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HomeMy WebLinkAbout10-13-11 Impact Fee Advisory Committee Minutes** MINUTES ** THE CITY OF BOZEMAN IMPACT FEE ADVISORY COMMITTEE THURSDAY, OCTOBER 13, 2011 ITEM 1. CALL TO ORDER AND ATTENDANCE Chairperson Pro Tern Nickelson called the meeting to order at 6:08 p.m., in the City Commission Meeting Room, City Hall, 121 North Rouse Avenue, Bozeman, Montana. Members Present James Nickelson, Chairperson Pro Tern Anna Rosenberry Erik Nelson David Graham Rob Evans George Thompson Chris Mehl, City Commission Liaison Members Absent Randy Carpenter Rick Hixson Visitors Present Greg Megaard Brit Fontenot Staff Present Tara Hastie, Recording Secretary Chris Saunders, Assistant Planning Director ITEM 2. MINUTES OF AUGUST 25, 2011. MOTION: Mr. Nelson moved, Mr. Graham seconded, to approve the minutes of August 25, 2011 as presented. The motion carried 6 -0. Those voting aye being Chairperson Pro Tern Nickelson, Ms. Rosenberry, Mr. Nelson, Mr. Graham, Mr. Evans, and Mr. Thompson. Those voting nay being none. 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 public comment was forthcoming. ITEM 4. ELECTION OF OFFICERS MOTION: Mr. Nelson moved, Mr. Thompson seconded, to nominate Mr. Nickelson as Chairperson. The motion carried 5 -0. Those voting aye being Ms. Rosenberry, Mr. Nelson, Page 1 of 11 Impact Fee Advisory Committee Meeting— October 13, 2011 Mr. Graham, Mr. Evans, and Mr. Thompson with Mr. Nickelson abstaining. Those voting nay being none. MOTION: Mr. Roberts moved, Mr. Thompson seconded, to nominate Mr. Graham as Vice Chairperson. The motion carried 5 -0. Those voting aye being Chairperson Nickelson, Ms. Rosenberry, Mr. Nelson, Mr. Evans, and Mr. Thompson with Mr. Graham abstaining. Those voting nay being none. ITEM 5. CITY COMMISSION LIAISON {A standing item to be used as needed} Mr. Mehl stated he had sent an e -mail late in the afternoon regarding the minutes of the August meeting and a discussion of the community economy and how it works. He presented the Committee with the American Community Survey data for Bozeman that encompassed 2005 to 2009, but he had also provided more general data showing the jobs in the County as a whole with employment numbers and income that included 2009 data averaged by sector. He stated he thought it might be helpful. Mr. Mehl stated he wanted to urge the committee with regard to discussions with the City Commission and City Manager; he wanted to make sure intersections were part of their discussion and their rationale for amendments to intersection projects. He asked the Committee to indicate to Tischler Bise to be more proactive in understanding the calculations involved in the updates. He stated the City Commission would be discussing the impact fees on October 24, 2011. He stated he was expecting the Commission would be putting the heat on the Impact Fee Committee to prepare a good report for review. He added he would be available for any questions Committee members might have. ITEM 6. PROJECT REVIEW Ms. Rosenberry presented the Staff memo noting she was a member of the Committee but also the Staff person for the City who prepares the CIP report. She stated that every year after an annual budget was adopted, projection of Capital needs for the following five years was reviewed. She stated that when the impact fees program started, the City began incorporating the impact fee funds into the existing Capital Fund process. She stated that regardless of charges for impact fees to the developer, there needs to be a plan to dictate how the money would be spent. She stated she had provided a memo that applied to all four impact fees. She stated the Committee would be planning for the next five years and she had included a sample scoring of the projects; scoring would help indicate which projects should be funded and which should wait. Mr. Evans asked if the criterion was also used to prioritize the general fund. Ms. Rosenberry responded there was a lot of literature giving instructions on how to create a Capital Improvement Plan; there were a lot of criteria that were used in the general fund but many were unique to the impact fee program. She noted those requirements that were State statute and would have to be met before being eligible for impact fee funding. She noted the difference in language that would allow a useful life of a project for 1 year in the General Fund Capital Page 2 of 11 Impact Fee Advisory Committee Meeting— October 13, 2011 Improvement Program but would be required to be a useful life of 10 years for impact fee eligibility. She stated the next two criteria paralleled the ones in the General Fund Capital Improvement Program. She stated that when only a portion of a project could be paid with impact fees and the rest of the funding was uncertain, there would be little point in putting the project high on the list of priorities as the money would not be available. She stated if a project was a priority on the Commission Work Plan, it would be given higher points. Vice Chairperson Graham asked for clarification of whether they were scoring things based on whether it was on the Commission Work Plan or not. Ms. Rosenberry responded Vice Chairperson