HomeMy WebLinkAbout07-26-07 Impact Fee Advisory Committee Minutes.doc** MINUTES **
CITY OF BOZEMAN
IMPACT FEE ADVISORY COMMITTEE
THURSDAY, JULY 26, 2007
6:00 P.M.
CALL TO ORDER AND ATTENDANCE
Chair Tim Dean called the meeting to order at 6:10 p.m., in the Commission Room at the Municipal Building, 411 East Main Street, Bozeman, Montana.
Members Present:
Tim Dean, Chair
Debra Becker (arrived at 6:15 p.m.)
Ken Eiden
Rick Hixson
Ron Kaiser
Members Absent:
Randy Carpenter
Nicholas Lieb
Anna Rosenberry
Bill Simkins
Staff Present:
Sean Becker, Commissioner Liaison
Chris Saunders, Assistant Planning Director
Robin Sullivan, Recording Secretary
Guests Present:
Bob Wallace, Tindale-Oliver and Associates
Art Wittich
Shawn Cote, SWMBIA
Joan Rudberg
PUBLIC COMMENT
{Limited to any public matter within the jurisdiction of the Impact Fee Advisory Committee and not scheduled on this agenda. Three-minute time limit per speaker.}
No comment was received under this agenda item.
CITY COMMISSION LIAISON
{ A standing item to be used as needed}
Commissioner Liaison Sean Becker stated that at Monday’s meeting, the City Commission discussed the implementation percentage for impact fees. He noted that during that discussion,
he forwarded this Committee’s discussion and sense that the percentage at which fees are implemented is a policy decision and outside its scope. He reported that he voted against the
motion to implement the impact fees at 100 percent, based largely on this Committee’s discussions, noting that he felt to implement the fees at even 95 percent would be a responsible
course of action. In the future, he hopes this Committee may address the question so it is on record even though it is an issue for which the Committee is not responsible.
Responding to Chair Dean, Sean Becker confirmed that the Commission’s vote was to implement all four impact fees at 100 percent, with the former Duncan study being the basis for setting
the fire and street impact fees since the new studies are not yet complete. He stated this was based on staff’s recommendations that all four impact fees be addressed at the same time
in the unified development ordinance revisions and that the fees be implemented without a reduction.
Chris Saunders noted the Commission’s action was to adopt an ordinance on first reading and stated that the second reading and adoption are scheduled for August 6. He indicated that
the ordinance can be revised prior to the second adoption, and the adoption of two resolutions will be required to implement the new fees. He noted the effective date of those resolutions
will be set the same as the effective date of the ordinance, which he suggested be September 8 so that they become effective on a weekend.
Further responding to Chair Dean, Chris Saunders stated that a change in the fees would require a change in the ordinance. He noted that the ordinance will need to be further revised
when the Commission makes its decision on this street impact fee study and potentially for the fire impact fees.
Responding to Chair Dean, Sean Becker stated the water and wastewater impact fee studies were approved as amended by the consultant after interaction with SWMBIA’s engineering consultant,
which resulted in a $250 reduction in the water impact fees.
Chris Saunders noted that the Commission discussed whether to include the full cost of replacing Sourdough Dam or just the engineering and design work; and they chose to include only
the engineering and design work at this time recognizing that when they review these fees in three years, they will have additional information available.
Ken Eiden voiced his surprise that the revised report did not come back before this Committee before going to the Commission.
Responding to Debra Becker, Sean Becker stated the water fees were reduced because the consultant found an error in interest calculations and because the leakage rate for the newer subdivisions
was too high.
MINUTES FROM JUNE 28, 2007
Since there were no corrections to the minutes of the meeting of June 28, 2007, Chair Tim Dean announced that the minutes are approved as submitted.
REVIEW AND DISCUSSION
(Presentation of the “Draft” Street Impact Fee Study Update by consultant Bob Wallace, Tindale-Oliver & Associates.)
Assistant Planning Director Chris Saunders noted that the Committee is not asked to make any decisions at this time; this agenda item is simply for review and discussion. He indicated
that Mr. Wallace is prepared to present the draft street impact fee study and to respond to many of the questions and issues raised at the last Committee meeting and to then revise the
study in light of input received. He noted that a public hearing before the Commission has been scheduled for September 10, but the Commission may open and continue that hearing to
a later date if necessary. He anticipates that the report will not be adopted until at least late fall, with the new fees not becoming effective until after the first of the year.
Mr. Bob Wallace, Tindale-Oliver & Associates, reviewed the draft street impact fee study, a copy of which was included in the packet, using a power point presentation to do so. He noted
the street impact fees were last updated in 1996 and, since that time, significant increases have occurred in construction costs. He noted that a review of growth rates revealed the
current growth rate is substantially higher than the overall growth rate for the past thirty years and is, in fact, close to the 5-percent growth rate used for other recent studies.
