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HomeMy WebLinkAbout01-11-07 Impact Fee Advisory Committee Minutes.doc** MINUTES ** CITY OF BOZEMAN IMPACT FEE ADVISORY COMMITTEE THURSDAY, JANUARY 11, 2007 7:00 P.M. ITEM 1. CALL TO ORDER AND ATTENDANCE Chair Tim Dean called the meeting to order at 7:08 p.m., in the Upstairs Conference Room at the Alfred M. Stiff Professional Building, 20 East Olive Street, Bozeman, Montana. Members Present: Tim Dean, Chair Debra Becker Randy Carpenter Rick Hixson Ron Kaiser Nicholas Lieb (arrived at 7:18 p.m.) Anna Rosenberry Bill Simkins Members Absent: Ken Eiden Staff Present: Sean Becker, Commissioner Liaison Chris Saunders, Assistant Planning Director Robin Sullivan, Recording Secretary Guests Present: None ITEM 2. MINUTES FROM NOVEMBER 9, 2006 Since there were no changes made to the minutes, Chair Tim Dean announced the minutes are approved as read. ITEM 3. PUBLIC COMMENT No comment was submitted under this agenda item. Chair Tim Dean stated a couple committee members would like to have more notice for these meetings. Chris Saunders assured the committee that a more normal schedule will be maintained now that we are past the holidays. He announced that January 25 will be the second piece of tonight’s discussion and will focus on water and fire; and the consultant, Randy Goff, is scheduled to make presentations on the wastewater and water impact fees on February 22. ITEM 4. CITY COMMISSION LIAISON Commissioner Liaison Sean Becker stated he has no report at this time. ITEM 5. STREET CAPITAL IMPROVEMENTS PROGRAM SCHEDULE FOR FISCAL YEARS 2008-2012 (Review and discussion on the draft financial summaries and project descriptions for the Street Impact Fee Fund.) Anna Rosenberry noted that the information provided to the committee members was prepared by several City staff members and reflects staff’s best professional recommendation. She invited the committee members to make any adjustments they feel are needed, noting that information will be forwarded to the Commission. She stated that the list of projects has been developed before the new fees are set, and are based on current revenues and fees escalated at 4 percent. The list will be adjusted once the new rates are adopted, which she anticipates will be done just before next year’s schedule of projects is prepared. Anna Rosenberry highlighted the memo, noting that the projects are not 100 percent funded by impact fees; and a number of other funding sources have been identified for the non-capacity expanding portions of the projects. Those sources often include state urban funds and special improvement districts. She stressed that the figures for each project are estimates, and those numbers will be finalized when the bid for the project is accepted and construction completed. She drew attention to the $700,000 deficit balance in the street schedule, noting that it recovers to a positive balance on the last year. Rick Hixson noted that, since the fiscal year is July 1, which is in the middle of the construction season, the timing of the project and the payments often resolve the timing problems that are reflected in the five-year capital improvement program. Anna Rosenberry noted that the map attached to the memo gives a general representation of where the projects lie around the city and shows how they are spread throughout the community. She indicated that several projects are non-scheduled for a variety of reasons, including the lack of money, no easements, or no right-of-way. Anna Rosenberry stated the balance in the fund is approximately $10 million; however, approximately $7.2 million in projects is scheduled for this upcoming year. Responding to Randy Carpenter, Anna Rosenberry stated she anticipates the new impact fees should be effective in early FY2008 and will be reflected in next year’s schedule. Chris Saunders cautioned that, since construction must begin within six months after a building permit is issued, the new fees will be phased in as projects work their way through the system. Responding to Debra Becker, Anna Rosenberry stated the recommendations for impact fees will be placed on the agenda as soon as staff can schedule a presentation from the consultants. Chris Saunders noted this committee is being asked to consider whether a project appears to be growth related and if it is related to where growth is occurring. He encouraged the committee members to comment on individual projects as the review continues. Chair Tim Dean noted the committee members will need time to absorb this information before making its recommendations to the Commission. Chair Dean noted that, at the present time, the committee can only address whether a portion of a project is impact fee eligible because the rates and fees have not yet been proposed. Anna Rosenberry reviewed each of the projects in the capital improvements program for Fiscal Years 2008 through 2012, as follows. Shops Complex, Phase II. This is a replacement facility, scheduled for FY2010. The project is estimated at $4 million, with $990,000 to be paid through impact fees. Responding to Debra Becker, Anna Rosenberry stated the shops complex is a $9 million project broken into two phases. She indicated that approximately one-third of the costs can be paid through impact fees, and street impact fees comprise approximately ten percent of the revenues. Responding to Bill Simkins, Anna Rosenberry stated the amount of costs that can be funded through impact fees has not been recalculated since she assumed the Finance Director position; however, she noted it was based on expansion of the City’s infrastructure and the additional workers and vehicles needed to maintain it. Right-of-way Acquisition. Anna Rosenberry stated that acquisition of right-of-way is an ongoing process, and