Graham was correct; the Work Plan was one element of the score. Mr. Mehl added that sometimes the priority was broad and sometimes very specific. Mr. Evans stated he noticed only one 20 point category and asked if the Benefits to Future Development rating had been intentional. Ms. Rosenberry responded it had been intentional; due to lack of funds 1/3 or more of the items went unfunded and the scoring was helpful to see what was important and why. She stated the Benefits to New Development category was one of those coming directly from statute. Assistant Planning Director Saunders added they were attempting to spend the money in a way that would be of the most benefit. Mr. Mehl added it would allow the City Commission to show the public their math; he stated the City would never have enough money to fund all of the projects. Mr. Evans added it would facilitate community understanding at the least. Vice Chairperson Graham asked if the scoring would be used primarily for capital improvements credits. Assistant Planning Director Saunders responded it would not exactly be an impact fee credit score but if it did not rise to the proper level of priority, a project would not be impact fee funded. Ms. Rosenberry added she thought the scoring system could help; it can be hard to remember how a conclusion was arrived at and it will be helpful to memorialize those items that the Committee and City Commission believe are important to fund. Chairperson Nickelson responded that Staff had generated a list in previous years and the Committee had found reasons to make adjustments; it had all been through Committee discussion in the past and the scoring would lend to interesting results. Ms. Rosenberry stated the proof was in the ranking and whether or not it made sense. Mr. Evans asked if the scoring had been applied retroactively to previous CIP's. Ms. Rosenberry responded the scoring had not been applied retroactively; the Committee previously was pretty small and after discussions they had forwarded their recommendations to the City Commission. Mr. Thompson stated it would be tough to validate the recommendation of a project if the rating were excluded; the reality was that a few months later a different proposal would modify the scoring. Mr. Evans stated his concern was that new development was indicated at twice a value. Mr. Nelson stated he would be curious to hear the logic on why the benefits to new development criteria was scored so highly; the money was there to benefit people creating the impact. Assistant Director Saunders responded that normally what occurred was an Page 3 of 11 Impact Fee Advisory Committee Meeting— October 13, 2011 improvement would need to be made prior to Final Plat; when he was looking at facilitating development, such as Harvest Creek and the light on 19th Avenue, impact fees were used to facilitate development of the subdivision and the impact fees came later with actual construction of homes in the subdivision. Mr. Nelson stated he saw it as a sort of credit; those providing the money would be getting a credit for the next people that came through. Assistant Director Saunders responded in many cases it was the developer doing the work that would draw the credit. Ms. Rosenberry stated the scoring could be modified as the Committee saw necessary; she directed the members to the Montana Code Annotated and its references to new development. Mr. Nelson stated that sometimes the scoring would be about debt retirement. Ms. Rosenberry stated she might be able to better match when fees are paid to consumption rates. Since there is no authority to bond against impact fee revenues it is harder to match. She stated utility payers and the general fund would have to make up some deficiencies. Mr. Thompson stated the City was not best poised to make those decisions; the benefits of new development were improvements to the City. Mr. Nelson stated he did not think the City could propose those items. Assistant Director Saunders responded it was sometimes City money to support private effort but could go either way as a privately or publicly initiated construction; he added impact fee credits could be requested. Ms. Rosenberry stated none of these projects would be up for actual funding until next year as they would be part of fiscal year 2013 Capital Improvements. Mr. Evans asked if the indicated scoring had been planned or was random. Ms. Rosenberry stated she provided scores and got feedback internally and had provided draft scores to the best of her ability based on previous comments. She stated if there were questions about specific projects, City Staff members would be brought to the next meeting. Fire Impact Fee Capital Improvement Program Annual Update (Rosenberry) Ms. Rosenberry directed the Committee to a summarization of the Fire CIP and indicated it was alright for a negative balance for one year as long as it wasn't the last year; some method of fund recovery would need to be achieved prior to the last year. She stated there was an estimated amount of money that the City expected to receive and noted there were few scheduled projects and she thought the Fire Station 43 would be paid for in the next year. She stated the construction