He cautioned that growth is cyclical, but recognized that revising this study to reflect the 5-percent growth rate would be appropriate. He stressed that, since this is a consumption-based
fee, new growth will pay for each unit consumed; and that fee will not differ with a slower or faster growth rate. If growth slows, that simply means there will be less money and less
demand for new facilities; if growth increases, that means there will be more money collected and more demand for new facilities.
Responding to Debra Becker, Bob Wallace reiterated that growth has little effect on the amount of the impact fee, particularly since the City is charging growth for consumption of the
capacity.
Bob Wallace turned his attention to the technical analysis, noting the key concepts are (1) transportation capacity is an asset, (2) consumption and replacement of that capacity should
occur at the same rate, and (3) the public benefit should be maximized by spending monies where they are most needed. He stated the formula for calculating the impact fee is the demand
for roads times the cost to build a lane mile of road less credits. He stressed the importance of using actual costs when making these calculations, cautioning that to use lower estimates
creates a gap that must then be covered by someone else. He also cautioned that to implement the fees at less than 100 percent will also result in a funding gap that must be funded
through another source.
Mr. Bob Wallace stated the general formula for determining impact fees is demand times unit cost less credits. He indicated that the demand component is measured by vehicle miles of
travel, noting that each use generates a certain number of trips, measuring a certain length; and a certain percentage of those are new trips. He indicated that in calculating the vehicle
miles of
travel, he looked at national data and the raw data gathered in traffic counts in Bozeman as well as data that his firm has collected in Florida over the last twenty years. He stated
that in Bozeman, data was collected at eleven sites split across single-family, condominium, office and commercial uses. He noted those sites were spread across the community and include
subdivisions rather than single structures, so the results of the survey represent approximately 400 single-family homes, 300 condominiums, 500 office land users and 1200 shopping center
users. He indicated that people were surveyed as they left their homes, when they came back, or when they went to an office or shopping center to gather specific data about the trip.
He indicated that his firm has pioneered techniques for gathering trip data and preparing statistical profiles; and he has a reasonable confidence level that the information in this
report is statistically very good.
Responding to questions from Tim Dean, Bob Wallace stated this study must be completed within a certain budget; and the data collection method used was what could be funded with the
monies available. He stated the trip characteristics in Bozeman, based on the raw data collected, reflect that less vehicle miles were traveled and, as a result, he was comfortable
with adjusting the numbers from other reports accordingly. He noted that the number of trips and the length of those trips generally balance out so that the total miles traveled is
virtually the same since those who must travel further tend to be more organized about their trips and make more than one stop.
Responding to Debra Becker, Mr. Wallace stated a new trip is one that wouldn’t be on the road if a specific development didn’t occur.
Bob Wallace turned his attention to the data on which the calculations are based. He noted the national average is 9.57 trips per day while the local data came in at 9.61 trips per
day; and the impact fee is based on the national average of 9.57 trips per day. He stated the local trip length is 3.52 miles, and that figure was also used in the calculations. He
indicated that the trip generation rates include services, including the mailman and delivery services, in addition to the trips that people make to and from their residences. The calculations
for daily vehicle miles of travel result in 33.69 miles per day; that figure is divided by two, so that each land use is charged for one-half of the vehicle miles. The result is 16.85
daily vehicle miles of travel per land use. He stated that figure is then lowered by 15 percent for residential uses to account for those portions of the trip that are traveled on the
interstate since local funds are not used for that roadway, so the adjusted figure for a single-family home is 14.32 vehicle miles of travel, which is the net capacity of road used.
Rick Hixson stressed the importance of remembering the data on which the fees are calculated is simply a snapshot in time; and the data will always vary.
Responding to Tim Dean, Bob Wallace stated the daytime and nighttime populations in Bozeman were not used in calculating the street impact fees because they are based on daily trip information
and not peak flow information.
Mr. Wallace stated that the traffic patterns in Bozeman are much like urban areas, with the number of trips being close to the national average for urban settings and the length being
shorter. He noted this results from the much more compact work center in Bozeman.
Responding to Ken Eiden, Bob Wallace stated the adjustment figure for interstate travel is based on traffic count data taken on the Bozeman on and off ramps times the trip lengths.
Bob Wallace turned his attention to the cost component, stressing this is not to be confused with the credits. He indicated the information is based on the 2001 Greater Bozeman Area
Transportation Plan Update because that is the only information he had available. He stated that when the new update is complete, these impact fees should be re-evaluated to see if
they are still appropriate or if they need to be changed based on that new information. He noted that reconstruction is more costly than a brand new road, and the ability to salvage
an existing roadway while adding a lane also helps to reduce the costs. He stated that two-lane roadways within the city are developer-built projects, so that portion of the roadway
is not included in impact fee costs. As a result, impact fees are not applied to two-lane facilities and are applied to only one lane of a three-lane facility.
