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HomeMy WebLinkAbout09-13-12 Impact Fee Advisory Committee Minutes ** MINUTES ** THE CITY OF BOZEMAN IMPACT FEE ADVISORY COMMITTEE THURSDAY, SEPTEMBER 13, 2012 Chairperson Nickelson called the meeting to order at 6:13 p.m., in the Madison Meeting Room, City Hall, 121 North Rouse Avenue, Bozeman, Montana. Members Present Staff Present James Nickelson, Chairperson Tara Hastie, Recording Secretary Rob Evans Chris Saunders, Assistant Planning Director Anna Rosenberry Brian Heaston George Thompson Erik Nelson Randy Carpenter Members Absent David Graham Guests Present Chris Mehl, City Commission Liaison Chris Kukulski Greg Megaard Brit Fontenot Dick Milligan Bonny Milligan ITEM 2. MINUTES OF AUGUST 16, 2012. MOTION: Mr. Thompson moved, Mr. Nelson seconded, to approve the minutes of August 16, 2012 as presented. The motion carried 7-0. Those voting aye being Mr. Evans, Mr. Carpenter, Mr. Nelson, Mr. Thompson, Mr. Heaston, Ms. Rosenberry, and Chairperson Nickelson. 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.} Dick Milligan stated he and his wife Bonny were at the meeting because they owned property on N. 27th Avenue and they were under the understanding that impact fee changes would be made to enhance the viability of owning property in Bozeman. He stated they felt they had been impacted pretty heavily and had begun with raw land and converted it to three, 3.3 acres lots. He stated they had installed the infrastructure along N. 27th Avenue and then had recently been included in an SID after they had been told there would be no further SID’s on their property. He stated that recently they had been told that Catamount Street would need to be Page 1 of 9 Impact Fee Advisory Committee Meeting– September 13, 2012 completed prior to being approved on future Building Permits. He stated they had been impacted very heavily and some of the costs were contingent costs that may come up including the impact fees and the cost would be close to $900,000.00 total cost to them. He stated they were not in the development business and the subdivision process for Bozeman had taken 2 ½ years while the same process in Belgrade had taken only 8 months. He stated they were asking, from a sales price standpoint, less than the property was worth. Ms. Milligan stated they had a property on the market for over a year due to all the entitlements constraining the site. She added the City may make more money on the property than they would ever see. Mr. Milligan added that more impact fees would be a hell of an impact. Mrs. Milligan stated the next person would be a buyer and would check into the costs associated with new development of the property. Mr. Milligan stated the tax man indicated the lots were worth $600,000 a piece, but were selling the lots for $200,000. He added that if the City of Bozeman were looking for land they would make them a great deal. Mr. Thompson confirmed that the fees would need to be paid to the City prior to any construction on the site. Mr. and Mrs. Milligan confirmed that Mr. Thompson was correct. Mrs. Milligan added that their engineer had indicated that there had been no condition of approval with their subdivision to pay for streets in the future and they had completed what had been required of them. Mr. Evans confirmed that Planning Staff had required the street improvements. Mrs. Milligan stated they were being knocked out of the market. Mr. Milligan added that there had been an indication from Planner Riley that the Impact Fee Advisory Committee would take their concerns into consideration. Mrs. Milligan asked for direction. Mr. Thompson asked if there was an appeal process that the Milligan’s could consider pursuing; he suggested there should be some type of an appeals format that meshed with the planning process. He added the owner would have no revenue to pay the taxes that were already assessed for the property. Assistant Director Saunders responded there was an appeal process that would be reviewed by the City Commission; he added Staff had some flexibility administratively but most appeals of that nature would be reviewed by the City Commission. Mrs. Milligan responded that she had already notified the City Commission in writing of their concerns. Mr. Mehl responded that discussions among the City Commission would include setting the policy for impact fee assessments in addition to the impact those fees would have on the community and fee implementation. He invited the Milligan’s to attend the City Commission meetings and encouraged them to contact Staff representative Chris Saunders if they had any questions regarding credit requests or appeals. Mr. Carpenter suggested Assistant Director Saunders discuss impact fee credits. Assistant Director Saunders responded that impact fee credits work in lieu of payments and were intended to offset the costs of the work. Mrs. Milligan stated it sounded like she needed to speak with Assistant Director Saunders with regard to the impact fee credit request. Assistant Director Saunders responded that Planner Riley should also be involved in the discussions as he had handled the projects in that vicinity recently. Chairperson Nickelson noted the fees being discussed at the meeting were proposed to be modified with the current updates. ITEM 4. CITY COMMISSION LIAISON {A standing item to be used as needed} Page 2 of 9 Impact Fee Advisory Committee Meeting– September 13, 2012 Mr. Mehl stated they had covered the