monies are set aside annually for it. Since this acquisition is entirely for capacity expansion, 100 percent of the costs are to be covered by impact fees. Rick Hixson noted there are a lot of county enclaves within city limits. Also, he noted that South Church Avenue is a road by petition, with no dedicated right-of-way—the same situation as that encountered on West Babcock Street. He stated that, if City staff sees properties for sale that could potentially create problems for road improvements in the future, these monies will be used to make an offer to purchase the needed right-of-way or the entire parcel. Debra Becker noted that $100,000 is not enough money to acquire much right-of-way. Rick Hixson agreed, acknowledging that it is a token amount. Chris Saunders noted that an easement is less costly than right-of-way acquisition. Baxter Lane, North 19th Avenue to Cottonwood Road. Sixty percent of the estimated $3.3 million project is to be funded through impact fees. The design is scheduled for FY2012, but construction is unscheduled. Baxter Lane, North 7th Avenue to North 19th Avenue. This $2.7 million project is scheduled for FY2009, with the entire project to be funded through impact fees. Responding to Debra Becker, Rick Hixson stated a portion of the street improvements was completed in conjunction with the new Lowes store. He noted, however, that the interstate is adjacent to one side of Baxter Lane so there is no chance to improve this roadway through a special improvement district or developer fees. Responding to Tim Dean, Chris Saunders estimated that Lowes paid $450,000 to $500,000 in street impact fees. He then acknowledged that the property along the southeast side of the roadway is beginning to develop and that those properties will be paying impact fees as they develop. He cautioned, however, that this is a challenging area because the water level results in more expense to build. Further responding to Tim Dean, Chris Saunders stated he can review the database to determine the impact fees collected from development along this portion of Baxter lane. South Church Avenue. This project is estimated at $9.6 million, with 60 percent of the costs to be covered by impact fees. While this is an important project, it has not been scheduled because of the cost and right-of-way issues. Responding to Debra Becker, Anna Rosenberry stated that 60 percent of the costs are related to capacity expansion, and the remainder must be funded through other sources because they pertain to upgrading of the existing roadway. She indicated that, if the right-of-way issues can be addressed, there is a potential that the other monies will be available in FY2013. Rick Hixson noted that this road is to be expanded from its current two-lane configuration to an urban collector standard. He stated that, while the percentages on such improvement projects may vary slightly, they are generally very close to the 60/40 split that has been used throughout this capital improvement program. Tim Dean voiced his concerns with this project because the major impact is from county subdivisions. As a result, he suggested the nexus is through the county rather than the city. Chris Saunders responded that the property along South Church Avenue can be served by city services, and he anticipates that existing development will be annexed and pay impact fees. He then suggested it may be possible to partner with the County in the improvements to this roadway and noted the narrative description in this capital improvement program can be revised to reflect that partnership. Bill Simkins noted that the cost of right-of-way acquisition along this road could be big. West College Street, South 8th Avenue to South 19th Avenue. This $3.3 million project is unscheduled because monies are not available. The costs are to be subject to the 60/40 split, and could be scheduled after FY2012, when urban funds will become available. Responding to Tim Dean, Chris Saunders stated that no one, including MSU, local governments and non-profit organizations, is exempt from paying impact fees. West College Street, West Main Street to South 19th Avenue. This project is estimated at $5.1 million, with 60 percent of the costs to be covered by impact fees. Design of the project is scheduled for FY2009, with construction to be completed in FY2010 and 2011. Durston Road, Fowler Avenue to Cottonwood Road. This $5 million project is scheduled for FY2008 and 2009. Funding of the project is to be subject to the 60/40 split, with $3 million from impact fees and $2 million from an SID that must be created soon. Kagy Boulevard, South Willson Avenue to South 19th Avenue. This $6.6 million project is currently unscheduled but urban funds may become available. The improvements are needed for the hospital property development as well as other development south of town. Responding to Debra Becker, Chris Saunders acknowledged that much of this roadway borders county land; however, he anticipates that the property along the south side will be annexed in the next three to five years and that right-of-way for these road improvements will be acquired at that time. Responding to Randy Carpenter, Rick Hixson estimated the level of service on Kagy Boulevard at Level “C” or better at the present time. East Oak Street, Cedar Street to East Main Street. This project is currently unscheduled, and no cost estimate has been provided because there are too many unknowns. Rick Hixson noted that neither the right-of-way nor the road exist at this time, and there are building encroachments and wetlands issues to be considered in designing it. Chris Saunders stated that the road alignment will be analyzed to determine if this is the best place or if there is a better alignment. He noted that, with the pressure