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HomeMy WebLinkAbout08-24-06 Impact Fee Advisory Committee Minutes.doc ** MINUTES ** THE CITY OF BOZEMAN IMPACT FEE ADVISORY COMMITTEE THURSDAY, AUGUST 24, 2006 7:00 P.M. ITEM 1. CALL TO ORDER AND ATTENDANCE Chairperson Tim Dean called the meeting to order at 7:07PM and directed the secretary to record the attendance. Members Present: Tim Dean, Chair Debra Becker Ron Kaiser Ken Eiden Randy Carpenter Nicholas Lieb Bill Simpkins Members Absent: Anna Rosenberry Rick Hixson Staff Present: Chris Saunders, Assistant Director, Planning and Community Development Kimberly Kenney-Lyden, Recording Secretary Guests Present: Bob Wallace, Tindale-Oliver & Associates Marlow Chavarria, Tindale-Oliver & Associates Sean Coty Sean Becker, Commissioner and Liaison ITEM 2. MINUTES of April 24, 2006 Strike the word ‘Really’ per Ms. Becker and noted it was on pg. 2. On Pg. 3, 4th item should read “Church Street was not approved for the five year period because it was not appropriate. Committee was unclear about the voting being very unclear about a service being ‘impact fee eligible’. Mr. Dean stated this notation should read that although a specific company/project/ person is not eligible for impact fees, we should still move through the bidding process. Tim Dean also requested that the minutes read clear. Motion to approve the minutes as corrected: All in favor, minutes will stand as corrected. 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.} Seeing there was none, Chair Tim Dean closed this portion of the meeting. ITEM 4. CITY COMMISSION LIASON { A standing item to be used as needed} Liaison Sean Becker noted he had nothing to add or comment on. ITEM 5. TINDALE-OLIVER & ASSOCIATES – STREET IMPACT FEE UPDATE Initial meeting and discussion with the consultants selected to update the street impact fees. Discussion on methodology and the update process. 5.1 INTRODUCTIONS Bob Wallace and Marlow Chavarria introduced themselves as representatives from Tindale-Oliver and Associates to facilitate this presentation and were selected by the city during the bid process to assist in the impact fee update. 5.2 IMPACT FEE OVERVIEW PRESENTATION Chris Saunders noted this presentation was to go over the information and current status of impact fees and where the city is in perspective to the budget. He also stated this presentation was to review the problematic issues we are currently dealing with and try to get up to date on what is needed to solve this. Mr. Bob Wallace noted he was pleased to represent his firm in serving this community in its plan to update the transportation impact fees. He stated his firm has the largest database for national impact fee structures from all over the country and their database is specifically formatted for this and is defensible. Mr. Wallace notes he reviewed the previous lawsuit and their goal is to do a study on what it costs the city of Bozeman to build a roadway infrastructure. These will be accurate figures and will form a basis of how to move forward. He commented to all committee members that he will always be available should there be any issues he can assist with. Mr. Wallace stated he would talk about differences on doing the impact fee study versus how the current impact fee program is structured. He will bring other options to the table that are here and accessible for us to use to help fund the transportation infrastructure. Mr. Wallace noted he will be presenting his power point in bullet point format. He states the housing prices have sky-rocketed all over the country and notes workforce housing is a problem and very relative to the impact fee program. He is looking at ways to reduce the impact of impact fees on affordable housing. 5.3 BASIC ORDINANCE REQUIREMENTS Tim Dean stated to Mr. Wallace that there will be several questions during this presentation that will need to be answered and wondered if the committee should wait until the presentation was over or if the members would be able to ask them as he goes along. Mr. Wallace agreed it is better to be informal and ask the questions as they come. He noted that impact fees are capital charges and cannot be used for operations and maintenance and is designed to cover a portion of the revenue needed for the transportation infrastructure costs. He stated the need to be sure to not double charge new growth. Mr. Wallace stated the City of Bozeman has a specific capital improvements program and it will need to be updated. He noted there are other revenues that fund improvements besides impact fees, but the objective of impact fees is to fund the capital improvements program. Mr. Wallace wanted to make sure all present understood the legal framework and noted he has worked with Tyson Smith on over 50 impact fee studies across the nation. He states Mr. Smith will be working with him on this project also. Due to the legal responsibilities, Bob Wallace states he wants to make sure to put the City of Bozeman in the proper position and will be using the accepted standard methodologies, procedures, correct