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HomeMy WebLinkAbout2000-11-13 Minutes, City Commission -------..-.... .- -.-.....----- ---.------ ...- .. MINUTES OF THE MEETING OF THE CITY COMMISSION BOZEMAN, MONTANA . November 13, 2000 ***************************** The Commission of the City of Bozeman met in regular session in the Commission Room, Municipal Building, on Monday, November 13, 2000, at 3:00 pm. Present were Mayor Youngman, Commissioner Brown, Commissioner Frost, Commissioner Smiley, Commissioner Kirchhoff, City Manager Johnson, Assistant City Manager Brey, City Attorney Luwe, and Deputy Clerk of the Commission DeLathower. The meeting was opened with the Pledge of Allegiance and a moment of silence. None of the Commissioners requested that any of the Consent Items be removed for discussion. Consent Items City Manager Johnson presented to the Commission the following Consent Items. Authorize City ManaQer to sian - Annexation Aareement with Amerimont, Inc. . annexina 4.24 acres described as Tract B.1 , COS No. 1827 Commission Resolution No. 3415 . annexina 4.24 acres described as Tract B-1, . COS No.1 827 (east side of Valley Center Drive, north of its intersection with Catron Street) COMMISSION RESOLUTION NO. 3415 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, PROVIDING FOR THE ANNEXATION OF A CERTAIN CONTIGUOUS TRACT OF LAND, HEREINAFTER DESCRIBED, TO THE CORPORATE LIMITS OF THE CITY OF BOZEMAN AND THE EXTENSION OF THE BOUNDARIES OF THE CITY OF BOZEMAN SO AS TO INCLUDE SAID CONTIGUOUS TRACT. Authorize City Manaaer to sian . Street LiQhtina Aareement with Montana Power Company - installation of street liahts in the Ferauson Meadows Subdivision Authorize City Manaaer to sign . Street Liahtina Aareement with Montana Power Company. installation of street IiQhts in the Allison Subdivision, Phase II Award bid . 2000 model year heavy.duty dump truck with dump body/de.icer, sander and plow. Schedule I to Kamp Implement, Belarade, Montana, in the bid amount of $76.828.00: Schedule II to Kois Brothers Eauipment. Billinas, Montana, in the bid amount of $37 , 179.00: and Schedule III to Yellowstone Hydraulics, Billinas, Montana. in the bid amount of $24.874.52 . Award bid - one (1) new 60,000 GVWR tandem axle truck cab and chassis and one (1) new 2000 model inside/outside rail roll-off hoist. Schedule I to Northwest -, - 2 - Truck and Trailer Sales. Billings. Montana. in the bid amount of $67 .020.00: and . Schedule II to Kois Brothers EauiDment. Billinas. Montana. in the bid amount of $23.850.00 Claims It was moved by Commissioner Brown, seconded by Commissioner Frost, that the Commission approve the Consent Items as listed and authorize and direct the appropriate persons to complete the necessary actions. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Brown, Commissioner Frost, Commissioner Smiley, Commissioner Kirchhoff, and Mayor Youngman; those voting No, none. Work Session - A. Discussion re cost of housina/Drocedures for Drovidina affordable housina: B. Presentation re Drocess for develoDment of budaet for Fiscal Year 2000-2001: and C. Discussion re creation of Inter-Neiahborhood Council A. Discussion re cost of housing/procedures for providing affordable housing Mr. Dab Dabney, Farmhouse Partners managing partner, used the Comstock III apartment project as an example during his presentation to the Commission. He noted that affordable rental housing can be a very emotional subject because the high cost of living in this area creates serious hardships, resulting in the high turnover of population here, which is not good for anyone. Mr. Dabney identified the stakeholders in affordable housing as the low-income renters; the community; the corporate investors, who receive tax credits and a portion of the project's profit upon its sale in 15 years; and the . developer, who bears all the risks of developing this type of property. He characterized the business of developing affordable rental housing as being about money and risk; one where there are complicated rules and very low profit margins. He stated the construction costs of the Comstock III project are $2.1 million, $139 per square foot, or $75,000 per unit. 80 percent of this project was funded by selling federal housing tax credits to a corporate investor. This project received $2 million in federal housing tax credits, which were sold to Bank One; and that money was then used to finance the project. The balance of the financing is provided by the land seller and a commercial bank loan. Mr. Dabney projects an annual operating profit of $10,700, assuming one unit is vacant. If three units are vacant at anyone time, this project will lose money. Rents are restricted and set annually by the federal government. Costs are too high and risks are too great to not have at least a small profit, which makes this type of project unattractive to developers, according to Mr. Dabney. Mr. Dabney distributed information