on the east side of town, a new roadway is needed but there are not a lot of alternatives. Anna Rosenberry noted this project was the subject of an unsuccessful funding request for federal monies last year. Responding to Randy Carpenter, Anna Rosenberry stated that 100 percent of this project would be eligible for impact fees, but that is not necessarily how it would be funded. East Oak Street, North Rouse Avenue to Cedar Street. Chris Saunders stated this is the second half of this road project. He indicated that the $7.5 million project is to be subject to the 60/40 split and is scheduled for FY2009 to 2011. Approximately $4.5 million is to be funded through impact fees with the remainder of the funding to possibly be from developer contributions, an SID, or the northeast tax increment financing district. He noted that this road extension will open up the Idaho Pole site for development since it would have direct access to North 7th Avenue. Bill Simkins voiced concern that the developer contribution is an exaction and seems to be a double hit. He stressed one of the justifications for impact fees is that everyone pays their fair share upfront and questioned whether developer contributions are appropriate. Anna Rosenberry responded that staff will try to fund the project through an SID or contributions from the tax increment financing district before pursuing developer contributions. She stressed however, that the funding will be dependent on how much someone might want to make a project happen. Anna Rosenberry stated the costs of this project are high because they include a bridge structure spanning over the railroad track, and the narrative will be revised to reflect that fact. Responding to Debra Becker, Chris Saunders stated an interchange at the end of East Oak Street is not impossible, but would be expensive and would be located within a half mile of another interchange. Warrant analysis and signal or intersection controls. Anna Rosenberry reviewed the intersections to be addressed under this item. They include South 11th Avenue/West College Street, which is scheduled for analysis in FY2008 and installation of a signal in FY2009 if warranted; South 11th Avenue/Kagy Boulevard, which is scheduled for signal installation in FY2008; and Highland Boulevard/East Main Street, which is scheduled for intersection and signal improvements in FY2008. Chris Saunders noted the State is required to look at a roundabout as an alternative for anything other than a stop sign. He cautioned that roundabouts work better in series than in sporadic placement. Also, their design is critical and, if not done right, can be bad. He indicated that the costs are about the same as the installation of a traffic signal since the surface area costs replace the costs of mast arms. ITEM 6. WASTEWATER CAPITAL IMPROVEMENTS PROGRAM SCHEDULE FOR FISCAL YEARS 2008-2012 (Review and discussion on the draft financial summaries and project descriptions for the Wastewater Impact Fee Fund.) Anna Rosenberry highlighted the memo for the wastewater capital improvements program, stressing that the priority for these impact fees and the wastewater rates is the new treatment facility. As a result, she noted the rest of the projects have been kept to a minimum in this program. Rick Hixson stated that design of the new plant is now under contract. Anna Rosenberry reviewed the various projects listed under this capital improvements program for Fiscal Years 2008 through 2012, as follows. Shops Complex, Phase I. This is the first phase of the shops complex replacement and is scheduled for FY2008. These impact fees are to fund approximately 11 percent of the total project cost, with other impact fees and utility funds to provide funding as well. BNR Plant Construction, Phase I. This is the first of a three-phase project to change the technology of the wastewater treatment plant and to expand its capacity to accommodate growth for the next twenty years. Anna Rosenberry noted that the design phase is underway. This phase of the project is estimated at $33.1 million, with approximately $10.8 million to be funded through impact fees. She estimated that $20 million will need to be borrowed and then repaid through the utility rates, and noted that $10 million in impact fees will be available to fund costs in FY2009 and 2010. Responding to Tim Dean, Chris Saunders stated that growth for the past two years was at 5½ to 6 percent, and this past year was down to 3½ to 4 percent. Anna Rosenberry noted she keeps asking what portion of the BNR plant costs is eligible for impact fees, and the answer continues to be one-third. Rick Hixson stated that the change in process is the major portion of the cost and affects everyone, including old ratepayers and those to come. He stressed that, even if there was no need to expand the plant, the City would still need to construct a BNR plant because of the new EPA regulations being implemented through the DNRC. Responding to Debra Becker, Rick Hixson stated that HDR is currently calculating the cost of conversion without expansion and then with the expansion and stressed that the figures now included in the capital improvement program are simply an estimate. Debra Becker questioned how this committee is to forward a good recommendation when it is hearing from only staff and not from the consultant. She stressed the importance of looking behind these figures, at the basis for them. Rick Hixson responded that the analysis is contained in the updated facility plan, which was recently adopted by the Commission, and the costs for the various elements and the split are fairly close. Responding to Tim Dean, Chris Saunders stated that the regulatory side of the costs is approximately 67 percent and is being funded through rates; the capacity