HomeMy WebLinkAbout01-26-12 Impact Fee Advisory Committee Minutes ** MINUTES **
THE CITY OF BOZEMAN
IMPACT FEE ADVISORY COMMITTEE
THURSDAY,JANUARY 26,2012
Chairperson Nickelson called the meeting to order at 6:05 p.m., in the City Commission Meeting
Room, City Hall, 121 North Rouse Avenue, Bozeman, Montana.
Members Present Staff Present
James Nickelson, Chairperson Tara Hastie,Recording Secretary
Anna Rosenberry Chris Saunders, Assistant Planning Director
Erik Nelson
George Thompson
Rick Hixson
Rob Evans
Chris Mehl, City Commission Liaison
Members Absent
Randy Carpenter
David Graham, Vice Chairperson
ITEM 2. MINUTES OF DECEMBER 8, 2011.
MOTION: Mr. Thompson moved, Mr.Nelson seconded, to approve the minutes of December
8, 2011 as presented. The motion carried 5-0. Those voting aye being Ms. Rosenberry, Mr.
Nelson, Mr. Hixson, Chairperson Nickelson, 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. CITY COMMISSION LIAISON
{A standing item to be used as needed}
Mr. Mehl urged the member's attendance on the 13th to provide feedback to the City
Commission. He stated he would touch base individually to confirm where the discussions
were headed.
ITEM 5. PROJECT REVIEW
1. Progress update with Carson Bise, of Tischler Bise and discussion on draft of Fire/EMS
fees. (Saunders)
Page 1 of 8
Impact Fee Advisory Committee Meeting—January 26,2012
Assistant Planning Director introduced the item and turned the presentation over to Carson Bise
of Tischler Bise.
Mr. Evans joined the Committtee.
Mr. Bise stated there were two options available for review. He stated one alternative was a
cost recovery or buy in, which would be advisable if the City wasn't looking to build a new fire
station within the next ten years. He stated the second approach was the one they would
recommend and was an incremental expansion methodology assuming the City would maintain
the current growth rate. He stated the master plan had assumed the City would build five
additional fire stations before 2030 and there was danger in that approach as things could
change in a short period of time. He directed the Committee to considerations in development
of the fee methodology including large areas of lower density at the peripheral of the City that
had less service demand, existing areas that are outside of response time objectives, the core
will remain one of the most concentrated areas for service demand, the long term deployment
strategies are intended to continue existing levels of service, and implementation.
Mr. Bise noted the population comparison analysis and the cu 1Iocations of City Fire
Stations. He noted the master plan had indicated replacement of Fire Station 92 as well as
construction of five more fire stations and associated apparatus. He stated the cost allocation
had been 51%residential and 49%nonresidential in the 2008 study. He stated they were
projecting nonresidential growth to be 6 million square feet, which was a great deal less than
the 2008 study which indicated 21 million square feet of nonresidential development. He stated
they had updated fire department incident data by type of development and had developed a
tighter analysis of what the nonresidential share would be.
Mr. Mehl asked what the City was intending to do to pay off the debt. Ms. Rosenberry
responded they had not made assumptions on how quickly they could pay it off and had
acquired a ten year note that they could pay off on time using impact fees. Mr. Bise added it
did not make sense for the City to use the cost recovery method if they would be out of debt in
2013.
Mr. Bise directed the Committee to the incremental expansion alternative and noted the fees
would be used to maintain the existing level of service. Mr.Nelson asked if there was a level
of granularity between residential and nonresidential incident responses. Mr. Bise responded
he was sure there was a distinction, but those incidents had been lumped together. Assistant
Planning Director Saunders added that the same equipment can be used for either type of call.
Mr. Nelson asked if there was a state standard that would need to be upheld. Mr. Bise
responded there were standards, but he could not think of a single client that had met that
standard; there were utilization as well as response times and all sorts of different measures to
determine those standards. Mr. Thompson asked if his insurance rates would go up if the City's
response time went down. Mr. Mehl responded the Bozeman rating had been improved of late
and some homeowners would see a reduction in those rates. Ms. Rosenberry added that the
Fire Master Plan indicated the response time was the science behind what was happening at the
other end of the call such as how long someone could survive a heart attack, fire flash time, etc.