of Fire Station 44 and the engine for Station 44 would need to be scheduled. She stated if the consultant made large changes to the calculations, there would be changes to the CIP; she expected the numbers would stay on track. She stated there was a limited amount of projects that could be used on Fire; anything after capacity expansion was maintenance and would not be eligible for impact fee funding. Mr. Nelson asked if it was unrealistic to be so ambitious to build 5 million dollars worth of stuff and asked if Fire Station 44 was necessary. Ms. Rosenberry responded that buying the land would be eligible, but the land had been granted to the City for free. Mr. Megaard responded he did not anticipate a need for Station 44 for 8 -10 years; the study done for Station 43 had been done during a period of substantial growth. Mr. Nelson asked if the City would be alright without the Fire Station for five years if the growth rate were based on 1 -2% per year. Mr. Megaard responded Mr. Nelson was correct and the City was just not growing at the previous Page 4 of 11 Impact Fee Advisory Committee Meeting— October 13, 2011 rate. Mr. Mehl added Fire Station 43 was not built completely with impact fee funds. Ms. Rosenberry responded the Fire Station 44 itself was the cheapest aspect of the project; the annual commitment of funds to staff the facility could be voted down by the community. 2. Sewer Impact Fee Capital Improvement Program Annual Update (Rosenberry) Ms. Rosenberry presented the Staff memo noting the wastewater and water schedules were similar. She stated the Wastewater Treatment Plant had almost been completed and had been a 36 month construction period that was near the end. She stated the City was short millions of dollars in capacity expanding portions of the project and the schedule reflected that the debt payment on the sewer plant was scheduled. She stated the estimated growth was not population and was strictly revenue; it was meant to be a modest estimate. She stated there were a lot of unscheduled items and she had estimated their scores. She stated the debt retirement was at the top of the list which would leave one more year of debt payment after the initial five year period on the current CIP. She stated the sewer line under Graf Street, design of Phase II of the sewer plant, hospital trunk line, and Front Street main replacement were also included. Mr. Mehl asked if it would save the City money if the debt was paid down faster; funds could be relocated. Ms. Rosenberry responded the policy was to pay every debt off as soon as possible. She stated the Graf Street extension project scores were interesting; she had given it a lot of points because it is a critical link to new development on the south side of Bozeman. Mr. Thompson stated Graf Street was in anticipation of future development. Assistant Director Saunders responded there had been two approved Preliminary Plats in that location but they have not moved forward to construction; Staff was positioning the project so that the City could partner with the private developers. If Graf Street went through, it would significantly enhance the fire support response; if it were sequenced correctly, it could be cost saving. He added it was a reaction to when and where development came into Bozeman. Mr. Nelson asked if in general, there was the option of a reserve fund to respond more nimbly to a project that needs funding immediately. Ms. Rosenberry responded that in order for a project to be eligible for and receive funding it would need to be listed on the approved CIP; she added for reserve funding to be available, you would need to leave a balance unspent. Mr. Nelson asked if the listed projects were the only ones eligible. Ms. Rosenberry responded they were the only ones and if the Committee identified projects that needed to be added. Mr. Nelson asked if there was a way to add items to the CIP list. Assistant Director Saunders responded there were methods to add items; not everything had been included or there would be a long list of unscheduled items. Mr. Nelson stated a broader list from which to choose might be beneficial; it would allow more transparency for private developers to get an idea of how they could partner with the City. Assistant Director Saunders responded impact fees were intended to meet growth needs but also to encourage people to make one decision over another to facilitate growth in that area. Chairperson Nickelson stated he did not think much thought had been put into adding items to the list due to the sewer plant being a top priority. Ms. Rosenberry responded Chairperson Nickelson was correct and suggested she could go back and investigate previous CIP's to find items that have been eliminated; she stated the Planning and Engineering Departments might Page 5 of 11 Impact Fee Advisory Committee Meeting— October 13, 2011 have the most clear idea of those items. Mr. Thompson stated the challenge would be to be nimble while including 100 projects on the list. Mr. Nelson stated he did not promote adding every project, but as an example, the City would like to see the Bridger Park Trailer Court cleaned up. Vice Chairperson Graham asked for clarification of how the