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HomeMy WebLinkAbout10-11-07 Impact Fee Advisory Committee Minutes.doc** MINUTES ** THE CITY OF BOZEMAN IMPACT FEE ADVISORY COMMITTEE THURSDAY, OCTOBER 11, 2007 6:00 P.M. ITEM 1. CALL TO ORDER AND ATTENDANCE Chair Tim Dean called the meeting to order at 6:02 p.m., in the Commission Room, Municipal Building, 411 East Main Street, Bozeman, Montana. Members Present: Tim Dean, Chair Debra Becker Randy Carpenter Ken Eiden City Engineer Hixson Ron Kaiser Anna Rosenberry Members Absent: Nicholas Lieb Bill Simkins Staff Present: Sean Becker, Commissioner Liaison Jason Schrauger, Deputy Chief of Operations, Bozeman Fire Department Chris Saunders, Assistant Planning Director Robin Sullivan, Recording Secretary Guests Present: None ITEM 2. MINUTES FROM JULY 26, 2007 Debra Becker voiced concern that the first paragraph on Page 2 states the Commission has voted to implement impact fees at 100 percent, particularly since this Committee has not yet made any recommendations on the last two impact fees. Assistant Planning Director Chris Saunders responded that the Commission’s decision to increase the impact fees collected from 80 percent to 100 percent was made independent of these new transportation or fire impact fee studies. He reminded the Committee that part of the settlement in April 2005 was an agreement that the City’s collection of impact fees would be set at 80 percent for two years or until fee studies were completed, whichever occurred first. That settlement was made 2 ½ years ago, and two of the studies have been completed, so three of the five Commissioners voted for the increase in current fees. He noted all indications have been that there would be increases in impact fees as a result of these new studies, and the increase in percentage of old fees is an interim step that provides for staged increases. He indicated the Commission clearly intended to reconsider that percentage as they review the information and impact fees contained in the new studies. Chair Dean asked for an update on the ordinance implementing 100 percent of the impact fees. Assistant Planning Director Chris Saunders announced that the ordinance was adopted and went into effect on September 8. In addition to the increase in fees, the ordinance includes clarification of the language in certain portions and the new methodology for calculating fees for large meter sizes as utilized in the new fee studies. Chair Dean noted that this Committee must vote on whether to recommend leaving the administrative fee at 2 percent, as suggested by Tindale-Oliver, or whether it should be raised to 5 percent, which is the rate currently assessed for water and sewer impact fees. Assistant Planning Director Saunders noted this Committee is scheduled to take action on street impact fees at its November 8, 2007 meeting, which would be a logical time to consider the administrative fee. Since there were no changes or corrections to the minutes of the meeting of July 26, Chair Tim Dean announced the minutes are approved as submitted. ITEM 3. 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. ITEM 4. CITY COMMISSION LIAISON {A standing item to be used as needed} Chair Tim Dean asked Commissioner Liaison Sean Becker to provide input on the Tindale-Oliver recommendation for tiering of street impact fees based on affordable housing. Commissioner Liaison Becker responded that, since he has been out of town, he has not yet seen the materials for the street impact fee study. Responding to Chair Dean, Assistant Planning Director Chris Saunders stated the Commission was interested in finding out if there was a factual basis for tiered fees; and whether to implement them will be a Commission decision. He noted that, if there is a demonstrable difference in demand, then a tiered fee based on affordability would be consistent with the purpose of the ordinance to match fees with demand. He indicated that if tiering is implemented, when an applicant applies for a project with affordable housing, the fee will be based on the lower demand for service. Chair Dean voiced concern that if a lower fee is paid for a house based on affordability, then the additional monies must be paid from another source. Assistant Planning Director Saunders responded that the fees are based on demand and that includes a lower amount of demand from affordable homes, so there is no difference to be covered. He indicated that if an applicant wishes to claim this lower rate, documentation must be provided to ensure that the unit is being sold at a low price and will remain qualified as a low income home according to the adopted guidelines. He stressed this program must be include a provision that failure to sell the unit at a lower price will trigger the requirement to pay the difference in the impact fee. ITEM 5. REVIEW AND DISCUSSION Presentation of the 2009 – 2013 fire impact fee Capital Improvements Program Jason Schrauger, Deputy Chief of Operations for the Fire Department, distributed an information sheet providing a history of recent activities in the Fire Department, the current situation, and recommendations for the use of impact fees. He briefly highlighted that information, noting that in November 2006, the City Commission formally adopted the Department’s master plan. That report