Page 2 of 8
impact Fee Advisory Committee Meeting—January 26,2012
Mr. Bise noted the current square footage base and noted the proposed schedule would be the
replacement value of the current facilities and apparatus. He noted the current approach
indicated that only a little over one Fire Station would be necessary over the next ten years to
maintain the level of service. Mr. Evans suggested that any other stations would be an
enhancement of the level of service. Mr. Mehl asked how the study addressed in-fill
development. Mr. Bise responded a no fee zone in the central part of the City had been
discussed,but it was clear in the master plan that there would be a larger number of incidents in
the downtown area; a zonal system would make sense if there was a large barrier separating the
City or if there was a large undeveloped area.
Mr. Bise stated the same study had been done with regard to procuring the necessary apparatus;
in order to determine the demand, they had consulted the growth related costs which ended up
being 3.5 million. He stated it resulted in an impact fee for single-family units at an average of
$410.00 which was less than the current impact fee approach. He stated the multiple unit fee
would be roughly 59%lower than the current fee. He stated the nonresidential industrial fees
would be $42 and was a decrease in fee, retail/restaurant would be $248, and all other services
would be $631; he noted the retail/restaurant and all other service fees would increase from the
current schedule. Assistant Director Saunders asked for clarification of"all other services".
Mr. Bise responded anything not industrial or retail/restaurant would fall into the"all other
services" category and would be specified in the final draft of the document.
Mr. Bise summarized the key reasons for the proposed changes; demand unit refinements over
the impact fee timeframe relative to the 2008 study and to ensure compliance with the Montana
impact fee requirement of not holding new development to a higher level of service than
existing users. He stated they thought the 2008 study was not rigorous enough in the analysis
of the share between the five proposed fire stations.
Ms. Rosenberry stated the new fire station was built right after the impact fee study in 2008
when they had only the money for 2/3 of the station and clarified that the level of service was
not what the City had intended at the time. Mr. Bise responded the same argument could be
made for any fee but a level of service had to be defined; the other methods used to craft a fire
master plan were operational rather than capital. He stated utilization rates and targeted
response times were not ways to determine level of service; it was part of the imperfection of
using the fees as a funding source. He stated it was clear in the master plan that if the full
complement of stations were completed, the level of service would increase. Mr. Hixson
responded the levels of service after the construction of Fire Station 92 and before the
construction of Fire Station 93 were different. Mr. Bise responded the previous method would
commit the City to building the remaining fire stations prior to 2024. Mr. Hixson asked if the
City was stuck with the current level of service. Mr. Bise responded they were until they did
another impact fee study. Mr. Thompson stated if the fees would be difficult to increase after
the studies were adopted and his concern was that the growth rate would be beyond what the
level of service would be.
Mr. Evans asked if the City should continue to pile the fees onto developers because they think
the city would grow or should they consider covering those future fees with an INTERCAP
loan that can be paid over a period of time. Ms. Rosenberry responded the City had never been
Page 3 of 8
Impact Fee Advisory Committee Meeting—January 26,2012
ahead of the curve on collection of fire impact fees; the general fund had paid for a portion of
Fire Station 93 construction and impact fees were paying the general fund back. Mr. Hixson
added the level of service after the construction of Fire Station 42 was increased,but impact
fees were not yet in place; he added the problem was that you could not add level of service
incrementally. Mr. Evans asked how they would rate fire service in 2006 versus the current
service. Mr. Hixson responded the firemen would like to achieve a four minute level of service
from the time they leave the station; the master plan had come about because the City knew
they needed a new facility. He asked for clarification of the level of service the City was
allowed to expect from new development.
Mr. Thompson suggested defining the level of service and added you cannot buy 1/3 of a fire
station but a developer could tell you that 1/3 of the cost is the land purchase. Mr. Bise
responded Bozeman was unique in that they waited until they had the impact fees collected
prior to construction of a new facility. He stated a more aggressive impact fee schedule would
leave the City on the hook to fund improvements from their general fund if growth did not
occur.
