 Transportation and Engineering Director (TED) Nick Ross presented Ordinance 2162, Revising Speed Limits on West Graf St., West Oak St., West Kagy Blvd. Why is Vehicle Speed Important? Safe Speeds for Bozeman Ordinance 2141, Ordinance 2142 Revisions, July 2023, Authority to Set Speed Limits, Ord. 2162 Speed Studies, Proposed Revisions to Article 7, Proposed Speed Zone Maps Questions of Staff 00:39:31 Public Comment on Action Item 1 There were no Public Comments on Action Item 1 00:39:59 Motion to approve Having reviewed and considered the ordinance, public comment, and staff presentation, I hereby move to provisionally adopt Ordinance 2162, Revising Speed Limits on West Graf Street, West Oak Street, West Kagy Boulevard. Joey Morrison: Motion Emma Bode: 2nd Discussion 00:47:18 Vote on the Motion to approve Having reviewed and considered the ordinance, public comment, and staff presentation, I hereby move to provisionally adopt Ordinance 2162, Revising Speed Limits on West Graf Street, West Oak Street, West Kagy Boulevard. The Motion carried 5 - 0. Approve: Terry Cunningham Joey Morrison Jennifer Madgic Douglas Fischer Emma Bode Disapprove: None 9 Bozeman City Commission Meeting Minutes, September 10, 2024 Page 6 of 8 I.2 Ordinance 2166, Provisional Adoption, Prohibiting Trapping on City Lands within the City and on City Lands in the Bozeman Creek Watershed Ord 2166 Trapping City Lands 2024 FINAL.docx Sourdough_property Ex to Ord.pdf Gallatin Trapping Closure 2013.pdf Draft_notice_Sourdough final.docx 00:47:35 ICM Winn introduced Action Item I.2 Staff Presentation 00:47:59 City Attorney (CA) Greg Sullivan presented Ordinance 2166 Prohibiting Trapping on City Lands within the Bozeman Creek Watershed. Map of Bozeman Creek Watershed, Considerations, Current Regulation, Operational Considerations, Trapping and Snaring Offenses, Next Steps, Recommended Motion Questions of Staff 01:00:22 Public Comment on Action Item 2 01:00:34 Jessica Karjala, Executive Director of Footloose Montana commented in support of Ordinance 2166 01:03:47 Nancy Ostlie commented in support of Ordinance 2166. 01:08:02 Clint Nagel, president of the Gallatin Wildlife Association commented in support of Ordinance 2166. 01:10:47 Jim Bell commented in support of Ordinance 2166. 01:14:31 Michael Storager commented in support of Ordinance 2166. 01:18:25 Motion to adopt :I move to provisionally adopt Ordinance 2166. Emma Bode: Motion Jennifer Madgic: 2nd Discussion 01:31:47 Vote on the Motion to adopt: I move to provisionally adopt Ordinance 2166. The Motion carried 4 - 1. Approve: Terry Cunningham Joey Morrison Jennifer Madgic Emma Bode Disapprove: 10 Bozeman City Commission Meeting Minutes, September 10, 2024 Page 7 of 8 Douglas Fischer J) 01:32:35 Work Session J.1 Pedestrian and Bicycle Gap Analysis Project Work Session Bozeman Gap Definition Memo ADA 071724.pdf 01:32:41 ICM Winn introduced Work Session J.1 Staff Presentation 01:33:06 Transportation Demand Management Coordinator Candace Mastel presented the Bicycle and Pedestrian Gap Analysis, Background, Scope: What Does the Project Include? What the Data Shows, Bike lane Gap, Sidewalk Gap, Trail Gap, Spot Gap, How Do We Define a "Gap?" City Commission Meeting Focus: Gap Definition, Types of Gaps Identified - Linear Gap, Experiential Gap, Spot Gap, Area Gap, Network Gap, engage.bozeman.net/bikeped, Conclusion. Questions of Staff 02:18:56 Public Comment on J.1 02:19:10 Matt Parsons from Gallatin Valley Land Trust commented in support of the Pedestrian and Bicycle Analysis Project. 02:22:34 Justin Bursick commented on different points of the Gap Analysis Project. 02:24:38 Noah ten Broek commented on how a gap might be defined. Discussion 02:51:00 Mayor Cunningham called the meeting into recess. 02:56:57 Mayor Cunningham called the meeting back into session. J.2 02:57:04 Local Street and Sidewalk Funding Work Session Resolution 4507 Resolution 5174 Street Reconstruction - Alt 3 - Fiscal Effects.pdf 02:57:05 ICM Winn introduced Work Session J. 2 Staff Presentation 02:57:17 Director of Transportation and Engineering Nick Ross presented the Local Street Reconstruction Work Session, Why Rebuild Streets?, What a New Street Looks Like, What is the Local Share of the Project?, Local Share (SID) Costs N. Grand Example, Recent Success of the Street Reconstruction Program, Feedback from Residents, Funding Alternatives, Equity Concerns, Fiscal Pressures, Alternative 3 Fiscal Analysis, PROs and CONs, Alternative 4 Fiscal Analysis, PROs and CONs, Missoula Example, Questions & Policy Discussion Questions of Staff 11 Bozeman City Commission Meeting Minutes, September 10, 2024 Page 8 of 8 Mayor Cunningham extended the meeting to 10:15 04:07:46 Public Comment There were no public comments on Action Item J.2 Discussion Mayor Cunningham extended the meeting to 10:25 Mayor Cunningham extended the meeting to 10:30 Mayor Cunningham extended the meeting to 10:35 K) 04:34:07 FYI / Discussion L) 04:34:19 Adjournment ___________________________________ Terry Cunningham Mayor ATTEST: ___________________________________ Mike Maas City Clerk PREPARED BY: ___________________________________ Alex Newby Deputy City Clerk Approved on October 1, 2024 12 Memorandum REPORT TO:City Commission FROM:Nicole Armstrong, Accounts Payable Clerk Rhonda Edwards, Accounts Payable Clerk Aaron Funk, City Controller Melissa Hodnett, Finance Director SUBJECT:Accounts Payable Claims Review and Approval MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Finance RECOMMENDATION:The City Commission is recommended to make a motion and approve payment of claims as presented. STRATEGIC PLAN:7.5. Funding and Delivery of City Services: Use equitable and sustainable sources of funding for appropriate City services, and deliver them in a lean and efficient manner. BACKGROUND:Montana Code Annotated, Section 7-6-4301 requires claims to be presented to the City Commission within one year of the date the claims accrued. Claims presented to the City Commission under this item have been reviewed and validated by the Finance Department. The Department has ensured that all goods and services have been received along with necessary authorizations and supporting documentation. Please provide approval for checks dated October 2nd, 2024. UNRESOLVED ISSUES:None ALTERNATIVES:The City Commission could decide not to approve these claims or a portion of the claims presented. This alternative is not recommended as it may result in unbudgeted late fees assessed against the City. FISCAL EFFECTS:The total amount of the claims to be paid is presented at the bottom of the Expenditure Approval List posted on the City’s website at https://www.bozeman.net/departments/finance/purchasing. Report compiled on: August 21, 2024 13 Memorandum REPORT TO:City Commission FROM:Mike Maas, City Clerk Chuck Winn, Interim City Manager SUBJECT:Acknowledge Receipt of Petition to Abandon North-South Alley within Block 100 of the Northern Pacific Addition to Bozeman, Located between East Peach Street and East Cottonwood Street MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Administration RECOMMENDATION:Acknowledge Receipt of Petition to Abandon North-South Alley within Block 100 of the Northern Pacific Addition to Bozeman, Located between East Peach Street and East Cottonwood Street STRATEGIC PLAN:4.3 Strategic Infrastructure Choices: Prioritize long-term investment and maintenance for existing and new infrastructure. BACKGROUND:The city received a petition to abandon the north-south alley within Block 100 of the Northern Pacific Addition to Bozeman, located between East Peach Street and East Cottonwood Street. Resolution 3628 sets the procedure for abandonment of streets or alleys. Accepting of the petition and directing staff to review the petition is the initial step of that procedure. Future steps include: completion of an engineering staff report, a Resolution of Intent, a noticed public hearing, and finally a Resolution of Abandonment. UNRESOLVED ISSUES:None ALTERNATIVES:As per Commission FISCAL EFFECTS:Application fee of $195 has been paid in full. Attachments: Plans 1_NORTHERN PACIFIC ADD - C-23.pdf Plans 2_Cloverleaf Survey.pdf Plans 3_Cloverleaf Alley Exhibit.pdf Plans 4_Cloverleaf Site Aerial Exhibit.pdf Plans 5_Utility Base Exhibit.pdf Documents 1_Application for street or alley vacation_060424.pdf Documents 2_Consent Letter from Adjacent Property Owner.pdf 14 Documents 3_Alley_Vacation_Narrative_updated 091724.pdf Documents 4_Photos.pdf Documents 5_Commitment Amendment.pdf Report compiled on: September 18, 2024 15 16 October 7, 2021 Douglas W. Pezoldt 15273LS 17 MANLEYFR O N TA GE 7THRED W IN G INTERSTATE 90BAXTERSIMMENTAL UNK19THLEAGRIFFINMANDEVILLEMAUSBOOT HILL FLORAF A R M V I E W REEVESORVILLE SACCORAWHIDE GALLATIN PARK WHEAT7THI NTERSTATE 900 0.25 0.5Miles May 2024 Block 100 Alley Vacation TRAX Partners TRAX Partners BOZEMAN TRAX Partners Crown Castle NorthWestern Energy State of MontanaMT Dept of Transportation BNSF (MRL) 18 MANLEYFR O N TA GE 7THRED W IN G INTERSTATE 90BAXTERSIMMENTAL UNK19THLEAGRIFFINMANDEVILLEMAUSBOOT HILL FLORAF A R M V I E W REEVESORVILLE SACCORAWHIDE GALLATIN PARK WHEAT7THI NTERSTATE 900 0.25 0.5Miles J, (within City ROW)Abandon (within MRL ROW) TRAX Partners TRAX Partners BOZEMAN Storm MainSewer Main Water Main TRAX Partners Crown Castle NorthWestern Energy State of MontanaMT Dept of Transportation BNSF (MRL) BOZEMAN, MT Feet 400200Alley, Block 100, Northern Pacific Addition to Bozeman Alley AbandonmentApril 29th, 2024 E. COTTONWOOD ST. E. PEACH ST.IDA AVE.PLUM AVE.E. A V O C A D O S T . CLOVERLEAF, LLC CLOVERLEAF, LLC CLOVERLEAF, LLC September 2024 19 MANLEYFR O N T A G E 7THRE D W I N G INTERSTATE 90BAXTERSIMMENTAL UNK19THLEAGRIFFINMANDEVILLEMAUSBOOT HILL FLORAFARM V I E W REEVESORVILLE SACCORAWHIDE GALLATIN PARK WHEAT7THINTERSTATE 90 0 0.25 0.5Miles TRAX Partners TRAX Partners BOZEMAN Storm MainSewer Main Water Main TRAX Partners Crown Castle NorthWestern Energy State of MontanaMT Dept of Transportation BNSF (MRL) Feet 400200Alley, Block 100, Northern Pacific Addition to Bozeman Existing Public UtilitiesMay 2024 E. COTTONWOOD ST. E. PEACH ST.IDA AVE.PLUM AVE.E. A V O C A D O S T . Alley Location September 2024 20 APPLICATION FOR STREET/ALLEY VACATION 1.Name:Cloverleaf Property, LLC 2. Address and Phone Number: P.O. Box 161236, Big Sky, MT 59715 3. Street/alley name and written description of area to be vacated: North-South Alley located within Block 100 of the Northern Pacific Addition to Bozeman. Located between East Peach Street and East Cottonwood Street. 4.Attach a map/design of proposed vacation showing the following: a.Location in City b.Street/alley to be vacated c.Applicant’s property d. Adjacent property owners e.Location of utilities f.Adjacent buildings/fixtures 5.Names and addresses of adjacent property owners to proposed street/alley vacation: Name Address Cloverleaf Property, LLC 707 E. Peach 6.ATTACH SIGNED CONSENT LETTERS FROM EACH ADJACENT PROPERTYOWNER. 7.Is street/alley improved?Yes No 8.Attach statement from utility companies indicating consent, consent with conditions (statingconditions), or object to proposed vacation 9.Attach title report showing all ownership interests and easements in property abutting proposedvacation. Title Report and ALTA Survey are attached. 21 NON-REFUNDABLE APPLICATION FEE (FOR SIMPLE STREET/ALLEY VACATIONS) Public Service: $60.00 City Clerk: $75.00 Police: $25.00 Fire $25.00 Planning: $10.00 Total: $195.00 For Complex Street/Alley Vacation: Add 10% to above fee Submission of Application for Street/Alley Vacation in no way obligates the City to vacate proposed street or alley. The ultimate decision for vacation is made by the City Commission, based on if proposed vacation is detrimental to the public interest. 22 Consent Letter from Adjacent Property Owner Adjacent Property Owner: Owner: Cloverleaf Property LLC Mailing Address: PO Box 161236, Big Sky, MT 59716 Property Legal Description: Northern Pacific Addition (Bozeman), Lot 1-8 & 11-28, Block 100 Property Address: 707 East Peach Cloverleaf Property LLC (Petitioner) wishes to abandon the alley within Block 100, running north- south between East Cottonwood Street and East Peach Street. Following the Petition to Vacate requirements established by City of Bozeman Resolution 3628, written consent to vacate the alley is required. By signing below, the above-referenced owner, Cloverleaf Property LLC consents to the Petition to abandon the portion of Alley within Block 100, Northern Pacific Addition. Signed: Date: Printed Name: Docusign Envelope ID: 362518D1-3441-4C6A-BA3E-71B8BAEAF7C2 7/25/2024 Tom Berkley 23327 Block 100, Northern Pacific Addition Alley Vacation Request Application Narrative Purpose Cloverleaf, LLC is requesting the vacation of the north-south alley within the 100 block of the Northern Pacific Addition in Bozeman, Montana. The alley is located between East Peach Street and East Cottonwood Street. The included maps show the location of the alley within the City, the alley to be vacated, the abutting properties, locations of public utilities, and adjacent buildings and fixtures. This request does not include the east-west alley, located west of North Ida Avenue. Alley Description The alley runs north-south between East Peach Street and East Cottonwood Street. It was established as part of the plat of the Northern Pacific Addition, dedicated in 1883 (plat C-23). The alley, as with all alleys on the plat, is a width of 16 feet. It is 300 feet in length, for a total of 4,800 square feet. The alley is not of actual existence, as it appears only on the plat of record and is not used or designated as an alley. It is unpaved and does not contain any known public or private utilities. Site photos and aerial imagery indicate that the alley has been integrated into the internal site circulation and access for the previous use and owner. Abutting Property Owners Cloverleaf LLC owns all abutting properties to the alley. Land & Uses Description The abutting properties include buildings formerly used by Bronken Distributing. The use has relocated and there are no current business activities on the property. The owners are currently in design for the redevelopment of the site. In advance of that design, this request to vacate the alley is being made. Public and Private Utilities No utilities are located in the alley. As shown on the Utility Exhibit, public utilities are available with the adjacent street rights-of-way. Public water mains are located within the rights-of-way 24 Block 100 Northern Pacific Addition Alley Vacation Request September 17, 2024 Page 2 of East Peach Street, North Ida Avenue, and East Cottonwood Street. Fire hydrants are adjacent to the parcels on East Peach Street and Plum Avenue. Wastewater collection is located within the East Peach Street and East Cottonwood Streets rights-of-way. Public stormwater collection is within East Peach Street and Plum Avenue. Private utilities are shown on the Survey Exhibit. Electric and communications provide service from Ida Avenue to the existing buildings adjacent to Ida Avenue, and the structure closest to Plum Street is services via overhead lines from East Peach Street and Plum Avenue. Traffic Impacts The vacation will not affect any existing traffic patterns, as it is currently not part of the transportation network within the neighborhood. Future development of the site will have impacts on traffic patterns, volumes, and other related issues. Access to and from the site will likely be via alley access. As development is considered for this site, additional traffic using this alley poses impacts on the network. Peach Street is a designated collector route. Along Peach Street, the intersection of the alley is not adequately separated from the intersections of Ida Avenue and Plum Avenue, therefore creating inconsistency with City intersection separation standards and potential safety concerns. Per Table 38.400.090-1 of the BMC, the minimum separation between public accesses along a Collector street is 330 feet for full access and 150 feet for partial access. The distance between the alley and Plum Avenue is 110 feet, therefore not meeting the minimum separation requirements. Table 38.400.090-1 25 Block 100 Northern Pacific Addition Alley Vacation Request September 17, 2024 Page 3 Additionally, the intersection of the alley on the north side of the property with East Cottonwood Street and North Plum Avenue creates an inconsistency in the street network, potentially leading to a public hazard. Vacation of the alley will remove these future conflicts, thereby improving public safety. Accessibility The alley vacation will have no effect on the accessibility of the site. Future development will be required to provide adequate site access, accessibility, and vehicle and pedestrian facilities. With the existing perimeter streets, and existing alley off North Ida Avenue, accessibility will not be affected. Emergency Services Access As with accessibility, the alley vacation will have no negative effect on emergency service access. Future development will be reviewed and permitted to ensure adequate emergency service access. With the existing perimeter streets, and existing alley off North Ida Avenue, emergency services will not be affected. Public Services Access As with accessibility and emergency services, the alley vacation will have no negative effect on other public services. Future development will be reviewed and permitted to ensure adequate access for garbage service, street maintenance, or similar services. With the existing perimeter streets, and existing alley off North Ida Avenue, these services will not be affected. Alternatives to vacation As the site is in design for redevelopment, vacating the alley provides the opportunity to improve public safety for the neighborhood. Reducing the number of access points on Peach Street, which is a designator Collector, improves public safety. 26 Alley Looking North Google Street Image, June 2019 Alley Looking South Google Street Image, September, 2015 100 Block, Northern Pacific Addition Alley Vacation Petition Approximate Alley Location Approximate Alley Location 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Memorandum REPORT TO:City Commission FROM:Natalie Meyer, Sustainability Program Manager Brian Heaston, Senior Engineer Shawn Kohtz, Director of Utilities SUBJECT:Authorize the City Manager to sign Task Order No. 6, under the Professional Services Master Task Order Agreement with the firm of HDR Engineering Inc., providing engineering services for a solar installation feasibility study at the Water Reclamation Facility. MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Agreement - Vendor/Contract RECOMMENDATION:Authorize the City Manager to sign Task Order No. 6, under the Professional Services Master Task Order Agreement with the firm of HDR Engineering Inc., providing engineering services for a solar installation feasibility study at the Water Reclamation Facility. STRATEGIC PLAN:6.3 Climate Action: Reduce community and municipal Greenhouse Gas (GHG) emissions, increase the supply of clean and renewable energy; foster related businesses. BACKGROUND:HDR Engineering provides professional engineering services on an on-call basis for the Bozeman Water Reclamation Facility (WRF) under a Master Task Order Agreement entered into on March 22, 2022. Attached is Task Order 6, providing engineering services to complete a solar installation feasibility study for the WRF. The WRF is the largest consumer of power for City-owned facilities by a large margin. The goal of solar installation at the WRF is to produce approximately 500 kW of power onsite, reducing current demands for grid power by 18%. Achievement of these goals at the WRF will reduce annual power costs and the overall carbon footprint of the City, advancing sustainability goals set forth in the commission-adopted 2020 Climate Plan. HDR will work with the local solar design firm of OnSite Energy on this project. OnSite Energy will provide technical services for solar array layout options to achieve the targeted power production for the WRF site. HDR will evaluate the solar layout options to determine, given existing infrastructure operations and maintenance and future planned facilities, the suitability of the installation. 42 UNRESOLVED ISSUES:None. ALTERNATIVES:As suggested by the City Commission. FISCAL EFFECTS:Total Task Order 6 negotiated costs amount to $16,506. The contract will be funded by the General Fund within the FY25 Sustainability Division operating budget for solar engineering analysis. Sufficient funding is available. Attachments: Task Order 6_HDR_WRF On Call.pdf Report compiled on: September 19, 2024 43 WRF Task Order No. 6 1 Exhibit A to Professional Services Agreement TASK ORDER NUMBER 06 Issued under the authority of Professional Services Agreement between the City of Bozeman and HDR Engineering, Inc. for: A range of professional and technical services related to operations and maintenance of the City of Bozeman Water Reclamation Facility and the East Gallatin River. This Task Order is dated , 2024 between City of Bozeman (City) and HDR Engineering, Inc. (Contractor). The following representatives have been designated for the work performed under this Task Order: City: Brian Heaston Contractor: Coralynn Revis SCOPE OF WORK: (attach additional sheet(s) as required) 1. Non-Export Solar Feasibility Study at the Bozeman, MT WRF. See Attachment No. 1 and No. 2. COMPENSATION: The anticipated level of effort for the above Task items are based upon the following manhour projection and expense projection in Attachment No. 3. The anticipated cost for services for the above Task items, to be completed on a Time and Materials Basis not to exceed without prior authorization, are as follows in Attachment No. 3. Contractor shall be reimbursed on a Time and Materials basis not to exceed the budget amounts presented, without prior written authorization from the City of Bozeman. Contractor shall notify the City of Bozeman prior to executing additional work, and shall not proceed with additional work without written authorization from the City of Bozeman. Contractor shall invoice no more often than monthly for services provided in the prior month. The provisions of the Professional Services Master Task Order Agreement and any Special Terms and Conditions and/or Exhibits or Attachments to this Task Order shall govern the Work. IN WITNESS WHEREOF, the parties authorized to commit resources of the companies have executed this Task Order: City of Bozeman HDR Engineering, Inc. By: By: Title: Title: Date: Date: Fed. ID. No. 44 ATTACHMENT NO. 1 CITY OF BOZEMAN, MONTANA WRF SOLAR FEASIBILITY STUDY SCOPE OF SERVICES Project Summary: The project consists of a feasibility study related to the potential installation of non-export solar power at the Bozeman, Montana Water Reclamation Facility (WRF). The work will include analysis of the electrical design, power distribution, and inverter control feasibility. The site does not have an ideal location for a centralized solar farm so it is likely the panels will need to be installed in multiple locations (ground mount and roof). The work will also include assessment of the feasibility of incorporating the proposed improvements into the City’s SCADA system. The project scope is organized into three separate work tasks. The work tasks include: TASKS 100 Project Management 200 Feasibility Assessment and Cost Estimates 300 Draft and Final Feasibility Report Task 100. Project Management Objective: Manage the professional services contract to provide completion of the project. Project will use the existing project management plan for the MSA to meet the City of Bozeman’s project needs. Subtasks: 101 Coordination Meetings/Workshops Conduct a project kickoff meeting with key City staff to establish project goals and objectives, review the project decision process, define anticipated work products, identify information needed to perform the work, refine the schedule, and establish points of contact and project communication. Conduct periodic meetings (monthly) with the City to review project progress, schedule, and budget. Identify information needs and make decisions regarding changes in the scope of the project, the design, and the construction services efforts. A total of two meetings are included in this scope, both held remotely. 102 Management Plan The MSA has an existing management plan that will be used to execute the project. 103 Progress Reports 45 Provide monthly progress reports with each invoice in letter format. The progress reports will summarize the work progress and budget expenditures to date and identify information requirements or decisions that need to be made. Deliverables: • Meeting agendas/minutes • Monthly invoices and project reports Task 200. Feasibility Assessment and Cost Estimates Objective: HDR will collect field data and assess the feasibility of the installation of non- export solar at the Bozeman WRF. Task 200 includes subcontractor services provided by OnSite Energy, Inc. Subtasks: 201 Subcontractor Services HDR will engage the services of OnSite Energy, Inc. to assist with equipment sizing and development of cost estimates. The scope of work to be provided by OnSite Energy is described in greater detail in Estimate 2819 dated August 20, 2024 (See Attachment No. 2). 202 Feasibility Analysis Task 202 will include the following major elements: • Development of a conceptual site panel layout drawing. • Development of a conceptual electrical one line diagram with solar interconnect. • Non-export control analysis in accordance with Northwestern Energy Rule 17 – Reverse Power Protection. • Development of an inverter control network block diagram • Development of civil design concepts including fencing, grading, and drainage. • Development of the preliminary network control description including SCADA incorporation and distributed inverter design concept. Future tasks not included in this scope may include: • Electrical site layout (future). • Geotech analysis for racking (future). • Preliminary and final design (future). Easement research will be completed by the City of Bozeman. 203 Development of Opinion of Probable Project Cost (OPPC) Task 203 will include the development of a preliminary OPPC based on the information developed during the feasibility study. Opinions of probable project cost or probable construction cost provided by Engineer are made on the basis of information available to Engineer and on the basis of Engineer's experience and qualifications and represents its judgment as an experienced and qualified professional engineer. However, since Engineer has no control over the cost of 46 labor, materials, equipment or services furnished by others, or over the contractor(s') methods of determining prices, or over competitive bidding or market conditions, Engineer does not guarantee that proposals, bids or actual project or construction cost will not vary from opinions of probable cost Engineer prepares. Deliverables: • Site panel conceptual layout drawing. • Conceptual electrical one line diagram with solar interconnect. • Inverter control network block diagram • Preliminary site layout and with grading and drainage concept • Preliminary network control description including SCADA incorporation and distributed inverter design. • Estimate of probable project cost. Task 300. Draft and Final Feasibility Report Objective: Provide a draft and final feasibility study summarizing the results of the analysis including an OPPC. Subtasks: 301 Draft and Final Feasibility Report The information developed in the Tasks above will be summarized in a draft feasibility report. The intent of the report is to provide guidance related to the installation of solar power at the Bozeman, WRF, challenges, potential solutions, and an OPPC. After receiving comments from the City, a final report we will prepared. A meeting related to discussing City comments on the draft feasibility study is addressed in Task 101 above. Deliverables: • Draft report. • Final report. 47 ATTACHMENT NO. 2 SUBCONTRACTOR SERVICES 48 1 - Project Manager General -Coralynn Revis2 - Project Principal General -Trey Morris3 - Quality Control Reviewer - Terry Stulc4 - Engineer Electrical - Jordan Creveling5 - EIT Electrical - Mark Herzog6 - Engineer Electrical - Tou Vang8 - Accountant - Paden Kaufman9 - Admin Asst Word Processor - Devie BessettTotal BudgetTask Task Description Status PJM15 PJM33 QCR10 EEL20 EEL10 EEL20-1 ACT03 ADM02TOTAL HOURS LABOR COSTSSUBCONTRACTORTOTAL COST101Coordination Meetings/Workshops . 2 2 26 1,451$ ◄-$ 102Mangement Plan .0-$ ◄-$ 103Progress Reports . 1 45 717$ ◄-$ Subtotal (including optional) 32020040 11 2,168$ -$ 2,168$ 201Subcontractor Services . 3 25 830$ 6,480$ 7,310$ 202Feasibility Analysis . 6 8 418 2,975$ ◄-$ 203Development of OPPC . 1 45 1,069$ ◄-$ Subtotal (including optional) 010138420 28 4,875$ 6,480$ 11,355$ 301Draft and Final Feasibility Report . 2 8 4 418 2,983$ ◄-$ .-$ -$ -$ Subtotal (including optional) 02084004 18 2,983$ -$ 2,983$ Total (including optional) 3 5 0 23 12 4 6 4 57 10,026$ 6,480$ 16,506$ HDRTask 100Project ManagementTask 200Feasibility Assessment and Cost EstimatesTask 300Draft and Final Feasibility ReportOther Direct Costs49 Memorandum REPORT TO:City Commission FROM:Katie Canter, Contracts and Sports Parks Coordinator Mitch Overton, Parks and Recreation Director SUBJECT:Authorize the City Manager to Sign a Third Amendment to the Professional Services Agreement with Clean Slate Group, LLC. for Snow Removal and Maintenance Services in the Parks and Trails District MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Agreement - Vendor/Contract RECOMMENDATION:Authorize the City Manager to Sign a Third Amendment to the Professional Services Agreement with Clean Slate Group, LLC. for Snow Removal and Maintenance Services in the Parks and Trails District. STRATEGIC PLAN:6.5 Parks, Trails & Open Space: Support the maintenance and expansion of an interconnected system of parks, trails and open spaces. BACKGROUND:On June 1, 2020, the Bozeman City Commission approved Resolution 5180 creating the Bozeman Parks and Trails Special District (District). To accomplish the District objectives the City has developed a multi-year District implementation plan designed to achieve steady calculated increases in level of service standards and sustainable maintenance practices in all City Parks. Beginning July 1, 2020 City’s Parks and Recreation Department assumed full responsibility for all of the District’s designated park properties including the addition of 235 acres of park land located within subdivision parks previously maintained by home owners/community associations. In September 2021, the Parks and Recreation Department conducted a request for proposals process to acquire professional services required to complete snow removal and additional maintenance services on parks in the District. After careful evaluation and review, Clean Slate Group, LLC. was determined to be a qualified, responsive and responsible vendor for Parks and Trails District Snow Removal Services contract. On November 16, 2021, the City entered into the Agreement with Clean Slate Group, LLC. [External Link] The Agreement is effective for one year after the date of execution with the option to extend the agreement an additional year upon mutual agreement. Clean Slate Group, LLC. has demonstrated the ability to provide comprehensive snow removal maintenance services for the City’s Parks and Trials District and will continue complete the services as defined and described in linked PSA Clean Slate Group, LLC. Snow Removal Services. The Attachment A PSA Amendment 3 Clean Slate Group, LLC. Snow Removal Services will extended the Agreement for an additional one (1) year period 50 and shall terminate on November 16, 2025. In no case, however, may this agreement run longer than five (5) years from the original effective date. UNRESOLVED ISSUES:None. ALTERNATIVES:As suggested by the City Commission. FISCAL EFFECTS: Funding is currently allocated for this maintenance within the FY25 and FY26 budget in the Parks and Trails District Maintenance Fund account. Attachments: Attachment A PSA Amendment 3 Clean Slate Group LLC..pdf Report compiled on: September 17, 2024 51 Third Amendment to Professional Services Agreement for Snow Removal Clean Slate Group LLC. FY 2025 – FY 2026 Page 1 of 2 THIRD AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT THIS THIRD AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT FOR Parks and Trials District Snow Removal Services dated November 16, 2021 (the “Agreement”) is made and entered into this _____ day of ____________, 2024, by and between the CITY OF BOZEMAN, MONTANA, a self governing municipal corporation organized and existing under its Charter and the laws of the State of Montana, 121 North Rouse Street, Bozeman, Montana, with a mailing address of PO Box 1230, Bozeman, MT 59771, hereinafter referred to as “City,” and Clean Slate Group LLC., 34 Outlier Way, Bozeman MT 59718 hereinafter referred to as “Contractor.” In consideration of the mutual covenants and agreements herein contained, the receipt and sufficiency whereof being hereby acknowledged, the parties hereto agree to amend the Agreement as follows: 1.Extension of Term: Section 31. Extensions: Professional Service Agreement between City and Contractor dated November 16, 2021 is extended for an additional one (1) year period. The Agreement shall terminate on November 16, 2025. 2.Scope of Services: It is the intention of the parties that the scope of services include the amendment agreed to in the Second Amendment to the Professional Services Agreement, dated October 24, 2023. 3.Agreement still valid. All remaining terms and provisions of the Agreement remain valid. **** END OF AGREEMENT EXCEPT FOR SIGNATURES **** 52 Third Amendment to Professional Services Agreement for Snow Removal Clean Slate Group LLC. FY 2025 – FY 2026 Page 2 of 2 IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and year first above written. CITY OF BOZEMAN, MONTANA CLEAN SLATE GROUP LLC. By________________________________ By_____________________________ Chuck Winn, Interim City Manager Print Name: Title: APPROVED AS TO FORM By_______________________________ Greg Sullivan, Bozeman City Attorney 53 Memorandum REPORT TO:City Commission FROM:Katie Canter, Contracts and Sports Parks Coordinator Mitch Overton, Parks and Recreation Director SUBJECT:Authorize the City Manager to Sign a Third Amendment to the Professional Services Agreement with Advantage Spraying Services, Inc. for Snow Removal Services in the Parks and Trails District MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Agreement - Vendor/Contract RECOMMENDATION:Authorize the City Manager to Sign a Third Amendment to the Professional Services Agreement with Advantage Spraying Services, Inc. for Snow Removal Services in the Parks and Trails District. STRATEGIC PLAN:6.5 Parks, Trails & Open Space: Support the maintenance and expansion of an interconnected system of parks, trails and open spaces. BACKGROUND:On June 1, 2020, the Bozeman City Commission approved Resolution 5180 creating the Bozeman Parks and Trails Special District (District). To accomplish the District objectives the City has developed a multi-year District implementation plan designed to achieve steady calculated increases in level of service standards and sustainable maintenance practices in all City Parks. Beginning July 1, 2020 City’s Parks and Recreation Department assumed full responsibility for all of the District’s designated park properties including the addition of 235 acres of park land located within subdivision parks previously maintained by home owners/community associations. In September 2021, the Parks and Recreation Department conducted a request for proposals process to acquire professional services required to complete snow removal and additional maintenance services on parks in the District. After careful evaluation and review, Advantage Spraying Services, Inc. was determined to be a qualified, responsive and responsible vendor for Parks and Trails District Snow Removal Services contract. On November 16, 2021, the City entered into the Agreement with Advantage Spraying Services, Inc. [EXTERNAL LINK] The Agreement is effective for one year after the date of execution with the option to extend the agreement an additional year upon mutual agreement. Advantage Spraying Services, Inc. has demonstrated the ability to provide comprehensive snow removal maintenance services for the City’s Parks and Trials District and will continue to complete the services as defined and described in the linked PSA Advantage Spraying Services Inc. The Attachment A PSA Amendment 3 Advantage Spraying Services, Inc. will extend the Agreement for an additional one (1) year period and shall 54 terminate on November 16, 2025. In no case, however, may this agreement run longer than five (5) years from the original effective date. UNRESOLVED ISSUES:None. ALTERNATIVES:As suggested by the City Commission. FISCAL EFFECTS:Funding is currently allocated for this maintenance within the FY25 and FY26 budget in the Parks and Trails District Maintenance Fund account. Attachments: Attachment A PSA Amendment 3 Advantage Spraying Services Inc.pdf Report compiled on: September 17, 2024 55 Third Amendment to Professional Services Agreement for Snow Removal Advantage Spraying Services Inc. FY 2025 – FY 2026 Page 1 of 2 THIRD AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT THIS THIRD AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT FOR Parks and Trials District Snow Removal Services dated November 16, 2021 (the “Agreement”) is made and entered into this _____ day of ____________, 2024, by and between the CITY OF BOZEMAN, MONTANA, a self governing municipal corporation organized and existing under its Charter and the laws of the State of Montana, 121 North Rouse Street, Bozeman, Montana, with a mailing address of PO Box 1230, Bozeman, MT 59771, hereinafter referred to as “City,” and Advantage Spraying Services Inc., 144 Wildcat Way, Bozeman MT 59718 hereinafter referred to as “Contractor.” In consideration of the mutual covenants and agreements herein contained, the receipt and sufficiency whereof being hereby acknowledged, the parties hereto agree to amend the Agreement as follows: 1.Extension of Term: Section 31. Extensions: Professional Service Agreement between City and Contractor dated November 16, 2021 is extended for an additional one (1) year period. The Agreement shall terminate on November 16, 2025. 2.Agreement still valid. All remaining terms and provisions of the Agreement remain valid. **** END OF AGREEMENT EXCEPT FOR SIGNATURES **** 56 Third Amendment to Professional Services Agreement for Snow Removal Advantage Spraying Services Inc. FY 2025 – FY 2026 Page 2 of 2 IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and year first above written. CITY OF BOZEMAN, MONTANA ADVANTAGE SPRAYING SERCICES INC. By________________________________ By_____________________________ Chuck Winn, Interim City Manager Print Name: Title: APPROVED AS TO FORM By_______________________________ Greg Sullivan, Bozeman City Attorney 57 Memorandum REPORT TO:City Commission FROM:Nicholas Ross, Director of Transportation and Engineering SUBJECT:Authorize the City Manager to Sign an Amendment 3 with Jacobs Engineering Group Inc. for Federal Transportation Grant Writing Services MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Agreement - Vendor/Contract RECOMMENDATION:Authorize the City Manager to Sign an Amendment 3 with Jacobs Engineering Group Inc. for Federal Transportation Grant Writing Services. STRATEGIC PLAN:4.3 Strategic Infrastructure Choices: Prioritize long-term investment and maintenance for existing and new infrastructure. BACKGROUND:To better position the City for federal transportation grant opportunities, staff solicited proposals from firms to help with federal grant writing. Jacobs Engineering Group Inc. was selected for the work. The original contract scope focused on the technical components of the Kagy Blvd MPDG application. Amendment 1 was for writing assistance associated with the Kagy Blvd MPDG application. Amendment 2 provided writing support for a joint COB-MDT application to the federal SMART program with the intent of securing a planning grant for integrated intelligent transportation system implementation. Amendment 3 will extend the contract to December 31, 2024. Staff recommends that commission authorize the City Manager to sign the attached amendment to the Professional Service Agreement. UNRESOLVED ISSUES:None. ALTERNATIVES:As recommended by Commission. FISCAL EFFECTS:None. Attachments: PSA Amendment 3 Jacobs - Transpo Grants Report compiled on: December 8, 2023 58 3rd Amendment to Professional Services Agreement for Federal Transportation Grant Writing Services FY 2024-FY 2025 Page 1 of 2 THIRD AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT THIS THIRD AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT FOR FEDERAL TRANSPORTATION GRANT WRITING SERVICES dated _March 7, 2023_ (the “Agreement”) is made and entered into this _____ day of ____________, 202__, by and between the CITY OF BOZEMAN, MONTANA, a self governing municipal corporation organized and existing under its Charter and the laws of the State of Montana, 121 North Rouse Street, Bozeman, Montana, with a mailing address of PO Box 1230, Bozeman, MT 59771, hereinafter referred to as “City,” and _JACOBS ENGINEERING GROUP INC_, hereinafter referred to as “Contractor.” In consideration of the mutual covenants and agreements herein contained, the receipt and sufficiency whereof being hereby acknowledged, the parties hereto agree to amend the Agreement as follows: 1. Extend term of agreement to December 31, 2024. 2. Agreement still valid. All remaining terms and provisions of the Agreement remain valid. **** END OF AGREEMENT EXCEPT FOR SIGNATURES **** 59 3rd Amendment to Professional Services Agreement for Federal Transportation Grant Writing Services FY 2024-FY 2025 Page 2 of 2 IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and year first above written. CITY OF BOZEMAN, MONTANA JACOBS ENGINEERING GROUP INC. By________________________________ By_____________________________ Chuck Winn, Acting City Manager Print Name: Heather Carroll Title: Manager of Projects APPROVED AS TO FORM By_______________________________ Greg Sullivan, Bozeman City Attorney 60 Memorandum REPORT TO:City Commission FROM:Jon Henderson, Assistant City Manager SUBJECT:Authorize the City Manager to Sign a Third Amendment to Architectural Services Agreement with A&E Design for Bozeman City Hall Renovation MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Agreement - Vendor/Contract RECOMMENDATION:Authorize the City Manager to Sign a Third Amendment to Architectural Services Agreement with A&E Design for Bozeman City Hall Renovation STRATEGIC PLAN:4.3 Strategic Infrastructure Choices: Prioritize long-term investment and maintenance for existing and new infrastructure. BACKGROUND:Capital improvement project GF370 is a consolidated project consisting of renovating office and public spaces in City Hall, retro commissioning the building for improved energy efficiency, and enhancing points of staff / public interaction through layout changes and security upgrades. On October 24, 2023 the City Commission approved an Architectural Services Agreement with A&E Design to perform professional services related to conceptual design. On January 27, 2024 the City Commission approved Amendment 1 adding full design and construction administration services. On May 7, 2024 the City Commission approved Amendment 2 adding interior design and furniture coordination services. This amendment includes the addition of a comprehensive signage plan and additional design work needed to finalize construction drawings. It is anticipated that this project will go to bid in late-October, followed by construction throughout the winter months, with a targeted completion date of June 30, 2024. A&E Design was selected as the Architect for this project through a public Request for Qualifications process in which respondents were scored based upon their experience and qualifications as applicable to this project. UNRESOLVED ISSUES:None. 61 ALTERNATIVES:As directed by the City Commission FISCAL EFFECTS:This amendment will increase the contracted price for Architectural Services by $21,600. Costs are to be paid from the GF370 Project Fund. Attachments: Amendment 3 - Architectural Services Agreement - A&E Design - City Hall Renovation GF370.pdf Report compiled on: September 19, 2024 62 Third Amendment to Professional Architectural Services Agreement for Architectural Services – City Hall Renovation FY 2024 – FY 2026 Page 1 of 2 THIRD AMENDMENT TO PROFESSIONAL ARCHITECTURAL SERVICES AGREEMENT THIS THIRD AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT FOR Architectural Services – City Hall Renovation dated October 24, 2023 (the “Agreement”) is made and entered into this _____ day of ____________, 2024, by and between the CITY OF BOZEMAN, MONTANA, a self governing municipal corporation organized and existing under its Charter and the laws of the State of Montana, 121 North Rouse Street, Bozeman, Montana, with a mailing address of PO Box 1230, Bozeman, MT 59771, hereinafter referred to as “City,” and A&E Design, 515 W Aspen St., Bozeman, MT 59715, hereinafter referred to as “Contractor.” In consideration of the mutual covenants and agreements herein contained, the receipt and sufficiency whereof being hereby acknowledged, the parties hereto agree to amend the Agreement as follows: 1. Scope of Work: Section 3 of the Agreement is amended to expand the project’s scope to include a signage design proposal attached hereto as Exhibit A and a proposal for additional design services attached hereto as Exhibit B. 2. Payment: Section 4 of the Agreement is amended to include costs associated with expansion of project scope as attached hereto as Exhibit A and Exhibit B. 3. Agreement still valid. All remaining terms and provisions of the Agreement remain valid. **** END OF AGREEMENT EXCEPT FOR SIGNATURES **** 63 Third Amendment to Professional Architectural Services Agreement for Architectural Services – City Hall Renovation FY 2024 – FY 2026 Page 2 of 2 IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and year first above written. CITY OF BOZEMAN, MONTANA A&E DESIGN By________________________________ By_____________________________ Chuck Winn, Interim City Manager Print Name: Title: APPROVED AS TO FORM By_______________________________ Greg Sullivan, Bozeman City Attorney 64 Signage Design Proposal 1 A&E Design 515 West Aspen Street Bozeman, MT 59715 ae.design August 1, 2024 Jon Henderson Strategic Services Director 20 East Olive Street Bozeman, MT 59715 Via email: jon.henderson@bozeman.net RE: Bozeman City Hall Signage Dear Jon, Thank you again for the opportunity to collaborate further with you on the Bozeman City Hall Renovation to help manage and design the signage package for this project. Scope: 1. Code/ADA Signage a. Room Signs b. Exit Signs c. Office Signs d. Evacuation Maps e. Restroom Signs 2. Wayfinding Signage a) Wall and ceiling mounted directional signage b) Level directory c) Building directory d) Amenity identification e) Department identification Schematic Development – Planning the Space During this phase, we’ll document all the existing signage and locations to help identify opportunities for new signage location and styles. This first phase will identify best locations for signage, as well as the initial style, colors, etc. for your review. Deliverables • Schematic Signage Floor Plan • Schematic Materials, Finishes, and Colors Exhibit A 65 Signage Design Proposal 2 Design Development – Planning the Space During this phase, we’ll provide a conceptual signage design to arrive at the best possible solution that blends the interior design and signage into a cohesive design that meets the space plan and goals for wayfinding. Deliverables • Further development of signage plan • Material and design options for specific signs (primarily wayfinding signs). Construction Documents – How It All Goes Together We’ll create drawings and schedules that describe in technical detail your project goals. This includes final FF&E plans with placement, materials, and equipment needed for the FF&E design completion and ability to procure from an outside vendor. We will continue to work with this outside vendor during this phase, managing the selection and design process for you. Deliverables • Final Signage Plan – Fully incorporated design intent along with placement and dimensions as required. • Final Materials, Finishes, and Colors Construction Administration – Procurement and Installation Our team offers in-house Construction Administration services, which reduces the potential for errors and miscommunication and ensures the project is completed on schedule and within budget. This service provides consistency between the design team, contractor, furniture vendor, and owner to preserve the design intent and ensure construction quality. From schedule review to coordination of specific materials and equipment, we verify all project requirements are met. Deliverables This proposal includes: • Management and review during signage installation. • Provide review of site deliverables to ensure quality, schedule, and final placement. Total Fee: $16,100 We are excited to help make your ideas into reality. Thank you for this opportunity! Sincerely, Emma Survis AIA 66 Our Proposal 1 A&E Design 515 West Aspen Street Suite 200A Bozeman, MT 59715 ae.design 9/12/24 Jon Henderson City of Bozeman Bozeman, MT 59715 RE: Bozeman City Hall Renovation Additional Services Dear Jon, Per our discussion on September 10, 2023, this proposal outlines the additional scope of services for the revised design of City Hall: • Reconfigure the City Manager’s office to be one large open office space with a specially defined reception space and 4 workstations, as well as a printer/copy area. To include changes to the architectural, mechanical, and electrical design. • Revise drawings to include the windows in the base bid scope, rather than as an Alternate. Fee Proposal The fee for this additional service is $5,500. Sincerely, Emma Survis AIA Project Manager Exhibit B 67 Memorandum REPORT TO:City Commission FROM:Addi Jadin, Park Planning and Development Manager Mitchell Overton, Director of Parks and Recreation SUBJECT:Resolution 5649 to Authorize Change Order One for Highland Construction for Glen Lake Rotary Park Parking Lot MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Agreement - Vendor/Contract RECOMMENDATION:Resolution 5649 to Authorize Change Order One for Highland Construction for Glen Lake Rotary Park Parking Lot STRATEGIC PLAN:6.5 Parks, Trails & Open Space: Support the maintenance and expansion of an interconnected system of parks, trails and open spaces. BACKGROUND:Change order needed for additional work to meet the existing grade of roadway, increase depth for bike rack pad, adjustments to accommodate irrigation and minor overrun items needed for the Glen Lake Rotary Park parking lot project. UNRESOLVED ISSUES:NA. ALTERNATIVES:Per Commission FISCAL EFFECTS:Additional $12,910 will be funded from budgeted amounts appropriate for this scope of work. Attachments: GLRP_Change-Order-1_Resolution-5649.docx Highland_Glen-Lake_Change-Order-1.pdf Report compiled on: September 6, 2024 68 Version February 2023 RESOLUTION 5649 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, WHEREAS,the City Commission did, on April 1, 2024, authorize award of the bid for the Glen Lake Rotary Park Parking Lot Phase 1 to Highland Construction Services, LLC; and WHEREAS,Section 7-5-4308, Montana Code Annotated, provides that any such alterations for modification of the specifications and/or plans of the contract be make by resolution; and WHEREAS, it has become necessary in the prosecution of the work to make alterations or modifications to the specifications and/or plans of the contract. NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, that the proposed modifications and/or alterations to the contract between the City of Bozeman, a municipal corporation, and Highland Construction Services, LLC, as contained in Change Order No. 1, attached hereto, be and the same are hereby approved; and the City Manager is hereby authorized and directed to execute the contract change order for and on behalf of the City; and the City Clerk is authorized and directed to attest such signature. PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the _____ day of ___________________, 20____. ___________________________________ TERRY CUNNINGHAM Mayor ATTEST: 69 Version February 2023 ___________________________________ MIKE MAAS City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 70 71 72 C 406.580.4394 O 406.586.2448 PO Box 207 | 7400 Thorpe Rd., Belgrade, MT 59714 highlandbuilds@gmail.com August 23, 2024 Danielle Scharf Sanderson Stewart 106 E Babcock St Suite L1 Bozeman, MT 59715 Glen Lake Rotary Park Phase 1 Change Order Pricing Addition of 2’ of curb inlet chase @ $1175 per foot = $2,350 Addition of 80 SY of Asphalt to match curb on the SW side of the entrance road on Manley @ $34 SY = $2,720 Changing the Bike pad from 4” to 6” $540 Additional curb and gutter from plan quantity @ $32 LF = $4,800 Additional prep for the extra 80 SY of asphalt @ $2,500 Total: $12,910.00 73 Memorandum REPORT TO:City Commission FROM:Chris Saunders, Community Development Manager Erin George, Interim Community Development Director SUBJECT:Ordinance 2168, Final Adoption, Amending Table 38.310.040.C. of Chapter 38 of the Bozeman Municipal Code to Allow Apartments as a Permitted Use with No Restrictions in Area on the Second and Subsequent Floors, and Basements of Buildings, and to Allow Lobbies on the Ground Floor When Associated with Residential Uses in the Northeast Historic Mixed Use (NEHMU) District, Application 24225 MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Ordinance RECOMMENDATION:Finally Adopt Ordinance 2168 STRATEGIC PLAN:4.2 High Quality Urban Approach: Continue to support high-quality planning, ranging from building design to neighborhood layouts, while pursuing urban approaches to issues such as multimodal transportation, infill, density, connected trails and parks, and walkable neighborhoods. BACKGROUND:The City Commission unanimously approved Application 24225 on August 27, 2024, to modify the City's development code to allow apartments as a permitted use with no restrictions in area on the second and subsequent floors, and basements of buildings, and to allow lobbies on the ground floor when associated with residential uses in the Northeast Historic Mixed Use (NEHMU) District. The proposed revision to the UDC Table 38.310.040.C. would be applicable to any lot within the NEHMU District, city wide. UNRESOLVED ISSUES:None ALTERNATIVES:As determined by the Commission FISCAL EFFECTS:No unusual fiscal effects have been identified. No presently budgeted funds will be changed by this Zone Text Amendment. Future development will incur costs and generate review according to standard City practices. Attachments: Ordinance 24225 NEHMU ZTA.docx Report compiled on: September 4, 2024 74 Version February 2023 Ord. 2168 Page 1 of 7 ORDINANCE 2168 AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA AMENDING TABLE 38.310.040.C OF CHAPTER 38 OF THE BOZEMAN MUNICIPAL CODE TO ALLOW APARTMENTS AS A PERMITTED USE WITH NO RESTRICTIONS IN AREA ON THE SECOND AND SUBSEQUENT FLOORS, AND BASEMENTS OF BUILDINGS, AND TO ALLOW LOBBIES ON THE GROUND FLOOR WHEN ASSOCIATED WITH RESIDENTIAL USES IN THE NEHMU DISTRICT (NORTHEAST HISTORIC MIXED USE DISTRICT), APPLICATION 24225. WHEREAS, the City of Bozeman (the “City”) has adopted land development and use standards to protect public health, safety and welfare and otherwise execute the purposes of Montana Code Annotated §§ 76-1-102, 76-2-304, 76-3-102, and 76-3-501; and WHEREAS, pursuant to the Bozeman City Charter, the City of Bozeman has adopted and is hereby relying upon its self-government powers recognizing pursuant to Montana law such self- government powers must be liberally construed in favor of such power; and WHEREAS,pursuant to Chapter 38, Section 38.260.010.A of the Bozeman Municipal Code (BMC), Bangtail Partners, LLC, Nest Partners submitted application number 24225 for a specific zoning text amendment for Table 38.310.040.C to allow apartments as a permitted use with no restrictions in area on the second and subsequent floors, and basements of buildings, and to allow lobbies on the ground floor when associated with residential uses in the NEHMU District; and WHEREAS,pursuant to BMC Section 38.260.020, upon receipt of such application, the Community Development Department initiated the required investigation of facts bearing on such proposed amendment to ensure that the action is consistent with the intent and purposes of Chapter 38, Section 38.100.040 to protect health, safety and general welfare; and WHEREAS,on July 15, 2024, the Bozeman Community Development Board, acting as the Bozeman Zoning Commission, voted unanimously to recommend approval on a 5-0 vote to the Bozeman City Commission; and 75 Ordinance No. 2168, NEHMU Zone Text Amendment Page 2 of 7 WHEREAS,pursuant to Sections 38.220.420 and 38.260.030, public notice of the July 15, 2024 public hearing on the proposed amendment before the Community Development Board and of the August 27, 2024 public hearing before the Bozeman City Commission was given by publication in a general circulation newspaper on June 22, 2024, July 6, 2024, and August 10, 2024, which is not less than 15 or more than 45 calendar days prior to the public hearings; and WHEREAS, after proper notice, the City Commission held its public hearing on August 27, 2024, to receive and review all written and oral testimony on the proposed amendments; and WHEREAS, the City Commission has reviewed and considered the applicable amendment criteria established in Montana Code Annotated (MCA) § 76-2-304, considered the Community Development Board recommendation, and all the information presented by staff and the Applicant at the July 15, 2024 public hearing, and found that the proposed amendments to Table 38.310.040.C presented by the Applicant and recommended by the Community Development Board is in compliance with the MCA criteria; and NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA: Section 1 Legislative Findings The City Commission hereby makes the following findings in support of adoption of this Ordinance: 1. The City adopted a growth policy, the Bozeman Community Plan 2020, by Resolution 5133 to establish policies for development of the community including zoning; 2. The Bozeman Community Plan 2020, Chapter 5, sets forth the policies by which the City reviews and applies the criteria for amendment of zoning established in 76-2-305, MCA; 3. Zoning, including text amendments, must be in accordance with an adopted growth policy; 4. A staff report analyzing the required criteria for a zone text amendment, including accordance to the Bozeman Community Plan 2020, has found that the required criteria are satisfied; 5. The two required public hearings were advertised as required in state law and municipal code and all persons have had opportunity to review the materials applicable to the application and provide comment prior to a decision; 6. The Bozeman Community Development Board as the Zoning Commission has been established as required in state law and conducted their required public hearing; and after consideration of application materials, staff analysis and report, and all submitted public 76 Ordinance No. 2168, NEHMU Zone Text Amendment Page 3 of 7 comment recommended approval of the application. 7. The City Commission conducted a public hearing to provide all interested parties the opportunity to provide evidence and testimony regarding the proposed amendment prior to the City Commission acting on the application. 8. The City Commission considered the application materials, staff analysis and report, the Community Development Board recommendation, all information presented by staff and the Applicant, and all other relevant information. 9. The City Commission determines that, as set forth in the staff report and incorporating the staff findings, Community Development Board’s amendment and recommendation, and staff and Applicant presentation at the public hearing as part of their decision, the required criteria for approval of the proposed Bozeman Unified Development Code (UDC) Table 38.310.040.C text amendment to allow apartments as a permitted use with no restrictions in area on the second and subsequent floors, and basements of buildings, and to allow lobbies on the ground floor when associated with residential uses in the NEHMU District. Section 2 Table 38.310.040.C—Permitted residential uses in commercial, mixed use, and industrial zoning districts. Permitted uses for the NEHMU District—shall be amended to read as follows with all other elements of the table and footnotes remaining unchanged. Zoning Districts Commercial Mixed Use Industrial PLI B-11 B-2 B-2M B-3 UMU (38.310.050) REMU (38.310.060) NEHMU BP M-1 M-2 General residential Accessory dwelling unit (38.360.040)--------------------P P ------------ Apartments*ᶟ P⁴P⁴P⁵P⁵P P A⁶ P⁴---A⁶A⁶--- Apartment buildings*ᶟ ---S P P⁵P P --------------- 77 Ordinance No. 2168, NEHMU Zone Text Amendment Page 4 of 7 Cottage housing* (38.360.120)---------------P --------------- Single household dwelling (38.360.220) ---------------P P ------------ B-11 B-2 B-2M B-3 UMU REMU NEHMU BP M-1 M-2 PLI Three household dwelling or four household dwelling (38.360.220) ---------------P --------------- Townhouses*ᶟ & rowhouses* (38.360.250)---S⁷P⁷P⁷---P⁸P ------------ Two-household dwelling (38.360.220)---------------P P ------------ Live-work units*P P P P P P P ------------ Ground floor residential S P⁵P⁵--------------------- Group residences Community residential facilities with eight or fewer residents* P⁴P⁴˒⁵P⁴˒⁵P⁴˒⁵P⁴˒⁵P P ------------ Community residential facilities serving nine or more residents* ---S S ---P P --------------- Cooperative household*---------------P S ------------ Group living (38.360.135)*P⁴P⁴P⁵P⁴---P P ------------ 78 Ordinance No. 2168, NEHMU Zone Text Amendment Page 5 of 7 Lodging houses*---S S⁵Sᶟ P P --------------- Transitional and emergency housing and related services (38.360.140)* ---S S S S S S S S ---S Notes: 1. In the B-1 district, the footprint of individual buildings must not exceed 5,000 square feet. 2. Authorized uses in the NEHMU district include those uses allowed in the R-2 district (some of which aren’t addressed in this table). 3. May be subject to the provisions of chapter 38, article 380. 4. When located on the second or subsequent floor, or basement as defined in section 38.700.030 of this chapter. Lobbies associated with residential uses are allowed on the ground floor. 5. Non-residential uses (except for lobbies associated with residential uses) are required on the ground floor to a minimum depth of 20 feet from front building façade on properties adjacent to designated storefront streets per section 38.500.010. 6. For the purpose of this section, accessory means less than 50 percent of the gross floor area of the building, and not located on the ground floor. 7. Five or more attached units. 8. Five or fewer attached units. Section 3 Repealer. All provisions of the ordinances of the City of Bozeman in conflict with the provisions of this ordinance are, and the same are hereby, repealed and all other provisions of the ordinances of the City of Bozeman not in conflict with the provisions of this ordinance shall remain in full force and effect. Section 4 Savings Provision. This ordinance does not affect the rights and duties that matured, penalties that were incurred or proceedings that were begun before the effective date of this ordinance. All other 79 Ordinance No. 2168, NEHMU Zone Text Amendment Page 6 of 7 provisions of the Bozeman Municipal Code not amended by this Ordinance shall remain in full force and effect. Section 5 Severability. That should any sentence, paragraph, subdivision, clause, phrase or section of this ordinance be adjudged or held to be unconstitutional, illegal, or invalid, the same shall not affect the validity of this ordinance as a whole, or any part or provision thereof, other than the part so decided to be invalid, illegal or unconstitutional, and shall not affect the validity of the Bozeman Municipal Code as a whole. Section 6 Codification. The provisions of Section 2 of this Ordinance shall be codified as appropriate in the Bozeman Municipal Code. Section 7 Effective Date. This ordinance shall be in full force and effect thirty (30) days after final adoption. 80 Ordinance No. 2168, NEHMU Zone Text Amendment Page 7 of 7 ADOPTED by the City Commission of the City of Bozeman, Montana, on first reading at a regular session held on the 17th day of September 2024. ____________________________________ TERENCE CUNNINGHAM Mayor ATTEST: ____________________________________ MIKE MAAS City Clerk FINALLY PASSED, ADOPTED AND APPROVED by the City Commission of the City of Bozeman, Montana on second reading at a regular session thereof held on the 1 st of October 2024. The effective date of this ordinance is ______________, 2024. _________________________________ TERENCE CUNNINGHAM Mayor ATTEST: _______________________________ MIKE MAAS City Clerk APPROVED AS TO FORM: _________________________________ GREG SULLIVAN City Attorney 81 Memorandum REPORT TO:City Commission FROM:Takami Clark, Communications & Engagement Manager SUBJECT:Unified Development Code (UDC) Update Engagement Plan MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Citizen Advisory Board/Commission RECOMMENDATION:Consider the Motion: I move to approve the engagement plan. STRATEGIC PLAN:1.2 Community Engagement: Broaden and deepen engagement of the community in city government, innovating methods for inviting input from the community and stakeholders. BACKGROUND:The Unified Development Code (UDC) sets regulations around what kinds of development can occur in which areas. For the 2022-2023 Commission 2- year priority cycle, Bozeman City Commission named the UDC update as a key priority of the City. Thus began the UDC Update process, a project that kicked off in summer 2022 with the goals of: Implementing the vision and goals of other guiding City documents, such as the 2020 Community Plan, Climate Plan, and the Community Housing Action Plan. Making the Code more user-friendly. Updating the Code per changes in state law. A variety of in-person and virtual engagement opportunities were held throughout 2022 and 2023, and in the summer of 2023, following feedback from the public and Commission, a draft code was released. Many residents expressed concerns about the draft, with some wanting more time to review and give feedback. In October 2023, Commission paused the process with the desire to pick back up in 2024. Following the pause, staff did not work on the project but did conduct a survey on communications and engagement preferences to get a better understanding for how the community wanted the next phase of engagement to go. The results from this survey helped to shape the Supplemental Engagement Plan. In September 2024, Commission began the restart of the project with a work session on how the project will resume, including what engagement might look like. Commission and members of the public provided important feedback on expanding the named partners and adding other ways and opportunities for people to engage. Edits have been incorporated into the attached updated draft engagement plan. The plan is a description of all of 82 the items we will do at a minimum, and other opportunities to engage may arise and be taken that go beyond what is described. This Action Item presentation will give a brief background of the project, review the upcoming engagement plan, and provide a path forward on how the Commission, staff, and public will engage with each other. UNRESOLVED ISSUES:None ALTERNATIVES:None FISCAL EFFECTS: Potential Budget Costs of $30,000: Hired facilitator - $5,000 Mailer(s) - $20,000 Utility Bill Insert - $1,000 Paid social ads - $2,000 Paid radio ads - $500 Paid Chronicle ads - $1,500 Attachments: UDC Update CE Plan Phase 2 v6.docx Report compiled on: September 24, 2024 83 Last Updated: 9/26/2024 5:51 PM COMMUNITY ENGAGEMENT PLAN –PHASE 2 Project Title:Building Our Future Together: Updating the Development Code Project Leads: Chris Saunders (City of Bozeman) Tom Rogers (City of Bozeman) Erin George (City of Bozeman) Code Studio, Logan Simpson C.E. Purpose/Background: This project is all about implementing the vision and goals established in our city’s guiding documents such as the 2020 Community Plan (aka “Growth Policy), the Climate Plan, and strategic priorities like affordable housing. These broad visions, goals, and priorities are implemented through the Unified Development Code (“the UDC” or “the code”).The UDC sets forth regulations around what kinds of development can occur in which areas through development standards and zoning districts. Engagement for this project kicked off in summer 2022 and focused on desired changes to the existing code. In 2023, the project team incorporated feedback from the public and Commission, resulting in the draft code which was released summer 2023. Since the release of the draft code, many residents have expressed concerns, with some wanting more time to review and give feedback. In October, Bozeman City Commission halted the project process with the desire to pick the topic back up in 2024 and ensure everyone in the community had a chance to weigh in. Heading into the next phase of engagement, the goal for this effort is to first collaborate with the community on determining the areas of greatest concern, and identifying topics on which this engagement should focus. Second, engagement will center on consulting members of the public regarding the identified areas, with the intent of determining options for altering draft code language in ways that reflect community values and align with the vision and goals of the Community Plan, Climate Plan, and Community Housing Action Plan. By engaging first on the key topic areas, staff will be able to market the engagement events differently to get more interest and devote more focused time and conversation during events to the topics that residents care most about. The first part of engagement will also act as a re-introduction to the UDC so that by the time residents are consulted on what to update, they are more familiar with the UDC and what it says on that specific topic area. Key Terms: Enabling acts –the state laws that authorize the City to regulate development and use of land. Form and intensity standards –the rules that create the physical volume within which a building can be built. Maximum height is an example. Public comment –any opportunity in writing or orally to contribute to the decision-making process on an application. Public hearing –a formal agenda action meeting state law requirements for public participation making prior to a final decision. 84 Last Updated: 9/26/2024 5:51 PM Review authority –Many different people and professions help administer the rules. The term review authority is generally used to mean the person responsible for making the decision on that subject. There is one place in the code where who decides on what rules is assigned. Unified Development Code (aka: UDC, “the code,” “development regulations” etc.) Zoning district (text) –the group of standards that define the allowed uses and physical dimensions of buildings allowed. Zoning district (map) –the geographical area where the rules established in a zoning district (text) apply. Zoning map –a single map of the entire city showing where the various individual zoning districts are applied. Affordable housing -Affordable housing does not require greater than 33 percent of the household gross annual median income for housing. Residential Units –number of dwelling units in a building (as applied to home configuration) Townhome/rowhome difference –visually they are the same, but the ownership of the land is different. Concurrent review -Parallel review of required zoning and building permits prior to construction Concurrent construction –approval to allow construction of infrastructure and building(s) at the same time Review Processes o Subdivision –Division of a larger piece of land into smaller parcels for development. o Site plan –Review of larger and more complex developments (e.g. commercial sites and residential complexes) for compliance with site design, use, and architectural standards. o Sketch plan -Review of smaller and simpler developments (e.g. individual homes on individual parcels) for compliance with site design, use, and architectural standards. o Special use permit –Review for development standard compliance where there is an inherent question whether the use is appropriate in a particular zoning district. Zone edge transitions –Required building form transitions at a zoning boundary. In some cases, development must be adjusted to decrease impacts on adjacent property Residential Density –Number of homes per acre of land Deviation vs departure vs variance –three processes to alter adopted standards for individual developments. Each has its own justifications, limitations, and restrictions. NCOD –an area of the community where special standards are applied to proposed development to preserve character and architectural history ADU –A size and occupancy-limited home that due to these limitations has less restrictive standards. ADUs are allowed in all residential zoning districts. Condominium –means of property ownership. May be applied to a variety of real property. Parking –A policy choice defined by the City Commission informed by practical experience. Setback -The distance from the property line to the nearest part of the applicable structure. Stepback –A steplike recession on a building. Block frontage –A system to orient, design, and relate buildings to the street for human interaction. 85 Last Updated: 9/26/2024 5:51 PM Key Partners/constituents/community groups: Internal City Commission (Decision maker) City Manager Office Community Development staff Transportation & Engineering staff Sustainability staff Legal staff Economic Development staff Utilities staff Forestry staff Parks & Rec staff Finance staff Police/Fire staff Advisory boards Community Development Board (provides recommendations to City Commission) Economic Vitality Board Sustainability Board Transportation Board Historic Preservation Advisory Board Urban Parks & Forestry Board External Broad Public Renters Inter Neighborhood Council Neighborhood Associations HOAs Property Management Companies University Students, K-12 students Churches, Interfaith Association Special interest groups –active transportation, lighting, housing, environmental, people with disabilities Development Community -Design & Engineering, Architects, Landscape Architects, Subdividers, Site Developers, Land planners, Builders, Realtors, Real Estate Professionals, Lenders Large employers -Bozeman Health, Billings Clinic, MSU Local businesses –Downtown Bozeman Partnership, Chamber of Commerce Gallatin County (staff & elected) Nonprofit Housing Organizations –HRDC, Family Promise, Haven Key Questions 1.What decisions have already been made? 86 Last Updated: 9/26/2024 5:51 PM a.Priorities, vision, and direction is established in the 2020 Community Plan, Climate Action Plan, Community Housing Action Plan, and enabling legislation. 2.What decisions are we gathering public input on? 1.Which focus areas of the UDC do residents most want to discuss? 2.What revisions to the draft code language should be considered that both reflect community values and keep in mind the vision and goals of the Community Plan, Climate Plan, and Community Housing Action Plan? 3. Who is the final decision maker? a.City Commission is the final decision maker with consideration of legal criteria, community input, staff recommendation, and Community Development Board recommendations. 3.At what stages in the decision-making process is the public being asked to participate (see graphic)? a.Evaluate Alternatives b.Formal public hearing and adoption process 4.Who will be most impacted by this decision/project/policy? a.Who may benefit, who may be burdened? i.The public with a more user-friendly code. ii.Design and development community with improved code to implement. iii.Staff, advisory boards, and commission with simpler code to administer. iv.Those who prefer more restrictive development rules may be dissatisfied with the resulting construction. v.Community benefit includes increased availability of housing options across the spectrum of need, increased transportation options and walkability as a result of more sustainable development patterns and community design. b.What are the potential unintended consequences? i.Revised zoning districts may not work as intended. ii.Graphic-focused code may be unfamiliar and some may find it harder to use. iii.Additional flexibility may impact community character. c.How will people be better off as a result of this decision/project/policy? i.Improved understanding and implementation of community priorities. ii.Simpler code raises fewer questions, regulations are easier to understand. iii.Improved implementation of Community Plan, Climate Plan, affordable housing goals –intended outcomes include increased housing supply, less reliance on single-occupant vehicle trips to reach essential services, employment. iv.Less project specific conflict due to understandable standards and clear milestones for participation in code drafting and application. 5.What is the timeline for this decision/project/policy? a.Project timeline has not been fully determined but is anticipated to wrap up in 2025. 6.What are the communication and engagement resources available? a.City staff in Community Development, City Manager’s Office will help create content and review and disseminate key messages, information, and opportunities to engage. b.Consultants are expected to be looped in to assist with content creation and engagement needs. 