Assistant Planning Director Chris Saunders noted the City could make a policy decision to collect 100 percent of the costs for a three-lane facility; but the City would then need to
construct the roads. He suggested that continuing to require the developer to install a two-lane facility and the coordinate with the developer to construct a third lane makes more
sense and is more efficient.
Bob Wallace stated it now costs $3.45 million to build one lane mile, based on real City projects. When the design and right-of-way costs are added, the result is a total of $4 million
per lane mile. He acknowledged that, while the State and the City have very similar road designs, the State’s construction is $3.84 million per lane mile, which is slightly higher than
the City’s. He suggested that if the mix of State and City projects changes, then the blended cost will change and impact fees should be reviewed and adjusted as necessary.
Responding to Tim Dean, Bob Wallace stated that construction costs rose 27 percent in 2004 and 47 percent in 2005, although the latest trend is bids leveling off and more bids coming
in for projects. The result is an increase from $1.5 million per lane mile in 1996 to $4 million in 2007.
Bob Wallace stated another component in the calculation is capacity. He noted the 1996 study listed a 6,000 capacity per lane mile while the added capacity from various improvements
and the 2001 study has resulted in a blended capacity of 8,658 per lane mile. He stated that increase in capacity has also helped to reduce the proposed increase in impact fees
Assistant Planning Director Chris Saunders stated that policy decisions by both public and private employers, such as flexible or staggered work schedules, can help to increase the capacity
of a roadway by reducing the peak load.
Bob Wallace addressed the issue of credits, stating that the City currently uses its gas tax monies for maintenance of its existing roadways. He indicated, however, that other non-impact
fee revenues are used for capacity expansion, including the general obligation bond issue that is currently being repaid through property taxes. Based on his calculations of this component
of the fee, a single-family home receives a credit of one cent per square foot.
Mr. Wallace turned his attention to the final calculations for the impact fee, noting that a single-family home consumes 14 vehicle miles per day. Based on the cost calculations, the
result is
$6,771 in road capacity less a credit of $876, or a net of $5,895 per single-family household. He acknowledged this is a tremendous increase but it represents the net value of what
a household consumes in the functioning classified transportation system of the city.
Bob Wallace turned his attention to the rationale for central business district versus non-central business district calculations. He noted state statute requires that impact fees be
proportional to the amount of capacity consumed by new growth and stated that, in response to questions and issues raised at the last meeting, he will amend the appendix to include the
vehicle miles traveled for each category. He stated that the proposed fees for commercial uses in the central business district are lower because so many commercial uses are concentrated
in a small area and people typically stop at more than one on any given trip.
Responding to questions from Debra Becker, Bob Wallace indicated he is comfortable with the differences between the fees for the central business district and the non-central business
district because the City’s ordinance allows a business to do an independent study that can result in an adjustment in the impact fee paid. He stated that if a business does conduct
an independent study that shows a significant variation from the calculations in this study, his firm will pay the costs of that study and will adjust the numbers in this study accordingly.
He also noted that the non-residential fees have already been adjusted by 40 to 50 percent, so he feels they are as fair as they can be and that the calculations are conservative.
Tim Dean stated he is concerned about the cost of the street impact fee for residential development, particularly since the proposed fees represent a 433 percent increase.
Bob Wallace noted that if a more traditional type of self-contained neighborhood development with mixed uses and overall synergy were to occur, there may be a reason to lower the fees
for residential development. He acknowledged that that type of development may be starting to occur in Bozeman and, if so, would be a reason to review the fees.
Bob Wallace noted that the costs for a lane mile are much lower in both Gallatin County, at $1.5 million, and Belgrade, at $1.65 million.
Assistant Planning Director Chris Saunders noted that the entire Gallatin County project list is three portions of road in the airport interchange project, so that study is designed
to fund a very short list of specific tasks. On the other hand, Bozeman’s study looks at the overall system and includes a number of projects.
Bob Wallace noted another component that can significant impact the cost per lane mile is the other funding that may be available.
Bob Wallace turned his attention to indexing, stating that he has included an 8.5-percent annual indexing rate. He stated this mechanism allows the City to increase impact fees at a
predetermined rate to keep from falling too far behind over a period of time.
Bob Wallace stated he has had his firm’s staff go through the entire Montana Code Annotated to make sure everything is covered. He indicated his company’s philosophy is to “plan for
the lawsuit” and to ensure the methodology is defensible in court. He then stressed the importance of reasonable effective dates, noting there should be no surprise that the fees will
increase.