process and tentative schedule for City Commission consideration of the proposed updates. He thanked the Committee members for their dedication and willingness to put in the time on the Committee. He stated they had given the Commission the groundwork upon which to make their decision. Chairperson Nickelson thanked Mr. Mehl for his support. Assistant Director Saunders added that October 8, 2012 was the tentative date the City Commission was scheduled to initially review the updates and they would schedule additional meetings as necessary. Mr. Mehl added he suspected they would actually vote on the studies in November. ITEM 5. PROJECT REVIEW (Continued from August 16, 2012.) A. Discussion/Action by Committee 1. Question responses from 8/16/12 meeting. Assistant Director Saunders stated Staff had provided responses from questions brought up by Committee members at the last meeting. He stated the first response was with regard to both water and sewer fees and how infill development would fit into the calculation for piping. He stated properties that had never been developed would be all new demand and would pay the distribution component of the development. He stated City maintenance of mains below the minimum standard would bring the pipes up to meet the minimum standard which adds some capacity. He stated the longstanding developments and those that had paid impact fees would be granted flexibility and not automatically charged the full distribution fee. He noted there was a standard the Commission had adopted that indicated a threshold for redevelopment of a site and it would provide consistency between the similar programs and a reasonable threshold for incidental expansion and significant expansion. He gave the example of the Armory that had water/sewer service for a really long time, but adding a hotel to the site would significantly increase the use of those facilities on the site and a distribution fee would be applied. He stated when there were phased or multi-building developments; they would be prorated and considered with regard to their total consumption. Ms. Rosenberry asked how the administration of the program would be handled as it was no longer based on a per meter system. Assistant Director Saunders responded that it would add complexity to the administration of the policy, but it would be possible and manageable; he added most developments existed for long periods of time but it would be more work. Ms. Rosenberry asked how MSU would be handled. Assistant Director Saunders responded that MSU was unique in that they had meters they had already paid for all around their site and each instance would have to be investigated. Mr. Nelson asked whether or not there would be an ability to incentivize projects by allowing phased commercial development if the owner entered into an agreement with the City to pay impact fees over a period of four or five years to allow businesses to find a way to avert the burden of carrying those costs until their businesses were established. Assistant Director Saunders responded Staff had investigated that avenue in the past and the Commission had concluded that the down sides outweighed the good sides; he noted it was a policy discussion that the City Commission could discuss though it had not been included in the proposed studies. Mr. Nelson responded that financing was still the burden of Page 3 of 9 Impact Fee Advisory Committee Meeting– September 13, 2012 the owner. Assistant Director Saunders responded that the money would still need to be accounted for in addition to the consideration that the owner may go bankrupt, etc. Mr. Mehl assured Mr. Nelson that the topic would be discussed by the Commission. He noted questions regarding the fourth fire station and funding would come up and be brought up at the meeting. Assistant Director Saunders stated another question that had come up was with regard to public parks and their consumption. He stated Mr. Guthrie would modify the language to include the necessity to account for public parks; he added concession stands and things usually came later on down the line with donation funding. Assistant Director Saunders stated fire and EMS services had come into question on whether or not they were at capacity for demand. He stated the Fire Department had operational data that could possibly be parsed out, but it was difficult to say whether or not capacity was reached on any given day. Chairperson Nickelson stated his understanding of the original question had been whether or not the new fire station could be funded 75% by impact fees. Assistant Director Saunders responded that the funds could be distributed evenly amongst the stations or distributed in a different manner. Mr. Heaston asked if there was an expiration of the time that the funds were allowed to be spent. Assistant Director Saunders responded that there was an expiration time but it had been set locally. Mr. Megaard added that the City was never left uncovered whether utilizing mutual aid or funding from another source; he added the growth had died down after the construction of station #3. Mr. Thompson asked what was necessary to commit those funds. Assistant Director Saunders responded committed was defined and it was more than just having the money in the account; it did not have to be spent yet, but he did not have the specific ordinance at the evening’s meeting. Mr. Kukulski asked if any of the fire impact fee money had been spent on anything other than fire station #3. Ms. Rosenberry responded that the opticom system had been 10% funded by impact fees and 90% by a grant. Mr. Kukulski asked how if station #3 had been fully funded while station #4 was not eligible for impact fees. Assistant Director Saunders responded that it was in how the funding was distributed amongst the construction of the stations. Ms. Rosenberry stated that if by virtue of the location of where development occurred would it mean development in certain places should have a local cost that did not just go to the general impact fee. Mr. Evans noted it got sticky when the resources were pushed outside of the delineated boundary. Ms. Rosenberry asked if it was reasonable to charge the whole City for a station constructed in a certain part of town. Assistant Director Saunders responded the metric used was a key because of travel time, number of gallons pumped, number of vehicles sent, hydrant locations, etc. were all factors that could be considered. Mr. Megaard responded the ISO was that standard and took all those components into consideration. Mr. Nelson suggested the void in the level of service would need to be filled with regard to annexations of large developments. Mr. Kukulski responded that the scenario had happened and indicated the City was stretched too thin and needed to provide a third fire station. Mr. Megaard added it was part of the ISO evaluation and noted the City had obtained the property to build station #4. Assistant Director Saunders noted there had been a question regarding the difference in the size of collector streets. The biggest collector was for three lanes while the smallest was for two lanes. He stated Mr. Heaston and Mr. Nickelson had looked into how there were a whole lot of Page 4 of 9 Impact Fee Advisory Committee Meeting– September 13, 2012 factors in determining the capacity of an intersection and its classification including the time frame; he added a fifteen to twenty year review was standard for those requirements. Mr. Heaston added that before the signalization of intersection, the major leg has no impediment while installing a traffic light impedes both legs of the intersection. Assistant Director Saunders added the metric that gets adopted is the level of service while considering the overall functionality of the intersection; the nature of traffic signals was a balancing act. Mr. Heaston added that the overall level of service would go up. Assistant Director Saunders noted he had found an article regarding the State giving the City of Billings water rights to handle a population of 500,000 people and he thought it was a great illustration of the differences from city to city and how it affected infrastructure needs. 2. Transportation Impact Fee update. MOTION: Mr. Nelson moved, Mr. Carpenter seconded, to forward a recommendation of approval to the City Commission for the Draft Transportation Impact Fee Study Update as proposed and amended by the Committee. Mr. Carpenter asked if discussions of separate service areas had been discussed. Assistant Director Saunders responded that the issue had been included as an appendix and was not readily visible. An adjustment to make it easier to find would be made in the final draft. He added that overall there was a 29% benefit to the type of business located downtown so 29% would be taken off the top and though it was not as steep a discount as in the past, it would even the uses out. Mr. Mehl added that right now the downtown area was the only area demonstrating compliance with the criteria for reduction but other areas could be considered for the same reduction. Mr. Nelson asked for clarification that each fee offered an opportunity to request a reduction. Assistant Director Saunders responded a reduction could be requested for any fee and would be required to be reviewed by the City Commission for approval. Assistant Director Saunders added that after further discussion with the consultant, the final draft would remove the collector streets that had already been constructed as being fully built out. He noted collector streets served an essential role in the overall traffic patterns and there was a lot of additional expense with regard to the addition of a third lane and added the City Commission would have to decide whether or not collector streets would be included or would the City’s development standards be modified to automatically include the third lane; he noted there would be an additional annual expense for maintenance of those roadways. Mr. Mehl asked how much more the impact fees would cost for installing the third lane. Assistant Director Saunders responded it would cost no more as those fees had already been included. Mr. Nelson asked if there was a different way to consider collector streets as two lanes instead of three lanes while upgrading some of the collector streets to arterials streets to provide for the three lane construction. Mr. Evans suggested the upgrade would be a good investment even if ten percent of them turned out to be unnecessary. Mr. Mehl added that the City got to designate whether streets were an arterial or collector. Assistant Director Saunders directed the Committee to the Transportation Plan Figure 9-2 map. Page 5 of 9 Impact Fee Advisory Committee Meeting– September 13, 2012 Ms. Rosenberry stated she thought it was the second or third study she had reviewed and they were tough; she thought it would get better and her understanding would be better, but the methodology changed a