calculations as to not leave any stone unturned. He noted that with the outcome of all their research and new data, the city should be prepared for the next lawsuit. There is a technical term and test called the rational nexus that will prove the need and benefit for an impact fee. Mr. Wallace states the city is interested very much in this being a study that reflects local conditions; local travel conditions, local construction costs, and other necessary local data. They will also be looking at compliance with the impact fee statute and making sure that once Tindale-Oliver comes back with recommendations to prepare the ordinance, there is a reasonable time frame from when they adopt the ordinance and when it will go into affect because there are many people who will already have projects going on and things in the pipeline. It won’t be a year or two before its effective, but it will be in a timeframe that will allow people who are already in the queue to complete their projects. Mr. Wallace noted there are 20 – 30 items that will need to be dealt with in the impact fee statutes; addressing future needs, updating capital improvements programs, having a mechanism in place that deal with deficient roadways, making sure the benefit areas target where the development is occurring and trip lengths associated with that development make sense, provide for credits, and allow for an adequate appeal process. He noted the above are some of the most important, but will be addressing all of them. Nicholas Lieb wanted more definition of what a ‘benefit area’ was, to which Mr. Wallace responded by noting it is the boundary which the city creates under which the impact fee is collected have to be spent in that area to demonstrate a benefit to those that have paid the impact fee. It is also called ‘proof of benefit’, a geographic area where the money is going to spent and benefits received. Ms. Debra Becker stated she is trying to understand the distribution of impact fees and how one can you identify the areas that would benefit in Bozeman. Mr. Wallace notes that no one knows yet and they will be looking at possibly multiple benefit districts. He stated most benefit areas he’s worked on were larger geographic areas than the City of Bozeman, and at least ½ of the municipal governmental impact fee studies done were single benefit districts. Mr. Wallace stated there are four key things this study will not do. First, new development will not be charged a higher standard than what the existing level of service reflects. Secondly, new growth will not be charged a proportionate cost that is higher than the actual cost to construct improvements, it just wouldn’t meet the proportionality tests. Third, this program doesn’t allow us to pick and choose who gets charged, it applies to all new development – everyone will pay an impact fee that is proportional to their consumption. Fourth and last, the impact fee will show a need and prove a benefit to those paying it because they will see the improvements. Affordable housing impact fee, right now, is paid from another funding source, it’s not being diminished by an exemption. Chair Tim Dean stated that Mr. Wallace noted we cannot charge for a higher standard, but higher than what? Mr. Wallace responded higher than the adopted standard that is in the plan, the example is if the standards for roads is a level of service C and if we were to raise that to a B, you cannot do that unless you have a corrective procedure in place to fix all the deficiencies. We cannot charge new development a higher level of service than what we adopted, in other words, we cannot use impact fees to correct deficiencies. Mr. Chris Saunders noted that right now our adopted level of service is C, a moderate level of delay. He stated it’s been on the books for the past 12 years and what the city has adopted. When the city plans long term projects, it’s the benchmark that is used in assessing impact fees. Mr. Wallace notes that level of service C is an excellent level of service standard. He commented that it is more common here, but in the more urbanized areas, very few are able to maintain a level of service at a C level. Ms. Becker questioned Mr. Wallace about the type of things that will improve this level of service and asked if it were things that would alleviate congestion. Mr. Wallace agreed. He noted there are a couple of major capacity service changes that will improve the level of service. He states at level of service C, you will not always be able to resolve the problems with turning lanes, adding additional lanes, or intersection improvements. Mr. Wallace commented that there are legal issues that need to be clarified also. He notes that people think impact fees are just a tax, but there’s a difference: taxes apply to everyone, generally doesn’t require any proof of benefit, whereas the impact fee requires a proof of benefit, and is a regulatory, one time fee for only new land development. This is different from a tax. He stated the city collects property taxes, but there is no requirement for proof