87 Last Updated: 9/26/2024 5:51 PM 88 Last Updated: 9/26/2024 5:51 PM Level of Community Engagement:Inform and Consult 89 Last Updated: 9/26/2024 5:51 PM Goal for Community Engagement Collaborate with the community on determining the topics areas of greatest concern. Then,consult members of the public on how to update those specific areas of the code in ways that reflect community values and align with the vision and goals of the Community Plan, Climate Plan, and Community Housing Action Plan. Objectives –(SMART! Specific, Measurable, Attainable, Realistic, Timely) Use a variety of innovative methods to inform the broad public about this effort and support informed engagement from a wide and balanced cross section of the community. Increase community understanding of the project and associated issues. Gather input on preferred alternatives for housing creation support. Engagement Timeline October through December 2024 –Identification of Focus Areas Communications tools: Engage Bozeman newsletter and webpage update, e-notification, web calendar, utility bill message, mailer (provides information on both focus area engagement AND neighborhood engagement), press release, Bozeman.net front page banner, paid social media ad on Facebook/Instagram, social media posts on Facebook, Instagram, Twitter, Nextdoor, paid ad in Chronicle on both focus area engagement AND neighborhood engagement. Survey on Engage Bozeman to determine focus areas. Webinar during day hours with resources/recording posted after the event so people can learn and engage on their own time. Webinar introduces the UDC, surveys attendees on focus areas, and answers questions from residents.Commissioners are invited to attend. Open House during weekday evening to introduce the UDC, collect input on focus areas, and answer questions from residents who prefer to engage in-person.Provide 4 meetings total with one in each quadrant of the city.Commissioners are invited to attend. Emails to key partners list with presentations and meetings if interested. January through February 2025 –Community Input on Focus Areas Communications tools: Engage Bozeman newsletter and webpage update, e-notification, web calendar, utility bill message, press release, Bozeman.net front page banner, paid social media ad on Facebook/Instagram, social media posts on Facebook, Instagram, Twitter, Nextdoor, paid ads on radio. Four 1 to 2-hour workshops with residents held weekday evenings: 1 each in NW, NE, SW, SE Bozeman, hosted in schools/non-city affiliated facility. Staff and/or a hired facilitator works with staff to lead workshop. Commissioners are invited to attend. Webinar(s)during day hours with resources/recording posted after the event so people can learn and engage on their own time. Hired facilitator works with staff to lead virtual breakout sessions. Commissioners are invited to attend. Survey on Engage Bozeman to collect specific feedback (especially for those who cannot attend in person). Host your own UDC chat –develop a toolkit based on key focus areas, with content people could review as needed before hosting a group chat with friends, colleagues, etc. Includes a report link for chat hosts to fill out after the event. 90 Last Updated: 9/26/2024 5:51 PM Emails to key partners list with presentations and meetings if interested. March 2025 and beyond –Provide updated UDC draft for public review and comment,and set timeline for hearings Communications tools: Engage Bozeman newsletter and webpage update, e-notification, web calendar, press release, Bozeman.net front page banner, paid social media ad on Facebook/Instagram, social media posts on Facebook, Instagram, Twitter, Nextdoor 2 general public presentations on UDC draft with Q&A, comment cards. Emails to key partners list with presentations and meetings if interested. 91 Memorandum REPORT TO:City Commission FROM:Jesse DiTommaso, Economic Development Specialist David Fine, Economic Development Program Manager Brit Fontenot, Economic Development Director SUBJECT:Resolution 5643 Approving a Project in the Northeast Urban Renewal District, known as Wallace Works, as an Urban Renewal Project; Making Findings with Respect Thereto and Approving the Use of Tax Increment Revenues to Reimburse Eligible Costs Thereof and Approving a Related Development Agreement MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Resolution RECOMMENDATION:Consider the Motion: I move to Approve Resolution 5643, a Project in the Northeast Urban Renewal District, known as Wallace Works, as an Urban Renewal Project; Making Findings with Respect Thereto and Approving the Use of Tax Increment Revenues to Reimburse Eligible Costs Thereof and Approving a Related Development Agreement. STRATEGIC PLAN:2.2 Infrastructure Investments: Strategically invest in infrastructure as a mechanism to encourage economic development. BACKGROUND:Please see attached staff memo. UNRESOLVED ISSUES:None. ALTERNATIVES:As suggested by the Commission. FISCAL EFFECTS:The applicant is requesting $2,055,563 in tax increment from the Northeast Urban Renewal District. It has been determined the project can support the request in a pay-go scenario as outlined in the attached development agreement. Attachments: Wallace Works Staff Memo FINAL.pdf Wallace Works Application FULL.pdf 233073-Final Memo-TIF Review-Wallace Works 09-23- 2024.pdf Resolution approving Wallace Works project FINAL.pdf BZN Development Agreement.WallaceWorks FINAL.pdf 92 Report compiled on: September 11, 2024 93 1 Wallace Works Mixed-Use Development | Staff Report To: Northeast Urban Renewal Board From: Jesse DiTommaso, Economic Development Specialist David Fine, Economic Development Program Manager for Housing and Development Brit Fontenot, Economic Development Director Meeting Date: October 1, 2024 TIF Assistance Program Overview Staff reviewed this application based on the seven goals in the Northeast Urban Renewal District’s Urban Renewal Plan. In staff’s opinion, this approach ensures the goals of the district are considered when applications are evaluated. The Northeast Urban Renewal District’s TIF Assistance Program supports projects that contribute to the following seven goals of the Northeast Urban Renewal District Plan: 1) Ensure the health, safety, and security of the District, 2) Balance Commerce and Livability within the Mixed-Use Framework, 3) Honor the Unique Character and Vitality of the District, 4) Public Open Space is Essential to a Healthy and Appealing Urban Environment, 5) The Costs of Projects and Programs shall be Weighed Against their Benefits to the District, 6) The City shall not Limit its Vision for the District Improvements to Monies Available Solely through the TIF Funding, and 7) Projects shall Consider Impacts on Adjacent Neighborhoods. These goals, as required by statute, focus on mitigating conditions of blight in the urban renewal district. Each of these seven goals is further refined with particular criteria creating a total of twelve categories that can receive points. Point awards demonstrate specific compliance with the criteria, but are not the only factors the Commission may consider in recommending an incentive award. For example, the Commission may also consider new taxable value created by the project, whether the project would be feasible without a public incentive, and the project’s provision of amenities and services that contribute to walkability, quality of life in the district and surrounding neighborhoods, as well as the provision of community housing. Staff Recommendation Staff Recommends providing TIF Assistance to the Project. The Northeast Urban Renewal District TIF Assistance Program exists to promote projects that meet the criteria, drive growth in taxable value for the long-term benefit of the wider community, and create demand for market driven redevelopment. At this phase in the Northeast URD’s redevelopment lifecycle, few projects containing the targeted criterion elements are financially feasible, “but for” TIF incentives for public infrastructure. The Northeast URD is considered a small district primarily comprised of residential property and will sunset in 2042. These factors make it difficult to provide incentives with longer payback periods. Incentives may create the potential for higher returns to mitigate higher risk, which will likely attract investment that would not occur without these incentives. 94 2 The project will further the Northeast Urban Renewal District’s stated goal of ensuring health, safety, and security of the district through infrastructure investments. The Wallace Works project includes the completion of a new sewer line in the Aspen Street right of way as well as the reconstruction of sidewalks, landscaping, and storm water drainage facilities along Tamarack Street and Wallace Avenue. By providing covered bicycle parking, small “vest pocket” plazas for improved pedestrian circulation, and specific car-share parking, the project encourages a land-use pattern that facilitates all modes of transportation for safe, efficient, and convenient access for residential and commercial uses. The project balances commerce and livability in the District within the mixed-use framework by providing 6,402 square feet of ground floor commercial space. A small grocery store will occupy a portion of the ground floor commercial, which will be able to serve some basic needs of District. The variety of housing units in the project will increase the rental and for sale housing stock in the Northeast neighborhood and aims to provide attainable and eclectic housing types within the District. The project includes five for-sale live/work units and 11 row homes. There will be 49 apartments for rent with seven of the 49 rental units deed restricted at 80% of area median income. Thoughtful consideration of design and massing in the construction of new buildings was done for compatibility of land uses through appropriate urban design techniques. The proposed incentive request of $2,055,563 is consistent with the goals of the Northeast Urban Renewal Plan by improving public infrastructure along Wallace Avenue and Tamarack Street and extending a sewer line into the Aspen Street right of way. With a project cost of $39,843,565 this represents a ratio of private to public investment of $19 of private investment for each dollar of public investment or a ratio of 19.38:1. This produces an outstanding ROI for the District. The developer will finance the project up front. When the project is completed and on the tax rolls, taxes generated by the project itself will be remitted back to the developer until they are made whole for eligible costs incurred. The arrangement is outlined in the attached development agreement. In order to ensure that the level of assistance makes the project feasible, but does not provide unreasonable returns to the developer, staff engaged Economic and Planning Systems, Inc. (EPS) to provide an independent, third-party assessment of the development pro forma. Staff contracts for this component of the review process to assess the reasonableness of each applicant’s incentive request. EPS found the project does generate a positive net cash flow from the for-sale units; however, the project overall may yield a lower rate of return than developers look for in real estate development investment. The project has a low internal rate of return and negative net present value in an unlevered discounted cash flow analysis. EPS concluded their analysis and found that the TIF request of $2,055,563 does not generate above market rate returns for the developer and that the TIF request improves the feasibility of the project. 95 3 The Wallace Works project received points on criteria representing 11 out of 12 of the District goals of the Northeast Urban Renewal District Plan, creates a return on investment that can fund future public infrastructure improvements and other TIF eligible costs in the District. Additionally and the Wallace Works project proposes the creation of seven affordable rental housing units at 80% AMI for 50 years. Given the satisfaction of these public policy priorities, staff recommends approval of the full funding request. Criteria for TIF Assistance Ensure the Health Safety and Security of the District 1. Infrastructure Improvement: Infrastructure Improvement: The project will repair, replace, or improve outdated or insufficient infrastructure i. The project will improve insufficient infrastructure with the addition of a sewer main in the Aspen Street Right of Way. The project will upgrade the sidewalk and boulevards on both Tamarack Street and Wallace Avenue. 4/6 2. Multimodal Transportation: The project incorporates transportation infrastructure that facilitates safe, efficient, and convenient access of the district for all modes of transportation. i. The project will incorporate pedestrian circulation plazas along both Tamarack Street and Wallace Avenue. Wallace Works will have 20 bike parking spaces with a portion of those being covered. There will be the 81 total parking spaces provided. 3/4 3. Public Utilities: The project will incorporate public utilities in a way so that they are not visually or physically obtrusive. i. The project will bury public utilities. 2/2 Balance Commerce and Livability within the Mixed-Use Framework 4. Mix of Uses: The project incorporates mixed use development that promotes livability. i. Wallace Works includes ground floor commercial spaces for small neighborhood retail, street level office, restaurant space, and live/work units. The residential units will be a mix of apartments, row homes, co-living units, and live/work units. 4/4 5. Community Housing: The project includes affordable housing units. For the purposes of this criterion, an affordable housing unit is defined as a unit that requires no more than 33 percent of a household’s income for housing payments based on a designated percentage of area median income (AMI). Eligible rental units shall be affordable at 70% AMI and eligible for sale units shall be affordable at 90% AMI. Condominium units are eligible as for sale units. Additional points may be awarded for projects that provide on-site housing for the proposed workforce. Eligible rental dwellings to be constructed in the proposed residential development shall be provided by long-term contractual obligation to an affordable housing agency, for a period of not less than 20 years, with a written plan assuring ongoing affordability pricing and eligibility monitoring, and annual re-certification. The city's affordability guidelines and subsequent revisions establish affordability and eligibility. To receive 3 points under this criterion, 10% of all units must meet the affordability criteria. To receive 6 points under this criterion, 20% of all units must meet the affordability criteria. i. The project includes 49 rental units, seven of which will be deed restricted at 80% AMI and four cohousing units. There will be 16 row homes for sale. The for-sale units are a mix of one and two bedrooms. Five of the row homes will be live/work units. The 96 4 developer aims to provide non-deed restricted housing at an “attainable” rate. No units are proposed for affordability at the rates suggested by this criterion; the above criteria was implemented prior to the City adoption of Ordinance 2105, the Affordable Housing Ordinance. While the criterion is not met as described, the project delivers the required number of affordable units as required by the Affordable Housing Ordinance; 14% of the rental units (and 10% of the total units) meet the City’s definition of affordable at 80% of area median income for 50 years. 3/6 Honor the Unique Character and Vitality of the District 6. Character: The physical design, materials, and massing of the project reflects the community’s values of durability, flexibility, and simplicity, and add vitality to the neighborhood. i. Staff concurs with the Applicant’s description of how the project meets the Character criterion 2/2: The Wallace Works project incorporates materials that are used within the district such as metal siding, natural wood, stucco, and cmu block. These materials are assembled to promote durability. The project keeps the form making of the buildings simple, gable forms for smaller scale structures and articulating the facades of larger buildings. The mass and scale of the buildings are deliberately low on the Southern portion of the site that is closest to the historic residences. Efforts are also being made with the landscaping and site improvements to fit within the neighborhood by keeping the character of the site funky (a word used frequently during our participation in the RUDAT to describe the unique character of the district). Wallace Works Application, Page 12. 7. Sustainability: The project’s design and construction practices incorporate environmentally sustainable strategies and elements i. The project incorporates United States Green Building (USGB) certification, drought tolerant landscaping measures, low flow plumbing fixtures, and stormwater sub surface site drainage containment. 1/2 Public Open Space is Essential to a Healthy and Appealing Urban Environment 8. Open Space: The project designates new land for parks and open space i. The project includes pedestrian plazas as part of the built environment, creating and enhancing open space. 1/4 9. Landscaping: The project improves landscaping in existing public spaces i. The project enhances the landscaping in the Wallace Boulevard as well as along Tamarack Street, where the pedestrian plazas will be located. 2/2 The Costs of Projects and Programs shall be Weighed Against their Benefits of the District 10. Return on Investment: The investment of public funds in the project results in a leverage ratio of at least 10:1 for residential projects; 8:1 for commercial/industrial projects; and/or 5:1 for living wage jobs. i. The Applicant is requesting $2,055,563 in TIF Assistance on a project with a total cost of $39M, a 19:1 ratio of private to public investment. This produces an outstanding ROI for the District. Economic and Planning Systems completed an independent third-party review of the project proforma and concluded the project satisfies a “but for” argument for the use of public funds. 4/4 97 5 The City shall not Limit its Vision for the District Improvements to Monies Available Solely through the TIF Funding 11. Public-Private Partnerships: This project involves and/or will encourage public-private partnerships that will add value to the District and its investments. i. The Applicant did not provide enough information to award points for this criterion. 0/4 Projects shall Consider Impacts on Adjacent Neighborhoods 12. Complimentary to Adjacent Neighborhoods: The project is complimentary to adjacent neighborhoods, not just the Northeast Urban Renewal District. 2/2 i. The project provides neighborhood scale food and retail spaces that can serve surrounding residents. The project received more than half of the available points and received points on criteria meeting 11 of 12 urban renewal plan goals. Total Points: 28/42 98 Pole Yard TIF Assistance Application Part 1 Page 1 Northeast Urban Renewal District Tax Increment Financing Assistance (TIF) Application PART 1 PROJECT INFORMATION Project Name: Wallace Works Property Address: __ 801 N Wallace Ave Legal Description: See Attached title report Property Geo-Code: 60-0799-06-4-17-02-0000, 06-0799-06-4-17-01-0000, 06-0799-06-4-19-31-0000, 06-0799-06-4-19-39-0000 County Tax ID #: RGH48588, RGH2336, RGH3296, RGH2337 Property Status: X Vacant Land ☐ Building on Leased Land ☐Existing Building APPLICANT INFORMATION Applicant’s primary contact: Name: Erik Nelson Business Name: Nest Partners / Wallace Works Business Phone: _______________________________Cell Phone: 406-539-1176 Email: erik@nest-partners.com Project Representative (if not applicant): Name: Erik Nelson – same as above Business Name: Business Phone: _______________________________Cell Phone: Email: Property Owner (if not applicant): Name: Greg Avis / Bangtail Partners LLC Business Name: Bangtail Partners LLC Business Phone: _______________________________Cell Phone: 406-539-1176 Email: Please attach a list of additional owners, business partners, developers and/or investors associated with this project, with the above information provided for each. 99 Pole Yard TIF Assistance Application Part 1 Page 2 COMPANY PROFILE Business Location New business establishing itself in Bozeman ☐Existing business ☐Expanding/remodeling at same location ☐Expanding to an additional location ☐Existing business relocating from (identify location): Street Address: City: State: Zip: X Other: Development partnership / has developed the Lark and Rialto in Bozeman Year Business Established: 7 years Type of Business (Describe): Development, specifically infill sites Has a business plan been developed in relation to the proposed project? ☐No (Development of a business plan may be required as part of the application process) ☐Yes (Include a copy with the application) TIF ASSISTANCE REQUEST DETAIL Type of TIF Assistance Sought: X Requesting assistance for public infrastructure costs ☐Building demolition Value of TIF Assistance Sought: $ 8,880,000 Will this project proceed if TIF assistance is not granted? Explanation for response must be included in the required project narrative. X No ☐ In a limited fashion ☐ Yes, but at a later date ☐ Yes, as scheduled ☐ Other 100 Pole Yard TIF Assistance Application Part 1 Page 3 This application must be signed by both the applicant(s) and the property owner(s) (if different). I (we), by signature below, certify that the information supplied in this application is, to the best of my (our) knowledge, true, accurate, and complete, and is provided for the purpose of obtaining approval to participate in the Pole Yard Urban Renewal District TIF assistance program. I (we) understand that failure to comply with the terms of the TIF assistance program may result in revocation of an award. I (we) understand the work to be undertaken must be in accordance with all applicable requirements of the Bozeman Municipal Code and any special conditions established by the approval authority and must receive all required approvals prior to commencing the work. I (we) understand if approved for TIF assistance, the work to be performed must also be in accordance with TIF assistance program procedures and the general design guidelines for the District, as well as the specific plans approved for the project. I (we) acknowledge that the City has an Impact Fee Program and impact fees may be assessed for my project. Further, I (we) agree to grant City personnel and other review agency representative’s access to the subject site during the course of the review process (Section 38.34.050, BMC). Applicant (s) (Print Name) Signature of Applicant Date Property Owner(s) (Print Name) Signature of Property Owner Date 101 Northeast TIF Assistance Application Part 1 Page 4 REQUIRED INFORMATION 1. Project Narrative Provide a narrative overview of the project including each of the following elements: a. Public Benefits Projects with a high degree of public benefits are typically more likely to receive TIF assistance. The criteria matrix of this application guides the Board and City Commission to understand and evaluate the public benefits for a project. Provide a detailed narrative response to each criterion and include supporting documentation. b. Project Description 1. Describe the status of the property status, including ownership and leases 2. Description of business(es) to benefit from the TIF Assistance 3. Identify all proposed uses: e.g. industrial, commercial, retail, office, mixed use, residential for sale or for rental, etc. 4. Total number and individual square footage of residential units; type of residential units (e.g. for-sale, rental, condominium, single-family, etc.); number and type of parking spaces provided; and construction phasing. 5. Value of TIF assistance requested – requests over $50,000 require Part 2 of the application c. Project Timeline 1. Provide anticipated dates for site acquisition, project start, completion, estimated date of occupancy, and other project milestones. Multi-phase projects must include details for each phase. The timeline should also identify any critical or time-sensitive dates as well as any time constraints facing the applicant. 2. Provide detailed explanation on impact on the timeline if TIF assistance is not granted at the requested amount. d. Construction information Size of any existing structure to be demolished or rehabbed; size of any new construction; types of construction materials (structural and finish); delineation of square foot allocation by use 2. Site Maps and Building Plans The Applicant must submit a completed Conceptual Review Application or Pre-Application and City responses to the Board. The application must include, at minimum: a. Photographs of project site and/or building b. Map showing the location of the site and its immediate surroundings c. Proposed development plans including site plans, floor plans, and building elevations d. Description of parking accommodations for residential units and commercial uses e. Anticipated off-site infrastructure improvements, including anticipated costs, and City comments on those infrastructure improvements f. Copy of Concept Review comments 3. Completed Criteria Matrix (see next page) The applicant must complete the matrix indicating criteria that apply to this project and points requested. Final determination of point and applicable criteria will be made by District Staff and the City of Bozeman. 102 Northeast TIF Assistance Application Part 1 Page 5 CRITERIA FOR TIF ASSISTANCE The Board will review each TIF assistance application the Board using the following criteria and point system. Points can range from 0 to the maximum shown below in each category. The following criteria will be used to rate your project. To receive points for any given item, provide a detailed narrative response to each criterion and include documentation demonstrating adherence to the criteria must be submitted with the application. The Board will use this information to evaluate the project. Northeast District Goals Points Ensure the health, safety, and security of the District 1. Infrastructure Improvement: The project will repair, replace, or improve outdated or insufficient infrastructure /6 2. Multimodal Transportation: The project incorporates infrastructure that facilitates safe, efficient, and convenient access of the district for all modes of transportation /4 3. Public Utilities: The project will incorporate public utilities in a way so that they are not visually or physically obtrusive /2 Balance Commerce and Livability within the Mixed-Use Framework 4. Mix of Uses: The project incorporates mixed use development that promotes livability /4 5. Community Housing: The project includes affordable housing units. For the purposes of this criterion, an affordable housing unit is defined as a unit that requires no more than 33 percent of a household’s income for housing payments based on a designated percentage of area median income (AMI). Eligible rental units shall be affordable at 70% AMI and eligible for sale units shall be affordable at 90% AMI. Condominium units are eligible as for sale units. Additional points may be awarded for projects that provide on-site housing for the proposed workforce. Eligible rental dwellings to be constructed in the proposed residential development shall be provided by long-term contractual obligation to an affordable housing agency, for a period of not less than 20 years, with a written plan assuring ongoing affordability pricing and eligibility monitoring, and annual re-certification. The city's affordability guidelines and subsequent revisions establish affordability and eligibility. To receive 3 points under this criterion, 10% of all units must meet the affordability criteria. To receive 6 points under this criterion, 20% of all units must meet the affordability criteria. /6 Honor the Unique Character and Vitality of the District 6. Character: The physical design, materials, and massing of the project reflects the community’s values of durability, flexibility, and simplicity, and add vitality to the neighborhood /2 7. Sustainability: The project’s design and construction practices incorporate environmentally sustainable strategies and elements /2 Public Open Space is Essential to a Healthy and Appealing Urban Environment 8. Open Space: The project designates new land for parks and open space /4 9. Landscaping: The project improves landscaping in existing public spaces /2 The Costs of Projects and Programs shall be Weighed Against their Benefits of the District 10. Return on Investment: The investment of public funds in the project results in a leverage ratio of at least 10:1 for residential projects; 8:1 for commercial projects; and/or 5:1 for living wage jobs /4 103 Northeast TIF Assistance Application Part 1 Page 6 The City shall not Limit its Vision for the District Improvements to Monies Available Solely through the TIF Funding 11. This project involves and/or will encourage public-private partnerships that will add value to the District and its investments. /4 Projects shall Consider Impacts on Adjacent Neighborhoods 12. The project is complimentary to adjacent neighborhoods, not just Northeast /2 Total Points /42 APPROVAL (For Official Use Only) Approval Status: Date Approved: Date Letter of Award Sent: Date Certificate of Completion: Date of Payment Request: Compatible 104 Northeast TIF Assistance Part 2 Page 7 PART 2 FOR PROJECTS REQUESTING OVER $50,000 IN ASSISTANCE Project Financial Information In order for the City of Bozeman Economic Development staff to adequately review applications seeking TIF assistance, the following information must be submitted with the application. This information will be used to perform a third-party financial analysis to determine the project’s anticipated return on investment (ROI) and reasonableness of developer profit. The goal of the Northeast TIF Assistance program is to make projects financially feasible. Therefore, projects that demonstrate financial need for public funding will be given priority. 1. Sources & Uses of Funds a. Identify the sources of funds used to finance the project. Typical sources include equity, lender financing, mezzanine financing, other anticipated types of public assistance, and any other types or methods of financing. Describe the sources of equity and include a term sheet for lender financing, if available. b. TIF assistance is available as a reimbursement after the project is complete. Thus, the project budget must identify the up-front sources intended to finance the development costs of the project. If determined, specify the specific line items of the project budget that each source will finance. c. Summarize the uses of funds. General categories to be identified include acquisition and related site costs, hard construction costs, and a breakdown of soft costs. 2. Development Budget Provide an accurate and detailed development budget for the project that includes a detailed breakdown of significant line item costs consistent with the sample included in the application packet. The budget should be arranged to identify acquisition and site related costs, hard costs, and soft costs. Also, identify all line items that are performed by the developer, owner, or related entities. 3. Budget of TIF Eligible Expenses Identify which of the development budget costs are eligible for reimbursement as allowed by 7-15- 4288, MCA. 4. Financial Commitments Submit commitment letters and/or term sheets from all lenders for proposed debt (such as construction, mezzanine, permanent, and government financing) and all other financial sources of the project (such as grants, and tax credits). Commitment letters must clearly specify the nature and terms of the obligations. 105 Wallace Works Mixed Use Project in NE Bozeman The origin of Wallace Works may be traced to nearly a decade ago when the Nest team acquired the abandoned Imperial 400 on Main Street. As the Lark, and subsequently the Rialto, emerged and flourished during Bozeman’s boom, many of our staff and their families and friends started to struggle amidst the skyrocketing costs of housing. Among other factors, this predicament prompted the team to imagine a relatively affordable, walkable, sustainable response to what now is a housing crisis. Wallace Works, shaped by engagement with the Northeast Neighborhood community, will provide 65 residential units complemented by market, office, and retail space. The endeavor, local in its roots, is designed to serve the articulated needs of the local community. 106 Vision Narrative The Northeast neighborhood has always been a special place in our minds. Our development group, made up of enthusiastic community builders, operates with one simple principle: “Do something good for Bozeman”. The group completed the revitalization of the Lark Hotel in downtown Bozeman and the rehabilitation of the Rialto Theater. Following completion of the Lark and Rialto projects, we sought to fulfill the next pressing need for the community and have centered on creating affordable and attainable housing. Hence Wallace Works The project is in the heart of the Northeast Urban Renewal District on the corner of Wallace and Tamarack. The project provides much needed housing for the district. The project includes a mix of housing types and demographics to reflect the eclectic nature of the area. There are forty-nine rental units 7 of which will be offered at 80% AMI and below while the rest will be at attainable rates for the area. The project also includes 16 row homes that are a mix of 2 bedroom and 1- bedroom units that will be for sale. Five of these for sale units include a live/work component. The area already has a great mix of commercial activities that this project intends to complement by offering additional area for restaurants, gyms, offices, laundry- mats and a small bodega. The proposed project takes its lead from some of the most progressive urban planning and design techniques in the United States and abroad, to create livable, walkable, mixed-use communities. Focusing on typologies for the missing middle and creating attainable housing. These additions to the neighborhood will support the need for housing, create artist spaces, provide public plazas and much needed parking for residents, the neighborhood, and community members to enjoy. The mass, scale, and orientation of buildings has been thoughtfully considered to respond to the existing fabric and adjacent uses in the neighborhood. The culmination of this research and community input has led us to propose the Wallace Works project. 107 Summary of Request for Funds: • Total project costs $41,500,000 • TIF funding for off-site infrastructure improvements • TIF funding request $2,055,563 • Project will provide 7 rental units at 80% AMI or below which is equivalent to 10% of the residential rental units. • TIF / payback will be 100% of Taxes collected less any non-qualifying Mills. • The payback amount will be paid in full during the payback period until the full amount is returned plus interest or the district sunsets in 2042 whichever is first. • These terms will be further described and detailed in the development agreement. Summary of program on site: • Residential units 65 [49 rental:: 16 For Sale] o 1 Co housing cluster (4 efficiency units) o 21 Studios o 21 One Bedroom Flats o 3 Two-bedroom units o 5 Live work units- For Sale o 11 Row Homes – For Sale • Commercial – 6,402 SF o 2,488 SF Bodega o 3,914 SF General commercial space • Parking facilities 81 spaces that include 72 spaces on site 5 of which are car-share and 9 on street • Pedestrian circulation facilities will be improved along both Tamarack and Wallace providing small “vest pocket” plazas. • Massing and scale for the buildings have been thoughtfully considered to minimize building height and maximize the perimeter of the site. Special consideration was given to residential adjacencies with both massing and use. 108 Outline of the Proposed Development Agreement The project seeks to establish a development agreement with the City to facilitate the improvement of public infrastructure and further the objectives of the NE Urban Renewal Plan. The improvements include: • Completion of a new sewer line in Aspen Street R.O.W. serving the project and future development along Aspen • An Off Set of impact fees generated by the project. • Street and sidewalk improvements along Tamarack and Wallace • Provide added energy efficient insulation. Summary of TIF Request cost* see exhibits • Total of project TIF reimbursement $2,055,563 o Aspen Sewer line $548,000 o Street front improvement $600,550 o Impact Fees $720,144 o 15% contingency $186,869 Project timeline Wallace Works will be constructed in a single-phase current estimate is that construction would start in Winter of 2024 and be completed in roughly two years. Public Benefit Criteria Matrix – Northeast District Goals – narrative Ensure the health, safety, and security of the District 1. Infrastructure Improvement: The project will repair, replace or improve outdated or insufficient infrastructure. 6 of 6 Points The Wallace Works project will make specific infrastructure improvements by placing a new sewer main in the Aspen Street R.O.W. running East from the property to Front Street. This improvement will provide for subsequent redevelopment and improvements along the entire length of Aspen Street. There are several vacant / underutilized parcels that would benefit from this. 2. Multimodal Transportation: The project incorporates infrastructure that facilitates safe, efficient, and convenient access of the district for all modes of transportation. 4 of 4 Points As part of the Wallace Works project there are significant improvements to pedestrian systems in and around the site with small plazas and new pedestrian ways across the site. The project 109 includes 20+ bike parking spaces, 3 times what is required with many of the spaces being weather protected to encourage biking in inclement weather. The project incorporates the use of the City’s car-share program which will be yet another mode of transportation for the residents to take advantage of. The project is also located within 1 block of a Streamline bus stop connecting it to the broader network of Bozeman’s transportation system. 3. Public Utilities: The project will incorporate public utilities in a way so that they are not visually or physically obtrusive. 2 of 2 Points The Wallace Works is providing utilities to the site in a manner that are not visually intrusive and will bury all possible utilities. Balance Commerce and Livability within the Mixed-Use Framework 4. Mix of Uses: The project incorporates mixed use development that promotes livability. 4 of 4 points The Wallace Works provides a mix of uses both commercial and residential, over 51% of the site / SF is used for commercial purposes that include, small neighborhood retail, street level office, restaurant space and live work units. The residential uses also vary in nature from 2-bedroom row homes, flats and studios, live work residences and co-living units. The commercial uses on the site will provide services far beyond the needs of the site denizens and the residential mix and unit type will provide for the much-needed variety of housing types that address the missing middle and affordable units. This combination of uses will add to the already livability of the district. 5. Community Housing: The project includes affordable housing as defined by the criterion…. 6 points possible – / 6 points based on the types of units and the self-stated goals outlined The Wallace Works specifically incorporates affordable units as defined by the criterion it is important to note that our goals for the project are to provide what the community has come to know as “attainable housing” or housing for the “missing middle”. These are residents that cannot qualify for public assistance like the affordable units in the criterion, but they cannot afford the current market rents either. This project seeks to provide housing units in the range 80% and below (affordable) and 90% to 120% AMI (attainable). This is a self-stated goal of the project. Honor the Unique Character and Vitality of the District 6. Character: The physical design, materials and massing of the project reflects the community’s values of durability, flexibility, and simplicity and add vitality to the neighborhood. 2 of 2 Points 110 The Wallace Works project incorporates materials that are used within the district such as metal siding, natural wood, stucco, and CMU block. These materials are assembled to promote durability. The project keeps the form making of the buildings simple, gable forms for smaller scale structures and articulating the facades of larger buildings. The mass and scale of the buildings are deliberately low on the Southern portion of the site that is closest to the historic residences. Efforts are also being made with the landscaping and site improvements to fit within the neighborhood by keeping the character of the site funky (a word used frequently during our participation in the RUDAT to describe the unique character of the district). 7. Sustainability: The project’s design and construction practices incorporate environmentally sustainable strategies and elements. 2 of 2 Points Redeveloping on an infill site with committed infrastructure surrounding the property covers roughly 30% of a LEED certified site development. We will not be pursuing LEED to keep costs down however the project does attain these. The primary rental building will however attain USGB certification significantly contributing to the sustainability of the project. Other efforts such as drought tolerant landscaping measures, low flow plumbing fixtures, and sub surface site drainage containment further the projects efforts to achieve sustainability. Public Open Space is Essential to a Healthy Appealing Urban Environment 8. Open Space: The project designates new land for parks and open space. 2 of 4 points The Wallace Works project is providing public plaza spaces on the site that will enhance the built environment in the neighborhood. The project will also be contributing to a cash-in-lieu fund for the parks that can be uses on areas in and around the district. 9. Landscaping: The project improves landscaping in the existing public spaces. 2 of 2 Points The Wallace Works will be enhancing the landscaping in the public ways specifically along Wallace in the boulevard and along Tamarack where there is a substantial setback from the street providing for generous plaza and pedestrian circulation. The existing power transmission lines along Wallace prevent the project from placing new street trees in the boulevard however, the project plans to locate smaller more compatible trees acceptable to Northwestern Energy. The Cost of Projects and Programs shall be Weighed Against their Benefits of the District 10. Return on Investment: The investment of public funds in the project results in a leverage of at least 10:1 for residential projects; 8:1 for commercial projects; and or 5:1 for living wage jobs. 4 of 4 Points The project is investing $39 million with the following requested TIF costs attributed to the project only not capacity expansion. Total TIF investment in project $2,054,695 Project investment to TIF 19:1 111 Significantly above the ratios listed. The City shall not Limit its Vision for the District Improvements to Monies Available Solely through TIF funding. 11. The project involves and/or will encourage public-private partnerships that will add value to the district and its investments. 2 of 4 Points The investment made into the dilapidated infrastructure that serves the project will be useful for future growth and add value to the district. Projects shall Consider Impacts on Adjacent Neighborhoods 12. The project is complementary to adjacent neighborhoods, not just Northeast 2 of 2 Points The Wallace Works will provide services to adjacent neighborhoods through the commercial spaces created. Additionally, as previously mentioned the massing and scale of the project has been contemplated to be complementary to the neighborhoods on both the north and south side which differ significantly from one another. Total point accomplished in the criterion 38 of 42 112 Project Financial Information – See Exhibits A&B along with TIF Application Part 2 information Sources and Uses of Funds The funds for the creation of the project will come from private owner equity and bank financing the anticipated split of funds are as follows: Owner Equity – 40% o Wallace Works LLC o $16.7 million Bank Financing – 60% o Glacier Bank Corp. o $ 25.0 million Development Budget- see attached Budget of Eligible Expenses Construction of public infrastructure – Aspen Street sewer main per item 4 below Estimated at $548,000 Construction of public infrastructure – Sidewalks, landscaping and drainage facilities along Tamarack and Wallace Estimated at $600,550 Funds towards impact fees – see item 5 below Estimated at $747,100 Project Contingency $186,0869 Eligible Expenses Per 7-15-4288, MCA • Item 4) the acquisition, construction and improvement of public improvements or infrastructure, publicly owned buildings, and public improvements o See 7-15-4283 Definitions related to tax increment financing ▪ (4) Infrastructure means tangible facilities and assets related to water, sewer, wastewater treatment, stormwater, solid waste, and utilities systems including natural gas, hydrogen, electrical and telecommunication lines, fire protection, ambulance and law enforcement, workforce housing, streets, roads, curbs gutters, sidewalks, pedestrian malls, alleys bridges an, and other transportation needs, 113 including but not limited to parking, park and ride facilities, bus and, air and rail service. • Item 5) costs incurred in connection with redevelopment activities allowed under 7-15- 4233 o See 7-15-4233 item d ▪ To undertake and carry out urban renewal projects as required by the local governing body Financial Commitments -Pending / contingent upon approval of TIF funding Development of underutilized sites / re-occupancy of vacant land The property sat vacant since the fall of the wall 2014. Prior to this the property sat as a vacant building with much needed maintenance. This project will bring activity and purpose back to an underutilized parcel in the district. Elimination of Blight The site is currently vacant and is in need to activity on the site to reduce the sense of blight. Inactivity on a property can promote crime, nuisance, weeds, and general neglect. The project will alleviate this sense of blight in a measurable way. Increase housing options and pursuit of attainable housing The project will create housing units to add to the much-needed housing stock. Further by locating housing in existing infill neighborhoods the public benefits by not needing to expand infrastructure. The Wallace Works project seeks to create housing that is attainable and provide a variety of housing options from small row homes for families to studio flats for individuals or couples. The new housing being created in the older parts of town, specifically the NE is pricing the average Bozemanite out of the market. This project seeks to stem the tide by providing truly attainable housing in the neighborhood. Increase in commercial activity As the neighborhood continues to evolve into the full mixed use pattern the need for commercial uses to support the residential uses is essential to its success. Not only with the added commercial uses benefit the new residents it will provide jobs and business ventures for new entrepreneurs in the district. The project also provides live work style units that can provide opportunities for emerging business all the while reducing the reliance on the car for commuting to work. Alignment of goals with NEURD Plan 114 The Northeast Urban Renewal District Mission and Vision: “The Plan envisions a mixed-use neighborhood that is user-friendly, safe, secure and healthy. While the plan envisions a District with diversity of housing, businesses, and amenities, it intends to maintain the unique ambiance and historic character of the District.” NEURD Plan pg. 5 We used this mission statement along with feedback from the RUDAT to develop our plans. We are seeking to create a neighborhood that is user-friendly offering plaza spaces and good connectivity to the surrounding neighborhood. We are providing a healthy mix of housing, businesses and amenities that respond to the unique ambiance of the district through massing and scale and configuration of buildings. The NEURD plan outlines nine principals along with goals and implementation policies that it seeks to achieve through the creation of our project it addresses many of these principals, goals, and implementation policies aligned in the plan. In fact, our project directly addresses 7 of these Principals. Specifically, Principal 1 is to ensure health safety and security of the district by updating outdated or insufficient infrastructure. We intend to make improvements to the surrounding street network and utilities in collaboration with the District. This project also furthers the goal of a land use pattern that facilitates all modes of transportation. We have provided plazas and greenways to facilitate public pedestrian uses on the site . Principal 2 speaks to the desire to balance commerce and livability in the district within the mixed-use framework. Our project provides this balance and compatibility through the very best practices of urban design. We achieve this by providing good connections to public spaces for all that improve quality of life for the residents and business owners alike. Principal 3 is to “honor the unique character and vitality of the district”. We have taken great effort to include opportunities within this project for attainable housing, unique artist spaces and commercial uses that best fit the emerging character of the district. Additionally, our thoughtful consideration of mass and scale, attention to public values, and sustainable building practices will both honor the vitality and show a path forward that the district can truly be proud of. Principal 4 addresses the need for public open space that contribute to the health and appeal of the urban environment. This project creates over 7,000 SF of multiple public open spaces and provides improvements to adjacent greenways. Principal 5 establishes the framework to evaluate the cost of projects and programs weighted against their benefits to the district. This project provides the much-needed benefit of attainable housing and unique artists spaces in a progressive urban design will enhance and preserve the unique character of the district. The project will also substantially increase the available increment in the district which can be used to achieve additional goals outlined in the plan. Principal 6 states that private land shall not be acquired for public use through the eminent domain process. Our project does not use any eminent domain in the redevelopment. We do offer our own private land to the general public in the form of public plazas. 115 Principal 8 states that projects shall consider impacts on adjacent neighborhoods. Our project has thoughtfully addressed the surrounding neighborhood by incorporating smaller scale housing next to smaller scale adjacent homes and placed more commercially oriented uses next to existing commercial uses. Essential goals of the 2006 NEURD Plan achieved: ✓ “Outdated or insufficient infrastructure should be repaired, replaced, or otherwise improved” (Principal 1, pg. 5 NEURD Plan) ✓ “Assure compatibility of land use through appropriate urban design techniques” (Principal 2, pg. 6 NEURD Plan) ✓ “Promote sustainable building practice and design within the District” (Principal 3, pg. 7 NEURD Plan) ✓ “Encourage affordable housing” (Principal 2, pg. 6 NEURD Plan) ✓ “Secure public open spaces in locations that will optimize accessibility” (Principal 4, pg.7 NEURD Plan) ✓ “New structures should be designed keeping in mind public values of durability, flexibility, and simplicity. Thoughtful consideration of design, materials, and massing in construction of new private buildings will add strength and character to the built environment. To the degree that private sector can be influenced by a public partner in development, the community ought to strongly encourage excellence in urban design as a basis of partnership.” (Principal 3, pg.7 NEURD Plan) ✓ “Harmonize commercial and industrial development with residential quality of life” (Principal 2, pg. 6 NEURD Plan) 116 Alignment of goals from the Vision NE (RUDAT follow-up committee) Many of the District goals drafted in 2005 are aligned with the recent RUDAT effort and the subsequent Vision NE Draft Goals and Principals. • Values the neighborhoods unique vibrancy, diversity, artistry, history, commercial / industrial interface, walk- and bike – ability, and special Bridger Mountain views • Understand that growth and change in our neighborhood is inevitable; and • Embraces the notation that change can be positive, that it can enhance the neighborhoods unique character and vitality and increase opportunities for affordable housing, connectively and civic participation. The goals of Wallace Works very much align with these as we endeavor to create attainable housing opportunities and embrace the artistry, history of the district while making opportunities for civic participation on site. The Vision NE further seeks to ✓ Enhance neighborhood character We are looking to enhance the character through unique buildings and public spaces and provide commercial opportunities for artists to continue to contribute to the fabric of place ✓ Create new pocket parks, urban rooms and public gathering spaces We have incorporated several public plaza spaces within the site to support public gathering and invite the neighborhood to be part of the location as we ask to be part of the neighborhood ✓ Provide safe transportation through residential neighborhoods The projects provide full pedestrian circulation through the sites connecting to the existing sidewalk and trail network. Transportation patterns have been considered to keep the majority of traffic on existing major roadways ✓ Support artists and artisans and providing opportunities for public art From the beginning our intent is to support and provide opportunity for the burgeoning artist community to flourish by adding additional artist spaces, as well as affordable places for artists to live and incorporate within the public spaces art. ✓ Consider the area’s agricultural and light industrial historical legacy; and The character of the buildings will incorporate attributes that pay homage to the legacy of the various historical uses. ✓ Provide affordable housing options Lastly – we are providing and attainable housing through a mix of unit types to support the unique character of the neighborhood. 117 GOALS – MATRIX OF ALIGNMENT PRINCIPALS, GOALS, IMPLEMENTATION POLICIES AND OBJECTIVES NEURD PLAN 2005 RUDAT VISION NE GOALS 2017 WALLACE WORKS METHODS AND MEANS HONOR / ENHANCE UNIQUE CHARACTER OF DISTRICT ✓ ✓ ✓ Through massing scale, and placement of buildings on the site. Additionally, program elements such as artists, makers etc. PROMOTE ENVIRONMENTALLY SOUND BUILDING AND PLANNING TECHNIQUES ✓ ✓ Providing centralized development in a more walkable neighborhood. PROVIDE SAFE, HEALTHY PUBLIC TRANSPORTATION FACILITES AND INFRASTRUCTURE ✓ ✓ ✓ Through the creation of additional public infrastructure and pedestrian plazas and walks SUPPORT ARTISTS AND PROVIDE OPPORTUNITY FOR PUBLIC ART ✓ ✓ Providing opportunities for artist residences and studio spaces and will incorporate public art in the plaza spaces RECOGNIZE IMPORTANCE OF BRIDGER VIEW SHED AND NEIGHBORHOOD IMPACTS ✓ ✓ ✓ By breaking up the buildings into several smaller buildings rather than one large one to maintain view angles through the site. PROMOTE SECURE PUBLIC OPENSPACES, POCKET PARKS, URBAN ROOMS AND PUBLIC GATHERING SPACES ✓ ✓ ✓ The project has over 7,000 SF of public plaza spaces and over 1,000 LF of public sidewalk circulation. PROMOTE AND PROVIDE AFFORDABLE HOUSING OPTIONS ✓ ✓ ✓ The project provides units at attainable rates between 90% and 120% AMI 118 9/13/2024 TIF Application Part 1 information Exhibit A TIF funds for reimbursement and purchase Impact Fees / water rights 720,144$ estimated Off site infrastructure 548,000$ estimated R.O.W. improvements 600,550$ estimated Project contingency 186,869$ estimated Total - reimbursement / bond 2,055,563$ requested Developer Investment 39,087,898$ Ratio Investment to TIF 19 :1 Total TIF funds 2,055,563$ Investment in Neighborhood Generated from TIF investment Total TIF funds 2,055,563$ Future connections to Aspen 45,000,000$ Speakman Site 30,000,000$ Tinworks 15,000,000$ Wallace Works Investment 39,087,898$ Current investment return 39,087,898$ Future investment return 84,087,898$ Ratio of investment to return 41 :1 Estimated future taxes genterated Wallace Works Developer Investment 39,087,898$ 390,879$ taxes annually Capacity building investment 45,000,000$ Total generated from TIF contributions 84,087,898$ Taxes based on value/cost 1.00%840,879$ annually TAXES ANNUALLY FROM WALLACE WORKS 390,879$ WALLACE WORKS - URBAN RENEWAL REQUEST 119 TIF Application Part 2 information 1 Sources and Uses of Funds Sources Project Costs 39,087,898$ Private Equity 40%15,635,159$ Lender Financing 60%23,452,739$ Uses Land 3,000,000$ Soft Costs 2,920,144$ Hard Costs 32,142,010$ Contingency 1,753,108$ Total 39,815,262$ 2 Development Budget Land Aqusition and hold 3,000,000$ Soft Costs 2,920,144$ A & E 2,000,000$ Carry costs 200,000$ Impact fees 720,144$ Hard Cost Project 32,142,010$ Off site improvents 548,000$ On Site Improvements 3,594,010$ Vertical Construction 28,000,000$ Project Contingency 5%1,753,108$ Total Project Costs 39,815,262$ 120 3 Budget of TIF Eligible Expenses Impact Fees 720,144$ Aspen Street Sewer / off site 548,000$ Contingency 186,869$ Total project TIF reimbursement 1,455,013$ TIF request for funds 1,455,013$ 4 Financial Commitments Debt 60% Equity 40% Private Equity has been secured Initial Discussion with Glacier Bank, will confim prior to finalizing Development Agreement with City 121 M EMORANDUM To: Jesse DiTomasso, City of Bozeman From: Brian Duffany & Christian Carroll, Economic & Planning Systems Subject: Bozeman URA TIF Request Review: Wallace Works; EPS #233073 Date: September 23, 2024 This memorandum summarizes Economic & Planning Systems’ (EPS) analysis of the request for tax increment financing (TIF) for the Wallace Works project. EPS has been contracted by the City of Bozeman to evaluate the developer’s request for TIF and evaluate key project assumptions, including construction costs, operating revenues and expenditures, and overall developer return. The purpose of this analysis is to evaluate if the assumptions presented by the developer are within a reasonable range of current market conditions, costs, and typical rates of return. This analysis will help the City determine if it is investing in a viable project, and if the amount of TIF requested is needed and reasonable. Approach As part of the TIF application process, each development team is required to submit a formal proposal that includes a project overview and key project assumptions. These materials include a summary of the development program, construction costs, eligible costs for TIF reimbursement, and sales or leasing revenues in a project pro forma. EPS used this information to look at the project’s financial performance in a discounted cash flow proforma. A discounted cash flow computes the present value of the future development revenues and costs to show the impact of the time value of money (i.e. a dollar today is worth more than a dollar in the future). The analysis was done on an unlevered basis, meaning that it looks at the project cash flows independent of debt financing payments. This removes the effects of different equity and debt structures that different developers may be able to achieve and therefore looks at the project on its own, since the financing (leverage) structure of a project can affect the returns to the developer. 122 Memorandum: Wallace Works TIF Request Review Page | 2 Development Program The project is located on the southwest corner of Wallace Avenue and Tamarack Street. The project proposes 49 rental units, 16 for-sale units, and 9,402 square feet of commercial space, as shown in Figure 1, including the following: • 42 Market Rate Units: 17 studio units, 19 1-bedroom units, 2 2- bedroom units, and 4 4-bedroom units. All located in Building A. • 7 Affordable Rental Units (80% Area Median Income): 4 studio units, 2 1-bedroom units, 1 2-bedroom unit. All located in Building A. • 16 For-Sale Units: 4 1-bedroom units, 7 2-bedroom units, and 5 live/work units. 6 two-story row homes will be located in Building C, 5 two-story row homes will be located in Building D, and 5 live/work units will be located in Building E. • 3 Commercial Units for Rent: A 2,488 square foot bodega in Building B for rent at $2.92 per square foot, and two commercial spaces in Building A. Figure 1. Project Site Plan 123 Economic & Planning Systems, Inc. Page | 3 As shown in Table 1, the project will contain a total of 65 residential units and 6,402 square feet of commercial space. Rents for the market rate products will range from $1,850 per month to $6,400 per month. Rents for the affordable products will range from $1,474 per month to $1,894 per month. The for-sale residential products sale prices range from $570,000 for a 1-bedroom rowhome to $1.46 million for a live/work unit. All commercial space is anticipated to be rented out at $2.92 per square foot per month or $35.00 per square foot annually. Table 1. Project Development Program Description Units % of Total Unit SF Total Sq. Ft. Rent/Unit per Month Utilities/Unit per Month Net Rent/Unit per Month Rent/Sq. Ft. per Month Total Annual Rent Rental Market Rate Studio 17 40.5%400 6,800 $1,850 $1,850 $4.63 $377,400 1 Bedroom 19 45.2%600 11,400 $2,316 $2,316 $3.86 $528,048 2 Bedroom 2 4.8%1,000 2,000 $3,005 $3,005 $3.01 $72,120 4 Bedroom 4 9.5%1,800 7,200 $6,400 $6,400 $3.56 $307,200 Total/Average 42 100.0% 652 27,400 $2,549 $2,549 $3.91 $1,284,768 Affordable Rental Studio 4 57.1%400 1,600 $1,474 $1,474 $3.69 $70,752 1 Bedroom 2 28.6%600 1,200 $1,684 $1,684 $2.81 $40,416 2 Bedroom 1 14.3%1,000 1,000 $1,894 $1,894 $1.89 $22,728 Total/Average 7 100.0% 543 3,800 $1,594 $1,594 $2.94 $133,896 Commercial Commercial Bodega 2,488 $7,257 $2.92 $87,080 Commercial A 1,930 $5,629 $2.92 $67,550 Commercial B 1,984 $5,787 $2.92 $69,440 Total 6,402 $18,673 $2.92 $224,070 For-Sale For-Sale Residential Price/Sq. Ft.Sale Price Closing Costs Net Income 1 Bedroom 4 25.0%600 2,400 $950 $570,000 6.0%$2,143,200 2 Bedroom 7 43.8%1,100 7,700 $900 $990,000 6.0%$6,514,200 Live/Work 5 31.3%1,716 8,580 $850 $1,458,600 6.0%$6,855,420 Total/Average 16 100.0% 1,168 18,680 --$3,018,600 --$15,512,820 Source: Developer Financial Documents; Economic & Planning Systems 124 Memorandum: Wallace Works TIF Request Review Page | 4 Project Costs The development and construction budget totals $41.7 million as shown in Table 2 and summarized below. • Land – The land has been purchased for $3.4 million or $45.22 per gross square foot and $52,300 per unit, accounting for roughly 8.1 percent of the total costs. • Hard Costs – Hard costs are estimated at $29.5 million or $392.95 per gross square foot, accounting for roughly 70.7 percent of the total costs. Hard Costs include construction, landscaping, insurance and liability for builders, and the contractor fee. • Soft Costs – Soft costs, not including financing costs, are estimated at $7.1 million or $93.82 per gross square foot, accounting for roughly 16.9 percent of the total costs. Soft costs include architectural and engineering costs, FF&E allowance (Furniture, Fixtures, and Electrical), contingency, marketing, holding costs, property tax, insurance, permitting, and impact fees. • Financing Costs – Financing costs are estimated at $1.8 million or $23.52 per gross square foot, accounting for roughly 4.2 percent of total costs. Financing costs include appraisal, loan initiation, and interest during construction. The hard costs are approximately $100 per gross square foot higher than other recent condo and multifamily projects that have applied for TIF. We attribute that to the unique design of the site and to the higher priced for-sale units which will have more expensive interior finishes. All other cost categories, such as land, soft costs, and financing costs fall within typical ranges for the Bozeman market. Table 2. Summarized Project Costs Description Total Cost per GSF % of Total Development Costs Land Costs $3,400,000 $45.22 8.1% Hard Costs $29,544,774 $392.95 70.7% Soft Costs $7,053,887 $93.82 16.9% Financing Costs $1,768,235 $23.52 4.2% Total Costs $41,766,896 $555.50 100.0% Source: Developer Financial Documents; Economic & Planning Systems 125 Economic & Planning Systems, Inc. Page | 5 Funding and Financing Sources The project is funded by approximately 60 percent debt and 40 percent equity. As shown in Table 3, the developer is relying on a $25.0 million 36-month interest- only construction loan to begin the project and is investing $16.7 million in equity to cover the remaining costs. Over the 36-month period, the construction loan will accrue $1.6 million in interest with $16.1 million in equity invested in the loan. Then, the remainder of the debt will be converted into two loans: a $9.4 million for-sale loan for 24-months until the for-sale residential properties are sold, and a $15.8 million multifamily loan for 24-months until the multifamily units are stabilized. Once the multifamily units are stabilized, the developer plans to convert the multifamily loan to a HUD/Agency Loan until project disposition in Year 10. Table 3. Sources Description Total % of Total Debt $25,060,138 60.0% Equity $16,706,759 40.0% Total $41,766,896 100.0% Sources - Construction Debt $25,060,138 60.0% Equity $16,706,759 40.0% TOTAL CONS. SOURCES $41,766,896 100.0% Sources - Permanent For-Sale Loan $9,307,692 37.1% Multi-Family Loan $15,752,446 62.9% TOTAL PERM. SOURCES $25,060,138 60.0% Source: Developer Financial Documents; Economic & Planning Systems 126 Memorandum: Wallace Works TIF Request Review Page | 6 Hurdle Rate Analysis The project is evaluated against a targeted internal rate of return (IRR) and net present value (NPV). The key financial metrics used in the analysis are defined below. • Net Present Value (NPV) – The net present value represents the overall financial value of the project in today’s dollars based on the net operating income (NOI) and discount rate of the project. The present value accounts for the time value of money, or “a dollar today is more than a dollar at some time in the future.” • Discount Rate – The discount rate is used to measure the current value of future cash flows of the project to calculate the net present value at the appropriate rate that reflects the risk of real estate development. Here, the discount rate is calculated as the weighted average cost of capital (WACC). The WACC is the weighted average of the interest rate on debt and the rate of return required on equity invested in the project, which typically ranges between 15 percent and 20 percent. • Internal Rate of Return (IRR) – Internal rate of return measures the rate at which the investment into the project grows. More specifically, it is equivalent to the discount rate when the net present value (NPV) of the project equals zero. Given the amount of equity invested, the project has a discount rate or WACC of 11.25 percent as shown in Table 4. This is calculated based on the rate associated with the cost of equity (usually between 15 percent and 20 percent) and the cost of debt (i.e., interest rate). In this case, the developer is investing 60 percent debt, 40 percent equity into the project, which skews the WACC closer to the interest rate. Table 4. Rates Description Rate Ratio Discount Rate (Before Refinancing) Cost of Equity 17.50%40.0% Cost of Debt 7.00%60.0% WACC 11.25%100.0% Source: CoStar; Economic & Planning Systems 127 Economic & Planning Systems, Inc. Page | 7 Unlevered Discounted Cash Flow (DCF) EPS created a discounted cash flow analysis of the project using cost and revenue information from the developer’s proforma. The discounted cash flow analysis is the appropriate analysis for this project because it has a combination of one-time revenues from the for-sale condominiums and ongoing rental income from the apartments and commercial space. In other TIF reviews of rental properties, EPS has used a Yield on Cost (YOC) analysis to compare the ratio of ongoing rental net operating income to development costs to a YOC hurdle rate. That technique is not appropriate for this project because of the mixture of one-time sale and ongoing lease revenues. For modeling purposes, the income-producing components of the project (i.e., apartments and common space) are analyzed for a Year 10 disposition. As shown in Table 5, in Year 10, the NOI is $1.8 million, and the assumed income capitalization rate is 6.0 percent. Given this, the gross disposition income is projected to be $30.5 million. Assuming a cost of sale of 3.0 percent, the net disposition income is projected to be $29.6 million. Table 5. Disposition Income for Apartments and Common Space Description Factor Disposition Year Year 10 Disposition NOI A $1,830,750 Cap Rate B 6.0% Gross Disposition Income C = A / B $30,512,500 Cost of Sale D 3.0% Net Disposition Income E = C x (1 - D)$29,597,125 Source: Developer Financial Documents; Economic & Planning Systems Z:\Shared\Projects\DEN\233073 Bozeman MT Advisory Services\Wallace Works TIF Review\Data\[23307 128 Memorandum: Wallace Works TIF Request Review Page | 8 As shown in Table 6, the construction costs are all occur in 2024 (Year 0). In 2025 and 2026, the developer anticipates selling 50 percent of the 16 for-sale units each year. Therefore, the project cash flow is higher for 2025 and 2026 due to a projected $7,756,410 in profits from the for-sale units. After the for-sale units are sold, the cash flow only contains rental income from the multifamily and commercial components of the project. The total net cash flows without TIF subsidy are $21.1 million and with the TIF subsidy they are $23.2 million. Without the TIF subsidy, the project yields a net present value (NPV) of negative $8.6 million at an 11.25 percent discount rate and an internal rate of return of 6.51 percent. With the TIF, the proposed project yields a net present value (NPV) of negative $7.4 million at an 11.25 percent discount rate, equating to an IRR of 7.19 percent. Given that the IRR is below the discount rate target of 11.25 percent, this provides an indication that the project has weak financial performance. EPS also made a cursory evaluation of the project’s returns on equity which shows that the leverage with TIF from the City improves the returns, but not to a level that is judged to be excessive or above reasonable rates of return on equity. Table 6. Unlevered Project Returns Year Land and Construction Costs Residential Sales Rental NOI Disposition Income Net Cash Flows w/o Subsidy TIF Request Net Cash Flows w/ Subsidy 2024 -$39,998,661 $0 $0 $0 -$39,998,661 $0 -$39,998,661 2025 $0 $7,756,410 $482,027 $0 $8,238,437 $0 $8,238,437 2026 $0 $7,756,410 $1,337,711 $0 $9,094,121 $293,528 $9,387,649 2027 $0 $0 $1,391,220 $0 $1,391,220 $293,528 $1,684,747 2028 $0 $0 $1,446,868 $0 $1,446,868 $293,528 $1,740,396 2029 $0 $0 $1,504,743 $0 $1,504,743 $293,528 $1,798,271 2030 $0 $0 $1,564,933 $0 $1,564,933 $293,528 $1,858,461 2031 $0 $0 $1,627,530 $0 $1,627,530 $293,528 $1,921,058 2032 $0 $0 $1,692,631 $0 $1,692,631 $293,528 $1,986,159 2033 $0 $0 $1,760,337 $0 $1,760,337 $0 $1,760,337 2034 $0 $0 $1,830,750 $29,597,125 $31,427,875 $0 $31,427,875 Net Cash Flows -$39,998,661 $15,512,820 $14,638,749 $29,597,125 $19,750,033 $2,054,694 $21,804,727 No Subsidy TIF Subsidy Discount Rate 11.25%Discount Rate 11.25% NPV -$8,592,452 NPV -$7,359,141 IRR 6.51%IRR 7.19% Source: Developer Financial Documents; Economic & Planning Systems Z:\Shared\Projects\DEN\233073 Bozeman MT Advisory Services\Wallace Works TIF Review\Data\[233073-Wallace Works TIF Review_9-23-24.xlsx]T-Returns 129 Economic & Planning Systems, Inc. Page | 9 Conclusions The Wallace Works project will be a unique development in the northeast side of Bozeman. The TIF request of approximately $2.0 million improves the feasibility of the project and provides the developer with a bit more financial flexibility given the high hard costs of the project development. The TIF request, in EPS’ opinion, does not generate above market rate returns. The project has a low IRR and a negative NPV in an unlevered discounted cash flow analysis. While the project does generate a positive net cash flow from the sale of 16 for- sale residential units, overall, this project may yield a lower rate of return than developers look for in a real estate development investment. 130 RESOLUTION 5643 RESOLUTION APPROVING A PROJECT IN THE NORTHEAST URBAN RENEWAL DISTRICT AS AN URBAN RENEWAL PROJECT; MAKING FINDINGS WITH RESPECT THERETO AND APPROVING THE USE OF TAX INCREMENT REVENUES TO REIMBURSE ELIGIBLE COSTS THEREOF AND APPROVING A RELATED DEVELOPMENT AGREEMENT BE IT RESOLVED by the City Commission (the “Commission”) of the City of Bozeman, Montana (the “City”), as follows: Section 1 Recitals. 1.01. Under the provisions of Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as amended (the “Act”), the City is authorized to create urban renewal areas, prepare and adopt an urban renewal plan therefor and amendments thereto, undertake urban renewal projects therein, provide for the segregation and collection of tax increment with respect to property taxes collected in such areas, and apply tax increment revenues derived from projects undertaken within the urban renewal area to pay eligible costs. 1.02. Pursuant to the Act and Ordinance No. 1655 adopted by the City Commission of the City (the “City Commission”) on November 28, 2005, the City has created the Northeast Urban Renewal District (the “District”) as an urban renewal district and has approved the Northeast Urban Renewal Plan (the “Plan”) as an urban renewal plan in accordance with the Act, which Plan provides for the segregation and collection of tax increment revenues with respect to the District. 131 Resolution 5643, Approving a Project in the Northeast URD Known as the Wallace Works Project 2 1.03. Wallace Works, LLC (the “Developer”) proposes to undertake the construction of a mixed-use development generally consisting of construction of approximately 49 residential rental units, one cohousing cluster with efficiency rental units, 16 row homes to be offered for sale, complementary commercial space, related infrastructure and utility improvements, and related improvements (the “Project”) on land owned by the Developer or an affiliate in the District. Seven of the 49 residential rental units are proposed to be affordable to households earning 80% of area median income and below. The Developer has requested that the City use tax increment revenues of the District to reimburse the Developer with respect to certain eligible costs of the Project (the “Eligible Costs”), including the design, engineering and construction of sewer main extensions on Aspen Street, sidewalks, landscaping and drainage in the public right of way on Tamarack Street and Wallace Street, and certain fees or charges pertaining to the Project. Eligible Costs are estimated to equal $2,055,563. Section 2 Approval of the Project as an Urban Renewal Project. The Commission hereby approves the Project as an urban renewal project under the Act and the Plan. The Project, including the Eligible Costs, is contemplated by and within the scope of the Plan, and the Eligible Costs are eligible for tax increment financing under the Act. Section 3 Findings. The Commission hereby finds with respect to the Project as follows: a. no persons will be displaced from their housing by the Project; b. the Plan and the Project conform to the Bozeman Community Plan or parts thereof for the City as a whole; 132 Resolution 5643, Approving a Project in the Northeast URD Known as the Wallace Works Project 3 c. the Plan and the Project will afford maximum opportunity, consistent with the needs of the City as a whole, for the rehabilitation or redevelopment of the District by private enterprise; d. taking into account the use of tax increment revenues to reimburse the Developer for all or a portion of the Eligible Costs, there is expected to be a sound and adequate financial program for the financing of the Project; and e. the Project constitutes an urban renewal project within the meaning of the Act and the Plan. Section 4 Development Agreement; Use of Tax Increment. 4.01. Staff of the City’s Economic Development Department and the Developer have negotiated a Development Agreement, the form of which is attached hereto as Exhibit A. The Development Agreement is hereby approved in substantially the form attached. The Interim City Manager, or in the event of his absence or disability, his designee, is hereby authorized and directed to finalize, approve, execute and deliver to the Developer the Development Agreement, with such changes as such officer shall deem necessary or appropriate. The execution and delivery by an appropriate officer of the City of the Development Agreement shall be conclusive as to the approval of such officer of the terms of the Development Agreement. 4.02. The Commission hereby approves the use of tax increment revenues in an amount up to $2,055,563 to reimburse the Developer for Eligible Costs of the Project, subject to the terms and conditions of the Development Agreement. 