HomeMy WebLinkAbout04-12-07 Impact Fee Advisory Committee Minutes.doc** MINUTES **
CITY OF BOZEMAN
IMPACT FEE ADVISORY COMMITTEE
THURSDAY, APRIL 12, 2007
6:00 P.M.
CALL TO ORDER AND ATTENDANCE
Chair Tim Dean called the meeting to order at 6:05 p.m., in the Commission Room at the Municipal Building, 411 East Main Street, Bozeman, Montana.
Members Present:
Tim Dean, Chair
Ken Eiden
Rick Hixson
Ron Kaiser
Nicholas Lieb (arrived at 6:45 p.m.)
Anna Rosenberry
Bill Simkins
Members Absent:
Debra Becker
Randy Carpenter
Staff Present:
Chris Saunders, Assistant Planning Director
Robin Sullivan, Recording Secretary
Guests Present:
Randy Goff, HDR Engineering, Inc.
Shawn Cote, SWMBIA
Camden Easterling, Bozeman Daily Chronicle (arrived at 6:20 p.m.)
MINUTES FROM FEBRUARY 15, 2007
Tim Dean delayed action on the minutes of the January 25, 2007, meeting to the next meeting since they were not included in this packet.
Tim Dean submitted the following correction to the minutes of February 15: Page 5 – second paragraph – change vote to read “… Anna Rosenberry and Rick Hixson voted for it while Debra
Becker, Nicholas Lieb, and Debra Becker Tim Dean voted against it …”
There were no additional changes; and Chair Dean announced the minutes of the meeting of February 15, 2007, are approved as amended.
CHAIR COMMENTS
Chair Tim Dean characterized the Phase I of the Committee’s work as education, and noted that phase is now complete. Phase II of the Committee’s work was going through the capital improvement
programs for each of the four impact fees; and that step has also been completed with no real disagreements among Committee members. He noted, however, that he senses some discontent
on the Committee and invited members to either talk to him individually or raise issues during these meetings. He stressed that it is not “government versus private sector” but is an
effort to determine what development or growth should pay for. He then noted the Committee is in Phase III of its work, which is evaluating the systems review and the consultant’s reports.
He stressed the importance of this phase, particularly since it sets the stage for the future.
Chair Dean characterized the Commissioners’ decision to approve a $35,000 expenditure from impact fees for the transportation plan update as disrespectful to this Committee, particularly
when they then sent a memo to the Committee seeking its blessing. He met with Commissioner Sean Becker and City Manager Chris Kukulski and expressed his concerns, speaking for the entire
Committee as much as possible and stressing that this is a volunteer board on which all members work hard; and indicated they were receptive to his comments. He also asked that the
Committee be given an opportunity to present its recommendations directly to the Commission rather than through the Commissioner Liaison and, at this time, he is uncertain if that request
will be granted.
Rick Hixson stated the recommendation from the Engineering Division was that Bike Board monies be used for the transportation update, particularly since the Board supported that recommendation.
He noted the Commission’s decision to use impact fee monies was formulated at the Commission meeting.
Chair Dean thanked staff for forwarding the data and methodology for setting of the impact fees ahead of time and for granting additional time for review and absorbing that information.
Chair Tim Dean raised the issue of attendance at these meetings. He voiced concern that some Committee members are just not showing up at meetings, and he wants to avoid the need to
go through the educational process again. He then asked if the Committee wishes to set guidelines for attendance.
Rick Hixson noted that if one misses one or two meetings, “you’re lost at sea.” He does not see how one can miss three meetings and then make an informed vote on an issue like the one
before the Committee tonight. As a result, he suggested that if a member misses three meetings, the Chair should ask the Commission to appoint a replacement.
Ron Kaiser stated what is most hurtful is missing consecutive meetings, noting that one cannot be an informed member when doing so. He also noted that the duration over which those
misses occurred is another component to consider.
Bill Simkins stated it is important to look at the time period and the reasons for missing the meetings. He cautioned that care must be taken in replacing members, particularly since
it may be difficult to get someone to serve and hard to get that individual up to speed.
Chair Dean concluded this item by indicating he will handle the attendance issue, taking into consideration the members’ comments.