Mr. Nelson stated the completion of the master plan indicated an average of 6.29 minutes and
suggested it was reasonable to say that was the average over the last ten years. Mr. Bise
responded he could buy looking backward to the last station to define level of service; he added
from his perspective the current impact fee study did not comply with the impact fee act as
there was no specific level of service analysis.
Mr.Nelson stated he did not think the City would come up short within five years until the next
study was completed. Mr. Hixson stated you never knew where or when you would need the
fire station; what would a developer think if the fire impact fee was low, but the service was 10
minutes away. He suggested basing it on a level of service that was an industry standard. Mr.
Bise responded the difficulty was how the standard would be defined. Ms. Rosenberry asked
how the proposed study addressed the issue. Mr. Bise responded the fees that have already paid
assumed the City builds the remaining fire stations by 2030 and another consideration was the
operating costs associated with fire stations and staff.
Mr. Mehl suggested Mr. Bise present the first alternative for clarification purposes and so that
they consider each option. Mr. Bise stated the average fire impact fee was $540 across the
nation; they were traditionally an integrated system and it was hard to justify a new fire station
being 100% growth related.
Chairperson Nickelson speculated that with 16,000 people and growth, the response time would
not be as good and the level of service for the entire community would drop significantly; he
added growth was causing the level of service to drop with no way to make growth pay for it.
Mr. Bise responded the Committee was supposing that the impact fees would pay for the fire
stations in their entirety and they would really only be paying for a portion of those facilities.
Ms. Rosenberry stated the money gets collected and the policy makers decide how the money is
spent; people who paid impact fees in 1998 were benefitting today from the construction of Fire
Station 93. Mr. Bise responded he had never seen impact fees done that way. Mr. Evans asked
how the first two fire stations had been paid for. Ms. Rosenberry responded they were voter
Page 4 of 8
Impact Fee Advisory Committee Meeting—January 26,2012
paid bond fees. Mr. Evans asked what happened to the financial model that had funded the first
two fire stations. Mr. Bise responded that was a different time with different grant
opportunities that were available at that time. Mr. Evans suggested taxes could be increased to
fund future facilities. Mr. Hixson responded the Commission had already decided that new
development would pay for the infrastructure improvements they demanded and current
population would not have increased taxes. Ms. Rosenberry concurred with Mr. Hixson that
the City Commission had indicated they would like to see growth pay for those improvements.
Mr. Bise directed the Committee to a map of the locations of the existing and proposed fire
stations and noted that existing development, as well as new development, would automatically
benefit from the construction of a new fire station. Mr. Hixson stated the fundamental
difference was that they would only build the fire station when growth demanded it, not when
enough fees had been collected. Mr. Bise asked the Committee to at least agree that if all the
fire stations were built there would be a substantial increase to the level of service seen today;
he asked what the Committee's suggestion would be. Mr. Evans asked what date the level of
service was met in this valley. Mr. Bise responded there was not a relationship between level
of service and square footage. Mr. Hixson asked why not 1995 or some date other than 2011
hadn't been used as his concern was that the level of service would be lower than it should be.
Mr. Bise responded under the current methodology the City would build five stations and pay
half of each; under the new methodology the City would pay for two stations and pay half of
each—the City would be on the hook for 13 million instead of 6.5 million. Ms. Rosenberry
stated it further left the cash flow issues unanswered and noted a lot of growth would be served
by capacity that already exists.
Mr. Bise stated the argument could be made that the current level of service was already over
what was necessary. Assistant Director Saunders stated there were several slow years without
uniform expansion. He added it was the role of the City Commission to identify side boards
and different funding sources to build whatever hardware that needed funded. He stated if it
changes the numbers that someone, in good faith, had looked at last time, so be it. He stated he
knew the fee numbers need to be updated periodically and noted there would be some lag due
to those routine changes. Mr. Nelson suggested the beginning of the thesis of the presentation
should be establishing where the City would assume growth to be. Mr. Bise responded the last
meeting had included growth projections which had been used to calculate the current
information. Assistant Director Saunders responded an incremental level expansion concept
would flow with the development pressure whether it was high or low; each individual would
have paid for their share and this emphasized the importance of getting the unit measurement
correct.