process worked. Assistant Director Saunders responded the City had never pioneered the infrastructure work and some other Cities were now bankrupt for doing so. He added it was a lot of work to use that approach, but under the right circumstances, it would be allowable. Mr. Mehl added the Commission was reluctant to say they knew more than the market and they rarely had enough money to actually pay the costs. He stated there were a few communities in which it had worked and others had failed. Vice Chairperson Graham clarified that someone could ask for a project to be included on the CIP. Assistant Director Saunders responded they could. Mr. Mehl added the amendments were not on a dime, but could fairly quickly be facilitated. Ms. Rosenberry stated the schedules could be developed with everything in the far column with a request from a developer to initiate the spending of those funds. Chairperson Nickelson suggested that placing everything on the non - funded list might be the best solution. Ms. Rosenberry stated if it was a schedule without projects a notice could be included that the schedule was subject to amendment to allow eligible projects to be added to the list. Assistant Director Saunders stated that developers typically had a good idea what was going to be needed on the ground so discussions could begin in the early stages. Ms. Rosenberry asked if the Committee would like to see old projects related to the Story Mill Neighborhood and what could be done to reduce the blight and benefit the neighborhood. 3. Water Impact Fee Capital Improvement Program Annual Update (Rosenberry) Ms. Rosenberry presented the Staff memo noting ground had just been broken on the new water plant; a definitive answer on the total project cost would not be available until the completion of the site. She stated substantial expenditures were included but trailed off in 2015, 2016, and 2017 with modest estimates of revenue collection for that period. They were constructing now and would be next year with a reduction in borrowing amount in the latter years. She stated the construction of the Sourdough Creek Dam was a substantial amount of money. She stated the estimated Graf Street extension and the 5 million gallon water storage tank had been included. Mr. Mehl asked for an explanation of why the additional transmission line would be eligible. Ms. Rosenberry responded the impact fee eligible portions of the lines were related to building the lines beyond their 8 inch capacity; the 8 inch portion would have to be paid for by a developer or other funding sources. She stated the facility plan map identified a problem that only one line brought water into the City. Chairperson Nickelson stated that calling it redundant indicated that it wouldn't increase capacity. Assistant Director Saunders suggested the item could probably be divided into two pieces. Chairperson Nickelson responded the concern stemmed from the crisis that would ensue if something happened to the one line that exists. Page 6of11 Impact Fee Advisory Committee Meeting— October 13, 2011 Vice Chairperson Graham asked what dictated capacity expanding. Assistant Director Saunders responded the City always assumed the first 8 inches would be replaced using maintenance funds; the eight inch diameter was never charged or credited for. Vice Chairperson Graham asked where the 8 inch determination had come from. Assistant Director Saunders responded the size met the State standards for public mains and the City's needs. Mr. Thompson stated the new line would not run right next to the existing. Assistant Director Saunders responded the new line would be approximately 2 miles away and a larger diameter that would definitely increase capacity. He added that Goldenstein Lane was currently the furthest water service south as water pressure could not be maintained to the City's standards beyond that point. Ms. Rosenberry stated she had been concerned with the storage reservoir and it was 100% impact fee eligible when no money would be available to build it. Vice Chairperson Graham asked for clarification of the listed amounts. Ms. Rosenberry responded the transmission main project did include the full cost instead of just what was impact fee eligible. Assistant Director Saunders responded the Engineering Department could check those amounts for us; the actual amount could be included with an amount indicated as the percentage of what was eligible. He stated it might make sense to split this into two projects. Chairperson Nickelson stated the latest estimate on the dam was 30 -50 million dollars instead of the 20 million dollars listed; he suggested it could be an unscheduled item. Mr. Mehl the need for the dam had been based on past growth; it would take an enormous amount of time to complete construction and he was loath to see it disappear from the schedule entirely though the Engineering Department was seeking alternatives. Chairperson Nickelson stated he did not think the values were critical, but the updated costs that were known today should be included. Ms. Rosenberry asked if she should describe one item as water resource development or if should separate them. Mr. Nelson responded the dam would be necessary