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HomeMy WebLinkAbout1995-10-25 ccmSPEC MINUTES OF THE SPECIAL MEETING OF THE CITY COMMISSION BOZEMAN, MONTANA October 25, 1995 ****************** *********** . The Commission of the City of Bozeman met in special session in the Community Room of the Gallatin County Courthouse, 311 West Main Street, on October 25, 1995, at 7:00 p.m. Present were Mayor Vincent, Commissioner Youngman, Commissioner Stiff, Commis- sioner Stueck, Commissioner Frost, City Manager Wysocki, City Attorney Luwe and Clerk of the Commission Sullivan. The meeting was opened with the Pledge of Allegiance. Signina of Notice of SDecial Meetina Each of the Commissioners in turn signed the Notice of Special Meeting. Work session with County Commission re imDact fee studies . County Commission Chair Kris Dunn welcomed those who were in attendance. Present at this work session, on behalf of the City and the County were: County City Commissioner Kris Dunn Mayor John Vincent Commissioner Jane Jelinski Commissioner Joe Frost Commissioner Phil Olson Commissioner AI Stiff County Attorney Mike Salvagni Commissioner Don Stueck County Planning Director Dale Beland Commissioner Marcia Youngman City Manager Jim Wysocki City Attorney Paul Luwe Clerk of Commission Robin Sullivan City-County Planning Director Andy Epple Deputy Fire Chief AI Scholes Updates on impact fee program status from County Planning Director Dale Beland and City-County Planning Director Andy Epple County Planning Director Dale Beland stated that the County has received a draft . regulation for adoption of the County fire and road impact fees. He noted that there have been minimal changes in the draft impact fee studies, so they have not been reprinted. He then indicated that since the draft regulation has been received just this week, he has not had an opportunity to review the document or forward any type of recommendation to the County Commission. 10-25-95 Special --- -------- - 2 - City-County Planning Director Andy Epple stated that the City has received copies of the revised impact fee studies for fire, streets, water and wastewater, along with a draft ordinance. He noted that this information was received on Monday afternoon and was immediately distributed to the Commission; however, he has not had an opportunity to review . the draft ordinance. He noted that the consultant has also forwarded memos responding to staff comments about the draft plans, along with a copy of the impact fee study for Albuquerque, New Mexico. Discussion of City-County planning jurisdictional area impact fee collection Commissioner Stueck asked what collection mechanism the County is considering, and whether existing lots will be subject to the impact fees. County Planning Director Beland stated that under Montana state statutes, impact fees may be collected at the time the final plat for a subdivision is filed, so no existing lots would be subject to impact fees. Responding to questions from Commissioner Frost, County Attorney Mike Salvagni stated that, at one time, the County Planning Board looked at the idea of developing zoning . regulations; however, the County Commission chose not to proceed with that idea. He then indicated that, in the absence of a land use permit, there is no other trigger for collection of impact fees than the subdivision process. He then noted the City and the County operate under totally separate statutory authorities; and care must be exercised to ensure that each body has the authority to take whatever action is being considered. Responding to City Manager Wysocki, County Attorney Salvagni stated that the County could implement a building permit system if it so chose. City-County Planning Director Epple noted that, even though the City has the statutory authority to issue building permits within the 4 % -mile planning jurisdictional area, the City has chosen to limit its permitting to the 3-mile zoning jurisdictional area. He cautioned, . however, that Duncan and Associates has indicated that the City may not collect impact fees in the jurisdictional area. County Attorney Salvagni noted that the County Commission has the implied authority to collect impact fees in the fourteen zoning districts within the County. He cautioned, however, that each of those zoning districts has its own comprehensive plan and 10-25-95 Special ...- - 3 - zoning regulations; and under statutory regulations, any fees collected must be applicable to that district rather than the County as a whole. Responding to Mayor Vincent, County Planning Director Beland stated that, according to the latest figures, there are slightly more than 10,000 undeveloped lots in the County. He . noted that none of those lots would be subject to impact fees under the proposed structure. Responding to additional questions from Mayor Vincent, County Commission Chair Dunn stated there were 620 septic permits issued last year, which is an extraordinarily high number. She also cautioned that not all of those permits necessarily reflect a new building start. County Commissioner Jelinski stressed the importance of recognizing that not all of those lots are buildable. She noted that many of the lots were created just prior to the recent legislative changes; and some of those lots have no access, water or septic system. City Manager Wysocki suggested it might be beneficial for the County to consider implementing some type of land use permit system, which would provide another trigger mechanism for impact fees. He then estimated there are 10,000 undeveloped lots within the . city limits, recognizing that not all of those lots are buildable. He encouraged the County Commission to consider the fact that the County