133 Resolution 5643, Approving a Project in the Northeast URD Known as the Wallace Works Project 4 PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 1st day of October, 2024. ___________________________________ TERRY CUNNINGHAM Mayor ATTEST: ___________________________________ MIKE MAAS City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 134 CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE I, the undersigned, being the duly qualified and acting recording officer of the City of Bozeman, Montana (the “City”), hereby certify that the attached resolution is a true copy of Resolution No. ____ entitled: “RESOLUTION APPROVING A PROJECT IN THE NORTHEAST URBAN RENEWAL DISTRICT AS AN URBAN RENEWAL PROJECT; MAKING FINDINGS WITH RESPECT THERETO AND APPROVING THE USE OF TAX INCREMENT REVENUES TO REIMBURSE ELIGIBLE COSTS THEREOF AND APPROVING A RELATED DEVELOPMENT AGREEMENT” (the “Resolution”), on file in the original records of the City in my legal custody; that the Resolution was duly adopted by the City Commission of the City at a regular meeting on October 1, 2024, and that the meeting was duly held by the City Commission and was attended throughout by a quorum, pursuant to call and notice of such meeting given as required by law; and that the Resolution has not as of the date hereof been amended or repealed. I further certify that, upon vote being taken on the Resolution at said meeting, the following Commission members voted in favor thereof: ; voted against the same: ; abstained from voting thereon: ; or were absent: . WITNESS my hand and seal officially this 1st day of October, 2024. (SEAL) __________________________________ MIKE MAAS City Clerk 135 Resolution 5643, Approving a Project in the Northeast URD Known as the Wallace Works Project A-1 EXHIBIT A [Form of Development Agreement] 136 DEVELOPMENT AGREEMENT (Wallace Works) This DEVELOPMENT AGREEMENT (this “Agreement”) is dated as of October 1, 2024, by and between WALLACE WORKS, LLC (the “Developer”) and the CITY OF BOZEMAN, MONTANA (the “City”). The Developer and the City are each individually referred to herein as a “Party” and collectively as the “Parties.” RECITALS: WHEREAS, under the provisions of Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as amended (the “Act”), the City is authorized to create urban renewal areas, prepare and adopt an urban renewal plan therefor and amendments thereto, undertake urban renewal projects therein, provide for the segregation and collection of tax increment with respect to property taxes collected in such areas, and apply tax increment revenues derived from projects undertaken within the urban renewal area to pay eligible costs; WHEREAS, pursuant to the Act and Ordinance No. 1655 adopted by the City Commission of the City (the “City Commission”) on November 28, 2005, the City has created the Northeast Urban Renewal District (the “District”) as an urban renewal district and has approved the Northeast Urban Renewal Plan (the “Plan”) as an urban renewal plan in accordance with the Act, which Plan provides for the segregation and collection of tax increment revenues with respect to the District; WHEREAS, the Developer proposes to undertake the construction of a mixed-use development generally consisting of construction of approximately 48 residential rental units, one cohousing cluster rental unit, 16 row homes to be offered for sale, complementary commercial space, related infrastructure and utility improvements, and related improvements, the estimated budget for which is set forth on Exhibit A hereto (the “Project”), on land located at 801 N. Wallace Avenue in Bozeman, Montana, which is legally described on Exhibit B hereto (the “Land”); WHEREAS, seven of the 49 residential rental units are proposed to be affordable to households earning 80% of area median income and below, and as a condition to the City’s reimbursement obligations under this Agreement, the Developer agrees to record restrictive covenants against the Land to provide for long-term affordability of those units (as further described herein, the “Restrictive Covenants”); and WHEREAS, pursuant to Resolution No.5643 adopted on October 1, 2024, the City Commission approved the Project as an urban renewal project under the Plan and the Act and authorized the use of tax increment revenue of the District to reimburse the Developer for certain eligible costs of the Project described more particularly on Exhibit C hereto (the “Eligible Costs”) in the maximum amount of $2,055,563, subject to the terms and conditions of this Agreement; and WHEREAS, certain of the Eligible Costs are costs paid by the Developer in connection with the design, engineering, work, construction, materials, equipment, and other improvements eligible to be reimbursed, which improvements are identified as such on Exhibit C hereto (the 137 2 “Infrastructure Improvements”), and certain of the Eligible Costs are costs to be paid by the Developer as fees or charges pertaining to the Project, which fees and charges are identified as such on Exhibit C hereto (the “Project Fees and Charges”); and WHEREAS, the City Commission has determined to reimburse the Developer for Eligible Costs solely out the Project Generated Tax Increment, as further described herein; and WHEREAS, the Parties desire to enter into this Agreement which sets forth the obligations and commitments of the Parties. NOW, THEREFORE, the City and the Developer, pursuant to the Act, each in consideration of the representations, covenants and agreements of the other, as set forth herein, mutually represent, covenant and agree as follows: Section 1. Definitions; Rules of Interpretation; Exhibits. 1.1. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context clearly requires otherwise, the following terms have the meanings assigned to them, respectively: “Act” means Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as amended or supplemented. “Affordable Housing Covenants” means the covenants set forth in Section 3.12 hereof. “Agreement” means this Development Agreement, dated as of _____________, 2024, by and between the City and the Developer, as it may be amended or supplemented from time to time in accordance with the terms hereof. “Bonds” means the Series 2017 Bond and any additional bonds issued by the City on a parity therewith in accordance with the Original Resolution. “City” means the City of Bozeman, Montana, or any successors to its functions under this Agreement. “City Commission” means the governing body of the City. “Developer” means Wallace Works, LLC, a Montana limited liability company, and its successors and assigns in accordance with and as permitted under this Agreement. “District” means the Northeast Urban Renewal District, an urban renewal district created by the Ordinance pursuant to the Act, as such may be enlarged or reduced from time to time in accordance with the Act. “DOR” means the State of Montana Department of Revenue. “Eligible Costs” means the costs identified as such on the attached Exhibit C. 138 3 “Environmental Laws and Regulations” means and includes the Federal Comprehensive Environmental Compensation Response and Liability Act (“CERCLA” or the “Federal Superfund Act”) as amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”), 42 U.S.C. §§ 9601 et seq.; the Federal Resource Conservation and Recovery Act of 1976 (“RCRA”), 42 U.S.C. §§ 6901 et seq.; the Clean Water Act, 33 U.S.C. § 1321 et seq.; and the Clean Air Act, 42 U.S.C. §§ 7401 et seq., all as the same may be from time to time amended, and any other federal, state, county, municipal, local or other statute, code, law, ordinance, regulation, requirement or rule which may relate to or deal with human health or the environment including without limitation all land use, zoning, and stormwater control regulations as well as all regulations promulgated by a regulatory body pursuant to any statute, code, law, ordinance, regulation, requirement or rule. “Fiscal Year” means the period commencing on the first day of July of any year and ending on the last day of June of the next calendar year, or any other twelve-month period authorized by law and specified by the Commission as the City’s fiscal year. “Indemnified Parties” has the meaning given to it in Section 7.1. “Infrastructure Improvements” means the design, engineering, work, construction, materials, equipment, and the other improvements, the costs of which form a part of the Eligible Costs described as such in Exhibit C hereto, as the same may be amended or supplemented from time to time, in accordance with the terms hereof. “Land” has the meaning given to it in the recitals hereof. “Land Use Regulations” means all federal, state and local laws, rules, regulations, ordinances and plans relating to or governing the development or use of the Land or the Project. “Milestone” of “Milestones” has the meaning given in Section 3.4 hereof. “Milestone Date” or “Milestone Dates” has the meaning given in Section 3.4 hereof. “Ordinance” means Ordinance No. 1655 adopted by the City Commission on November 28, 2005. “Original Resolution” means Resolution No. 4801 adopted by the City Commission on May 22, 2017, pursuant to which the City issued the Series 2017 Bond. “Person” means any individual, corporation, limited liability company, partnership, limited liability partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. “Prevailing Wage Rates” means the Montana Prevailing Wage Rate for public works projects as published from time to time by and available from the Montana Department of Labor and Industry, Research and Analysis Bureau, P.O. Box 1728, Helena, Montana 59624, telephone number (800) 541-3904. 139 4 “Project” means the facilities to be constructed by the Developer on the Land pursuant to this Agreement, as described in the recitals hereto. “Project Fees and Charges” means those fees and charges pertaining to the Project that form a part of the Eligible Costs described as such in Exhibit C hereto, as the same may be amended or supplemented from time to time, in accordance with the terms hereof. “Project Generated Tax Increment” means the property taxes paid by the Developer with respect to the Project, as further described in Section 5.2 hereof. “Restricted Units” has the meaning set forth in Section 3.12 hereof. “Restrictive Covenants” has the meaning set forth in Section 3.12 hereof. “Series 2017 Bond” means the Tax Increment Urban Renewal Revenue Bond, Series 2017 (Northeast Urban Renewal District), issued in the principal amount of $1,446,000 pursuant to the Original Resolution. “State” means the State of Montana. “Tax Increment” means the amount received by the City pursuant to the Act from the extension of levies of Taxes (expressed in mills) against the incremental taxable value (as defined in the Act) of all Taxable Property, and shall include all payments in lieu of Taxes attributable to the incremental taxable value and all payments received by the City designated as replacement revenues for lost Tax Increment. “Taxable Property” means all real and personal property located in the District and subject to Taxes, including land, improvements and equipment. “Taxes” means all taxes levied on an ad valorem basis by any Taxing Body against the Taxable Property (exclusive of the six mill levy for university purposes levied by the State and any other mills that are excluded from the calculation of tax increment under State law), and shall include all payments in lieu of taxes received by the City with respect to Taxable Property. “Taxing Body” means the City; the County of Gallatin, Montana; High School District No. 7 (Bozeman), Gallatin County, Montana; Elementary School District No. 7 (Bozeman), Gallatin County, Montana; the State; and any other political subdivision or governmental unit that levies or may hereafter levy or cause to be levied Taxes against property within the District. “Unavoidable Delay” means a delay resulting from a cause over which the Party required to perform does not have control and which cannot or could not have been avoided by the exercise of reasonable care, including but not limited to, acts of God, accidents, war, civil unrest, embargoes, strikes, unavailability of raw materials or manufactured goods, litigation, pandemics, epidemics, labor shortages, unusually inclement weather and the delays of the other Party or its contractors, agents or employees in the performance of their duties under or incident to this Agreement. 1.2. Rules of Interpretation. 140 5 (a) The words “herein,” “hereof” and words of similar import, without reference to any particular section or subdivision, refer to this Agreement as a whole rather than to any of its particular sections or subdivisions. (b) References to any particular section or subdivision hereof are to the section or subdivision of this Agreement in its original signed form, unless otherwise indicated. (c) The word “or” is not exclusive but is intended to contemplate or encompass one, more or all of the alternatives conjoined. 1.3. Exhibits. The following Exhibits are attached to and by reference made a part of this Agreement: Exhibit A: Project Budget Exhibit B: Legal Description of the Land Exhibit C: Eligible Costs Exhibit D: Milestones Exhibit E: Form of Developer Certificate to Establish Amount of Eligible Costs Exhibit F: Form of Developer Certificate Regarding Project Generated Tax Increment and Request for Reimbursement Exhibit G: Nondiscrimination and Equal Pay Affirmation Section 2. Representations. 2.1. City Representations. The City hereby represents as follows: (a) Pursuant to the Act, and after a public hearing duly called and held, the City by the Ordinance has duly created the District. (b) Pursuant to the Original Resolution, the City has issued and there is outstanding the Series 2017 Bond. In the Original Resolution, the City reserved the right to issue additional bonds having a lien on Tax Increment on a parity with the Series 2017 Bond (“Bonds”) and obligations having a lien on Tax Increment subordinate to the lien of the Bonds (“Subordinate Obligations”). Any obligation of the City to make payments under this Agreement constitutes a Subordinate Obligation under the Original Resolution, subordinate and junior in all respects to the repayment of the Bonds and the replenishment of the debt service reserve account for the Bonds, and subject to all other terms and conditions of the Original Resolution. (c) Pursuant to Resolution No. 5643 of the City Commission, the City Commission authorized the execution and delivery by the City of this Agreement and approved the use of the Project Generated Tax Increment, if available, to reimburse the Eligible Costs in a total amount not to exceed $2,055,563. 141 6 (d) The DOR has advised the City that the base taxable value (as defined in the Act) of the District is $423,054. 2.2. Developer Representations. The Developer hereby represents as follows: (a) The Developer is a Montana limited liability company, duly formed, validly existing and in good standing under the laws of the State of Montana and is duly qualified to do business in the State of Montana. The Developer has the power to enter into this Agreement and by all necessary corporate action has duly authorized the execution and delivery of this Agreement. (b) The Developer has good marketable title to the Land, free and clear of all liens, encumbrances and defects except such as do not materially affect the value of the Land or materially interfere with the use made and proposed to be made of the Land by the Developer. (c) The Developer has the financial capability or commitments to complete the Project at a cost not less than $39,843,565. (d) The Developer is not aware of any facts the existence of which would cause the Developer to be in violation in any material respect of any Environmental Laws and Regulations applicable to the Project or the Infrastructure Improvements. The Developer has not received from any local, state or federal official any notice or communication indicating that the activities of the Developer have been, may be or will be in violation of any Environmental Laws and Regulations applicable to the Project or the Infrastructure Improvements. (e) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions hereof is prohibited or limited by, conflicts with or results in a breach of the terms, conditions or provisions of the certificate of formation, partnership agreement or operating agreement of the Developer or any evidence of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. (f) There is no action, suit, investigation or proceeding now pending or, to the knowledge of the Developer, threatened against or affecting the Developer or its business, operations, properties or condition (financial or otherwise) before or by any governmental department, commission, board, authority or agency, or any court, arbitrator, mediator or grand jury, that could, individually or in the aggregate, materially and adversely affect the ability of the Developer to complete the Project. (g) The Developer acknowledges and agrees that the sole source of funds for reimbursing the Developer under this Agreement is the Project Generated Tax Increment. The Developer further acknowledges and agrees the amount of Tax Increment in the District is dependent upon a number of variables, including, without limitation, the taxable value of the Project, the number of mills levied by Taxing Bodies, and then-prevailing state laws regarding computation of Tax Increment, and that the City has no control over such variables. If Tax Increment in the District decreases, the City may need to use some or all of the Project Generated Tax Increment to pay debt service on Bonds or to replenish the debt service reserve account for 142 7 the Bonds, and there may not be Project Generated Tax Increment available to reimburse the Developer for Eligible Costs, despite the Developer having paid all property taxes then due with respect to the Project. The Developer agrees that if Project Generated Tax Increment is required to be used to pay debt service or replenish the debt service reserve account for the Bonds such that the Project Generated Tax Increment is not available to reimburse the Developer, the City shall have no obligation to pay to the Developer the amount of reimbursement described in Section 4. The Developer agrees that such event shall not constitute a default by the City hereunder. In such event, if Developer has not received any reimbursement but has recorded the Restrictive Covenants described in Section 3.12, the City shall consent to the termination of the Restrictive Covenants and cooperate with the Developer to remove the Restrictive Covenants from the Land. Section 3. Developer Undertakings. 3.1. Construction and Maintenance of Project. The Developer hereby agrees and commits to the City that it will diligently prosecute to completion the construction of the Project in accordance with this Agreement, the site plan submitted to the City and all applicable federal, State and local laws, rules, regulations, ordinances and plans relating to or governing the development or use of the Project, including applicable Land Use Regulations and Environmental Laws and Regulations. The total estimated costs of the Project are shown on Exhibit A hereto. The Developer has the financial capacity to complete the Project, and the Developer agrees to pay all costs thereof. If there is an increase in the costs of the Project from that shown on Exhibit A hereto that cannot be covered by the contingency amount, the Developer shall notify the City of the increase and submit additional evidence in a form acceptable to the City that the Developer has the financial capacity to cover such additional costs and complete the Project. At all times during the term of this Agreement, the Developer will operate and maintain, preserve and keep the Project or cause the Project to be operated, maintained, preserved and kept for the purposes for which it was constructed, and with the appurtenances and every part and parcel thereof, in good repair and condition. The Developer agrees to permit the City and any of its officers, employees or agents access to the Land for the purpose of inspection of all work being performed in connection with the Project; provided, however, that the City shall have no obligation to inspect such work. 3.2. Preparation, Review and Approval of Construction Plans. In connection with the Project, the Developer, at its sole expense, shall prepare and submit construction plans, drawings, and related documents for each portion of the Project to the appropriate City officials for architectural, engineering or land use review and written approval or permits, and the Developer shall include this Agreement in the materials submitted to City officials for review. The Developer acknowledges that no review or approval by City officials hereunder may be in any way construed by the Developer to replace, override or be in lieu of any required review, inspection, or approval by the City Planning Division, or any other building construction official review or approvals required by any State laws or local ordinances or regulations. Nothing contained in this Agreement indicates or evidences that the City has approved or will approve the Project or any portion thereof. This Agreement does not affect or limit the City’s regulatory powers with regard to the Project, including, without limitation, those relating to building permits or other permits or the payment of fees. As further described in Section 7.1, the City shall have no liability and the Developer shall hold the City harmless with respect to any 143 8 increases in costs of the Project related to or arising out of delays resulting from the City’s regulatory actions or approvals. 3.3. Construction of the Infrastructure Improvements. The Developer shall acquire, install, construct or otherwise provide the Infrastructure Improvements. The Developer acknowledges and agrees that the City is not responsible for acquiring, installing, constructing or otherwise providing the Infrastructure Improvements. The estimated costs of the Infrastructure Improvements, which form a part of the Eligible Costs, are shown on Exhibit C hereto. 3.4. Milestones of the Project. Certain steps in the development of the Project are listed on Exhibit D attached hereto (collectively, the “Milestones”; each a “Milestone”), together with the dates by which the Developer is obligated to complete the Milestones (collectively, the “Milestone Dates”; each as it relates to a particular Milestone, the “Milestone Date”). The Developer acknowledges and agrees that the City in reserving or offering to make available Tax Increment to pay or reimburse the Eligible Costs necessarily means that certain Tax Increment is not available to pay or reimburse other undertakings or costs for the benefit of the District and that the City reasonably expects additional Tax Increment as a result of completion of the Project. The Developer acknowledges and agrees that conditioning the availability of Project Generated Tax Increment to pay or reimburse the Eligible Costs on completion or satisfaction of the Milestones by the corresponding Milestone Dates is reasonable. If the Developer is unable to complete or satisfy a Milestone by the corresponding Milestone Date, the Developer shall make a formal written request to the Director of Economic Development, with appropriate supporting material, to extend the Milestone Date and, as appropriate, subsequent Milestone Dates. The Director of Economic Development may, in his or her sole discretion, (i) determine whether such extension is appropriate and, if so, fix a new and superseding Milestone Date and also adjust other subsequent Milestone Dates, along with any other terms or conditions, or (ii) refer the request to the City Commission to either approve the extension and adjust other Milestone Dates, as appropriate, or terminate this Agreement, in which case the City will have no obligation to reimburse the Developer hereunder. If this Agreement is terminated as described in this Section 3.4 and the Developer has not received any reimbursement but has recorded the Restrictive Covenants described in Section 3.12, the City will consent to the termination of the Restrictive Covenants and cooperate with the Developer to remove the restrictive covenants from the Land. 3.5. Prevailing Wage Rates; Competitive Bidding. The Developer understands that the City is obligated to follow certain laws with respect to the expenditure of public funds, which includes Tax Increment. The Developer agrees to comply with laws that govern City contracting obligations, including public procurement laws relating to all of the Infrastructure Improvements, such as, without limitation, laws and rules regarding prevailing wage and solicitation of work on a competitive basis. Without limitation of the foregoing, the Developer agrees that in the awarding of contracts for the Infrastructure Improvements (i) it will, and it will cause its contractor to, competitively bid contracts for each component of the Infrastructure Improvements, and (ii) through its contract with its contractor, it will, in addition to the requirements of Sections 3.9 and 3.10, require its contractor to, pay the Prevailing Wage Rates on such contracts related to the Infrastructure Improvements. The Developer will provide to the City all documentation requested to verify the compliance of the Developer and its contractor with the foregoing 144 9 requirements. Failure of the Developer or its contractor to bid competitively contracts for each component of the Infrastructure Improvements or to require contracts entered into directly with contractors or sub-contractors to include provisions requiring the contractor or sub-contractor to pay the Prevailing Wage Rates on the work related to the Infrastructure Improvements will be considered a breach of this Agreement and the City will be entitled, at its discretion and without obligation, to exercise any and all measures to assure compliance and retroactive compensation plus interest to workers not paid in accordance with this Agreement, and recovery of any penalty or fine assessed by the State attributed to any failure to pay the Prevailing Wage Rates. Additionally, the Developer acknowledges that a violation of these requirements may, in the City’s sole discretion, cause the Infrastructure Improvements to be ineligible for the application of Tax Increment, in which case the City will have no obligation to reimburse or pay the Developer hereunder. 3.6. Utilities. The Developer shall not interfere with, or construct any improvements over, any public street or utility easement without the prior written approval of the City. All connections to public utility lines and facilities shall be subject to approval of the City and any private utility company involved. The Developer at its own expense shall replace any public facilities or utilities damaged during the Project by the Developer or its agents or by others acting on behalf of or under their direction or control of the Developer. 3.7. Permits and Compliance With Laws. The Developer will obtain, in a timely manner, all required permits, licenses and approvals, and will meet all requirements of all local, state and federal laws, rules and regulations which must be obtained or met in connection with the acquisition and construction of the Project, including the Infrastructure Improvements. Without limiting the foregoing, the Developer will request and seek to obtain from the City or other appropriate governmental authority all necessary land use, zoning, and building permits. The Developer will comply in all material respects with all Environmental Laws and Regulations applicable to the construction, acquisition, and operation of the Project, including the Infrastructure Improvements, will obtain any and all necessary environmental reviews, licenses or clearances under, and will comply in all material respects with, Environmental Laws and Regulations. In addition, the Developer shall comply fully with all applicable state and federal laws, regulations, and municipal ordinances related to worker safety including but not limited to the Occupational Safety and Health Act (OSHA), the safety rules, codes, and provisions of the Montana Safety Act in Title 50, Chapter 71, MCA, all applicable City, County, and State building and electrical codes, and the Americans with Disabilities Act. 3.8. Easements. To the extent that the Infrastructure Improvements are to be located on the Land, the Developer hereby agrees to grant to the City and applicable utility companies from time to time such easements, rights-of-way and similar licenses in a form required by the City and as are reasonably necessary to permit the City to own, operate and maintain the Infrastructure Improvements. 3.9. Nondiscrimination and Equal Pay Affirmation. The Developer agrees to require its contractor(s) to be in compliance with the City’s Nondiscrimination and Equal Pay Affirmation attached hereto as Exhibit G, as well as Title 49, Montana Code Annotated, regarding activities related to the Project, including the Infrastructure Improvements. The Developer agrees that in its contracts with its contractors the Developer’s contractor will be 145 10 required to require its subcontractors to comply with the City’s Nondiscrimination and Equal Pay Affirmation attached hereto as Exhibit G, as well as Title 49, Montana Code Annotated, regarding activities related to the Project. The Developer agrees to provide copies of all such contracts upon request by the City. 3.10. Worker’s Compensation Insurance. The Developer shall provide in its construction contracts related to the Project with all of its respective contractors that such contractors are to be covered by a Worker’s Compensation insurance program with the State, a private insurance carrier, or an approved self-insurance plan in accordance with State law. 3.11. Walkaway Provision. The Developer shall have the option, in its sole discretion and for any reason, to cease developing the Project and terminate this Agreement without penalty at any time prior to the Developer submitting any request for reimbursement or payment to the City (“Walkaway Provision”). If the Developer exercises this Walkaway Provision , this Agreement shall immediately terminate and all rights and obligations of the Parties under this Agreement shall cease, except for those rights and obligations specifically identified in this Agreement as surviving termination. If the Developer exercises this Walkaway Provision , the Developer automatically waives any and all rights to reimbursement or payment from the City under this Agreement. This Walkaway Provision shall not limit or prohibit any rights, claims, or recourse that the City may have in connection with the Project. The Parties expect that, if the Developer determines to exercise this Walkaway Provision, the Restrictive Covenants will not be recorded against the Land. If the Developer records the Restrictive Covenants and, at a later date, determines to exercise the Walkaway Provision, the City consents to and agrees to cooperate with the Developer to remove the Restrictive Covenants from the Land. 3.12. Affordable Housing Covenants. The Developer agrees that a minimum of 7 of the residential rental units developed on the Land as part of the Project (the “Restricted Units”) will be restricted for a period not less than 50 years for use as housing affordable to households with incomes up to 80% area median income (“AMI”). As a condition to reimbursement from Project Generated Tax Increment, as described in Section 5.1 hereof, the Developer shall record restrictive covenants in a form approved by the City Attorney and acceptable to the Developer (the “Restrictive Covenants”) against the Land. The Restrictive Covenants must (i) run with the land, (ii) bind, for a period not less than 50 years from the date of issuance of a certificate of occupancy with respect to the Restricted Units, the Restricted Units to be affordable at 80% AMI, with rental prices tied to affordability at 80% AMI, and (iii) provide that a third-party nonprofit or government entity with experience in managing affordable housing units will manage the rental of the Restricted Units. The affordability requirements in the Restrictive Covenants will be index-based, tied to AMI, and pursuant to the Restrictive Covenants, rental prices of the Restricted Units will be based on the most recent affordability data available through the Housing and Urban Development’s Housing Availability Data System or other similar affordability data that is available at the time of rental. The Developer’s covenants described in this Section 3.12 are referred to herein as the “Affordable Housing Covenants.” The Developer acknowledges and agrees that the Affordable Housing Covenants are fundamental to the City’s agreements hereunder. The Developer acknowledges that, as development proceeds on the Project, it may be required to record other instruments to implement the Affordable Housing Covenants and provide for the affordability of the Restricted Units, in addition to or in replacement of the Restrictive Covenants to be recorded as a condition to reimbursement of the 146 11 Developer under this Agreement, and the Developer agrees to record such other instruments if necessary. The Restrictive Covenants to be filed hereunder are separate and distinct from any other restrictive covenants that may be required by other City regulations, programs or agreements, including pursuant to the City’s affordable housing ordinance. The Developer acknowledges that, as determined by the City, one-person household pricing relates to studios, two-person household pricing relates to one bedroom units, three-person household pricing relates to two bedroom units, and four-person household pricing relates to three bedroom units. Section 4. City Undertakings. Subject to satisfaction of all conditions in Section 5 below, subject to the prior lien of the Bonds and the debt service reserve account therefor on the Project Generated Tax Increment, the City agrees to reimburse the Developer in an amount equal to 100% of the Project Generated Tax Increment in each Fiscal Year, until the Developer is reimbursed for the Eligible Costs (up to $2,055,563). Section 5. Reimbursement for the Eligible Costs. Reimbursement of the Developer for Eligible Costs shall be subject to the following conditions and in accordance with the following procedures: 5.1. Conditions to Reimbursement. (a) (i) The Developer must have completed or satisfied each of the Milestones by the applicable Milestone Date, as such date may have been extended pursuant to Section 3.4 hereof, (ii) the City must have issued a certificate of occupancy for the Project, (iii) the Infrastructure Improvements must have been completed in their entirety and the City must have delivered to the Developer written acceptance of the Infrastructure Improvements (which may be in the form of a Certificate of Completion or such other format as required by the City), and (iv) the Developer must demonstrate to the City’s satisfaction, by a title report or other means acceptable to the City, that the Infrastructure Improvements are free of financial liens and any encumbrances affecting the Infrastructure Improvements must be acceptable to the City. (b) Reimbursement by the City for costs of the Infrastructure Improvements must be based on paid invoices for costs incurred by the Developer, its contractors and subcontractors or utility companies, which the Developer must supply to the City. The City may reject, in its sole discretion, any invoice related to the Infrastructure Improvements. The City will notify the Developer within seven (7) days of any rejected invoice and the reason it was rejected, and will provide the Developer a reasonable opportunity to cure. (c) The Parties agree that the City will have no obligation to pay or reimburse any of the Eligible Costs unless at the time of such request (i) all of the Developer’s representations as set forth in Section 2.2 are true and correct, (ii) the Developer is not in breach of any covenant or undertaking as set forth in Section 3, and (iii) there shall be adequate Tax Increment on hand to satisfy all financial obligations related to the Bonds and the debt service reserve account for the Bonds such that the Project Generated Tax Increment is available to reimburse the Developer. (d) The Developer shall have provided evidence satisfactory to the City that the Developer is in compliance with the Affordable Housing Covenants and the Restrictive Covenants, together with evidence that the Restrictive Covenants have been recorded with the 147 12 Gallatin County Clerk and Recorder’s Office and are in full force and effect, and other information regarding the Restricted Units, which may include outreach and marketing materials relating to the rental of the Restricted Units, rental data relating to the Restricted Units, and/or other relevant information. (e) After receiving a certificate of occupancy for the Project, the Developer shall provide to the City a signed Developer certificate substantially in the form attached as Exhibit F hereto and acceptable to the City, accompanied by the invoices and lien waivers from the contractors or subcontractors that have performed the work to be reimbursed. In addition, the Developer agrees to provide to the City any additional information requested by the City for the City to determine the total amount of the Eligible Costs actually incurred. Based on this Developer certificate and the related information provided by the Developer, the City Manager or his or her designee shall determine the total dollar amount of Eligible Costs that may be reimbursed (up to $2,055,563). If any of the above conditions are not satisfied in the determination of the City, and after reasonable opportunity for the Developer to cure any default, the City shall have no obligation to reimburse any of the Eligible Costs and the City’s determination to refrain from reimbursing, or its inability to reimburse, any of the Eligible Costs shall not be or result in a default of this Agreement. 5.2. Process for Reimbursement. The actual property taxes paid by the Developer in each Fiscal Year following receipt of a final certificate of occupancy with respect to the Project constitutes the “Project Generated Tax Increment.” Subject to the prior lien of the Bonds on Tax Increment, the Developer is eligible to be reimbursed in an amount equal to the Project Generated Tax Increment in each Fiscal Year, until the Developer is reimbursed for the Eligible Costs (up to $2,055,563). Following determination of the dollar amount of the Eligible Costs that may be reimbursed under Section 5.1(e), and the Developer’s payment of property taxes with respect to the Project in accordance with Section 6.1, Developer shall submit to the Director of Economic Development, not more than twice in any Fiscal Year, a certificate substantially in the form attached hereto as Exhibit F, together with such supporting documentation as may be requested by the City, showing the amount of the Project Generated Tax Increment paid by the Developer at that time. Section 6. Covenants to Pay Taxes. 6.1. Taxes. The Developer shall pay or cause to be paid when due and prior to the imposition of penalty all Taxes and all installments of any special assessments payable with respect to the Land and the Project and any improvements thereto or extension thereof. 6.2. Maintenance of Land and Project. The Developer agrees to use its commercially reasonable best efforts to maintain and operate the Land and the Project so as to be able at all times to pay promptly and when due all property taxes levied with respect to the Land and the Project. 6.3. Injunction; Specific Performance. The Parties agree that, in the event of a breach of this Section 6 by the Developer or its successors or assigns, the City would suffer irreparable 148 13 harm. Therefore, in the event the Developer or its successors or assigns fails to comply with the provisions of this Section 6, the Developer agrees that the City may pursue any remedy at law or in equity, including, without limitation, the remedies of injunction and specific performance. Section 7. Indemnification and Insurance. 7.1. Indemnification. The Developer releases the City and all City Commission members, board members, officers, agents, servants and employees of the City (the “Indemnified Parties”) from, and covenants and agrees that the Indemnified Parties shall not be liable for, and agrees to indemnify, defend and hold harmless the Indemnified Parties against, any loss, damage, cost (including reasonable attorneys’ fees), claim, demand, suit, action or other proceeding whatsoever (i) arising or purportedly arising out of, or resulting or purportedly resulting from, the acquisition and construction of the Project, including the Infrastructure Improvements, any violation by the Developer of any agreement, condition or covenant of this Agreement, the ownership, maintenance and operation of the Project, or the presence on any portion of the Land, of any dangerous, toxic or hazardous pollutants, contaminants, chemicals, waste, materials or substances; or (ii) which is proximately caused by the Developer or its officers, agents, contractors, consultants or employees. 7.2. Insurance. The Developer shall keep and maintain the Project at all times insured against such risks and in such amounts, with such deductible provisions, as are customary in connection with facilities of the type and size comparable to the Project, and the Developer shall carry and maintain, or cause to be carried and maintained, and pay or cause to be paid timely the premiums for direct damage insurance covering all risks of loss, including, but not limited to, the following: 1. fire 2. extended coverage perils 3. vandalism and malicious mischief 4. boiler explosion (but only if steam boilers are present) 5. collapse on a replacement cost basis in an amount equivalent to the Full Insurable Value thereof. “Full Insurable Value” shall include the actual replacement cost of the Project, exclusive of foundations and footings, without deduction for architectural, engineering, legal or administrative fees or for depreciation. The policies required by this Section 7.2 shall be subject to a no coinsurance clause or contain an agreed amount clause, and must contain a deductibility provision not exceeding $100,000. Subject to the terms of any mortgage relating to the Project, policies of insurance required by this Section 7.2 shall insure and be payable to Developer and shall provide for release of insurance proceeds to Developer for restoration of loss. The City shall be furnished certificates showing the existence of such insurance. In case of loss, Developer is hereby authorized to adjust the loss and execute proof thereof in the name of all parties in interest. During construction of the Project, any and all of the foregoing insurance policies may be maintained by the Developer’s contractor; provided that once the Project is placed into service, 149 14 Developer shall maintain all of the foregoing insurance policies. In addition, as a condition to placing the Project in service, the City may require that the Developer or owner of the Project obtain additional insurance that would protect the City or the City’s interest in the Infrastructure Improvements. In addition to and independent of the above, the Developer shall at the Developer’s expense secure liability insurance through an insurance company or companies duly licensed and authorized to conduct insurance business in Montana. The insurance shall not contain any exclusion for liabilities specifically assumed by the Developer in this Section. The insurance shall cover and apply to all claims, demands, suits, damages, losses, and expenses that may be asserted or claimed against, recovered from, or suffered by the City in relation to construction of the Project and the Infrastructure Improvements without limit and without regard to the cause therefore. The Developer must furnish to the City an accompanying certificate of insurance and accompanying endorsements in amounts not less than as follows: Commercial General Liability - $1,000,000 per occurrence; $2,000,000 annual aggregate The above amounts shall be exclusive of defense costs. The City, its officers, agents, and employees, shall be endorsed as an additional or named insured on a primary non-contributory basis on the Commercial General Liability policy. The insurance and required endorsements must be in a form suitable to City and shall include no less than a thirty (30) day notice of cancellation or non-renewal. The City must approve all insurance coverage and endorsements prior to the Developer commencing work on Project or Infrastructure Improvements. Developer must notify the City within two (2) business days of Developer’s receipt of notice that any required insurance coverage will be terminated or Developer’s decision to terminate any required insurance coverage for any reason. Section 8. General Provisions. 8.1. Conflicts of Interest; City’s Representatives Not Individually Liable. The Developer represents that it does not employ, retain, or contract with an officer or employee of the City and that no member, officer or employee of the City has a personal or financial interest, direct or indirect, in this Agreement or in the Project, or a financial interest in the Infrastructure Improvements. No member, officer or employee of the City shall be personally liable to Developer in the event of any default under or breach of this Agreement by the City, or for any amount that may become due to Developer for any obligation issued under or arising from the terms of this Agreement. 8.2. Rights Cumulative. The rights and remedies of the Parties of this Agreement, whether provided by law or by this Agreement, shall be cumulative, and the exercise by any Party hereto of any one or more of such remedies shall not preclude the exercise by such Party, at the same or different times, of any other remedy for the same default or breach or of any of its remedies for any other default or breach of the Party subject to the limitation of remedies provided herein. No waiver made by such Party with respect to the performance or the manner or time thereof, of any obligation under this Agreement, shall be considered a waiver with respect to the particular obligation of the other Party or a condition to its own obligation beyond 150 15 those expressly waived in writing and to the extent thereof, or a waiver in any respect in regard to any other rights of the Party making the waiver of any obligations of the other Party. Delay by a Party hereto instituting or prosecuting any cause of action or claim hereunder shall not be deemed a waiver of any rights hereunder. 8.3. Term of Agreement. (a) This Agreement shall remain in effect until the earlier of (i) the date that is 10 days after the date the City reimburses the Developer in full hereunder, or (ii) the termination of this Agreement pursuant to Section 5.2(b) or Section 3.11; provided that this Agreement may be earlier terminated by the City in its sole discretion at any time after failure by the Developer to complete or satisfy a Milestone by the applicable Milestone Payment Date (as such date may be extended as described in Section 3.4). (b) Notwithstanding the foregoing provisions of this Section 8.3, (i) Sections 6, 7, and 8 of this Agreement shall in all events survive the termination of this Agreement, and (ii) if the Developer is reimbursed under this Agreement, Section 3.12 shall survive the termination of this Agreement. 8.4. Limitation on City Liability. No agreements or provisions contained in this Agreement nor any agreement, covenant or undertaking by the City contained in any document in connection with the Project, including the Infrastructure Improvements, or the Eligible Costs shall give rise to any pecuniary liability of the City or a charge against its general credit or taxing powers, or shall obligate the City financially in any way except with respect to then-available Project Generated Tax Increment. No failure of the City to comply with any term, condition, covenant or agreement herein shall subject the City to liability for any claim for damages, costs or other financial or pecuniary charge except to the extent that the same can be paid or recovered from then-available Project Generated Tax Increment; and no execution on any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit, general funds or taxing powers of the City (except as such constitute then-available Project Generated Tax Increment). Nothing herein shall preclude a proper party in interest from seeking and obtaining specific performance against the City for any failure to comply with any term, condition, covenant or agreement herein; provided that no costs, expenses or other monetary relief shall be recoverable from the City except as may be payable from the Project Generated Tax Increment. This Agreement shall not constitute or be construed to give rise to a debt of the City. 8.5. Assignment. This Agreement is unique between the City and the Developer and no Party may assign any rights or privileges, or delegate any duties or obligations under this Agreement, without first obtaining the written consent of the other Party. 8.6. Successors Bound By Agreement; No Third Party Beneficiary; No Property Interest. Subject to compliance with Section 8.5, this Agreement will inure to the benefit of and be binding upon the Parties to this Agreement and their respective successors in interest and permitted assignees. This Agreement is for the exclusive benefit of the Parties, does not constitute a third-party beneficiary agreement, and may not be relied upon or enforced by a third 151 16 party. This Agreement, by itself, does not create or give rise to a property interest in the Land or the Project. 8.7. Prior Agreements. This Agreement supersedes, merges and voids any and all prior discussions, negotiations, agreements and undertakings between the Parties with respect to the subject matter of this Agreement. The Parties waive and release each other from any claims, actions, or causes of action that relate in any manner to any prior discussions, negotiations, agreements and undertakings between the Parties with respect to the subject matter of this Agreement. 8.8. Entire Agreement. This Agreement, including any exhibits and attachments hereto, embodies the entire agreement and understanding of the Parties with respect to its subject matter. All Parties shall be prohibited from offering into evidence in any arbitration or civil action any terms, conditions, understandings, warranties, statements or representations, whether oral or written, with respect to the subject matter of this Agreement and that are not contained in this Agreement. 8.9. Amendments, Changes and Modifications. This Agreement may be amended and any of its terms may be modified only by written amendment authorized and signed by the Parties hereto. 8.10. Headings. The headings of articles and sections in this Agreement are inserted for convenience of reference only and do not limit or amplify the terms and provisions of the Agreement in any manner. The headings will be ignored and will not affect the construction of any provisions of this Agreement. 8.11. Notice. Any formal notice, demand or communication required or permitted by the terms of this Agreement to be given to the City or the Developer will be in writing and will be delivered to such Party either: (i) by personal hand-delivery; or (ii) by depositing the same in the United States mail, certified mail with return receipt requested, addressed to such Party at the address named below, with postage prepaid thereon. Notice will be deemed complete upon receipt of the notice pursuant to any of the foregoing methods of notice. If to City: City of Bozeman Attention: Bozeman City Manager 121 N. Rouse Ave. P.O. Box 1230 Bozeman, MT 59771 With a copy to: [___________________] If to Developer: 152 17 Wallace Works, LLC Attention: Erik Nelson 113 East Oak, Suite 4B Bozeman, MT 59715 With a copy to: [___________________] The City and the Developer, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications should be sent. 8.12. Severability. If any provision of this Agreement is declared void or held invalid, such provision will be deemed severed from this Agreement and the remaining provisions of this Agreement will otherwise remain in full force and effect. 8.13. Duplicate Originals or Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. 8.14. Place of Performance. The place of performance of this Agreement will be in the City of Bozeman, Gallatin County, Montana. 8.15. Governing Law. This agreement and the legal relations between the Parties hereto will be governed by and construed in accordance with the laws of the State of Montana, without giving effect to any choice of law statutes, rules, or principles. 8.16. Dispute Resolution. (a) Any claim, controversy, or dispute between the Parties, their agents, employees, or representatives shall be resolved first by negotiation between senior-level personnel from each Party duly authorized to execute settlement agreements. Upon mutual agreement of the Parties, the Parties may invite an independent, disinterested mediator acceptable to the Parties to assist in the negotiated settlement discussions. (b) If the Parties are unable to resolve the dispute within thirty (30) days from the date the dispute was first raised, then such dispute may only be resolved in a court of competent jurisdiction in compliance with the applicable law and the provisions of this Agreement. 8.17. Further Assurances and Corrective Instruments. The Parties agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Project, including the Infrastructure Improvements, or the Eligible Costs or for carrying out the expressed intention of this Agreement. 8.18. Reports/Accountability/Public Information. The Developer agrees to develop and/or provide documentation as requested by the City demonstrating the Developer’s 153 18 compliance with the requirements of this Agreement. The Developer shall allow the City, its auditors, and other persons authorized by the City to inspect and copy its books and records for the purpose of verifying that the monies reimbursed to the Developer pursuant to this Agreement were used in compliance with this Agreement and all applicable provisions of federal, state, and local law. The Developer shall not issue any statements, releases or information for public dissemination regarding this Agreement or the work contemplated hereunder without prior written approval of the City. [Balance of page intentionally left blank] 154 19 IN WITNESS WHEREOF, the Parties hereto have caused this Development Agreement to be executed as of the [_____] day of [___________]. CITY OF BOZEMAN, MONTANA By: _______________________________________ Printed Name: Chuck Winn Title: City Manager [Signature Page to Development Agreement] 155 20 WALLACE WORKS, LLC By: Name: Title: [Signature Page to Development Agreement] 156 A-1 EXHIBIT A ESTIMATED PROJECT BUDGET 157 B-1 EXHIBIT B LEGAL DESCRIPTION OF THE LAND 158 C-1 EXHIBIT C ELIGIBLE COSTS 159 D-1 EXHIBIT D MILESTONES MILESTONE MILESTONE DATE Phase 1 Site Plan Submittal to the City Complete Phase 2 Site Plan Submitted to the City Phase 1 Building Permit Submittal Phase 2 Building Permit Submittal Jan 2025 Complete August 2025 Start of Development Construction Nov 15th 2025 Start of Infrastructure Construction Jan 15th 2026 Substantial Completion of Infrastructure Construction Jan 15th 2027 Completion of Development Construction (occupancy) Jan 15th 2028 160 E-1 EXHIBIT E FORM OF DEVELOPER CERTIFICATE TO ESTABLISH AMOUNT OF ELIGIBLE COSTS TO: City of Bozeman, Montana (the “City”) FROM: Wallace Works, LLC (the “Developer”) SUBJECT: Eligible Costs This Developer Certificate requests $_________ for reimbursement of Eligible Costs, as defined in the Development Agreement between the Developer and the City, dated as of ________________ (the “Development Agreement”). Capitalized terms used but not otherwise defined herein shall have the respective meanings given such terms in the Development Agreement. Pursuant to Section 5.1(d) of the Development Agreement, the undersigned hereby certifies on behalf of the Developer that: (a) the expenditures for which reimbursement is requested are listed in summary form in the attached schedule headed “Project Expenditures;” (b) invoices paid by the Developer corresponding to the expenditures set forth on the attached Project Expenditures Schedule are appended to the attached schedule headed “Project Invoices;” (c) the amounts for which reimbursement is requested have been paid by the Developer to the City for Project Fees and Charges or to contractors, subcontractors, materialmen, engineers, architects or other persons who or that have performed necessary or appropriate services or supplied necessary or appropriate materials for the acquisition, construction, renovation, equipping, and installation of the Infrastructure Improvements; (d) with respect to the Infrastructure Improvements, the contractor and subcontractors were solicited and retained competitively and all persons performing work on the Infrastructure Improvements were paid the Montana prevailing wage for such work; (e) the reimbursement of the amounts requested will not result in a breach of any of the covenants of the Developer contained in the Development Agreement; and (f) no litigation has been instituted or is threatened with regard to any amounts sought to be reimbursed, and binding and enforceable lien waivers have been obtained from all contractors, subcontractors, materialmen, and others with regard to all work related to any amounts for which reimbursement is requested. The Developer represents that all of the representations of the Developer in Section 2.2 of the Development Agreement are true and correct as of the date hereof and the Developer is not in 161 E-2 default of the performance of any of its undertakings or obligations under Section 3 of the Development Agreement as of the date hereof. Dated: _____________, 20__ Wallace Works, LLC By: Authorized Developer Representative 162 F-1 EXHIBIT F FORM OF DEVELOPER CERTIFICATE REGARDING PROJECT GENERATED TAX INCREMENT TO: City of Bozeman, Montana (the “City”) FROM: Wallace Works, LLC (the “Developer”) SUBJECT: Project Generated Tax Increment This Developer Certificate relates to Project Generated Tax Increment, as defined in the Development Agreement between the Developer and the City, dated as of ________________ (the “Development Agreement”). Capitalized terms used but not otherwise defined herein shall have the respective meanings given such terms in the Development Agreement. Pursuant to Section 5.2 of the Development Agreement, the undersigned hereby certifies on behalf of the Developer that on [___________], 20__] and [___________], 20__], the Developer, and/or person(s) or entity responsible for paying taxes, has paid property taxes relating to the Project in the total amount of $[______]1, and is therefore eligible for reimbursement in an amount of $[________]2. The Developer has attached proof of each payment to this certificate. The Developer is eligible to be reimbursed for $[______]3 in total Eligible Costs. [The Developer has previously been reimbursed for Eligible Costs in the amount of $[_____], and as of the date hereof, the Developer is eligible to be reimbursed for an additional $[_______] in Eligible Costs.] The Developer further certifies that all of the representations of the Developer in Section 2.2 of the Development Agreement are true and correct as of the date hereof and the Developer is not in default of the performance of any of its undertakings or obligations under Section 3 of the Development Agreement as of the date hereof. Dated: _____________, 20__ Wallace Works, LLC By: Authorized Developer Representative 1 Project Generated Tax Increment. 2 Same as FN 6. 3 Amount of Eligible Costs established by Developer Certificate at Exhibit E. 163 G-1 EXHIBIT G 164 Memorandum REPORT TO:City Commission FROM:Chris Saunders, Community Development Manager Erin George, Community Development Interim Director SUBJECT:Review and Approval of the 2024 Impact Fee Service Area Report for Fire/Emergency Medical Services MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Plan/Report/Study RECOMMENDATION:Consider the Motion: Having reviewed and considered the staff presentation, draft service area report, public comment, and all information presented, I hereby find the 2024 service area report for Fire/EMS meets all requirements and accept the report. STRATEGIC PLAN:7.5. Funding and Delivery of City Services: Use equitable and sustainable sources of funding for appropriate City services, and deliver them in a lean and efficient manner. BACKGROUND:The City of Bozeman first adopted impact fees in 1996 and has used them continuously since. The State of Montana authorizes local government impact fees through Title 7, Chapter 6, Part 16, Montana Code Annotated (MCA) [External Link]. An impact fee is defined as: (5) (a) "Impact fee" means any charge imposed upon development by a governmental entity as part of the development approval process to fund the additional service capacity required by the development from which it is collected. An impact fee may include a fee for the administration of the impact fee not to exceed 5% of the total impact fee collected. (b) The term does not include: (i) a charge or fee to pay for administration, plan review, or inspection costs associated with a permit required for development; (ii) a connection charge; (iii) any other fee authorized by law, including but not limited to user fees, special improvement district assessments, fees authorized under Title 7 for county, municipal, and consolidated government sewer and water districts and systems, and costs of ongoing maintenance; or (iv) onsite or offsite improvements necessary for new development to meet the safety, level of service, and other minimum development standards that have been adopted by the governmental entity. The City uses impact fees to advance the following purposes: Equity in funding capital expansion of certain services 165 Public safety Infrastructure concurrency Remove barriers from development Implement growth policy and facility plans by increasing capacity to serve new development Cost efficiency from coordinated projects The Community Development Board has been assigned by the City Commission the duties of the Impact Fee Advisory Committee [External Link] to review calculation of fees. An element of this duty is to review and recommend on the service area report (SAR). A key part of the state authorization for impact fees is the requirement for a local government to prepare a service area report for each fee type. The SAR consolidates key information relating to the future needs for infrastructure, expected means to provide the infrastructure, and the process by which the cost of additional services are assigned to units of new development. A copy of 7-16-1602 MCA that sets required documentation for an impact fee is attached to this agenda item. In addition to the details of the SAR the City also provides required documentation through its Fire Master Plan [External PDF] and annual capital improvement program and budgets [External link]. The City updates the SAR at least every four years to help ensure the fees are accurate, reflect current construction costs and service needs, and remain roughly proportionate and logically connected to the development that pays the fees. The City hired TischlerBise, a nationally prominent specialist in impact fees, to support the City in updating the impact fee SAR. Staff has reviewed the draft SAR prepared by TischlerBise on behalf of the City and finds that the document meets the requirements of state law for an SAR. The SAR is in writing, the document has been provided to the public for review through the Engage Bozeman website [External Link] as well as the agenda for the Community Development Board meeting and the City Commission agenda. The City has an annual process to update a capital improvement program to schedule construction of public facility capital improvements. As shown in the SAR, actual costs of construction and reasonable estimate of costs have been used, forecast for future needs are provided, necessary facilities to serve future growth are identified, and the appropriateness of a single service area is established. No maintenance or operational costs are included in the calculated fee. All other necessary elements are also provided. The City published formal notice in the Bozeman Daily Chronicle on 8/17/2024, 8/31/2024, and 9/07/2024 of the public hearings before the Community Development Board and City Commission. A news item was included on the City's website, the Engage Bozeman impact fee update project website was established, several publicly available work sessions and training sessions regarding impact fees have been held during the project, 166 and direct notification to interest groups occurred at the beginning of the project. The Community Development Board held a public hearing on the draft SAR on Sept 9th. The video and minutes of the hearing are available through the City's website [External Link]. The Board recommended unanimously, 5-0, approval to the City Commission. The action under this agenda item is specific to the Fire/EMS impact fee. The City also implements transportation, water, and wastewater fees. SAR for those fees are under development and will come forward for public review, Community Development Board recommendation, and City Commission action as they are completed. The City has adopted various fiscal policies to guide how revenues and expenditures are made. These are included in the City’s adopted budget [external link], see page 175. A relevant policy is: 5. User fees and charges will be used, as opposed to general taxes, when distinct beneficiary populations or interest groups can be identified. User fees and charges are preferable to general taxes because user charges can provide clear demand signals which assist in determining what services to offer, their quantity, and their quality. User charges are also more equitable, since only those who use the service must pay--thereby eliminating the subsidy provided by nonusers to users, which is inherent in general tax financing. Consistent with this policy the City uses impact fees to fund capital improvements to expand service capacity. Also consistent with this policy, impact fees are set only to the amount found necessary to offset the costs due from new construction. Impact fee revenue can be used to pay bonds for capital improvements that otherwise qualify as an impact fee expenditure. All expenses for operations such as personnel and supplies, maintenance, and capital replacement must come from other user fees, assessments, and taxes as authorized by law. Most elements of the 2024 Fire/EMS SAR are very similar to previous SAR although updated data has been used in the forecasts and other calculations. The data requirements established by state law ensure substantial consistency from one SAR to its successor. The primary change is to expand the range of home sizes for which fees are calculated. As better data has become available and a greater range of home sizes is being constructed in the community it is appropriate to consider if an improved fit between construction, expected service demand, and fees charged can be established. It is also necessary to keep the range realistic and reasonably descriptive of expected demand. For example, although there is a demonstrated correlation between home size and occupancy the occupancy of a home can never go below 1 regardless of its size. Two factors have most influenced the change in cost of service shown in the 167 SAR. Most importantly, since the last SAR the cost of construction and capital equipment has increased almost 300%. See page 12 of the SAR. This large increase directly raises the cost of constructing a new fire station or initial purchase of capital equipment. Since the impact fee is a cost recovery approach the cost of the impact must rise to reflect changing cost of inputs. The other is service call rates. A large fraction of the total calls the Fire Department responds to are medical service calls. The Fire Department recently adopted updated dispatch protocols that more clearly identifies the resources needed for a medical call. As a result, the fire trucks respond less frequently. This change in operations substantially reduces the rate of calls of service and which lowers the impact fee necessary to recoup cost of service. This is most clearly seen in the reduced fee calculated for health care and social assistance services that have a high rate of medical calls and reduces the fee increases on other uses. See Pages 9, and 11-12 of the SAR. One policy change is included in the SAR. The fee for residences has been based on a range of homes sizes and/or home type since 2009. The current range has been in place since 2019. Greater data availability has enabled this SAR to consider a more refined range of home size and type. The expanded range more clearly ties a fee to the lower dwelling occupancy expected in smaller units. Since service demand is strongly influenced by occupancy this enables a lower fee to be charged for smaller homes. Bozeman has seen a substantial increase in smaller sized homes, especially in the apartment type configuration, over the past few years. The expansion of dwelling size range is a policy option. It will add a modest amount of additional work for staff to administer the program. The City Commission could direct the size range continue in its current range from <1,400 sq. ft. to 3,001 sq. ft. and greater; or use the expanded range included in the SAR. Staff recommends adoption of the range proposed in the SAR. If the Commission supports the recommended action a separate resolution to adopt the SAR and set the effective date to apply the new SAR to building permits is required. The formal Resolution is a subsequent action item on this agenda. For context, a simple memo with information from other communities using impact fees in MT is attached. Each community is distinct and cost of service is not comparable from one community to another. Since the question of what other communities are doing comes up every time the fee schedules are updated staff provides this information. UNRESOLVED ISSUES: To accept or not accept the change in home size range as shown on pages 8- 9 of the service area report. ALTERNATIVES:1. Approve the service area report; 2. Approve with modifications the draft service area report; 3. Reject the draft service area report; or 4. Open and continue the public hearing on the application, with specific 168 request staff to supply additional information or to address specific items. FISCAL EFFECTS:The service area report does not expend funds. It does update the costs per unit of new development. Subsequent adoption of the SAR will enable continued operation of the impact fee program to offset capital costs from new construction for fire/EMS functions. Attachments: Bozeman MT Impact Fee Report_FireEMS_8.27.24.pdf 7-6-1602. Calculation of impact fees -- documentation required -- ordinance or resolution -- requirements for impact fees, MCA.pdf Other Communities Memo 9-5-2024.pdf Report compiled on: September 19, 2024 169 Fire/EMS Service Area Report and Impact Fee Study Prepared for: Bozeman, Montana August 27, 2024 4701 Sangamore Road Suite S240 Bethesda, MD (301) 320-6900 www.TischlerBise.com 170 Service Area Report and Impact Fee Study Bozeman, Montana [PAGE INTENTIONALLY LEFT BLANK] 171 Service Area Report and Impact Fee Study Bozeman, Montana i Table of Contents Executive Summary ............................................................................................................... 3 Montana Impact Fee Enabling Legislation ........................................................................... 3 Public Facilities ...................................................................................................................................... 3 Service Area Report .............................................................................................................................. 4 Legal Framework ................................................................................................................ 4 Methodology ..................................................................................................................... 6 Conceptual Impact Fee Calculation ...................................................................................................... 7 Evaluation of Credits ............................................................................................................................. 7 Maximum Supportable Impact Fees ................................................................................... 8 Fire/EMS Service Area Report .............................................................................................. 10 Service Area ........................................................................................................................................ 10 Cost Allocation .................................................................................................................................... 10 Service Demand Units ......................................................................................................................... 10 Level of Service and Cost Analysis .................................................................................... 12 Fire/EMS Station Space ....................................................................................................................... 12 Fire/EMS Station Land......................................................................................................................... 13 Fire/EMS Apparatus ............................................................................................................................ 13 Projected Service Demand Units and for Demand for Services .......................................... 15 Fire/EMS Growth-Related Capital Improvement Plans ...................................................... 16 Credit for Other Revenues Sources ................................................................................... 16 Fire/EMS Personnel and Operations ................................................................................................... 16 Maximum Supportable Fire/EMS Impact Fees .................................................................. 17 Projected Fire/EMS Impact Fee Revenue .......................................................................... 20 Capital Improvement Plan ................................................................................................... 21 Appendix A: Land Use Assumptions ..................................................................................... 22 Population and Housing Characteristics ............................................................................ 22 Building Permit History .................................................................................................... 22 Base Year Housing Units and Population .......................................................................... 23 Housing Unit and Population Projections .......................................................................... 26 Current Employment and Nonresidential Floor Area ......................................................... 27 Employment and Nonresidential Floor Area Projections ................................................... 27 Vehicle Trip Generation ................................................................................................... 29 Residential Vehicle Trips by Housing Type.......................................................................................... 29 Residential Vehicle Trips Adjustment Factors..................................................................................... 30 Nonresidential Vehicle Trips ............................................................................................................... 30 Vehicle Trip Projections .................................................................................................... 32 Demand Indicators by Dwelling Size ................................................................................. 33 Bozeman Control Totals ...................................................................................................................... 33 Demand Indicators by Dwelling Size ................................................................................................... 33 Persons by Dwelling Size ..................................................................................................................... 34 Person by Dwelling Size and Housing Type ......................................................................................... 35 Trip Generation by Dwelling Size ........................................................................................................ 38 172 Service Area Report and Impact Fee Study Bozeman, Montana ii Vehicle Trip Ends by Dwelling Size ...................................................................................................... 39 Vehicle Trip Ends by Dwelling Size and Housing Type ........................................................................ 40 Appendix B: Land Use Definitions ........................................................................................ 42 Residential Development .................................................................................................................... 42 Nonresidential Development .............................................................................................................. 