Bob Wallace stated that under the scope of services, he is required to look at ways to deal with the affordable housing issue. He indicated that he has presented papers at national
roundtables on why the size of the house and lower income level for an affordable house result in less trips and consume less capacity. He noted that data from the federal government,
the housing survey and the average median income data for Bozeman have allowed him to stratify the data and allow the City to consider tiering of the fees. He indicated the data will
allow this Committee to make a reasoned recommendation and the Commission to make an informed decision. He concluded by stating data reveals that larger homes do create a greater demand
on the transportation system.
Mr. Wallace stated the administrative fee is currently at 2 percent while the administrative fee under the new water and wastewater impact fee studies is set at 5 percent. He noted
that when fees go up, the percentage generates additional funds to cover costs. He stated that statutorily the City may charge up to 5 percent and suggested that, if the Committee wishes,
it may recommend a lower percentage or a cap on the administrative fee at a certain dollar amount. He indicated that he will seek direction at a future meeting.
Bob Wallace noted he has addressed the comments from the last meeting and from staff. In light of further input from staff and this Committee, some changes will be made in the draft
report. Those will include adding an executive summary that generalizes the demand cost and credits and identifies what has changed and the impact in the change of the fee. He assured
the Committee the summary will be in laymen’s terms and will lay out those issues in a fairly simplistic manner. The general formatting of the report will also be changed to a more
traditional format. The introduction will also be expanded to include information on population projections, public safety and the use of roads. The fee schedule will also be simplified
and included as a table in the report. He will look at the central business district office use to determine if the fee is appropriate. Also, the data in the trip characteristics database
will be included in the introduction.
Mr. Wallace turned his attention to the questions raised in the letter from the Southwest Montana Building Industry Association, dated July 25 and distributed just prior to the meeting,
as follows. (1) The Four Corners north project needs to be removed from Table C-3. (2) The full cost of intersection upgrades and signalization is included in Table C-3. He indicated
that the Four Corners north project should be removed, but cautioned that deleting it will reduce the credit and indicated that the full cost of the intersection improvements is included
because the full value of those improvements is capacity expanding. He indicated that same principle applies to (3), which pertains to reconstruction of a primary roadway. (4) The
percentage change for various residential fee levels cannot be compared to the current fee. (5) Durston Road and West Babcock Street were the only streets used in determining the cost
per lane mile for future projects because they are the only recent projects that are reflective of the City’s standards and real costs.
Bob Wallace stated there will be changes in Appendix E because the latest median data income might affect how the break points for tiering of impact fees are developed. He also must
complete his review of City staff’s comments following their reviews.
Art Wittich stated that when SWMBIA hired a technical consultant to review the water and wastewater impact fee studies, they were confused by the number of drafts of those reports.
He
expressed his interest in avoiding that problem with review of the draft of this report and asked that they be given adequate time to review the draft when it is as complete as possible.
He asked when that will occur.
Bob Wallace stated he would like a month to make the changes he has identified, noting that some of the changes may affect multiple sections.
Responding to Chair Dean, Assistant Planning Director Saunders stated the public hearing before the Commission may be opened and continued or extended to accommodate the additional review
time.
Responding to Bob Wallace, Art Wittich stated he would like thirty days for the SWMBIA consultant to complete his review of the final draft report. He also noted he feels the final
report and SWMBIA consultant comments should come back to this Committee before going to the Commission.
Chair Dean asked if the Committee members want to meet in two weeks or if they want to wait until the final draft report is received; the Committee members agreed to wait until the draft
report is received.
Assistant Planning Director Saunders stated that when the final draft report has been received, he will work with Chair Dean to schedule the next meeting.
Sean Becker noted that the public transit system is growing rapidly. He further noted that it was not in the mix when data was collected in October and suggested that it would be nice
to see that component added in the credit section of the report.
Bob Wallace characterized the transit system as a baby system, noting that 345 riders per day is great but has no impact on the transportation fees at this time. He stated that when
a transit system is incorporated into the program or the impact fees are adjusted, looking at the value of that mode of transportation may be appropriate. He further noted that the
capital component of the transit system could also be included in the capital improvement list, but cautioned that is also the only component for which federal monies can be received.
Sean Becker asked that the transit system be at least mentioned in this report, even if it has no impact on the fees.
COMMITTEE COMMENTS
No comments were received under this agenda item.
ADJOURNMENT
There being no further business to come before the committee at this time, Chair Tim Dean adjourned the meeting at 8:50 p.m.
_____________________________________ _____________________________________
Tim Dean, Chairperson Chris Saunders, Assistant Director
Impact Fee Advisory Committee Dept of Planning & Community Development
City of Bozeman City of Bozeman