entitled "Anatomy of an Affordable Apartment Property" and reviewed the costs listed thereon. He noted there is nowhere to cut costs - there is a limited amount of sites zoned for multi-family units, contractors are busy, consultant fees are fixed by the market, financing costs are fixed, impact and other fees are set by the City. Commissioner Frost asked about the costs of construction, lumber in particular. Mr. Dabney replied those costs cannot easily be broken out; but he believes the cost of framing is about $10 per foot, although lumber prices have dropped since last spring. . Concluding the discussion on potential rent reductions, Mr. Dabney noted that people who live in his apartment projects live paycheck to paycheck, with a margin of safety of $10, $20, or $30 per - 3 - month at the most. Dropping rents by even $20 per month is very significant to those individuals. . Mayor Youngman expressed appreciation for the breakdowns Mr. Dabney provided, noting they are targets for talking in the future. She then asked Mr. Dabney if he had ever tried to partner with non- profit agencies before. Mr. Dabney answered he had tried it once, but it didn't work; the relationship wasn't a successful one. Commissioner Kirchhoff offered the breakdowns are suggestive of possible policy actions that might be taken by the Commission. He asked Mr. Dabney for some concrete advice on those actions, since he prepared these breakdowns. Mr. Dabney replied he has lots of ideas, which he would be willing to discuss at any time since time would not permit that this afternoon. Commissioner Smiley stated she has thought for a long time the city needs block grants and needs to be a major participant in those. Commissioner Kirchhoff asked Mr. Dabney, in his opinion. which two rent reduction scenarios would be most beneficial to affordable housing developers. Mr. Dabney responded impact fees are a real issue because it makes it hard to get tax credits. which is the first step to getting these types of projects approved at the state level. He suggested the deferment of payment of impact fees for 15 years. until the project is sold. as a possible solution. Mr. Dabney also noted a low interest rate. first mortgage would provide a significant savings to the developer. Comstock I was a project that was financed by block grant funds from the city and would not have been built without that help. . - Mr. Clair Daines addressed the Commission. observing that things are at least better now than . they were in 1964 when he moved to Bozeman.' The bottom line of housing costs is supply and demand. The building industry in Bozeman has moved from the small guy trying to build up his business to major developers who have a lot of money available. which takes out the small guys, who can develop much more efficiently. He noted that Mr. Dabney projects his costs per unit for Comstock III will be $75,000, while Mr. Daines said over the past two years he has built 40 rental units in Bozeman at a cost of $60,000 to $62.000 per unit. He suggested it is time for the City to help the "little guy" to be successful once again. Fees are a definite problem in Bozeman; they are too large a percentage of the costs of building in this city. The bottom line is the regulatory costs and improvement costs are prohibitive to building in Bozeman. Mr. Daines offered cooperation between the governmental bodies and the developers is the answer to affordable housing. Mr. Mark Evans. Executive Officer of SWMBIA. distributed materials compiled by the building industry and Fannie Mae. He stated they are investigating how the Home Builders Association could partner with Fannie Mae to improve the housing situation for low-income individuals. Mr. Jeff Rupp, HRDC, said they have been doing community/housing development in varying forms since 1989. He would ask that any, discussion of affordable housing in the future include preservation of the current affordable units. He noted HRDC will be working with rural communities. as well. in the preservation of current housing. Mr. Tom Clark. president of Habitat for Humanity, said they like to keep the monthly payment of their homes at or below $300. He noted the m'edian price for a lot in Bozeman is $47.610, and Habitat for Humanity cannot build in Bozeman for that reason. The material costs alone of building a . home are $48.000. He said he would love to see a set-aside program in Bozeman to provide housing for lower income families. - 4 - Commissioner Smiley asked what a set-aside program entails. Mr. Clark said the program used . in Seattle requires a certain portion of each development be set aside for low-income housing. A tax break is als.o provided. Commissioner Kirchhoff then asked how a set-aside program would affect a development project. Mr. Daines responded a middle-income individual would have to pay more for his home so the lower- income individual could spend less on his. He noted that, personally, he