42 173 Service Area Report and Impact Fee Study Bozeman, Montana 3 EXECUTIVE SUMMARY The City of Bozeman, Montana, contracted with TischlerBise to document land use assumptions, prepare the Service Area Report, and update impact fees within the applicable service areas pursuant to Montana Code 7-6-16 (hereafter referred to as the “Enabling Legislation”). Governmental entities in Montana may assess impact fees to offset infrastructure costs to the governmental entity for public facilities needed to serve future development. For each public facility for which an impact fee is imposed, the governmental entity shall prepare and approve a service area report. The impact fees must (1) be reasonably related to and reasonably attributable to the development's share of the cost of infrastructure improvements made necessary by the new development and (2) may not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in accommodating the development. Impact fees are one-time payments used to construct system improvements needed to accommodate future development, and the fee represents future development’s proportionate share of infrastructure costs. Impact fees may be used for infrastructure improvements or debt service for growth-related infrastructure. In contrast to general taxes, impact fees may not be used for operations, maintenance, replacement, or correcting existing deficiencies. This Service Area Report and associated update to its impact fees are for Fire/EMS public facilities. In a tandem effort, TischlerBise is also updating the Service Area Reports for Transportation, Water, and Wastewater public facilities. Montana Impact Fee Enabling Legislation The Enabling Legislation governs how impact fees are calculated for governmental entities in Montana. Public Facilities Under the requirements of the Enabling Legislation, impact fees may only be used for construction, acquisition, or expansion of public facilities made necessary by new development. “Public Facilities” means any of the following categories of capital improvements with a useful life of 10 years or more that increase or improve the service capacity of a public facility (§7-6-1601(7)): 1. a water supply production, treatment, storage, or distribution facility; 2. a wastewater collection, treatment, or disposal facility; 3. a transportation facility, including roads, streets, bridges, rights-of-way, traffic signals, and landscaping; 4. a storm water collection, retention, detention, treatment, or disposal facility or a flood control facility; 5. a police, emergency medical rescue, or fire protection facility; and 6. other facilities for which documentation is prepared as provided in 7-6-1602 that have been approved as part of an impact fee ordinance or resolution by: 7. a two-thirds majority of the governing body of an incorporated city, town, or consolidated local government; or 8. a unanimous vote of the board of county commissioners of a county government. 174 Service Area Report and Impact Fee Study Bozeman, Montana 4 Also, §7-6-1601(5a) states that "impact fee" means any charge imposed upon development by a governmental entity as part of the development approval process to fund the additional service capacity required by the development from which it is collected. An impact fee may include a fee for the administration of the impact fee not to exceed 5 percent of the total impact fee collected. Service Area Report For each public facility for which an impact fee is imposed, the governmental entity shall prepare and approve a service area report. The service area report is a written analysis that must: 1. describe existing conditions of the facility; 2. establish level-of-service standards; 3. forecast future additional needs for service for a defined period of time; 4. identify capital improvements necessary to meet future needs for service; 5. identify those capital improvements needed for continued operation and maintenance of the facility; 6. make a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits; 7. make a determination as to whether one service area or more than one service area for transportation facilities is needed to establish a correlation between impact fees and benefits; 8. establish the methodology and time period over which the governmental entity will assign the proportionate share of capital costs for expansion of the facility to provide service to new development within each service area; 9. establish the methodology that the governmental entity will use to exclude operations and maintenance costs and correction of existing deficiencies from the impact fee; 10. establish the amount of the impact fee that will be imposed for each unit of increased service demand; and 11. have a component of the budget of the governmental entity that: a. schedules construction of public facility capital improvements to serve projected growth; b. projects costs of the capital improvements; c. allocates collected impact fees for construction of the capital improvements; and d. covers at least a 5-year period and is reviewed and updated at least every 5 years. Legal Framework Both state and federal courts have recognized the imposition of impact fees as a legitimate form of land use regulation, provided the fees meet standards intended to protect against regulatory takings. Land use regulations, development exactions, and impact fees are subject to the Fifth Amendment prohibition on taking of private property for public use without just compensation. To comply with the Fifth Amendment, development regulations must be shown to substantially advance a legitimate governmental interest. In the case of impact fees, that interest is in the protection of public health, safety, and welfare by ensuring development is not detrimental to the quality of essential public services. The means to this end are also important, requiring both procedural and substantive due process. The process followed to receive 175 Service Area Report and Impact Fee Study Bozeman, Montana 5 community input (i.e., stakeholder meetings, work sessions, and public hearings) provides opportunities for comments and refinements to the impact fees. There are three reasonable relationship requirements for impact fees that are closely related to “rational nexus”, or “reasonable relationship” requirements enunciated by a number of state courts. Although the term “dual rational nexus” is often used to characterize the standard by which courts evaluate the validity of impact fees under the U.S. Constitution, we prefer a more rigorous formulation that recognizes three elements: “need,” “benefit,” and “proportionality.” The dual rational nexus test explicitly addresses only the first two, although proportionality is reasonably implied, and was specifically mentioned by the U.S. Supreme Court in the Dolan case (Dolan v. City of Tigard, OR, 1994). Furthermore, the plaintiff in the 2024 Sheetz v. El Dorado County U.S. Supreme Court case argued that the El Dorado County, CA impact fee program failed to meet the Nollan/Dolan test. The U.S. Supreme Court remanded the case back to the California Supreme Court for further proceedings on a stricter interpretation of the rational nexus, specifically the extent impact fees can be “roughly proportionate.” Thus, is has been determined that State courts will make judgements further similar cases. Individual elements of the nexus standard are discussed further in the following paragraphs. All new development in a community creates additional demands on some, or all, public facilities provided by local government. If the capacity of facilities is not increased to satisfy that additional demand, the quality or availability of public services for the entire community will deteriorate. Impact fees may be used to recover the cost of development-related facilities, but only to the extent that the need for facilities is a consequence of development that is subject to the fees. The Nollan decision reinforced the principle that development exactions may be used only to mitigate conditions created by the developments upon which they are imposed. That principle clearly applies to impact fees. In this study, the impact of development on infrastructure needs is analyzed in terms of quantifiable relationships between various types of development and the demand for specific capital facilities, based on applicable level-of-service standards. The requirement that exactions be proportional to the impacts of development was clearly stated by the U.S. Supreme Court in the Dolan case and is logically necessary to establish a proper nexus. Proportionality is established through the procedures used to identify development-related facility costs, and in the methods used to calculate impact fees for various types of facilities and categories of development. The demand for capital facilities is measured in terms of relevant and measurable attributes of development (e.g., a typical housing unit’s average weekday vehicle trips). A sufficient benefit relationship requires that impact fee revenues be segregated from other funds and expended only on the facilities for which the fees were charged. Impact fees must be expended in a timely manner and the facilities funded by the fees must serve the development paying the fees. However, nothing in the U.S. Constitution or the state enabling legislation requires that facilities funded with fee revenues be available exclusively to development paying the fees. In other words, benefit may extend to a general area including multiple real estate developments. Procedures for the earmarking and expenditure of fee revenues are discussed near the end of this study. All of these procedural as well as substantive issues are intended to ensure that new development benefits from the impact fees they are 176 Service Area Report and Impact Fee Study Bozeman, Montana 6 required to pay. The authority and procedures to implement impact fees is separate from and complementary to the authority to require improvements as part of subdivision or zoning review. As documented in this report, the City of Bozeman has complied with applicable legal precedents. Impact fees are proportionate and reasonably related to the capital improvement demands of new development. Specific costs have been identified using local data and current dollars. With input from City staff, TischlerBise identified service demand indicators for each type of infrastructure and calculated proportionate share factors to allocate costs by type of development. This report documents the formulas and input variables used to calculate the impact fees for each type of public facility. Impact fee methodologies also identify the extent to which new development is entitled to various types of credits to avoid potential double payment of growth-related capital costs. Methodology Impact fees for public facilities made necessary by new development must be based on the same level of service provided to existing development in the service area. There are three basic methodologies used to calculate impact fees. They examine the past, present, and future status of infrastructure. The objective of evaluating these different methodologies is to determine the best measure of the demand created by new development for additional infrastructure capacity. Each method has advantages and disadvantages in a particular situation and can be used simultaneously for different cost components. Additionally, impact fees for public facilities can also include a fee for the administration of the impact fee not to exceed five percent of the total impact fee collected. Reduced to its simplest terms, the process of calculating impact fees involves two main steps: (1) determining the cost of growth-related capital improvements and (2) allocating those costs equitably to various types of development. In practice, though, the calculation of impact fees can become quite complicated because of the many variables involved in defining the relationship between development and the need for facilities within the designated service area. The following paragraphs discuss basic methods for calculating impact fees and how those methods can be applied. • Cost Recovery (past improvements) - The rationale for recoupment, often called cost recovery, is that future development is paying for its share of the useful life and remaining capacity of facilities already built, or land already purchased, from which future development will benefit. This methodology is often used for utility systems that must provide adequate capacity before new development can take place. • Incremental Expansion (concurrent improvements) - The incremental expansion methodology documents current level-of-service standards for each type of public facility, using both quantitative and qualitative measures. This approach assumes there are no existing infrastructure deficiencies or surplus infrastructure capacity. Future development is only paying its proportionate share for growth-related infrastructure. Revenue will be used to expand or provide additional facilities, as needed, to accommodate future development. An incremental expansion methodology is best suited for public facilities that will be expanded in regular increments to keep pace with development. 177 Service Area Report and Impact Fee Study Bozeman, Montana 7 • Plan-Based (future improvements) - The plan-based methodology allocates costs for a specified set of improvements to a specified amount of development. Improvements are typically identified in a long-range facility plan and development potential is identified by a land use plan. There are two basic options for determining the cost per service demand unit: (1) total cost of a public facility can be divided by total service demand units (average cost), or (2) the growth-share of the public facility cost can be divided by the net increase in service demand units over the planning timeframe (marginal cost). Conceptual Impact Fee Calculation In contrast to project-level improvements, impact fees fund growth-related infrastructure that will benefit multiple development projects, or the entire service area (usually referred to as system improvements). The first step is to determine an appropriate service demand indicator for the particular type of infrastructure. The service demand indicator measures the number of service units for each unit of development. For example, an appropriate indicator of the demand for roadways is vehicle trips or vehicle miles of travel that can be determined by development type. The second step in the impact fee formula is to determine infrastructure improvement units per service demand unit, typically called level-of-service (LOS) standards. In keeping with the roadway example, a common LOS standard is volume to capacity ratio. The third step in the impact fee formula is the cost of various infrastructure units. To complete the roadway example, this part of the formula would establish a construction cost per lane mile of road expansion. Evaluation of Credits A consideration of credits is integral to the development of a legally defensible impact fee. There are two types of credits that should be addressed in impact fee studies and ordinances. The first is a revenue credit due to possible double payment situations, which could occur when other revenues expected to be paid by future development may contribute to the capital costs of infrastructure covered by the impact fee. This type of credit is integrated into the fee calculation, thus reducing the fee amount. The second type of credit is a site-specific credit for system improvements that have been included in the impact fee calculations. Policies and procedures related to site-specific credits for system improvements are addressed in the ordinance that establishes the impact fees. However, the general concept is that developers may be eligible for site-specific credits only if they provide system improvements that have been included in the impact fee calculations. Project improvements normally required as part of the development approval process are not eligible for credits against impact fees. Site-specific credits are addressed in the administration and implementation of the development fee program. Below, Figure 1 summarizes service areas, methodologies, and infrastructure cost components. Figure 1. Impact Fee Service Areas, Methodologies, and Cost Allocation Fire/EMS Citywide -Fire Station Space & Land, Apparatus -Calls for Service Cost AllocationFee Category Service Area Incremental Expansion Plan-Based Cost Recovery 178 Service Area Report and Impact Fee Study Bozeman, Montana 8 Maximum Supportable Impact Fees The following figures list the schedule of the maximum supportable impact fees by type of land use. The fees represent the highest amount allowable for each type of applicable land use. The City may adopt fees that are less than the amounts shown. However, a reduction in impact fee revenue will necessitate an increase in other revenues, a decrease in planned capital expenditures, and/or a decrease in levels of service. The maximum supportable impact fees for residential development will be assessed per housing unit, based on the square footage of the unit. This study presents additional size bands. The current fee schedule has 10 bands, while 19 bands are included in the update. Expanding the schedule allows for further proportionately. Nonresidential impact fees will be assessed per square foot of floor area. Figure 2. Maximum Supportable Impact Fee Schedule – Single-Unit Dwelling Including Townhomes Residential - Single-Unit Dwelling including Townhomes Residential (per housing unit) Under 600 0.038 $601 $384 $217 600 to 800 0.044 $696 $384 $312 801 to 1,000 0.054 $854 $384 $470 1,001 to 1,200 0.061 $965 $384 $581 1,201 to 1,400 0.068 $1,075 $384 $691 1,401 to 1,600 0.073 $1,155 $393 $762 1,601 to 1,800 0.078 $1,234 $401 $834 1,801 to 2,000 0.082 $1,297 $408 $889 2,001 to 2,200 0.086 $1,360 $415 $945 2,201 to 2,400 (avg.)0.089 $1,408 $422 $986 2,401 to 2,600 0.092 $1,455 $431 $1,024 2,601 to 2,800 0.095 $1,503 $439 $1,064 2,801 to 3,000 0.098 $1,550 $448 $1,102 3,001 to 3,200 0.100 $1,582 $469 $1,113 3,201 to 3,400 0.103 $1,629 $469 $1,160 3,401 to 3,600 0.105 $1,661 $469 $1,192 3,601 to 3,800 0.107 $1,692 $469 $1,223 3,801 to 4,000 0.109 $1,724 $469 $1,255 4,001 or More 0.111 $1,756 $469 $1,287 Maximum Supportable Fee Current Fee Increase/ Decrease Dwelling Size (square feet) Calls per Household 179 Service Area Report and Impact Fee Study Bozeman, Montana 9 Figure 3. Maximum Supportable Impact Fee Schedule – Other Residential Figure 4. Maximum Supportable Impact Fee Schedule – Nonresidential Fee Residential - Other Residential Residential (per housing unit) Under 600 0.036 $569 $272 $297 600 to 800 0.042 $664 $272 $392 801 to 1,000 0.051 $807 $272 $535 1,001 to 1,200 0.058 $917 $272 $645 1,201 to 1,400 0.064 $1,012 $272 $740 1,401 to 1,600 (avg.)0.069 $1,091 $279 $812 1,601 to 1,800 0.073 $1,155 $285 $870 1,801 to 2,000 0.078 $1,234 $290 $944 2,001 to 2,200 0.081 $1,281 $294 $987 2,201 to 2,400 0.085 $1,344 $301 $1,043 2,401 to 2,600 0.087 $1,376 $306 $1,070 2,601 to 2,800 0.090 $1,423 $312 $1,111 2,801 to 3,000 0.093 $1,471 $317 $1,154 3,001 to 3,200 0.095 $1,503 $359 $1,144 3,201 to 3,400 0.097 $1,534 $359 $1,175 3,401 to 3,600 0.099 $1,566 $359 $1,207 3,601 to 3,800 0.101 $1,597 $359 $1,238 3,801 to 4,000 0.103 $1,629 $359 $1,270 4,001 or More 0.105 $1,661 $359 $1,302 Group Quarters 0.036 $569 $181 $388 Maximum Supportable Fee Current Fee Increase/ Decrease Dwelling Size (square feet) Calls per Household Nonresidential Industrial 0.016 $253 $54 $199 Retail, Accommodation & Food Services 0.097 $1,534 $503 $1,031 Health Care & Social Assistance 0.136 $2,151 $2,161 ($10) All Other Services 0.048 $759 $539 $220 Calls per 1,000 Sq Ft Nonresidential (per 1,000 square feet) Current Fee Increase/ Decrease Maximum Supportable FeeDevelopment Type 180 Service Area Report and Impact Fee Study Bozeman, Montana 10 FIRE/EMS SERVICE AREA REPORT The Fire/EMS Service Area Report includes components for station space, station land, and apparatus. An incremental expansion methodology is applied to examine the current level of service of facilities and demand from residential and nonresidential development. Importantly, the initial purchase of the apparatus that are included in the analysis have a useful life of 10 years or longer making it an impact fee eligible component. Service Area Bozeman’s Fire/EMS Department strives to provide uniform response times citywide, with its current and future stations and apparatus operating as an integrated network. The service area for the Fire/EMS Service Area Report is citywide. Cost Allocation Demand and proportionality in the fire/EMS impact fee is determined with calls for service data. The City of Bozeman is tracking calls based on 102 property use types. From a call report for calendar year 2023 there were 4,191 calls for service. To account for calls from residential and nonresidential land use, 72 calls were removed that were labeled as jail, police station, and fire station locations. As a result, the impact fee analysis examined 4,119 calls. In Figure 5, calls for service are attributed to development in five categories: residential, industrial, retail, health care, and all other services. Additionally, there were 753 traffic-related calls which are attributed to those categories based on their percentage of calls to locations. In Figure 5, the adjusted total calls reflect the calls to location and attributed traffic calls. The adjusted total is compared to the 2023 demand factor to calculate the calls per unit. For example, there is an estimated 2,144 residential-related calls and a base year permanent and seasonal population of 59,271 resulting in 0.036 calls per person (2,114 calls / 59,271 persons = 0.036 calls per person). The nonresidential demand unit is 1,000 square feet. Figure 5. Calls for Service by Location Service Demand Units Calls for service rates are used to calculate the fire/EMS impact fee. The average call per person rate (0.036 calls per person) is applied to the persons per housing unit (PPHH) factors for single-unit dwellings Residential Permanent and Seasonal Pop 1,752 52%392 2,144 persons 59,271 0.036 Nonresidential Industrial 41 1%9 50 1,000 sq ft 3,204 0.016 Retail, Accom. & Food Services 625 19%140 765 1,000 sq ft 7,856 0.097 Healthcare & Social Assistance 779 23%174 953 1,000 sq ft 7,002 0.136 All Other Services 169 5%38 207 1,000 sq ft 4,302 0.048 Total 3,366 753 4,119 [2] Traffic-related calls are attributed to development based on percent of calls to location Demand Factor 2023 Estimate Calls per Unit [1] Annual fire call report broken down to 102 property uses then summed by development type Development Calls to Location [1] % of Total Traffic Calls [2] Adj. Total Calls 181 Service Area Report and Impact Fee Study Bozeman, Montana 11 and other residential dwellings by size. A detailed analysis of the PPHH factors is provided in Appendix A: Land Use Assumptions. Figure 6 combines the call per person with the PPHH factors to find the average calls for service per household factors. The City has seen an increase in smaller dwelling construction and improved detailed data available. Therefore, a broader range of size bands compared to the prior service area report is evaluated in this study. The current fee schedule has 10 bands, while 19 bands are included in the update. Expanding the schedule allows for further proportionately. Figure 6. Residential Fire/EMS Calls for Service Rates Figure 7 provides a summary for the nonresidential development types included in the analysis. Figure 7. Nonresidential Fire/EMS Calls for Service Rates Of note, since the 2019 impact fee study the City acknowledged that the increasing call volume was reaching a challenging level. In 2020, the Fire Department started to evaluate operations internally to find a way to better match dispatched resources to the actual needs of the call. This effort resulted in the implementation of the Emergency Medical Dispatch (EMD) protocols, which eliminates the need for a fire truck response to certain medical calls. Medical response is a large fraction of total calls for service. Full Residential - Single-Unit Dwelling incl. Townhomes Residential - Other Residential Residential (per housing unit)Residential (per housing unit) Under 600 1.06 0.038 Under 600 1.00 0.036 600 to 800 1.23 0.044 600 to 800 1.16 0.042 801 to 1,000 1.49 0.054 801 to 1,000 1.41 0.051 1,001 to 1,200 1.70 0.061 1,001 to 1,200 1.61 0.058 1,201 to 1,400 1.88 0.068 1,201 to 1,400 1.78 0.064 1,401 to 1,600 2.03 0.073 1,401 to 1,600 (avg.)1.92 0.069 1,601 to 1,800 2.16 0.078 1,601 to 1,800 2.04 0.073 1,801 to 2,000 2.28 0.082 1,801 to 2,000 2.16 0.078 2,001 to 2,200 2.38 0.086 2,001 to 2,200 2.25 0.081 2,201 to 2,400 (avg.)2.48 0.089 2,201 to 2,400 2.35 0.085 2,401 to 2,600 2.56 0.092 2,401 to 2,600 2.42 0.087 2,601 to 2,800 2.64 0.095 2,601 to 2,800 2.50 0.090 2,801 to 3,000 2.72 0.098 2,801 to 3,000 2.57 0.093 3,001 to 3,200 2.79 0.100 3,001 to 3,200 2.64 0.095 3,201 to 3,400 2.85 0.103 3,201 to 3,400 2.70 0.097 3,401 to 3,600 2.92 0.105 3,401 to 3,600 2.76 0.099 3,601 to 3,800 2.97 0.107 3,601 to 3,800 2.81 0.101 3,801 to 4,000 3.03 0.109 3,801 to 4,000 2.87 0.103 4,001 or More 3.08 0.111 4,001 or More 2.91 0.105 Group Quarters 1.00 0.036 Dwelling Size (square feet) Persons per Household Calls per Household Dwelling Size (square feet) Persons per Household Calls per Household Industrial 1,000 sq ft 0.016 Retail, Accommodation & Food Services 1,000 sq ft 0.097 Health Care & Social Assistance 1,000 sq ft 0.136 All Other Services 1,000 sq ft 0.048 Development Demand Factor Calls per KSF 182 Service Area Report and Impact Fee Study Bozeman, Montana 12 implementation was completed in 2023. The Fire Department estimates that without the EMD protocols the call volume in 2023 would have been approximately 6,600 calls. This effort has in turn resulted in reduced call rates for most development types. Figure 8 lists the change in call rates from the 2019 study. Figure 8. Change in Call Rates by Development Type Level of Service and Cost Analysis The following section details the level of service and cost factors for facility types included in the analysis. Fire/EMS Station Space The first component is fire/EMS stations. Shown below in Figure 9, after the current relocation project of Station 2, there will be 45,068 square feet of station space. The square footage is compared to the current annual call volume to calculate the current level of service (45,068 square feet / 4,119 calls = 10,941 square feet per 1,000 calls, rounded). To determine the capital cost per call, the level of service standard is multiplied by the current construction cost found from the Station 4 CIP project. As a result, the cost per call is $14,070 (10,941 square feet per 1,000 calls x $1,286 per square foot = $14,070 per call). Figure 9. Fire/EMS Station Space Level of Service and Cost Analysis Residential Population persons 0.036 0.040 -10% Nonresidential Industrial 1,000 sq ft 0.016 0.012 33% Retail, Accommodation & Food Services 1,000 sq ft 0.097 0.111 -13% Health Care & Social Assistance 1,000 sq ft 0.136 0.477 -71% All Other Services 1,000 sq ft 0.048 0.119 -60% % Change Calls per Unit (2023)Development Calls per Unit (2019) Demand Unit Station 1 19,000 $24,434,000 Station 2 13,500 $17,361,000 Station 3 12,568 $16,162,448 Total 45,068 $57,957,448 Square Feet Share of Square Feet 45,068 Citywide Calls for Service 4,119 Square Feet per 1,000 Calls 10,941 Square Feet Square Feet per 1,000 Calls 10,941 Average Cost per Square Foot [1]$1,286 Capital Cost per Call for Service $14,070 [1] Cost per square foot based on Station 4 CIP project Facility Level-of-Service Standards Cost Analysis Square Feet Replacement Cost [1] 183 Service Area Report and Impact Fee Study Bozeman, Montana 13 Fire/EMS Station Land The City of Bozeman anticipates purchasing land for future station expansion. Shown below in Figure 10, there is currently 2.38 acres of land at stations. Resulting in a current level of service of 0.58 acres per 1,000 calls (2.38 acres / 4,119 calls = 0.58 acres per 1,000 calls). The City’s practice of collocating fire facilities with other municipal facilities at Stations 1 and 3 reduces total land used and lowers costs. To determine the capital cost per call, the level of service standard is multiplied by the land cost found from the Station 4 CIP project. As a result, the cost per call is $580 (0.58 acres per 1,000 calls x $1,000,000 per acre = $580 per call). Figure 10. Fire/EMS Station Land Level of Service and Cost Analysis Fire/EMS Apparatus Bozeman plans to expand its current fleet to serve demand from new development. Currently, there are a total of eight units in the fleet that provide fire and EMS services. The fleet is compared to the current annual call volume to calculate the current level of service (8 units / 4,119 calls = 1.94 units per 1,000 calls). To determine the capital cost per call, the level of service standard is multiplied by the weighted average of the fleet based on current purchase price of the unit type. As a result, the cost per call is $1,564 (1.94 units per 1,000 calls x $806,000 per unit = $1,564 per call). Station 1 0.45 $450,000 Station 2 1.20 $1,200,000 Station 3 0.73 $730,000 Total 2.38 $2,380,000 Acres Share of Acres 2.38 Citywide Calls for Service 4,119 Acres per 1,000 Calls 0.58 Acres Acres per 1,000 Calls 0.58 Average Cost per Acre [1]$1,000,000 Capital Cost per Call for Service $580 Cost Analysis [1] Cost per acre based on anticipated cost for future land purchases for Station 4 Level-of-Service Standards Facility Acres Replacement Cost [1] 184 Service Area Report and Impact Fee Study Bozeman, Montana 14 Figure 11. Fire/EMS Apparatus Level of Service and Cost Analysis Ambulance 1 $350,000 $350,000 Brush Trucks 2 $225,000 $450,000 Engine 3 $900,000 $2,700,000 Hazmat Freightliner 1 $350,000 $350,000 Ladder 1 $2,600,000 $2,600,000 Total 8 $6,450,000 Level-of-Service Standards Units Share of Fleet 8 Citywide Calls for Service 4,119 Units per 1,000 Calls 1.94 Cost Analysis Units Units per 1,000 Calls 1.94 Average Cost per Unit $806,000 Capital Cost per Call for Service $1,564 [1] Cost based on current price of unit type Total ValueApparatusUnits Cost per Unit [1] 185 Service Area Report and Impact Fee Study Bozeman, Montana 15 Projected Service Demand Units and for Demand for Services To accommodate projected development, Bozeman will expand its fire/EMS station facilities and acquire additional apparatus as development occurs. The anticipated need is based on the development projections contained in the land use assumptions (see Appendix A: Land Use Assumptions). Shown in Figure 12, over the next ten years, based on current call volume and development projections there is an estimated increase of 945 calls for service. Current facility levels of service are applied to the growth in calls for service to estimate the growth-related need in facility expansion. For example, there is a need for 10,336 square feet of new station space (10,941 square feet per 1,000 calls x 945 increase in growth-related calls = 10,336 square feet). The current cost factors are applied to the growth-related need to estimate growth-related cost. Overall, there is a growth-related cost of $15.2 million to provide current levels of service to future development. Figure 12. Growth-Related Need for Fire/EMS Station Space Cost/Unit 10,941 square feet $1,286 0.58 acres $1,000,000 1.94 units $806,000 Base 2023 4,119 45,066 2.4 8.0 Year 1 2024 4,213 46,100 2.4 8.2 Year 2 2025 4,308 47,133 2.5 8.4 Year 3 2026 4,402 48,167 2.6 8.5 Year 4 2027 4,497 49,200 2.6 8.7 Year 5 2028 4,591 50,234 2.7 8.9 Year 6 2029 4,686 51,267 2.7 9.1 Year 7 2030 4,780 52,301 2.8 9.3 Year 8 2031 4,875 53,334 2.8 9.5 Year 9 2032 4,969 54,368 2.9 9.6 Year 10 2033 5,064 55,402 2.9 9.8 945 10,336 0.5 1.8 Projected Expenditure $13,292,096 $500,000 $1,450,800 Growth-Related Expenditures for Fire Facilities $15,242,896 Growth-Related Need for Fire Facilities Ten-Year Increase Year Calls for Service Station Square Feet Station Acres Apparatus Units Fire Apparatus per 1,000 calls for service Fire Station Space per 1,000 calls for service Fire Station Land per 1,000 calls for service Infrastructure Level of Service 186 Service Area Report and Impact Fee Study Bozeman, Montana 16 Fire/EMS Growth-Related Capital Improvement Plans Figure 13 lists the Fire Department growth-related Capital Improvement Plan (CIP). The plans include construction of Fire Station 4 which is anticipated to cost $18 million and $1 million for land purchase. Additionally, the department will man the new station with new apparatus. These plans are consistent with the projected growth-related needs to continue the current levels of service. Figure 13. Fire/EMS Growth-Related CIP Credit for Other Revenues Sources Evaluation of other revenues funding capital expansion is necessary to ensure the impact fee is proportionate and there are no double charging scenarios. The City has an existing impact fee fund balance that will fund a portion of the CIP. To account for this revenue, the fund balance is compared to the CIP to find its share of the plan. A portion of the existing balance has been earmarked for the Station 2 relocation/expansion project that is underway. In Figure 14, the unencumbered fund balance ($1.5 million) accounts for 7.1 percent of the growth-related CIP. Figure 14. Existing Fire/EMS Impact Fee Fund Balance Credit In the past, the City of Bozeman has issued two bonds for the Station 1 and Station 2 CIP projects. The vast majority of both projects addressed current deficiencies such as the bay sizes of the older stations were too small for the larger, modern apparatus. A portion of the Station 2 project is considered growth- related and impact fee funds have been allocated from the impact fee fund balance to pay for that portion. In this case, no credit is needed for future debt payments since the payments represent needed improvements that are not attributed to future development. Fire/EMS Personnel and Operations As described in the legal framework section of this report, impact fees are limited to capital purchases. No personnel or operations expenses are allowed to be included in an impact fee and all such expenses are excluded from the impact fee. All personnel and operations expenses are paid for with taxes or other CIP Project New Fire Station Fire Station 4 14,000 square feet $18,000,000 $1,286 Fire Station 4 1.00 acres $1,000,000 $1,000,000 New Apparatus Station 4 Engine or Quint Ladder Truck 1 unit $900,000-$2,600,000 - Station 4 Ambulance 1 unit $350,000 $350,000 Total $21,100,000 Units Total Cost Cost per Unit City of Bozeman Fire/EMS Impact Fee Fund Existing Fund Balance [1]$1,500,000 Growth-Related CIP $21,100,000 Balance Share of CIP 7.1% [1] A portion of the balance has been reserved for the Station 2 project and removed from the credit analysis. 187 Service Area Report and Impact Fee Study Bozeman, Montana 17 non-impact fee revenue. Furthermore, a referendum is planned for later this year to raise an operational levy for fire/EMS. Since the revenue is dedicated for operations, no credit in the impact fee is necessary. Maximum Supportable Fire/EMS Impact Fees The following figures lists the maximum supportable fire/EMS impact fees for residential and nonresidential development and includes an administration fee of five percent (§ 7-6-1601(5a)). After reducing the fee for the credit, the net total cost per call is $15,816. Fees are derived with the call rates. For example, the fee for a 2,300 square foot single-unit housing unit is $1,408 ($15,816 per call x 0.089 calls per unit = $1,408 per unit, rounded). The City may adopt fees that are less than the amounts shown. However, a reduction in impact fee revenue will necessitate an increase in other revenues, a decrease in planned capital expenditures, and/or a decrease in levels of service. Figure 15. Maximum Supportable Fire/EMS Impact Fees – Single-Unit Dwelling Including Townhomes Cost per Call Fire Station Space $14,070 Fire Station Land $580 Fire Apparatus $1,564 Gross Total $16,214 Credit for Existing Fund Balance (7.1%)($1,151) Administrative Fee (5%)$753 Net Total $15,816 Residential - Single-Unit Dwelling including Townhomes Residential (per housing unit) Under 600 0.038 $601 $384 $217 600 to 800 0.044 $696 $384 $312 801 to 1,000 0.054 $854 $384 $470 1,001 to 1,200 0.061 $965 $384 $581 1,201 to 1,400 0.068 $1,075 $384 $691 1,401 to 1,600 0.073 $1,155 $393 $762 1,601 to 1,800 0.078 $1,234 $401 $834 1,801 to 2,000 0.082 $1,297 $408 $889 2,001 to 2,200 0.086 $1,360 $415 $945 2,201 to 2,400 (avg.)0.089 $1,408 $422 $986 2,401 to 2,600 0.092 $1,455 $431 $1,024 2,601 to 2,800 0.095 $1,503 $439 $1,064 2,801 to 3,000 0.098 $1,550 $448 $1,102 3,001 to 3,200 0.100 $1,582 $469 $1,113 3,201 to 3,400 0.103 $1,629 $469 $1,160 3,401 to 3,600 0.105 $1,661 $469 $1,192 3,601 to 3,800 0.107 $1,692 $469 $1,223 3,801 to 4,000 0.109 $1,724 $469 $1,255 4,001 or More 0.111 $1,756 $469 $1,287 Maximum Supportable Fee Current Fee Fee Component Increase/ Decrease Dwelling Size (square feet) Calls per Household 188 Service Area Report and Impact Fee Study Bozeman, Montana 18 Figure 16. Maximum Supportable Fire/EMS Impact Fees – Other Residential Cost per Call Fire Station Space $14,070 Fire Station Land $580 Fire Apparatus $1,564 Gross Total $16,214 Credit for Existing Fund Balance (7.1%)($1,151) Administrative Fee (5%)$753 Net Total $15,816 Residential - Other Residential Residential (per housing unit) Under 600 0.036 $569 $272 $297 600 to 800 0.042 $664 $272 $392 801 to 1,000 0.051 $807 $272 $535 1,001 to 1,200 0.058 $917 $272 $645 1,201 to 1,400 0.064 $1,012 $272 $740 1,401 to 1,600 (avg.)0.069 $1,091 $279 $812 1,601 to 1,800 0.073 $1,155 $285 $870 1,801 to 2,000 0.078 $1,234 $290 $944 2,001 to 2,200 0.081 $1,281 $294 $987 2,201 to 2,400 0.085 $1,344 $301 $1,043 2,401 to 2,600 0.087 $1,376 $306 $1,070 2,601 to 2,800 0.090 $1,423 $312 $1,111 2,801 to 3,000 0.093 $1,471 $317 $1,154 3,001 to 3,200 0.095 $1,503 $359 $1,144 3,201 to 3,400 0.097 $1,534 $359 $1,175 3,401 to 3,600 0.099 $1,566 $359 $1,207 3,601 to 3,800 0.101 $1,597 $359 $1,238 3,801 to 4,000 0.103 $1,629 $359 $1,270 4,001 or More 0.105 $1,661 $359 $1,302 Group Quarters 0.036 $569 $181 $388 Maximum Supportable Fee Current Fee Increase/ Decrease Fee Component Dwelling Size (square feet) Calls per Household 189 Service Area Report and Impact Fee Study Bozeman, Montana 19 Figure 17. Maximum Supportable Fire/EMS Impact Fees – Nonresidential Fee Component Cost per Call Fire Station Space $14,070 Fire Station Land $580 Fire Apparatus $1,564 Gross Total $16,214 Credit for Existing Fund Balance (7.1%)($1,151) Administrative Fee (5%)$753 Net Total $15,816 Nonresidential Industrial 0.016 $253 $54 $199 Retail, Accommodation & Food Services 0.097 $1,534 $503 $1,031 Health Care & Social Assistance 0.136 $2,151 $2,161 ($10) All Other Services 0.048 $759 $539 $220 Calls per 1,000 Sq Ft Nonresidential (per 1,000 square feet) Current Fee Increase/ Decrease Maximum Supportable FeeDevelopment Type 190 Service Area Report and Impact Fee Study Bozeman, Montana 20 Projected Fire/EMS Impact Fee Revenue Revenue projections assume implementation of the maximum supportable fire/EMS impact fees and that future development is consistent with the land use assumptions described in Appendix A: Land Use Assumptions. To the extent the rate of development either accelerates or slows down, there will be a corresponding change in the impact fee revenue. The fee for an average size single-unit dwelling and other residential is used in the revenue projections. As shown in Figure 18, fire/EMS impact fee revenue is expected to total approximately $14.9 million over the next 10 years, compared to projected expenditures of $15.2 million. The funding gap is the result of the credit included in the analysis. Importantly, the existing fund balance will mitigate the funding gap. Figure 18. Projected Fire/EMS Impact Fee Revenue Infrastructure Costs for Fire Facilities Total Cost Growth Cost Fire Station Space $13,292,096 $13,292,096 Fire Station Land $500,000 $500,000 Fire Apparatus $1,450,800 $1,450,800 Total Expenditures $15,242,896 $15,242,896 Projected Development Impact Fee Revenue Single Family Multifamily Retail Other Serv.Industrial Health Care $1,408 $1,091 $1,534 $759 $253 $2,151 per unit per unit per unit per unit per unit per unit Housing Units Housing Units KSF KSF KSF KSF Base 2023 14,654 11,928 7,856 3,025 3,204 8,279 1 2024 14,882 12,694 7,906 3,086 3,222 8,375 2 2025 15,110 13,460 7,956 3,147 3,240 8,472 3 2026 15,338 14,226 8,006 3,207 3,258 8,568 4 2027 15,566 14,992 8,056 3,268 3,276 8,664 5 2028 15,794 15,758 8,106 3,329 3,294 8,761 6 2029 16,022 16,524 8,156 3,390 3,312 8,857 7 2030 16,250 17,290 8,206 3,450 3,329 8,954 8 2031 16,478 18,056 8,256 3,511 3,347 9,050 9 2032 16,706 18,822 8,306 3,572 3,365 9,147 10 2033 16,934 19,588 8,356 3,632 3,383 9,243 Ten-Year Increase 2,280 7,660 500 607 179 964 Projected Revenue $3,210,240 $8,357,060 $767,000 $460,821 $45,179 $2,074,179 Projected Revenue $14,914,000 Total Expenditures $15,243,000 Non-Impact Fee Funding $329,000 Year 191 Service Area Report and Impact Fee Study Bozeman, Montana 21 CAPITAL IMPROVEMENT PLAN Per State of Montana enabling legislation (§7-6-1602(2)), the Service Area Report needs to identify capital improvements necessary to meet future needs. The following figure lists the growth-related capital plans for each department included in this analysis. There are other non-growth-related CIP projects that are not included in this analysis. As shown in the previous chapter, the CIP satisfies the projected growth- related needs to accommodate future demand. Figure 19. Fire/EMS Growth-Related Capital Improvement Plan CIP Project New Fire Station Fire Station 4 14,000 square feet $18,000,000 $1,286 Fire Station 4 1.00 acres $1,000,000 $1,000,000 New Apparatus Station 4 Engine or Quint Ladder Truck 1 unit $900,000-$2,600,000 - Station 4 Ambulance 1 unit $350,000 $350,000 Total $21,100,000 Units Total Cost Cost per Unit 192 Service Area Report and Impact Fee Study Bozeman, Montana 22 APPENDIX A: LAND USE ASSUMPTIONS The following sections detail base year and projected demographic assumptions. These assumptions are used in the fire/EMS impact fee calculations along with the tandem efforts in updating the Service Area Reports for Transportation, Water, and Wastewater public facilities. In this case, there is data in the following section that relates to the other efforts and not the fire/EMS calculations (i.e., trip generation rates and the Transportation Service Area Report). Note: definitions for the Single-Unit Dwelling and Other Residential housing types can be found Appendix B: Land Use Definitions Population and Housing Characteristics Impact fees often use per capita standards and persons per housing unit or persons per household to derive proportionate share fee amounts. Housing types have varying household sizes and, consequently, a varying demand on City infrastructure and services. Thus, it is important to differentiate between housing types and size. When persons per housing unit (PPHU) is used in the development impact fee calculations, infrastructure standards are derived using year-round population. In contrast, when persons per household (PPHH) is used in the development impact fee calculations, the fee methodology assumes all housing units will be occupied, thus requiring seasonal or peak population to be used when deriving infrastructure standards. The City of Bozeman and the surrounding area is home to a significant number of second/vacation homes and hosts many visitors throughout the year. Thus, TischlerBise recommends that fees for residential development in Bozeman be imposed according to persons per household. Figure 20 shows the US Census American Community Survey 2021 5-Year Estimates data for the City of Bozeman. Single-unit dwellings have an average household size of 2.48 persons and other residential dwellings have an average household size of 1.92 persons. Additionally, there is a housing mix of 59 percent single-unit dwelling and 41 percent other residential. The estimates in Figure 20 are for household size calculations. Base year population and housing units are estimated with another, more recent data source. Figure 20. Persons per Household Building Permit History In Figure 21, the past six years of building permit history is listed by housing type to understand the recent growth trend in Bozeman. There has been a steady amount of single-unit dwelling development over the Housing Persons per Persons per Housing Housing Type Persons Units Housing Unit Households Household Unit Mix Single-Unit Dwelling [1]31,140 13,355 2.33 12,534 2.48 59% Other Residential [2]16,235 9,110 1.78 8,451 1.92 41% Subtotal 47,375 22,465 2.11 20,985 2.26 [1] Includes attached and detached single family homes and mobile homes [2] Includes all other types Source: U.S. Census Bureau, 2021 American Community Survey 5-Year Estimates 193 Service Area Report and Impact Fee Study Bozeman, Montana 23 past years in Bozeman, while other residential development has been the driving factor in the elevated construction trend. Housing development peaked in 2021 which included the largest apartment complex ever built in the city. Housing activity leveled slowed in 2022 (consistent with the national trend with increasing interest rates) while construction had a noticeable increase in 2023. Overall, there has been an average of 228 single-unit dwellings and 766 other residential units constructed annually. Figure 21. Building Permit History by Housing Type Base Year Housing Units and Population Furthermore, the nature of the influx of seasonal population in Bozeman necessitates four types of populations to be included in the impact fee study: 1) Permanent Residents 2) Seasonal Residents 3) On-Campus Students 4) Overnight-Visitors Bozeman is a destination for vacationers, students, and seasonal residents and City facilities and services have been sized to accommodate the additional demand. The peak population includes residents who have second homes in the city, students living on-campus at Montana State University, and the seasonal labor influx during peak tourism months. The MSU students living off-campus are captured in the permanent housing population. Bozeman permanent population is found by using the housing growth since the 2020 US Census. The 2020 decennial census estimated that there were 23,535 housing units and 49,298 household population in Bozeman. Additionally, there were 663 single-unit dwellings and 2,384 other residential units constructed since the survey. Based on PPHU factor, there has been an increase of 5,788 residents since the census. By combining the 2020 US Census household population and estimated new residents since the Census, a 2023 permanent population of 55,086 residents is estimated. Housing Type 2018 2019 2020 2021 2022 2023 Total Average Single-Unit Dwelling [1]266 245 211 255 197 193 1,367 228 Other Residential [2]593 546 734 1,128 522 1,075 4,598 766 Total 859 791 945 1,383 719 1,268 5,965 994 Source: City of Bozeman [1] Includes attached and detached single family homes and mobile homes [2] Includes all other types 194 Service Area Report and Impact Fee Study Bozeman, Montana 24 Figure 22. Permanent Population Seasonal housing population estimates are found by applying the PPHH factors for each housing type to base year housing estimates to the percent of housing occupied for seasonal use. As a result, the seasonal population estimate is 4,185 (Figure 23). Figure 23. Seasonal Population Shown in Figure 24, in a survey of hotel and motels in Bozeman, TischlerBise found 2,241 lodging rooms in the city. Based on general peak seasonal lodging factors there are 4,258 overnight-visitors assumed. Figure 24. Bozeman Visitors Lastly, based on a news briefing from Montana State University in September 2023 there were 5,200 students living on-campus. The information above is summarized in Figure 25. Based on the four population types, there is an estimated peak population of 68,729 residents along with 26,582 housing units in Bozeman. Bozeman, MT Housing Units [1]HH Population [2] 2020 Census 23,535 49,298 Housing Units 2020 Census Post Census 2023 Single-Unit Dwelling 13,991 663 14,654 Other Residential 9,544 2,384 11,928 Total 23,535 3,047 26,582 PPHU Single-Unit Dwelling 663 2.33 1,545 Other Residential 2,384 1.78 4,244 Total 3,047 5,788 Household Population 49,298 5,788 55,086 [1] Source: US Census DP1 Table Bozeman, MT Units Built Post Census New Residents Post Census [2] Source: US Census DP1 Table. Household population excludes those in group quarters. Group quarters is estimated with On-Campus Students in another figure. Bozeman, MT 2020 Census New Residents Post Census 2023 Estimate Housing Units PPHH Single-Unit Dwelling 14,654 7%967 2.48 2,399 Other Residential 11,928 8%930 1.92 1,786 Total 26,582 1,898 4,185 Seasonal Residents Seasonal Units % Seasonal Units 2023 Housing Units Total Lodging Rooms 2,241 Assumed Ave Occupancy 2 Assumed Occupancy Rate 95% Total Overnight-Visitors 4,258 Source: TischlerBise survey of lodging property and general peak season lodging factors 195 Service Area Report and Impact Fee Study Bozeman, Montana 25 Figure 25. Base Year Housing and Population Base Year 2023 Permanent Hsg Population [1]55,086 Seasonal Hsg Population [2]4,185 On-Campus Students [3]5,200 Overnight-Visitors [4]4,258 Total Peak Population 68,729 Housing Units [1] Single-Unit Dwelling 14,654 Other Residential 11,928 Total Housing Units 26,582 Bozeman, MT [1] Calculated based on 2020 US Census estimate plus housing development since [2] Assuming seasonal housing is fully occupied during peak season [3] MSU News Service (September, 2023) [4] TischlerBise survey of lodging property and general peak season lodging factors 196 Service Area Report and Impact Fee Study Bozeman, Montana 26 Housing Unit and Population Projections The ten-year residential projections are listed in Figure 26. Housing development in Bozeman is assumed to continue at its current pace over the next ten years. Overall, over the next ten years, 2,280 new single-unit dwellings and 7,660 other residential units are assumed to be constructed. As a result of the market supporting more non-single-unit dwelling development, by 2033 there will be more non-single-unit dwelling units than single-unit dwellings in Bozeman. Population growth is based on housing development and PPHH factors. Over the next ten years, housing development will support 18,841 new permanent residents and 1,520 seasonal residents. It is assumed that visitors to Bozeman will grow at the same rate as resident population. Lastly, MSU has built a new dormitory every five years and is currently exploring another expansion. Conservatively, a 1 percent annual growth is assumed for on-campus students. Overall, the peak population is estimated to grow from 68,729 to 91,099, a 32.5 percent increase. Figure 26. Residential Development Projections Importantly, the impact fee methodology does not rely on the growth projections to determine the fee amount. Rather, the current level of service is used in the fee calculation. In this case, if the growth projections included in the report overestimate or underestimate the real development in Bozeman, the fee collection is still accurate. For example, if growth is slower than the 10-year projection, less revenue will be collected, however, the City will provide less capital expansion to keep up with the level of service. Base Year City of Bozeman, MT 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Permanent Hsg Population [1]55,086 56,970 58,855 60,739 62,623 64,507 66,391 68,275 70,159 72,043 73,928 18,841 Seasonal Hsg Population [1]4,185 4,337 4,489 4,641 4,793 4,945 5,097 5,249 5,401 5,553 5,705 1,520 On-Campus Students [2]5,200 5,252 5,305 5,358 5,412 5,466 5,521 5,576 5,632 5,688 5,745 545 Overnight-Visitors [3]4,258 4,404 4,551 4,697 4,843 4,989 5,136 5,282 5,428 5,574 5,721 1,463 Total Peak Population 68,729 70,964 73,199 75,435 77,671 79,907 82,145 84,382 86,621 88,859 91,099 22,369 3.3%3.2%3.1%3.0%2.9%2.8%2.7%2.7%2.6%2.5%32.5% Housing Units [4] Single-Unit Dwelling 14,654 14,882 15,110 15,338 15,566 15,794 16,022 16,250 16,478 16,706 16,934 2,280 Other Residential 11,928 12,694 13,460 14,226 14,992 15,758 16,524 17,290 18,056 18,822 19,588 7,660 Total Housing Units 26,582 27,576 28,570 29,564 30,558 31,552 32,546 33,540 34,534 35,528 36,522 9,940 [1] Permanent and seasonal population growth is based on housing development and PPHH factors [2] On-campus residences are conservatively assumed to grow by 1 percent annually [3] Visitor population is estimate to grow at the same rate as permanent and seasonal population [4] Housing development is based on the recent building permit trends without the 2021 peak development year Total Increase Percent Increase 197 Service Area Report and Impact Fee Study Bozeman, Montana 27 Current Employment and Nonresidential Floor Area The impact fee study will include nonresidential development as well. The base year employment estimates are calculated from two sources. First, from the Montana Department of Labor & Industry there is an estimated 34,569 total jobs in Bozeman. Second, from the U.S. Census Bureau OnTheMap web application employment splits are found between retail, office, industrial, and institutional industries. As a result, the institutional industries (which includes education and healthcare) account for the highest share while retail industries employee over 10,000 jobs as well. Furthermore, the floor area for the four industry types is summarized in Figure 27. Retail, office, and industrial square footage is available from the Montana Department of Revenue (DOR). However, since public education and healthcare facilities are tax exempt the DOR does not gather floor space for such development. Instead, TischlerBise applied the average employee density factors (square feet per employee) for schools and hospitals to the estimated institutional job total to estimate floor area. As a result, there are 22.4 million square feet of nonresidential development in Bozeman. The majority being institutional and retail industries. Figure 27. Base Year Nonresidential Floor Area Employment and Nonresidential Floor Area Projections The Bozeman Community Plan 2020 provides an in-depth analysis of the local market and buildout capacity of the city. Through 2045, the Community Plan projected a growth of 6.3 million square feet of nonresidential development broken down by retail, office, industrial, and institutional industries. The ten- year growth projections from the impact fee studies relies on these projections along with employee density factors from the Institution of Transportation Engineers’ (ITE). For the retail industry the Shopping Center land use factors are used; for office the General Office factors are used; for industrial the Light Industrial factors are used; for Institutional the Hospital factors are used. Figure 28. Institute of Transportation Engineers (ITE) Employment Density Factors Employment Industries Base Year Jobs [1] Percent of Total Floor Area (sq. ft.) [2] Percent of Total Retail 10,116 29%7,855,849 35% Office 7,798 23%3,025,341 14% Industrial 5,042 15%3,204,452 14% Institutional [3]11,612 34%8,278,652 37% Total 34,569 100%22,364,294 100% [3] Source: Trip Generation, Institute of Transportation Engineers, 11th Edition (2021) [1] Source: MT Employment Statistics - LAUS [2] Source: Montana Department of Revenue Database Employment ITE Demand Emp Per Sq Ft Industry Code Land Use Unit Dmd Unit Per Emp Retail 820 Shopping Center 1,000 Sq Ft 2.12 471 Office 710 General Office 1,000 Sq Ft 3.26 307 Industrial 110 Light Industrial 1,000 Sq Ft 1.57 637 Institutional 610 Hospital 1,000 Sq Ft 2.86 350 Source: Trip Generation , Institute of Transportation Engineers, 11th Edition (2021) 198 Service Area Report and Impact Fee Study Bozeman, Montana 28 Shown in Figure 29, Bozeman is anticipated to grow by 6,075 jobs (17.6 percent) over the next ten years. Institutional, office, and retail industries all have significant growth while industrial development is anticipated to taper off. Based on the employee density factors, the employment growth will generate 2,250,000 million square feet of nonresidential floor area (10 percent growth from the base year). Figure 29. Employment and Nonresidential Floor Area Projections Base Year 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Jobs [1] Retail 10,116 10,222 10,329 10,435 10,541 10,647 10,753 10,859 10,966 11,072 11,178 1,062 Office 7,798 7,996 8,194 8,391 8,589 8,787 8,985 9,182 9,380 9,578 9,776 1,978 Industrial 5,042 5,070 5,098 5,126 5,154 5,182 5,210 5,238 5,266 5,295 5,323 280 Institutional 11,612 11,888 12,164 12,439 12,715 12,990 13,266 13,541 13,817 14,092 14,368 2,755 Total 34,569 35,176 35,784 36,391 36,999 37,606 38,214 38,821 39,429 40,036 40,644 6,075 1.8%1.7%1.7%1.7%1.6%1.6%1.6%1.6%1.5%1.5%17.6% Nonresidential Floor Area (1,000 sq. ft.) [2] Retail 7,856 7,906 7,956 8,006 8,056 8,106 8,156 8,206 8,256 8,306 8,356 500 Office 3,025 3,086 3,147 3,207 3,268 3,329 3,390 3,450 3,511 3,572 3,632 607 Industrial 3,204 3,222 3,240 3,258 3,276 3,294 3,312 3,329 3,347 3,365 3,383 179 Institutional 8,279 8,375 8,472 8,568 8,664 8,761 8,857 8,954 9,050 9,147 9,243 964 Total 22,364 22,589 22,814 23,039 23,264 23,489 23,714 23,939 24,164 24,389 24,614 2,250 [1] Source: Bozeman Community Plan (2020) [2] Source: Institute of Transportation Engineers, Trip Generation , 2021 Industry Total Increase Percent Increase 199 Service Area Report and Impact Fee Study Bozeman, Montana 29 Vehicle Trip Generation Residential Vehicle Trips by Housing Type A customized trip rate is calculated for the single-unit dwellings and other residential units in Bozeman. In Figure 30, the most recent data from the US Census American Community Survey is input into equations provided by the Institute of Transportation Engineers to calculate the trip ends per housing unit factor. A single-unit dwelling is estimated to generate 9.27 trip ends and other residential units are estimated to generate 5.36 trip ends on an average weekday. Figure 30. Customized Residential Trip End Rates by Housing Type Owner-Occupied 19,262 8,463 889 9,352 2.06 Renter-Occupied 20,735 4,071 7,562 11,633 1.78 Total 39,997 12,534 8,451 20,985 1.91 13,355 9,110 22,465 Persons in Trip Vehicles by Trip Average National Trip Households4 Ends5 Type of Unit Ends6 Trip Ends Ends per Unit7 Single-Unit Dwelling 31,140 86,764 24,680 160,855 123,810 9.27 9.43 Other Residential 16,235 37,097 15,292 60,543 48,820 5.36 4.54 Total 47,375 123,861 39,972 221,398 172,630 7.68 7. Trip Generation, Institute of Transportation Engineers, 11th Edition (2021). Local Trip Ends per Unit 1. Vehicles available by tenure from Table B25046, 2020 American Community Survey 5-Year Estimates. 3. Housing units from Table B25024, 2020 American Community Survey 5-Year Estimates. 4. Total population in households from Table B25033, 2020 American Community Survey 5-Year Estimates. 5. Vehicle trips ends based on persons using formulas from Trip Generation (ITE 2021). For single-family housing (ITE 210), the fitted curve equation is EXP(0.89*LN(persons)+1.72). To approximate the average population of the ITE studies, persons were divided by 3 and the equation result multiplied by 3. For multi-family housing (ITE 221), the fitted curve equation is (2.29*persons)-64.48 (ITE 2017). 6. Vehicle trip ends based on vehicles available using formulas from Trip Generation (ITE 2021). For single-family housing (ITE 210), the fitted curve equation is EXP(0.92*LN(vehicles)+2.68). To approximate the average number of vehicles in the ITE studies, vehicles available were divided by 5 and the equation result multiplied by 5. For multi- family housing (ITE 221), the fitted curve equation is (4.77*vehicles)-46.46 (ITE 2021). 2. Households by tenure and units in structure from Table B25032, 2020 American Community Survey 5-Year Estimates. Vehicles per HH by Tenure Housing Units3 Housing Type Households by Structure Type2 Tenure by Units in Structure Vehicles Available1 Single Family Multifamily Total 200 Service Area Report and Impact Fee Study Bozeman, Montana 30 Residential Vehicle Trips Adjustment Factors A vehicle trip end is the out-bound or in-bound leg of a vehicle trip. As a result, so as not double count trips, a standard 50 percent adjustment is applied to trip ends to calculate a vehicle trip. For example, the out-bound trip from a person’s home to work is attributed to the housing unit and the trip from work back home is attributed to the employer. However, an additional adjustment is necessary to capture city residents’ work bound trips that are outside of the city. The trip adjustment factor includes two components. According to the National Household Travel Survey, home-based work trips are typically 31 percent of out-bound trips (which are 50 percent of all trip ends). Also, utilizing the most recent data from the Census Bureau's web application "OnTheMap”, 40 percent of Bozeman workers travel outside the city for work. In combination, these factors account for 6 percent of additional production trips (0.31 x 0.50 x 0.40 = 0.06). Shown in Figure 31, the total adjustment factor for residential housing units includes attraction trips (50 percent of trip ends) plus the journey-to-work commuting adjustment (6 percent of production trips) for a total of 56 percent. Figure 31. Residential Trip Adjustment Factor for Commuters Nonresidential Vehicle Trips Vehicle trip generation for nonresidential land uses are calculated by using ITE’s average daily trip end rates and adjustment factors found in their recently published 11th edition of Trip Generation. To estimate the trip generation in Bozeman, the weekday trip end per 1,000 square feet factors listed in Figure 32 are used. The prior service area report used the 10th Edition of the Trip Generation. The latest edition includes travel surveys since the previous edition ensuring changes in travel behavior is being captured in the update. Figure 32. Institute of Transportation Engineers Nonresidential Factors For nonresidential land uses, the standard 50 percent adjustment is applied to office, industrial, and institutional development. A lower vehicle trip adjustment factor is used for retail development because Employed Bozeman Residents (2020)25,702 Residents Working in Bozeman (2020)15,447 Residents Commuting Outside of Bozeman for Work 10,255 Percent Commuting Out of Bozeman 40% Additional Production Trips 6% Standard Trip Adjustment Factor 50% Residential Trip Adjustment Factor 56% Source: U.S. Census, OnTheMap Application, 2020 Trip Adjustment Factor for Commuters Employment ITE Demand Wkdy Trip Ends Wkdy Trip Ends Industry Code Land Use Unit Per Dmd Unit Per Employee Retail 820 Shopping Center 1,000 Sq Ft 37.01 17.42 Office 710 General Office 1,000 Sq Ft 10.84 3.33 Industrial 110 Light Industrial 1,000 Sq Ft 4.87 3.10 Institutional 610 Hospital 1,000 Sq Ft 10.77 3.77 Source: Trip Generation, Institute of Transportation Engineers, 11th Edition (2021) 201 Service Area Report and Impact Fee Study Bozeman, Montana 31 this type of growth attracts vehicles as they pass-by on arterial and collector roads. For example, when someone stops at a convenience store on their way home from work, the convenience store is not their primary destination. In Figure 33, the Institute for Transportation Engineers’ land use code, daily vehicle trip end rate, and trip adjustment factor is listed for each land use. Figure 33. Daily Vehicle Trip Factors Residential (per housing unit) Single-Unit Dwelling 210 9.27 56%5.19 Other Residential 220 5.36 56%3.00 Nonresidential (per 1,000 square feet) Retail 820 37.01 38%14.06 Office 710 10.84 50%5.42 Industrial 110 4.87 50%2.44 Institutional 610 10.77 50%5.39 Land Use ITE Codes Daily Vehicle Trip Ends Trip Adj. Factor Daily Vehicle Trips Source: Trip Generation, Institute of Transportation Engineers, 11th Edition (2021); National Household Travel Survey, 2009 202 Service Area Report and Impact Fee Study Bozeman, Montana 32 Vehicle Trip Projections The base year vehicle trip totals and vehicle trip projections are calculated by combining the vehicle trip end factors, the trip adjustment factors, and the residential and nonresidential assumptions for housing stock and floor area. Citywide, residential land uses account for 111,875 vehicle trips and nonresidential land uses account for 179,264 vehicle trips in the base year (Figure 34). Through 2033, it is projected that daily vehicle trips will increase by 50,788 trips with the majority of the growth being generated by residential development (69 percent). Figure 34. Vehicle Trip Projections Base Year 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Residential Trips Single-Unit Dwelling 76,072 77,255 78,439 79,623 80,806 81,990 83,173 84,357 85,541 86,724 87,908 11,836 Other Residential 35,803 38,102 40,402 42,701 45,000 47,299 49,598 51,898 54,197 56,496 58,795 22,992 Subtotal 111,875 115,358 118,841 122,323 125,806 129,289 132,772 136,255 139,737 143,220 146,703 34,828 Nonresidential Trips Retail 110,483 111,186 111,889 112,593 113,296 113,999 114,702 115,405 116,109 116,812 117,515 7,032 Office 16,397 16,726 17,055 17,385 17,714 18,043 18,372 18,701 19,030 19,359 19,688 3,291 Industrial 7,803 7,846 7,890 7,933 7,977 8,020 8,064 8,107 8,151 8,194 8,238 435 Institutional 44,581 45,100 45,619 46,138 46,658 47,177 47,696 48,215 48,735 49,254 49,773 5,193 Subtotal 179,264 180,859 182,454 184,049 185,644 187,239 188,834 190,429 192,024 193,619 195,214 15,950 Vehicle Trips Grand Total 291,139 296,217 301,294 306,372 311,450 316,528 321,606 326,684 331,761 336,839 341,917 50,778 Source: Institute of Transportation Engineers, Trip Generation , 11th Edition (2021) Total IncreaseDevelopment Type 203 Service Area Report and Impact Fee Study Bozeman, Montana 33 Demand Indicators by Dwelling Size Impact fees must be proportionate to the demand for infrastructure. Because averages per household, for both persons and vehicle trip ends, have a strong, positive correlation to the square footage of the dwelling unit, TischlerBise recommends residential fee schedules by the size of the unit (consistent with the City of Bozeman’s current fee schedule). Bozeman Control Totals According to the U.S. Census Bureau, Bozeman single-unit dwellings have an average household size of 2.48 persons and other residential units have an average household size of 1.92 persons. Figure 35. Persons per Household Trip generation rates are also dependent upon the average number of vehicles available per dwelling. Key independent variables needed for the analysis (i.e., vehicles available, households, and persons) are available from the U.S. Census Bureau American Community Survey (ACS), indicating an average of 1.90 vehicles per household in Bozeman. Figure 36. Vehicles per Household Demand Indicators by Dwelling Size Custom tabulations of demographic data by bedroom range can be created from individual survey responses provided by the U.S. Census Bureau in files known as Public Use Microdata Samples (PUMS). PUMS files are only available for areas of at least 100,000 persons with Bozeman included in Public Use Microdata Areas (PUMA) 400. Housing Persons per Persons per Housing Housing Type Persons Units Housing Unit Households Household Unit Mix Single-Unit Dwelling [1]31,140 13,355 2.33 12,534 2.48 59% Other Residential [2]16,235 9,110 1.78 8,451 1.92 41% Subtotal 47,375 22,465 2.11 20,985 2.26 [1] Includes attached and detached single family homes and mobile homes [2] Includes all other types Source: U.S. Census Bureau, 2021 American Community Survey 5-Year Estimates Owner-occupied 19,262 8,463 889 9,352 2.06 Renter-occupied 20,735 4,071 7,562 11,633 1.78 Total 39,997 12,534 8,451 20,985 1.91 Single-Unit Dwelling [1]24,680 12,534 1.97 Other Residential [2]15,292 8,451 1.81 Total 39,972 20,985 1.90 Source: U.S. Census Bureau, 2021 American Community Survey 5-Year Estimates Vehicles per HH by Tenure Housing Type Vehicles Available Housing Units Vehicles per Housing Unit Households Tenure Vehicles Available Single Family Multifamily Total 204 Service Area Report and Impact Fee Study Bozeman, Montana 34 Cells shaded yellow below are survey results for PUMA 400. Unadjusted persons per household (2.31), derived from PUMS data for the PUMA listed above, are adjusted downward to match the control totals for Bozeman (2.26), as shown above in Figure 35. Adjusted persons per household totals are shaded in gray. Figure 37. Persons by Bedroom Range Persons by Dwelling Size Average floor area and number of persons by bedroom range are plotted in Figure 38 with a logarithmic trend line derived from 2021 square footage estimates provided by the U.S. Census Bureau (West Region). Dwellings with two bedrooms or less average 1,032 square feet of floor area—based on multifamily dwellings constructed in the West Census Region. Three-bedroom dwellings average 2,118 square feet, four-bedroom dwellings average 2,932 square feet, and dwellings with five or more bedrooms average 4,269 square feet—based on single-unit dwellings constructed in the West Census Region. Using the trend line formula shown in the chart, TischlerBise derived the estimated average number of persons, by dwelling size, using 19 size thresholds, expanding the low and high range of the fee schedule. As shown in the upper-right corner of the table below, the smallest floor area range (under 600 square feet) has an estimated average of 1.06 persons per dwelling. The largest floor area range (4,001 square feet or more) has an estimated average of 3.08 persons per dwelling. 0-2 2,180 2,204 1,273 33%1.71 1.68 1.73 1.46 3 3,508 3,443 1,471 38%2.38 2.33 2.34 1.97 4 2,173 2,139 798 21%2.72 2.67 2.68 2.25 5+1,070 958 327 8%3.27 3.20 2.93 2.46 Total 8,931 8,744 3,869 100%2.31 2.26 2.26 1.90 [1] American Community Survey, Public Use Microdata Sample for Montana PUMA 400 (2021 5-Year unweighted data). [2] Adjusted multipliers are scaled to make the average PUMS values match control totals for Bozeman based on 2021 American Community Survey 5-Year Estimates. Unadjusted PPHH Adjusted PPHH2 Unadjusted VPHH Adjusted VPHH2 Bedroom Range Persons1 Vehicles Available1 Households1 Housing Mix 205 Service Area Report and Impact Fee Study Bozeman, Montana 35 Figure 38. Persons by Dwelling Size Person by Dwelling Size and Housing Type The PPHH factors in Figure 38 represents an average over all housing types in Bozeman. An equivalent dwelling unit (EDU) analysis is completed to calculate the PPHH by size for single-unit dwellings and other residential units. Shown in Figure 39, one single-unit EDU is set to the average sized single-unit dwelling in Bozeman (2,201 to 2,400 square feet). The EDU factor for the other size thresholds is found by comparing the PPHH factors, for example, a single-unit dwelling from 1,801 to 2,000 square feet is 0.92 EDUs (2.28 PPHH / 2.48 PPHH = 0.92 EDUs). Bedrooms Square Feet Persons Sq Ft Range Persons 0-2 1,032 1.68 Under 600 1.06 3 2,118 2.33 600 to 800 1.23 4 2,932 2.67 801 to 1,000 1.49 5+4,269 3.20 1,001 to 1,200 1.70 1,201 to 1,400 1.88 1,401 to 1,600 2.03 1,601 to 1,800 2.16 1,801 to 2,000 2.28 2,001 to 2,200 2.38 2,201 to 2,400 2.48 2,401 to 2,600 2.56 2,601 to 2,800 2.64 2,801 to 3,000 2.72 3,001 to 3,200 2.79 3,201 to 3,400 2.85 3,401 to 3,600 2.92 3,601 to 3,800 2.97 3,801 to 4,000 3.03 4,001 or More 3.08 Actual Averages per Hsg Unit Fitted-Curve Values y = 1.0498ln(x) -5.6504 R² = 0.9878 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 0 1,000 2,000 3,000 4,000 5,000Person per HouseholdSquare Feet of Living Area Persons per Household by Square Feet of Dwelling Average persons per household derived from 2021 ACS PUMS data for the area that includes Bozeman. Unit size for 0-2 bedroom is from the 2021 U.S. Census Bureau average for all multifamily units constructed in the Census West region. Unit size for all other bedrooms is from the 2021 U.S. Census Bureau average for single-unit dwellings constructed in the Census Mountain division. 206 Service Area Report and Impact Fee Study Bozeman, Montana 36 The EDU factors for the size threshold is then combined with the average PPHH for single-unit dwelling. For example, found with US Census ACS 2021 data (Figure 20) the average single-unit dwelling home in Bozeman is 2.48 persons, thus a single-unit home from 1,801 to 2,000 square feet is 2.28 persons (0.92 EDUs x 2.48 persons = 2.28 persons per household). Figure 39. Single-Unit Dwelling PPHH by Size Shown in Figure 40, one other residential EDU is set to the average sized other residential dwelling in Bozeman (1,401 to 1,600 square feet). The EDU factor for the other size thresholds is found by comparing the PPHH factors, for example, a unit from 1,001 to 1,200 square feet is 0.84 EDUs (1.70 PPHH / 2.03 PPHH = 0.84 EDUs). The EDU factors for the size threshold is then combined with the average PPHH for other residential dwellings. For example, found with US Census ACS 2021 data (Figure 20) the average other residential dwelling home in Bozeman is 1.92 persons, thus a single-unit home from 1,001 to 1,200 square feet is 1.61 persons (0.84 EDUs x 1.92 persons = 1.61 persons per household). Single-Unit Dwelling including Townhomes Single-Unit EDU Factor PPHH Under 600 1.06 0.43 1.06 600 to 800 1.23 0.50 1.23 801 to 1,000 1.49 0.60 1.49 1,001 to 1,200 1.70 0.69 1.70 1,201 to 1,400 1.88 0.76 1.88 1,401 to 1,600 2.03 0.82 2.03 1,601 to 1,800 2.16 0.87 2.16 1,801 to 2,000 2.28 0.92 2.28 2,001 to 2,200 2.38 0.96 2.38 2,201 to 2,400 (avg. single)2.48 1.00 2.48 2,401 to 2,600 2.56 1.03 2.56 2,601 to 2,800 2.64 1.06 2.64 2,801 to 3,000 2.72 1.10 2.72 3,001 to 3,200 2.79 1.13 2.79 3,201 to 3,400 2.85 1.15 2.85 3,401 to 3,600 2.92 1.18 2.92 3,601 to 3,800 2.97 1.20 2.97 3,801 to 4,000 3.03 1.22 3.03 4,001 or More 3.08 1.24 3.08 Average 2.48 Dwelling Size (squre feet) Overall PPHH 207 Service Area Report and Impact Fee Study Bozeman, Montana 37 Figure 40. Other Residential PPHH by Size Other Residential Other Res. EDU Factor PPHH Under 600 1.06 0.52 1.00 600 to 800 1.23 0.61 1.16 801 to 1,000 1.49 0.73 1.41 1,001 to 1,200 1.70 0.84 1.61 1,201 to 1,400 1.88 0.93 1.78 1,401 to 1,600 (avg. other)2.03 1.00 1.92 1,601 to 1,800 2.16 1.06 2.04 1,801 to 2,000 2.28 1.12 2.16 2,001 to 2,200 2.38 1.17 2.25 2,201 to 2,400 2.48 1.22 2.35 2,401 to 2,600 2.56 1.26 2.42 2,601 to 2,800 2.64 1.30 2.50 2,801 to 3,000 2.72 1.34 2.57 3,001 to 3,200 2.79 1.37 2.64 3,201 to 3,400 2.85 1.40 2.70 3,401 to 3,600 2.92 1.44 2.76 3,601 to 3,800 2.97 1.46 2.81 3,801 to 4,000 3.03 1.49 2.87 4,001 or More 3.08 1.52 2.91 Average 1.92 Overall PPHH Dwelling Size (squre feet) 208 Service Area Report and Impact Fee Study Bozeman, Montana 38 Trip Generation by Dwelling Size Rather than rely on one methodology, the recommended trip generation rates shown at the bottom of Figure 41, shaded gray, are an average of trip rates based on persons and vehicles available for all types of housing units. In Bozeman, the average household is expected to yield 8.86 average weekday vehicle trip ends (AWVTE), compared to the national weighted average of 7.45 trip ends per household. Figure 41. Average Weekday Vehicle Trip Ends by Bedroom Range 0-2 2,180 2,204 1,273 33%1.71 1.68 1.73 1.46 3 3,508 3,443 1,471 38%2.38 2.33 2.34 1.97 4 2,173 2,139 798 21%2.72 2.67 2.68 2.25 5+1,070 958 327 8%3.27 3.20 2.93 2.46 Total 8,931 8,744 3,869 100%2.31 2.26 2.26 1.90 National Averages According to ITE 210 SFD 2.65 6.36 9.43 59%3.56 1.48 221 Apt 3.31 5.10 4.54 41%1.37 0.89 Weighted Avg 2.92 5.85 7.45 100%2.67 1.24 Recommended AWVTE per Household 0-2 4.91 8.54 6.73 3 6.80 11.52 9.16 4 7.80 13.16 10.48 5+9.34 14.39 11.87 Average 6.60 11.12 8.86 210 SFD 6.80 11.52 9.16 2.33 1.97 220 Apt 5.20 10.59 7.90 1.78 1.81 All Types 6.16 11.12 8.64 2.11 1.90 Unadjusted VPHH Bedroom Range AWVTE per HH Based on Persons3 AWVTE per HH Based on Vehicles4 AWVTE per Household5 ITE Code AWVTE per Person AWVTE per Vehicle AWVTE per HH Unadjusted PPHH Unadjusted PPHH Adjusted PPHH2 Unadjusted VPHH Adjusted VPHH2 ITE Code AWVTE per Person AWVTE per Vehicle AWVTE per HH Housing Mix Persons per Household Vehicles per Household Bedroom Range Persons1 Vehicles Available1 Households1 Housing Mix 1.American Community Survey,Public Use Microdata Sample for Montana PUMA 400 (2021 5-Year unweighted data). 2.Adjusted multipliers are scaled to make the average PUMSvaluesmatchcontroltotalsforBozemanbasedon2021 American CommunitySurvey 5-Year Estimates.3.Adjusted persons per household multiplied by national weighted average triprate perperson. 4.Adjusted vehicles available per household multiplied by national weighted average trip rateper vehicle.5.Average trip rates based on persons and vehicles per household. 209 Service Area Report and Impact Fee Study Bozeman, Montana 39 Vehicle Trip Ends by Dwelling Size To derive AWVTE by dwelling size, TischlerBise matched trip generation rates and average floor area, by bedroom range, as shown in Figure 42, with a logarithmic trend line derived from 2021 square footage estimates provided by the U.S. Census Bureau (West Region). Using the trend line formula shown in the chart, TischlerBise derived the estimated average weekday vehicle trip ends, by dwelling size, using 19 size thresholds, expanding the low and high range of the fee schedule. As shown in the upper-right corner of the table below, the smallest floor area range (under 600 square feet) generates an estimated average of 4.70 trip ends per dwelling. The largest floor area range (4,001 square feet or more) generates an estimated average of 11.68 trip ends per dwelling. Figure 42. Vehicle Trip Ends by Dwelling Size Bedrooms Square Feet Trip Ends Sq Ft Range Trip Ends 0-2 1,032 6.73 Under 600 4.70 3 2,118 9.16 600 to 800 5.27 4 2,932 10.48 801 to 1,000 6.18 5+4,269 11.87 1,001 to 1,200 6.91 1,201 to 1,400 7.51 1,401 to 1,600 8.03 1,601 to 1,800 8.49 1,801 to 2,000 8.89 2,001 to 2,200 9.25 2,201 to 2,400 9.58 2,401 to 2,600 9.88 2,601 to 2,800 10.16 2,801 to 3,000 10.42 3,001 to 3,200 10.66 3,201 to 3,400 10.89 3,401 to 3,600 11.10 3,601 to 3,800 11.30 3,801 to 4,000 11.50 4,001 or More 11.68 Actual Averages per Hsg Unit Fitted-Curve Values y = 3.6254ln(x) -18.482 R² = 0.9986 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 0 1,000 2,000 3,000 4,000 5,000Trip Ends per HouseholdSquare Feet of Living Area Vehicle Trips by Square Feet of Dwelling Vehicle trips by dwelling size are derived from 2021 ACS PUMS data for the area that includes Bozeman. Unit size for 0-2 bedroom is from the 2021 U.S. Census Bureau average for all multifamily units constructed in the Census West region. Unit size for all other bedrooms is from the 2021 U.S. Census Bureau average for single-unitdwellings constructed in the Census Mountain division. 