Assistant Planning Director Chris Saunders highlighted the schedule for upcoming meetings. He stressed the importance of giving this Committee more than one meeting to look at the information
on impact fees and make its recommendation before the issue is scheduled for public hearing before the City Commission. He noted that Randy Goff will be making his presentations at
this meeting, and suggested the decisions be made at the Committee’s April 26 meeting. The public hearings before the City Commission can then be set for May 14 and, if the Committee
is unable to make its decision at the April 26 meeting, it would then have time to call a special meeting for the following week to make its recommendation.
The Committee agreed with the timeline as outlined by Chris Saunders.
PUBLIC COMMENT
No comment was submitted under this agenda item.
CITY COMMISSION LIAISON
Commissioner Liaison Sean Becker was not present.
PRESENTATION
(A Presentation by Randy Goff, HDR Engineering, Inc., to discuss the results of the Water and Wastewater Impact Fee Study.)
A. Water Impact Fee Study Results.
Randy Goff, HDR Engineering, Inc., suggested that a review of the exhibits and numbers will help Committee members understand the rationale and basis for the proposed impact fees.
Randy Goff stated the data is considered on an equivalent dwelling unit (EDU) basis, with commercial uses being converted to a specific number of EDUs based on the size of the water
meter. He noted the average daily usage has been calculated at 83.04 gallons per day per person; a 12.7 percent loss factor increases that number to 93.59 gallons per day. Based on
an average of 2.3 persons per household, the average daily usage is 190.99 gallons per day per EDU.
Randy Goff stated that water facilities must be sized to meet the peak day demand, which has been calculated at 439.28 per EDU. He stressed that storage per EDU also plays an important
part in the calculations, since it is imperative that adequate storage be provided to meet the ups and downs in demand during the day as well as storage to cover an emergency, such as
a broken water main, and fire flows at a certain level. The calculations reflect that is 201.63 gallons per EDU.
Randy Goff noted the next step is to determine how many EDUs are to be served over the next twenty years. He indicated that the City’s master plan projects growth for the next twenty
years at 5 percent. In 2005, the EDU calculation is 29,776; in 2025 it is projected at 78,947 based on that growth rate.
Mr. Goff turned has attention to the breakdown of the different components in the system, the first of which is supply and treatment. He identified the existing assets and the percentages
that have been allocated as impact fee related. He noted that the existing water treatment plant is to be abandoned and replaced with a new membrane plant. That plant will serve both
existing customers and new development and, as a result, 32 percent of that project has been identified as impact fee eligible. He noted that existing customers have invested in additional
capacity for future development; and the new plant will be designed to accommodate additional growth as well. The new plant will increase treatment capacity from 15 million gallons
per day to 22 million gallons per day, at an estimated cost of $2.31 per gallon. When that cost is multiplied by the 439.28 gallon daily requirement per EDU, the result is a $1,015
per EDU impact fee related to source of supply and treatment.
Responding to questions from Committee members, Mr. Goff confirmed that the peak day usage is the design standard for treatment plants. He also confirmed that the percentages listed
in this impact fee report are linked to, and tie back to, the percentages in the capital improvement program.
Randy Goff stated that the estimated costs for the Sourdough Creek Dam include only the design and permitting, since this document is based on a ten-year horizon and it is not anticipated
that the dam will be constructed in the period of time, if at all.
Randy Goff turned his attention to Exhibit 3, which pertains to storage. He noted that the storage calculation of 201.63 gallons per EDU is used as the basis for these calculations.
He indicated that the Lyman Creek Reservoir is fully eligible for impact fees. Based on the calculations, $191 per EDU is eligible for impact fees.
Responding to questions from Tim Dean, Chris Saunders stressed that the basis for these calculations is equivalent dwelling units, which includes commercial and industrial development,
so it is not possible to tie the numbers in this report back to the actual building permits issued for the last ten years.
Randy Goff noted that these projections are based on the 5-percent growth rate used in the master planning documents. He noted, however, that if growth slows down, the improvements
can be delayed but will still serve the 79,000 EDUs contained in the projections.
Rick Hixson stated that using a lower growth rate for the plans done in the last two decades has resulted in those plans not lasting as long as anticipated. He recognized that the 5-percent
growth rate is conservative but, if the market softens and growth slows a bit, that simply means the plan will last longer than anticipated.