lot. She noted she liked that the data being used was more recent; she just thought it was difficult and complicated. She added she was concerned with regard to administration of the policy and the City Commission would also take additional public comment. Mr. Evans stated he did not have the impression that there had been enough public comment and suggested he would feel more comfortable waiting for the next meeting. Assistant Director Saunders responded the draft documents had been posted on the website for public view for two months. Mr. Nelson recommended that the City include the information on the front page of the Chronicle to engage the public in what was proposed. Assistant Director Saunders responded his expectation was that it would become new again once it was scheduled to be heard before the City Commission. Mr. Mehl noted the Commission review would likely take 6 weeks and he would request the Chronicle write an article prior to the November meeting so they would have plenty of time. Mr. Carpenter suggested an overview of the updated impact fees be provided to members of the public. Mr. Evans added that the residential aspect of the fee made sense to him and seemed sound, but the commercial aspect and consequences being drawn did not seem to make sense. Assistant Director Saunders responded there were a lot of differences in the two calculations and it was due to the differences in the uses within those districts. Mr. Evans stated he thought that warehouses and similar uses would move to the County while fast food restaurants would litter Bozeman; he suggested the Commission consider the economic impetus and the impact on development. Mr. Nelson responded if the study shows their impact is what it is, a mechanism to pay over time should be put in place to allow the business to access the market they are trying to access. Mr. Thompson stated they heard anecdotal stories with regard to the cost of impact fees in addition to all the equipment and added that part of the challenge was to get the information out to the public. Assistant Director Saunders noted that part of the answer was a policy question that the City Commission would need to consider. Ms. Rosenberry stated she thought the Committee had done good work on the proposals and she thought they should move it forward to the City Commission. Mr. Carpenter stated it was not just what Bozeman charged, but what was happening in the County as well. The motion carried 7-0. Those voting aye being Mr. Evans, Mr. Carpenter, Mr. Nelson, Mr. Thompson, Mr. Heaston, Ms. Rosenberry, and Chairperson Nickelson. Those voting nay being none. 3. Fire/EMS Impact Fee update. MOTION: Mr. Evans moved, Mr. Nelson seconded, to forward a recommendation of approval to the City Commission for the Draft Fire Impact Fee Study Update as proposed and amended by the Committee to use population as the applicable metric. Page 6 of 9 Impact Fee Advisory Committee Meeting– September 13, 2012 Mr. Mehl encouraged the Committee to discuss the level of service and clarify if exceeding level of service should be impact fee eligible and in what percentages. Mr. Evans stated he was not a huge fan of impact fees though he thought the process was sound; he felt the existing residences were in fact benefiting from improvements especially concerning fire and despite their location. He stated it was almost the jurisdictions responsibility to provide the service and everyone should pay; he added he liked paying 25% of each of the four stations with general funding. Ms. Rosenberry stated she took issue with the indicated deficiency in the current fire service as it was not her current understanding of the level of service. She stated there was no policy for the local portion of the fire station like there was a policy for the local portion of a street and she thought there might be something missing. She stated new development paying its way as not being upheld with the proposal as by design there was no local portion of funding allocated to the fire station without increasing taxes. Mr. Nelson asked if the consultant was correct that new development could not be held in a higher standard unless there was a mechanism otherwise in place and asked if that would be a levy. Mr. Mehl responded it would be a levy and explained that time would be used as the determinate. Chairperson Nickelson stated that when fire station #4 was built a certain part of town would attain a much better level of service. Mr. Megaard added that he agreed with Ms. Rosenberry that the level of service in Bozeman was adequate as it was not just the geographical location of the station, but the closest equipment available to take the call. Chairperson Nickelson noted fire station proximity would benefit individuals on their fire insurance rates as well. Ms. Rosenberry noted the fire station could not be built until there was enough money to staff it even if impact fees paid for the entire thing. Mr. Evans responded that with development there was a broader tax base that would account for the difference. Mr. Mehl stated he struggled with the consultant’s recommendation as it went against ISO with regard to the level of service; a current level of service would make the station eligible when facility increases would not be eligible. Assistant Director Saunders responded that he thought it was positive to bring the point forward. Ms. Rosenberry stated she had thought it was always the level of service that was indicated when the