in the future. Mr. Mehl responded the dam would not necessarily be the case and asked if water rights would be eligible for funding. Chairperson Nickelson suggested including one item described as Water Resource Development and estimate the amount at 50 million dollars so that it remained on the list. Ms. Rosenberry responded water right purchases were eligible for funding; cash in lieu of water rights were purchased as available and those funds did not always match up to when the rights were needed. She stated having it in the utility charges was more predictable. Vice Chairperson Graham asked why the holding tank was eligible for funding. Assistant Director Saunders responded the service area would be expanded to more land would be serviced and new users required more storage. 4. Transportation Impact Fee Capital Improvement Program Annual Update (Rosenberry) Ms. Rosenberry presented the Staff memo noting stated the transportation impact fee schedule was the most interesting as it held the most projects and carried a balance. She stated there were two years where larger projects were anticipated and the schedule included other sources of revenue. She noted our allocation of Urban Funds was a big factor in getting street projects completed. She stated total project costs had been included. Page 7of11 Impact Fee Advisory Committee Meeting— October 13, 2011 Ms. Rosenberry stated one item on the list every year was right of way acquisition for expanding the street system. She stated the design stage for improvements to College Street was an Urban Funds project and would also partially be funded by impact fees. Mr. Nelson asked what allowed Urban Funds to be designated to the project. Assistant Director Saunders responded the Urban Funds could only be used on designated Urban Routes through the City; the last time the map was updated in 2001 the State recognized the growth rate of the City and allowed additional miles to be included. Once the route was designated and the funds granted, the street had to be constructed to the State of Montana standards. Vice Chairperson Graham clarified that outside of the Urban Funds, the project would be totally impact fee funded. Ms. Rosenberry responded Vice Chairperson Graham was correct for capacity expansion. Vice Chairperson Graham asked if the Committee could determine the percentages; shouldn't the 40% that isn't increasing capacity be paid out of the general fund instead of impact fees. Assistant Director Saunders responded a credit was granted that takes into account roadway construction on the cost calculation from other funding; on the expenditure side, the maintenance was not capacity expansion and the Urban Funds were the maintenance funding source. Mr. Mehl asked Assistant Director Saunders to clarify the use of outside funding sources. Assistant Director Saunders responded that the Urban Funds coming from Federal gas tax money could be used exclusively for maintenance of the Urban Route and did not have to go to capacity expansion projects. Ms. Rosenberry added federal gas tax money could be used for either maintenance or capacity expansion. Vice Chairperson Graham clarified that if there were no Urban Funds, the maintenance would need to come from some source other that impact fees. Assistant Director Saunders responded that Vice Chairperson Graham was correct. Ms. Rosenberry added that the Committee could recommend using Urban Funds for capacity expansion exclusively. Chairperson Nickelson asked if it was in the scope of the Committee to say that maybe impact fees should be spread out more and Urban Funds be used more often. Ms. Rosenberry responded the Committee could make those recommendations if they saw fit but the ultimate decision would be made by the City Commission. Mr. Thompson asked why two points had been granted and suggested direct benefits might need to be a higher score. Ms. Rosenberry stated if the Committee saw College Street as a direct benefit to individual users she could score it higher. Assistant Director Saunders responded the score might be lower as a direct benefit to development as there was less undeveloped land for new development in that area but the street did connect new development on either end. Ms. Rosenberry stated the next item was an intersection that she did not know much about. Assistant Director Saunders responded there was a lot of activity in the area of Cottonwood Road; it would likely be a City project instead of a developer. Chairperson Nickelson asked the current level of service. Assistant Director Saunders responded he did not know, but it was likely part of the Transportation Plan. Ms. Rosenberry stated the next item was requested by a developer per the written request from Thomas, Dean, and Hoskins. She invited Brit Fontenot to address the Committee. He stated Page 8 of 11 Impact Fee Advisory Committee Meeting— October 13, 2011 there was interest in development of the Manley Road property. He stated it had begun a conversation about where in the City there was an intersection that needed upgraded and would also facilitate growth in those locations and the City could get in front of the improvements. He stated upgrades would continue to be identified