expansion is approximately 33 percent of the costs and is to be funded through impact fees. Debra Becker stressed that this committee is supposed to look at the projects and proposed use of impact fees and noted it needs to have the information on which to base a determination of whether the allocation is appropriate. Rick Hixson indicated that staff will get the requested information from HDR; Debra Becker requested that a one-page summary of the information be provided to the committee. Chris Saunders suggested that staff could ask the consultants to review the information with this committee in their next presentation on rates. Responding to Randy Carpenter, Chris Saunders stated that, if a design feature meant to reduce on-going operations and maintenance costs results in incidental growth and capacity expansion opportunities, it is not eligible for impact fees. Debra Becker questioned how newcomers can be required to help pay for the transition between systems when it is the result of a past event. She noted that isolating the growth portion of this project is complicated and stated she wants the experts to tell her how it has been done. Pipe projects. Anna Rosenberry highlighted the pipe projects included in this capital improvement program. The first is the hospital trunk from Haggerty Lane to Kagy Boulevard, and approximately 70 percent of the estimated $1.1 million is related to capacity expansion and is to be funded through impact fees. The project is scheduled for FY2008. Responding to Debra Becker, Rick Hixson stated that the developer is responsible for installation of a minimum 8-inch sewer line and, if the City determines that a 12-inch line is needed, the developer installs the larger line and the City pays for the additional 4 inches with impact fees. Responding to additional questions from Debra Becker, Chris Saunders confirmed that the developer still pays impact fees. He then noted that, while he did not pay for the local street adjacent to his home, he did pay for the recent improvements to West Babcock Street. Debra Becker noted that when this committee was first formed, the use of impact fees was discussed. She stated this program seems to run counter to the impact fee program because the developer is required to install the improvements and then pay impact fees as well. She voiced concern that she is not hearing the answer to that question. Anna Rosenberry responded that the upgrading of lines to accommodate a development often results in replacement of a perfectly good pipe that the ratepayers have already paid for; and it is not appropriate to ask the ratepayers to bear the costs of upgrading the line for that specific development. She then noted that these pipeline projects are eligible for impact fee credits; however, she cautioned that the City cannot afford to incur a lot of credits in this fund that might impact the plant construction. Responding to Tim Dean, Rick Hixson stated the percentages can be calculated based on the size of the pipe, and those calculations are done by City staff. Anna Rosenberry turned her attention to the other pipe projects, which include the 21-inch interceptor sewer at Davis Lane/Fowler Avenue. The project is to be constructed in FY2011, with 70 percent of the $843,000 project to be funded by impact fees. The next two projects are unscheduled and include replacement of the South Rouse Avenue trunk line from East Babcock Street to Kagy Boulevard and replacement of the main in Front Street from East Tamarack Avenue to North Rouse Avenue. Bill Simkins suggested that the aging pipes should be identified and the utility bear the costs of those upgrades. Sean Becker noted the person who buys a home in a subdivision and then is assessed a special improvement district for improvements is the one who is truly double assessed. Debra Becker noted everyone benefits from every expansion of every infrastructure system and stated she still questions why the developer should be required to bear the costs of an 8-inch line. Chris Saunders responded that the developer is responsible for the 8-inch pipe in any instance; the issue is the most efficient way to pay for infrastructure improvements. ITEM 7. OLD BUSINESS There was no discussion under this agenda item. ITEM 8. NEW BUSINESS Anna Rosenberry announced that the rate study will be presented to the City Commission at its February 20 meeting. ITEM 9. SETTING OF NEXT MEETING DATE Chris Saunders stated the next meeting is scheduled for January 25, at which time the projects for water and fire impact fees will be discussed. Responding to questions from Anna Rosenberry, Debra Becker suggested that the committee could discuss its recommendations to the City Commission regarding the streets and wastewater capital improvement programs if it has answers to the questions raised. Rick Hixson suggested that the committee consider starting its meetings at 6:00 p.m. until the workload lessens; the committee agreed. Chris Saunders stated the next meeting will be held on February 8, and no specific topic has been identified for that meeting except for possibly follow-up discussion on the capital improvement programs for water and fire. Representatives from HDR are scheduled to make a presentation to the committee at its February 22 meeting. Chair Tim Dean requested that an update on the figures be distributed via e-mail to the committee members as soon as possible. ITEM 10. ADJOURNMENT There being no further business to come before the committee at this time, Chair Tim Dean adjourned the meeting at 9:02 p.m. _______________________________________ ____________________________________ Tim Dean, Chairperson Chris Saunders, Assistant Planning Director Impact Fee Advisory Committee Planning and Community Development and Staff Liaison to IFAC