identifies service delivery benchmarks for determining when new facilities are needed and recommendations for the placement of additional fire stations. Deputy Chief Schrauger stated that Fire Station No. 3, which will be located in the northwest quadrant of the community, will go to bid in February 2008; and all available impact fees and potentially those from future years will be used to construct that facility. As a result, staff is recommending construction of Fire Station No. 4, which will be located in the southwest quadrant of the community, be moved from FY2011 to FY2013. Also, staff recommends that the Opticom traffic pre-emption system which was scheduled for FY2008 be moved to FY2009 and that fire engine 4 be moved from FY2011 to FY2013. Deputy Chief Schrauger noted that the Opticom traffic pre-emption system was installed with the new traffic signal upgrades in the downtown area; however, the City does own some signals where the traffic pre-emption system has not yet been installed. He stated that this system allows fire apparatus to move more quickly through the community, thus reducing response times. Also, the extension of Graf Street from South 19th Avenue to South 3rd Avenue will allow for reduced response times from Fire Station No. 2 to Westfield Subdivision and Sundance Springs Subdivision, which now lie outside the 6-minute response time. Deputy Chief Schrauger drew attention to the graphs showing those portions of the community covered by the two existing fire stations and the portions that will be covered when the third fire station is constructed. He then stressed the importance of responding to both fire calls and medical emergency calls within six minutes, noting that the potential for a positive result in either situation decreases dramatically after six minutes. Deputy Chief Jason Schrauger concluded by stating that nothing has been added to the impact fee schedule; projects have simply been moved within the schedule. Responding to Debra Becker, Deputy Chief Schrauger stated the mill levy on the November ballot is for staffing of Fire Station No. 3 and the replacement of small equipment on a rotational basis. Anna Rosenberry stressed that impact fees can only be spent on capital items with a life of ten year or more; therefore, they can be used for fire engines but not for personal protective equipment or personnel. Responding to Chair Dean, Jason Schrauger stated staff has no problem with this Committee reviewing Fire Station No. 3 post bid. Responding to Debra Becker, Anna Rosenberry stated the beginning balance in the fire impact fee fund is higher than the projected balance because the $500,000 budgeted for design of the fire station has not yet been expended since staff is not yet certain whether the structure will be a freestanding fire station or a joint facility with the 911 center. She indicated that the amount in this year’s budget for the fire station has been increased by that $500,000, so the projected expenditure is now the full $2.15 million. Responding to Chair Dean, Assistant Planning Director Saunders indicated that the decision on this impact fee CIP will be listed on the agenda for the next meeting. Chair Dean thanked Deputy Chief Schrauger for the presentation. Presentation of the 2009 – 2013 street impact fee Capital Improvements Program City Engineer Hixson, City Engineer, reviewed the list of capital improvement projects for street impact fees for FY2009 through FY2013. He noted that the list of projects through Fiscal Year 2011 has not changed. He then turned his attention to the new projects on the list, which include traffic signalization at the intersections of North 15th Avenue and West Oak Street, North 27th Avenue and West Oak Street, and South 7th Avenue and Kagy Boulevard, and a portion of the extension of West Graf Street between South 3rd Avenue and South 19th Avenue. Responding to Chair Dean, City Engineer Hixson stated that improvements to Durston Road between Fowler Avenue and Cottonwood Road have been moved back a year in response to the slow down in development and in recognition of the fact that other sources of revenue will not be available for another year. Debra Becker questioned why developers are not required to install traffic signals if they are necessitated by new development. City Engineer Hixson responded that in the past, developments were viewed as triggering the need for a traffic signal and either a single developer or a group of developers would be charged with finding a way to provide that signal. It has now been recognized that the whole community generates the need for a traffic signal and that it is more appropriate to use impact fees for those signals than to require a few developments in the immediate area to install the signal. Responding to comments from Debra Becker, City Engineer Hixson stressed the importance of considering the city as a whole when determining which projects are to be funded through impact fees, particularly since some areas of the community are fully built out and will not generate additional impact fees. Assistant Planning Director Saunders noted that some improvements may be attributable to a new project; however, the entire community uses the major road network to move throughout the city. Staff has found that the percentage impact on any