Chris Saunders noted that if a facility is overplanned, it will not be built. On the other side, the revenues will not be coming in from development, so this is a self-regulating system.
He stressed that EDUs are the basis of the report; the timeframe is simply provided for convenience.
Bill Simkins stated he needs to know how much of the demand is based on commercial development and how much is based on industrial development since the population is not increasing
at the rate projected.
Chris Saunders responded that information is contained in the facilities plan update, noting the City knows the size of every meter in the system. Since weighting factors are assigned
to the increased meter sizes, the non-residential factors have been built into the plan. He then stressed that commercial and industrial uses and schools draw on the system, with many
of those working at or using the facilities often traveling to their homes outside city limits.
Responding to Tim Dean, Randy Goff stated that if growth slows, the nexus will remain because it will cost x dollars to serve y units.
Chris Saunders stated that by 2025, the Committee will have gone through this exercise four more times. These reviews will provide the opportunity to identify any fundamental differences
and to make any needed adjustments.
Randy Goff turned his attention to Exhibit 4, which pertains to the distribution system. He stated the planning standard is the peak day demand plus fire flow. He noted the distribution
system is like a spider web and grows outward, so a portion of the existing system is included in the impact fee calculation. The standard for future lines is 8-inch pipe, and the developer
will be required to install that line. Any oversizing of that pipe to support the overall system will then be eligible for impact fees. The calculations, based on those premises, result
in an impact fee per EDU of $1,648.
Mr. Goff noted that Exhibit 5 provides the calculations for the total impact fee, which includes a 5-percent administrative charge and is rounded to the nearest $5. The result is a
recommended impact fee of $3,000 for a ¾-inch water meter. That rate is then used for calculating the impact fees for larger meters, based on AWWA meter capacity ratings.
Responding to Tim Dean, Chris Saunders confirmed that the City is now charging 80 percent of the impact fees in the tables. He indicated that the fees on those tables reflect the costs
calculated in 1995-1996 plus annual adjustments for inflation, based on the CPI. He confirmed that the proposed impact fees reflect a 7½-percent increase.
Chris Saunders noted that Exhibit 4 shows redundancy lines from the water treatment plant at zero impact fee for 36 and 48-inch mains. He noted the current main is a 30-inch line, and
the larger lines would provide additional capacity as well as redundancy. Randy Goff responded that he will review that issue and adjust the calculations if necessary.
Randy Goff asked for Committee feedback on the information at the beginning of the exhibits, noting that staff asked for information on the basis of calculations.
Chris Saunders noted that those portions of the projects not covered by impact fees will be covered from other sources, such as the monthly bills and possibly an occasional grant.
Responding to Tim Dean, Chris Saunders stated the facilities plan identifies the usage rates for different uses. He then noted that the population is increasing faster than water usage,
which reflects a decreased per-capita usage and helps reduce the fees.
Randy Goff responded to several questions from Committee members. He then noted it is cheaper to build treatment facilities than to build storage facilities.
Chris Saunders stated it is important to size the treatment plant to meet the seven or eight days of peak summer demand because people demand that water be available when they turn on
the shower or the dishwasher. He further reiterated the City has a legal obligation to provide storage for fire flows and emergencies, such as a main break.
Randy Goff returned to Exhibit 5, noting that the chart is currently based on AWWA weighting factors. He noted the alternative is usage, citing the potential that a commercial or industrial
use that uses water at full flow 24 hours a day could choose to locate in Bozeman. He had backed away from that option because of the administrative burden it would place on staff.
Chris Saunders noted this would be an alternative for rare events that might arise once every two or three years.
Wastewater Impact Fee Study Results.
Randy Goff noted this study is very similar to the water study. He began with a review of Exhibit 1, which reflects an average residential usage of 89 gallons per day per person. Based
on 2.3 persons per household, the calculation is 204.7 gallons per EDU. Mr. Goff compared those calculations to the water calculations of 90 gallons per day per person. He indicated
that these calculations are based on normal strength effluent, noting that high strength waste costs more to process than household waste.