of benefit. Mr. Wallace explained the formula for the impact fees. It is the net difference of what the total cost of public infrastructure is, minus any new revenue that new development generates. New development generates property taxes, it generates gas taxes, so the impact fee is the net difference less other revenues that new growth generates for that same purpose – expanding and improving the road systems. Bill Simkins asked what kind of time period does he use when looking at new revenue sources for growth. Mr. Simkins gave an example of buying new equipment for his business. He incurs the costs right now, but the benefits are realized over time. If you look at the cost now versus one or two years of revenue, it will never work out. Mr. Wallace answered that when they look at the life cycle of the road which is 20 or 25 years, they look at the credits like gas taxes. They are looking at the revenue stream of over a 25 year period and bring it back to present value, because the impact fee is a one-time capital payment. It is usually at an interest rate that’s similar to what the city would have to pay if they have to bond something, which is about 4 ½ to 5%. New development is getting the benefit of 25 years worth of revenues that are being used for public infrastructure. We have to be careful to continue to use this source (gas tax) in the future. Mr. Wallace added that if you look at Bozeman’s 1996 impact fee study, the example given is a roadway and a single family home. When you look at that home, it consumes roadway capacity and makes so many trips a day that equals 30.5 miles per day. If you cut the vehicle miles in half, divide that by 2, this is what is used in the analysis of impact fees. The higher that figure is, the lower the impact fee goes. We divide the impact fee vehicle miles by two to reflect half the consumption and it avoids doubling the charge. This study will reflect local conditions. Now, he is expecting that mile per vehicle per day to be higher. One lane mile costs about 1.5 million dollars to construct and this is based on the 1996 data. Mr. Wallace noted those in the construction industry have seen the increase of costs and now it looks like it will costs 3.5 million dollars to build one lane, one mile road and this is reflected in the estimates for the South 19th Avenue expansion. Randy Carpenter asked what factors go into increasing that figure for 6,000 vehicles per day per one lane of capacity. Mr. Wallace noted the highway capacity manual gives you the maximum number of vehicle that can cross one lane of traffic in one hour period of time and establishes parameters and how much capacity a road way could absorb at an adopted level of service standards, he feels that number is very low. We will see that number go up in this study. He notes the number will go up while still remaining at the same level of service C. Chris Saunders commented to Mr. Carpenter the reason why staff thinks this number can increase is that in 2002, the city made some changes to the regulatory structure having to do with the distance of spacing in between access points onto the major street network, every time you have a place to come on and off that network, it disrupts the flow of traffic and slows it down. He notes that if you drive up North 19th, it looks very different where you get in and out on that street than say West Main in between 19th and College intersection where you have driveways every 75 yards. Mr. Saunders stated that demonstrates that even though 6,000 vehicles per day was accurate in 1996, with the changes that have occurred in the standards we can do better than that. Ms. Becker wanted clarification as to the number reflecting 6,000 vehicles per day or 6,000 vehicle miles per day and Mr. Wallace answered that when looking at capacity, we look at vehicles per day. She asked how one can come up with that formula. Mr. Wallace noted the impact fee formula is the product of the trip length times trip rate times the percent of trips made. Therefore, each new development is consuming x number of miles of capacity. Bill Simkins questioned the level of service, although everyone is stating that our level of service C is a good level of service, the 6,000 vehicles per day per mile could possible change that level of service. Mr. Wallace noted it also depends on density, length of storage turn lanes, the percent of traffic that makes turns, and stated we can make reasoned assumptions and can pretty well come up with what we think the average capacity is at level of service C. He notes the average speed down along a corridor are what’s used to establish the level of service. If, for example the average speed on an arterial is 35 miles per hour for level of service C and it’s around 25 miles per hour in a level of service D, you can calculate how long it will take to travel 5 miles of road. We can relate the traveling speeds of C and D to the volume of vehicles that can physically travel that mile of roadway. The calculation of impact fees will be based on these standards and notes that it could