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HomeMy WebLinkAbout02-24-25 CDB Agenda and Packet MaterialsA. Call to Order - 6:00 pm B. Disclosures C. Changes to the Agenda D. Action Items D.1 Review and Recommendation for the 2025 Impact Fee Service Area Report for Wastewater(Saunders) D.2 Review and Recommendation for the 2025 Impact Fee Service Area Report for THE COMMUNITY DEVELOPMENT BOARD OF BOZEMAN, MONTANA CDB AGENDA Monday, February 24, 2025 General information about the Community Development Board is available in our Laserfiche repository. If you are interested in commenting in writing on items on the agenda please send an email to comments@bozeman.net or by visiting the Public Comment Page prior to 12:00pm on the day of the meeting. At the direction of the City Commission, anonymous public comments are not distributed to the Board or staff. Public comments will also be accepted in-person and through video conference during the appropriate agenda items. As always, the meeting will be streamed through the Commission's video page and available in the City on cable channel 190. For more information please contact Chris Saunders, csaunders@bozeman.net 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 +1 346 248 7799 Access code: 954 6079 2484 Consider the Motion: Having reviewed and considered the staff presentation, draft service area report, public comment, and all information presented, I hereby find the 2025 service area report for Wastewater meets all requirements and accept the report as the basis for wastewater impact fees and recommend adoption to the City Commission. 1 Water(Saunders) E. Public Comments on Non-agenda Items Falling within the Purview and Jurisdiction of the Board F. FYI/Discussions F.1 Upcoming Items for the March 3, 2025, Community Development Board Meeting (Saunders) F.2 Upcoming Public Engagement for Unified Development Code Update (Saunders) G. Adjournment Consider the Motion: Having reviewed and considered the staff presentation, draft service area report, public comment, and all information presented, I hereby find the 2025 service area report for Water meets all requirements and accept the report as the basis for water impact fees and recommend approval to the City Commission. This is the time to comment on any non-agenda matter falling within the scope of the Community Development Board. 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 Community Development Board cannot take action on any item which does not appear on the agenda. All persons addressing the Community Development Board 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. General public comments to the Board can be found in their Laserfiche repository folder. Information only, no action required. Information only, no action required. This board generally meets the first and third Monday of the month from 6:00 pm to 8:00 pm. City Board meetings are open to all members of the public. If you have a disability that requires assistance, please contact our ADA Coordinator, David Arnado, at 406.582.3232. 2 Memorandum REPORT TO:Community Development Board FROM:Chris Saunders, Community Development Manager Erin George, Community Development Interim Director SUBJECT:Review and Recommendation for the 2025 Impact Fee Service Area Report for Wastewater MEETING DATE:February 24, 2025 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 2025 service area report for Wastewater meets all requirements and accept the report as the basis for wastewater impact fees and recommend adoption to the City Commission. 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 ever 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. 3 In MCA 7-6-1601, Definitions, impact fees are authorized for specifically listed types of facilities including: (7) "Public facilities" means: (b) a wastewater collection, treatment, or disposal facility; The City uses impact fees to advance the following purposes: Infrastructure concurrency of service increase with demand from new development Equity in funding capital expansion of certain services Public safety 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 preparation of 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 Wastewater Collection Facilities Plan and Water Reclamation Facilities Plan [External Link] 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. Annual inflation adjustments are applied on January 1st of each year and do not require an update to the SAR. 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 a 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 will be in 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 4 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 2/01/2025, 2/15/2025, 3/01/2025 and 3/15/2025 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 action through this agenda item is specific to the Wastewater impact fee. The City also implements Fire/EMS, Transportation, and Water fees. Updated SARs for Fire/EMS and Transportation were approved and adopted by the Commission in 2024. 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. An example of 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 necessary to serve new development. Also consistent with this policy, impact fees are set only to the amount demonstrated as necessary in the SAR 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 2025 Wastewater SAR are very similar to previous SAR although updated data has been used in the forecasts and other calculations. 