intersection on a primary roadway from a specific project is seldom above a single digit percent. It is the incremental effects which are to be offset. He stressed that traffic signals help to improve capacity on those roadways, so impact fees can be used to fund those signals. He indicated that a development project may still be approved with the condition that it may not be undertaken until the traffic signal has been installed without requiring the developer to install the signal unless the project is to move forward ahead of when the signal is to be installed with impact fees. In that instance, he noted the developer could then seek impact fee credits for that improvement. Tim Dean noted that last year, he voted against including the traffic signal at the intersection of South 11th Avenue and West College Street and indicated he will do so again because he is not convinced that new growth is the only reason it is needed. Assistant Planning Director Saunders stated the new study changes the basis on which impact fees are assessed for MSU properties, with the new fees taking into consideration the number of students as well as square footages of facilities. Responding to questions from Chair Dean, Assistant Planning Director Saunders stated that with recent subdivision approvals, West Graf Street is to be extended a majority of the distance between South 19th Avenue and South 3rd Avenue, leaving only one small gap. Staff has found that finishing that gap will improve traffic circulation in that portion of the community and provide for better public health and safety. He indicated that a certain portion of those improvements will be recouped with future development in the area. He concluded by noting that two years ago, no additional development was proposed in this area. Chair Dean concluded this agenda item by thanking Staff for the presentation. ITEM 6. OLD BUSINESS A. Revised draft of Transportation Impact Fee Study Assistant Planning Director Chris Saunders noted that a copy of the final report for transportation impact fees as prepared by Tindale-Oliver & Associates, Inc., dated October 3, 2007, was included in the packets for this meeting. He noted this report incorporates the comments received the last time the consultant was in town. He acknowledged that this draft will continue to be reviewed but is ready for public discussion and, as a result, has been posted on the web with hard copies being made available at the library. He indicated that the consultant will be present at this Committee’s November 8 meeting, and the Commission has scheduled its public hearing for November 26. He anticipates that, at that time, the Commission will consider the matter at more than one meeting, similar to the process they followed when considering the water and sewer impact fee studies. He asked that any questions or comments on this report be sent to him so that he can forward them to the consultant. He noted that now is the time for any comments or data supporting an alternate conclusion to be brought forward. Responding to Chair Dean, the Assistant Planning Director stated he will check on the growth schedule in Table 8, noting that information may be been incorporated into the text rather than included in a table. Further responding to the Chair, the Assistant Planning Director indicated that Table H-1 is designed to reflect that lower growth rates result in less impact fee revenue being collected. Debra Becker noted that, just prior to the meeting, she distributed a comparison chart of the proposed impact fee to the current impact fee, based on 80 percent of the study rate, as well as the study rates for Belgrade and Gallatin County, and the percentage increase that the new rates reflect. She then questioned how the rates in this study can be so different from those in the studies for Belgrade and Gallatin County, particularly since construction costs for all three entities are presumably the same. City Engineer Hixson responded that neither the streets in Belgrade nor the roads in Gallatin County are built to the same standards as those in Bozeman. He noted that Bozeman’s standards are similar to those of the State and acknowledged that the higher construction costs are due in part to the lack of competition. Debra Becker suggested that the significantly higher cost for constructing roads in Bozeman could potentially drive development into the county or to Belgrade and suggested that the road standards may need to be reconsidered. City Engineer Hixson responded the community has indicated that roads should not be strictly avenues of commerce, but must accommodate those who live there and include curb and gutter, boulevards, sidewalks, pathways, pedestrian crossings and bike lanes; and all of those elements increase the costs. Assistant Planning Director Saunders stressed that the capital improvement program for Bozeman impact fees looks at both collector and arterial roadways, with more total lane miles in the program than in either the Belgrade or Gallatin County studies. Anna Rosenberry agreed that Gallatin County’s road standards are significant lower than Bozeman’s, and the City of Belgrade is planning to construct fewer streets than Bozeman is. She then expressed her interest in looking at the Belgrade study to see what is different from this