population could expand by 25,000 to 30,000 people with no impact fees being collected if the existing lots within the county were developed. County Commissioner Jelinski noted that the County previously put its resources into developing a land use permit system and, therefore, has not considered implementing a building permit system to date. She stressed the importance of proceeding with the implementation of impact fees as quickly as possible, rather than deferring that action until some type of permitting system has been developed. She stated that if the impact fees are properly structured at this time, a future permitting system could serve as a trigger point for collection of those impact fees. . County Attorney Mike Salvagni cautioned that the County may not be able to require building permits without land use regulations. County Commission Chair Dunn stated she also feels the impact fees should be enacted as quickly as possible, rather than delaying them until some type of permitting system 10-25-95 Special .. --.-.-.-.-- ..--.. ..---.. ____...__n - 4 - is enacted. She then asked about the collection of impact fees in the "donut", or zoning jurisdictional area. City-County Planning Director Epple stated that, according to the information received from the consultant, the City may collect impact fees only within the city limits. He noted that . the County is responsible for collecting impact fees up to the city limits of an incorporated municipality; and currently, that can be done only at the time of subdivision. He then indicated that the City Attorney and County Attorney have stated general concurrence with the consultant's position. Responding to Commissioner Stueck, the City-County Planning Director stated that if a subdivision is created as a County subdivision, with County impact fees collected at that time and, during or after development the property is then annexed to the City, the City can collect only the difference between the County impact fees and the City impact fees for streets and fire plus the fees for water and wastewater. He cautioned that those instances would be extremely rare. City Attorney Luwe noted that one option under consideration by the City is the . collection of impact fees for water and wastewater at the time of connection to those services. He noted that under that scenario, properties outside city limits connecting to those services could be assessed those impact fees. Responding to questions from Brian leland, County Attorney Salvagni stated that the County may assess impact fees only in conjunction with processes for which the County has primary authority. He stated that since electrical permits are issued by the State, the County could not use that as a trigger mechanism. Responding to questions from the City Commissioners, City-County Planning Director Epple stated that for subdivisions which have been served by community systems, they would receive no credit for the costs of that system when connecting to the City's system because, until the time of connection, they have not impacted the capacity of the City's system. He . indicated that, on that basis, the full impact fee would be assessed, with no credit for costs incurred in conjunction with the previous system. Mr. Brian Leland asked if it would be possible for the County to implement a permit system under which footings, foundations and framing would be inspected, and if that could serve as a trigger mechanism for impact fees. He noted that, based on 600 housing starts in 10-25-95 Special - --- -------- .....----- - 5 - a year, at the proposed impact fee of $2,092, the County would realize a revenue of $1.2 million. Mayor Vincent asked if any of the 56 counties in Montana has a building permit process, citing recent activity in Flathead County. . County Commissioner Jelinski stated that, while a building permit system was voted in by the voters in Flathead County and it was subsequently implemented, it was voted out within a short period of time. Consideration of impact fees as part of a comprehensive planning "tool kit" County Planning Director Beland asked the Commissions to consider the idea of impact fees as just part of a comprehensive planning "tool kit", rather than a mechanism that will solve all of the problems which currently exist. He also asked that the Commissioners identify other "tools" which could be incorporated into the "tool kit", with those "tools" to be added as quickly as possible. City-County Planning Director Epple noted that development of a cooperative valley- wide GIS is in the initial stages. He also noted that another meeting on growth issues has been . set for early December. City Manager Wysocki stated that the information submitted by Mr. Duncan suggests that impact fees can have a positive effect on economic development and stabilizing of tax increases. He cautioned, however, that impact fees cannot be used to address existing deficiencies; and those deficiencies must be identified and addressed through some other funding mechanism. County Planning Director Beland suggested that the City and the County have a window of opportunity which they should carefully consider. He cited recent approvals of bond issues for the School District and the City's $5 million bond issue for transportation projects, noting that residents seem to be willing to pay the costs of upgrading infrastructure at this time. He noted that the impact fees could provide a level of predictability for future . development; and the GIS information could serve as another tool to increase that level of predictability. County Planning Director Beland stated that making more information available to the public is also important. He noted that the County Master Plan should be rewritten so that it 10-25-95 Special .