be higher than what it is now. So, if you take how much a home consumes divided by the general capacity and lane costs, we get that one home consumes about $4,000 of that one lane mile of road based on the 1996 numbers. When you look at credits, Mr. Wallace stated they look at how much money new growth generates for each unit of land use. What this approach does is look at the percent of non-local funding, and this says the difference of total costs minus the non-local funding is how much the local impact fee should be, so that means we are giving new growth the credit for all the money that existing residents are generating plus what new growth is generating. This concept creates a very significant credit that could get one in trouble because it’s not reflective of what really is available to fund projects in terms of what new growth consumes of the network. However, he noted this is the calculation. Mr. Wallace noted that back in 1996, there was more money from ad valorum plus the gas taxes that were going into new road construction, yet today, the only funding is from the 5 million dollar bond issue. He stated that there is less funding going into road construction than there was ten years ago when you look at the local perspective. Ken Eiden wanted to know if the study will do a comparative of the 1996 data versus the 2006 data. Mr. Wallace stated this study will and it will dissect where we were then and where we are today. Mr. Eiden asked if the revenue source of 30,000 more people moving into the community will factor into the credit side of impact fees. Mr. Wallace noted the statue states new growth has to get credit for any non-impact fee revenues that it generates that are used for capacity expansion. Mr. Carpenter asked if there were any other reasons beyond political that you would give credit for ad valorum revenues that stem from existing residents. Mr. Wallace answered that the analysis done in 1996 has given credit from all revenues generated from new and existing growth. Ms. Becker noted that the statute cited states very clearly that the impact fee is entitled to a credit for all funding revenues ‘it’ generates, therefore how can an argument be made that if it doesn’t generate that revenue, it doesn’t get a credit at all. Mr. Wallace commented that this is purely from a political and policy perspective because he feels the statute is clear, however an attorney might disagree and argue differently. He notes he will get direction from the city on this. Mr. Kaiser asked if this rests on the assumption that Bozeman is a single benefit district. Mr. Wallace responded that this will be the outcome of whether or not we will keep this purely on the shoulders of new development and new growth. Liaison Sean Becker asked if the credit comes from property taxes. Mr. Wallace notes the credit is only required for the non-impact fee funding sources that will be used to fund capital expansion of the transportation system, and new growth generates revenues so a credit has to be given to new growth. Mr. Becker asked if all the roads that were built to date were created from funding sources only directed towards these types of capital improvements and Mr. Wallace responded they have not had a chance yet to study this. Mr. Simkins wanted clarification that property taxes generated by new growth do not get factored into a credit. Mr. Wallace states if property taxes are used to fund capital expansion of the transportation system, they will be included in the credit calculation. If these property taxes are used to fund operations and maintenance that are not transportation related like library improvements, there is no credit that new growth receives because there is no benefit from those revenues to the transportation infrastructure. Mr. Simkins then noted that the property tax is a political decision as to how the government wants to spend it - it could be on transportation infrastructure or on something else. Mr. Wallace states it is a policy decision that is made by the elected officials on how they chose to spend their funds. Mr. Simkins feels that property taxes should be used as a credit. Mr. Wallace stated that if the city credits all the property taxes and it reduces the impact fee by $2,000 for a single family home, when the city goes to budget its projects, then there is an impact fee that is created that is $1,500 short of what the real cost of public infrastructure will be. Mr. Simkins stated that new growth is paying an unfair amount of money for city operations and other items and needs to be looked at. Mr. Wallace noted that if we overstate the credit, someone will end up paying for the gap. He commented that he wants to make sure that the credit the city gives is conservative and will more than cover the values that are generated by growth. Mr. Lieb notes that we are in a unique situation, property values have doubled in the last few years, so when property taxes are reassessed, there will be an increase and more property tax dollars. Mr. Wallace answered that some states have limits on how much