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HomeMy WebLinkAbout05-03-07 Impact Fee Advisory Committee Minutes.doc** MINUTES ** CITY OF BOZEMAN IMPACT FEE ADVISORY COMMITTEE THURSDAY, MAY 3, 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 Debra Becker Randy Carpenter Ken Eiden Rick Hixson Ron Kaiser Nicholas Lieb (arrived at 6:20 p.m.) Anna Rosenberry Members Absent: Bill Simkins Staff Present: Sean Becker, Commissioner Liaison Chris Saunders, Assistant Planning Director Robin Sullivan, Recording Secretary Guests Present: Shawn Cote, SWMBIA MINUTES FROM APRIL 26, 2007 Since there were no corrections to the minutes of the meeting of April 26, 2007, Chair Tim Dean announced that they are approved as submitted. PUBLIC COMMENT Shawn Cote, Southwest Montana Building Industry Association, noted he has just received a copy of the HDR Engineering response to the questions raised in letters from his organization. He requested that this Committee give the building industry more time to review the information and come back with their comments, noted he feels it would be more appropriate to respond to this advisory body than to the Commission. CITY COMMISSION LIAISON Commissioner Liaison Sean Becker indicated he has no comment at this time. DECISION ON WATER IMPACT FEE STUDY A Review and Decision on the recommendation to the City Commission regarding the Final Draft for the Water Impact Fee Study by HDR Engineering. Chair Tim Dean reviewed the current and proposed impact fees, revised as a result of last week’s meeting, as follows. Water impact fees – Current fees at 100 percent - $2,792.64 Current fees at 80 percent - $2,234.11 Proposed fees at 100 percent - $3,150.00 Wastewater impact fees – Current fees at 100 percent - $3,540.57 Current fees at 80 percent - $2,832.46 Proposed fees at 100 percent - $2,955.00 Tim Dean noted that, based on those figures, the water impact fees would increase $915.89, or a 41-percent increase from the fees currently paid; and the wastewater impact fees would increase by $122.54, or a 4.3-percent increase. Randy Carpenter noted that if the new fees were implemented at 80 percent of the proposed rate, the wastewater impact fee would actually decrease. Assistant Planning Director Chris Saunders reviewed the information contained in the packets distributed to the Committee members at the beginning of the meeting. He noted that the information includes HDR Engineering’s responses to the questions that have been raised; memos from him to the Committee regarding the wastewater impact fees and water impact fees; the documentation which the City needs to show the impact fees are appropriate; a copy of the allocation table that HDR Engineering prepared to determine what portion of the wastewater treatment plant is eligible for impact fees; copies of two letters from the Southwest Montana Building Industry Association, dated April 26 and May 2, providing input on the reports; and copies of the cover from the Bozeman Area Master Plan from 1983, along with a page from that document that sets the policy that growth shall pay for growth. Chair Tim Dean encouraged all of the Committee members to take a few minutes to review the information prior to proceeding with discussion. Responding to questions from Randy Carpenter, Rick Hixson stated that 8-inch lines are the minimum size required for any development. As a result, only those lines over 8 inches are capacity expanding and, thus, eligible for impact fees. He noted this standard applies to both the water and wastewater systems. Further responding to Randy Carpenter, Rick Hixson stated that 100 percent of the costs of constructing a dam in the Sourdough Creek drainage are impact fee eligible. He noted, however, that construction of a dam is a major undertaking and the costs are unknown at this time, so the only portion included at this time is a study to identify the steps to be completed for permitting of a new dam and to identify the hurdles that will be encountered in trying to re-establish the dam. Also, it is anticipated it will take twenty years to complete the process of constructing a new dam. Responding to Tim Dean, Rick Hixson noted that the facilities plan estimates water consumption at 150 gallons per day per person across all total users. The consumption rate in the impact fee represents 89 gallons per person in a residence which is 201 gallons per EDU. This more accurately represents future demand. Using the 150 gallons per day per person which would be well over 300 gallons per unit. He cautioned that if the higher consumption rate were used as the basis of calculations, the proposed impact fees would be significantly higher. Ron Kaiser characterized the revisions between the first and second drafts as fairly minor. He also noted that a majority of the discussion at last week’s meeting revolved around growth rates, and he feels Randy Goff did a good job of making it clear that the growth rate really does not matter. He identified the change in the wastewater impact fee as the biggest change in the report. Ken Eiden stated he still does not feel that he has his arms around how everything ties together in these reports. He feels the growth rate is high, and that causes him significant concern. He also questioned whether the City really needs the “Cadillac of facilities”. He concluded by stating he would like more time to review and more fully understand the reports. Anna Rosenberry voiced her appreciation for Randy Goff’s responses to the issues raised by the Southwest Montana Building Industry Association. She is satisfied that the reports are good and include the best information the City has about all of these facilities at this time. She noted that long-range planning necessarily involve estimates; and in this instance, those estimates include large facilities and big costs. She acknowledged the report is not perfect, but noted it is as good as possible. Responding to Tim Dean, Anna Rosenberry stated the bulk of the expenditures are for the two treatment plants; and the technology of those plants and associated costs are driven by the regulations with which the City is required to comply. She does not view the facilities as “Cadillacs”; rather, they are what is necessary to protect the natural