------.-...-..-- ________________ ._..".".__. u_ _... .._.__~_..._ - 6 - is more easily understood; and he feels that the City's Master Plan could also be written so it is more easily understood. Commissioner Stueck cautioned that the amount collected for impact fees in the County could grow very slowly, given the number of lots that have already been platted. He . then expressed concern that, with the differential between the proposed impact fees for the .. - City and the County, more development could be driven into the county, negatively impacting both the City and the County, particularly in the "donut" area. County Planning Director Beland suggested that the Commissions may wish to consider implementation of exaction policies in conjunction with the impact fees, thus providing an alternative mechanism for ensuring that impacts are appropriately mitigated. Commissioner Stiff stated one of the concerns he is hearing is the fact that, in addition to the fees, monies from another source must be used to correct existing deficiencies, which are significant. He also expressed concern that the impact fees cannot be tapered from the city out into the county, to alleviate some of the potential for pushing development into the county. . The County Planning Director suggested that benefit assessment districts might be . considered, noting that they could serve as a mechanism for ensuring that costs of capital improvements can be adequately addressed in the "donut" area. He then cautioned that care must be taken to make the public aware that impact fees are not being viewed as the "cure all"; rather, they are simply one mechanism in a whole list of options for addressing infrastructure needs. He stated that impact fees must be spent within ten years after being collected, or they must be returned; and development of a capital improvements program is required before the monies can be expended. County Commissioner Chair Dunn suggested that impact fees should be viewed not as a mechanism for controlling growth, but as a mechanism for controlling infrastructure. Commissioner Stiff asked if it would be possible to use impact fees to either retire . revenue bonds or to leverage other revenues. The City Manager responded that, since it is not possible to accurately predict the annual revenues, impact fees could not be used to retire a revenue bond issue. He noted, however, that once impact fees have generated a sufficient balance, those monies could be used as the "down payment" on a financing mechanism for selected infrastructure 10-25-95 Special -..- - 7 - improvements, or possibly be used to lower the costs of a special improvement district for system-wide improvements. County Commission Chair Dunn stated that, from the way the draft regulation is worded, it appears one who has paid an impact fee can ask that the impact fee be applied to . reduce his or her proportionate share of the debt incurred through some type of bonding process. County Planning Director Beland stressed the importance of remembering that a property cannot be assessed again for what has been covered by an impact fee assessment. He cautioned, however, that this does not pertain to remedying of existing deficiencies. Commissioner Stueck expressed concern about the proposed impact fees on commercial development, and the potential that the fee could drive commercial development out into the county, thus reducing the tax base within city limits. County Commissioner Jelinski noted that the disparity between the City and County impact fees has been the subject of many discussions throughout the process. She noted that, given the new non-degradation rules and new State regulations under which County . development is now occurring, the costs of septic systems have increased dramatically. Because of those costs, she does not believe the disparity in fees will be as drastic as it may appear on the surface. Mr. Brian Leland noted it is important to remember that "in the free market, there's no free lunch". He suggested that once impact fees have been in place for a while, the playing field will level out because of the free market. He noted that people typically have a certain amount of money with which to build or purchase a home; and the cost of the impact fees may cause them to either forego a planned luxury or downscale the project slightly to stay within budget. Mrs. Dixie Swenson, Executive Director of the Gallatin Development Corporation, noted that Albuquerque, where the consultant has indicated impact fees have actually . enhanced economic development, is in a metropolitan area where the impact fees are all the same. She cautioned that in Bozeman, the proposed impact fees would be higher than in the County; and a business could move to Belgrade and incur no impact fee. She noted that this could serve to erode the commercial tax base in Bozeman, placing more burden on the residential property owners. 10-25-95 Special ---- -....----. -.. -.. .---- .-----.--.-- ---.-- .-..-...- --- ..