210 Service Area Report and Impact Fee Study Bozeman, Montana 40 Vehicle Trip Ends by Dwelling Size and Housing Type The vehicle trip end factors in Figure 42 represents an average over all housing types in Bozeman. An equivalent dwelling unit (EDU) analysis is completed to calculate the trip ends by size for single-unit dwellings and other residential units. Shown in Figure 43, one single-unit EDU is set to the average sized single-unit dwelling in Bozeman (2,201-2,400 square feet). The EDU factor for the other size thresholds is found by comparing the trip factors, for example, homes from 1,801 to 2,000 square feet are 0.93 EDUs (8.89 trip ends / 9.58 trip ends = 0.93 EDUs). The EDU factors for the size threshold is then combined with the average trip end factor for single-unit dwellings to find the trip ends by size. For example, found with US Census ACS 2021 data (Figure 30) the average single-unit dwelling in Bozeman generates 9.27 trip ends, thus a single-unit dwelling from 1,801 to 2,000 square feet has a trip end factor of 8.60 (0.93 EDUs x 9.27 trip ends = 8.60 trip ends per household). Figure 43. Single-Unit Dwelling Trip Ends by Size Shown in Figure 44, one Other Residential EDU is set to the average sized other residential dwelling in Bozeman (1,401 to 1,600 square feet). The EDU factor for the other size thresholds is found by comparing the trip factors, for example, homes from 1,001 to 1,200 square feet are 0.86 EDUs (6.91 trip ends / 8.03 trip ends = 0.86 EDUs). The EDU factors for the size threshold is then combined with the average trip end factor for other residential dwellings to find the trip ends by size. For example, found with US Census ACS 2021 data (Figure 30) the average other residential dwelling in Bozeman generates 5.36 trip ends, thus an other Single-Unit Dwelling including Townhomes Single-Unit EDU Factor Trip Ends Under 600 4.70 0.49 4.55 600 to 800 5.27 0.55 5.10 801 to 1,000 6.18 0.65 5.98 1,001 to 1,200 6.91 0.72 6.69 1,201 to 1,400 7.51 0.78 7.27 1,401 to 1,600 8.03 0.84 7.77 1,601 to 1,800 8.49 0.89 8.22 1,801 to 2,000 8.89 0.93 8.60 2,001 to 2,200 9.25 0.97 8.95 2,201 to 2,400 (avg. single)9.58 1.00 9.27 2,401 to 2,600 9.88 1.03 9.56 2,601 to 2,800 10.16 1.06 9.83 2,801 to 3,000 10.42 1.09 10.08 3,001 to 3,200 10.66 1.11 10.32 3,201 to 3,400 10.89 1.14 10.54 3,401 to 3,600 11.10 1.16 10.74 3,601 to 3,800 11.30 1.18 10.93 3,801 to 4,000 11.50 1.20 11.13 4,001 or More 11.68 1.22 11.30 Average 9.27 Dwelling Size (squre feet) Overall Trip Ends 211 Service Area Report and Impact Fee Study Bozeman, Montana 41 residential dwelling from 1,001 to 1,200 square feet has a trip end factor of 4.61 (0.86 EDUs x 5.36 trip ends = 4.61 trip ends per household). Figure 44. Other Residential Trip Ends by Size Other Residential Other Res. EDU Factor Trip Ends Under 600 4.70 0.59 3.14 600 to 800 5.27 0.66 3.52 801 to 1,000 6.18 0.77 4.13 1,001 to 1,200 6.91 0.86 4.61 1,201 to 1,400 7.51 0.94 5.01 1,401 to 1,600 (avg. other)8.03 1.00 5.36 1,601 to 1,800 8.49 1.06 5.67 1,801 to 2,000 8.89 1.11 5.93 2,001 to 2,200 9.25 1.15 6.17 2,201 to 2,400 9.58 1.19 6.39 2,401 to 2,600 9.88 1.23 6.59 2,601 to 2,800 10.16 1.27 6.78 2,801 to 3,000 10.42 1.30 6.96 3,001 to 3,200 10.66 1.33 7.12 3,201 to 3,400 10.89 1.36 7.27 3,401 to 3,600 11.10 1.38 7.41 3,601 to 3,800 11.30 1.41 7.54 3,801 to 4,000 11.50 1.43 7.68 4,001 or More 11.68 1.45 7.80 Average 5.36 Overall Trip Ends Dwelling Size (squre feet) 212 Service Area Report and Impact Fee Study Bozeman, Montana 42 APPENDIX B: LAND USE DEFINITIONS Residential Development Single-Unit Dwelling: 1. Single-family detached is a one-unit structure detached from any other house, that is, with open space on all four sides. Such structures are considered detached even if they have an adjoining shed or garage. A one-family house that contains a business is considered detached as long as the building has open space on all four sides. 2. Single-family attached (townhouse) is a one-unit structure that has one or more walls extending from ground to roof separating it from adjoining structures. In row houses (sometimes called townhouses), double houses, or houses attached to nonresidential structures, each house is a separate, attached structure if the dividing or common wall goes from ground to roof. 3. Mobile home includes both occupied and vacant mobile homes, to which no permanent rooms have been added, are counted in this category. Mobile homes used only for business purposes or for extra sleeping space and mobile homes for sale on a dealer's lot, at the factory, or in storage are not counted in the housing inventory. Other Residential: 1. 2+ units (duplexes and apartments) are units in structures containing two or more housing units, further categorized as units in structures with “2, 3 or 4, 5 to 9, 10 to 19, 20 to 49, and 50 or more apartments.” 2. Boat, RV, Van, etc. includes any living quarters occupied as a housing unit that does not fit the other categories (e.g., houseboats, railroad cars, campers, and vans). Recreational vehicles, boats, vans, railroad cars, and the like are included only if they are occupied as a current place of residence. Such living quarters are only allowed under Bozeman zoning under unusual temporary conditions. Nonresidential Development Nonresidential development categories represent general groups of land uses that share similar average weekday vehicle trip generation rates and employment densities (i.e., jobs per 1,000 square feet). Retail: Establishments primarily selling merchandise, eating/drinking places, and entertainment uses. By way of example, Retail includes shopping centers, supermarkets, pharmacies, restaurants, bars, nightclubs, automobile dealerships, and movie theaters. Industrial: Establishments primarily engaged in the production, transportation, or storage of goods. By way of example, Industrial includes manufacturing plants, distribution warehouses, trucking companies, utility substations, power generation facilities, and telecommunications buildings. Office: Establishments providing management, administrative, professional, or business services. By way of example, Office can include business offices, office parks, and corporate headquarters. Institutional: Establishments providing education and healthcare services. By way of example, Institutional includes universities, nursing homes, daycare facilities, and hospitals. 213 MCA Contents / TITLE 7 / CHAPTER 6 / Part 16 / 7-6-1602 Calculation of… Montana Code Annotated 2023 TITLE 7. LOCAL GOVERNMENT CHAPTER 6. FINANCIAL ADMINISTRATION AND TAXATION Part 16. Impact Fees to Fund Capital Improvements Calculation Of Impact Fees -- Documentation Required -- Ordinance Or Resolution -- Requirements For Impact Fees 7-6-1602. Calculation of impact fees -- documentation required -- ordinance or resolution -- requirements for impact fees. (1) For each public facility for which an impact fee is imposed, the governmental entity shall prepare and approve a service area report. (2) The service area report is a written analysis that must: (a) describe existing conditions of the facility; (b) establish level-of-service standards; (c) forecast future additional needs for service for a defined period of time; (d) identify capital improvements necessary to meet future needs for service; (e) identify those capital improvements needed for continued operation and maintenance of the facility; (f) make a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits; (g) make a determination as to whether one service area or more than one service area for transportation facilities is needed to establish a correlation between impact fees and benefits; (h) establish the methodology and time period over which the governmental entity will assign the proportionate share of capital costs for expansion of the facility to provide service to new development within each service area; (i) establish the methodology that the governmental entity will use to exclude operations and maintenance costs and correction of existing deficiencies from the impact fee; (j) establish the amount of the impact fee that will be imposed for each unit of increased service demand; and (k) have a component of the budget of the governmental entity that: (i) schedules construction of public facility capital improvements to serve projected growth; (ii) projects costs of the capital improvements; (iii) allocates collected impact fees for construction of the capital improvements; and (iv) covers at least a 5-year period and is reviewed and updated at least every 5 years. 214 (3) The service area report is a written analysis that must contain documentation of sources and methodology used for purposes of subsection (2) and must document how each impact fee meets the requirements of subsection (7). (4) The service area report that supports adoption and calculation of an impact fee must be available to the public upon request. (5) The amount of each impact fee imposed must be based upon the actual cost of public facility expansion or improvements or reasonable estimates of the cost to be incurred by the governmental entity as a result of new development. The calculation of each impact fee must be in accordance with generally accepted accounting principles. (6) The ordinance or resolution adopting the impact fee must include a time schedule for periodically updating the documentation required under subsection (2). (7) An impact fee must meet the following requirements: (a) The amount of the impact fee must be reasonably related to and reasonably attributable to the development's share of the cost of infrastructure improvements made necessary by the new development. (b) The impact fees imposed may not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in accommodating the development. The following factors must be considered in determining a proportionate share of public facilities capital improvements costs: (i) the need for public facilities capital improvements required to serve new development; and (ii) consideration of payments for system improvements reasonably anticipated to be made by or as a result of the development in the form of user fees, debt service payments, taxes, and other available sources of funding the system improvements. (c) Costs for correction of existing deficiencies in a public facility may not be included in the impact fee. (d) New development may not be held to a higher level of service than existing users unless there is a mechanism in place for the existing users to make improvements to the existing system to match the higher level of service. (e) Impact fees may not include expenses for operations and maintenance of the facility. History: En. Sec. 2, Ch. 299, L. 2005; amd. Sec. 1, Ch. 358, L. 2009; amd. Sec. 1, Ch. 276, L. 2015. Created by 215 MEMORANDUM TO: COMMUNITY DEVELOPMENT BOARD FROM: CHRIS SAUNDERS, COMMUNITY DEVELOPMENT MANAGER DATE: AUGUST 14, 2024 SUBJECT: IMPACT FEE USE BY OTHER MONTANA COMMUNITIES The Community Development Board expressed interest in the impact fees used by other communities in the state. Staff has surveyed likely communities and obtained information as follows. Belgrade: Belgrade is currently working on an update to their impact fees. An RFP was issued in March and a consultant was selected. Belgrade has adopted impact fees for Parks, Water, Sewer, Streets, and Fire. Fees were most recently updated in 2019 and have not been inflation adjusted since then. They recently merged fire services with Central Valley Fire District. Fees are charged for both residential and non-residential uses. They do not divide fees as finely as Bozeman does. Fees for a single detached home (no specified size) are: Parks $1,139 Water $4,786 Sewer $2,709 Streets $5,238 Fire $272 Administration fee of 5% $707.20 Missoula: Missoula has adopted impact fees for Community Services (various governmental general functions, vehicles, and equipment), Parks and Open Space, Transportation, Police, and Fire. City-wide fees were updated in 2019. Fees are charged for both residential and non-residential uses. They divide fees similar to how Bozeman does with gradations for housing size but different size bands. Fees for a single detached home (2,400 sq. ft.) are: Community Services $1,406 Parks and Open Space $4,904 Transportation $1,602 Police $151 Fire $506 216 Page 2 of 2 Whitefish: Whitefish has adopted impact fees for Water, Sewer, Stormwater, Police, and Fire. Fees were most recently adopted in 2023. Fees are charged for both residential and non-residential uses. They divide some fees by square footage of home but less finely than Bozeman does. Water and sewer are set by meter size for all uses. Fees for a single detached home (2,400 sq. ft.) are: Parks & Recreation $419 Paved Trails $912 City Hall $1,138 Police $551 Fire $790 Water $3,903 Sewer $4,041 Kalispell: Kalispell has adopted impact fees for Water, Sewer, Stormwater, Police, and Fire. Fees were adopted in 2015-2019. They have recently begun inflation adjustments. Fees are charged for both residential and non-residential uses. They do not divide fees as finely as Bozeman does. Fees for a single detached home (no specified size) are: Water $2,138 Sewer $3,240 Stormwater $618 Police $41 Fire $438 Helena, Great Falls, and Billings have not chosen to use impact fees as part of their infrastructure funding approach. 217 Memorandum REPORT TO:City Commission FROM:Chris Saunders, Community Development Manager Erin George, Community Development Interim Director SUBJECT:Resolution 5651 Adopting the 2024 Service Area Report for Fire/Emergency Medical Services Impact Fees and Establishing an Effective Date MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Resolution RECOMMENDATION:Consider the Motion: Having reviewed and considered the staff presentation, public comment, and all information presented, I hereby adopt the findings of Resolution 5651 and adopt Resolution 5651 with an effective date of November 1, 2024. STRATEGIC PLAN:7.5. Funding and Delivery of City Services: Use equitable and sustainable sources of funding for appropriate City services, and deliver them in a lean and efficient manner. BACKGROUND:The City of Bozeman first adopted impact fees in 1996 and has used them continuously since. The State of Montana authorizes local government impact fees through Title 7, Chapter 6, Part 16, Montana Code Annotated (MCA) [External Link]. A key part of the state authorization is the requirement for a local government to prepare a service area report (SAR) for each fee type. The SAR consolidates key information relating to the future needs for infrastructure, expected means to provide the infrastructure, and the process by which the cost of additional services are assigned to units of new development. The City updates the SAR at least every four years to help ensure the fees are accurate, reflect current construction costs and service needs, and remain roughly proportionate and logically connected in the benefits to the development that pays the fees. The City hired TischlerBise, a nationally prominent specialist in impact fees, to support the City in updating the impact fee SAR. Staff has reviewed the draft Fire/EMS SAR prepared by TischlerBise on behalf of the City and finds that the document meets the requirements of state law for an SAR. The SAR is in writing, the document has been provided to the public for review through the Engage Bozeman website [External Link] as well as the agenda for the Community Development Board meeting and the City Commission agenda. The City has an annual process to update a capital 218 improvement program to schedule construction of public facility capital improvements. As shown in the SAR, actual costs of construction and reasonable estimate of costs have been used, forecast for future needs are provided, necessary facilities to serve future growth are identified, and the appropriateness of a single service area is established. No maintenance or operational costs are included in the calculated fee. All other necessary elements are also provided. The City published formal notice in the Bozeman Daily Chronicle on 8/17/2024, 8/31/2024, and 9/07/2024 of the public hearings before the Community Development Board and City Commission. A news item was included on the City's website, the Engage Bozeman impact fee update project website was established, several publicly available work sessions and training sessions regarding impact fees have been held during the project, and direct notification to interest groups occurred at the beginning of the project. The Community Development Board held a public hearing on the draft SAR on Sept 9th. The video and minutes of the hearing are available through the City's website [External Link]. The Board recommended unanimously, 5-0, approval to the City Commission. The action under this agenda item is specific to the Fire/EMS impact fee. The City also implements transportation, water, and wastewater fees. Service Area Reports for those fees are under development and will come forward for public review, Community Development Board recommendation, and City Commission action as they are completed. The review of the SAR is an item on the Commission's Oct 1st agenda. Should the Commission find that the SAR is correct and meets all requirements then this action adopting Resolution 5651 formally adopts the service area report and sets the date that it will take effect. UNRESOLVED ISSUES: To accept or not accept the suggested effective date. ALTERNATIVES:1. Approve the Resolution as submitted; 2. Approve the Resolution with a modified effective date; or 3. Open and continue the item, with specific request staff to supply additional information or to address specific items. FISCAL EFFECTS:Adoption by resolution of the Service Area Report will enable continued operation of the impact fee program to offset capital costs from new construction for fire/EMS functions. Attachments: Resolution 5651 Fire-EMS 2024.docx Bozeman MT Impact Fee Report_FireEMS_8.27.24.pdf Report compiled on: September 19, 2024 219 Version February 2023 RESOLUTION 5651 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, ADOPTING THE FIRE/EMS FACILITIES IMPACT FEE SERVICE AREA REPORT PER ARTICLE 2.06, BMC AND ESTABLISHING FIRE/EMS IMPACT FEES AS STATED IN THE STUDY. WHEREAS,the City of Bozeman is committed to addressing the community’s expressed needs and desires for services; and WHEREAS,the City of Bozeman is committed to meeting those desires and demands for services in a fiscally responsible manner; and WHEREAS,the City of Bozeman is committed to meeting those desires and demands for services in a manner which recognizes the fiscal and legal interests of all of the system users now and in the future and not a limited subset of users; and WHEREAS, the City of Bozeman has developed and adopted a Fire/EMS Facilities master plan which examined current and future needs and provides a lawful, logical, balanced, operationally sound, and cost effective basis upon which to maintain and develop the City’s Fire/EMS facilities system; and WHEREAS, the City Commission has chosen to utilize impact fees as one element of an integrated approach to fund and provide Fire/EMS facilities services; and WHEREAS, Sections 7-6-1601 through 7-6-1604, MCA provide specific authority and guidance regarding the documentation necessary to establish an impact fee and procedures to adopt and administer an impact fee; and WHEREAS, the City contracted with TischlerBise to provide professional services in development of an updated Fire/EMS facilities impact fee service area report; 220 Version February 2023 WHEREAS,TischlerBise reviewed the existing demand and needs for Fire/EMS facilities, the existing facilities available to meet that demand, and the method of financing the existing systems and needed new facilities; and, WHEREAS, TischlerBise also reviewed the contribution made or to be made in the future in cash or by taxes, fees, or assessments by property owners towards the capital costs of Fire/EMS facilities; and, WHEREAS,TishlerBise reviewed and relied upon the City of Bozeman’s level of service (LOS) standards and facility cost assumptions as established by recently constructed projects in recommending Fire/EMS facilities impact fees; and, WHEREAS,TischlerBisehas prepared the Fee Study, presented to the City Commission on October 1, 2024, including the assumptions, population and residential and non-residential development projections, capital infrastructure and impact fee calculations, which study has been submitted to and reviewed by City staff, Community Development Board acting in their capacity as the Impact Fee Advisory Committee, and City Commission; and, WHEREAS,the City develops its Fire/EMS Facilities facility plans, and its capital improvements program in a manner open to the public and accepts and responds to public comment and input; and WHEREAS,the City and TischlerBise have developed the service area report in a manner open to the public and accepted and responded as appropriate to comment and input; and WHEREAS,the City of Bozeman Community Development Board in their capacity as the Impact Fee Advisory Committee has considered and made a recommendation to the City Commission on the service area report; and WHEREAS,the Community Development Board in their capacity as the Impact Fee Advisory Committee conducted a public hearing on the subject of the service area report on September 9, 2024, and the City Commission conducted a public hearing on October 1, 2024; and WHEREAS,public comment was received and considered; and WHEREAS,the City Commission reviewed and discussed the service area report and accepts and agrees with the content of the service area report and recognizes that updates and modifications will be made to the fee schedule in the future in accord with the annual cost 221 Version February 2023 adjustment requirements of Chapter 2, Article 6, Division 9 BMC; and WHEREAS,the City Commission finds that all required elements necessary for compliance with standards for development of an impact fee have been satisfied. NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, to wit: 1. The draft of the Fire EMS Facilities Impact Fee Service Area Report, as contained in Exhibit "A", attached hereto and by this reference made a part hereof, is hereby adopted. 2. As of November 1, 2024, any person who seeks to obtain any of the forms of development listed 2.06.1660, BMC must pay a Fire/EMS Facilities Impact Fee pursuant to the schedule included in Exhibit A of this Resolution. PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 1st day of October 2024. ___________________________________ TERENCE CUNNINGHAM Mayor ATTEST: ___________________________________ MIKE MAAS City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 222 Fire/EMS Service Area Report and Impact Fee Study Prepared for: Bozeman, Montana August 27, 2024 4701 Sangamore Road Suite S240 Bethesda, MD (301) 320-6900 www.TischlerBise.com 223 Service Area Report and Impact Fee Study Bozeman, Montana [PAGE INTENTIONALLY LEFT BLANK] 224 Service Area Report and Impact Fee Study Bozeman, Montana i Table of Contents Executive Summary ............................................................................................................... 3 Montana Impact Fee Enabling Legislation ........................................................................... 3 Public Facilities ...................................................................................................................................... 3 Service Area Report .............................................................................................................................. 4 Legal Framework ................................................................................................................ 4 Methodology ..................................................................................................................... 6 Conceptual Impact Fee Calculation ...................................................................................................... 7 Evaluation of Credits ............................................................................................................................. 7 Maximum Supportable Impact Fees ................................................................................... 8 Fire/EMS Service Area Report .............................................................................................. 10 Service Area ........................................................................................................................................ 10 Cost Allocation .................................................................................................................................... 10 Service Demand Units ......................................................................................................................... 10 Level of Service and Cost Analysis .................................................................................... 12 Fire/EMS Station Space ....................................................................................................................... 12 Fire/EMS Station Land......................................................................................................................... 13 Fire/EMS Apparatus ............................................................................................................................ 13 Projected Service Demand Units and for Demand for Services .......................................... 15 Fire/EMS Growth-Related Capital Improvement Plans ...................................................... 16 Credit for Other Revenues Sources ................................................................................... 16 Fire/EMS Personnel and Operations ................................................................................................... 16 Maximum Supportable Fire/EMS Impact Fees .................................................................. 17 Projected Fire/EMS Impact Fee Revenue .......................................................................... 20 Capital Improvement Plan ................................................................................................... 21 Appendix A: Land Use Assumptions ..................................................................................... 22 Population and Housing Characteristics ............................................................................ 22 Building Permit History .................................................................................................... 22 Base Year Housing Units and Population .......................................................................... 23 Housing Unit and Population Projections .......................................................................... 26 Current Employment and Nonresidential Floor Area ......................................................... 27 Employment and Nonresidential Floor Area Projections ................................................... 27 Vehicle Trip Generation ................................................................................................... 29 Residential Vehicle Trips by Housing Type.......................................................................................... 29 Residential Vehicle Trips Adjustment Factors..................................................................................... 30 Nonresidential Vehicle Trips ............................................................................................................... 30 Vehicle Trip Projections .................................................................................................... 32 Demand Indicators by Dwelling Size ................................................................................. 33 Bozeman Control Totals ...................................................................................................................... 33 Demand Indicators by Dwelling Size ................................................................................................... 33 Persons by Dwelling Size ..................................................................................................................... 34 Person by Dwelling Size and Housing Type ......................................................................................... 35 Trip Generation by Dwelling Size ........................................................................................................ 38 225 Service Area Report and Impact Fee Study Bozeman, Montana ii Vehicle Trip Ends by Dwelling Size ...................................................................................................... 39 Vehicle Trip Ends by Dwelling Size and Housing Type ........................................................................ 40 Appendix B: Land Use Definitions ........................................................................................ 42 Residential Development .................................................................................................................... 42 Nonresidential Development .............................................................................................................. 42 226 Service Area Report and Impact Fee Study Bozeman, Montana 3 EXECUTIVE SUMMARY The City of Bozeman, Montana, contracted with TischlerBise to document land use assumptions, prepare the Service Area Report, and update impact fees within the applicable service areas pursuant to Montana Code 7-6-16 (hereafter referred to as the “Enabling Legislation”). Governmental entities in Montana may assess impact fees to offset infrastructure costs to the governmental entity for public facilities needed to serve future development. For each public facility for which an impact fee is imposed, the governmental entity shall prepare and approve a service area report. The impact fees must (1) be reasonably related to and reasonably attributable to the development's share of the cost of infrastructure improvements made necessary by the new development and (2) may not exceed a proportionate share of the costs incurred or to be incurred by the governmental entity in accommodating the development. Impact fees are one-time payments used to construct system improvements needed to accommodate future development, and the fee represents future development’s proportionate share of infrastructure costs. Impact fees may be used for infrastructure improvements or debt service for growth-related infrastructure. In contrast to general taxes, impact fees may not be used for operations, maintenance, replacement, or correcting existing deficiencies. This Service Area Report and associated update to its impact fees are for Fire/EMS public facilities. In a tandem effort, TischlerBise is also updating the Service Area Reports for Transportation, Water, and Wastewater public facilities. Montana Impact Fee Enabling Legislation The Enabling Legislation governs how impact fees are calculated for governmental entities in Montana. Public Facilities Under the requirements of the Enabling Legislation, impact fees may only be used for construction, acquisition, or expansion of public facilities made necessary by new development. “Public Facilities” means any of the following categories of capital improvements with a useful life of 10 years or more that increase or improve the service capacity of a public facility (§7-6-1601(7)): 1. a water supply production, treatment, storage, or distribution facility; 2. a wastewater collection, treatment, or disposal facility; 3. a transportation facility, including roads, streets, bridges, rights-of-way, traffic signals, and landscaping; 4. a storm water collection, retention, detention, treatment, or disposal facility or a flood control facility; 5. a police, emergency medical rescue, or fire protection facility; and 6. other facilities for which documentation is prepared as provided in 7-6-1602 that have been approved as part of an impact fee ordinance or resolution by: 7. a two-thirds majority of the governing body of an incorporated city, town, or consolidated local government; or 8. a unanimous vote of the board of county commissioners of a county government. 227 Service Area Report and Impact Fee Study Bozeman, Montana 4 Also, §7-6-1601(5a) states that "impact fee" means any charge imposed upon development by a governmental entity as part of the development approval process to fund the additional service capacity required by the development from which it is collected. An impact fee may include a fee for the administration of the impact fee not to exceed 5 percent of the total impact fee collected. Service Area Report For each public facility for which an impact fee is imposed, the governmental entity shall prepare and approve a service area report. The service area report is a written analysis that must: 1. describe existing conditions of the facility; 2. establish level-of-service standards; 3. forecast future additional needs for service for a defined period of time; 4. identify capital improvements necessary to meet future needs for service; 5. identify those capital improvements needed for continued operation and maintenance of the facility; 6. make a determination as to whether one service area or more than one service area is necessary to establish a correlation between impact fees and benefits; 7. make a determination as to whether one service area or more than one service area for transportation facilities is needed to establish a correlation between impact fees and benefits; 8. establish the methodology and time period over which the governmental entity will assign the proportionate share of capital costs for expansion of the facility to provide service to new development within each service area; 9. establish the methodology that the governmental entity will use to exclude operations and maintenance costs and correction of existing deficiencies from the impact fee; 10. establish the amount of the impact fee that will be imposed for each unit of increased service demand; and 11. have a component of the budget of the governmental entity that: a. schedules construction of public facility capital improvements to serve projected growth; b. projects costs of the capital improvements; c. allocates collected impact fees for construction of the capital improvements; and d. covers at least a 5-year period and is reviewed and updated at least every 5 years. Legal Framework Both state and federal courts have recognized the imposition of impact fees as a legitimate form of land use regulation, provided the fees meet standards intended to protect against regulatory takings. Land use regulations, development exactions, and impact fees are subject to the Fifth Amendment prohibition on taking of private property for public use without just compensation. To comply with the Fifth Amendment, development regulations must be shown to substantially advance a legitimate governmental interest. In the case of impact fees, that interest is in the protection of public health, safety, and welfare by ensuring development is not detrimental to the quality of essential public services. The means to this end are also important, requiring both procedural and substantive due process. The process followed to receive 228 Service Area Report and Impact Fee Study Bozeman, Montana 5 community input (i.e., stakeholder meetings, work sessions, and public hearings) provides opportunities for comments and refinements to the impact fees. There are three reasonable relationship requirements for impact fees that are closely related to “rational nexus”, or “reasonable relationship” requirements enunciated by a number of state courts. Although the term “dual rational nexus” is often used to characterize the standard by which courts evaluate the validity of impact fees under the U.S. Constitution, we prefer a more rigorous formulation that recognizes three elements: “need,” “benefit,” and “proportionality.” The dual rational nexus test explicitly addresses only the first two, although proportionality is reasonably implied, and was specifically mentioned by the U.S. Supreme Court in the Dolan case (Dolan v. City of Tigard, OR, 1994). Furthermore, the plaintiff in the 2024 Sheetz v. El Dorado County U.S. Supreme Court case argued that the El Dorado County, CA impact fee program failed to meet the Nollan/Dolan test. The U.S. Supreme Court remanded the case back to the California Supreme Court for further proceedings on a stricter interpretation of the rational nexus, specifically the extent impact fees can be “roughly proportionate.” Thus, is has been determined that State courts will make judgements further similar cases. Individual elements of the nexus standard are discussed further in the following paragraphs. All new development in a community creates additional demands on some, or all, public facilities provided by local government. If the capacity of facilities is not increased to satisfy that additional demand, the quality or availability of public services for the entire community will deteriorate. Impact fees may be used to recover the cost of development-related facilities, but only to the extent that the need for facilities is a consequence of development that is subject to the fees. The Nollan decision reinforced the principle that development exactions may be used only to mitigate conditions created by the developments upon which they are imposed. That principle clearly applies to impact fees. In this study, the impact of development on infrastructure needs is analyzed in terms of quantifiable relationships between various types of development and the demand for specific capital facilities, based on applicable level-of-service standards. The requirement that exactions be proportional to the impacts of development was clearly stated by the U.S. Supreme Court in the Dolan case and is logically necessary to establish a proper nexus. Proportionality is established through the procedures used to identify development-related facility costs, and in the methods used to calculate impact fees for various types of facilities and categories of development. The demand for capital facilities is measured in terms of relevant and measurable attributes of development (e.g., a typical housing unit’s average weekday vehicle trips). A sufficient benefit relationship requires that impact fee revenues be segregated from other funds and expended only on the facilities for which the fees were charged. Impact fees must be expended in a timely manner and the facilities funded by the fees must serve the development paying the fees. However, nothing in the U.S. Constitution or the state enabling legislation requires that facilities funded with fee revenues be available exclusively to development paying the fees. In other words, benefit may extend to a general area including multiple real estate developments. Procedures for the earmarking and expenditure of fee revenues are discussed near the end of this study. All of these procedural as well as substantive issues are intended to ensure that new development benefits from the impact fees they are 229 Service Area Report and Impact Fee Study Bozeman, Montana 6 required to pay. The authority and procedures to implement impact fees is separate from and complementary to the authority to require improvements as part of subdivision or zoning review. As documented in this report, the City of Bozeman has complied with applicable legal precedents. Impact fees are proportionate and reasonably related to the capital improvement demands of new development. Specific costs have been identified using local data and current dollars. With input from City staff, TischlerBise identified service demand indicators for each type of infrastructure and calculated proportionate share factors to allocate costs by type of development. This report documents the formulas and input variables used to calculate the impact fees for each type of public facility. Impact fee methodologies also identify the extent to which new development is entitled to various types of credits to avoid potential double payment of growth-related capital costs. Methodology Impact fees for public facilities made necessary by new development must be based on the same level of service provided to existing development in the service area. There are three basic methodologies used to calculate impact fees. They examine the past, present, and future status of infrastructure. The objective of evaluating these different methodologies is to determine the best measure of the demand created by new development for additional infrastructure capacity. Each method has advantages and disadvantages in a particular situation and can be used simultaneously for different cost components. Additionally, impact fees for public facilities can also include a fee for the administration of the impact fee not to exceed five percent of the total impact fee collected. Reduced to its simplest terms, the process of calculating impact fees involves two main steps: (1) determining the cost of growth-related capital improvements and (2) allocating those costs equitably to various types of development. In practice, though, the calculation of impact fees can become quite complicated because of the many variables involved in defining the relationship between development and the need for facilities within the designated service area. The following paragraphs discuss basic methods for calculating impact fees and how those methods can be applied. • Cost Recovery (past improvements) - The rationale for recoupment, often called cost recovery, is that future development is paying for its share of the useful life and remaining capacity of facilities already built, or land already purchased, from which future development will benefit. This methodology is often used for utility systems that must provide adequate capacity before new development can take place. • Incremental Expansion (concurrent improvements) - The incremental expansion methodology documents current level-of-service standards for each type of public facility, using both quantitative and qualitative measures. This approach assumes there are no existing infrastructure deficiencies or surplus infrastructure capacity. Future development is only paying its proportionate share for growth-related infrastructure. Revenue will be used to expand or provide additional facilities, as needed, to accommodate future development. An incremental expansion methodology is best suited for public facilities that will be expanded in regular increments to keep pace with development. 230 Service Area Report and Impact Fee Study Bozeman, Montana 7 • Plan-Based (future improvements) - The plan-based methodology allocates costs for a specified set of improvements to a specified amount of development. Improvements are typically identified in a long-range facility plan and development potential is identified by a land use plan. There are two basic options for determining the cost per service demand unit: (1) total cost of a public facility can be divided by total service demand units (average cost), or (2) the growth-share of the public facility cost can be divided by the net increase in service demand units over the planning timeframe (marginal cost). Conceptual Impact Fee Calculation In contrast to project-level improvements, impact fees fund growth-related infrastructure that will benefit multiple development projects, or the entire service area (usually referred to as system improvements). The first step is to determine an appropriate service demand indicator for the particular type of infrastructure. The service demand indicator measures the number of service units for each unit of development. For example, an appropriate indicator of the demand for roadways is vehicle trips or vehicle miles of travel that can be determined by development type. The second step in the impact fee formula is to determine infrastructure improvement units per service demand unit, typically called level-of-service (LOS) standards. In keeping with the roadway example, a common LOS standard is volume to capacity ratio. The third step in the impact fee formula is the cost of various infrastructure units. To complete the roadway example, this part of the formula would establish a construction cost per lane mile of road expansion. Evaluation of Credits A consideration of credits is integral to the development of a legally defensible impact fee. There are two types of credits that should be addressed in impact fee studies and ordinances. The first is a revenue credit due to possible double payment situations, which could occur when other revenues expected to be paid by future development may contribute to the capital costs of infrastructure covered by the impact fee. This type of credit is integrated into the fee calculation, thus reducing the fee amount. The second type of credit is a site-specific credit for system improvements that have been included in the impact fee calculations. Policies and procedures related to site-specific credits for system improvements are addressed in the ordinance that establishes the impact fees. However, the general concept is that developers may be eligible for site-specific credits only if they provide system improvements that have been included in the impact fee calculations. Project improvements normally required as part of the development approval process are not eligible for credits against impact fees. Site-specific credits are addressed in the administration and implementation of the development fee program. Below, Figure 1 summarizes service areas, methodologies, and infrastructure cost components. Figure 1. Impact Fee Service Areas, Methodologies, and Cost Allocation Fire/EMS Citywide -Fire Station Space & Land, Apparatus -Calls for Service Cost AllocationFee Category Service Area Incremental Expansion Plan-Based Cost Recovery 231 Service Area Report and Impact Fee Study Bozeman, Montana 8 Maximum Supportable Impact Fees The following figures list the schedule of the maximum supportable impact fees by type of land use. The fees represent the highest amount allowable for each type of applicable land use. The City may adopt fees that are less than the amounts shown. However, a reduction in impact fee revenue will necessitate an increase in other revenues, a decrease in planned capital expenditures, and/or a decrease in levels of service. The maximum supportable impact fees for residential development will be assessed per housing unit, based on the square footage of the unit. This study presents additional size bands. The current fee schedule has 10 bands, while 19 bands are included in the update. Expanding the schedule allows for further proportionately. Nonresidential impact fees will be assessed per square foot of floor area. Figure 2. Maximum Supportable Impact Fee Schedule – Single-Unit Dwelling Including Townhomes Residential - Single-Unit Dwelling including Townhomes Residential (per housing unit) Under 600 0.038 $601 $384 $217 600 to 800 0.044 $696 $384 $312 801 to 1,000 0.054 $854 $384 $470 1,001 to 1,200 0.061 $965 $384 $581 1,201 to 1,400 0.068 $1,075 $384 $691 1,401 to 1,600 0.073 $1,155 $393 $762 1,601 to 1,800 0.078 $1,234 $401 $834 1,801 to 2,000 0.082 $1,297 $408 $889 2,001 to 2,200 0.086 $1,360 $415 $945 2,201 to 2,400 (avg.)0.089 $1,408 $422 $986 2,401 to 2,600 0.092 $1,455 $431 $1,024 2,601 to 2,800 0.095 $1,503 $439 $1,064 2,801 to 3,000 0.098 $1,550 $448 $1,102 3,001 to 3,200 0.100 $1,582 $469 $1,113 3,201 to 3,400 0.103 $1,629 $469 $1,160 3,401 to 3,600 0.105 $1,661 $469 $1,192 3,601 to 3,800 0.107 $1,692 $469 $1,223 3,801 to 4,000 0.109 $1,724 $469 $1,255 4,001 or More 0.111 $1,756 $469 $1,287 Maximum Supportable Fee Current Fee Increase/ Decrease Dwelling Size (square feet) Calls per Household 232 Service Area Report and Impact Fee Study Bozeman, Montana 9 Figure 3. Maximum Supportable Impact Fee Schedule – Other Residential Figure 4. Maximum Supportable Impact Fee Schedule – Nonresidential Fee Residential - Other Residential Residential (per housing unit) Under 600 0.036 $569 $272 $297 600 to 800 0.042 $664 $272 $392 801 to 1,000 0.051 $807 $272 $535 1,001 to 1,200 0.058 $917 $272 $645 1,201 to 1,400 0.064 $1,012 $272 $740 1,401 to 1,600 (avg.)0.069 $1,091 $279 $812 1,601 to 1,800 0.073 $1,155 $285 $870 1,801 to 2,000 0.078 $1,234 $290 $944 2,001 to 2,200 0.081 $1,281 $294 $987 2,201 to 2,400 0.085 $1,344 $301 $1,043 2,401 to 2,600 0.087 $1,376 $306 $1,070 2,601 to 2,800 0.090 $1,423 $312 $1,111 2,801 to 3,000 0.093 $1,471 $317 $1,154 3,001 to 3,200 0.095 $1,503 $359 $1,144 3,201 to 3,400 0.097 $1,534 $359 $1,175 3,401 to 3,600 0.099 $1,566 $359 $1,207 3,601 to 3,800 0.101 $1,597 $359 $1,238 3,801 to 4,000 0.103 $1,629 $359 $1,270 4,001 or More 0.105 $1,661 $359 $1,302 Group Quarters 0.036 $569 $181 $388 Maximum Supportable Fee Current Fee Increase/ Decrease Dwelling Size (square feet) Calls per Household Nonresidential Industrial 0.016 $253 $54 $199 Retail, Accommodation & Food Services 0.097 $1,534 $503 $1,031 Health Care & Social Assistance 0.136 $2,151 $2,161 ($10) All Other Services 0.048 $759 $539 $220 Calls per 1,000 Sq Ft Nonresidential (per 1,000 square feet) Current Fee Increase/ Decrease Maximum Supportable FeeDevelopment Type 233 Service Area Report and Impact Fee Study Bozeman, Montana 10 FIRE/EMS SERVICE AREA REPORT The Fire/EMS Service Area Report includes components for station space, station land, and apparatus. An incremental expansion methodology is applied to examine the current level of service of facilities and demand from residential and nonresidential development. Importantly, the initial purchase of the apparatus that are included in the analysis have a useful life of 10 years or longer making it an impact fee eligible component. Service Area Bozeman’s Fire/EMS Department strives to provide uniform response times citywide, with its current and future stations and apparatus operating as an integrated network. The service area for the Fire/EMS Service Area Report is citywide. Cost Allocation Demand and proportionality in the fire/EMS impact fee is determined with calls for service data. The City of Bozeman is tracking calls based on 102 property use types. From a call report for calendar year 2023 there were 4,191 calls for service. To account for calls from residential and nonresidential land use, 72 calls were removed that were labeled as jail, police station, and fire station locations. As a result, the impact fee analysis examined 4,119 calls. In Figure 5, calls for service are attributed to development in five categories: residential, industrial, retail, health care, and all other services. Additionally, there were 753 traffic-related calls which are attributed to those categories based on their percentage of calls to locations. In Figure 5, the adjusted total calls reflect the calls to location and attributed traffic calls. The adjusted total is compared to the 2023 demand factor to calculate the calls per unit. For example, there is an estimated 2,144 residential-related calls and a base year permanent and seasonal population of 59,271 resulting in 0.036 calls per person (2,114 calls / 59,271 persons = 0.036 calls per person). The nonresidential demand unit is 1,000 square feet. Figure 5. Calls for Service by Location Service Demand Units Calls for service rates are used to calculate the fire/EMS impact fee. The average call per person rate (0.036 calls per person) is applied to the persons per housing unit (PPHH) factors for single-unit dwellings Residential Permanent and Seasonal Pop 1,752 52%392 2,144 persons 59,271 0.036 Nonresidential Industrial 41 1%9 50 1,000 sq ft 3,204 0.016 Retail, Accom. & Food Services 625 19%140 765 1,000 sq ft 7,856 0.097 Healthcare & Social Assistance 779 23%174 953 1,000 sq ft 7,002 0.136 All Other Services 169 5%38 207 1,000 sq ft 4,302 0.048 Total 3,366 753 4,119 [2] Traffic-related calls are attributed to development based on percent of calls to location Demand Factor 2023 Estimate Calls per Unit [1] Annual fire call report broken down to 102 property uses then summed by development type Development Calls to Location [1] % of Total Traffic Calls [2] Adj. Total Calls 234 Service Area Report and Impact Fee Study Bozeman, Montana 11 and other residential dwellings by size. A detailed analysis of the PPHH factors is provided in Appendix A: Land Use Assumptions. Figure 6 combines the call per person with the PPHH factors to find the average calls for service per household factors. The City has seen an increase in smaller dwelling construction and improved detailed data available. Therefore, a broader range of size bands compared to the prior service area report is evaluated in this study. The current fee schedule has 10 bands, while 19 bands are included in the update. Expanding the schedule allows for further proportionately. Figure 6. Residential Fire/EMS Calls for Service Rates Figure 7 provides a summary for the nonresidential development types included in the analysis. Figure 7. Nonresidential Fire/EMS Calls for Service Rates Of note, since the 2019 impact fee study the City acknowledged that the increasing call volume was reaching a challenging level. In 2020, the Fire Department started to evaluate operations internally to find a way to better match dispatched resources to the actual needs of the call. This effort resulted in the implementation of the Emergency Medical Dispatch (EMD) protocols, which eliminates the need for a fire truck response to certain medical calls. Medical response is a large fraction of total calls for service. Full Residential - Single-Unit Dwelling incl. Townhomes Residential - Other Residential Residential (per housing unit)Residential (per housing unit) Under 600 1.06 0.038 Under 600 1.00 0.036 600 to 800 1.23 0.044 600 to 800 1.16 0.042 801 to 1,000 1.49 0.054 801 to 1,000 1.41 0.051 1,001 to 1,200 1.70 0.061 1,001 to 1,200 1.61 0.058 1,201 to 1,400 1.88 0.068 1,201 to 1,400 1.78 0.064 1,401 to 1,600 2.03 0.073 1,401 to 1,600 (avg.)1.92 0.069 1,601 to 1,800 2.16 0.078 1,601 to 1,800 2.04 0.073 1,801 to 2,000 2.28 0.082 1,801 to 2,000 2.16 0.078 2,001 to 2,200 2.38 0.086 2,001 to 2,200 2.25 0.081 2,201 to 2,400 (avg.)2.48 0.089 2,201 to 2,400 2.35 0.085 2,401 to 2,600 2.56 0.092 2,401 to 2,600 2.42 0.087 2,601 to 2,800 2.64 0.095 2,601 to 2,800 2.50 0.090 2,801 to 3,000 2.72 0.098 2,801 to 3,000 2.57 0.093 3,001 to 3,200 2.79 0.100 3,001 to 3,200 2.64 0.095 3,201 to 3,400 2.85 0.103 3,201 to 3,400 2.70 0.097 3,401 to 3,600 2.92 0.105 3,401 to 3,600 2.76 0.099 3,601 to 3,800 2.97 0.107 3,601 to 3,800 2.81 0.101 3,801 to 4,000 3.03 0.109 3,801 to 4,000 2.87 0.103 4,001 or More 3.08 0.111 4,001 or More 2.91 0.105 Group Quarters 1.00 0.036 Dwelling Size (square feet) Persons per Household Calls per Household Dwelling Size (square feet) Persons per Household Calls per Household Industrial 1,000 sq ft 0.016 Retail, Accommodation & Food Services 1,000 sq ft 0.097 Health Care & Social Assistance 1,000 sq ft 0.136 All Other Services 1,000 sq ft 0.048 Development Demand Factor Calls per KSF 235 Service Area Report and Impact Fee Study Bozeman, Montana 12 implementation was completed in 2023. The Fire Department estimates that without the EMD protocols the call volume in 2023 would have been approximately 6,600 calls. This effort has in turn resulted in reduced call rates for most development types. Figure 8 lists the change in call rates from the 2019 study. Figure 8. Change in Call Rates by Development Type Level of Service and Cost Analysis The following section details the level of service and cost factors for facility types included in the analysis. Fire/EMS Station Space The first component is fire/EMS stations. Shown below in Figure 9, after the current relocation project of Station 2, there will be 45,068 square feet of station space. The square footage is compared to the current annual call volume to calculate the current level of service (45,068 square feet / 4,119 calls = 10,941 square feet per 1,000 calls, rounded). To determine the capital cost per call, the level of service standard is multiplied by the current construction cost found from the Station 4 CIP project. As a result, the cost per call is $14,070 (10,941 square feet per 1,000 calls x $1,286 per square foot = $14,070 per call). Figure 9. Fire/EMS Station Space Level of Service and Cost Analysis Residential Population persons 0.036 0.040 -10% Nonresidential Industrial 1,000 sq ft 0.016 0.012 33% Retail, Accommodation & Food Services 1,000 sq ft 0.097 0.111 -13% Health Care & Social Assistance 1,000 sq ft 0.136 0.477 -71% All Other Services 1,000 sq ft 0.048 0.119 -60% % Change Calls per Unit (2023)Development Calls per Unit (2019) Demand Unit Station 1 19,000 $24,434,000 Station 2 13,500 $17,361,000 Station 3 12,568 $16,162,448 Total 45,068 $57,957,448 Square Feet Share of Square Feet 45,068 Citywide Calls for Service 4,119 Square Feet per 1,000 Calls 10,941 Square Feet Square Feet per 1,000 Calls 10,941 Average Cost per Square Foot [1]$1,286 Capital Cost per Call for Service $14,070 [1] Cost per square foot based on Station 4 CIP project Facility Level-of-Service Standards Cost Analysis Square Feet Replacement Cost [1] 236 Service Area Report and Impact Fee Study Bozeman, Montana 13 Fire/EMS Station Land The City of Bozeman anticipates purchasing land for future station expansion. Shown below in Figure 10, there is currently 2.38 acres of land at stations. Resulting in a current level of service of 0.58 acres per 1,000 calls (2.38 acres / 4,119 calls = 0.58 acres per 1,000 calls). The City’s practice of collocating fire facilities with other municipal facilities at Stations 1 and 3 reduces total land used and lowers costs. To determine the capital cost per call, the level of service standard is multiplied by the land cost found from the Station 4 CIP project. As a result, the cost per call is $580 (0.58 acres per 1,000 calls x $1,000,000 per acre = $580 per call). Figure 10. Fire/EMS Station Land Level of Service and Cost Analysis Fire/EMS Apparatus Bozeman plans to expand its current fleet to serve demand from new development. Currently, there are a total of eight units in the fleet that provide fire and EMS services. The fleet is compared to the current annual call volume to calculate the current level of service (8 units / 4,119 calls = 1.94 units per 1,000 calls). To determine the capital cost per call, the level of service standard is multiplied by the weighted average of the fleet based on current purchase price of the unit type. As a result, the cost per call is $1,564 (1.94 units per 1,000 calls x $806,000 per unit = $1,564 per call). Station 1 0.45 $450,000 Station 2 1.20 $1,200,000 Station 3 0.73 $730,000 Total 2.38 $2,380,000 Acres Share of Acres 2.38 Citywide Calls for Service 4,119 Acres per 1,000 Calls 0.58 Acres Acres per 1,000 Calls 0.58 Average Cost per Acre [1]$1,000,000 Capital Cost per Call for Service $580 Cost Analysis [1] Cost per acre based on anticipated cost for future land purchases for Station 4 Level-of-Service Standards Facility Acres Replacement Cost [1] 237 Service Area Report and Impact Fee Study Bozeman, Montana 14 Figure 11. Fire/EMS Apparatus Level of Service and Cost Analysis Ambulance 1 $350,000 $350,000 Brush Trucks 2 $225,000 $450,000 Engine 3 $900,000 $2,700,000 Hazmat Freightliner 1 $350,000 $350,000 Ladder 1 $2,600,000 $2,600,000 Total 8 $6,450,000 Level-of-Service Standards Units Share of Fleet 8 Citywide Calls for Service 4,119 Units per 1,000 Calls 1.94 Cost Analysis Units Units per 1,000 Calls 1.94 Average Cost per Unit $806,000 Capital Cost per Call for Service $1,564 [1] Cost based on current price of unit type Total ValueApparatusUnits Cost per Unit [1] 238 Service Area Report and Impact Fee Study Bozeman, Montana 15 Projected Service Demand Units and for Demand for Services To accommodate projected development, Bozeman will expand its fire/EMS station facilities and acquire additional apparatus as development occurs. The anticipated need is based on the development projections contained in the land use assumptions (see Appendix A: Land Use Assumptions). Shown in Figure 12, over the next ten years, based on current call volume and development projections there is an estimated increase of 945 calls for service. Current facility levels of service are applied to the growth in calls for service to estimate the growth-related need in facility expansion. For example, there is a need for 10,336 square feet of new station space (10,941 square feet per 1,000 calls x 945 increase in growth-related calls = 10,336 square feet). The current cost factors are applied to the growth-related need to estimate growth-related cost. Overall, there is a growth-related cost of $15.2 million to provide current levels of service to future development. Figure 12. Growth-Related Need for Fire/EMS Station Space Cost/Unit 10,941 square feet $1,286 0.58 acres $1,000,000 1.94 units $806,000 Base 2023 4,119 45,066 2.4 8.0 Year 1 2024 4,213 46,100 2.4 8.2 Year 2 2025 4,308 47,133 2.5 8.4 Year 3 2026 4,402 48,167 2.6 8.5 Year 4 2027 4,497 49,200 2.6 8.7 Year 5 2028 4,591 50,234 2.7 8.9 Year 6 2029 4,686 51,267 2.7 9.1 Year 7 2030 4,780 52,301 2.8 9.3 Year 8 2031 4,875 53,334 2.8 9.5 Year 9 2032 4,969 54,368 2.9 9.6 Year 10 2033 5,064 55,402 2.9 9.8 945 10,336 0.5 1.8 Projected Expenditure $13,292,096 $500,000 $1,450,800 Growth-Related Expenditures for Fire Facilities $15,242,896 Growth-Related Need for Fire Facilities Ten-Year Increase Year Calls for Service Station Square Feet Station Acres Apparatus Units Fire Apparatus per 1,000 calls for service Fire Station Space per 1,000 calls for service Fire Station Land per 1,000 calls for service Infrastructure Level of Service 239 Service Area Report and Impact Fee Study Bozeman, Montana 16 Fire/EMS Growth-Related Capital Improvement Plans Figure 13 lists the Fire Department growth-related Capital Improvement Plan (CIP). The plans include construction of Fire Station 4 which is anticipated to cost $18 million and $1 million for land purchase. Additionally, the department will man the new station with new apparatus. These plans are consistent with the projected growth-related needs to continue the current levels of service. Figure 13. Fire/EMS Growth-Related CIP Credit for Other Revenues Sources Evaluation of other revenues funding capital expansion is necessary to ensure the impact fee is proportionate and there are no double charging scenarios. The City has an existing impact fee fund balance that will fund a portion of the CIP. To account for this revenue, the fund balance is compared to the CIP to find its share of the plan. A portion of the existing balance has been earmarked for the Station 2 relocation/expansion project that is underway. In Figure 14, the unencumbered fund balance ($1.5 million) accounts for 7.1 percent of the growth-related CIP. Figure 14. Existing Fire/EMS Impact Fee Fund Balance Credit In the past, the City of Bozeman has issued two bonds for the Station 1 and Station 2 CIP projects. The vast majority of both projects addressed current deficiencies such as the bay sizes of the older stations were too small for the larger, modern apparatus. A portion of the Station 2 project is considered growth- related and impact fee funds have been allocated from the impact fee fund balance to pay for that portion. In this case, no credit is needed for future debt payments since the payments represent needed improvements that are not attributed to future development. Fire/EMS Personnel and Operations As described in the legal framework section of this report, impact fees are limited to capital purchases. No personnel or operations expenses are allowed to be included in an impact fee and all such expenses are excluded from the impact fee. All personnel and operations expenses are paid for with taxes or other CIP Project New Fire Station Fire Station 4 14,000 square feet $18,000,000 $1,286 Fire Station 4 1.00 acres $1,000,000 $1,000,000 New Apparatus Station 4 Engine or Quint Ladder Truck 1 unit $900,000-$2,600,000 - Station 4 Ambulance 1 unit $350,000 $350,000 Total $21,100,000 Units Total Cost Cost per Unit City of Bozeman Fire/EMS Impact Fee Fund Existing Fund Balance [1]$1,500,000 Growth-Related CIP $21,100,000 Balance Share of CIP 7.1% [1] A portion of the balance has been reserved for the Station 2 project and removed from the credit analysis. 240 Service Area Report and Impact Fee Study Bozeman, Montana 17 non-impact fee revenue. Furthermore, a referendum is planned for later this year to raise an operational levy for fire/EMS. Since the revenue is dedicated for operations, no credit in the impact fee is necessary. Maximum Supportable Fire/EMS Impact Fees The following figures lists the maximum supportable fire/EMS impact fees for residential and nonresidential development and includes an administration fee of five percent (§ 7-6-1601(5a)). After reducing the fee for the credit, the net total cost per call is $15,816. Fees are derived with the call rates. For example, the fee for a 2,300 square foot single-unit housing unit is $1,408 ($15,816 per call x 0.089 calls per unit = $1,408 per unit, rounded). The City may adopt fees that are less than the amounts shown. However, a reduction in impact fee revenue will necessitate an increase in other revenues, a decrease in planned capital expenditures, and/or a decrease in levels of service. Figure 15. Maximum Supportable Fire/EMS Impact Fees – Single-Unit Dwelling Including Townhomes Cost per Call Fire Station Space $14,070 Fire Station Land $580 Fire Apparatus $1,564 Gross Total $16,214 Credit for Existing Fund Balance (7.1%)($1,151) Administrative Fee (5%)$753 Net Total $15,816 Residential - Single-Unit Dwelling including Townhomes Residential (per housing unit) Under 600 0.038 $601 $384 $217 600 to 800 0.044 $696 $384 $312 801 to 1,000 0.054 $854 $384 $470 1,001 to 1,200 0.061 $965 $384 $581 1,201 to 1,400 0.068 $1,075 $384 $691 1,401 to 1,600 0.073 $1,155 $393 $762 1,601 to 1,800 0.078 $1,234 $401 $834 1,801 to 2,000 0.082 $1,297 $408 $889 2,001 to 2,200 0.086 $1,360 $415 $945 2,201 to 2,400 (avg.)0.089 $1,408 $422 $986 2,401 to 2,600 0.092 $1,455 $431 $1,024 2,601 to 2,800 0.095 $1,503 $439 $1,064 2,801 to 3,000 0.098 $1,550 $448 $1,102 3,001 to 3,200 0.100 $1,582 $469 $1,113 3,201 to 3,400 0.103 $1,629 $469 $1,160 3,401 to 3,600 0.105 $1,661 $469 $1,192 3,601 to 3,800 0.107 $1,692 $469 $1,223 3,801 to 4,000 0.109 $1,724 $469 $1,255 4,001 or More 0.111 $1,756 $469 $1,287 Maximum Supportable Fee Current Fee Fee Component Increase/ Decrease Dwelling Size (square feet) Calls per Household 241 Service Area Report and Impact Fee Study Bozeman, Montana 18 Figure 16. Maximum Supportable Fire/EMS Impact Fees – Other Residential Cost per Call Fire Station Space $14,070 Fire Station Land $580 Fire Apparatus $1,564 Gross Total $16,214 Credit for Existing Fund Balance (7.1%)($1,151) Administrative Fee (5%)$753 Net Total $15,816 Residential - Other Residential Residential (per housing unit) Under 600 0.036 $569 $272 $297 600 to 800 0.042 $664 $272 $392 801 to 1,000 0.051 $807 $272 $535 1,001 to 1,200 0.058 $917 $272 $645 1,201 to 1,400 0.064 $1,012 $272 $740 1,401 to 1,600 (avg.)0.069 $1,091 $279 $812 1,601 to 1,800 0.073 $1,155 $285 $870 1,801 to 2,000 0.078 $1,234 $290 $944 2,001 to 2,200 0.081 $1,281 $294 $987 2,201 to 2,400 0.085 $1,344 $301 $1,043 2,401 to 2,600 0.087 $1,376 $306 $1,070 2,601 to 2,800 0.090 $1,423 $312 $1,111 2,801 to 3,000 0.093 $1,471 $317 $1,154 3,001 to 3,200 0.095 $1,503 $359 $1,144 3,201 to 3,400 0.097 $1,534 $359 $1,175 3,401 to 3,600 0.099 $1,566 $359 $1,207 3,601 to 3,800 0.101 $1,597 $359 $1,238 3,801 to 4,000 0.103 $1,629 $359 $1,270 4,001 or More 0.105 $1,661 $359 $1,302 Group Quarters 0.036 $569 $181 $388 Maximum Supportable Fee Current Fee Increase/ Decrease Fee Component Dwelling Size (square feet) Calls per Household 242 Service Area Report and Impact Fee Study Bozeman, Montana 19 Figure 17. Maximum Supportable Fire/EMS Impact Fees – Nonresidential Fee Component Cost per Call Fire Station Space $14,070 Fire Station Land $580 Fire Apparatus $1,564 Gross Total $16,214 Credit for Existing Fund Balance (7.1%)($1,151) Administrative Fee (5%)$753 Net Total $15,816 Nonresidential Industrial 0.016 $253 $54 $199 Retail, Accommodation & Food Services 0.097 $1,534 $503 $1,031 Health Care & Social Assistance 0.136 $2,151 $2,161 ($10) All Other Services 0.048 $759 $539 $220 Calls per 1,000 Sq Ft Nonresidential (per 1,000 square feet) Current Fee Increase/ Decrease Maximum Supportable FeeDevelopment Type 243 Service Area Report and Impact Fee Study Bozeman, Montana 20 Projected Fire/EMS Impact Fee Revenue Revenue projections assume implementation of the maximum supportable fire/EMS impact fees and that future development is consistent with the land use assumptions described in Appendix A: Land Use Assumptions. To the extent the rate of development either accelerates or slows down, there will be a corresponding change in the impact fee revenue. The fee for an average size single-unit dwelling and other residential is used in the revenue projections. As shown in Figure 18, fire/EMS impact fee revenue is expected to total approximately $14.9 million over the next 10 years, compared to projected expenditures of $15.2 million. The funding gap is the result of the credit included in the analysis. Importantly, the existing fund balance will mitigate the funding gap. Figure 18. Projected Fire/EMS Impact Fee Revenue Infrastructure Costs for Fire Facilities Total Cost Growth Cost Fire Station Space $13,292,096 $13,292,096 Fire Station Land $500,000 $500,000 Fire Apparatus $1,450,800 $1,450,800 Total Expenditures $15,242,896 $15,242,896 Projected Development Impact Fee Revenue Single Family Multifamily Retail Other Serv.Industrial Health Care $1,408 $1,091 $1,534 $759 $253 $2,151 per unit per unit per unit per unit per unit per unit Housing Units Housing Units KSF KSF KSF KSF Base 2023 14,654 11,928 7,856 3,025 3,204 8,279 1 2024 14,882 12,694 7,906 3,086 3,222 8,375 2 2025 15,110 13,460 7,956 3,147 3,240 8,472 3 2026 15,338 14,226 8,006 3,207 3,258 8,568 4 2027 15,566 14,992 8,056 3,268 3,276 8,664 5 2028 15,794 15,758 8,106 3,329 3,294 8,761 6 2029 16,022 16,524 8,156 3,390 3,312 8,857 7 2030 16,250 17,290 8,206 3,450 3,329 8,954 8 2031 16,478 18,056 8,256 3,511 3,347 9,050 9 2032 16,706 18,822 8,306 3,572 3,365 9,147 10 2033 16,934 19,588 8,356 3,632 3,383 9,243 Ten-Year Increase 2,280 7,660 500 607 179 964 Projected Revenue $3,210,240 $8,357,060 $767,000 $460,821 $45,179 $2,074,179 Projected Revenue $14,914,000 Total Expenditures $15,243,000 Non-Impact Fee Funding $329,000 Year 244 Service Area Report and Impact Fee Study Bozeman, Montana 21 CAPITAL IMPROVEMENT PLAN Per State of Montana enabling legislation (§7-6-1602(2)), the Service Area Report needs to identify capital improvements necessary to meet future needs. The following figure lists the growth-related capital plans for each department included in this analysis. There are other non-growth-related CIP projects that are not included in this analysis. As shown in the previous chapter, the CIP satisfies the projected growth- related needs to accommodate future demand. Figure 19. Fire/EMS Growth-Related Capital Improvement Plan CIP Project New Fire Station Fire Station 4 14,000 square feet $18,000,000 $1,286 Fire Station 4 1.00 acres $1,000,000 $1,000,000 New Apparatus Station 4 Engine or Quint Ladder Truck 1 unit $900,000-$2,600,000 - Station 4 Ambulance 1 unit $350,000 $350,000 Total $21,100,000 Units Total Cost Cost per Unit 245 Service Area Report and Impact Fee Study Bozeman, Montana 22 APPENDIX A: LAND USE ASSUMPTIONS The following sections detail base year and projected demographic assumptions. These assumptions are used in the fire/EMS impact fee calculations along with the tandem efforts in updating the Service Area Reports for Transportation, Water, and Wastewater public facilities. In this case, there is data in the following section that relates to the other efforts and not the fire/EMS calculations (i.e., trip generation rates and the Transportation Service Area Report). Note: definitions for the Single-Unit Dwelling and Other Residential housing types can be found Appendix B: Land Use Definitions Population and Housing Characteristics Impact fees often use per capita standards and persons per housing unit or persons per household to derive proportionate share fee amounts. Housing types have varying household sizes and, consequently, a varying demand on City infrastructure and services. Thus, it is important to differentiate between housing types and size. When persons per housing unit (PPHU) is used in the development impact fee calculations, infrastructure standards are derived using year-round population. In contrast, when persons per household (PPHH) is used in the development impact fee calculations, the fee methodology assumes all housing units will be occupied, thus requiring seasonal or peak population to be used when deriving infrastructure standards. The City of Bozeman and the surrounding area is home to a significant number of second/vacation homes and hosts many visitors throughout the year. Thus, TischlerBise recommends that fees for residential development in Bozeman be imposed according to persons per household. Figure 20 shows the US Census American Community Survey 2021 5-Year Estimates data for the City of Bozeman. Single-unit dwellings have an average household size of 2.48 persons and other residential dwellings have an average household size of 1.92 persons. Additionally, there is a housing mix of 59 percent single-unit dwelling and 41 percent other residential. The estimates in Figure 20 are for household size calculations. Base year population and housing units are estimated with another, more recent data source. Figure 20. Persons per Household Building Permit History In Figure 21, the past six years of building permit history is listed by housing type to understand the recent growth trend in Bozeman. There has been a steady amount of single-unit dwelling development over the Housing Persons per Persons per Housing Housing Type Persons Units Housing Unit Households Household Unit Mix Single-Unit Dwelling [1]31,140 13,355 2.33 12,534 2.48 59% Other Residential [2]16,235 9,110 1.78 8,451 1.92 41% Subtotal 47,375 22,465 2.11 20,985 2.26 [1] Includes attached and detached single family homes and mobile homes [2] Includes all other types Source: U.S. Census Bureau, 2021 American Community Survey 5-Year Estimates 246 Service Area Report and Impact Fee Study Bozeman, Montana 23 past years in Bozeman, while other residential development has been the driving factor in the elevated construction trend. Housing development peaked in 2021 which included the largest apartment complex ever built in the city. Housing activity leveled slowed in 2022 (consistent with the national trend with increasing interest rates) while construction had a noticeable increase in 2023. Overall, there has been an average of 228 single-unit dwellings and 766 other residential units constructed annually. Figure 21. Building Permit History by Housing Type Base Year Housing Units and Population Furthermore, the nature of the influx of seasonal population in Bozeman necessitates four types of populations to be included in the impact fee study: 1) Permanent Residents 2) Seasonal Residents 3) On-Campus Students 4) Overnight-Visitors Bozeman is a destination for vacationers, students, and seasonal residents and City facilities and services have been sized to accommodate the additional demand. The peak population includes residents who have second homes in the city, students living on-campus at Montana State University, and the seasonal labor influx during peak tourism months. The MSU students living off-campus are captured in the permanent housing population. Bozeman permanent population is found by using the housing growth since the 2020 US Census. The 2020 decennial census estimated that there were 23,535 housing units and 49,298 household population in Bozeman. Additionally, there were 663 single-unit dwellings and 2,384 other residential units constructed since the survey. Based on PPHU factor, there has been an increase of 5,788 residents since the census. By combining the 2020 US Census household population and estimated new residents since the Census, a 2023 permanent population of 55,086 residents is estimated. Housing Type 2018 2019 2020 2021 2022 2023 Total Average Single-Unit Dwelling [1]266 245 211 255 197 193 1,367 228 Other Residential [2]593 546 734 1,128 522 1,075 4,598 766 Total 859 791 945 1,383 719 1,268 5,965 994 Source: City of Bozeman [1] Includes attached and detached single family homes and mobile homes [2] Includes all other types 247 Service Area Report and Impact Fee Study Bozeman, Montana 24 Figure 22. Permanent Population Seasonal housing population estimates are found by applying the PPHH factors for each housing type to base year housing estimates to the percent of housing occupied for seasonal use. As a result, the seasonal population estimate is 4,185 (Figure 23). Figure 23. Seasonal Population Shown in Figure 24, in a survey of hotel and motels in Bozeman, TischlerBise found 2,241 lodging rooms in the city. Based on general peak seasonal lodging factors there are 4,258 overnight-visitors assumed. Figure 24. Bozeman Visitors Lastly, based on a news briefing from Montana State University in September 2023 there were 5,200 students living on-campus. The information above is summarized in Figure 25. Based on the four population types, there is an estimated peak population of 68,729 residents along with 26,582 housing units in Bozeman. Bozeman, MT Housing Units [1]HH Population [2] 2020 Census 23,535 49,298 Housing Units 2020 Census Post Census 2023 Single-Unit Dwelling 13,991 663 14,654 Other Residential 9,544 2,384 11,928 Total 23,535 3,047 26,582 PPHU Single-Unit Dwelling 663 2.33 1,545 Other Residential 2,384 1.78 4,244 Total 3,047 5,788 Household Population 49,298 5,788 55,086 [1] Source: US Census DP1 Table Bozeman, MT Units Built Post Census New Residents Post Census [2] Source: US Census DP1 Table. Household population excludes those in group quarters. Group quarters is estimated with On-Campus Students in another figure. Bozeman, MT 2020 Census New Residents Post Census 2023 Estimate Housing Units PPHH Single-Unit Dwelling 14,654 7%967 2.48 2,399 Other Residential 11,928 8%930 1.92 1,786 Total 26,582 1,898 4,185 Seasonal Residents Seasonal Units % Seasonal Units 2023 Housing Units Total Lodging Rooms 2,241 Assumed Ave Occupancy 2 Assumed Occupancy Rate 95% Total Overnight-Visitors 4,258 Source: TischlerBise survey of lodging property and general peak season lodging factors 248 Service Area Report and Impact Fee Study Bozeman, Montana 25 Figure 25. Base Year Housing and Population Base Year 2023 Permanent Hsg Population [1]55,086 Seasonal Hsg Population [2]4,185 On-Campus Students [3]5,200 Overnight-Visitors [4]4,258 Total Peak Population 68,729 Housing Units [1] Single-Unit Dwelling 14,654 Other Residential 11,928 Total Housing Units 26,582 Bozeman, MT [1] Calculated based on 2020 US Census estimate plus housing development since [2] Assuming seasonal housing is fully occupied during peak season [3] MSU News Service (September, 2023) [4] TischlerBise survey of lodging property and general peak season lodging factors 249 Service Area Report and Impact Fee Study Bozeman, Montana 26 Housing Unit and Population Projections The ten-year residential projections are listed in Figure 26. Housing development in Bozeman is assumed to continue at its current pace over the next ten years. Overall, over the next ten years, 2,280 new single-unit dwellings and 7,660 other residential units are assumed to be constructed. As a result of the market supporting more non-single-unit dwelling development, by 2033 there will be more non-single-unit dwelling units than single-unit dwellings in Bozeman. Population growth is based on housing development and PPHH factors. Over the next ten years, housing development will support 18,841 new permanent residents and 1,520 seasonal residents. It is assumed that visitors to Bozeman will grow at the same rate as resident population. Lastly, MSU has built a new dormitory every five years and is currently exploring another expansion. Conservatively, a 1 percent annual growth is assumed for on-campus students. Overall, the peak population is estimated to grow from 68,729 to 91,099, a 32.5 percent increase. Figure 26. Residential Development Projections Importantly, the impact fee methodology does not rely on the growth projections to determine the fee amount. Rather, the current level of service is used in the fee calculation. In this case, if the growth projections included in the report overestimate or underestimate the real development in Bozeman, the fee collection is still accurate. For example, if growth is slower than the 10-year projection, less revenue will be collected, however, the City will provide less capital expansion to keep up with the level of service. Base Year City of Bozeman, MT 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Permanent Hsg Population [1]55,086 56,970 58,855 60,739 62,623 64,507 66,391 68,275 70,159 72,043 73,928 18,841 Seasonal Hsg Population [1]4,185 4,337 4,489 4,641 4,793 4,945 5,097 5,249 5,401 5,553 5,705 1,520 On-Campus Students [2]5,200 5,252 5,305 5,358 5,412 5,466 5,521 5,576 5,632 5,688 5,745 545 Overnight-Visitors [3]4,258 4,404 4,551 4,697 4,843 4,989 5,136 5,282 5,428 5,574 5,721 1,463 Total Peak Population 68,729 70,964 73,199 75,435 77,671 79,907 82,145 84,382 86,621 88,859 91,099 22,369 3.3%3.2%3.1%3.0%2.9%2.8%2.7%2.7%2.6%2.5%32.5% Housing Units [4] Single-Unit Dwelling 14,654 14,882 15,110 15,338 15,566 15,794 16,022 16,250 16,478 16,706 16,934 2,280 Other Residential 11,928 12,694 13,460 14,226 14,992 15,758 16,524 17,290 18,056 18,822 19,588 7,660 Total Housing Units 26,582 27,576 28,570 29,564 30,558 31,552 32,546 33,540 34,534 35,528 36,522 9,940 [1] Permanent and seasonal population growth is based on housing development and PPHH factors [2] On-campus residences are conservatively assumed to grow by 1 percent annually [3] Visitor population is estimate to grow at the same rate as permanent and seasonal population [4] Housing development is based on the recent building permit trends without the 2021 peak development year Total Increase Percent Increase 250 Service Area Report and Impact Fee Study Bozeman, Montana 27 Current Employment and Nonresidential Floor Area The impact fee study will include nonresidential development as well. The base year employment estimates are calculated from two sources. First, from the Montana Department of Labor & Industry there is an estimated 34,569 total jobs in Bozeman. Second, from the U.S. Census Bureau OnTheMap web application employment splits are found between retail, office, industrial, and institutional industries. As a result, the institutional industries (which includes education and healthcare) account for the highest share while retail industries employee over 10,000 jobs as well. Furthermore, the floor area for the four industry types is summarized in Figure 27. Retail, office, and industrial square footage is available from the Montana Department of Revenue (DOR). However, since public education and healthcare facilities are tax exempt the DOR does not gather floor space for such development. Instead, TischlerBise applied the average employee density factors (square feet per employee) for schools and hospitals to the estimated institutional job total to estimate floor area. As a result, there are 22.4 million square feet of nonresidential development in Bozeman. The majority being institutional and retail industries. Figure 27. Base Year Nonresidential Floor Area Employment and Nonresidential Floor Area Projections The Bozeman Community Plan 2020 provides an in-depth analysis of the local market and buildout capacity of the city. Through 2045, the Community Plan projected a growth of 6.3 million square feet of nonresidential development broken down by retail, office, industrial, and institutional industries. The ten- year growth projections from the impact fee studies relies on these projections along with employee density factors from the Institution of Transportation Engineers’ (ITE). For the retail industry the Shopping Center land use factors are used; for office the General Office factors are used; for industrial the Light Industrial factors are used; for Institutional the Hospital factors are used. Figure 28. Institute of Transportation Engineers (ITE) Employment Density Factors Employment Industries Base Year Jobs [1] Percent of Total Floor Area (sq. ft.) [2] Percent of Total Retail 10,116 29%7,855,849 35% Office 7,798 23%3,025,341 14% Industrial 5,042 15%3,204,452 14% Institutional [3]11,612 34%8,278,652 37% Total 34,569 100%22,364,294 100% [3] Source: Trip Generation, Institute of Transportation Engineers, 11th Edition (2021) [1] Source: MT Employment Statistics - LAUS [2] Source: Montana Department of Revenue Database Employment ITE Demand Emp Per Sq Ft Industry Code Land Use Unit Dmd Unit Per Emp Retail 820 Shopping Center 1,000 Sq Ft 2.12 471 Office 710 General Office 1,000 Sq Ft 3.26 307 Industrial 110 Light Industrial 1,000 Sq Ft 1.57 637 Institutional 610 Hospital 1,000 Sq Ft 2.86 350 Source: Trip Generation , Institute of Transportation Engineers, 11th Edition (2021) 251 Service Area Report and Impact Fee Study Bozeman, Montana 28 Shown in Figure 29, Bozeman is anticipated to grow by 6,075 jobs (17.6 percent) over the next ten years. Institutional, office, and retail industries all have significant growth while industrial development is anticipated to taper off. Based on the employee density factors, the employment growth will generate 2,250,000 million square feet of nonresidential floor area (10 percent growth from the base year). Figure 29. Employment and Nonresidential Floor Area Projections Base Year 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Jobs [1] Retail 10,116 10,222 10,329 10,435 10,541 10,647 10,753 10,859 10,966 11,072 11,178 1,062 Office 7,798 7,996 8,194 8,391 8,589 8,787 8,985 9,182 9,380 9,578 9,776 1,978 Industrial 5,042 5,070 5,098 5,126 5,154 5,182 5,210 5,238 5,266 5,295 5,323 280 Institutional 11,612 11,888 12,164 12,439 12,715 12,990 13,266 13,541 13,817 14,092 14,368 2,755 Total 34,569 35,176 35,784 36,391 36,999 37,606 38,214 38,821 39,429 40,036 40,644 6,075 1.8%1.7%1.7%1.7%1.6%1.6%1.6%1.6%1.5%1.5%17.6% Nonresidential Floor Area (1,000 sq. ft.) [2] Retail 7,856 7,906 7,956 8,006 8,056 8,106 8,156 8,206 8,256 8,306 8,356 500 Office 3,025 3,086 3,147 3,207 3,268 3,329 3,390 3,450 3,511 3,572 3,632 607 Industrial 3,204 3,222 3,240 3,258 3,276 3,294 3,312 3,329 3,347 3,365 3,383 179 Institutional 8,279 8,375 8,472 8,568 8,664 8,761 8,857 8,954 9,050 9,147 9,243 964 Total 22,364 22,589 22,814 23,039 23,264 23,489 23,714 23,939 24,164 24,389 24,614 2,250 [1] Source: Bozeman Community Plan (2020) [2] Source: Institute of Transportation Engineers, Trip Generation , 2021 Industry Total Increase Percent Increase 252 Service Area Report and Impact Fee Study Bozeman, Montana 29 Vehicle Trip Generation Residential Vehicle Trips by Housing Type A customized trip rate is calculated for the single-unit dwellings and other residential units in Bozeman. In Figure 30, the most recent data from the US Census American Community Survey is input into equations provided by the Institute of Transportation Engineers to calculate the trip ends per housing unit factor. A single-unit dwelling is estimated to generate 9.27 trip ends and other residential units are estimated to generate 5.36 trip ends on an average weekday. Figure 30. Customized Residential Trip End Rates by Housing Type Owner-Occupied 19,262 8,463 889 9,352 2.06 Renter-Occupied 20,735 4,071 7,562 11,633 1.78 Total 39,997 12,534 8,451 20,985 1.91 13,355 9,110 22,465 Persons in Trip Vehicles by Trip Average National Trip Households4 Ends5 Type of Unit Ends6 Trip Ends Ends per Unit7 Single-Unit Dwelling 31,140 86,764 24,680 160,855 123,810 9.27 9.43 Other Residential 16,235 37,097 15,292 60,543 48,820 5.36 4.54 Total 47,375 123,861 39,972 221,398 172,630 7.68 7. Trip Generation, Institute of Transportation Engineers, 11th Edition (2021). Local Trip Ends per Unit 1. Vehicles available by tenure from Table B25046, 2020 American Community Survey 5-Year Estimates. 