does not agree with that philosophy. Mr. Dabney added he has seen inclusionary zoning elsewhere, and it tends to be "clumsy". It doesn't really satisfy the problem, and it creates a lot of ill-will in the community. He suggested the City should be able to arrive at a more palatable solution. He reiterated that lack of multi-family zoned land is a continuing problem in this city. Commissioner Smiley asked what would be the costs of changing the zoning; application fees and such. Planning Director Epple replied the application fee for a zoning change is $400; however, the surrounding neighborhood response is the greater cost. There has been lots of lobbying by neighborhoods to stop increased multi-family zoning. Also, current zoning regulations do not prohibit land zoned multi-family from being developed as a single-density unit. Mr. Dabney inquired if someone wants to develop a site in the Bozeman core area, off Mendenhall Street, for example, is there any way the City could offer an incentive with a reduction in taxes? City Attorney LuVlie responded he would have to look at an exact proposal. Mr. Rupp added that if the City were to partner with a non-profit organization, HRDC has found a way to do that. Bill Leistiko, Oak Creek Village and River Rock Homes, spoke on behalf of the manufactured . home industry, noting these units have improved vastly since 1986 when HUD became involved in their production. These are HUD certified and inspected homes, which meet all specifications of HUD homes. A 1,200 square foot home, on a permanent foundation, can be purchased for under $50 per square foot. Mr. Leistiko questioned whether or not these homes are allowed in Bozeman; to which Mayor Youngman replied they are allowed on permanent foundations in most zoning areas. She added the City is trying to encourage manufactured homes at the current time. City Manager Johnson asked Mr. Daines what the effect would be of Bozeman getting very aggressive for annexation and making subdivision very easy so there would be a lot of property available for development. Would that make housing cheaper and easier to construct? Mr. Daines replied land development is a very, very difficult process. Supply and demand balance will help. He said, "Remember Valley Unit; that created the best source of cheaper land in Bozeman we've ever had." City Manager Johnson restated that just making more land available may not help? Mr. Daines answered it depends on what the developer has to pay for the land. Raw land costs are huge, and the margin is very thin. Mr. Clark expressed his opinion the market demand would be leveled out if all the lots were dumped onto the market at once. Mr. Daines responded the only thing that will make land prices go down is an economic turnover. There is not much elasticity in land prices; this is a very tough market. Mr. Johnson then asked why farmers in Belgrade are willing to sell their land cheaper than those in Bozeman. Mr. Clark replied it is the supply and demand situation again. Infrastructure requirements in Bozeman raise the price of land. . Ms. Caren Roberty, HRDC, stated affordable housing MUST be subsidized and regulated and controlle,d. There must be a cash infusion to make it happen. - 5'- Mr. Daines added Valley Grove is where lower income people bought recently. They sold 400 . units in the blink of an eye, and that is 3 miles from the edge of town. Mayor Youngman inquired if the Community,Affordable Housing AdvisorY,Board would be willing to weigh-in on the interim displacement ordinance. Chair Biekert answered they would. Ms. Roberty said they would need the information the City is compiling in abbreviated form in order for them to review it. ' Ms. Green, VISTA, offered to work on condensing that information before presentation to the Board. Mayor Youngman noted one idea that has been tossed around over the years is a "starter home" project; a development of single-family, multi-fal"(1ily, and rental units, with the City, realtors, banks, developers all working together. She stated this community needs "another big hit of affordable housing" . Mayor Youngman asked, in terms of policy direction, what is next? Commissioner Kirchhoff stated that looking back at Mr. Dabney's seven scenarios for potential rent reductions, he believes no. 4, free development sites, is a great one. He believes the only way to eliminate the private sector's ability to jack up prices is to own the ground. He said he would be interested in getting recommendations from developers to look at; something concrete for the City to work with. Commissioner Frost added that if the City does something like that, one of the best options would be to put the land into a land trust so that it would be affordable forever rather than just 20 or 30 years., Otherwise, the City will constantly be trying to keep up with what is being sold. It is important to look at long-term affordability, not ju'st short term. Commissioner