impact fee was implemented. Mr. Mehl suggested the level of service has to move and could not go back to the original baseline. Ms. Rosenberry responded that she was referring to identified deficiencies and it seemed situational. Mr. Heaston asked what the enabling statute indicated. Assistant Director Saunders responded it just indicated the level of service and added the Facility Plan could be updated to include language regarding the ISO rating. Mr. Megaard added that the City had more water in the distribution than they could pump. Mr. Mehl suggested that the study would indicate what the City wanted to see new development bring to the City. Page 7 of 9 Impact Fee Advisory Committee Meeting– September 13, 2012 Assistant Director Saunders asked the timeframe in which the ISO rated the City. Mr. Megaard responded they were rated every 10 years unless they requested one earlier. Assistant Director Saunders suggested considering including ISO in the definition of the level of service for fire in the future. AMENDED MOTION: Mr. Thompson moved, Mr. Nelson seconded, to forward a recommendation of approval to the City Commission for the Draft Fire Impact Fee Study Update with the defining marker being population instead of land area. Ms. Rosenberry stated she did not want to go against the decision of the Committee, but she disagreed with the consultant that there is a less than adequate level of service. Assistant Director Saunders responded that using population instead of land area would be included and the language would be revised accordingly. The amended motion carried 7-0. Those voting aye being Mr. Evans, Mr. Carpenter, Mr. Nelson, Mr. Thompson, Mr. Heaston, Ms. Rosenberry, and Chairperson Nickelson. Those voting nay being none. 4. Water Impact Fee update. MOTION: Mr. Carpenter moved, Mr. Thompson seconded, to forward a recommendation of approval to the City Commission for the Draft Water Impact Fee Study Update as proposed and amended by the Committee to address parks per Assistant Director Saunders 9/13/12 memo. Mr. Evans stated he concurred with Mr. Nelson that any of the fees getting collected before service was implemented was problematic to him because during construction fire, water, and sewer usage is not applicable. He suggested collecting impact fees at the time of the request for Final Occupancy as it seemed fairer. Mr. Nelson asked for clarification of water impact fees and asked if those two numbers on page 19would be added together. Assistant Director Saunders responded the fractional cost for acres would be factored into the equation. Mr. Carpenter asked Mr. Evans if he felt the discussion and its reflection in the minutes would be adequate to convey his opinion to the City Commission. Mr. Evans responded it would and he was also planning on attending the City Commission meetings to provide his input as well; when the fees were collected would make the housing more affordable. Mr. Evans responded it was hard enough to convince a home owner to build a new home and then they are the bearers of the bad news of the cost of impact fees. Ms. Rosenberry stated she hoped the shift in impact fee trigger with the change of a meter size would not catch the community by surprise. Mr. Evans responded the Building Division would need to distribute the information. Mr. Mehl suggested people were aware of the requirements already and it was starting to catch on even if the general public was not aware of the change; he added there were other benefits. Mr. Evans added it would be fairer. Page 8 of 9 Impact Fee Advisory Committee Meeting– September 13, 2012 Page 9 of 9 Impact Fee Advisory Committee Meeting– September 13, 2012 The motion carried 7-0. Those voting aye being Mr. Evans, Mr. Carpenter, Mr. Nelson, Mr. Thompson, Mr. Heaston, Ms. Rosenberry, and Chairperson Nickelson. Those voting nay being none. 5. Wastewater Impact Fee update. MOTION: Ms. Rosenberry moved, Mr. Carpenter seconded, to forward a recommendation of approval to the City Commission for the Draft Wastewater Impact Fee Study Update as proposed and amended by the Committee to address parks per Assistant Director Saunders 9/13/12 memo. Chairperson Nickelson noted for the record that the water discussion also applied to the sewer discussion. The motion carried 7-0. Those voting aye being Mr. Evans, Mr. Carpenter, Mr. Nelson, Mr. Thompson, Mr. Heaston, Ms. Rosenberry, and Chairperson Nickelson. Those voting nay being none. ITEM 6. OLD BUSINESS There were no items forthcoming. ITEM 7. COMMITTEE COMMENTS Ms. Rosenberry stated the Committee had completed their revisions of the studies and noted the CIP’s would be under their review in October or November as the Commission was required to review the proposals in December. Mr. Nelson suggested an easier way for individual projects to be included on the CIP could be identified and encouraged his fellow members to consider it. Assistant Director Saunders responded there is a method in place for those types of requests to be considered. Ms. Rosenberry suggested she did not know how to better spread the information to the public. Assistant Director Saunders noted that every approval through Planning included a letter stating that impact fees would be assessed and explaining the necessity for those assessments. ITEM 8. ADJOURNMENT There being no further business to come before the Committee at this time, Chairperson Nickelson adjourned the meeting at 9:04 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