the property tax can go up. Liaison Becker noted Montana does have a cap on property tax increase, it is 1.4% this year. Mr. Wallace stated that if one constantly gives credits, the money needs to be pulled from some other source to cover the deficiency. The city will not be able to collect at a rate to build a public infrastructure that’s necessary to maintain the standards. Debra Becker asked Mr. Wallace if the projections used for the future is based on the city commission budget they have adopted. He agreed and noted his study will look at revenue projection. Ms. Becker stated that if the City Commission were to move funds around to prejudice the impact fee unfairly, it would have to be a legally defensive impact fee. Sean Becker noted the report will have to be exceptionally clear. Mr. Wallace stated there are two or three CPA’s on this committee and noted the data will be clear and defensible by having their input. Chris Saunders commented that when Anna Rosenberry gets back into town, the committee can have a discussion and presentation on where the funds and revenues come from and how they are allocated. He noted that the city is able to collect at 1 ½ of the rate of inflation after the first year of growth increment and despite the fact that there have been many homes built, there has not been as much revenue as the newspaper editorial page would like to believe. Mr. Simkins wanted some objective data and asked if there a national average on how communities budget their impact fees and property taxes. Mr. Wallace answered there is a number of other techniques used to fund operations and every state has radically different options, there is no national standard. Ms. Becker stated the City Commission should have had this impact fee study in front of them prior to adopting the capital improvements program. Mr. Wallace noted the capital improvements program can be adjusted and will provide some options. They may look at some types of bonding and other resources. 5.4 IMPACT FEE METHODOLOGY a. Demand Component * Trip Length and Percent New Trips – FL Studies Database ** Trip Generation Rate – ITE and travel demand model *** Collection of local trip characteristics data **** Development of recommended trip characteristics data Mr. Wallace moved on to another component of the study: The Demand Component. He states the study will reflect that the city will only charge new growth based on their new trips and how much impact it generates on roads. This will also be based on per unit of development. He will use local data in conjunction with studies done nationwide. Tim Dean asked how he will factor in how much the roads are being affected by the communities. Mr Wallace responded that they will only track traffic within the city limits and minor radius outside the city, not 30 to 40 miles out of the city. Mr. Dean stated that much of the city traffic reflects people driving in from Three Forks or Manhattan to work in Bozeman. Mr. Wallace notes that during their study, they will ask travelers where they came from to accurately reflect local impact. Mr. Lieb asked what the margin of error is for this study and Mr. Wallace answered that they will use a technique based on the sample size of a couple hundred people at a 90% confidence level and within 10% accuracy of the actual calculation of the trip length. If they see they are not meeting that standard, then he will make an adjustment to look at why the standard deviation is so great at that site. He stated the methodology is not perfect, but they always meet that 10% accuracy level. Mr. Wallace notes they will engage local groups to help collect this data and comments they will not add the interstate travel as part of this study. The data they will use will be reflective of local information. He stated they will change their sample size to reflect a split of two condominium units and three single family homes instead of the five single family homes originally discussed. . The trip characteristic data will be analyzed to develop accurate trip information of the land use area. b. Cost Component: * Recent trends and increases in construction costs ** Right-of-way cost estimates *** Review of city, county, and state roadway costs ****Other Mr. Wallace stated his firm will be looking at how the impact fee compares to the cost per vehicle mile of capacity. He defined the cost components which is initial studies and design of the roadways, construction of the roadways, right of ways, costs associated with inspection during the construction, costs associated with the relocation of the utilities as part of the road program, and off-site mitigation for storm water retention programs. Mr. Wallace stated he has really good data that notes what used to be total cost at .5 million per mile is now about 4-5 million per mile. The impact fee will reflect these costs. Mr. Saunders noted we have local numbers (costs) with all the construction on 19th and Durston so the dollar amounts are not reflective of ten years ago. Mr. Lieb states that we can expect much higher impact fees. Mr. Wallace