Smiley asked if the building industry could form a task force and come back to . the Commission with specific recommendations, with the VISTAs doing block grant research. Mayor Youngman asked the HRDC representatives when the block grant deadlines are. They replied the deadline for housing grants is in the fall; public facilities' deadlines are in the spring. The maximum amount for housing is $500,000. Ms. Roberty and Mr. Rupp are unsure if block grants can be used for land acquisition. Mr. Michael Dean, 21 7 West Koch, noted there are models out there for projects the Commission might want to investigate, naming high-density units in Colorado and sleeping room-only units in California as examples. Break Mayor Youngman declared a break from 4:32 pm until 4:41 pm in compliance with Commission policy. B. Presentation re process for development of budget for Fiscal Year 2000-2001 Included in the Commissioners' packets were a calendar of presentations to be made during the upcoming waeks, a calendar for preparation of the budget for next fiscal year, and a packet of information on the preliminary budget picture for Fiscal Year 2002. City Manager Johnson stated the purpose of these presentations is to get the budget process refined to where the Commissioners feel they have all information they need, and the City will be able . to do some things that are a Commission priority. Every department has been asked to give a 20-minute presentation to refresh what it is they are doing and plan to do in the next few years. December 16 the -- __. .u._ -. -- - 6 - Commission, Directors, Department Heads, and Superintendents will meet to discuss their priorities. . The budget will then be brought back during the first week of January. Mr. Johnson stated it is important for the Commission to get a true look at what the City's financial picture is. Administrative Services Director Gamradt reviewed the handouts distributed in the Commission packets. He noted he will be talking about four different funds; the general fund and water, sewer, and garbage funds, which are enterprise funds. The general fund is limited in its ability to raise money. Water, sewer, and garbage funds can generate additional.revenues. The general fund should be much more stable than the other funds because those are very stable costs, which don't fluxuate like the others. Mr. Gamradt emphasized downward trends are harder to pull back up in this fund; slight changes are harder to correct. The previous downward trend in the general fund wasn't really a problem because of what caused it; one-time projects that were planned. However, the current decline isn't caused by anyone-time costs; and, in Mr. Gamradt's opinion; should be leveled out and the decline halted. He added the City is going to be spending lots of money in the near future from the enterprise funds, but the general funds are very, very tiQht; and it is his opinion there will be a shortage in those funds. Commissioner Frost asked if City revenues would be "taking a hit" because of the recent statewide initiatives. Mr. Gamradt responded the effect on every community is going to be different. He is anticipating a reduction, but he has not quantified what that decrease will be. Commissioner Brown asked if the City wins the lawsuit, will that have an effect on the working capital? Mr. Gamradt answered should the City win the lawsuit, there will be a lot of projects coming forward. . ' City Manager Johnson asked the Commissioners if this budget process is one they will want to participate in, or would they prefer a different approach? He stated this process is designed to get Commission input on the front end and offer them the opportunity to give direction to City staff regarding their priorities. City Manager Johnson advised the Commissioners there is really nothing extra that can be cut; and it looks like the Parks Department may be next ih line for budget cuts. Assistant City Manager Brey added that department tried to make a few adjustments last year, and there was a "real human cry". He asked for Commission endorsement for those decisions that will need to be made. All Commissioners agreed to use the current budget process and approved the date of Saturday, December 16 for the all~day budget retreat. C. Discussion re creation of Inter-Neighborhood Council Included in the Commissioners' packets was a letter from Ashley Greene and Cheryn Fairbairn, VISTAs, dated November 8, forwarding documentation pertaining to inter-neighborhood councils in other communities and a proposal for creation of an Inter~Neighborhood Council in Bozeman. Mayor Youngman opened the discussion stating the purpose is to give the Commission and the neighborhood council folks a chance to ask questiol1s. They will need to work out an ordinance that can be put in place. Those in attendance incl.ude Christopher Nixon, representing NENA, Cheryn Fairbairn, VIST A, Ashley Greene, VISTA, and Michael Dean, who is interested in community councils. . Mr. Nixon stated those interested in a neighborhood council met on two occasions previously, with five neighborhoods having representatives in attendance. During the last meeting the group . - ..