3. Housing units from Table B25024, 2020 American Community Survey 5-Year Estimates. 4. Total population in households from Table B25033, 2020 American Community Survey 5-Year Estimates. 5. Vehicle trips ends based on persons using formulas from Trip Generation (ITE 2021). For single-family housing (ITE 210), the fitted curve equation is EXP(0.89*LN(persons)+1.72). To approximate the average population of the ITE studies, persons were divided by 3 and the equation result multiplied by 3. For multi-family housing (ITE 221), the fitted curve equation is (2.29*persons)-64.48 (ITE 2017). 6. Vehicle trip ends based on vehicles available using formulas from Trip Generation (ITE 2021). For single-family housing (ITE 210), the fitted curve equation is EXP(0.92*LN(vehicles)+2.68). To approximate the average number of vehicles in the ITE studies, vehicles available were divided by 5 and the equation result multiplied by 5. For multi- family housing (ITE 221), the fitted curve equation is (4.77*vehicles)-46.46 (ITE 2021). 2. Households by tenure and units in structure from Table B25032, 2020 American Community Survey 5-Year Estimates. Vehicles per HH by Tenure Housing Units3 Housing Type Households by Structure Type2 Tenure by Units in Structure Vehicles Available1 Single Family Multifamily Total 253 Service Area Report and Impact Fee Study Bozeman, Montana 30 Residential Vehicle Trips Adjustment Factors A vehicle trip end is the out-bound or in-bound leg of a vehicle trip. As a result, so as not double count trips, a standard 50 percent adjustment is applied to trip ends to calculate a vehicle trip. For example, the out-bound trip from a person’s home to work is attributed to the housing unit and the trip from work back home is attributed to the employer. However, an additional adjustment is necessary to capture city residents’ work bound trips that are outside of the city. The trip adjustment factor includes two components. According to the National Household Travel Survey, home-based work trips are typically 31 percent of out-bound trips (which are 50 percent of all trip ends). Also, utilizing the most recent data from the Census Bureau's web application "OnTheMap”, 40 percent of Bozeman workers travel outside the city for work. In combination, these factors account for 6 percent of additional production trips (0.31 x 0.50 x 0.40 = 0.06). Shown in Figure 31, the total adjustment factor for residential housing units includes attraction trips (50 percent of trip ends) plus the journey-to-work commuting adjustment (6 percent of production trips) for a total of 56 percent. Figure 31. Residential Trip Adjustment Factor for Commuters Nonresidential Vehicle Trips Vehicle trip generation for nonresidential land uses are calculated by using ITE’s average daily trip end rates and adjustment factors found in their recently published 11th edition of Trip Generation. To estimate the trip generation in Bozeman, the weekday trip end per 1,000 square feet factors listed in Figure 32 are used. The prior service area report used the 10th Edition of the Trip Generation. The latest edition includes travel surveys since the previous edition ensuring changes in travel behavior is being captured in the update. Figure 32. Institute of Transportation Engineers Nonresidential Factors For nonresidential land uses, the standard 50 percent adjustment is applied to office, industrial, and institutional development. A lower vehicle trip adjustment factor is used for retail development because Employed Bozeman Residents (2020)25,702 Residents Working in Bozeman (2020)15,447 Residents Commuting Outside of Bozeman for Work 10,255 Percent Commuting Out of Bozeman 40% Additional Production Trips 6% Standard Trip Adjustment Factor 50% Residential Trip Adjustment Factor 56% Source: U.S. Census, OnTheMap Application, 2020 Trip Adjustment Factor for Commuters Employment ITE Demand Wkdy Trip Ends Wkdy Trip Ends Industry Code Land Use Unit Per Dmd Unit Per Employee Retail 820 Shopping Center 1,000 Sq Ft 37.01 17.42 Office 710 General Office 1,000 Sq Ft 10.84 3.33 Industrial 110 Light Industrial 1,000 Sq Ft 4.87 3.10 Institutional 610 Hospital 1,000 Sq Ft 10.77 3.77 Source: Trip Generation, Institute of Transportation Engineers, 11th Edition (2021) 254 Service Area Report and Impact Fee Study Bozeman, Montana 31 this type of growth attracts vehicles as they pass-by on arterial and collector roads. For example, when someone stops at a convenience store on their way home from work, the convenience store is not their primary destination. In Figure 33, the Institute for Transportation Engineers’ land use code, daily vehicle trip end rate, and trip adjustment factor is listed for each land use. Figure 33. Daily Vehicle Trip Factors Residential (per housing unit) Single-Unit Dwelling 210 9.27 56%5.19 Other Residential 220 5.36 56%3.00 Nonresidential (per 1,000 square feet) Retail 820 37.01 38%14.06 Office 710 10.84 50%5.42 Industrial 110 4.87 50%2.44 Institutional 610 10.77 50%5.39 Land Use ITE Codes Daily Vehicle Trip Ends Trip Adj. Factor Daily Vehicle Trips Source: Trip Generation, Institute of Transportation Engineers, 11th Edition (2021); National Household Travel Survey, 2009 255 Service Area Report and Impact Fee Study Bozeman, Montana 32 Vehicle Trip Projections The base year vehicle trip totals and vehicle trip projections are calculated by combining the vehicle trip end factors, the trip adjustment factors, and the residential and nonresidential assumptions for housing stock and floor area. Citywide, residential land uses account for 111,875 vehicle trips and nonresidential land uses account for 179,264 vehicle trips in the base year (Figure 34). Through 2033, it is projected that daily vehicle trips will increase by 50,788 trips with the majority of the growth being generated by residential development (69 percent). Figure 34. Vehicle Trip Projections Base Year 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Residential Trips Single-Unit Dwelling 76,072 77,255 78,439 79,623 80,806 81,990 83,173 84,357 85,541 86,724 87,908 11,836 Other Residential 35,803 38,102 40,402 42,701 45,000 47,299 49,598 51,898 54,197 56,496 58,795 22,992 Subtotal 111,875 115,358 118,841 122,323 125,806 129,289 132,772 136,255 139,737 143,220 146,703 34,828 Nonresidential Trips Retail 110,483 111,186 111,889 112,593 113,296 113,999 114,702 115,405 116,109 116,812 117,515 7,032 Office 16,397 16,726 17,055 17,385 17,714 18,043 18,372 18,701 19,030 19,359 19,688 3,291 Industrial 7,803 7,846 7,890 7,933 7,977 8,020 8,064 8,107 8,151 8,194 8,238 435 Institutional 44,581 45,100 45,619 46,138 46,658 47,177 47,696 48,215 48,735 49,254 49,773 5,193 Subtotal 179,264 180,859 182,454 184,049 185,644 187,239 188,834 190,429 192,024 193,619 195,214 15,950 Vehicle Trips Grand Total 291,139 296,217 301,294 306,372 311,450 316,528 321,606 326,684 331,761 336,839 341,917 50,778 Source: Institute of Transportation Engineers, Trip Generation , 11th Edition (2021) Total IncreaseDevelopment Type 256 Service Area Report and Impact Fee Study Bozeman, Montana 33 Demand Indicators by Dwelling Size Impact fees must be proportionate to the demand for infrastructure. Because averages per household, for both persons and vehicle trip ends, have a strong, positive correlation to the square footage of the dwelling unit, TischlerBise recommends residential fee schedules by the size of the unit (consistent with the City of Bozeman’s current fee schedule). Bozeman Control Totals According to the U.S. Census Bureau, Bozeman single-unit dwellings have an average household size of 2.48 persons and other residential units have an average household size of 1.92 persons. Figure 35. Persons per Household Trip generation rates are also dependent upon the average number of vehicles available per dwelling. Key independent variables needed for the analysis (i.e., vehicles available, households, and persons) are available from the U.S. Census Bureau American Community Survey (ACS), indicating an average of 1.90 vehicles per household in Bozeman. Figure 36. Vehicles per Household Demand Indicators by Dwelling Size Custom tabulations of demographic data by bedroom range can be created from individual survey responses provided by the U.S. Census Bureau in files known as Public Use Microdata Samples (PUMS). PUMS files are only available for areas of at least 100,000 persons with Bozeman included in Public Use Microdata Areas (PUMA) 400. Housing Persons per Persons per Housing Housing Type Persons Units Housing Unit Households Household Unit Mix Single-Unit Dwelling [1]31,140 13,355 2.33 12,534 2.48 59% Other Residential [2]16,235 9,110 1.78 8,451 1.92 41% Subtotal 47,375 22,465 2.11 20,985 2.26 [1] Includes attached and detached single family homes and mobile homes [2] Includes all other types Source: U.S. Census Bureau, 2021 American Community Survey 5-Year Estimates Owner-occupied 19,262 8,463 889 9,352 2.06 Renter-occupied 20,735 4,071 7,562 11,633 1.78 Total 39,997 12,534 8,451 20,985 1.91 Single-Unit Dwelling [1]24,680 12,534 1.97 Other Residential [2]15,292 8,451 1.81 Total 39,972 20,985 1.90 Source: U.S. Census Bureau, 2021 American Community Survey 5-Year Estimates Vehicles per HH by Tenure Housing Type Vehicles Available Housing Units Vehicles per Housing Unit Households Tenure Vehicles Available Single Family Multifamily Total 257 Service Area Report and Impact Fee Study Bozeman, Montana 34 Cells shaded yellow below are survey results for PUMA 400. Unadjusted persons per household (2.31), derived from PUMS data for the PUMA listed above, are adjusted downward to match the control totals for Bozeman (2.26), as shown above in Figure 35. Adjusted persons per household totals are shaded in gray. Figure 37. Persons by Bedroom Range Persons by Dwelling Size Average floor area and number of persons by bedroom range are plotted in Figure 38 with a logarithmic trend line derived from 2021 square footage estimates provided by the U.S. Census Bureau (West Region). Dwellings with two bedrooms or less average 1,032 square feet of floor area—based on multifamily dwellings constructed in the West Census Region. Three-bedroom dwellings average 2,118 square feet, four-bedroom dwellings average 2,932 square feet, and dwellings with five or more bedrooms average 4,269 square feet—based on single-unit dwellings constructed in the West Census Region. Using the trend line formula shown in the chart, TischlerBise derived the estimated average number of persons, by dwelling size, using 19 size thresholds, expanding the low and high range of the fee schedule. As shown in the upper-right corner of the table below, the smallest floor area range (under 600 square feet) has an estimated average of 1.06 persons per dwelling. The largest floor area range (4,001 square feet or more) has an estimated average of 3.08 persons per dwelling. 0-2 2,180 2,204 1,273 33%1.71 1.68 1.73 1.46 3 3,508 3,443 1,471 38%2.38 2.33 2.34 1.97 4 2,173 2,139 798 21%2.72 2.67 2.68 2.25 5+1,070 958 327 8%3.27 3.20 2.93 2.46 Total 8,931 8,744 3,869 100%2.31 2.26 2.26 1.90 [1] American Community Survey, Public Use Microdata Sample for Montana PUMA 400 (2021 5-Year unweighted data). [2] Adjusted multipliers are scaled to make the average PUMS values match control totals for Bozeman based on 2021 American Community Survey 5-Year Estimates. Unadjusted PPHH Adjusted PPHH2 Unadjusted VPHH Adjusted VPHH2 Bedroom Range Persons1 Vehicles Available1 Households1 Housing Mix 258 Service Area Report and Impact Fee Study Bozeman, Montana 35 Figure 38. Persons by Dwelling Size Person by Dwelling Size and Housing Type The PPHH factors in Figure 38 represents an average over all housing types in Bozeman. An equivalent dwelling unit (EDU) analysis is completed to calculate the PPHH by size for single-unit dwellings and other residential units. Shown in Figure 39, one single-unit EDU is set to the average sized single-unit dwelling in Bozeman (2,201 to 2,400 square feet). The EDU factor for the other size thresholds is found by comparing the PPHH factors, for example, a single-unit dwelling from 1,801 to 2,000 square feet is 0.92 EDUs (2.28 PPHH / 2.48 PPHH = 0.92 EDUs). Bedrooms Square Feet Persons Sq Ft Range Persons 0-2 1,032 1.68 Under 600 1.06 3 2,118 2.33 600 to 800 1.23 4 2,932 2.67 801 to 1,000 1.49 5+4,269 3.20 1,001 to 1,200 1.70 1,201 to 1,400 1.88 1,401 to 1,600 2.03 1,601 to 1,800 2.16 1,801 to 2,000 2.28 2,001 to 2,200 2.38 2,201 to 2,400 2.48 2,401 to 2,600 2.56 2,601 to 2,800 2.64 2,801 to 3,000 2.72 3,001 to 3,200 2.79 3,201 to 3,400 2.85 3,401 to 3,600 2.92 3,601 to 3,800 2.97 3,801 to 4,000 3.03 4,001 or More 3.08 Actual Averages per Hsg Unit Fitted-Curve Values y = 1.0498ln(x) -5.6504 R² = 0.9878 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 0 1,000 2,000 3,000 4,000 5,000Person per HouseholdSquare Feet of Living Area Persons per Household by Square Feet of Dwelling Average persons per household derived from 2021 ACS PUMS data for the area that includes Bozeman. Unit size for 0-2 bedroom is from the 2021 U.S. Census Bureau average for all multifamily units constructed in the Census West region. Unit size for all other bedrooms is from the 2021 U.S. Census Bureau average for single-unit dwellings constructed in the Census Mountain division. 259 Service Area Report and Impact Fee Study Bozeman, Montana 36 The EDU factors for the size threshold is then combined with the average PPHH for single-unit dwelling. For example, found with US Census ACS 2021 data (Figure 20) the average single-unit dwelling home in Bozeman is 2.48 persons, thus a single-unit home from 1,801 to 2,000 square feet is 2.28 persons (0.92 EDUs x 2.48 persons = 2.28 persons per household). Figure 39. Single-Unit Dwelling PPHH by Size Shown in Figure 40, one other residential EDU is set to the average sized other residential dwelling in Bozeman (1,401 to 1,600 square feet). The EDU factor for the other size thresholds is found by comparing the PPHH factors, for example, a unit from 1,001 to 1,200 square feet is 0.84 EDUs (1.70 PPHH / 2.03 PPHH = 0.84 EDUs). The EDU factors for the size threshold is then combined with the average PPHH for other residential dwellings. For example, found with US Census ACS 2021 data (Figure 20) the average other residential dwelling home in Bozeman is 1.92 persons, thus a single-unit home from 1,001 to 1,200 square feet is 1.61 persons (0.84 EDUs x 1.92 persons = 1.61 persons per household). Single-Unit Dwelling including Townhomes Single-Unit EDU Factor PPHH Under 600 1.06 0.43 1.06 600 to 800 1.23 0.50 1.23 801 to 1,000 1.49 0.60 1.49 1,001 to 1,200 1.70 0.69 1.70 1,201 to 1,400 1.88 0.76 1.88 1,401 to 1,600 2.03 0.82 2.03 1,601 to 1,800 2.16 0.87 2.16 1,801 to 2,000 2.28 0.92 2.28 2,001 to 2,200 2.38 0.96 2.38 2,201 to 2,400 (avg. single)2.48 1.00 2.48 2,401 to 2,600 2.56 1.03 2.56 2,601 to 2,800 2.64 1.06 2.64 2,801 to 3,000 2.72 1.10 2.72 3,001 to 3,200 2.79 1.13 2.79 3,201 to 3,400 2.85 1.15 2.85 3,401 to 3,600 2.92 1.18 2.92 3,601 to 3,800 2.97 1.20 2.97 3,801 to 4,000 3.03 1.22 3.03 4,001 or More 3.08 1.24 3.08 Average 2.48 Dwelling Size (squre feet) Overall PPHH 260 Service Area Report and Impact Fee Study Bozeman, Montana 37 Figure 40. Other Residential PPHH by Size Other Residential Other Res. EDU Factor PPHH Under 600 1.06 0.52 1.00 600 to 800 1.23 0.61 1.16 801 to 1,000 1.49 0.73 1.41 1,001 to 1,200 1.70 0.84 1.61 1,201 to 1,400 1.88 0.93 1.78 1,401 to 1,600 (avg. other)2.03 1.00 1.92 1,601 to 1,800 2.16 1.06 2.04 1,801 to 2,000 2.28 1.12 2.16 2,001 to 2,200 2.38 1.17 2.25 2,201 to 2,400 2.48 1.22 2.35 2,401 to 2,600 2.56 1.26 2.42 2,601 to 2,800 2.64 1.30 2.50 2,801 to 3,000 2.72 1.34 2.57 3,001 to 3,200 2.79 1.37 2.64 3,201 to 3,400 2.85 1.40 2.70 3,401 to 3,600 2.92 1.44 2.76 3,601 to 3,800 2.97 1.46 2.81 3,801 to 4,000 3.03 1.49 2.87 4,001 or More 3.08 1.52 2.91 Average 1.92 Overall PPHH Dwelling Size (squre feet) 261 Service Area Report and Impact Fee Study Bozeman, Montana 38 Trip Generation by Dwelling Size Rather than rely on one methodology, the recommended trip generation rates shown at the bottom of Figure 41, shaded gray, are an average of trip rates based on persons and vehicles available for all types of housing units. In Bozeman, the average household is expected to yield 8.86 average weekday vehicle trip ends (AWVTE), compared to the national weighted average of 7.45 trip ends per household. Figure 41. Average Weekday Vehicle Trip Ends by Bedroom Range 0-2 2,180 2,204 1,273 33%1.71 1.68 1.73 1.46 3 3,508 3,443 1,471 38%2.38 2.33 2.34 1.97 4 2,173 2,139 798 21%2.72 2.67 2.68 2.25 5+1,070 958 327 8%3.27 3.20 2.93 2.46 Total 8,931 8,744 3,869 100%2.31 2.26 2.26 1.90 National Averages According to ITE 210 SFD 2.65 6.36 9.43 59%3.56 1.48 221 Apt 3.31 5.10 4.54 41%1.37 0.89 Weighted Avg 2.92 5.85 7.45 100%2.67 1.24 Recommended AWVTE per Household 0-2 4.91 8.54 6.73 3 6.80 11.52 9.16 4 7.80 13.16 10.48 5+9.34 14.39 11.87 Average 6.60 11.12 8.86 210 SFD 6.80 11.52 9.16 2.33 1.97 220 Apt 5.20 10.59 7.90 1.78 1.81 All Types 6.16 11.12 8.64 2.11 1.90 Unadjusted VPHH Bedroom Range AWVTE per HH Based on Persons3 AWVTE per HH Based on Vehicles4 AWVTE per Household5 ITE Code AWVTE per Person AWVTE per Vehicle AWVTE per HH Unadjusted PPHH Unadjusted PPHH Adjusted PPHH2 Unadjusted VPHH Adjusted VPHH2 ITE Code AWVTE per Person AWVTE per Vehicle AWVTE per HH Housing Mix Persons per Household Vehicles per Household Bedroom Range Persons1 Vehicles Available1 Households1 Housing Mix 1.American Community Survey,Public Use Microdata Sample for Montana PUMA 400 (2021 5-Year unweighted data). 2.Adjusted multipliers are scaled to make the average PUMSvaluesmatchcontroltotalsforBozemanbasedon2021 American CommunitySurvey 5-Year Estimates.3.Adjusted persons per household multiplied by national weighted average triprate perperson. 4.Adjusted vehicles available per household multiplied by national weighted average trip rateper vehicle.5.Average trip rates based on persons and vehicles per household. 262 Service Area Report and Impact Fee Study Bozeman, Montana 39 Vehicle Trip Ends by Dwelling Size To derive AWVTE by dwelling size, TischlerBise matched trip generation rates and average floor area, by bedroom range, as shown in Figure 42, with a logarithmic trend line derived from 2021 square footage estimates provided by the U.S. Census Bureau (West Region). Using the trend line formula shown in the chart, TischlerBise derived the estimated average weekday vehicle trip ends, by dwelling size, using 19 size thresholds, expanding the low and high range of the fee schedule. As shown in the upper-right corner of the table below, the smallest floor area range (under 600 square feet) generates an estimated average of 4.70 trip ends per dwelling. The largest floor area range (4,001 square feet or more) generates an estimated average of 11.68 trip ends per dwelling. Figure 42. Vehicle Trip Ends by Dwelling Size Bedrooms Square Feet Trip Ends Sq Ft Range Trip Ends 0-2 1,032 6.73 Under 600 4.70 3 2,118 9.16 600 to 800 5.27 4 2,932 10.48 801 to 1,000 6.18 5+4,269 11.87 1,001 to 1,200 6.91 1,201 to 1,400 7.51 1,401 to 1,600 8.03 1,601 to 1,800 8.49 1,801 to 2,000 8.89 2,001 to 2,200 9.25 2,201 to 2,400 9.58 2,401 to 2,600 9.88 2,601 to 2,800 10.16 2,801 to 3,000 10.42 3,001 to 3,200 10.66 3,201 to 3,400 10.89 3,401 to 3,600 11.10 3,601 to 3,800 11.30 3,801 to 4,000 11.50 4,001 or More 11.68 Actual Averages per Hsg Unit Fitted-Curve Values y = 3.6254ln(x) -18.482 R² = 0.9986 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 0 1,000 2,000 3,000 4,000 5,000Trip Ends per HouseholdSquare Feet of Living Area Vehicle Trips by Square Feet of Dwelling Vehicle trips by dwelling size are derived from 2021 ACS PUMS data for the area that includes Bozeman. Unit size for 0-2 bedroom is from the 2021 U.S. Census Bureau average for all multifamily units constructed in the Census West region. Unit size for all other bedrooms is from the 2021 U.S. Census Bureau average for single-unitdwellings constructed in the Census Mountain division. 263 Service Area Report and Impact Fee Study Bozeman, Montana 40 Vehicle Trip Ends by Dwelling Size and Housing Type The vehicle trip end factors in Figure 42 represents an average over all housing types in Bozeman. An equivalent dwelling unit (EDU) analysis is completed to calculate the trip ends by size for single-unit dwellings and other residential units. Shown in Figure 43, one single-unit EDU is set to the average sized single-unit dwelling in Bozeman (2,201-2,400 square feet). The EDU factor for the other size thresholds is found by comparing the trip factors, for example, homes from 1,801 to 2,000 square feet are 0.93 EDUs (8.89 trip ends / 9.58 trip ends = 0.93 EDUs). The EDU factors for the size threshold is then combined with the average trip end factor for single-unit dwellings to find the trip ends by size. For example, found with US Census ACS 2021 data (Figure 30) the average single-unit dwelling in Bozeman generates 9.27 trip ends, thus a single-unit dwelling from 1,801 to 2,000 square feet has a trip end factor of 8.60 (0.93 EDUs x 9.27 trip ends = 8.60 trip ends per household). Figure 43. Single-Unit Dwelling Trip Ends by Size Shown in Figure 44, one Other Residential EDU is set to the average sized other residential dwelling in Bozeman (1,401 to 1,600 square feet). The EDU factor for the other size thresholds is found by comparing the trip factors, for example, homes from 1,001 to 1,200 square feet are 0.86 EDUs (6.91 trip ends / 8.03 trip ends = 0.86 EDUs). The EDU factors for the size threshold is then combined with the average trip end factor for other residential dwellings to find the trip ends by size. For example, found with US Census ACS 2021 data (Figure 30) the average other residential dwelling in Bozeman generates 5.36 trip ends, thus an other Single-Unit Dwelling including Townhomes Single-Unit EDU Factor Trip Ends Under 600 4.70 0.49 4.55 600 to 800 5.27 0.55 5.10 801 to 1,000 6.18 0.65 5.98 1,001 to 1,200 6.91 0.72 6.69 1,201 to 1,400 7.51 0.78 7.27 1,401 to 1,600 8.03 0.84 7.77 1,601 to 1,800 8.49 0.89 8.22 1,801 to 2,000 8.89 0.93 8.60 2,001 to 2,200 9.25 0.97 8.95 2,201 to 2,400 (avg. single)9.58 1.00 9.27 2,401 to 2,600 9.88 1.03 9.56 2,601 to 2,800 10.16 1.06 9.83 2,801 to 3,000 10.42 1.09 10.08 3,001 to 3,200 10.66 1.11 10.32 3,201 to 3,400 10.89 1.14 10.54 3,401 to 3,600 11.10 1.16 10.74 3,601 to 3,800 11.30 1.18 10.93 3,801 to 4,000 11.50 1.20 11.13 4,001 or More 11.68 1.22 11.30 Average 9.27 Dwelling Size (squre feet) Overall Trip Ends 264 Service Area Report and Impact Fee Study Bozeman, Montana 41 residential dwelling from 1,001 to 1,200 square feet has a trip end factor of 4.61 (0.86 EDUs x 5.36 trip ends = 4.61 trip ends per household). Figure 44. Other Residential Trip Ends by Size Other Residential Other Res. EDU Factor Trip Ends Under 600 4.70 0.59 3.14 600 to 800 5.27 0.66 3.52 801 to 1,000 6.18 0.77 4.13 1,001 to 1,200 6.91 0.86 4.61 1,201 to 1,400 7.51 0.94 5.01 1,401 to 1,600 (avg. other)8.03 1.00 5.36 1,601 to 1,800 8.49 1.06 5.67 1,801 to 2,000 8.89 1.11 5.93 2,001 to 2,200 9.25 1.15 6.17 2,201 to 2,400 9.58 1.19 6.39 2,401 to 2,600 9.88 1.23 6.59 2,601 to 2,800 10.16 1.27 6.78 2,801 to 3,000 10.42 1.30 6.96 3,001 to 3,200 10.66 1.33 7.12 3,201 to 3,400 10.89 1.36 7.27 3,401 to 3,600 11.10 1.38 7.41 3,601 to 3,800 11.30 1.41 7.54 3,801 to 4,000 11.50 1.43 7.68 4,001 or More 11.68 1.45 7.80 Average 5.36 Overall Trip Ends Dwelling Size (squre feet) 265 Service Area Report and Impact Fee Study Bozeman, Montana 42 APPENDIX B: LAND USE DEFINITIONS Residential Development Single-Unit Dwelling: 1. Single-family detached is a one-unit structure detached from any other house, that is, with open space on all four sides. Such structures are considered detached even if they have an adjoining shed or garage. A one-family house that contains a business is considered detached as long as the building has open space on all four sides. 2. Single-family attached (townhouse) is a one-unit structure that has one or more walls extending from ground to roof separating it from adjoining structures. In row houses (sometimes called townhouses), double houses, or houses attached to nonresidential structures, each house is a separate, attached structure if the dividing or common wall goes from ground to roof. 3. Mobile home includes both occupied and vacant mobile homes, to which no permanent rooms have been added, are counted in this category. Mobile homes used only for business purposes or for extra sleeping space and mobile homes for sale on a dealer's lot, at the factory, or in storage are not counted in the housing inventory. Other Residential: 1. 2+ units (duplexes and apartments) are units in structures containing two or more housing units, further categorized as units in structures with “2, 3 or 4, 5 to 9, 10 to 19, 20 to 49, and 50 or more apartments.” 2. Boat, RV, Van, etc. includes any living quarters occupied as a housing unit that does not fit the other categories (e.g., houseboats, railroad cars, campers, and vans). Recreational vehicles, boats, vans, railroad cars, and the like are included only if they are occupied as a current place of residence. Such living quarters are only allowed under Bozeman zoning under unusual temporary conditions. Nonresidential Development Nonresidential development categories represent general groups of land uses that share similar average weekday vehicle trip generation rates and employment densities (i.e., jobs per 1,000 square feet). Retail: Establishments primarily selling merchandise, eating/drinking places, and entertainment uses. By way of example, Retail includes shopping centers, supermarkets, pharmacies, restaurants, bars, nightclubs, automobile dealerships, and movie theaters. Industrial: Establishments primarily engaged in the production, transportation, or storage of goods. By way of example, Industrial includes manufacturing plants, distribution warehouses, trucking companies, utility substations, power generation facilities, and telecommunications buildings. Office: Establishments providing management, administrative, professional, or business services. By way of example, Office can include business offices, office parks, and corporate headquarters. Institutional: Establishments providing education and healthcare services. By way of example, Institutional includes universities, nursing homes, daycare facilities, and hospitals. 266 Memorandum REPORT TO:City Commission FROM:Chris Saunders, Community Development Manager Erin George, Community Development Interim Director SUBJECT:Ordinance 2169 Provisional Adoption, Revisions to Chapter 2, Article 6, Division 9 Impact Fees, Bozeman Municipal Code to Revise Definitions, Reorganize Division Structure, Clarify Relationship To The City's Capital Improvement Program, Update Provisions For Impact Fee Refunds To Conform To Recent Changes In State Law, Strike Certain Exemptions, Update Processes For Approval Of Impact Fee Credits And Custom Fee Studies, Update Processes For Appeals, And Providing An Effective Date MEETING DATE:October 1, 2024 AGENDA ITEM TYPE:Ordinance RECOMMENDATION:Consider the motion: Having reviewed and considered the staff report, draft text, public comment, and all information presented, I hereby adopt the findings presented by the Staff and provisionally adopt Ordinance 2169. STRATEGIC PLAN:7.5. Funding and Delivery of City Services: Use equitable and sustainable sources of funding for appropriate City services, and deliver them in a lean and efficient manner. BACKGROUND:The Bozeman Municipal Code contains Chapter 2, Article 6, Division 9, Impact Fees [external link] which is the local enabling legislation for the City’s impact fee program. The City reviews and when needed updates the code in conjunction with updates to the impact fee service area reports. The State passed some changes in the enabling legislation regarding refunds in the 2023 Legislative session. Due to the extent of edits in the text, the proposed ordinance is a complete repeal and replace of the division. Exhibit A attached to the ordinance is the final proposed language and shows no markups. There is a marked up version of the existing text showing the changes attached to this agenda item as supporting documentation that will not be included in the ordinance. Summary of changes in the draft ordinance. General rewording to active tense, more plain language, and updating of language per current code drafting protocols Updating legislative findings for clarity Updating authority references reflecting a change to a charter 267 community authority Update definitions to correspond with other changes and define terms used but not currently defined Rearrange locations for generally applicable requirement to precede specific requirements Remove certain fee exceptions originally established for program start up and no longer needed Standardize wording for review of independent fee calculation studies Revise process for refunding impact fees to match with changed state law requirements for who receives the refund Revise process for review and approval of impact fee credits for construction of qualifying infrastructure Revise miscellaneous provisions to coordinate with other changes and clarify existing practice. Establish a specific section for deferrals to make it easier to find those elements of the code Revise processes for appeals, administration, and interpretation of the impact fee code. The City has implemented impact fees for transportation, Fire/EMS, water, and sewer. The service area reports for each service are reviewed separately from this item. See the attached staff memo for additional background information. The Community Development Board, has been assigned the duties of the Impact Fee Advisory Committee (IFAC). Training for the Board on the role of the IFAC was provided on August 19th. The video and materials for the training are available through the City's website [External Link]. The item begins at 1:03:15 in the recording. The Community Development Board, acting in their capacity as the Impact Fee Advisory Committee (IFAC), recommended approval of draft ordinance 5-0 at their public hearing on September 9th. The video and materials for the hearing are available through the City's website [External Link]. The item begins at 1:15:15 in the recording. No public comment was received. In addition to recommending on the proposed ordinance 2169, the Community Development Board passed a second motion 5-0 suggesting to the City Commission that the possibility of including community parking structures be evaluated as part of the transportation impact fee. UNRESOLVED ISSUES:None ALTERNATIVES:1. Approve the ordinance; 2. Approve the ordinance with modifications to the recommended amendments; 3. Deny the ordinance based on failure to comply with state adopted 268 criteria for impact fees; or 4. Open and continue the public hearing on the application, with specific request to staff to supply additional information or to address specific items. FISCAL EFFECTS:None, the proposed amendments are primarily process related and do not commit or expend money. Attachments: Ordinance 2169 CC Staff Memo.pdf Ordinance 2169 Amending 2.06 Div 9 Impact Fees.docx Ordinance 2169 - Exhbit A CC.docx DIVISION_9.___IMPACT_FEES - Markup Exhibit CC Final.pdf Report compiled on: September 18, 2024 269 MEMORANDUM TO: CITY COMMISSION FROM: CHRIS SAUNDERS, COMMUNITY DEVELOPMENT MANAGER DATE: OCTOBER 1, 2024 SUBJECT: ORDINANCE 2169 REVISING IMPACT FEES BACKGROUND: Title 7, Chapter 6, Part 16 of the Montana Code Annotated authorizes local government to charge impact fees. The Bozeman Municipal Code contains Chapter 2, Article 6, Division 9, Impact Fees which is the local enabling legislation for the City’s impact fee program. This division of the Municipal Code sets the general parameters for the impact fee program. From time to time, changes to the code are identified which are expected to make it more functional and effective. Ordinance 2169 is an outgrowth of the discussions occurring with the on-going update to the impact fee studies. Ordinance 2169 amends text addressing the following subjects: A) Updating definitions. B) Reorganizes some elements of the division to provide a better subject flow for the reader. C) Clarifies relationship to the capital improvement program. D) Update refund provisions to comply with recently amended state law. E) Strike certain exemptions that were included with initial adoption of impact fees in 1996 as part of a “soft implementation” of the program. F) Revise the process for review and approval of impact fee credits, custom fee studies, and appeals. G) Non-material changes to remove duplicative language, remove unnecessary wording, or clarify wording. Due to the many edits with all the rewording, organizational, and substantive changes staff determined it was more efficient to replace the entire Division as a single action rather than amending individual sections. To be clear about what is changing, the staff has attached an exhibit of the original text with standard tracking markup. The markup is not part of the adopting ordinance. The ordinance amendments are addressing procedural changes and do not change the amount of money charged for individual units of demand. Authority for Impact Fees The State authorizes but does not require local governments to have impact fees. Local regulations must be in alignment with enabling legislation – 7-6-16 [external link] et. seq. MCA, passed by the 270 Page 2 of 4 state. The impact fee enabling language has some elements that are quite specific and some that are quite general. There are specific purposes and certain procedures required. (5) (a) "Impact fee" means any charge imposed upon development by a governmental entity as part of the development approval process to fund the additional service capacity required by the development from which it is collected. An impact fee may include a fee for the administration of the impact fee not to exceed 5% of the total impact fee collected. (b) The term does not include: (i) a charge or fee to pay for administration, plan review, or inspection costs associated with a permit required for development; (ii) a connection charge; (iii) any other fee authorized by law, including but not limited to user fees, special improvement district assessments, fees authorized under Title 7 for county, municipal, and consolidated government sewer and water districts and systems, and costs of ongoing maintenance; or (iv) onsite or offsite improvements necessary for new development to meet the safety, level of service, and other minimum development standards that have been adopted by the governmental entity. Bozeman implements impact fees through 2.06.1600 [external link] et. seq. BMC. This part of the municipal code contains the locally adopted standards and establishes local procedures. Bozeman chooses to use impact fees for Fire/Emergency Services, Water, Sewer, and Transportation services. Impact fees can only be used to fund construction to serve new development. Impact fees are not taxes. State law establishes that impact fees are a fee for service. A tax is a mandatory payment or charge collected by governments from individuals or businesses to cover the costs of general operations. Fees cover the cost of providing a service by charges to the users. The City has adopted various fiscal policies to guide how revenues and expenditures are made. These are included in the City’s adopted budget [external link], see page 175. 5. User fees and charges will be used, as opposed to general taxes, when distinct beneficiary populations or interest groups can be identified. User fees and charges are preferable to general taxes because user charges can provide clear demand signals which assist in determining what services to offer, their quantity, and their quality. User charges are also more equitable, since only those who use the service must pay--thereby eliminating the subsidy provided by nonusers to users, which is inherent in general tax financing. The great majority of impact fee administration occurs at the staff level. The designated Impact Fee Coordinator is the Director of Community Development who has delegated to Chris Saunders who takes care of much of the daily work. The impact fee collection and expenditure follow standard governmental practices for accounting and reporting. Further details are provided below. Community Development Board Responsibilities Related to Impact Fees 271 Page 3 of 4 A local government wishing to establish impact fees must have an impact fee advisory committee. The City Commission has assigned these duties to the Community Development Board. The primary role of the Community Development Board (CDB) in its capacity as the Impact Fee Advisory Committee (IFAC) is oversight on the calculation and use of impact fees. This responsibility is assigned in state law. This review process provides an opportunity for public input and awareness of the impact fee program and that use of fees meets established criteria for approval. 7-6-1604. Impact fee advisory committee. (1) A governmental entity that intends to propose an impact fee ordinance or resolution shall establish an impact fee advisory committee. (2) An impact fee advisory committee must include at least one representative of the development community. The committee shall review and monitor the process of calculating, assessing, and spending impact fees. (3) The impact fee advisory committee shall serve in an advisory capacity to the governing body of the governmental entity. There are three activities through which the CDB meets its responsibilities related to impact fees. 1) The City prepares an impact fee service area report (SAR) for each type of fee every four years. This study examines existing conditions, identifies needed future improvements which impact fees may fund, identifies costs of construction, and establishes the cost per unit of service. These various elements are required by 7-6-1602 [external link]. The data in the SAR enables the city to translate demand for services to needed infrastructure to cost per unit. Each SAR supports a determination of how the City determines how much demand for services must be offset by each type of new construction. Impact fees are only used to support new development and prevent barriers to block development. Impact fees may not be used for maintenance, operations (including personnel), or curing existing deficiencies. Impact fees must be both reasonably related and roughly proportionate to demand from a new development. These requirements are set by state law and have been confirmed by the courts. The SAR provides documentation that the City’s impact fees meet these standards. The IFAC provides a public forum for this work and opportunity for public comment. The City chooses a contractor to do the analysis and prepare the needed documentation. TischlerBise, a national leader in impact fees, is assisting the City with the current SAR update. These studies are the basis for assessing and collecting impact fees. 2) The City, in conjunction with the SAR updates, reviews and as needed updates the impact fee code in 2.06 Div 9 BMC [external link]. The Community Development Board sees and makes a recommendation on those changes. 3) Each fall the City prepares a CIP which identifies upcoming construction projects and funding sources. This is the process the City uses to expend impact fees. The IFAC reviews the recommended CIP prepared by staff and provides a recommendation to the City Commission. This typically takes 272 Page 4 of 4 two meetings and happens in late October and early November. Members of the public can suggest projects for inclusion. A key element of the CIP is the scheduling of work. Use of Impact Fees The four implemented impact fees provide essential support for infrastructure to support new development. Without the resources to expand infrastructure, the City would need to pass those costs to existing residents and property owners. Impact fees allow concurrency of infrastructure so that needed services keep pace with development. Since the fees are tied directly to service units if more development occurs then more money is collected and if development slows then less money is collected. This connection avoids the City needing to guess at the future pace of development in raising revenues. Impact fees may only be used for capital expansion. No impact fee revenue can be used for operations, maintenance, or replacement of existing equipment. The City identifies future projects to receive impact fee funding through the annual capital improvement program. Staff identifies projects, identifies which elements are capacity expanding vs maintenance/operations, and proposes funding packages that construct needed facilities consistent with funding limitations. The local impact fee ordinance lays out local procedures to implement the program consistent with state law. A key element an impact fee is the Service Area Report. As noted above, the City prepares an impact fee service area report (SAR) for each type of fee every four years. This study examines existing conditions, identifies needed future improvements which impact fees may fund, identifies costs of construction, and establishes the cost per unit of service. These various elements are required by 7-6-1602 [external link]. The SAR is an essential element in demonstrating legal compliance with standards for impact fees. Individual SAR are adopted by resolution of the City Commission. The City is currently charging the full calculated cost of service from the prior SAR. The City chose to begin using impact fees in 1996 to advance principles of: • Equity • Public safety • Infrastructure concurrency • Remove barriers from development • Implement growth policy and facility plans by increasing capacity to serve new development • Cost efficiency from coordinated projects 273 Version February 2023 Ord 2169 Page 1 of 3 ORDINANCE 2169 AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA REPEALING AND REPLACING CHAPTER 2, ARTICLE 6, DIVISION 9 IMPACT FEES. WHEREAS, Sections 7-6-1601 through 7-6-1604, MCA provide specific authority and guidance about the necessary documentation to establish an impact fee and procedures to adopt and administer an impact fee; and WHEREAS,the City of Bozeman adopted an impact fee program in 1996 through ordinance 1414 which has been amended from time to time and is codified in Chapter 2, Article 6, and Division 9 of the municipal code; and WHEREAS, changes in wording were identified as improving the organization, clarity,and function of the impact fee program; and WHEREAS, public notice was provided in accordance with 7-1-4127 MCA of public hearings before the Community Development Board in their capacity as the Impact Fee Advisory Committee and the City Commission and the public has had opportunity to review and comment on the language of this ordinance; NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA: Section 1 That Chapter 2, Article 6, Division 9 of the Bozeman Municipal Code be repealed in its entirety and replaced with the wording in Exhibit A of this Ordinance. Section 2 Repealer. 274 Ordinance No. 2169, Repealing and Replacing Impact Fee Codes Page 2 of 3 All provisions of the ordinances of the City of Bozeman in conflict with the provisions of this ordinance are hereby, repealed and all other provisions of the ordinances of the City of Bozeman not in conflict with the provisions of this ordinance shall remain in full force and effect. Section 3 Savings Provision. This ordinance does not affect the rights and duties that matured, penalties that were incurred, or proceedings that were begun before the effective date of this ordinance. All other provisions of the Bozeman Municipal Code not amended by this Ordinance shall remain in full force and effect. Section 4 Severability. If any sentence, paragraph, subdivision, clause, phrase or section of this ordinance be adjudged or held to be unconstitutional, illegal, or invalid, it shall not affect the validity of this ordinance as a whole, or any part or provision thereof, other than the part so decided to be invalid, illegal or unconstitutional, and shall not affect the validity of the remainder of this ordinance or the Bozeman Municipal Code as a whole. Section 5 Codification. This Ordinance shall be codified as indicated in Section 1. Section 6 Effective Date. This ordinance shall be in full force and effect thirty (30) days after final adoption. PROVISIONALLY ADOPTED by the City Commission of the City of Bozeman, Montana, on first reading at a regular session held on the _____ day of ________________, 2024. 275 Ordinance No. 2169, Repealing and Replacing Impact Fee Codes Page 3 of 3 ____________________________________ TERENCE CUNNINGHAM Mayor ATTEST: ____________________________________ MIKE MAAS City Clerk FINALLY PASSED, ADOPTED AND APPROVED by the City Commission of the City of Bozeman, Montana on second reading at a regular session thereof held on the ___ of ____________________, 2024. The effective date of this ordinance is ______________, 2024. _________________________________ TERENCE CUNNINGHAM Mayor ATTEST: _______________________________ MIKE MAAS City Clerk APPROVED AS TO FORM: _________________________________ GREG SULLIVAN City Attorney 276 Page 1 of 23 Exhibit A – Ordinance 2169 DIVISION 9. IMPACT FEES Sec. 2.06.1600. Legislative findings. A.The city commission finds that: 1.The protection of the health, safety, and general welfare of the citizens of the city requires that the transportation, fire protection/EMS, water, and wastewater systems of the city be expanded and improved to accommodate continuing growth within the city and within those areas directly served by its fire department and within those areas connected to its water and wastewater systems. 2.New residential and nonresidential development imposes increased and excessive demands upon existing city facilities. 3.New development will overburden existing public facilities unless it offsets increased service demand, and the tax revenues generated from new development do not generate sufficient funds to provide public facilities to serve the new development as the cost of construction inflation substantially exceeds the ½ the three-year average rate of inflation allowed to local governments under 15-10-420 MCA and property taxes are charged in arrears. 4.New development is expected to continue and will place ever-increasing demands on the city to provide public facilities to serve new development. 5.The creation of an equitable development impact fee system enables the city to demonstrate and require payment of a roughly proportionate share of the costs of required improvements to the city's transportation, fire protection/EMS, water, and wastewater systems on those developments that create the need for them. 6.All types of development that are not explicitly exempted from the provisions of this division will generate demand for city's transportation, fire protection/EMS, water, and wastewater services or facilities that will require improvements to city facilities and equipment. 7.The city's adopted impact fee service area reports set forth reasonable methodologies and analyses for determining the impacts of various types of development on the city's transportation, fire protection/EMS, water, and wastewater systems and for determining the cost of acquiring land and the cost of acquiring or constructing facilities and equipment necessary to meet the demands for such services created by new development. 8.The city establishes as city standards the assumptions and service standards referenced in the impact fee service area reports and other duly adopted documents as part of its current plans for the transportation system and for the city's fire protection/EMS, water, and wastewater systems. 9.The documentation required by MCA 7-6-1602, is collectively contained in the city's facility plans, impact fee service area reports, development regulations, financial records, capital improvements program, design and specification manual, and other city documents. 10.The development impact fees described in this division are reasonably related to the service demands and needs of new development and are based on the impact fee service area reports and documentation cited in subsection 7 of this section and are shown to not exceed the costs of acquiring additional land and the costs of acquiring or constructing additional facilities or equipment required to serve the new developments that will pay the fees. 11.All transportation improvements upon which the transportation impact fees are based and upon which transportation impact fee revenues will be spent, based on the limitations set forth in this division will 277 Page 2 of 23 benefit all new development in the city; and it is, therefore, appropriate to treat the entire city as a single service area for purposes of calculating, collecting, and spending the transportation impact fees, while recognizing differences in the demand for service based upon the identified factors set forth in the transportation impact fee service area report. 12.All fire protection/EMS improvements upon which the fire protection/EMS impact fee service area report are based and upon which fire protection/EMS impact fee revenues will be spent, based on the limitations set forth in this division will benefit all new development that receives fire protection/EMS service directly from the city fire department; and it is, therefore, appropriate to treat the entire city and all properties served directly by the city fire department as a single service area for purposes of calculating, collecting, and spending the fire protection/EMS impact fees. 13.All water system improvements upon which the water impact fee service area report are based and upon which water impact fee revenues will be spent, based on the limitations set forth in this division will benefit all new development that connects to the city water system; and it is, therefore, appropriate to treat the entire city and all properties connected to the city water system as a single service area for purposes of calculating, collecting, and spending the water impact fees. 14.All wastewater system improvements upon which the wastewater impact fee service area report are based and upon which wastewater impact fee revenues will be spent, based on the limitations set forth in this division will benefit all new development that connects to the city wastewater system; and it is, therefore, appropriate to treat the entire city and all properties connected to the city wastewater system as a single service area for purposes of calculating, collecting, and spending the wastewater impact fees. 15.There is both a rational nexus and a rough proportionality between the development impacts created by each type of development covered by this division and the development impact fees that such development will be required to pay and the fee study and project-specific calculation process provides an individualized determination of impacts to be mitigated by payment of the impact fee. 16.The city's facility planning, capital improvement program, development review, and bidding processes create a public process by which, on a specific and detailed basis, the capacity expanding components of construction can be identified and funded distinctly from those components which are not capacity expanding by providing for evaluation by the city and the impact fee advisory committee of future needs related to growth, identification of applicable funding sources, and monitoring of construction and payments. 17.To meet the needs of new development the city may construct capacity expanding capital improvements prior to development of adjacent properties. This may include the construction of capacity expanding infrastructure of a nature and in a location that may require such improvements to be deemed project related improvements at the time of the development of such adjacent properties. The city commission finds that under certain conditions it is fair and reasonable that the costs of a project related improvement that have been paid by the city prior to development of certain properties should be reimbursed at the time of development of those properties. 18.This division creates a system by which development impact fees paid by new developments will be used to expand or improve the city transportation, fire protection/EMS, water, and wastewater systems in ways that benefit the development that paid each fee within a reasonable period after the fee is paid. 19.This division creates a system under which development impact fees must not be used to cure existing deficiencies in public facilities or to pay maintenance or operations costs associated with providing public facilities. 278 Page 3 of 23 Sec. 2.06.1610. Authority and applicability. A.This division is enacted pursuant to the city's self-government powers, the authority granted to the city by the Montana State Constitution, MCA 7-6-1601 through 7-6-1604, and the city charter. B.The provisions of this division apply to all the territory within the limits of the city. C.The provisions of this division related to the fire protection/EMS impact fees apply to all properties located outside the city that are served directly by the city fire department. D.The provisions of this division related to water impact fees apply to all properties located outside the city that are connected to the city water system. E.The provisions of this division related to wastewater impact fees apply to all properties located outside the city that are connected to the city wastewater system. F.The provisions of this division related to the establishment of transportation, fire protection/EMS, water, and sewer reimbursement districts applies to properties located outside the city that are deemed to benefit from capacity expansion. Sec. 2.06.1620. Intent of division. A.This division implements the growth policy/land use plan of the city, the city's most recently adopted long range transportation plan, the most recently adopted water facility plan, the most recently adopted wastewater facility plan, and the most recently adopted fire protection/EMS master plan. B.This division ensures that new development bears its proportionate share of the cost of improvements to the city transportation, fire protection/EMS, water, and wastewater systems; ensures that such proportionate share does not exceed the roughly proportionate cost of the transportation, fire protection/EMS, water, and wastewater facilities and equipment required to serve such new developments. C.It is the further intent of this division that new development pays for its roughly proportionate share of public facilities through the imposition of development impact fees that will be used to finance, defray, or reimburse all or a portion of the costs incurred by the city to construct improvements to the city transportation, fire protection/EMS, water, and wastewater systems that serve or benefit impact fee payers. D.Prevents the collection of money through impact fees from new development in excess of the reasonably foreseeable, logically connected, and roughly proportional amount necessary to offset new demands for transportation, fire protection/EMS, water, or wastewater improvements generated by that new development within the service area as established in the service area report for each fee type. E.No moneys collected from any development impact fee and deposited in an impact fee fund may be co- mingled with moneys from a different impact fee fund or ever be used for a type of facility or equipment different from that for which the fee was paid. F.Any funds paid pursuant to a reimbursement district established in this division or payback district established through other municipal authority do not replace or reduce any impact fees imposed upon development. Sec. 2.06.1630. Definitions. A.The following words, terms, and phrases, when used in this division, have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: 1."Capacity expanding capital improvements" means improvements that increase the functional capacity of the city's water system, wastewater system, fire protection and emergency medical service system (EMS), or transportation system. This term may include capital improvements that if constructed in 279 Page 4 of 23 advance of development may meet the definition of "project related improvements" when development of adjacent property occurs. 2."Central Business District" (CBD) means the land area encompassed within the B-3, "Central Business District," zoning district as of [the effective date of this ordinance]. 3."Development" means any construction or expansion of a building, structure, or use, any change in use of a building or structure, or any change in the use of land, which creates additional demand for public services. 4."Development impact fees" means the transportation impact fee, fire protection/EMS impact fee, water impact fee, and wastewater impact fee established by this division. 5."Encumber" means to legally obligate by contract, or otherwise commit to use by appropriation, or another official act of the city. 6.Fee schedule means the listing of the dollar cost of each impact fee as established in the most recent service area report and as adjusted annually for inflation. 7."Impact fee capital improvement program" means the capital improvements program for the transportation system, the city fire protection/EMS system, and the city water and wastewater systems, which assigns moneys from each impact fee fund to specific projects and related expenses for improvements to the type of facilities or services for which the fees in that fund were paid, and must not include improvements needed to correct existing deficiencies or operations or maintenance costs. 8."Impact fee coordinator" means the director of the city's department of community development or designee. 9."Impact fee funds" means the transportation impact fee fund, fire protection/EMS impact fee fund, water impact fee fund, and wastewater impact fee fund established by this division. 10."Impact fee studies" means the service area reports most recently adopted by resolution of the city commission for each impact fee which set forth reasonable methodologies and analyses for determining the impacts of various types of development on the city's transportation, fire protection/EMS, water and wastewater systems or other services or facilities for which an impact fee may be charged and for determining the cost of acquiring land and the cost of acquiring or constructing facilities and equipment necessary to meet the demands for such services created by new development. 11."Improvement" means planning, land acquisition, engineering design, construction inspection, on-site construction, off-site construction, equipment purchases, and financing costs associated with new or expanded facilities, buildings, and equipment that expand the capacity of a facility or service system and that have an average useful life of at least ten years. The term "improvement" does not include maintenance, operations, or improvements that do not expand capacity. 12."Independent fee calculation study" means a study prepared by an applicant for a building permit or water or wastewater connection permit calculating the cost of expansions or improvements to the city's transportation, fire protection/EMS, water, or wastewater systems required to serve the applicant's proposed development; that is performed on an average cost (not marginal cost) methodology; uses the service units and unit construction costs stated in the impact fee studies; and is performed in compliance with any criteria for such studies established by this division or by the city. 13."Initiation of construction" means the date of the preconstruction meeting with the city engineer, or the date of the first visible change in the physical condition of the improved site caused by the first person furnishing services or materials to effect construction of the improvement, whichever occurs first. 14."Maintenance" means replacement, repair, or caring for a constructed water, sewer, fire protection/EMS, or transportation facility to preserve them in a functional state equal to their initial 280 Page 5 of 23 installed design; and which does not change the basic design or structure or change them from their original purpose. Activities that change the scope of a project beyond the original design are not included in this definition. 15.“Payback district” means a legal mechanism for an entity that installs incidental excess capacity that benefits future development and is not funded by or eligible for impact fees to recapture a proportionate share of the value of installed excess capacity from benefited landowners. 16."Project-related improvements" means site-related improvements including, without limitation, all access streets including sidewalks adjacent to the proposed development or leading only to the proposed development and not included on the transportation system; all streets, driveways, and pedestrian/bicycle facilities within the development; all acceleration, deceleration, right, or left turn lanes leading to any streets and driveways within the development; all traffic control devices for streets and driveways within the development; all water lines or facilities adjacent to, leading to, or located within the development and serving only the development; all wastewater lines or facilities adjacent to, leading to, or located within and serving only the development; and all off-site improvements necessary for the safety and code compliance of a development. Credit for incidental improvements is not allowed. It is presumed that the minimum improvement needed to serve a project is a project improvement even if additional capacity is thereby created that may be potentially used by other developments presently or in the future. 17.“Reimbursement district” means a legal mechanism to recoup the costs of project-related improvements funded by impact fees as part of initial installation of a larger capacity expanding improvement greater than project-related improvements. 18."Transportation system" means existing or planned collectors or arterial streets, including associated non-motorized travel elements and which are either included on the most current long range transportation plan or the city's impact fee capital improvement program. 19 "Trip exchange district" means a defined geographic area where there is a demonstrated significant reduction in new vehicle trips below that established in the transportation service area report. Sec. 2.06.1640. General Requirements. A.Interest earned on moneys in any impact fee fund is part of such fund and is subject to the same restrictions on use applicable to the impact fees deposited in such fund. B.No moneys from any impact fee fund may be spent for periodic or routine maintenance of any facility of any type or to cure deficiencies in public facilities. C.Nothing in this division restricts the city from requiring an applicant to construct reasonable project related improvements required to serve the applicant's project, whether or not such improvements are of a type for which credit is available under section 2.06.1700. D.The city must maintain accurate records of the development impact fees paid, including the name of the person paying such fees, the project for which the fees were paid, the date of payment of each fee, the amounts received in payment for each fee, and any other matters that the city deems appropriate or necessary to the accurate accounting of such fees, and such records must be available for review by the public during city business hours. E.1. The city manager must present to the city commission a proposed impact fee capital improvements program consistent with section 5.07 of the city charter for the transportation system, fire protection/EMS system, water system, and wastewater system, which identifies the capacity-adding capital improvements that will benefit new development subject to the terms of this division, exclusive of any improvements needed to correct existing deficiencies or for operation or maintenance purposes. The city commission must approve the capital program consistent with section 5.08 of the city charter. 281 Page 6 of 23 2. The capital improvements program must assign moneys from each impact fee fund to specific projects and related expenses for improvements to the type of facilities or services for which the fees in that fund were paid. Any moneys, including any accrued interest, not assigned to specific projects within such capital improvements program and not expended pursuant to section 2.06.1690 or 2.06.1700 must be retained in the same impact fee fund. The impact fee capital improvements program schedules the construction of capital improvements to serve projected growth and project capital improvement costs, expenditures, and impact fee fund revenues for a five-year period. The individual fee funds shall maintain a positive fiscal balance. 3. The city manager shall adopt and revise, as needed, an administrative impact fee manual to carry out the purposes of this division. The manual must address processes, further definitions as needed, special cases for calculation of fees, independent fee studies, calculation of credits, deferral processes, and appeals. F.Updating of impact fee information. 1.The facility plans described in this division must be reviewed by the city at least once every five years and if a revision of a facility plan to address changed conditions is deemed necessary by the city, the plan must be updated. 2.The development impact fees described in this division, fee studies, data and analysis relied upon and required by MCA 7-6-1602, and the administrative procedures and manual of this division must be updated at least once every four fiscal years. 3.The purpose of the review and updating of impact fee related documentation is to ensure that: a.The demand and cost assumptions underlying such fees are still valid; b.The resulting fees do not exceed reasonable estimates of the cost of constructing improvements that are of the type for which the fee was paid and that are required to serve new development; c.The moneys collected or to be collected in each impact fee fund have been, and are expected to be, spent for improvements of the type for which such fees were paid; and d.That such improvements will benefit those developments for which the fees were paid. G.The development impact fees shown in the most recently adopted impact fee studies must be adjusted annually to reflect the effects of inflation on those costs for improvements set forth in the impact fee studies. On January 1st of each year unless and until the impact fee studies are revised or replaced, and then beginning in the subsequent calendar year, each fee amount set forth in each such study must be adjusted by multiplying such amount by one plus the value of the Construction Cost Index published in the first December edition of the current year. (Source: Engineering News Record.) Such adjustments in such fees become effective immediately upon calculation by the city and do not require additional action by the city commission to be effective. Sec. 2.06.1650. Transportation impact fees. A.Imposition of transportation impact fees. 1.Any person who seeks to obtain any of the following forms of development approval is required to pay a transportation impact fee in the amount specified in the commission resolution adopting the most recent transportation impact fee study and establishing the transportation impact fee and as updated as required in this division. a.A building permit; b.Any other permit that will result in the construction of improvements that will generate additional demand for transportation services; or c.Any delayed payment of impact fees as specified and approved by the city commission in accordance with division 38.380. 282 Page 7 of 23 2.Notwithstanding subsection A.1 of this section, no impact fee may be imposed earlier than the issuance of a building permit for developments requiring a building permit. Development generating additional demand for service and not requiring a building permit must pay impact fees prior to the action of the City that authorizes initiation of construction. 3.No permits of the types described in subsection A.1 of this section may be issued until the transportation impact fee described in this division has been paid, unless the development for which the permit is sought is exempted by subsection F of this section; or unless deferral of payment of the transportation impact fee has been approved by the impact fee coordinator pursuant to a deferral program approved by resolution of the Commission in compliance with 2.06.1720. B.Computation of amount of transportation impact fee. 1.An applicant required by this division to pay a transportation impact fee may choose to have the amount of such fee determined pursuant to either subsection B.2 or B.3 of this section. 