study. Debra Becker reiterated her concern about these fees, noting it is not in the City’s best interests to drive development outside to the city, particularly into areas close to the city that may be annexed in the future with substandard streets and infrastructure. City Engineer Hixson noted that water quality issues in the county will make it more difficult to develop in the county, which becomes a factor in where development occurs. Assistant Planning Director Saunders stated the purpose of the impact fee study is to identify the costs of projects and provide information on which more informed decisions may be based. He stated that, until a price is attached, it is difficult for people to make a rational judgment. The value of this Committee reviewing the report is the confirmation that the numbers reflect what it will cost to build a specific type of facility. Chair Dean noted the down side is that this Committee can’t come up with alternative financing; rather, it must vote yes or no. He stated that even Bob Wallace has mentioned some alternative financing is the key. Anna Rosenberry acknowledged that this Committee sees only that portion of the capital improvement program funded through impact fees and stressed that the City’s investment in capital infrastructure also includes several other sources, such as water and sewer funds, solid waste funds, street maintenance funds and urban funds. Debra Becker suggested that educating the public about the costs attached to the various components, such as bike lanes, may temper their demands. She also suggested that the City run a chart showing the old fees, the proposed new fees and the percentage of change. Ken Eiden noted that, while everyone might want to drive a Mazaratti, once they realize the cost of doing so, they choose to drive a Chevrolet instead. He agreed that if the public knew the actual costs of the infrastructure improvements they desire, they may lower their standards. Randy Carpenter noted that if it were the case that the infrastructure costs were excessively high and if impact fees drove development outside city limits, then Gallatin County, Belgrade, Amsterdam and Manhattan would be seeing more growth than they are. Debra Becker responded that some businesses are location specific but others are not. She noted that the current impact fees have not been significantly different from the County’s and have not been large enough to drive development to Belgrade, but the new fees could do so. Ron Kaiser acknowledged the importance of remaining competitive, but suggested that Bozeman’s competition lies in other communities, such as Missoula and Whitefish, rather than in Gallatin County and Belgrade. He suggested that the road standards in those communities may be more important than the standards around this area. He stated it is tough for him as a Committee member to operate in a bubble, unable to see the big picture. Chair Dean noted lack of zoning is one of the reasons that growth is not occurring in the county. City Engineer Hixson noted that Billings has an arterial and collector road levy, which is one of the additional funding sources they use to pay for infrastructure improvements funded through impact fees here. He then stated that the Montana Department of Transportation has increased Bozeman’s allowance in urban funds in recognition of its transportation problems and the fact that it is the only large community in Montana that does not receive metropolitan area funding. Missoula, Great Falls, and Billings are all metropolitan areas. Anna Rosenberry encouraged the Committee members to recognize the public infrastructure improvements that have been made, due in part to the use of impact fees, and to acknowledge the competitive advantage that they have provided. Randy Carpenter agreed, noting that when a subdivision puts in extra amenities, it has a competitive edge. He stated that he does not like the disparity between the impact fees for Bozeman and Gallatin County but stressed that is a political decision that is in the Commission’s arena. Debra Becker stated that, while she likes the quality of streets in Bozeman better than that in Belgrade, it is important to weigh the difference and to determine if that difference is warranted. City Engineer Hixson stated that people in Gallatin County have always made that decision, noting that it was much cheaper to build in the county fifteen years ago, before impact fees were implemented. He acknowledged that adopting the new fees would widen the gap in apparent costs but stated that other costs must be taken into consideration, such as commuting costs at $3.00 a gallon for gasoline. Assistant Planning Director Saunders acknowledged that impact fees are a lot of money and noted that people must make a rational economic decision. He stated another key element to developing in this area is a willingness to pay large sums up to $600,000 per acre for commercial land, and suggested that the impact fees are actually a small percentage of that initial investment. He concluded by noting that Commission has a significant policy decision, including whether to phase in the fees and at what level to implement the fees. ITEM 7. COMMITTEE COMMENTS No issues were raised under this agenda item. ITEM 8. 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