then confirmed that by saying this study will reflect ‘what’ the costs of the impact fees ‘could be’, who should pay and how much they should pay. Mr. Simkins asked if there will be a trend analysis because business he sees in the construction industry is definitely slowing down. Mr. Wallace responded this study will be a snap shot of today, not five years into the future and notes they will not artificially inflate any costs. That is why there is an index, a five year profile of historical trends and come up with an average of that. He would rather be conservative on the index and will see exactly how they are developed. If the MDOT has construction costs, they will look at those also. Mr. Carpenter stated that from a financial standpoint, if the index is too low, the existing residents will end up paying for it. Mr. Wallace stated if the index is too low, the city will not re-coop enough money out of the impact fee and over a two, three year period, you will find out that you are 5 to 10% under-budgeted. We should come up with an index that makes sense. One can always go back and amend the impact fee reflective of what changes have occurred. Mr. Saunders notes we have an index that is in the ordinance and is connected to the consumer price index. However the recent construction costs are substantially above that. He notes we do have an index in place. Mr. Carpenter asked if there is construction or development based indexes to which Mr. Wallace agreed that there are construction based indexes. He also stated all they are trying to do with the index is to reasonably capture the expected increase in costs from one year to the next when new projects are bid. Debra Becker asked Mr. Wallace if this study is reliable for a ten year period. Mr. He responded it is not, it is only good for a three to five year period. This is why he states we will see such a different number, a higher number, with the impact fee because the study was done ten years ago. Ken Eiden wondered if part of this issue is impact fees based on costs recently increasing so quickly. He notes the current real estate taxes are not keeping up with this kind of growth. If the current real estate tax is a component of the credit as part of the impact fee, how does it become fair and equitable? How does that become a true credit? Mr. Wallace responded states where there is no capital improvement program have contemplated what has happened with cost increases in the past two years. He noted the ability to do a city’s five year program have been thrown out the window. The cities, counties, and state DOT’s across the country are lucky if they can keep what’s in the first three years, funded projects and complete those projects within their five year program. It’s not uncommon to see projects sliding out two, three, four years or more and those projects will get further behind. Mr. Wallace stated we are in a situation right now that no one has seen in the past fifty years from the impact of trying to build roads. Mr. Saunders commented that the state re-appraises property every six years. So, it takes them six years to find out how my property has changed. Each time this is done, it’s an older calculation and leaves the tax structure out of date. The total dollar value one could collect is only ½ the rate of inflation. Property taxes are falling behind and not even keeping up with the minimal level of inflation. He noted it’s beyond the City’s control, but has a huge impact on fundamental funding of the city and county improvements. Mr. Eiden notes we’re sitting in the position where we can make these adjustments of impact fees to keep pace, but we cannot keep up with the other side and will always be looking at less credits and more impact fees. Mr. Saunders responded there is a way around this, through a voter approved bond. Mr. Becker asked Mr. Saunders if the city did get approval for a five million dollar bond, but what does that get the city and Mr. Saunders stated it would only get the city one mile of a one lane street. Mr. Lieb stated you cannot ‘not’ raise the impact fee because of this. Mr. Saunders noted that the increase allowed in the city’s budget that goes towards transportation improvements is from grants or impact fees. Ms. Becker adds that we are stuck with this tremendous increase in the costs of new and improved roads. She asked that when the city built 19th, how does 7th become a deficient road that has to be improved in order for the standard and quality of service to be level throughout the city. Mr. Saunders notes it can be, it depends on capacity, how far and fast people travel through that area. The city has set up a tax increment finance district which will help to pay for some of the improvements to North 7th. He stated the real measure is whether or not it meets the level of service standard, how much of a delay is there in the system. The number one complaint to city offices he hears is why are there so many cars on the road? Why does it take so long to get from one point to another? Mr. Saunders states this is a constant