--- - 7 - examined "what is a neighborhood?". Mr. Nixon acknowledged it has been difficult to define; but they . tried to come up with lines to delineate areas with similar components, which are loosely defined at this time. The group looked at other neighborhood councils and their representation and found there are several ways a council could be organized. Mr. Nixon noted they haven't yet discovered how someone is chosen to be a representative from the neighborhood, although they have explored several options such as an election for representatives or someone who is interested and actively involved in their neighborhood is appointed. Mayor Youngman asked, from a legal standpoint, how fluid can this process be? City Attorney Luwe replied state statute says it must be set by ordinance, so it depends on how the ordinance is written. However the Commission wants to establish the council and its representatives should be sufficient. He cautioned there are certain procedural aspects the Commission will want to have in place after they set up the neighborhood council to ensure neighborhoods have a valid way to determine who their representative is. Assistant City Manager Brey noted there are three kinds of neighborhood councils in Helena, Great Falls, and Missoula. All of them are very effective groups. In Helena, they have a 28-member neighborhood council; and they utilize an election process, which is done in conjunction with the Commission election. Whil'e he could not find any information on the council formation in Great Falls, Mr. Brey said he believes their representatives are also selected by ballot. The Missoula neighborhood council w~s formed when folks were galvanized by some very unpopular rezoning decisions made by the City Council. At this time, the neighborhood council there is primarily involved in zoning issues. Their structure is similar to Helena's. . Commissioner Frost indicated he likes Missoula's idea, which is more like a town meeting and everyone gets involved. Mr. Nixon responded that has seemed to work well for the group so far. They haven't been ,voting on anything; it is an opportunity for everyone to air their issues and tally the support. Commissioner Frost noted they may find consensus does not always work; they may need to vote occasionally. Ms. Fairbairn said they are not interested in a finalized vote, just an expression of opinions of the neighborhoods to present to the Commission in a tallied form. At this point in time, Ms. Fairbairn explained, people are not in favor of the formal election process for these councils. This group would like to see an ordinance that is general in nature, with a structure that is loose and non- conforming, so as to invite people in at will. It could be formalized down the road; but for now, they don't want to scare away anyone who is interested. There are less than 10 neighborhoods represented at this time, and they are seeking ways to expand that. Ms. Fairbairn noted she and Ms. Green will be looking at the grant-writing process during their remaining tenure here; but already the neighborhood core group is expressing concern about where the' money will come from for newsletters and other expenses. NENA currently asks for donations, and the New Hyalite View neighborhood does fundraising in addition to asking for donations. The neighborhoods would like to have some funds from the City, but they don't want to be limited in their scope/decision-making by those donations. Mr. Nixon stated they are here to find out what is required to get the neighborhood council formation process rolling. Commissioner Brown noted it is a definite plus to have a couple of real strong neighborhood groups currently in place" who have been great role models. He suggested other neighborhopds should take their lead from these groups. Commissioner Frost added it is important for groups to start from the bottom. If a neighborhood wants to be active, they can; and if not, they won't. In Fort Collins, Colorado, the neighborhoods compete for a pot of money from the city; similar to . Bozeman's park fund. That could be a good motivational tool for neighborhoods to improve things. They must be organized and a coherent group to qualify for those monies. Mr. Frost believes the - --.--.---..----..-- - ------------------- .----.-..-----". -.