5 The data requirements established by state law ensure substantial consistency from one SAR to its successor. The primary changes 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's 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. The expanded range more clearly ties a fee to the lower dwelling occupancy expected in smaller units. Service demand is strongly influenced by occupancy therefore 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 new SAR includes nine additional size bands to improve fit between fee and demand. A review of building permit sizing for single homes and townhomes over the past 24 months shows that 21% of the homes would have been included in the new size ranges. Staff concludes that this is enough improvement to support using the increased range of sizes. This also supports consistency between fee types as the Fire/EMS SAR and Transportation SAR use the expanded size range. Only 4 homes were in the largest of the new upper range categories. Staff concludes that this small number indicates that it is unnecessary to add further to the upper range at this time. Size ranges can be reevaluated with the next SAR. The City Commission approved this expanded range with the recent Fire/EMS and Transportation SAR update and it has been carried forward with this SAR. Staff recommends adoption of the range proposed in the SAR to maintain consistency with the recently adopted Fire/EMS and Transportation SAR which included the expanded size range and maintain a best practical fit between construction and fee characteristics. 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. Several community's fees have not been updated recently and therefore do not reflect recent cost escalation. Since the question of what other communities are doing comes up every time the service area reports are updated staff provides this information for reference. Impact fees are only one component of a complete water funding system. Operations and maintenance activities cannot be funded with impact fees and no such projects are included in the service area report. Operation and maintenance are funded by the monthly service charges from the water utility. Water rights for new development hare addressed through the city's 6 water adequacy provisions for annexation and new development and are not included as part of the water impact fee. The Community Development Board, in their role as the impact fee advisory committee required by state law, will hold a public hearing on February 24, 2025. TischlerBise will attend remotely to present the report. UNRESOLVED ISSUES:None. ALTERNATIVES:1. Accept the service area report; 2. Accept with modifications the draft service area report; 3. Reject the draft service area report; or 4. Open and continue the public hearing on the service area report, with specific request to 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 to ensure fees meet all legal requirements. Subsequent adoption of the SAR by the City Commission will enable continued operation of the impact fee program to offset capital costs from new construction for Transportation functions. Attachments: 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: February 18, 2025 7 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. 8 (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 9 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 10 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. 11 Memorandum REPORT TO:Community Development Board FROM:Chris Saunders, Community Development Manager Erin George, Community Development Interim Director SUBJECT:Review and Recommendation for the 2025 Impact Fee Service Area Report for Water MEETING DATE:February 24, 2025 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 2025 service area report for Water meets all requirements and accept the report as the basis for water impact fees and recommend approval to the City Commission. 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 ever 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. 12 In MCA 7-6-1601, Definitions, impact fees are authorized for specifically listed types of facilities including: (7) "Public facilities" means: (a) a water supply production, treatment, storage, or distribution facility; The City uses impact fees to advance the following purposes: Infrastructure concurrency of service increase with demand from new development Equity in funding capital expansion of certain services Public safety 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 preparation of 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 Water Master Plan and Integrated Water Resources 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. Annual inflation adjustments are applied on January 1st of each year and do not require an update to the SAR. 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 a 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 will be in 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 13 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 2/01/2025, 2/15/2025, 3/01/2025 and 3/15/2025 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 action through this agenda item is specific to the Water impact fee. The City also implements Fire/EMS, Transportation, and Wastewater fees. Updated SARs for Fire/EMS and Transportation were approved and adopted by the Commission in 2024. 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. An example of 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 necessary to serve new development. Also consistent with this policy, impact fees are set only to the amount demonstrated as necessary in the SAR 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 2025 Water SAR are very similar to previous SAR although updated data has been used in the forecasts and other calculations. 14 The data requirements established by state law ensure substantial consistency from one SAR to its successor. The two primary changes are to expand the range of home sizes for which fees are calculated, and integration of revised water demand standards affected by recent water conservation requirements adopted in 2024. 