2.Unless an applicant requests that the city determine the amount of such fee pursuant to subsection B.3 of this section, the city must determine the amount of the required transportation impact fee by reference to the most recently adopted transportation impact fee service area report schedule of fees. The fee amounts set forth in the service area report include credits for expected future receipts of state and federal highway funds and expected future receipts of gas tax revenues, and all other non- impact fee sources of funding anticipated to be made by or because of new development to be applied to the transportation improvements required to serve new development. a.If a development is of a type not listed in the most recently adopted transportation impact fee service area report, then the city must use the fee applicable to the most nearly comparable type or land use in the report. In deciding which use is most nearly comparable, the city is guided by the most recent edition of "Trip Generation: An Information Report" prepared by the Institute of Transportation Engineers; or if such publication is no longer available, then by a similar publication. If the city determines that there is no comparable type of land use listed in the study, then a new fee must be determined by: (1)Finding the most nearly comparable trip generation rate from the publication noted in subsection B.2.a. of this section; and (2)Applying an independent fee study as set forth in subsection B.3.d of this section. b.If the applicant's development includes a mix of those uses listed in the most recently adopted transportation impact fee study, then the fee is determined by adding up the fees that would be payable for each use if it were a freestanding use pursuant to the most recently adopted transportation impact fee study. c.If the applicant is applying for an extension of a permit issued previously, then an additional fee is necessary and that fee is the net increase between the fee applicable at the time of the current permit extension application and any transportation impact fee previously paid pursuant to this division for the same structure. If the fee applicable at the time of the current extension permit application is lower than the transportation impact fee previously paid pursuant to this division for the same structure, no refund of transportation impact fees previously paid is allowed. If fees are not yet paid, the amounts due prior to permit issuance will be updated based on the date of the extension application. d.If the applicant is applying for a permit to allow a change of use or the expansion, redevelopment, or modification of an existing development, the fee must be based on the net positive increase in the fee for the new use as compared to the previous use. However, no new fee may be imposed unless additional service demand is created, in accordance with the most recently adopted transportation impact fee study. If necessary to determine such net increase, the city must be guided by the most recent edition of "Trip Generation Manual" prepared by the 283 Page 8 of 23 Institute of Transportation Engineers; or if such publication is no longer available, then by a similar publication. If the proposed change of use, expansion, redevelopment, or modification results in a net decrease in the fee for the new use or development as compared to the previous use or development, no refund of transportation impact fees previously paid is allowed. 3.Prior to issuance of a building permit, an applicant may request that the city determine the amount of the required transportation impact fee by reference to an independent fee calculation study for the applicant's development prepared by qualified professional traffic engineers and/or economists at the applicant's cost and submitted to the city engineer. Any such study must show the traffic engineering and economic methodologies and assumptions used, including, but not limited to, those forms of documentation listed in subsections B.3.and B.3.b of this section and must be acceptable to the city pursuant to subsection B.3.c of this section. a.Traffic engineering studies must include documentation of trip generation rates, trip lengths, any percentage of trips from the site that represent net additions to current trips from the site, the percentage of trips that are new trips as opposed to pass-by or divert-link trips, and any other trip data for the proposed land use. b.Economic studies must include documentation of any special factors that the applicant believes will reduce the traffic volumes otherwise attributable to the proposed land use. c.The city must consider all such documentation and any independent fee calculation study submitted by the applicant. The city is not required to accept any such study or documentation that the city deems to be inaccurate or unreliable and may request that the applicant submit additional or different documentation for consideration. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or accepted with modifications by the city as the basis for calculating transportation impact fees. d.The city will review and determine whether to accept a customized calculation within 90 calendar days of submittal. If accepted, the city will use the customized calculation in assessing the fee and no further correspondence is required. If the city rejects a customized calculation the city will inform the applicant of the reasons in writing. e.Upon acceptance, or acceptance with modifications, of an independent fee calculation study and documentation, the city will use the formulas and methodology contained within the most recently adopted transportation impact fee study to determine the transportation impact fee. C.Payment of transportation impact fee. 1.All funds paid by an applicant pursuant to this division must be identified as transportation impact fees and must be promptly deposited in the transportation impact fee fund described in subsection D of this section. D.Transportation impact fee funds. 1.A single transportation impact fee fund is created, and such fund must be maintained in an interest- bearing account. 2.Such fund must contain those transportation impact fees collected pursuant to this division and any interest which may accrue from time to time on such amounts. 3.Such fund may also contain reimbursements collected pursuant to subsection 2.06.1650.F. E.Use of transportation impact fee funds.The moneys in the transportation impact fee fund must be used only as follows: 1.To acquire land for and/or acquire or construct capacity expanding capital improvements to the transportation system reasonably related to the benefits accruing to new development subject to the terms of this division, in accordance with the requirements of state law; or 284 Page 9 of 23 2.To pay debt service on such capital improvements to the transportation system; or 3.For purposes of refunds or credits, as described in section 2.06.1690 or 2.06.1700; and 4.May not be used for: a.Operations or maintenance purposes; or b.To correct existing deficiencies. F.Transportation impact fee reimbursement.When the commission determines to fund capacity expanding capital improvements to the transportation system and the commission determines prior to expenditure of funds for such improvements that, upon future development, such improvements may be considered project related improvements the commission may by resolution create a transportation impact fee reimbursement district. The resolution creating the district must: 1.Identify the specific transportation system improvements that will be subject to reimbursement if determined at a later date to be a project related improvement; 2.Identify the real property to be included in such district wherein future development may be required to provide reimbursement; 3.Identify the rationale for the commission's determination that such improvements may be considered in the future to be project related improvements; 4.Identify the estimated amount of repayment that will be due from each property, the methodology for adjusting the estimated amount to the actual costs of construction, and the methodology for determining such amount; 5.Identify whether the amount of repayment will account for the time value of the initial expenditure, and if so, describe the calculation methodology; 6.Identify the period the reimbursement district will exist; and 7.Identify the required timing of payment of the reimbursement which may be upon annexation or prior to final subdivision or site plan approval, and in no case later than issuance of a building permit. Prior to adoption of a resolution creating the reimbursement district, the city must provide 15 business days written notice to owners of real property within the proposed district. G.Exemptions from transportation impact fee. 1.The following types of development are exempt from payment of the transportation impact fee: a.Alterations, remodeling, rehabilitations, expansions of existing buildings, or other improvements to an existing structure where no additional vehicle trips will be produced over and above those produced by the existing use; b.Construction of accessory buildings or structures that will not produce additional vehicle trips over and above those produced by the primary building or land use; c.The replacement of a destroyed or partially destroyed building or structure with a new building or structure of the same size and use where no additional vehicle trips will be produced over and above those produced by the original building or structure; d.The installation or replacement of a mobile home on a lot or a mobile home site when a transportation impact fee for such lot or site has previously been paid pursuant to this division or where a mobile home legally existed on such site on or prior to the effective date of the ordinance from which this division is derived; and e.Any other type of development for which the applicant can demonstrate that the proposed land use and development will produce no more vehicle trips from such site over and above the trips from such site prior to the proposed development, or for which the applicant can show that a 285 Page 10 of 23 transportation impact fee for such site has previously been paid in an amount that equals or exceeds the transportation impact fee that would be required by this division for such development. 2.Any such claim for exemption must be made no later than the time when the applicant applies for the first permit or a type listed in subsection A.1 of this section for the proposed development, and any claim for exemption not made at or before that time is waived. 3.The city must determine the validity of any claim for exemption pursuant to the criteria set forth in subsection G.1. H. A trip exchange district is established through an independent fee study or similar data through a service area report. Areas where a trip exchange district may be established have the majority of the following characteristics: 1.The use of shared and consolidated parking. 2.A high degree of pedestrian and bicycle access to and throughout the proposed development. 3.The availability of public transit. 4.Extensive trip capture within the existing and proposed development where trips to the proposed development result in visits to multiple destinations in the area via a mode other than automobile. 5.Diverse business proprietorships within the development. 6. Primary use at the ground floor is non-residential. 7. The majority of individual businesses within the development are less than 20,000 square feet. 8. Structures within the development are near to each other and the public street (with small or no setbacks). 9. The majority of buildings associated with the proposed development are multi-story building, often more than two stories. 10.Having a high percentage building coverage on the lot and typically more than 0.5. 11.The physical characteristics are shared among the entire area, not just one or a few businesses. 12.The area is at least 50 percent developed as measured by lot area utilized. 13.The area is the subject of a city enforceable common plan of development, such as an urban renewal plan or master site plan. Sec. 2.06.1660. Fire protection and emergency medical service impact fees. A.Imposition of fire protection and emergency medical service impact fees. 1.Any person who seeks to obtain any of the following forms of development approval is required to pay a fire protection/EMS impact fee in the amount specified in the commission resolution adopting the most recent fire protection /EMS impact fee service area report and establishing the fire protection/EMS impact fee and as updated as required in this division: a.A building permit; or b.Any other permit that will result in construction that will generate demand for fire protection services/EMS; or c.Any delayed payment of impact fees as specified and approved by the city commission in accordance with division 38.380. 286 Page 11 of 23 2.Notwithstanding subsection A.1 of this section, no impact fee may be imposed earlier than the issuance of a building permit for developments requiring a building permit. Development generating additional demand for service and not requiring a building permit must pay impact fees prior to the action of the City that authorizes initiation of construction. 3.No permits of the types described in subsection A.1 of this section may be issued until the fire protection/EMS impact fee described in this division has been paid, unless the development for which the permit is sought is exempted by subsection F of this section; or unless deferral of payment of the fire protection/EMS impact fee has been approved by the city pursuant to a deferral program approved by resolution of the commission in compliance with 2.06.1720. B.Computation of amount of fire protection/EMS impact fee. 1.An applicant required by this division to pay a fire protection/EMS impact fee may choose to have the amount of such fee determined pursuant to either subsection B.2 or B.3 of this section. 2.Unless an applicant requests that the city determine the amount of such fee pursuant to subsection B.3 of this section, the city must determine the amount of the required fire protection/EMS impact fee by reference to the most recently adopted fire/EMS impact fee service area report. a.If a development is not of a type listed in the most recently adopted fire/EMS impact fee service area report, then the city must use the fee applicable to the most nearly comparable type or land use in the service area report. b.If the type of development that a permit is applied for includes a mix of those uses listed in the most recently adopted fire protection/EMS impact fee service area report, then the fee must be determined by adding up the fees that would be payable for each use if it were a freestanding use pursuant to the most recently adopted fire protection/EMS impact fee service area report. c.If the applicant is applying for an extension of a permit issued previously, then an additional fee is necessary and that fee is the net increase between the fee applicable at the time of the current permit application and any fire/EMS protection impact fee previously paid pursuant to this division for the same structure. If the fee applicable at the time of the current extension permit application is lower than the fire protection impact fee previously paid pursuant to this division for the same structure, no refund of fire protection/EMS impact fees previously paid is allowed. If fees are not yet paid, the amounts due prior to permit issuance will be updated based on the date of the extension application. d.If the applicant is applying for a permit to allow a change of use or for the expansion, redevelopment, or modification of an existing development, the fee is based on the net increase in the fee for the new use as compared to the previous use. If the proposed change of use, expansion, redevelopment, or modification results in a net decrease in the fee for the new use or development as compared to the previous use or development, no refund of fire protection/EMS impact fees previously paid is allowed. 3.Prior to issuance of a building permit, an applicant may request that the city determine the amount of the required fire protection/EMS impact fee by reference to an independent fee calculation study for the applicant's development prepared at the applicant's cost by qualified professional fire protection experts and/or economists and submitted to the impact fee coordinator and city fire chief. Any such study must be based on the same service standards and unit costs for fire protection/EMS used in the most recently adopted fire/EMS impact fee service area report and must document the economic methodologies and assumptions used. a.Independent fee calculation studies must include documentation of rate of calls for service, required service standard, and any other relevant data for the proposed land use. b.Economic studies must include documentation of any special factors that the applicant believes will reduce the service demand otherwise attributable to the proposed land use. 287 Page 12 of 23 c.The city must consider all such documentation and any independent fee calculation study submitted by the applicant. The city is not required to accept any such study or documentation that the city deems to be inaccurate or unreliable and may request that the applicant submit additional or different documentation for consideration. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or accepted with modifications by the city as the basis for calculating transportation impact fees. d.The city will review and determine whether to accept a customized calculation within 90 calendar days of submittal. If accepted, the city will use the customized calculation in assessing the fee and no further correspondence is required. If the city rejects a customized calculation the city will inform the applicant of the reasons in writing. e.Upon acceptance, or acceptance with modifications, of an independent fee calculation study and documentation, the city will use the formulas and methodology contained within the most recently adopted transportation impact fee study to determine the transportation impact fee. C.Payment of fire protection/EMS impact fees. 1.All funds paid by an applicant pursuant to this division must be identified as fire protection/EMS impact fees and must be promptly deposited in the fire protection/EMS impact fee fund described in subsection D of this section. D.Fire protection/EMS impact fee funds. 1.A single fire protection/EMS impact fee fund is created, and such fund must be maintained in an interest-bearing account. 2.Such fund must contain those fire protection/EMS impact fees collected pursuant to this division and any interest which may accrue from time to time on such amounts. 3.Such fund may also contain reimbursements collected pursuant to section 2.06.1660.F. E.Use of fire protection/EMS impact fee funds.The moneys in the fire protection/EMS impact fee fund must be used only: 1.To acquire or construct capacity expanding fire protection/EMS improvements within the city; or 2.To pay debt service on any portion of any future general obligation bond issue or revenue bond issue used to finance the acquisition or construction of fire protection/EMS improvements within the city; or 3.As described in section 2.06.1690 or 2.06.1700. F.Fire protection/EMS impact fee reimbursement.When the commission determines to fund capacity expanding capital improvements to the fire protection/EMS system and the commission determines prior to expenditure of funds for such improvements that, upon future development, such improvements may be considered project related improvements the commission may by resolution create a fire protection/EMS impact fee reimbursement district. The resolution creating the district must: 1.Identify the specific fire protection/EMS improvements that will be subject to reimbursement if determined at a later date to be a project related improvement; 2.Identify the real property to be included in such district wherein future development may be required to provide reimbursement; 3.Identify the rationale for the commission’s determination that such improvements may be considered in the future to be project related improvements; 4.Identify the estimated amount of repayment that will be due from each property, the methodology for adjusting the estimated amount to the actual costs of construction, and the methodology for determining such amount; 288 Page 13 of 23 5.Identify whether the amount of repayment will account for the time value of the initial expenditure, and if so, describe the calculation methodology; 6.Identify the period the reimbursement district will exist; and 7.Identify the required timing of payment of the reimbursement which may be upon annexation or prior to final subdivision or site plan approval, and in no case later than issuance of a building permit. Prior to adoption of a resolution creating the reimbursement district, the city must provide 15 business days written notice to owners of real property within the proposed district. G.Exemptions from fire protection/EMS impact fee. 1.The following types of development are exempted from payment of the fire protection/EMS impact fee: a.Reconstruction or replacement of a previously existing residential unit that does not create any additional or larger residential units. b.Construction of unoccupied accessory structures related to a residential unit. c.Projects that the applicant can demonstrate will produce no greater demand for fire protection/EMS from such land than existed prior to issuance of such permit. d.Projects for which a fire protection/EMS impact fee has previously been paid in an amount that equals or exceeds the fire protection/EMS impact fee that would be required by this division. 2.Any such claim for exemption must be made no later than the time when the applicant applies for the first permit of a type listed in subsection A.1 of this section for the proposed development, and any claim for exemption not made at or before that time is waived. 3.The city must determine the validity of any claim for exemption pursuant to the criteria set forth in subsection G.1. Sec. 2.06.1670. Water impact fees. A.Imposition of water impact fees. 1.Any person who seeks to obtain a permit for connection to the city water system, or who is subject to subsection B.2.b of this section and applies for a city permit to expand or add to the structure served by a previously approved water connection is required to pay a water impact fee in the amount specified in the commission resolution adopting the water impact fee service area report and establishing the water impact fee and as updated as required in this division; or 2.Any delayed payment of impact fees as specified and approved by the city commission in accordance with division 38.380. 3.No permits for connection to the city water system may be issued until the water impact fee described in this division has been paid, unless the development for which the permit is sought is exempted by subsection F of this section; or unless deferral of payment of the water impact fee has been approved by the city pursuant to a deferral program approved by resolution of the commission in compliance with 2.06.1720. B.Computation of amount of water impact fee. 1.An applicant required by this division to pay a water impact fee may choose to have the amount of such fee determined pursuant to either subsection B.2 or B.3 of this section. 2.The city must determine the amount of the required water impact fee by reference to the most recently adopted water impact fee schedule unless the applicant chooses to submit an individualized calculation pursuant to subsection B.3.a of this section or the city determines the application to be 289 Page 14 of 23 subject to subsection B.3.b of this section. If the applicant is applying for a replacement for a water connection permit issued previously or extension for a permit, then the fee is the net positive difference between the service demand and associated fee applicable at the time of the current permit application and the service demand for which a water impact fee was previously paid pursuant to this division for the same structure. If the fee applicable at the time of the replacement permit application is lower than the water impact fee previously paid pursuant to this division for the same structure, no refund of water impact fees previously paid is allowed. 3.Individualized calculations. a.An applicant may request that the city determine the amount of the required water impact fee by reference to an independent fee calculation study for the applicant's development prepared at the applicant's cost by a professional engineer and/or economist and submitted to the city transportation and engineering director. Any such study must be based on the same service standards and unit costs used in the most recently adopted water impact fee study and must document the economic methodologies and assumptions used. 1.Independent fee calculation studies must include documentation of rate of calls for service, required service standard, and any other relevant data for the proposed land use. 2.Economic studies must include documentation of any special factors that the applicant believes will reduce the service demand otherwise attributable to the proposed land use. 3.The city must consider all such documentation and any independent fee calculation study submitted by the applicant. The city is not required to accept any such study or documentation that the city deems to be inaccurate or unreliable and may request that the applicant submit additional or different documentation for consideration. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or accepted with modifications by the city as the basis for calculating transportation impact fees. 4.The city will review and determine whether to accept a customized calculation within 90 calendar days of submittal. If accepted, the city will use the customized calculation in assessing the fee and no further correspondence is required. If the city rejects a customized calculation the city will inform the applicant of the reasons in writing. 5.Upon acceptance, or acceptance with modifications, of an independent fee calculation study and documentation, the city will use the formulas and methodology contained within the most recently adopted transportation impact fee study to determine the transportation impact fee. b.The city may identify a user as having extraordinary demands for water service which are not accurately represented by the average usage which was relied upon by the methodology which generated the calculated charges in the most recently adopted water impact fee study. In this circumstance the city must prepare a customized calculation based upon the most recently adopted water impact fee service area report. 1. The impact fee paid for water meters larger than three inches may be adjusted based on actual usage. If usage is greater than 110 percent of anticipated volume during the 12- month period beginning six months after building occupancy is granted by the city, an additional impact fee may be charged, using the same techniques for calculating peak day and storage EDUs and multiplying by the peak day impact fee cost per EDU and the storage impact fee cost per EDU then in effect. The additional impact fee is the positive net demand between a previously calculated impact fee and the impact fee based upon the metered demand. C.Payment of water impact fee. 290 Page 15 of 23 1.All funds paid by an applicant pursuant to this section must be identified as water impact fees and must be promptly deposited in the water impact fee fund described in subsection D of this section. D.Water impact fee funds. 1.A single water impact fee fund is created, and such fund must be maintained in an interest-bearing account. 2.Such fund must contain those water impact fees collected pursuant to this division and any interest which may accrue from time to time on such amounts. 3.Such fund may also contain reimbursements collected pursuant to section 2.06.1670.F. E.Use of water impact fee funds.The moneys in the water impact fee fund must be used only: 1.To acquire or construct capacity expanding improvements to the city water system; or 2.To pay debt service on any portion of any future general obligation bond issue or revenue bond issue used to finance improvements to the city water system; or 3.As described in section 2.06.1690 or 2.06.1700. F.Water impact fee reimbursement.When the commission determines to fund capacity expanding capital improvements to the water system and the commission determines prior to expenditure of funds for such improvements that, upon future development, such improvements may be considered project related improvements the commission may by resolution create a water impact fee reimbursement district. The resolution creating the district must: 1.Identify the specific water improvements that will be subject to reimbursement if determined at a later date to be a project related improvement; 2.Identify the real property to be included in such district wherein future development may be required to provide reimbursement; 3.Identify the rationale for the commission's determination that such improvements may be considered in the future to be project related improvements; 4.Identify the estimated amount of repayment that will be due from each property, the methodology for adjusting the estimated amount to the actual costs of construction, and the methodology for determining such amount; 5.Identify whether the amount of repayment will account for the time value of the initial expenditure, and if so, describe the calculation methodology; 6.Identify the period the reimbursement district will exist; and 7.Identify the required timing of payment of the reimbursement which may be upon annexation or prior to final subdivision or site plan approval, and in no case later than issuance of a building permit. Prior to adoption of a resolution creating the reimbursement district, the city must provide 15 business days written notice to owners of real property within the proposed district. G.Exemptions from water impact fees. 1.The following types of development are exempt from payment of the water impact fee: a.Alteration or expansion of an existing nonresidential building that does not require an additional or larger water meter; b.Replacement of a nonresidential building or structure of the same size that does not require an additional or larger water meter; c.The reconstruction or replacement of a previously existing residential unit that does not create any additional or larger residential units. 291 Page 16 of 23 2.The installation of fire lines for fire protection are exempt from payment of the water impact fee. 3.Any such claim for exemption must be made no later than the time when the applicant applies for the first permit of a type listed in subsection A.1 of this section for the proposed development, and any claim for exemption not made at or before that time is waived. 4.The city must determine the validity of any claims for exemption pursuant to the criteria set forth in subsections G.1 and G.2 of this section. Sec. 2.06.1680. Wastewater impact fees. A.Imposition of wastewater impact fees. 1.Any person who seeks to obtain a permit for connection to the city wastewater system, or who is subject to subsection B.2.b of this section and applies for a city permit to expand or add to the structure served by a previously approved water connection is required to pay a wastewater impact fee in the amount specified in the commission resolution adopting the wastewater impact fee service area report and establishing the wastewater impact fee and as updated as required in this division; or 2.Any delayed payment of impact fees as specified and approved by the city commission in accordance with division 38.380. 3.No permits for connection to the city water system may be issued until the water impact fee described in this division has been paid, unless the development for which the permit is sought is exempted by subsection F of this section; or unless deferral of payment of the wastewater impact fee has been approved by the city pursuant to a deferral program approved by resolution of the commission in compliance with 2.06.1720. B.Computation of amount of wastewater impact fee. 1.An applicant required by this division to pay a water impact fee may choose to have the amount of such fee determined pursuant to either subsection B.2 or B.3 of this section. 2.The city must determine the amount of the required wastewater impact fee by reference to the most recently adopted wastewater impact fee schedule unless the applicant chooses to submit an individualized calculation pursuant to subsection B.3.a of this section or the city determines the application to be subject to subsection B.3.b of this section. If the applicant is applying for a replacement for a wastewater connection permit issued previously or extension for a permit, then the fee is the net positive difference between the service demand and associated fee applicable at the time of the current permit application and any wastewater impact fee previously paid pursuant to this division for the same structure. If the fee applicable at the time of the replacement permit application is lower than the wastewater impact fee previously paid pursuant to this division for the same structure, no refund of wastewater impact fees previously paid is allowed. 3.Individualized calculations. a.An applicant may request that the city determine the amount of the required wastewater impact fee by reference to an independent fee calculation study for the applicant's development prepared at the applicant's cost by a professional engineer and/or economist and submitted to the city transportation and engineering director. Any such study must be based on the same service standards and unit costs used in the most recently adopted wastewater impact fee study and must document the economic methodologies and assumptions used. a.Independent fee calculation studies must include documentation of rate of calls for service, required service standard, and any other relevant data for the proposed land use. b.Economic studies must include documentation of any special factors that the applicant believes will reduce the service demand otherwise attributable to the proposed land use. 292 Page 17 of 23 c.The city must consider all such documentation and any independent fee calculation study submitted by the applicant. The city is not required to accept any such study or documentation that the city deems to be inaccurate or unreliable and may request that the applicant submit additional or different documentation for consideration. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or accepted with modifications by the city as the basis for calculating transportation impact fees. d.The city will review and determine whether to accept a customized calculation within 90 calendar days of submittal. If accepted, the city will use the customized calculation in assessing the fee and no further correspondence is required. If the city rejects a customized calculation the city will inform the applicant of the reasons in writing. e.Upon acceptance, or acceptance with modifications, of an independent fee calculation study and documentation, the city will use the formulas and methodology contained within the most recently adopted transportation impact fee study to determine the transportation impact fee. b.The city may identify a user as having extraordinary demands for wastewater service which are not accurately represented by the average usage which was relied upon by the methodology in the most recently adopted wastewater impact fee study. In this circumstance the city must prepare a customized calculation based upon the methodology in the water impact fee study. When applicable an adjustment to the wastewater treatment portion of the impact fee for high strength discharge will be applied. (1)The impact fee paid for water meters larger than three inches may be adjusted based on actual usage. If usage is greater than 110 percent of anticipated volume or other measure of demand during the 12-month period beginning six months after building occupancy is granted by the city, an additional impact fee may be charged, using the same techniques for calculating treatment and collection in EDUs and multiplying by the impact fee cost per EDU. The additional impact fee is the positive net demand between a previously calculated impact fee and the impact fee based upon the metered demand. C.Payment of wastewater impact fee. 1.All funds paid by an applicant paid pursuant to this section must be identified as wastewater impact fees and must be promptly deposited in the wastewater impact fee fund described in subsection D of this section. D.Wastewater impact fee funds. 1.A single wastewater impact fee fund is created, and such fund must be maintained in an interest- bearing account. 2.Such fund must contain those wastewater impact fees collected pursuant to this division and any interest which may accrue from time to time on such amounts. 3.Such fund may also contain reimbursements collected pursuant to section 2.06.1680.F. E.Use of wastewater impact fee funds.The moneys in the wastewater impact fee fund must be used only: 1.To acquire or construct capacity expanding improvements to the city wastewater system; or 2.To pay debt service on any portion of any future general obligation bond issue or revenue bond issue used to finance improvements to the city wastewater system; or 3.As described in section 2.06.1690 or section 2.06.1700. F.Wastewater impact fee reimbursement.When the commission determines to fund capacity expanding capital improvements to the wastewater system and the commission determines prior to expenditure of funds for such improvements that, upon future development, such improvements may be considered project 293 Page 18 of 23 related improvements the commission may by resolution create a wastewater impact fee reimbursement district. The resolution creating the district must: 1.Identify the specific wastewater improvements that will be subject to reimbursement if determined at a later date to be a project related improvement; 2.Identify the real property to be included in such district wherein future development may be required to provide reimbursement; 3.Identify the rationale for the commission's determination that such improvements may be considered in the future to be project related improvements; 4.Identify the estimated amount of repayment that will be due from each property, the methodology for adjusting the estimated amount to the actual costs of construction, and the methodology for determining such amount; 5.Identify whether the amount of repayment will account for the time value of the initial expenditure, and if so, describe the calculation methodology; 6.Identify the period the reimbursement district will exist; and 7.Identify the required timing of payment of the reimbursement which may be upon annexation or prior to final subdivision or site plan approval, and in no case later than issuance of a building permit. Prior to adoption of a resolution creating the reimbursement district, the city must provide 15 business days written notice to owners of real property within the proposed district. G.Exemptions from wastewater impact fees. 1.The following types of development are exempt from payment of the wastewater impact fee: a.Alteration or expansion of an existing nonresidential building that does not require an additional or larger water meter; b.Replacement of a nonresidential building or structure of the same size that does not require an additional or larger water meter; c.The replacement of a previously existing residential unit that does not create any additional or larger residential units. 2.Any such claim for exemption must be made no later than the time when the applicant applies for the first permit of a type listed in subsection A.1 of this section for the proposed development, and any claim for exemption not made at or before that time is waived. 3.The city must determine the validity of any claim for exemption pursuant to the criteria set forth in subsection G.1. Sec. 2.06.1690. Refunds of development impact fees paid. A.Refunds of development impact fees must be made only in the following instances and in the following manner: 1.Upon application to the impact fee coordinator by the applicant, the city must refund the development impact fee paid if capacity is available and service is denied. 2.Expenses and encumbrances. a.Upon application to the impact fee coordinator, the city must refund the development impact fee paid and not expended or encumbered within ten years from the date the development impact fee was paid or spent in a manner not in accordance with this division or MCA 7-6-1602. Refunds must be paid to the owner of the property at the time impact fee in question was paid. 294 Page 19 of 23 In determining whether development impact fees have been expended or encumbered, fees must be considered encumbered on a first-in, first-out (FIFO) basis. b.When the right to a refund exists due to a failure to expend or encumber development impact fees, the city must publish written notice within 30 days after the expiration of the ten-year period from the date development impact fee was paid. The published notice must contain the heading "Notice of Entitlement to Development Impact Fee Refund." 3.If an applicant paid a development impact fee required by this division and obtained any of the types of permits or extensions listed in sections 2.06.1650.A.1, 2.06.1660.A.1, 2.06.1670.A.1, or 2.06.1680.A.1, and, a. The applicant cancels the project prior to beginning construction of the work for which the fee was paid, or b. The permit or extension for which the fee was paid later expires without the possibility of further extension and construction of the project has not begun, then the applicant who paid such fee is entitled to a refund of the fee paid, without interest. To be eligible to receive such refund, the applicant who paid such fee must submit an application for such refund within 30 calendar days after the expiration of the permit or extension for which the fee was paid. 4.A refund application must be made to the impact fee coordinator within 30 calendar days from the date such refund becomes payable under subsections A.1 through A.3 of this section, or within one year from the date of publication of the notice of entitlement of a refund under subsection A.2 of this section, whichever is later. Any refund not applied for within said time is waived. 5.A refund application must include information and documentation sufficient to permit the impact fee coordinator to determine whether the refund claimed is proper and, if so, the amount of such refund. 6.All refunds must be paid within 90 days after the impact fee coordinator determines that such refund is due. 7.Once paid, an impact fee may not be refunded in exchange for impact fee credits issued according to section 2.06.1700. Sec. 2.06.1700. Credits against development impact fees. A.After the effective date of the ordinance from which this division is derived, mandatory or voluntary land or easement dedications for transportation, fire protection/EMS, water, or wastewater improvements, and mandatory or voluntary acquisition or construction of capital improvements to the transportation system or the city fire protection/EMS, water, or wastewater systems by an applicant in connection with a proposed development may result in a pro rata credit against the development impact fee for the same type of service or facility otherwise due for such development, except that no such credit may be awarded for: 1.Projects or land dedications not listed on the impact fee capital improvements program (CIP); or 2.Land dedications for, or acquisition or construction of, project-related improvements as defined in section 2.06.1630; or 3.Any voluntary land or easement dedications not accepted by the city; or 4.Any voluntary acquisition or construction of improvements not approved in writing by the city prior to commencement of the acquisition or construction. B.In order to obtain a credit against development impact fees otherwise due, an applicant must submit a written offer to dedicate to the city specific parcels of qualifying land or easements, or to acquire or construct specific improvements to the transportation system or the city fire protection/EMS, water, or wastewater systems in accordance with all applicable state or city design and construction standards, and must specifically request a credit against such development impact fees. Such written request must be made 295 Page 20 of 23 on a form provided by the city, must contain a statement under oath of the facts that qualify the applicant to receive a credit, must be accompanied by documents evidencing those facts, and must be approved not later than the initiation of construction of improvements or the acceptance by the city of land dedications, or the applicant's claim for the credit is waived. The city may approve a credit only after making findings that the need for the dedication or construction is clearly documented pursuant to MCA 7-6-1602 and that any land dedication proposed for credit is determined to be appropriate for the proposed use. 1.Upon receipt of a complete application for impact fee credit, the impact fee coordinator must coordinate review of the application for compliance with the requirements of this division and other relevant requirements. The impact fee coordinator must consult with applicable department directors during the review. Upon completion of the review the impact fee coordinator must: a. Approve the application; or b. If the application is insufficient or otherwise does not conform to the city's requirements, communicate in writing to the applicant the reason the credit request failed. c. If the application satisfies the requirements and is approved, the credit may be provided in any of the allowed forms as described in subsection G of this section. 2.Factors for consideration: a.When credit is sought for an improvement listed in the second through fifth years of the CIP after the current fiscal year there is a rebuttable presumption that any credit is to be awarded as a credit balance and not as cash. b.If the city considers that award of a credit may negatively impact its ability to construct improvements listed sooner in time on the CIP or otherwise interfere with city priorities, they may decline to award a credit at that time without removing the item from the CIP. 3.Appeals of administrative decisions on credit requests may be appealed to the city manager per section 2.06.1730. C.The credit due to an applicant must be calculated and documented as follows: 1.Credit for qualifying land or easement dedications must, at the applicant's option, be valued at: a.One hundred percent of the most recent assessed value for such land as shown in the records of the state assessor; or b.That fair market value established by a private appraiser acceptable to the city in an appraisal paid for by the applicant. 2.To receive credit for qualifying acquisition or construction of transportation, fire protection/EMS, water, or wastewater improvements, the applicant must submit preliminary engineering drawings, specifications, and construction cost estimates to the city. The city must determine the amount of credit due based on the information submitted, or, if it determines that such information is inaccurate or unreliable, then on alternative engineering or construction costs acceptable to the city. Final credit values are determined after completion of construction and the city verifies final costs. D.Approved credits become effective at the following times: 1.Approved credit for land or easement dedications becomes effective when the land has been conveyed to the city in a form acceptable to the city, and at no cost to the city, and has been accepted by the city. When such conditions have been met, the city must note that fact in the credit record maintained by the city department of finance. Upon request of the credit holder, the city must send the credit holder a letter stating the credit balance available to the credit holder. 2.Approved credits for the acquisition or construction of transportation, fire protection/EMS, water, or wastewater improvements become effective when: 296 Page 21 of 23 a.All required construction has been completed and has been accepted by the city; and b.A suitable maintenance and warranty bond has been received and approved by the city; and c.All design, construction, inspection, testing, bonding, and acceptance procedures have been completed in compliance with all applicable city and state procedures. However, approved credits for the construction of improvements may become effective at an earlier date if the applicant posts security and completes all other steps necessary under 38.270 for securing completion of infrastructure. When such conditions have been met, the city must note that fact in the credit record maintained by the city department of finance. Upon request of the credit holder, the city must also send the credit holder a letter stating the credit balance available to the credit holder. E.Approved credits may be used to reduce the amount of development impact fees due from any proposed development for the same type of service or facility for which the applicant dedicated land or acquired or constructed improvements until the amount of the credit is exhausted. Each time a request to use credit from a mandatory or voluntary dedication, acquisition, or construction is presented to the city, the city must reduce the amount of the development impact fee of the same type otherwise due from the applicant and must note in the city records the amount of credit remaining, if any. In the case of a mandatory dedication, acquisition, or construction, any credit more than the amount of the development impact fee otherwise due under this division is deemed excess credit that is remaining and available for use by the applicant. In the case of a voluntary dedication, acquisition, or construction, any credit more than the amount of the development impact fee of the same type and applicable to the project is deemed excess credit that is remaining and available for use by the applicant. Upon request of the credit holder, the city must send the credit holder a letter stating the amount of credit remaining to the credit holder. F.Approved credit may only be used to reduce the amount of development impact fees of the same type otherwise due under this division and must not be paid to the applicant in cash or in credit against any development impact fees for a different type of facility or service or against any other moneys due from the applicant to the city, except as described in subsection G of this section. G.If the amount of approved credit for a mandatory dedication, acquisition, or construction exceeds the amount of the development impact fees of the same type otherwise due under this division, the applicant may request in writing that the city provide for reimbursement of any excess credit to the applicant in cash. Such written request must be approved not later than the initiation of construction of improvements, or the acceptance by the city of land dedications, or the applicant's claim is waived. Upon receipt of such a written request, the city may, at its discretion: 1.Arrange for the reimbursement of such excess credit from the impact fee fund for the same type of service or facility from development impact fees paid by others; 2.Arrange for the reimbursement of such excess credit through the issuance of a promissory note payable in not more than ten years and bearing interest equal to the interest rate paid by the city for its long-term debt; or 3.Reject the request for cash and provide credit. Such excess credit must be valued at 100 percent of actual developer costs for the excess improvements, or at the actual appraised value of such excess improvements, at the city's option. H.Credit may be transferred from one holder to another by notarized writing clearly identifying the credit issued under subsection C of this section that is to be transferred, provided that such instrument is signed by both the transferor and transferee, and that the document is delivered to the city for registration of the change in ownership. Sec. 2.06.1710. Miscellaneous provisions. A.The city may retain not more than five percent of the development impact fees collected as payment for the expenses of collecting the fee and administering this division. 297 Page 22 of 23 B.If a development impact fee has been calculated and paid based on a mistake or misrepresentation, it must be recalculated. Any amounts overpaid by an applicant must be refunded by the city to the applicant within 60 business days after the city's acceptance of the recalculated amount. Amounts underpaid by the applicant must be paid to the city within 30 business days after the city's acceptance of the recalculated amount unless the city and landowner agree to a different time frame In the case of an underpayment to the city, the city must not issue any additional permits or approvals for the project for which the development impact fee was previously paid until such underpayment is corrected; and if amounts owed to the city are not paid within such 30 business day period, the city may also repeal any permits issued in reliance on the previous payment of such development impact fee and refund such fee. The city may decline to collect underpaid fees if the city determines that the cost of collection of underpaid fees exceeds benefit of the fee. C.1. To promote affordable housing, the city commission may pay some or all the impact fee from other funds of the city that are not restricted to other uses. 2. To promote the economic development of the city the city commission may agree to pay some, or all the development impact fees imposed on a proposed development by this division from other funds of the city that are not restricted to other uses. 3. Any such decision to pay development impact fees on behalf of an applicant is at the discretion of the city commission and must be made pursuant to goals and objectives previously adopted by the city commission to promote economic development and/or affordable housing. Sec. 2.06.1720. Deferrals. A.The city commission may, by resolution, create a program to enable deferral of payment of impact fees to a time after issuance of a building permit or a connection permit to the water and sewer systems. Any such resolution must: 1.Specify the circumstances and conditions under which a deferral may be allowed or disallowed. 2.Specify the points in time when the deferral may be requested, granted, and when payment of fees is required. 3.Specify costs to be incurred with deferral and fee payment and who is responsible for paying those costs. 4.Specify the process to receive and process a request for a deferral, including any administrative fees or required security for payment. 5.Specify the process for recognizing the payment of deferred fees and the release of any limitations on the property. 6.Require an impact fee deferral agreement and related documents as approved by the city attorney to be recorded at the Gallatin County Clerk and Recorder's Office securing the amount due, including a covenant running with the land agreeing that a certificate of occupancy or other permit required by this division when a certificate of occupancy is not required will not be provided until payment of the deferred fees is verified. Sec. 2.06.1730. Appeals, administration, and interpretation. A. 1. Any determination made by any official of the city charged with the administration of any part of this division may be appealed to the city manager by filing: a.A written notice of appeal on a form provided by the city; b.A written explanation of why the appellant feels that a determination was in error including any supporting documentation; and 298 Page 23 of 23 c.An appeal fee of $500.00 with the impact fee coordinator within 15 business days after the determination for which the appeal is being filed. 2.The city manager must review the appeal within 30 working days of the date the written appeal was presented to the impact fee coordinator. If the city manager concludes that all or part of a determination made by an official of the city charged with the administration of any part of this division was in error, then the appeal fee described in this subsection must be returned to the appellant. B.The impact fee coordinator is responsible for interpretation of this division. C.Violation of this division is a misdemeanor and is subject to those remedies provided in section 1.01.210. Knowingly furnishing false information to any official of the city charged with the administration of this division on any matter relating to the administration of this division, including without limitation the furnishing of false information regarding the expected size, use, or impacts on services from a proposed development, is a violation of this division. In addition to, or in lieu of, any criminal prosecution, the city, or any applicant for a permit of the types described in section 2.06.1650.A.1, 2.06.1660.A.1, 2.06.1670.A.1, or 2.06.1680.A.1 have the right to sue in civil court to enforce the provisions of this division. D.The section titles used in this division are for convenience only and do not affect the interpretation of any portion of the text of this division. E.Any judicial action or proceeding to attack, review, set aside, or annul the reasonableness, legality, or validity of any development impact fee must be filed and service of process effected within 90 calendar days following final administrative action to impose the fee, including resolution of any appeals. 299 Page 1 of 27 Exhibit A – Ordinance 2169 showing markup DIVISION 9. IMPACT FEES Sec. 2.06.1600. Legislative findings. A. The city commission finds that: 1. The protection of the health, safety, and general welfare of the citizens of the city requires that the street transportation, fire protection/EMS, water, and wastewater systems of the city be expanded and improved to accommodate continuing growth within the city and within those areas directly served by its fire department and within those areas connected to its water and wastewater systems. 2. New residential and nonresidential development imposes increased and excessive demands upon existing city facilities. 3. New development often will overburdens existing public facilities unless it offsets increased service demand, and the tax revenues generated from new development often do not generate sufficient funds to provide public facilities to serve the new development as the cost of construction inflation substantially exceeds the ½ the three year average rate of inflation allowed to local governments under 15-10-420 MCA and property taxes are charged in arrears. 4. New development is expected to continue and will place ever-increasing demands on the city to provide public facilities to serve new development. 5. The creation of an equitable development impact fee system would enables the city to demonstrate and require payment of impose a roughly proportionate share of the costs of required improvements to the city's transportation, fire protection/EMS, water, and wastewater systems on those developments that create the need for them. 6. All types of development that are not explicitly exempted from the provisions of this division will generate demand for city's transportation, fire protection/EMS, water, and wastewater services or facilities that will require improvements to city facilities and equipment. 7. The city's adopted impact fee studies service area reports set forth reasonable methodologies and analyses for determining the impacts of various types of development on the city's transportationstreet, fire protection/EMS, water, and wastewater systems and for determining the cost of acquiring land and the cost of acquiring or constructing facilities and equipment necessary to meet the demands for such services created by new development. 8. The city establishes as city standards the assumptions and service standards referenced in the impact fee service area reports studies and other duly adopted documents as part of its current plans for the transportation system and for the city's fire protection/EMS, water, and wastewater systems. 9. The documentation required by MCA 7-6-1602, is collectively contained in the city's facility plans, impact fee studies service area reports, development regulations, financial records, capital improvements program, design and specification manual, and other city documents. 10. The development impact fees described in this division are reasonably related to the service demands and needs of new development and are based on the impact fee studies service area reports and documentation cited in subsection 7 of this section and are shown to do not exceed the costs of acquiring additional land and the costs of acquiring or constructing additional facilities or equipment required to serve the new developments that will pay the fees. 11. All transportation improvements upon which the transportation impact fees are based and upon which transportation impact fee revenues will be spent, based on the limitations set forth in this division will 300 Page 2 of 27 benefit all new development in the city; and it is, therefore, appropriate to treat the entire city as a single service area for purposes of calculating, collecting, and spending the transportation impact fees, while recognizing differences in the demand for service based upon the identified factors set forth in the transportation impact fee service area reportstudy. 12. All of the fire protection/EMS improvements upon which the listed in the fire protection/EMS impact fee study service area report are based and upon which fire protection/EMS impact fee revenues will be spent, based on the limitations set forth in this division will benefit all new development that receives fire protection/EMS service directly from the city fire department; and it is, therefore, appropriate to treat the entire city and all properties served directly by the city fire department as a single service area for purposes of calculating, collecting, and spending the fire protection/EMS impact fees. 13. All of the water system improvements upon which listed in the water impact fee study service area report are based and upon which water impact fee revenues will be spent, based on the limitations set forth in this division will benefit all new development that connects to the city water system; and it is, therefore, appropriate to treat the entire city and all properties connected to the city water system as a single service area for purposes of calculating, collecting, and spending the water impact fees. 14. All of the wastewater system improvements upon which listed in the wastewater impact fee study service area report are based and upon which wastewater impact fee revenues will be spent, based on the limitations set forth in this division will benefit all new development that connects to the city wastewater system; and it is, therefore, appropriate to treat the entire city and all properties connected to the city wastewater system as a single service area for purposes of calculating, collecting, and spending the wastewater impact fees. 15. There is both a rational nexus and a rough proportionality between the development impacts created by each type of development covered by this division and the development impact fees that such development will be required to pay and the fee study and project-specific calculation process provides an individualized determination of impacts to be mitigated by payment of the impact fee. 16. The city's facility planning, capital improvement program, development review, and bidding processes create a public process by which, on a specific and detailed basis, the capacity expanding components of construction can be identified and funded distinctly from those components which are not capacity expanding by providing for evaluation by the city and the impact fee advisory committee of future needs related to growth, identification of applicable funding sources, and monitoring of construction and payments. 17. To meet the needs of new development the city may construct capacity expanding capital improvements prior to development of adjacent properties. This may include the construction of capacity expanding infrastructure of a nature and in a location that may require such improvements to be deemed project related improvements at the time of the development of such adjacent properties. The city commission finds that under certain conditions it is fair and reasonable that the costs of a project related improvement that have been paid by the city prior to development of certain properties should be reimbursed at the time of development of those properties. 18. This division creates a system by which development impact fees paid by new developments will be used to expand or improve the city transportation, fire protection/EMS, water, and wastewater systems in ways that benefit the development that paid each fee within a reasonable period of timeperiod after the fee is paid. 19. This division creates a system under which development impact fees shall must not be used to cure existing deficiencies in public facilities or to pay maintenance or operations costs associated with providing public facilities. 301 Page 3 of 27 Sec. 2.06.1610. Authority and applicability. A. This division is enacted pursuant to the city's self-government powers, the authority granted to the city by the Montana State Constitution, MCA 7-6-1601 through 7-6-1604, and MCA 7-1-4123, 7-1-4124, 7-3-4313, 7- 7-4404, 7-7-4424, 7-13-4304, and 69-7-101, and the city charter. B. The provisions of this division shall apply to all ofall the territory within the limits of the city. C. The provisions of this division related to the fire protection/EMS impact fees shall also apply to all properties located outside the city that are served directly by the city fire department. D. The provisions of this division related to water impact fees shall also apply to all properties located outside the city that are connected to the city water system. E. The provisions of this division related to wastewater impact fees shall also apply to all properties located outside the city that are connected to the city wastewater system. F. The provisions of this division related to the establishment of transportation, fire protection/EMS, water, and sewer reimbursement districts applies to properties located outside the city that are deemed to benefit from capacity expansion. Sec. 2.06.1620. Intent of division. A. This division is adopted to help implements the growth policy/land use plan of the city, the city's most recently adopted long range transportation plan, the most recently adopted water facility plan, the most recently adopted wastewater facility plan, and the most recently adopted fire protection/EMS master plan. B. The intent of this division is to eThis division ensures that new development bears its a proportionate share of the cost of improvements to the city transportation, fire protection/EMS, water, and wastewater systems; to ensures that such proportionate share does not exceed the roughly proportionate cost of the transportation, fire protection/EMS, water, and wastewater facilities and equipment required to serve such new developments.; and to ensure that funds collected from new developments are actually used to construct improvements to the city transportation, fire protection, water, and wastewater systems that reasonably relate to the benefits accruing to such new developments. C. It is the further intent of this division that new development pays for its roughly proportionate share of public facilities through the imposition of development impact fees that will be used to finance, defray, or reimburse all or a portion of the costs incurred by the city to construct improvements to the city transportation, fire protection/EMS, water, and wastewater systems that serve or benefit such new developmentimpact fee payers. D. Prevents the It is not the intent of this division to collection of any money through impact fees from any new development in excess of the reasonably foreseeable, logically connected, and roughly proportional actual amount necessary to offset new demands for transportation, fire protection/EMS, water, or wastewater improvements generated by that new development within the service area as established in the service area report for each fee type. E. It is not the intent of this division that any No moneys collected from any development impact fee and deposited in an impact fee fund may ever be co-mingled with moneys from a different impact fee fund or ever be used for a type of facility or equipment different from that for which the fee was paid. F. Any funds paid pursuant to a reimbursement district established in this division or payback district established through other municipal authority do not replace or reduce any impact fees imposed upon development. 302 Page 4 of 27 Sec. 2.06.1630. Definitions. A. The following words, termsterms, and phrases, when used in this division, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: 1. "Capacity expanding capital improvements" means improvements that increase the functional capacity of the city's water system, wastewater system, fire protection and emergency medical service system (EMS), or transportation system. This term may include capital improvements that if constructed in advance of development may meet the definition of "project related improvements" when development of adjacent property occurs. 2. "Central Business District" (CBD) means the land area encompassed land uses established within the B- 3, "Central Business District," zoning district as of [the effective date of this ordinance]. 3. "Development" means any construction or expansion of a building, structure, or use, any change in use of a building or structure, or any change in the use of land, which creates additional demand for public services. 4. "Development impact fees" means the transportation impact fee, fire protection/EMS impact fee, water impact fee, and wastewater impact fee established by this division. 5. "Development impact fees review committee" means the committee composed of the impact fee coordinator, the building official, the director of transportation and engineering, the fire chief, and the director of community development, or their designees appointed to serve in the member's place at a meeting. 56. "Encumber" means to legally obligate by contract, or otherwise commit to use by appropriation, or otheranother official act of the city. 6. Fee schedule means the listing of the dollar cost of each impact fee as established in the most recent service area report and as adjusted annually for inflation. 7. "Impact fee capital improvement program" means the capital improvements program for the transportation system, the city fire protection/EMS system, and the city water and wastewater systems, which shall assigns moneys from each impact fee fund to specific projects and related expenses for improvements to the type of facilities or services for which the fees in that fund were paid, and shall must not include improvements needed to correct existing deficiencies or operations or maintenance costs. 8. "Impact fee coordinator" means the director of the city's department of community development or designee. 9. "Impact fee funds" means the transportation impact fee fund, fire protection/EMS impact fee fund, water impact fee fund, and wastewater impact fee fund established by this division. 10. "Impact fee studies" means the service area reports studies most recently adopted by resolution of the city commission for each impact fee which set forth reasonable methodologies and analyses for determining the impacts of various types of development on the city's street transportation, fire protection/EMS and emergency medical services, water and wastewater systems or other services or facilities for which an impact fee may be charged and for determining the cost of acquiring land and the cost of acquiring or constructing facilities and equipment necessary to meet the demands for such services created by new development. 11. "Improvement" means planning, land acquisition, engineering design, construction inspection, on-site construction, off-site construction, equipment purchases, and financing costs associated with new or expanded facilities, buildings, and equipment that expand the capacity of a facility or service system and that have an average useful life of at least ten years. The term "improvement" does not include maintenance, operations, or improvements that do not expand capacity. 303 Page 5 of 27 12. "Independent fee calculation study" means a study prepared by an applicant for a building permit or water or wastewater connection permit calculating the cost of expansions or improvements to the city's transportation, fire protection/EMS, water, or wastewater systems required to serve the applicant's proposed development; that is performed on an average cost (not marginal cost) methodology; uses the service units and unit construction costs stated in the impact fee studies; and is performed in compliance with any criteria for such studies established by this division or by the city. 13. "Initiation of construction" means the date of the preconstruction meeting with the city engineer, or the date of the first visible change in the physical condition of the improved site caused by the first person furnishing services or materials to effect construction of the improvement, whichever occurs first. 14. "Maintenance" means replacement, repair, or caring for a constructed water, sewer, fire protection/EMS, or transportation facility to preserve them in a functional state equal to their initial installed design; and which does not change the basic design or structure or change them from their original purpose. Activities that change the scope of a project beyond the original design are not included in this definition. 15. “Payback district” means a legal mechanism for an entity that installs incidental excess capacity that benefits future development and is not funded by or eligible for impact fees to recapture a proportionate share of the value of installed excess capacity from benefited landowners. 165. "Project-related improvements" means site-related improvements including, without limitation, all access streets including sidewalks adjacent to the proposed development or leading only to the proposed development and not included on the transportation system; all streets, and driveways, and pedestrian/bicycle facilities within the development; all acceleration, deceleration, right, or left turn lanes leading to any streets and driveways within the development; all traffic control devices for streets and driveways within the development; all water lines or facilities adjacent to, leading to, or located within the development and serving only the development; all wastewater lines or facilities adjacent to, leading to, or located within and serving only the development; and all off-site improvements necessary for the safety and code compliance of a development. Credit for incidental improvements shall is not be allowed. The presumption shall be madeIt is presumed that the minimum improvement needed to serve a project shall be deemed to beis a project improvement even if additional capacity is thereby created that may be potentially used by other developments presently or in the future. 17. “Reimbursement district” means a legal mechanism to recoup the costs of project-related improvements funded by impact fees as part of initial installation of a larger capacity expanding improvement greater than project-related improvements. 186. "Transportation system" means existing or planned collectors or arterial streets, including associated non-motorized travel elementsroads of three lanes or more and, which are either included on the most current long range transportation plan or the city's impact fee capital improvement program. The transportation system includes bicycle and pedestrian facilities appurtenant to such roads. 19. 17. Trip exchange district. a. "Trip exchange district" means a defined geographic area where there is a demonstrated significant reduction in new vehicle trips below that established in the transportation service area report. that meets the following criteria, pursuant to the transportation fee study and an independent fee calculation study as provided in section 2.06.1640.B.3: (1) The use of shared and consolidated parking; (2) A high degree of pedestrian and bicycle access to and throughout the proposed development; (3) The availability of public transit; 304 Page 6 of 27 (4) Extensive trip capture within the proposed development where trips to the proposed development result in visits to multiple businesses in the area via a mode other than automobile; b. The following additional physical development characteristics are associated with trip exchange district land uses: (1) The majority of buildings associated with the proposed development are multi-story building, often more than two stories; (2) Diverse business proprietorships within the development; (3) Primary use at the ground floor is commercial; (4) The majority of individual businesses within the development are less than 20,000 square feet; (5) Structures within the development are in near to each other and the public street (with small or no setbacks); (6) Having a high percentage building coverage on the lot and typically in excess of 0.5; (7) The physical characteristics are shared among the entire business area, not just one or a few of the businesses; (8) The area should be at least 50 percent developed as measured by lot area utilized; and (9) The area is the subject of a city enforceable common plan of development, such as an urban renewal plan. Sec. 2.06.1640. General Requirements. A. Interest earned on moneys in any impact fee fund is part of such fund and is subject to the same restrictions on use applicable to the impact fees deposited in such fund. B. No moneys from any impact fee fund may be spent for periodic or routine maintenance of any facility of any type or to cure deficiencies in public facilities. C. Nothing in this division restricts the city from requiring an applicant to construct reasonable project related improvements required to serve the applicant's project, whether or not such improvements are of a type for which credit is available under section 2.06.1700. D. The city must maintain accurate records of the development impact fees paid, including the name of the person paying such fees, the project for which the fees were paid, the date of payment of each fee, the amounts received in payment for each fee, and any other matters that the city deems appropriate or necessary to the accurate accounting of such fees, and such records must be available for review by the public during city business hours. E. 1. The city manager must present to the city commission a proposed impact fee capital improvements program consistent with section 5.07 of the city charter for the transportation system, fire protection/EMS system, water system, and wastewater system, which identifies the capacity-adding capital improvements that will benefit new development subject to the terms of this division, exclusive of any improvements needed to correct existing deficiencies or for operation or maintenance purposes. The city commission must approve the capital program consistent with section 5.08 of the city charter. 