-. - 8 - stronger groups will be the ones who start from the b'ottom, work up, and work hard together. They . will be the ones to show the City that they are really interested in doing things, and those are the neighborhood groups that will be heard by the City. Commissioner Smiley noted some neighborhoods work better with different processes, so the organization of the council should be kept a little fluid. She prefers more of a town meeting type of structure, rather than a few people in the neighborhood having power over the others. It is best to allow each neighborhood to function however they choose to. Mr. Nixon indicated no one in NENA is interested in canvassing at this time. They just get together', talk, and have a dialogue. They know there is going to be a certain percentage of people in the neighborhood that don't agree with everyone else. Commissioner Smiley asked if they could choose a leader per issue per time needed. Mr. Nixon replied that sounds like a good idea. Assistant City Manager Brey stated his appreciation for what Mr. Nixon and others had to say, but the rub is that every area of the city ought to be a member of the neighborhood council. Issues arise if not every neighborhood is involved. The problem is how to take the next step to get other neighborhoods involved. Mr. Nixon indicated the core group wants to try to contact areas without representation to see if they are interested in becoming involved. Hopefully, when these people see things happening throughout the city, they will come together, form their group, and take part in this process. Commissioner Frost agreed that he never envisioned it would be mandatory for neighborhoods to become involved. Once people see an area getting special attention, they may want to start . organizing; it has to just happen, there isn't any way to force that. Mr. Dean added the issues that drive participation, apathy and lack of empowerment, need to be addressed. He advoc,ated using the allocation of, funds and using the neighborhood council as an official channel of communication as incentives to participation. He, too, believes too structured an environment may drive people away. City Attorney Luwe pointed out the structure for the council needs to be figured out before the ordinance can be written. He asked if the vision was to have little neighborhood groups, whose representatives attend the inter-neighborhood council meetings, who then advise the Commission. Commissioner Frost noted if there isn't the large council represented by all neighborhoods, not all areas of the city will be informed of concerns. Mr. Nixon stated every neighborhood needs a slot on the inter- neighborhood council, but that slot doesn't need a name or a specified term. The person most interested in that issue from that particular neighborhood should be the one to attend the inter-neighborhood council meeting. City Attorney Luwe advised the inter-neighborhood council needs to be more formal than the neighborhood groups. There can be flexibility of appointments, but how the representatives function within that council may need to be formalized. Assistant City Manager Bray suggested that providing more empowerment to the inter-neighborhood council requires more formalization from the neighborhood groups. ' The objective is to take this council to a more effective level, which requires formalization. Ms. Green asked City Attorney Luwe if the ordinance could provide choices of ways to choose representation on the inter-neighborhood council, and then each neighborhood could pick the method they desire to use. Mr. Luwe indicated that would be possible. . Discussion - FYI Items City Manager Johnson presented to the Commission the following "For Your Information" items. --..- --------- --.-------- --- .- -9 - ( 1 ) Copy of a letter from Engineering Assistant Kerr, dated November 3, to property owners . along Bogert Place, regarding parking restrictions in that area. (2) Copy of a letter from Engineering Assistant Kerr, dated November 3, to property owners along South Rouse Avenue, regarding parking restrictions in that area. (3) Letter from the Croatians who visited Bozeman a year ago. , (4) Memo from Associate Planner Saunders, dated November 9, forwarding the Bozeman 2020 Community Plan Goals and Objectives. (5) Agenda for the School Board meeting to be held at 7:00 pm on Monday, November 13, at the Willson School. (6) . Agenda for the County Commission meeting to be held at 9:00 am on Tuesday, November 14, at the Courthouse. (7) Agenda for the Development Review Committee meeting to be held at 10:00 am on Tuesday, November 14, at the Professional Building. (8) Agenda for the Design Review Board meeting to be held at 3:30 pm on Tuesday, November 14, at the Professional Building. Adjournment - 6:04 Dm . There being no further business to come before the Commission at this time, it was moved by Commissioner Frost, seconded by Commissioner Kirchhoff, that the meeting be adjourned. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Frost, Commissioner Kirchhoff, Commissioner Brown, Commissioner Smiley, and Mayor Youngman; those voting No, none. .~(5~ MARCIA B. YOUNG 'A ,Mayor ATTEST: ~;/Jl&~ ROBIN L. SULLIVAN " Clerk of the Commission , - . . PREPARED BY: ct<. 4AJ--r--.! ~~~ KAREN L. DeLA THO ER . Deputy Clerk of the Commission -----