complaint that people are unhappy, even if there were a level of service A. a. Credit Component * Non-impact fee funding on capacity expansion ** Discount rate b. Interstate Mileage Percent (travel on I-90 in city) Mr. Wallace gave an example of the gas tax. The credit for gas tax occurs because new growth puts more cars on the road. New growth is consuming gas and it is generating money that goes back to local agencies so that some of this used for capital improvements. He noted that cities can use the gas tax, a non-impact fee revenue instead of the impact fee for capital expansion, this will reduce the impact fee. There are also bonds that could be used besides impact fees that can be used to fund capital expansion projects. If there are other sources you would like us to look at, let him know and he will investigate the available options and will make himself available to the advisory committee. He stated there are other variables that impact the credit calculation; the magnitude of the discount rate, the interstate toll, the facility adjustment, and how we look at the fuel efficiency of the vehicles consuming gas. Mr. Wallace noted he’s not aware of what the increases will be, but feels they will be potentially significant, but policy will state how much is charged. Mr. Simkins states that studies note commercial development has helped communities immensely, it is a money maker, they still have to pay property taxes, and somehow it has to be put back into this calculation. Mr. Wallace stated it will be based on what the travel demands are for that business or quality restaurant. Mr. Simkins notes that it brings us back to the credit issue again and how property taxes are spent. Mr. Wallace responded that they will look at the credit calculations. If a certain amount of money out of taxes were to be allocated to road improvements, he will show the committee how this will impact the credit perspective of the impact fee structure. Mr. Chris Saunders states that HDR will come to visit committee members next month to talk about the water and sewer impact fees and will have the opportunity look at several aspects. Debra Becker noted since we are only charging 80% of impact fees as a result of the lawsuit, are you going to reflect that or will it be a post recommendation adjustment that we make in the impact fee. Mr. Wallace states this study will show what the impact fee could be set at, whether it’s phased in over a three or five year period, and what policy makers state as to what percent will be paid. Ms. Becker asked Mr. Saunders if the terms of the lawsuit settlement were that the impact fees would stay at a discounted rate until this type of study has been completed. Mr. Saunders agreed, but Ms. Becker stated we could expect a 20% jump after the study is done. Mr. Saunders noted the Commission still needs to amend the ordinance. Ms. Becker stated that the developers will expect the number to change. Mr. Wallace noted there is a 20 percent gap already because the 1996 study is 10 years old. Mr. Tim Dean stated that at three times during this presentation, it’s been announced that there will be a projected increase. He noted he doesn’t want to see a single family residence end up paying and hurting because they are paying the same amount as a commercial business. Mr. Wallace stated the numbers may not go up, but would rather prepare everyone for the fact that they could go up and hear the reasons it could be higher. Mr. Ken Eiden asked how the affect of tourism could get calculated into this. He wondered if this was a possible revenue source. Mr. Wallace responded he is not sure how the tourism tax is used, and not sure if it is used for transportation. However, if that became a decision of the community to put a certain amount of money from tourism tax towards transportation expansion, it would in fact become a credit. He states it would be a legitimate revenue source and stated it could possibly reduce the impact fee. Mr. Eiden notes that if you live here between May through September, there is a significant amount of change during that time period than the rest of the time during the year. He asked if it was possible to tax those people who are using our community. Mr. Eiden notes there is a significant level of difference when you are at level F during the summer and then in November, you are at a level of service C or B. Is the affect of tourists added into this or can we use this to assist in non-impact fee revenue? Mr. Wallace noted he has not the impact of tourism on the community yet. Ms. Becker states that if Mr. Wallace’s firm is going to start their data collection and study soon and span over a period of six months, they will not be able to capture the tourist traffic. Mr. Wallace noted he can make season adjustments so it is reflective of what the average conditions are during the year. Mr. Saunders states that the numbers they will be drawing from such as doctors offices and business should remain pretty much the same. The study will reflect more of the locals because only those people will