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. The expanded range more clearly ties a fee to the lower dwelling occupancy expected in smaller units. Service demand is strongly influenced by occupancy therefore 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 new SAR includes nine additional size bands to improve fit between fee and demand. A review of building permit sizing for single homes and townhomes over the past 24 months shows that 21% of the homes would have been included in the new size ranges. Staff concludes that this is enough improvement to support using the increased range of sizes. This also supports consistency between fee types as the Fire/EMS SAR and Transportation SAR use the expanded size range. Only 4 homes were in the largest of the new upper range categories. Staff concludes that this small number indicates that it is unnecessary to add further to the upper range at this time. Size ranges can be reevaluated with the next SAR. The City Commission approved this expanded range with the recent Fire/EMS SAR update and it has been carried forward with this SAR. Staff recommends adoption of the range proposed in the Transportation SAR to maintain consistency with the recently adopted Fire/EMS SAR which included the expanded size range and maintain a best practical fit between construction and fee characteristics. Since the last SAR, the cost of construction and capital equipment has increased substantially. Offsetting those cost increases has been a change in outdoor water use standards. The new standards are expected to reduce maximum daily demand by 1/3. This is a very substantial change and results in costs for system expansion decreasing for residential properties. This is a one time change and is reflected in the SAR. 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. Several community's fees have not been updated recently and therefore do not reflect recent cost 15 escalation. Since the question of what other communities are doing comes up every time the service area reports are updated staff provides this information for reference. Impact fees are only one component of a complete water funding system. Operations and maintenance activities cannot be funded with impact fees and no such projects are included in the service area report. Operation and maintenance are funded by the monthly service charges from the water utility. Water rights for new development hare addressed through the city's water adequacy provisions for annexation and new development and are not included as part of the water impact fee. The Community Development Board, in their role as the impact fee advisory committee required by state law, will hold a public hearing on February 24, 2025. TischlerBise who prepared the report will attend remotely. UNRESOLVED ISSUES:None. ALTERNATIVES:1. Accept the service area report; 2. Accept with modifications the draft service area report; 3. Reject the draft service area report; or 4. Open and continue the public hearing on the service area report, with specific request to 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 to ensure fees meet all legal requirements. Subsequent adoption of the SAR by the City Commission will enable continued operation of the impact fee program to offset capital costs from new construction for Transportation functions. Attachments: 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: February 19, 2025 16 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. 17 (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 18 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 19 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. 20 Memorandum REPORT TO:Community Development Board FROM:Chris Saunders, Community Development Manager Erin George, Community Development Interim Director SUBJECT:Upcoming Items for the March 3, 2025, Community Development Board Meeting MEETING DATE:February 24, 2025 AGENDA ITEM TYPE:Citizen Advisory Board/Commission RECOMMENDATION:Information only, no action required. 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 following development applications are presently scheduled for review at the March 3, 2025, Community Development Board meeting: 1. 1519 Alder Court zone map amendment in conjunction with annexation, Application 24428 [External Link]. Considered in the role as the Zoning Commission. UNRESOLVED ISSUES:None. ALTERNATIVES:None. FISCAL EFFECTS:None. Report compiled on: February 19, 2025 21 Memorandum REPORT TO:Community Development Board FROM:Chris Saunders, Community Development Manager Erin George, Community Development Interim Director SUBJECT:Upcoming Public Engagement for Unified Development Code Update MEETING DATE:February 24, 2025 AGENDA ITEM TYPE:Citizen Advisory Board/Commission RECOMMENDATION:Information only, no action required. 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 Phase 2 Supplemental Public Engagement workshops for the UDC update are underway. Two online and four in-person events are scheduled at times and locations shown below. Please note that registration is required for the online events. These workshops are to look more deeply into the subjects of public concern identified during Phase 1 events held in December and January. Transportation & Environment: Feb. 24: 12 to 2 p.m. online with registration to attend at https://zoom.us/meeting/register/uPwp9O1KQWGAdMguAl2Y1Q (External link). Transportation & Environment: Feb. 26: 6 to 8 p.m. at Gallatin County Fairgrounds, 901 N Black Ave. Growth, Housing, & Neighborhoods: March 3: 12 to 2 p.m. online with registration to attend at https://zoom.us/meeting/register/s8ahgU-iRVK8or7x658DFQ (External link) Housing & Neighborhoods: March 5: 6 to 8 p.m. at Chief Joseph Middle School, 4255 Kimberwicke St. Growth & Neighborhoods: March 10: 6 to 8 p.m. at Sacajawea Middle 22 School, 3525 S 3rd Ave All topics (Transportation, Environment, Growth, Housing, Neighborhoods): March 12: 6 to 8 p.m. at Willson School, 404 W Main St. *Note that due to discussing all topics during this meeting, topics will be condensed and not as large of a deep dive. What is included in the topic areas? Neighborhoods: character, preservation, and compatibility Housing: affordability, supply, variety and choice Growth: zoning, density, buildings (height & transitions) Transportation & Environment: traffic, parking, ped & bike infrastructure, open space, natural areas, parks, wetlands, urban forest, water, sustainability Additional tools for public input will be made available through https://engage.bozeman.net/udc [External Link] as they are developed. People are encouraged to register at Engage Bozeman to be able to receive alerts as information on this project goes out. UNRESOLVED ISSUES:None. ALTERNATIVES:None. FISCAL EFFECTS:None. Report compiled on: February 19, 2025 23