and included on the list if possible. He stated the project proposal was in its infancy at this time. Mr. Nelson stated it was a great example of what they had discussed before regarding how firm the commitment would be on the part of the developer. Mr. Fontenot responded there was no current commitment but identifying those areas in advance would facilitate future discussions. Mr. Nelson stated this was a perfect example of someone wanting the improvements there, but backing out of the project; how would the projects be prioritized. Ms. Rosenberry responded the City could not over - commit, but when they were considering a project they wanted some certainty; she noted it was difficult to give developers the commitment that those improvements would be made, but the schedule would need to be amended, budgeted, and scheduled. Mr. Thompson stated he thought it would be a good precedent that would present the City as nimble in responding to their concerns. Mr. Nelson stated his view was opposite Mr. Thompson's view and he thought the money should not be spent on uncertain projects when improvements were needed elsewhere. Vice Chairperson Graham suggested the developer could fund the project and then get reimbursed by impact fee funds. Mr. Fontenot concurred and noted it was easier to amend the CIP to move a project from unscheduled to scheduled. Mr. Mehl suggested that Mr. Nelson wanted the market to come to the City. Ms. Rosenberry added that it was not a wise assumption to make that the funds would be available upon the time the project was moved up on the list; just because it is placed in the unscheduled column, does not necessarily mean that it will be funded. Assistant Director Saunders added the unscheduled items column was a way to have a calendar system of actions that were on the City's mind, but were not planned yet. Chairperson Nickelson responded if the City was willing to handle the project or if there was an area where multiple developments were occurring, it would be in the funded category while speculative items were left unscheduled. Vice Chairperson Graham asked for clarification of the 100% street impact fee eligibility and asked if there was a beginning year where all streets were eligible. Ms. Rosenberry responded it was the addition of a turn lane, relocation of railroad equipment, and the installation of a traffic signal. Mr. Fontenot stated Dave Crawford had tried in his request letter to explain those items which he thought were eligible though there was some question about the railroad equipment being eligible. Mr. Nelson asked if all the projects that had available impact fee funds were scored as a 10. Ms. Rosenberry clarified that certainty of funding played a role and as the funds were less, the scoring was less. Mr. Nelson stated he thought the funding certainty score should be included. Assistant Director Saunders stated there would be unique aspects to some of the projects on the CIP and this was the first draft and response to the request at Manley Road and Griffin Drive. Mr. Evans stated Mr. Nelson was getting an inkling of a "self fulfilling score" and how it could have a dramatic affect on development. He stated getting the idea out there where the public could look at it was a good idea, but he wondered if the list could be too long. Mr. Thompson concurred and added the City would be prepared to add an item if the developer was Page 9 of 11 Impact Fee Advisory Committee Meeting— October 13, 2011 committed; the developer would need to drive the request. Mr. Fontenot stated he was not aware of a way to identify the instances where improvements should be undertaken and asked for suggestions on how to capture the information. Mr. Nelson suggested Mr. Fontenot should have a template of what the City would need to receive from the developer. Mr. Mehl stated there was no money available for the current list and adding to the schedule would not guarantee its funding. Mr. Nelson responded that actions speak louder than words and being included on the list would draw someone's interest in the project. Mr. Fontenot responded he had already spoken with two separate people regarding the same location. Mr. Mehl stated there was still uncertainty either way; the developer would still have to have a long conversation with the City. Chairperson Nickelson stated he could see every landowner in town noticing an intersection that needed improving. Mr. Thompson suggested moving to the next item on the list. ITEM 7. OLD BUSINESS Mr. Mehl asked Assistant Director Saunders to give a rough estimate of time on document drafts from the consultant. Assistant Director Saunders responded shortly after the first of the year. ITEM 8. COMMITTEE COMMENTS No items were forthcoming. ITEM 9. ADJOURNMENT There being no further business to come before the Committee at this time, Chairperson Nickelson adjourned the meeting at 9:08 p.m. James Nickelson, Chairperson Impact Fee Advisory Committee City of Bozeman ATTEST: Tara Hastie, Recording Secretary PREPARED BY: Page 10 of 11 Impact Fee Advisory Committee Meeting— October 13, 2011 Tara Hastie, Recording Secretary Approval date: Page 11 of 11 Impact Fee Advisory Committee Meeting— October 13, 2011