resources, meet public health requirements, and meet State permitting requirements. Rick Hixson voiced his agreement, noting that the most advanced technology available is necessary to meet the State’s discharge requirements for the East Gallatin River, particularly those pertaining to nitrogen and phosphorous levels. He characterized the facilities themselves as unadorned concrete basins; and the operations buildings are to be masonry unit type buildings with the possible use of break-off bricks to provide a more aesthetic view from the interstate and adjacent commercial uses. He stressed that the cost issues revolve around the treatment processes and stressed there is no cheaper way to do it. Further responding to Tim Dean, Rick Hixson stated the net effect of not putting in a new wastewater treatment plant will be the City’s inability to discharge into the East Gallatin River. He then stressed that the water treatment plant is also subject to similar regulatory requirements, which trigger the need to construct a plant with the highest level of technology available. Responding to Nicholas Lieb, Anna Rosenberry confirmed that, since the wastewater treatment plant must be replaced to meet stricter standards, two-thirds of the costs are to be borne by the ratepayers. Responding to comments from Tim Dean, Rick Hixson stated that the $5.3 million for a new water storage reservoir is $1 per gallon, which has been the cost of storage for a long time. Responding to Nicholas Lieb, Assistant Planning Director Chris Saunders stated the total contract with HDR Engineering is for $180,000, which includes water and wastewater rate studies in addition to the water impact fee report and the wastewater impact fee report. He noted that the cost is essentially broken into quarters, making each study approximately $45,000. Nicholas Lieb noted he was shocked at the magnitude of the error made on the wastewater impact fee calculations and noted that error makes him wonder about the other numbers. Anna Rosenberry stated City Manager Chris Kukulski was also very disappointed with the errors in the draft reports, noting that City staff had higher expectations. Ken Eiden voiced his agreement with those concerns, noting that he feels the reports are good for the most part, but the unknowns are what concern him. He noted that this Committee has spent over a year in meetings, and is now expected to make a decision on these reports in a short period of time. Nicholas Lieb stated Committee members are now being expected to become experts on various issues like EDUs and pipe sizes, and it is a lot of information to assimilate in a short period of time. He expressed concern that what the Committee is deciding will have a big impact on the future of the city. Debra Becker noted this is the culmination of a long, slow process that started last February. To date, the Committee has gone slowly and steadily through the capital improvement plans and had questions answered along the way. The expert is now applying the numbers from those plans, and this Committee’s charge is to see that the methodology and formulas applied are fair. She has no problem with delaying the decision if that is the wish of the Committee, and she shares the others’ concerns about the arithmetic errors. She indicated that the Southwest Montana Building Industry Association has also done a good job of reviewing the report and raising legitimate questions that she finds have been answered in a detailed way. She concluded by stating she feels if the consensus is that the rates are fair, the Committee’s work is done. Randy Carpenter noted he, too, does not know what he would do with additional time but would not object to granting more time if other Committee members feel it would be of benefit. Responding to Tim Dean, Assistant Planning Director Chris Saunders indicated that the public hearings before the City Commission have been scheduled for May 14. At that time, the Commission may hold the public hearings or continue them to a date certain. Subsequent to its action to proceed with adoption of the reports, staff will come back with resolutions to adopt them. The Assistant Planning Director noted, however, that some ordinance changes will be required before the resolutions adopting the reports can be enacted, so the adoption of the ordinance and the resolution will be coordinated so that all have the same effective date. He estimated that this process will take sixty days after the Commission makes a decision to proceed, so there is still adequate time to raise concerns or make comments as a result of further review of these reports. Sean Becker encouraged Committee members to identify any concerns or problems prior to first reading of the ordinance, noting that once that step is taken, it is more difficult to make changes. Responding to Debra Becker, Sean Becker stated the Commission expects this Committee’s recommendation prior to holding the public hearing, noting that it is important to have that recommendation. Responding to Tim Dean, Sean Becker stated the discussion on the level at which impact fees are set will depend on staff’s recommendation. He noted that if the staff recommends continuing the level at 80 percent of the calculated fees, the Commission will probably followdiscuss that recommendation; however, he noted that if staff recommends implementing the fees at 100 percent, the Commission will probably accept discuss that recommendation first. Assistant Planning Director Chris Saunders noted that funding sources for various improvements may include developer contributions, impact fees, ratepayer fees, and possibly grants. He stressed that these sources are unique and don’t overlap; and cautioned that if a shortfall occurs in one of those sources, then it must be funded through another source. Tim Dean noted that he has listened to this City talk about affordable housing for a long time, and stressed that providing affordable housing must be a conscious effort of everyone involved, including government. He expressed concern that if it is not addressed, then Bozeman will be known as a city for the rich and famous. He feels that HDR Engineering has done a good job and that the rates are fair, but he has serious concerns about how