Mr. Evans stated it reminded him of his workman's compensation insurance where he got a
refund; would the impact fees work the same way so that the City would refund those fees. He
asked if the Committee would rather over collect or under collect the fees; he did not think that
any of the fees could be segmented into new growth as the existing community would benefit in
some way.
Mr. Thompson stated the new station was predicated to support new development while
operational costs would be paid through property taxes and unfairly burdening him; he stated
Page 5 of 8
Impact Fee Advisory Committee Meeting—January 26,2012
the fees were such a miniscule number and were the cost of doing business. Mr. Hixson
responded some of the data was indisputable because we have three fire stations and the
population was confirmed; the problem in his mind was that the fee was divorced from the level
of service. He gave the example of the difference in the area of a 4 inch and 8 inch pipe—the 8
inch pipe is more than just twice as large because it varies as the square of the radius—it's not
linear. He stated the population number would not serve as the expansion was similarly
exponential and not lineal. Mr. Bise responded the City would run into those issues as they
were open systems; he noted his was a more conservative approach and they tended to err to
that side in a state with an established impact fee act. He asked how someone would define a 4
minute level of service with regard to an impact fee. He stated he would feel more comfortable
with an aggressive approach if the City committed to building all the fire stations—a
commitment to an instate level of service.
Mr. Bise stated that what they were trying to do was paint the overall financial picture with
regard to the City's impact fees; it was clear to him what the relationship under the proposed
fee calculation is but the Committee was getting hung up on the monetary percentage. Mr.
Thompson asked if the City accepted the proposed fee study, would people be asking for
refunds. Mr. Bise responded that once the new study was adopted, the old fees would be
replaced.
Chairperson Nickelson asked if 2011 was the correct year to define the level of service. Mr.
Bise responded the level of service for population had doubled in the last five or six years. Mr.
Hixson responded that if you used 1995 the level of service would be way better and using
1974 the level of service would be way,way better. Assistant Director Saunders responded the
likelihood of everyone building out their property to maximum density was very low; it would
be a radically different response time if everyone lived in an apartment building instead of on a
7,500 square foot lot. He added there were too many unknowns to fund facilities with 100%
accuracy.
Mr. Bise stated the marginal costs tomorrow that the City incurs would be larger than the
average costs; the impact fee would need to be based on the average. He stated in Florida they
were doing proportionate share which was an impact fee and an additional fee for help the
community.
Mr. Nelson noted the division between nonresidential and added it seemed necessary to provide
a distinction between nursing facilities and offices. Mr. Bise responded he would take that
under advisement. Assistant Director Saunders suggested placing the nursing home under the
residential component. Mr. Bise concurred with Assistant Director Saunders.
Mr. Thompson suggested defining the side boards as Assistant Director Saunders had suggested
as the community would be interested in the amounts charged to the developers.
Mr. Bise stated if the City chose the cost recovery route they would need to revisit the fees in a
year. He stated they limited the buy-in to the rate of the bond and the fees would be spread
over what the development base would be in 2013. He noted the costs per square foot resulted
in an average of$375 which was 55% lower than the current fee amount. He noted the
Page 6 of 8
Impact Fee Advisory Committee Meeting—January 26,2012
increases for retail/restaurant/all other services and the decrease for industrial uses. He stated if
the City was undecided on what facilities they were constructing the incremental expansion
methodology might be the best choice but the money would need to be spent in a certain
amount of time.
Mr. Evans excused himself from the meeting.