Rick Hixson gave a brief overview of BOD, characterizing it as the demand for bugs. He noted that higher demand for BOD results in the demand for more oxygen fed into the water through
enormous centrifugal blowers. He noted it is easy to accommodate what a household puts into the system; however, some industrial users can significantly load the system. He cited milk
as an example, noting it is almost 100 percent BOD. He also noted that any kind of food processing plant generates high strength effluent.
Randy Goff stated that the pipes in the collection system are sized for peak day usage, but the treatment plant is sized for average day demand. He indicated that the new wastewater
treatment plant is to be constructed in three phases, with 1.8 million gallons of capacity added in the first phase. After his review and calculations, he determined that 67 percent
of the first phase is capacity related while the remainder is system related. He noted that the subsequent phases are for additional capacity and, as a result, are impact fee related.
Anna Rosenberry raised questions about the calculation, noting that her conversations with Amanda McGinnis reflected a ⅓ impact fee related and ⅔ user fee related split.
Chris Saunders indicated that this issue will be carefully reviewed, to ensure that it is appropriately addressed in the impact fee report.
Randy Goff turned his attention to the collection system, noting the same process was followed as used for the water distribution system. He noted that any pipe greater than 8 inches
would be considered oversized and, thus, eligible for impact fees. He briefly reviewed the impact fees for the various components of the wastewater system, noting that the proposed
impact fee is $3,266 per EDU.
Tim Dean noted that is a 15-percent increase from the current fees. Randy Goff responded that part of the increased fee is driven by increasingly stringent treatment requirements and
increased costs of building capacity for new customers.
Tim Dean noted that Section 5.5.2. of this report references equivalent residential use; Randy Goff responded that reference will be corrected.
Responding to Nicholas Lieb, Randy Goff stated the percentages are based on the formulas used for identifying that portion of the existing system that is eligible for impact fees. He
indicated that AWWA standards are used in doing so, noting the calculation is simple and is standard in the industry.
Randy Goff suggested an alternative for calculating the fees could be an assessment on industrial processes that result in higher strength effluent.
Responding to Ron Kaiser, Rick Hixson stated the City is currently trying to level the playing field on charges for high strength effluent, but the charges do not yet cover the additional
costs.
Further responding to Ron Kaiser, Mr. Goff stated the cost structure will need to be changed to address high strength discharges. He acknowledged the City may want a mechanism to capture
additional costs or to encourage the installation of a pretreatment system.
Rick Hixson stated that under the current review process for new development, a pretreatment survey identifies the potential of extra strength effluent and allows the City to negotiate
with a significant industrial user.
Chris Saunders suggested that language could be added to the table that indicates the figures reflect the average load on the plant from a single household and that a review of flow
strength could result in additional costs or the requirement for a pretreatment system.
Randy Goff turned his attention to the issue of affordable housing. He stated that affordable housing discounts on impact fees can be provided; however, those discounts cannot result
in collecting higher impact fees from others. He noted that, as a policy decision, the Commission could choose to cover the discount from another funding source. He stressed that issues
of policy are best addressed outside the impact fee report and voiced a willingness to address it in a letter.
Responding to Anna Rosenberry, Mr. Goff stated that sometimes smaller houses can create more demand than larger houses, depending on the number of persons in the household.
Chris Saunders noted that an impact fee is a one-time charge. He cautioned that if a house is initially constructed as an affordable house but is later converted to a market price home,
any discount monies will be lost.
Responding to Ron Kaiser, Chris Saunders indicated one possible source of revenue would be the mill levy that is being earmarked for affordable housing.
Chris Saunders asked for Committee feedback on providing procedures for addressing special cases, noting that they would be rare circumstances that might have a sizeable impact on the
system.
Following discussion, the Committee members generally agreed that a statement be added to reflect that additional charges may be imposed for additional strength.
Committee members requested that the split between impact fees and user fees for the first phase of the wastewater plant be reviewed to ensure they are correct, and that any needed adjustments
be made.
Randy Goff indicated he will also look at the water main redundancy issue.
ADJOURNMENT
There being no further business to come before the committee at this time, Chair Tim Dean adjourned the meeting at 7:50 p.m.
_____________________________________ _____________________________________
Tim Dean, Chairperson Chris Saunders, Assistant Planning Director
Impact Fee Advisory Committee Dept of Planning & Community Development
City of Bozeman City of Bozeman