they will impact affordable housing. He then voiced his interest in this Committee recommending that the Commission enact these fees at 80 percent and this Committee reviewing every project post-bid. Assistant Planning Director Saunders stated he plans to bring the draft ordinance to this Committee prior to Commission action, currently scheduled for June 4th. Debra Becker stated she sees the percentage of impact fees implemented as a political decision and not within the purview of this Committee. Tim Dean countered that this is an advisory committee, and suggested that it advise the Commission to implement the fees at 80 percent. Responding to Randy Carpenter, Assistant Planning Director Saunders stated that depreciation is primarily for tax purposes. When it comes to water and sewer lines, they retain their value for their entire lives, so there is no depreciation. He noted, however, that the City must build reserves for replacement of those pipes, but that is funded by the ratepayers rather than by impact fees. Debra Becker asked if the fee schedule is to be revised again in light of HDR Engineering’s response to Item No. 27 in the SWMBIA letter. Assistant Planning Director Saunders stated all HDR Engineering responses that indicate agreement with the suggestions from SWMBIA will result in revisions to the report. Responding to Nicholas Lieb, Anna Rosenberry stated that staff has not gone through the report and reviewed the numbers; only this Committee has done so. Debra Becker noted that many of the issues and questions raised by the Southwest Montana Building Industry Association were raised by the Committee members, thoroughly discussed, and answered a long time ago. Ron Kaiser voiced his agreement with Debra Becker, noting this Committee must be comfortable with the methodology used. He noted this Committee must either agree with the method or not; the professionals will make recommendations on the details. It was moved by Debra Becker, seconded by Randy Carpenter, that the Committee recommend to the Commission that the revised draft report from HDR Engineering, as revised to incorporate the changes in text and fee schedule resulting from the latest review, be accepted. The motion carried by the following Aye and No vote: those voting Aye being Randy Carpenter, Debra Becker, Nicholas Lieb, Rick Hixson, Anna Rosenberry and Ron Kaiser; those voting No being Ken Eiden and Tim Dean. DECISION ON WASTEWATERWATER IMPACT FEE STUDY A Review and Decision on the recommendation to the City Commission regarding the Final Draft for the Wastewater Impact Fee Study by HDR Engineering. Chair Tim Dean noted that much of the discussion in the previous agenda item applies to this item as well. He then reiterated that this impact fee would actually be lower than the current fee. Ken Eiden stated that in light of the fact that costs for everything are going up, including fuel and materials, he has a hard time believing that this fee could actually be going down. He noted that, given the errors that have already been identified in the calculations in this report, he has concerns that there may be others leading to an erroneously low fee. Tim Dean suggested that the impact fee proposed in this report may be more appropriate than the fee in the previous report. Assistant Planning Director Chris Saunders stated the methodology used in this study is similar to that used in the previous study. He identified several changes that have occurred between the two studies, including a decrease in per-capita use of water and wastewater discharge, an aggressive maintenance program that has addressed infiltration/inflow problems, and changes that make the treatment plant more efficient. He stressed that collection pipes must be sized to accommodate peak flows, which are 2.3 times the average flows, so any decrease in flows can dramatically affect the number of units that a line may serve. Responding to Nicholas Lieb, the Assistant Planning Director acknowledged that figures in the last study may have been incorrect, stressing that the figures in a study must be based on best estimates for the future. Nicholas Lieb suggested that the Committee ask HDR Engineering to review the numbers in this report once again; the Assistant Planning Director confirmed that could be done. The Committee members all agreed that request should be made. It was moved by Ron Kaiser, seconded by Debra Becker, that the Committee recommend to the Commission that the revised draft report from HDR Engineering, as revised to incorporate the changes in text and fee schedule resulting from the latest review, be accepted. The motion carried by the following Aye and No vote: those voting Aye being Randy Carpenter, Debra Becker, Nicholas Lieb, Rick Hixson, Anna Rosenberry, Ron Kaiser and Tim Dean; those voting No being Ken Eiden. Assistant Planning Director Chris Saunders noted that the “public” in the public hearing before the Commission includes the members of this Committee and encouraged them to provide input either in writing before the public hearing or orally at the public hearing. COMMITTEE COMMENTS Sean Becker encouraged this Committee to discuss and comment on any issues or concerns it might have, citing affordable housing and the potential of moving the payment of impact fees from building permit to certificate of occupancy as possible topics on which Committee comment would be appreciated by the Commissioners. Ken Eiden suggested it may be beneficial for the Committee to discuss the percentage of impact fees to be implemented. He expressed his concern about implementing less than 100 percent of the fee because that would immediately create a shortfall that must be funded through another source. He voiced his position that government needs to assess the real costs of doing business rather than passing shortfalls on to future generations. Sean Becker stated he appreciates this type of dialogue and input by advisory boards, noting he sometimes feels that consultants are directing the City’s direction because their reports are simply approved and adopted. ADJOURNMENT There being no further business to come before the committee at this time, Chair Tim Dean adjourned the meeting at 7:30 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