------------ - 8 - Commissioner Stiff noted the comparison sheet on costs of lots inside and outside city limits, as prepared by City staff, graphically demonstrates that the improved lot costs in the County, including impact fees, are approximately $10,000 higher than in Bozeman. He noted, however, that he is concerned about the proposed impact fees for commercial . development. He stated that Bozeman needs the commercial tax base; and care must be taken to ensure that it is not destroyed in this process. Commissioner Frost stated that he share the same concern; however, he feels it is important to identify the amount of subsidy the existing taxpayer is providing if commercial impact fees are not implemented. Mayor Vincent noted that, while he was serving in the Legislature in Helena, they received results from several national surveys in which taxes generally were ranked as the fifth or sixth most important issue when a business was considering relocation to a community, behind items such as labor, access to markets, and quality of life. Mrs. Swenson concurred with that assessment. She noted, however, that in this instance, she is interested in retaining the "home grown" commercial developments such as . Dana Designs and ILX Lightwave. Responding to Commissioner Stiff, Planning Director Epple stated that impact fees would be assessed only against any new expansion of an existing business, not against the entire development. Commissioner Youngman stated that she is concerned about negative impacts on affordable housing projects as well as commercial projects. County Planning Director Dale Beland suggested that some type of "rebate" program could possibly be implemented, under which the governmental entity would collect the impact fees but would, in turn, reimburse the developer a certain amount or percentage of those costs from a different funding source. City Manager Wysocki stressed the importance of separating any possible "rebate" . program from the collection of impact fees. He suggested that the separation be to the extent that the impact fees be implemented, with any consideration of "rebates" being considered either on a case-by-case basis or at a later date. He noted that some funding source other than impact fees must be identified, suggesting that, in addition to the General Fund, the City Commission could consider either the CDBG Revolving Loan Fund or the CDBG Economic 10-25-95 Special - 9 - Development Revolving Loan Fund, depending on the type of development seeking the "rebate". He then suggested that, if legal, another option might be to require payment of half of the impact fees upfront, with the remainder being deferred for up to five years. Mr. Brian Leland noted that not every new start-up business will be constructing a . new building; rather, they will probably be remodeling an existing building. He asked if that renovation would be subject to the impact fees. Planning Director Epple responded that the impacts of the previous use and the impacts of the new use would be evaluated; and the new business would be required to pay impact fees on the net difference. Mr. Leland noted that some of the older housing on the north side of town is affordable housing, therefore, not all affordable housing projects would necessarily be subject to impact fees. Mayor Vincent asked Planning Director Epple for a list of local examples can be found to address "Myth 3 - Impact Fees Will Have Border Effects", as found on Page 8 of the Albuquerque study. . Discussion of adoption scheduling options Commissioner Frost stated he feels it is imperative to move ahead on impact fees as quickly as possible, noting that until such fees are implemented, the general taxpayers will continue to bear the burden. Mayor Vincent stated his concurrence, characterizing this as a tax equity issue. He then forwarded his belief that a fair, equitable impact fee proposal would gain significant public support. County Commissioner Jelinski stated her concurrence, citing this as a "quality of life" issue. She noted that, by failing to provide the infrastructure to support the growing population, diminution of the quality of life is occurring. . Commissioner Youngman stated her agreement with all of the above comments. County Commissioner Olson noted that "money is money"; and developers will quickly learn that the proposed "rebate" program is simply taking money out of one pocket and putting it in another. He also noted that care must be taken not to create the perception that impact fees will cure all of the problems, particularly when all of the Commissioners recognize that they will not. 10-25-95 Special . - ._._n._ . n__._ - 10 - County Commissioner Chair Dunn noted that the 1990 census showed 50,400 people in Gallatin County; and the 1995 estimated population is 57,000. She stressed the importance of moving forward with impact fees as quickly as possible to address impacts on infrastructure in the future. . Mayor Vincent cited the fluid population in Bozeman, noting studies indicate that 70 percent of the population turns over every five years. He noted that those who have lived in Bozeman for 25 years are in the top one percent; and those who have been here all their lives are in the top one-quarter percent of the statistical range. Responding to County Commissioner Jelinski, County Planning Director Beland stated that he and City-County Planning Director Epple can have the administrative rules for the impact fees completed within two weeks. He then encouraged the Commissions to continue through the process as quickly as possible. The Commissions determined that no additional work sessions are necessary prior to the public hearings. The public hearing before the City Commission was set for Monday, November 27; and the public hearing before the County Commission was set for Tuesday, . November 28, 1995. Adiournment - 9:13 D.m. There being no further business to come before the Commission at this time, it was moved by Commissioner Stueck, seconded by Commissioner Frost, that the meeting be adjourned. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Stueck, Commissioner Frost, Commissioner Youngman, Commissioner Stiff and Mayor Vincent; those voting No, none. ~~~ JO VINC T, Mayor " . ATTEST: ~Z~ ROBIN L. SULLIVAN Clerk of the Commission 10-25-95 Special --- ---- ...----.-.... -- ---.