Chairperson Nickelson stated it seemed to him that if the 1995 data was used the level of
service would be better. Mr. Bise responded a debt service credit wouju be necessary and some
of the funding would need to come from the general fund. He state , edit could be added
to continue to use impact fees to pay off the debt; the credit would be so that the City was not
double paying. Assistant Director Saunders responded that the general fund would not make
the loan payments unless the impact fee stream ran dry. Ms. Rosenberry stated she cannot
build one house worth of a fire station. Assistant Director Saunders added they knew the
station would not be used to its fullest capacity at construction so they had built the facility and
level of service beyond that which was required at the time. Mr. Bise responded he could factor
that information in; in theory, if you pledge the general fund to repay the debt, there is no
guarantee that impact fees would pay it but also no harm done since there were no payments of
impact fees being made. Ms. Rosenberry suggested she did not want to see a reduction in the
current fee because it would eat away at the financing. Mr. Bise responded he thought the City
could consider a credit.
Mr. Thompson suggested the level of service in 1995 as Vice Chairperson Nickelson suggested
would smooth out the figures. Mr. Bise calculated that the level of service in 1995 would be
less than the current level of service. Mr. Nelson asked if integers could be used instead of
square footage. Mr. Bise responded if it was done that way they would only need to build one
station and the result would be the same. Ms. Rosenberry stated they were speaking of two
different things; she was worried about how the fire funds would be deployed to meet the
demands of growth. Mr. Bise responded all he had to go on was the master plan and they had
defined level of service; no CIP had been submitted.
Assistant Director Saunders asked what difference it would make if the data from 2010 were
used instead of 2011. Mr. Bise responded it might make a 5% increase. Assistant Director
Saunders asked if it would be any easier to explain if there were more absolutes. Mr. Bise
responded level of service could vary substantially. Assistant Director Saunders suggested if
the Committee agreed to use 2010 the hard data would be available and the level of service
would be preserved. Mr. Bise responded Assistant Director Saunders was theoretically correct.
Mr. Nelson added 2010 was the swing period and might prove to be a marginally higher level
of service. Mr. Bise asked if station#4 had a year attached to it in the CIP. Ms. Rosenberry
stated the land had already been acquired and lack of financial resources had moved the station
down on the list. Mr.Nelson asked if the City was ever charging enough to pay for five
stations. Ms. Rosenberry noted they had to geographically distribute the fire stations based on
number of acres and active use. Assistant Director Saunders added that all of the capacity in all
of the stations would not be used and there would still be capacity.
Page 7 of 8
Impact Fee Advisory Committee Meeting—January 26,2012
Mr. Bise stated that whatever they came up with, it would not substantially change what the
City would have to pay and what impact fees could be used to pay for. Mr.Nelson responded
that the City expected growth to pay for the next station. Mr. Bise responded no one would be
willing to hang their hat on growth projections. Assistant Director Saunders responded
projections would be off if the number of persons in a household drastically changed.
Mr. Hixson noted that if the 16,000 people came in on the outskirts of town and evenly
distributed; there would be no way to provide the same level of service. Mr. Nelson responded
the problem existed today and was indicative of the system. Mr. Bise wked if the
implementation of the master plan would bring up the level of service e City. Assistant
Director Saunders concurred that the level of service would be better.
Ms. Rosenberry asked if the citizens would be demanding the level of service or would it really
be growth. Assistant Director Saunders responded it would be a combination of both the
citizenry and growth. Mr. Bise noted that if the City implemented the master plan, they could
be more aggressive with regard to impact fees.
Chairperson Nickelson clarified that impact fees would only pay for half of the fire stations and
other funds would need to be acquired. Mr. Bise clarified that inconsistency was why the
growth per acres units were used.
ITEM 6. OLD BUSINESS
Assistant Director Saunders clarified that the City Commission meeting on February 15th would
be held at 6:00 p.m. instead of 5:00 p.m.
ITEM 7. COMMITTEE COMMENTS
No items were forthcoming.
ITEM 8. ADJOURNMENT
There being no further business to come before the Committee at this time, Chairperson
Nickelson adjourned the meeting at 8:52 p.m.
James Nickelson, Chairperson Chris Saunders, Assistant Planning Director
Impact Fee Advisory Committee Dept. of Planning& Community Development
City of Bozeman City of Bozeman
Page 8 of 8
Impact Fee Advisory Committee Meeting—January 26,2012