be asked where they are going, where they came from, and those number are used to calculate whether or not there are new trips on the road and the length of time it took to get there. Mr. Wallace noted this study is designed to capture the ‘average condition’. Ms. Becker wondered if this study is a joint contract with the county and Mr. Saunders replied it is not, however there was consideration of a group effort made for the fire impact fee study. Ms. Becker then asked if this test is done by having cars run over wires up and down the street. Mr. Saunders responded that it will include this, but will also study how many stops or trips one would make from a single family residence versus how many people go in and out of a restaurant or general office. Mr. Wallace stated he wants to make sure we are close as we can be to a daily characteristic. He also wants to look at data and create a land use for affordable housing and how they can create a lower impact fee based on the size of the home. Not sure how to get these statistics for Bozeman, but will look at this information and then Mr. Sean Becker stated the US Census metropolitan statistical data includes parcels in Butte as well. Mr. Wallace stated there are deminimus exemptions that will assist with the impact fees. Mr. Becker asked for clarification of the ‘deminimus exemption’. Mr. Wallace explained an example that 3% of the impact fees collected on residential homes could be viewed as having a minimal impact on the ability of the capital improvements program to satisfy the requirements that need to built in that program. In other words, if we took 3% of two million dollars of residential collections, that would be $60,000 that could be used to reduce the impact fee for four or five low income homes. Once that 3% is reached, you cannot go over. Mr. Wallace notes if you go over that 3%, it will call to question whether or not the exemption you are providing really demands or did whether we really need the money in the first place. He stated it is all about balancing. Tyson Smith, the attorney working with him on this study, will be able to help analyze the entire affordable housing issue as well. REVIEW OF SCOPE OF SERVICES AND SCHEDULE The organizational process that needs to be identified he just explained. The Kickoff Presentation and related meetings will be held on 8/23 and 8/24/06. The Trip studies will start in September and run through October 2006. The Draft Report will be completed in February 2007. The Study Review meeting and Staff meeting will be in March 2007. The final part will be the Public Meetings on this study that are tentatively scheduled to run in April through June 2007. 5.6 OTHER COMMENTS AND ISSUES Mr. Dean wanted to thank Mr. Wallace for his patience during this presentation in answering everyone’s questions. Liaison Becker asked where public transportation fits in this and Mr. Saunders stated it does not right now but can effect vehicle trips generated. Mr. Becker notes he likes the idea of affordable housing and being able to stagger impact fee based on square footage. He stated the city is investing in a public transportation system and how it can fit into the credit side of this mix. Mr. Wallace notes the problem with public transportation is, what is the real benefit that this system will produce in terms of the change in the downtown area. He states if we had a long enough track record of the public transportation system, we would have a mode split. It could be a real significant split. As this develops over time, he could see small portion of the money going to public transportation. Mr. Wallace stated the greatest costs are the operating and maintenance costs, the impact fees would not help, not significantly, and could defeat the purpose of federal and state grants. Mr. Saunders states the one place public transportation can show up directly is to study this and say on that given day of study shows that on that given day, 25% of the cars are off the road because they are riding a bus, that would be the only way. Ms. Becker asked if part of this study could reflect answered questions from people who took public transportation. Mr. Wallace notes that if there is initial data reflecting a large usage of the bus system, it would be worth doing a separate study. ITEM 6. OLD BUSINESS Seeing there was none, Tim Dean closed this portion of the meeting. ITEM 7. NEW BUSINESS Mr. Saunders noted that he will work with Anna Rosenberry to set up a separate presentation on September 14th and then a formal meeting on September 28th. ITEM 8. ADJOURNMENT Chair Tim Dean adjourned the meeting at 9: 42PM. ____________________________________ ____________________________________ Tim Dean, Chairperson Chris Saunders, Assistant Planning Director City Of Bozeman Impact Fee Advisory City of Bozeman Planning & Community Committee Development *City of Impact Fee Advisory Committee meetings are open to all members of the public. If you have a special need or disability, please contact our ADA Coordinator, Ron Brey, at 582-2306 (voice) or 582-2301 (TDD).