2. The capital improvements program must assign moneys from each impact fee fund to specific projects and related expenses for improvements to the type of facilities or services for which the fees in that fund were paid. Any moneys, including any accrued interest, not assigned to specific projects within such capital improvements program and not expended pursuant to section 2.06.1690 or 2.06.1700 must be retained in the same impact fee fund. The impact fee capital improvements program schedules the construction of 305 Page 7 of 27 capital improvements to serve projected growth and project capital improvement costs, expenditures, and impact fee fund revenues for a five-year period. The individual fee funds shall maintain a positive fiscal balance. 3. The city manager shall adopt and revise, as needed, an administrative impact fee manual to carry out the purposes of this division. The manual must address processes, further definitions as needed, special cases for calculation of fees, independent fee studies, calculation of credits, deferral processes, and appeals. F. Updating of impact fee information. 1. The facility plans described in this division must be reviewed by the city at least once every five years and if a revision of a facility plan to address changed conditions is deemed necessary by the city, the plan must be updated. 2. The development impact fees described in this division, fee studies, data and analysis relied upon and required by MCA 7-6-1602, and the administrative procedures and manual of this division must be updated at least once every four fiscal years. 3. The purpose of the review and updating of impact fee related documentation is to ensure that: a. The demand and cost assumptions underlying such fees are still valid; b. The resulting fees do not exceed reasonable estimates of the cost of constructing improvements that are of the type for which the fee was paid and that are required to serve new development; c. The moneys collected or to be collected in each impact fee fund have been, and are expected to be, spent for improvements of the type for which such fees were paid; and d. That such improvements will benefit those developments for which the fees were paid. G. The development impact fees shown in the most recently adopted impact fee studies must be adjusted annually to reflect the effects of inflation on those costs for improvements set forth in the impact fee studies. On January 1st of each year unless and until the impact fee studies are revised or replaced, and then beginning in the subsequent calendar year, each fee amount set forth in each such study must be adjusted by multiplying such amount by one plus the value of the Construction Cost Index published in the first December edition of the current year. (Source: Engineering News Record.) Such adjustments in such fees become effective immediately upon calculation by the city and do not require additional action by the city commission to be effective. Sec. 2.06.16401650. Transportation impact fees. A. Imposition of transportation impact fees. 1. Any person who seeks to obtain any of the following forms of development approval is required to pay a transportation impact fee in the amount specified in the commission resolution adopting the most recent transportation impact fee study and establishing the transportation impact fee and as updated as required in this division. a. A building permit; b. Any other permit that will result in the construction of improvements that will generate additional trafficdemand for transportation services; or c. Any extension of any such permit that was issued before the effective date of the ordinance from which this division is derived; or 306 Page 8 of 27 d. Any delayed payment of impact fees as specified and approved by the city commission in accordance with chapterdivision 38.380., article 43. 2. Notwithstanding subsection A.1 of this section, no impact fee shall may be imposed earlier than the issuance of a building permit for developments requiring a building permit. Development generating additional demand for service and not requiring a building permit must pay impact fees prior to the action of the City that authorizes initiation of construction. 3. No permits of the types described in subsection A.1 of this section may be issued until the transportation impact fee described in this division has been paid, unless the development for which the permit is sought is exempted by subsection F of this section; or unless deferral of payment of the transportation impact fee has been approved by the impact fee coordinator pursuant to a deferral program approved by resolution of the Commission in compliance with 2.06.17201700.I. B. Computation of amount of transportation impact fee. 1. An applicant required by this division to pay a transportation impact fee may choose to have the amount of such fee determined pursuant to either subsection B.2 or B.3 of this section. The amount of the fee calculated pursuant to either subsection B.2 or B.3 of this section shall be subject to the following adjustment: a. For the first expansion of an existing nonresidential building, the amount calculated shall not include the amount calculated for the expansion of up to 30 percent as compared with its size on February 22, 1996, or 2,000 square feet, whichever is less. b. When a property changes from one nonresidential use to another within an existing nonresidential building, the area included in the calculation of change in demand shall exclude the first 2,000 square feet of gross floor area. c. The transportation impact fees are those adopted by resolution of the commission and as updated as provided for in this division. 2. Unless an applicant requests that the city determine the amount of such fee pursuant to subsection B.3 of this section, the city shall must determine the amount of the required transportation impact fee by reference to the most recently adopted transportation impact fee studyservice area report schedule of fees. The fee amounts set forth in such study the service area report include credits for expected future receipts of state and federal highway funds and expected future receipts of gas tax revenues, and all other non-impact fee sources of funding anticipated to be made by or as a result ofbecause of new development to be applied to the transportation improvements required to serve new development. a. If a the applicant's development is of a type not listed in the most recently adopted transportation impact fee service area reportstudy, then the city shall must use the fee applicable to the most nearly comparable type or land use in the study report. In making a decisiondeciding about which use is most nearly comparable, the city shall isbe guided by the most recent edition of "Trip Generation: An Information Report" prepared by the Institute of Transportation Engineers; or if such publication is no longer available, then by a similar publication. If the city determines that there is no comparable type of land use listed in the study, then a new fee shall must be determined by: (1) Finding the most nearly comparable trip generation rate from the publication noted in subsection B.2.a. of this section; and (2) Applying the formula an independent fee study as set forth in subsection B.3.d of this section. b. If the applicant's development includes a mix of those uses listed in the most recently adopted transportation impact fee study, then the fee shall beis determined by adding up the fees that 307 Page 9 of 27 would be payable for each use if it were a freestanding use pursuant to the most recently adopted transportation impact fee study. c. If the applicant is applying for an extension of a permit issued previously, then an additional fee is necessary and that the fee shall beis the net increase between the fee applicable at the time of the current permit extension application and any transportation impact fee previously paid pursuant to this division for the same structure. In the event that If the fee applicable at the time of the current extension permit application is lower than the transportation impact fee previously paid pursuant to this division for the same structure, there shall be no refund of transportation impact fees previously paid is allowed. If fees are not yet paid, the amounts due prior to permit issuance will be updated based on the date of the extension application. d. If the applicant is applying for a permit to allow a change of use or the expansion, redevelopment, or modification of an existing development, the fee shallmust be based on the net positive increase in the fee for the new use as compared to the previous use. However, no new fee may shall be imposed unless an additional unit of service demand is created, in accordance with the most recently adopted transportation impact fee study. If necessary to determine such net increase, the city shallmust be guided by the most recent edition of "Trip Generation Manual: An Information Report" prepared by the Institute of Transportation Engineers; or if such publication is no longer available, then by a similar publication. In the event thatIf the proposed change of use, expansion, redevelopment, or modification results in a net decrease in the fee for the new use or development as compared to the previous use or development, there shall be no refund of transportation impact fees previously paid is allowed. 3. Prior to issuance of a building permit, Aan applicant may request that the city determine the amount of the required transportation impact fee by reference to an independent fee calculation study for the applicant's development prepared by qualified professional traffic engineers and/or economists at the applicant's cost and submitted to the city engineer. Any such study must show the traffic engineering and economic methodologies and assumptions used, including, but not limited to, those forms of documentation listed in subsections B.3.a andand B.3.b of this section and must be acceptable to the city pursuant to subsection B.3.c of this section. a. Traffic engineering studies must include documentation of trip generation rates, trip lengths, any percentage of trips from the site that represent net additions to current trips from the site, the percentage of trips that are new trips as opposed to pass-by or divert-link trips, and any other trip data for the proposed land use. b. Economic studies must include documentation of any special factors that the applicant believes will reduce the traffic volumes otherwise attributable to the proposed land use. c. The city shall must consider all such documentation and any independent fee calculation study submitted by the applicant., but shall The city is not be required to accept any such study or documentation that the city deems to be inaccurate or unreliable and may request that the applicant submit additional or different documentation for consideration. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or accepted with modifications by the city as the basis for calculating transportation impact fees. d. The city will review and determine whether to accept a customized calculation within 90 calendar days of submittal. If accepted, the city will use the customized calculation in assessing the fee and no further correspondence is required. If the city rejects a customized calculation the city will inform the applicant of the reasons in writing. ed. Upon acceptance, or acceptance with modifications, of an independent fee calculation study and documentation, the city shall will use the formulas and methodology contained within the most recently adopted transportation impact fee study to determine the transportation impact fee. C. Payment of transportation impact fee. 308 Page 10 of 27 1. All funds paid by an applicant pursuant to this division shall must be identified as transportation impact fees and shall must be promptly deposited in the transportation impact fee fund described in subsection D of this section. D. Transportation impact fee funds. 1. A single transportation impact fee fund is createdcreated, and such fund must be maintained in an interest bearinginterest-bearing account. 2. Such fund may must contain those transportation impact fees collected pursuant to this division and any interest which may accrue from time to time on such amounts. 3. Such fund may also contain reimbursements collected pursuant to subsection 2.06.16501640.F. E. Use of transportation impact fee funds. The moneys in the transportation impact fee fund shall must be used only as follows: 1. To acquire land for and/or acquire or construct capacity expanding capital improvements to the transportation system reasonably related to the benefits accruing to new development subject to the terms of this division, in accordance with the requirements of state law; or 2. To pay debt service on such capital improvements to the transportation system; or 3. For purposes of refunds or credits, as described in section 2.06.16901680 or 2.06.17001690.G; and 4. May not be used for: a. Operations or maintenance purposes; or b. To correct existing deficiencies.; or c. For bicycle or pedestrian facilities unless built in conjunction with and included in a capacity- adding transportation system facility, otherwise eligible for impact fee funding. F. [Transportation impact fee reimbursement.] When the commission determines to fund capacity expanding capital improvements to the transportation system and the commission determines prior to expenditure of funds for such improvements that, upon future development, such improvements may be considered project related improvements the commission may by resolution create a transportation impact fee reimbursement district. The resolution creating the district must: 1. Identify the specific transportation system improvements that will be subject to reimbursement if determined at a later date to be a project related improvement; 2. Identify the real property to be included in such district wherein future development may be required to provide reimbursement; 3. Identify the rationale for the commission's determination that such improvements may be considered in the future to be project related improvements; 4. Identify the estimated amount of repayment that will be due from each property, the methodology for adjusting the estimated amount to the actual costs of construction, and the methodology for determining such amount; 5. Identify whether the amount of repayment will account for the time value of the initial expenditure, and if so, describe the calculation methodology; 6. Identify the period of time the reimbursement district will exist; and 7. Identify the required timing of payment of the reimbursement which may be upon annexation or prior to final subdivision or site plan approval, and in no case later than issuance of a building permit. Prior to adoption of a resolution creating the reimbursement district, the city must provide 15 business days written notice to owners of real property within the proposed district. 309 Page 11 of 27 G. Exemptions from transportation impact fee. 1. The following types of development shall beare exempted from payment of the transportation impact fee: a. Alterations, remodeling, rehabilitations, expansions of existing buildings, or other improvements to an existing structure where no additional vehicle trips will be produced over and above those produced by the existing use; b. Construction of accessory buildings or structures that will not produce additional vehicle trips over and above those produced by the primary building or land use; c. The replacement of a destroyed or partially destroyed building or structure with a new building or structure of the same size and use where no additional vehicle trips will be produced over and above those produced by the original building or structure; d. The installation or replacement of a mobile home on a lot or a mobile home site when a transportation impact fee for such lot or site has previously been paid pursuant to this division or where a mobile home legally existed on such site on or prior to the effective date of the ordinance from which this division is derived; and e. Any other type of development for which the applicant can demonstrate that the proposed land use and development will produce no more vehicle trips from such site over and above the trips from such site prior to the proposed development, or for which the applicant can show that a transportation impact fee for such site has previously been paid in an amount that equals or exceeds the transportation impact fee that would be required by this division for such development. 2. Any such claim for exemption must be made no later than the time when the applicant applies for the first permit or a type listed in subsection A.1 of this section for the proposed development, and any claim for exemption not made at or before that time shall have beenis waived. 3. The city shall must determine the validity of any claim for exemption pursuant to the criteria set forth in subsections G.1 and G.2 of this section. H. A trip exchange district is established through an independent fee study or similar data through a service area report. Areas where a trip exchange district may be established have the majority of the following characteristics: 1. The use of shared and consolidated parking. 2. A high degree of pedestrian and bicycle access to and throughout the proposed development. 3. The availability of public transit. 4. Extensive trip capture within the existing and proposed development where trips to the proposed development result in visits to multiple destinations in the area via a mode other than automobile. 5. Diverse business proprietorships within the development. 6. Primary use at the ground floor is non-residential. 7. The majority of individual businesses within the development are less than 20,000 square feet. 8. Structures within the development are near to each other and the public street (with small or no setbacks). 9. The majority of buildings associated with the proposed development are multi-story building, often more than two stories. 10. Having a high percentage building coverage on the lot and typically more than 0.5. 310 Page 12 of 27 11. The physical characteristics are shared among the entire area, not just one or a few businesses. 12. The area is at least 50 percent developed as measured by lot area utilized. 13. The area is the subject of a city enforceable common plan of development, such as an urban renewal plan or master site plan. Sec. 2.06.16601650. Fire protection and emergency medical service impact fees. A. Imposition of fire protection and emergency medical service impact fees. 1. Any person who seeks to obtain any of the following forms of development approval is required to pay a fire protection/EMS impact fee in the amount specified in the commission resolution adopting the most recent fire protection/EMS impact fee service area reportstudy and establishing the fire protection/EMS impact fee and as updated as required in this division: a. A building permit; or b. Any other permit that will result in construction that will generate demand for fire protectionprotection/EMS services; or c. Any extension of any such permit that was issued before the effective date of the ordinance from which this division is derived, is required to pay a fire protection impact fee in the amount specified in this division; or d. Any delayed payment of impact fees as specified and approved by the city commission in accordance with chapter 38, article 43division 38.380. 2. Notwithstanding subsection A.1 of this section, no impact fee may be imposed earlier than the issuance of a building permit for developments requiring a building permit. Development generating additional demand for service and not requiring a building permit must pay impact fees prior to the action of the City that authorizes initiation of construction. 23. No permits of the types described in subsection A.1 of this section may be issued until the fire protection/EMS impact fee described in this division has been paid, unless the development for which the permit is sought is exempted by subsection F of this section; or unless deferral of payment of the fire protection/EMS impact fee has been approved by the city pursuant to a deferral program approved by resolution of the commission in compliance with 2.06.17201700.I. B. Computation of amount of fire protection/EMS impact fee. 1. An applicant required by this division to pay a fire protection/EMS impact fee may choose to have the amount of such fee determined pursuant to either subsection B.2 or B.3 of this section. The amount of the fee calculated pursuant to either subsection B.2 or B.3 of this section shall be subject to the following adjustment: a. For the first expansion of an existing nonresidential building, the amount calculated shall not include the amount calculated for the expansion of up to 30 percent as compared with its size on February 22, 1996, or 2,000 square feet, whichever is less. 2. Unless an applicant requests that the city determine the amount of such fee pursuant to subsection B.3 of this section, the city shall must determine the amount of the required fire protection/EMS impact fee by reference to the most recently adopted fire protection/EMS impact fee studyservice area report. a. If a the type of development is not of a type listed in the most recently adopted fire/EMS impact fee service area report that a permit is applied for is not listed in the most recently adopted fire impact/EMS fee study, then the city shall must use the fee applicable to the most nearly comparable type or land use in the study service area report. 311 Page 13 of 27 b. If the type of development that a permit is applied for includes a mix of those uses listed in the most recently adopted fire protection/EMS impact fee study, then the fee shall must be determined by adding up the fees that would be payable for each use if it were a freestanding use pursuant to the most recently adopted fire protection/EMS impact fee service area reportstudy. c. If the applicant is applying for an extension of a permit issued previously, then an additional fee is necessary and that the fee shall isbe the net increase between the fee applicable at the time of the current permit application and any fire protection/EMS impact fee previously paid pursuant to this division for the same structure. In the event that If the fee applicable at the time of the current extension permit application is lower than the fire protection/EMS impact fee previously paid pursuant to this division for the same structure, there shall be no refund of fire protection impact fees previously paid is allowed. If fees are not yet paid, the amounts due prior to permit issuance will be updated based on the date of the extension application. d. If the applicant is applying for a permit to allow a change of use or for the expansion, redevelopment, or modification of an existing development, the fee shall be is based on the net increase in the fee for the new use as compared to the previous use. In the event that If the proposed change of use, expansion, redevelopment, or modification results in a net decrease in the fee for the new use or development as compared to the previous use or development, there shall be no refund of fire protection/EMS impact fees previously paid is allowed. 3. Prior to issuance of a building permit, aAn applicant may request that the city determine the amount of the required fire/EMS protection/EMS impact fee by reference to an independent fee calculation study for the applicant's development prepared at the applicant's cost by qualified professional fire protection experts and/or economists and submitted to the impact fee coordinator and city fire chief. Any such study shall must be based on the same service standards and unit costs for fire protection/EMS used in the most recently adopted fire/EMS impact fee service area reportstudy, and must document the economic methodologies and assumptions used. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or accepted with modifications by the city as the basis for calculating fire protection impact fees. If such study is accepted or accepted with modifications as a more accurate measure of the demand for new fire protection/EMS facilities and equipment created by the applicant's proposed development than the applicable fee shown in the most recently adopted fire impact fee study, then the fire protection/EMS impact fee due under this division may be calculated according to such study. a. Independent fee calculation studies must include documentation of rate of calls for service, required service standard, and any other relevant data for the proposed land use. b. Economic studies must include documentation of any special factors that the applicant believes will reduce the service demand otherwise attributable to the proposed land use. c. The city must consider all such documentation and any independent fee calculation study submitted by the applicant. The city is not required to accept any such study or documentation that the city deems to be inaccurate or unreliable and may request that the applicant submit additional or different documentation for consideration. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or accepted with modifications by the city as the basis for calculating transportation impact fees. d. The city will review and determine whether to accept a customized calculation within 90 calendar days of submittal. If accepted, the city will use the customized calculation in assessing the fee and no further correspondence is required. If the city rejects a customized calculation the city will inform the applicant of the reasons in writing. e. Upon acceptance, or acceptance with modifications, of an independent fee calculation study and documentation, the city will use the formulas and methodology contained within the most recently adopted transportation impact fee study to determine the transportation impact fee. 312 Page 14 of 27 C. Payment of fire protection/EMS impact fees. 1. All funds paid by an applicant pursuant to this division shall must be identified as fire protection/EMS impact fees and shall must be promptly deposited in the fire protection/EMS impact fee fund described in subsection D of this section. D. Fire protection/EMS impact fee funds. 1. A single fire protection/EMS impact fee fund is created, and such fund must be maintained in an interest bearinginterest-bearing account. 2. Such fund must may contain those fire protection/EMS impact fees collected pursuant to this division and any interest which may accrue from time to time on such amounts. 3. Such fund may also contain reimbursements collected pursuant to section 2.06.16601650.F. E. Use of fire protection/EMS impact fee funds. The moneys in the fire protection/EMS impact fee fund shall must be used only: 1. To acquire or construct capacity expanding fire protection/EMS improvements within the city; or 2. To pay debt service on any portion of any future general obligation bond issue or revenue bond issue used to finance the acquisition or construction of fire protection/EMS improvements within the city; or 3. As described in section 2.06.16901680 or 2.06.17001690.G. F. [Fire protection/EMS impact fee reimbursement.] When the commission determines to fund capacity expanding capital improvements to the fire protection/EMS system and the commission determines prior to expenditure of funds for such improvements that, upon future development, such improvements may be considered project related improvements the commission may by resolution create a fire protection/EMS impact fee reimbursement district. The resolution creating the district must: 1. Identify the specific fire protection/EMS improvements that will be subject to reimbursement if determined at a later date to be a project related improvement; 2. Identify the real property to be included in such district wherein future development may be required to provide reimbursement; 3. Identify the rationale for the commission'’s determination that such improvements may be considered in the future to be project related improvements; 4. Identify the estimated amount of repayment that will be due from each property, the methodology for adjusting the estimated amount to the actual costs of construction, and the methodology for determining such amount; 5. Identify whether the amount of repayment will account for the time value of the initial expenditure, and if so, describe the calculation methodology; 6. Identify the period of timeperiod the reimbursement district will exist; and 7. Identify the required timing of payment of the reimbursement which may be upon annexation or prior to final subdivision or site plan approval, and in no case later than issuance of a building permit. Prior to adoption of a resolution creating the reimbursement district, the city must provide 15 business days written notice to owners of real property within the proposed district. G. Exemptions from fire protection/EMS impact fee. 1. The following types of development shall be are exempted from payment of the fire protection/EMS impact fee: 313 Page 15 of 27 a. Reconstruction or replacement of a previously existing residential unit that does not create any additional or larger residential units. b. Construction of unoccupied accessory units structures related to a residential unit. c. Projects that the applicant can demonstrate will produce no greater demand for fire protection/EMS from such land than existed prior to issuance of such permit. d. Projects for which a fire protection/EMS impact fee has previously been paid in an amount that equals or exceeds the fire protection/EMS impact fee that would be required by this division. 2. Any such claim for exemption must be made no later than the time when the applicant applies for the first permit of a type listed in subsection A.1 of this section for the proposed development, and any claim for exemption not made at or before that time shall have been is waived. 3. The city shall must determine the validity of any claim for exemption pursuant to the criteria set forth in subsections G.1 and G.2 of this section. Sec. 2.06.16701660. Water impact fees. A. Imposition of water impact fees. 1. Any person who seeks to obtain a permit for connection to the city water system, or who is subject to subsection B.2.b of this section and applies for a city permit to expand or add to the structure served by a previously approved water connection, or any extension of such a permit issued before the effective date of the ordinance from which this division is derived, is required to pay a water impact fee in the amount specified in the commission resolution adopting the water impact fee service area reportstudy and establishing the water impact fee and as updated as required in this division; or 2. Any delayed payment of impact fees as specified and approved by the city commission in accordance with chapter 38, article 43division 38.380. 3. No permits for connection to the city water system may be issued until the water impact fee described in this division has been paid, unless the development for which the permit is sought is exempted by subsection F of this section; or unless deferral of payment of the water impact fee has been approved by the city pursuant to a deferral program approved by resolution of the commission in compliance with 2.06.17201700.I. B. Computation of amount of water impact fee. 1. An applicant required by this division to pay a water impact fee may choose to have the amount of such fee determined pursuant to either subsection B.2 or B.3 of this section. 2. The city shall must determine the amount of the required water impact fee by reference to the most recently adopted water impact fee studyschedule unless the applicant chooses to submit an individualized calculation pursuant to subsection B.32.a of this section or the city determines the application to be subject to subsection B.23.b of this section. If the applicant is applying for a replacement for a water connection permit issued previously or extension for a permit, then the fee shall be is the net positive difference between the service demand and associated fee applicable at the time of the current permit application and any the service demand for which a water impact fee was previously paid pursuant to this division for the same structure. In the event thatIf the fee applicable at the time of the replacement permit application is lower than the water impact fee previously paid pursuant to this division for the same structure, there shall be no refund of water impact fees previously paid is allowed. 23. Individualized calculations. a. An applicant may request that the city determine the amount of the required water impact fee by reference to an independent fee calculation study for the applicant's development prepared 314 Page 16 of 27 at the applicant's cost by a professional engineer and/or economist and submitted to the city transportation and engineering director. Any such study shall must be based on the same service standards and unit costs used in the most recently adopted water impact fee study and must document the economic methodologies and assumptions used. 1. Independent fee calculation studies must include documentation of rate of calls for service, required service standard, and any other relevant data for the proposed land use. 2. Economic studies must include documentation of any special factors that the applicant believes will reduce the service demand otherwise attributable to the proposed land use. 3. The city must consider all such documentation and any independent fee calculation study submitted by the applicant. The city is not required to accept any such study or documentation that the city deems to be inaccurate or unreliable and may request that the applicant submit additional or different documentation for consideration. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or accepted with modifications by the city as the basis for calculating transportation impact fees. 4. The city will review and determine whether to accept a customized calculation within 90 calendar days of submittal. If accepted, the city will use the customized calculation in assessing the fee and no further correspondence is required. If the city rejects a customized calculation the city will inform the applicant of the reasons in writing. 5. Upon acceptance, or acceptance with modifications, of an independent fee calculation study and documentation, the city will use the formulas and methodology contained within the most recently adopted transportation impact fee study to determine the transportation impact fee. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or accepted with modifications by the city as the basis for calculating water impact fees. If such study is accepted, or accepted with modifications, as a more accurate measure of the demand for new water facilities created by the applicant's proposed development than the applicable fee shown in the most recently adopted water impact fee study, then the water impact fee due under this division may be calculated according to such study. b. The city may identify a user as having extraordinary demands for water service which are not accurately represented by the average usage which was relied upon by the methodology which generated the calculated charges in the most recently adopted water impact fee study. In this circumstance the city shall must prepare a customized calculation based upon the most recently adopted water impact fee service area reportstudy. 1. The impact fee paid for water meters larger than three inches as of the effective date of the ordinance from which this division is derived may be adjusted based on actual usage. If usage is greater than 110 percent of anticipated volume during the 12-month period of timeperiod beginning six months after building occupancy is granted by the city, an additional impact fee may be charged, using the same techniques for calculating peak day and storage EDUs and multiplying by the peak day impact fee cost per EDU and the storage impact fee cost per EDU then in effect. The additional impact fee is the positive net demand between a previously calculated impact fee and the impact fee based upon the metered demand. C. Payment of water impact fee. 1. All funds paid by an applicant pursuant to this section division shall must be identified as water impact fees and shall must be promptly deposited in the water impact fee fund described in subsection D of this section. D. Water impact fee funds. 315 Page 17 of 27 1. A single water impact fee fund is createdcreated, and such fund must be maintained in an interest bearinginterest-bearing account. 2. Such fund must may contain those water impact fees collected pursuant to this division and any interest which may accrue from time to time on such amounts. 3. Such fund may also contain reimbursements collected pursuant to section 2.06.1670.1660.F. E. Use of water impact fee funds. The moneys in the water impact fee fund shall must be used only: 1. To acquire or construct capacity expanding improvements to the city water system; or 2. To pay debt service on any portion of any future general obligation bond issue or revenue bond issue used to finance improvements to the city water system; or 3. As described in section 2.06.16901680 or 2.06.17001690.G. F. [Water impact fee reimbursement.] When the commission determines to fund capacity expanding capital improvements to the water system and the commission determines prior to expenditure of funds for such improvements that, upon future development, such improvements may be considered project related improvements the commission may by resolution create a water impact fee reimbursement district. The resolution creating the district must: 1. Identify the specific water improvements that will be subject to reimbursement if determined at a later date to be a project related improvement; 2. Identify the real property to be included in such district wherein future development may be required to provide reimbursement; 3. Identify the rationale for the commission's determination that such improvements may be considered in the future to be project related improvements; 4. Identify the estimated amount of repayment that will be due from each property, the methodology for adjusting the estimated amount to the actual costs of construction, and the methodology for determining such amount; 5. Identify whether the amount of repayment will account for the time value of the initial expenditure, and if so, describe the calculation methodology; 6. Identify the period of timeperiod the reimbursement district will exist; and 7. Identify the required timing of payment of the reimbursement which may be upon annexation or prior to final subdivision or site plan approval, and in no case later than issuance of a building permit. Prior to adoption of a resolution creating the reimbursement district, the city must provide 15 business days written notice to owners of real property within the proposed district. G. Exemptions from water impact fees. 1. The following types of development shall be are exempted from payment of the water impact fee: a. Alteration or expansion of an existing nonresidential building that does not require an additional or larger water meter; b. Replacement of a nonresidential building or structure of the same size that does not require an additional or larger water meter; c. The reconstruction or replacement of a previously existing residential unit that does not create any additional or larger residential units. 2. The installation of fire lines for fire protection shall beare exempted from payment of the water impact fee. 316 Page 18 of 27 3. Any such claim for exemption must be made no later than the time when the applicant applies for the first permit of a type listed in subsection A.1 of this section for the proposed development, and any claim for exemption not made at or before that time shall have beenis waived. 4. The city shall must determine the validity of any claims for exemption pursuant to the criteria set forth in subsections G.1 and G.2 of this section. Sec. 2.06.16801670. Wastewater impact fees. A. Imposition of wastewater impact fees. 1. Any person who seeks to obtain a permit for connection to the city wastewater system, or who is subject to subsection B.2.b of this section and applies for a city permit to expand or add to the structure served by a previously approved water connection, or any extension of such a permit issued before the effective date of the ordinance from which this division is derived is required to pay a wastewater impact fee in the amount specified in the commission resolution adopting the wastewater impact fee service area report study and establishing the wastewater impact fee and as updated as required in this division; or 2. Any delayed payment of impact fees as specified and approved by the city commission in accordance with chapter 38, article 43division 38.380. 3. No permits for connection to the city water system may be issued until the water impact fee described in this division has been paid, unless the development for which the permit is sought is exempted by subsection F of this section; or unless deferral of payment of the wastewater impact fee has been approved by the city pursuant to a deferral program approved by resolution of the commission in compliance with 2.06.17201700.I. B. Computation of amount of wastewater impact fee. 1. An applicant required by this division to pay a water impact fee may choose to have the amount of such fee determined pursuant to either subsection B.2 or B.3 of this section. 2. The city shall must determine the amount of the required wastewater impact fee by reference to the most recently adopted wastewater impact fee schedulestudy unless the applicant chooses to submit an individualized calculation pursuant to subsection B.32.a of this section or the city determines the application to be subject to subsection B.32.b of this section. If the applicant is applying for a replacement for a wastewater connection permit issued previously or extension for a permit, then the fee shall be is the net positive difference between the service demand and associated fee applicable at the time of the current permit application and any wastewater impact fee previously paid pursuant to this division for the same structure. In the event thatIf the fee applicable at the time of the replacement permit application is lower than the wastewater impact fee previously paid pursuant to this division for the same structure, there shall be no refund of wastewater impact fees previously paid is allowed. 32. Individualized calculations. a. An applicant may request that the city determine the amount of the required wastewater impact fee by reference to an independent fee calculation study for the applicant's development prepared at the applicant's cost by a professional engineer and/or economist and submitted to the city transportation and engineering director. Any such study shall must be based on the same service standards and unit costs used in the most recently adopted wastewater impact fee study and must document the economic methodologies and assumptions used. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or modified by the city as the basis for calculating wastewater impact fees. If such study is accepted or accepted with modifications as a more accurate measure of the demand for new wastewater facilities created by the applicant's proposed 317 Page 19 of 27 development than the applicable fee shown in the most recently adopted wastewater impact fee study, then the wastewater impact fees due under this division shall be calculated according to such study. a. Independent fee calculation studies must include documentation of rate of calls for service, required service standard, and any other relevant data for the proposed land use. b. Economic studies must include documentation of any special factors that the applicant believes will reduce the service demand otherwise attributable to the proposed land use. c. The city must consider all such documentation and any independent fee calculation study submitted by the applicant. The city is not required to accept any such study or documentation that the city deems to be inaccurate or unreliable and may request that the applicant submit additional or different documentation for consideration. Any independent fee calculation study submitted by an applicant may be accepted, rejected, or accepted with modifications by the city as the basis for calculating transportation impact fees. d. The city will review and determine whether to accept a customized calculation within 90 calendar days of submittal. If accepted, the city will use the customized calculation in assessing the fee and no further correspondence is required. If the city rejects a customized calculation the city will inform the applicant of the reasons in writing. e. Upon acceptance, or acceptance with modifications, of an independent fee calculation study and documentation, the city will use the formulas and methodology contained within the most recently adopted transportation impact fee study to determine the transportation impact fee. b. The city may identify a user as having extraordinary demands for wastewater service which are not accurately represented by the average usage which was relied upon by the methodology in the most recently adopted wastewater impact fee study. In this circumstance the city shall must prepare a customized calculation based upon the methodology in the water impact fee study. When applicable an adjustment to the wastewater treatment portion of the impact fee for high strength discharge will be applied. (1) The impact fee paid for water meters larger later than three inches as of the effective date of the ordinance from which this division is derived may be adjusted based on actual usage. If usage is greater than 110 percent of anticipated volume or other measure of demand during the 12-month period of timeperiod beginning six months after building occupancy is granted by the city, an additional impact fee may be charged, using the same techniques for calculating treatment and collection in EDUs and multiplying by the impact fee cost per EDU. The additional impact fee is the positive net demand between a previously calculated impact fee and the impact fee based upon the metered demand. C. Payment of wastewater impact fee. 1. All funds paid by an applicant paid pursuant to this section division shall must be identified as wastewater impact fees and shall must be promptly deposited in the wastewater impact fee fund described in subsection D of this section. D. Wastewater impact fee funds. 1. A single wastewater impact fee fund is createdcreated, and such fund must be maintained in an interest bearinginterest-bearing account. 2. Such fund must may contain those wastewater impact fees collected pursuant to this division and any interest which may accrue from time to time on such amounts. 3. Such fund may also contain reimbursements collected pursuant to section 2.06.16801670.F. 318 Page 20 of 27 E. Use of wastewater impact fee funds. The moneys in the wastewater impact fee fund shall must be used only: 1. To acquire or construct capacity expanding improvements to the city wastewater system; or 2. To pay debt service on any portion of any future general obligation bond issue or revenue bond issue used to finance improvements to the city wastewater system; or 3. As described in section 2.06.16901680 or section 2.06.17001690.G. F. [Wastewater impact fee reimbursement.] When the commission determines to fund capacity expanding capital improvements to the wastewater system and the commission determines prior to expenditure of funds for such improvements that, upon future development, such improvements may be considered project related improvements the commission may by resolution create a wastewater impact fee reimbursement district. The resolution creating the district must: 1. Identify the specific wastewater improvements that will be subject to reimbursement if determined at a later date to be a project related improvement; 2. Identify the real property to be included in such district wherein future development may be required to provide reimbursement; 3. Identify the rationale for the commission's determination that such improvements may be considered in the future to be project related improvements; 4. Identify the estimated amount of repayment that will be due from each property, the methodology for adjusting the estimated amount to the actual costs of construction, and the methodology for determining such amount; 5. Identify whether the amount of repayment will account for the time value of the initial expenditure, and if so, describe the calculation methodology; 6. Identify the period of timeperiod the reimbursement district will exist; and 7. Identify the required timing of payment of the reimbursement which may be upon annexation or prior to final subdivision or site plan approval, and in no case later than issuance of a building permit. Prior to adoption of a resolution creating the reimbursement district, the city must provide 15 business days written notice to owners of real property within the proposed district. G. Exemptions from wastewater impact fees. 1. The following types of development shall beare exempted from payment of the wastewater impact fee: a. Alteration or expansion of an existing nonresidential building that does not require an additional or larger water meter; b. Replacement of a nonresidential building or structure of the same size that does not require an additional or larger water meter; c. The replacement of a previously existing residential unit that does not create any additional or larger residential units. 2. Any such claim for exemption must be made no later than the time when the applicant applies for the first permit of a type listed in subsection A.1 of this section for the proposed development, and any claim for exemption not made at or before that time shall have beenis waived. 3. The city shall must determine the validity of any claim for exemption pursuant to the criteria set forth in subsections G.1 and G.2 of this section. 319 Page 21 of 27 Sec. 2.06.16901680. Refunds of development impact fees paid. A. Refunds of development impact fees shall must be made only in the following instances and in the following manner: 1. Upon application to the impact fee coordinator by the applicant, the city shall must refund the development impact fee paid if capacity is available and service is denied. 2. Expenses and encumbrances. a. Upon application to the impact fee coordinator, the city shall must refund the development impact fee paid and not expended or encumbered within ten years from the date the development impact fee was paid or spent in a manner not in accordance with this division or MCA 17-6-1602. Refunds shallmust be paid to the owner of the property at the time impact fee in question was paidthe refund is due. In determining whether development impact fees have been expended or encumbered, fees shall must be considered encumbered on a first-in, first-out (FIFO) basis. b. When the right to a refund exists due to a failure to expend or encumber development impact fees, the city shall must publish written notice within 30 days after the expiration of the ten yearten-year period from the date development impact fee was paid. The published notice shall must contain the heading "Notice of Entitlement to Development Impact Fee Refund." 3. If an applicant has paid a development impact fee required by this division and has obtained any of the types of permits or extensions listed in sections 2.06.16501640.A.1, 2.06.16601650.A.1, 2.06.16701660.A.1, or 2.06.16801670.A.1, and, a. The applicant cancels the project prior to beginning construction of the work for which the fee was paid, or b. tThe permit or extension for which the fee was paid later expires without the possibility of further extension and construction of the project has not begun, then the applicant who paid such fee shall beis entitled to a refund of the fee paid, without interest. In order toTo be eligible to receive such refund, the applicant who paid such fee shall be required tomust submit an application for such refund within 30 calendar days after the expiration of the permit or extension for which the fee was paid. 4. A refund application shall must be made to the impact fee coordinator within one year30 calendar days from the date such refund becomes payable under subsections A.1 and through BA.3 of this section, or within one year from the date of publication of the notice of entitlement of a refund under subsection BA.2 of this section, whichever is later. Any refund not applied for within said time periodtime shall be deemedis waived. 5. A refund application shall must include information and documentation sufficient to permit the impact fee coordinator to determine whether the refund claimed is proper and, if so, the amount of such refund. 6. A refund shall include a pro rata share of interest actually earned on the unused or excess development impact fee paid. 67. All refunds shall must be paid within 690 days after the impact fee coordinator determines that such refund is due. 8. Any refund payable pursuant to subsections A and B of this section, shall be made to the record owner of property as of the date the refund was due. 89. Once paid, an impact fee may not be refunded in exchange for impact fee credits issued according to section 2.06.17001690. 320 Page 22 of 27 Sec. 2.06.17001690. Credits against development impact fees. A. After the effective date of the ordinance from which this division is derived, mandatory or voluntary land or easement dedications for transportation, fire protection/EMS, water, or wastewater improvements, and mandatory or voluntary acquisition or construction of capital improvements to the transportation system or the city fire protection/EMS, water, or wastewater systems by an applicant in connection with a proposed development may result in a pro rata credit against the development impact fee for the same type of service or facility otherwise due for such development, except that no such credit shall may be awarded for: 1. Projects or land dedications not listed on the impact fee capital improvements program (CIP); or 2. Land dedications for, or acquisition or construction of, project-related improvements as defined in section 2.06.1630; or 3. Any voluntary land or easement dedications not accepted by the city; or 4. Any voluntary acquisition or construction of improvements not approved in writing by the city prior to commencement of the acquisition or construction. B. In order to obtain a credit against development impact fees otherwise due, an applicant must submit a written offer to dedicate to the city specific parcels of qualifying land or easements, or to acquire or construct specific improvements to the transportation system or the city fire protection/EMS, water, or wastewater systems in accordance with all applicable state or city design and construction standards, and must specifically request a credit against such development impact fees. Such written request must be made on a form provided by the city, must contain a statement under oath of the facts that qualify the applicant to receive a credit, must be accompanied by documents evidencing those facts, and must be approved not later than the initiation of construction of improvements or the acceptance by the city of land dedications, or the applicant's claim for the credit shall beis waived. The granting of credit shall be approved by the city commission. The city shall may approve a credit only after showing making findings that the need for the dedication or construction is clearly documented pursuant to MCA 7-6-1602 and that any land dedication proposed for credit is determined to be appropriate for the proposed use. 1. Upon receipt of a complete application for impact fee credit, the impact fee coordinator shall must coordinate review of the application for compliance with the requirements of this division and other relevant requirements. The impact fee coordinator must consult with applicable department directors during the review. Upon completion of the review the impact fee coordinator shall either must: a. forward the application to the city manager, or when required to the city commission, for approval Approve the application; or b. or iIf the application is insufficient or otherwise does not conform to the city's requirements, shall communicate in writing to the applicant the reason the credit request failed. c. If the application satisfies the requirements and is approved, the credit may be provided in any of the allowed forms as described in subsection G of this section. a2. Factors for consideration: a.(1) When credit is sought for an improvement listed in the second through fifth years of the CIP after the current fiscal year there shall beis a rebuttable presumption that any credit shall is to be awarded as a credit balance and not as cash. (2) The final decision to approve a credit request in excess of $1,000,000.00 from a single impact fee fund shall be made by the city commission. b.(3) In the event that the city manager believes that a credit request may result in a significant effect on policy decisions the credit request may be referred to the city commission for final action, regardless of the dollar amount. 321 Page 23 of 27 (4) In the event thatIf the city considers that award of a credit may negatively impact its ability to construct improvements listed sooner in time on the CIP or otherwise interfere with city priorities, they may decline to award a credit at that time without removing the item from the CIP. 32. Appeals of staff administrative decisions on credit requests may be appealed to the city manager commission per section 2.06.17301700. C. The credit due to an applicant shall must be calculated and documented as follows: 1. Credit for qualifying land or easement dedications shallmust, at the applicant's option, be valued at: a. One hundred 100 percent of the most recent assessed value for such land as shown in the records of the citystate assessor; or b. That fair market value established by a private appraiser acceptable to the city in an appraisal paid for by the applicant. 2. In order toTo receive credit for qualifying acquisition or construction of transportation, fire protection/EMS, water, or wastewater improvements, the applicant shall must submit preliminary complete engineering drawings, specifications, and construction cost estimates to the city. The city shall must determine the amount of credit due based on the information submitted, or, if it determines that such information is inaccurate or unreliable, then on alternative engineering or construction costs acceptable to the city. Final credit values are determined after completion of construction and the city verifies final costs. D. Approved credits shall become effective at the following times: 1. Approved credit for land or easement dedications shall becomes effective when the land has been conveyed to the city in a form acceptable to the city, and at no cost to the city, and has been accepted by the city commission. When such conditions have been met, the city shall must note that fact in the credit record maintained by the city department of finance. Upon request of the credit holder, the city shall must send the credit holder a letter stating the credit balance available to the credit holder. 2. Approved credits for the acquisition or construction of transportation, fire protection/EMS, water, or wastewater improvements shall generally become effective when: a. All required construction has been completed and has been accepted by the city; and b. A suitable maintenance and warranty bond has been received and approved by the city; and c. All design, construction, inspection, testing, bonding, and acceptance procedures have been completed in compliance with all applicable city and state procedures. However, approved credits for the construction of improvements may become effective at an earlier date if the applicant posts security in the form of a performance bond, irrevocable letter of credit, or escrow agreement, and the amount and terms of such security are accepted by the city. At a minimum, such security must be in the amount of the approved credit or an amount determined to be adequate to allow the city to construct the improvements for which the credit was given, whichever is higher.and completes all other steps necessary under 38.270 for securing completion of infrastructure. When such conditions have been met, the city shallmust note that fact in the credit record maintained by the city department of finance. Upon request of the credit holder, the city shallmust also send the credit holder a letter stating the credit balance available to the credit holder. E. Approved credits may be used to reduce the amount of development impact fees due from any proposed development for the same type of service or facility for which the applicant dedicated land or acquired or constructed improvements until the amount of the credit is exhausted. Each time a request to use credit from a mandatory or voluntary dedication, acquisition, or construction is presented to the city, the city shallmust reduce the amount of the development impact fee of the same type otherwise due from the applicant and shall must note in the city records the amount of credit remaining, if any. In the case of a mandatory dedication, acquisition, or construction, any credit in excess ofmore than the amount of the 322 Page 24 of 27 development impact fee otherwise due under this division shall beis deemed excess credit that is remaining and available for use by the applicant. In the case of a voluntary dedication, acquisition, or construction, any credit in excess ofmore than the amount of the development impact fee of the same type and applicable to the project shall beis deemed excess credit that is remaining and available for use by the applicant. Upon request of the credit holder, the city shall alsomust send the credit holder a letter stating the amount of credit remaining to the credit holder. F. Approved credit shall may only be used to reduce the amount of development impact fees of the same type otherwise due under this division and shall must not be paid to the applicant in cash or in credit against any development impact fees for a different type of facility or service or against any other moneys due from the applicant to the city, except as described in subsection G of this section. G. If the amount of approved credit for a mandatory dedication, acquisition, or construction exceeds the amount of the development impact fees of the same type otherwise due under this division, the applicant may request in writing that the city provide for reimbursement of any excess credit to the applicant in cash. Such written request must be approved not later than the initiation of construction of improvements, or the acceptance by the city of land dedications, or the applicant's claim shall beis waived. Upon receipt of such a written request, the city may, at its discretion: 1. Arrange for the reimbursement of such excess credit from the impact fee fund for the same type of service or facility from development impact fees paid by others; 2. Arrange for the reimbursement of such excess credit through the issuance of a promissory note payable in not more than ten years and bearing interest equal to the interest rate paid by the city for its long-term debt; or 3. Reject the request for cash and provide credit. Such excess credit shall must be valued at 100 percent of actual developer costs for the excess improvements, or at the actual appraised value of such excess improvements, at the city's option. H. Credit may be transferred from one holder to another by any written instrument notarized writing clearly identifying the credit issued under subsection C of this section that is to be transferred, provided that such instrument is signed by both the transferor and transferee, and that the document is delivered to the city for registration of the change in ownership. I. In the event that land is annexed into the city from the county after the effective date of the ordinance from which this division is derived, and that road or fire impact fees have been previously paid to the county, an applicant proposing a development on the land may request in writing a credit against the transportation impact fee equal to the amount of any road impact fee paid to the county for the same land and may also request a credit against the fire protection impact fee equal to the amount of any fire protection impact fee paid to the county for the same land. Such written request must be filed not later than the time when an applicant applies for the first permit of a type listed in section 2.06.1640.A.1 or 2.06.1650.A.1 that creates an obligation to pay the type of development impact fee against which the credit is requested, or the applicant's claim shall be waived. Sec. 2.06.17101700. Miscellaneous provisions.S A. Interest earned on moneys in any impact fee fund shall be considered part of such fund and shall be subject to the same restrictions on use applicable to the impact fees deposited in such fund. B. No moneys from any impact fee fund shall be spent for periodic or routine maintenance of any facility of any type or to cure deficiencies in public facilities existing on the effective date of the ordinance from which this division is derived. C. Nothing in this division shall restrict the city from requiring an applicant to construct reasonable project improvements required to serve the applicant's project, whether or not such improvements are of a type for which credit is available under section 2.06.1690. 323 Page 25 of 27 D. The city shall maintain accurate records of the development impact fees paid, including the name of the person paying such fees, the project for which the fees were paid, the date of payment of each fee, the amounts received in payment for each fee, and any other matters that the city deems appropriate or necessary to the accurate accounting of such fees, and such records shall be available for review by the public during city business hours. E. At least once during each fiscal year of the city, the city manager shall present to the city commission a proposed impact fee capital improvements program for the transportation system, fire protection system, water system, and wastewater system, which identifies the capacity-adding capital improvements that will benefit new development subject to the terms of this division, exclusive of any improvements needed to correct existing deficiencies or for operation or maintenance purposes. Such capital improvements program shall assign moneys from each impact fee fund to specific projects and related expenses for improvements to the type of facilities or services for which the fees in that fund were paid. Any moneys, including any accrued interest, not assigned to specific projects within such capital improvements program and not expended pursuant to section 2.06.1680 or 2.06.1690.G shall be retained in the same impact fee fund until the next fiscal year. The impact fee capital improvements program shall be adopted by the city commission as a supplemental document to the city budget. The impact fee capital improvements program shall schedule the construction of capital improvements to serve projected growth and project capital improvement costs, expenditures and impact fee fund revenues for a five-year period. The individual fee funds shall maintain a positive fiscal balance. The program may be amended by a majority vote of the city commission. The city manager shall adopt and revise, as needed, an administrative impact fee manual to carry out the purposes of this division. AF. The city shall be entitled tomay retain not more than five percent of the development impact fees collected as payment for the expenses of collecting the fee and administering this division. BG. If a development impact fee has been calculated and paid based on a mistake or misrepresentation, it shallmust be recalculated. Any amounts overpaid by an applicant shallmust be refunded by the city to the applicant within 3060 business days after the city's acceptance of the recalculated amount, with interest at the rate of five percent per annum since the date of such overpayment. Any aAmounts underpaid by the applicant shallmust be paid to the city within 30 business days after the city's acceptance of the recalculated amount unless the city and landowner agree to a different time frame, with interest at the rate of five percent per annum since the date of such underpayment. In the event the underpayment is caused by an error attributed solely to the city, the applicant shall pay the recalculated amount without interest. In the case of an underpayment to the city, the city shallmust not issue any additional permits or approvals for the project for which the development impact fee was previously paid until such underpayment is corrected; and if amounts owed to the city are not paid within such 30 business -day period, the city may also repeal any permits issued in reliance on the previous payment of such development impact fee and refund such fee to the then current owner of the land. The city may decline to collect underpaid fees if the city determines that the cost of collection of underpaid fees exceeds benefit of the fee. CH. 1. In order to promote affordable workforce housing of the city, the city commission may waive impact fees for workforce housing lots approved by the city commission pursuant to chapter 38, article 43, by paying pay some or all of the impact fee from other funds of the city that are not restricted to other uses. 2. In order to promote the economic development of the city and the provision of affordable housing in the city, the city commission may agree to pay some or all of the development impact fees imposed on a proposed development by this division from other funds of the city that are not restricted to other uses. 3. Any such decision to pay development impact fees on behalf of an applicant shall beis at the discretion of the city commission and mustshall be made pursuant to goals and objectives previously adopted by the city commission to promote economic development and/or affordable housing. 324 Page 26 of 27 Sec. 2.06.1720. Deferrals. IA. The city commission may, by resolution, create a program to enable deferral of payment of impact fees to a time after issuance of a building permit or a connection permit to the water and sewer systems. Any such resolution shallmust: 1. Specify the circumstances and conditions under which a deferral may be allowed or disallowed. 2. Specify the points in time when the deferral may be requested, granted, and when payment of fees is required. 3. Specify costs to be incurred with deferral and fee payment and who is responsible for paying those costs. 4. Specify the process to receive and process a request for a deferral, including any administrative fees or required security for payment. 5. Specify the process for recognizing the payment of deferred fees and the release of any limitations on the property. 6. Require an impact fee deferral agreement and related documents as approved by the city attorney to be recorded at the Gallatin County Clerk and Recorder's Office securing the amount due, including a covenant running with the land agreeing that a certificate of occupancy or other permit required by this division when a certificate of occupancy is not required will not be provided until payment of the deferred fees is verified. Sec. 2.06.1730. Appeals, administration, and interpretation. JA. 1. Any determination made by any official of the city charged with the administration of any part of this division may be appealed to the development impact fees review committeecity manager by filing: a. A written notice of appeal on a form provided by the city; b. A written explanation of why the appellant feels that a determination was in error including any supporting documentation; and c. An appeal fee of $500.00 with the impact fee coordinator within ten 15 business working days after the determination for which the appeal is being filed. 2. The development impact fees review committee shall meet to city manager must review the appeal within 30 working days of the date the written appeal was presented to the impact fee coordinator. If the city manager concludes that all or part of a determination made by an official of the city charged with the administration of any part of this division was in error, then the appeal fee described in this subsection must be returned to the appellant. If the appellant is dissatisfied with the decision of the development impact fees review committee, the appellant may appeal the decision to the city commission by filing a written request with the city clerk within ten working days of the committee's decision. At the regular meeting following the filing of the appeal, the city commission shall fix a time and place for hearing the appeal; and the city clerk shall mail notice of the hearing to the appellant at the address given in the notice of appeal. The hearing shall be conducted at the time and place stated in such notice given by the city commission. The determination of the city commission shall be final. If the city commission concludes that all or part of a determination made by an official of the city charged with the administration of any part of this division was in error, then the appeal fee described in this subsection shall be returned to the appellant. K. Updating of impact fee information. 1. The facility plans described in this division shall be reviewed by the city at least once every five years and if a revision of a facility plan to address changed conditions is deemed necessary by the city, the plan shall be updated. 325 Page 27 of 27 2. The development impact fees described in this division, fee studies, data and analysis relied upon and required by MCA 7-6-1602, and the administrative procedures and manual of this division shall be updated at least once every four fiscal years. 3. The impact fee capital improvement program shall be reviewed and updated as provided in section 2.06.1700.E. 4. The purpose of the review and updating of impact fee related documentation is to ensure that: a. The demand and cost assumptions underlying such fees are still valid; b. The resulting fees do not exceed the actual cost of constructing improvements that are of the type for which the fee was paid and that are required to serve new development; c. The moneys collected or to be collected in each impact fee fund have been, and are expected to be, spent for improvements of the type for which such fees were paid; and d. That such improvements will benefit those developments for which the fees were paid. L. The development impact fees shown in the most recently adopted impact fee studies shall be adjusted annually to reflect the effects of inflation on those costs for improvements set forth in the impact fee studies. On January 1 of each year unless and until the impact fee studies are revised or replaced, and then beginning in the subsequent calendar year, each fee amount set forth in each such study shall be adjusted by multiplying such amount by one plus the value of the Construction Cost Index published in the first December edition of the current year. (Source: Engineering News Record.) Such adjustments in such fees shall become effective immediately upon calculation by the city and shall not require additional action by the city commission to be effective. B. The impact fee coordinator is responsible for interpretation of this division. CM. Violation of this division shall beis a misdemeanor and shall beis subject to those remedies provided in section 1.01.210. Knowingly furnishing false information to any official of the city charged with the administration of this division on any matter relating to the administration of this division, including without limitation the furnishing of false information regarding the expected size, use, or traffic impacts on services from a proposed development, shall be is a violation of this division. In addition to, or in lieu of, any criminal prosecution, the citycity, or any applicant for a permit of the types described in section 2.06.16501640.A.1, 2.06.16601650.A.1, 2.06.16701660.A.1, or 2.06.16801670.A.1 shall have the right to sue in civil court to enforce the provisions of this division. DN. The section titles used in this division are for convenience only and shall do not affect the interpretation of any portion of the text of this division. EO. Any judicial action or proceeding to attack, review, set aside, or annul the reasonableness, legality, or validity of any development impact fee must be filed and service of process effected within 90 calendar days following the date of imposition of the fee or the final determination of the city commission, whichever is the later. final administrative action to impose the fee, including resolution of any appeals. Secs. 2.06.1710—2.06.1840. Reserved. 326 Consent Letter from Adjacent Property Owner Adjacent Property Owner: Owner: Cloverleaf Property LLC Mailing Address: PO Box 161236, Big Sky, MT 59716 Property Legal Description: Northern Pacific Addition (Bozeman), Lot 1-8 & 11-28, Block 100 Property Address: 707 East Peach Cloverleaf Property LLC (Petitioner) wishes to abandon the alley within Block 100, running north- south between East Cottonwood Street and East Peach Street. Following the Petition to Vacate requirements established by City of Bozeman Resolution 3628, written consent to vacate the alley is required. By signing below, the above-referenced owner, Cloverleaf Property LLC consents to the Petition to abandon the portion of Alley within Block 100, Northern Pacific Addition. Signed: Date: Printed Name: Docusign Envelope ID: 362518D1-3441-4C6A-BA3E-71B8BAEAF7C2 7/25/2024 Tom Berkley 23327