HomeMy WebLinkAboutResolution 4424 Transportation Impact Fee update1
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Chris Saunders
SUBJECT: Commission Resolution 4424 adopting the update to the Transportation
impact fee study to establish methodology, and document required information to conform to
statute, and determine the generalized average cost per unit of service.
MEETING DATE: December 10, 2012
AGENDA ITEM TYPE: Action
RECOMMENDATION: Adopt Commission Resolution 4424 adopting the updated
transportation impact fee study [also known as a service area report] as presented.
SUGGESTED MOTION: Having received and considered the updated study for transportation
impact fees, the recommendation from the impact fee advisory committee, and having heard and
considered public comment I move to approve Commission Resolution 4424 adopting the
October 24, 2012 draft of the Transportation Impact Fee Study.
BACKGROUND: The City has approximately 255 miles of roadways of different types
within its boundaries. These streets are a mix of local, state, and federal roadways. These streets
provide service to over 169,000 vehicle trips per day as well as many thousand pedestrian and
bicyclists. A mix of local, state, and federal funding provides for maintenance and operations to
serve existing users, and also funding to expand the system to serve future users. Local funding for operations and maintenance comes primarily from the semi-annual assessment on real
property. In FY2013 this is expected to create $2,986,000 of revenue. This includes funding for
daily operations such as wages and supplies and also some funding for the repair and
replacement of existing streets. The City also received $659,500 in revenue sharing from the fuel
taxes collected by the state and federal governments. Like the local assessment these funds are primarily used for maintenance. The City also receives “urban funds” a special restricted use
funding to maintain and expand certain defined streets.
Capital goods are generally defined as having a service life in excess of 10 years and are physical
items such as pipes, treatment and collection buildings, and vehicles. Capital expansion of the street system is achieved by combined funding sources such as impact fees, development project
related installations of local streets and portions of the major street network, urban funds, and
applicable grants which occur infrequently. All these funding sources must work together to
provide the reliable and adequate service needed for a healthy community. Overall, in FY2013
the City expects to expend in excess of $8,896,000 to maintain and expand the street system in
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addition to funds expended directly by the State and Federal government of roadways they
maintain.
Coordination of these various efforts is provided through the long range facility plan and the annual capital improvement programming system as well as the operational oversight of the staff and Commission. The City also plays a major role in the Transportation Coordinating
Committee; a multi-agency interlocal agreement between the City, County, State, Federal
governments, MSU, and transportation advisory groups. The TCC helps prepare long range
transportation plans, coordinates between member activities, and works to obtain maximum effectiveness and efficiency in the transportation system and related expenditures.
This memo is focused on one element of the overall funding structure for the transportation
system, impact fees. Bozeman initially adopted impact fees in 1996. Most recently the fee
studies were updated in 2007. The present fee study began in 2011. Impact fees have helped the City provide needed services during high, moderate, and slow growth periods. The memo is structured in sections identified by letter. Each section addresses an individual topic. The
majority of the sections are focused on the content of the new fee study, the presentation of
information that occurred on October 8th, and related questions. Section F identifies questions
and issues that will be addressed with implementation. Many of these items interrelate to other issues, programs, and standards. These interrelationships are often complex and on-going. These
items do not all need to be resolved prior to acceptance and adoption of the fee studies.
The sections are:
A. Responses to questions from October 8th B. Summary History C. Process
D. Common Study Elements and Changes
E. Transportation specific items
F. Issues for Future Discussion and Implementation After the October 8th meeting of the Commission, the Institute of Transportation Engineers
released a new edition of the Trip Generation Manual (ITE manual). The ITE manual is the
collection of transportation research which forms the basis for expected numbers of vehicle trips
created by new development. The City is committed to using the most up to date available information in its impact fee program. Therefore, the consultant prepared a new draft of the
transportation study dated October 24, 2012 which uses the data from the newly published
edition in the fee calculations. The effect of the change may be determined by comparing figure
14 from the October 24 and the September 23rd studies. Financially there is a small, as little as
1.2%, increase in the calculated cost of service. There is also a change in uses where the metric for elementary and secondary schools changed from a cost per student to a cost per 1,000 square
feet of building area. This memo presents the October 24, 2012 draft for potential action.
Sections:
A. Question from October 8th:
1) Intersections – Please see Section F, Intersections segment, page 11 for this response.
2) Should Collector street be included in the impact fee – Please see Section F,
Transportation Systems Improvements segment, page 8 for this response.
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3) Commuters – Page 18 of the study notes that Bozeman experiences significant
commuting which affects total travel demand. Impact fees are charged for those trips
whose destination lies within the City. Therefore, commuters, whose travel by definition
includes at least one trip destination outside of the City, are placing demand on the transportation network that is not mitigated by impact fees paid to the City. Therefore, impact fees are not an adequate sole source of funding to address the need for increased
capacity in the transportation network. As discussed in the background section and in
Section F, Alternative Transportation Funding segment and Funding Mix segment, page
XX the City does not rely solely on impact fees for transportation capacity expansion funding. The City Commission as part of the impact fee update has chosen to set aside 25% of the Urban fund allocation from the state to be used for capacity expansion needs
that impact fees cannot meet such as commuter travel. As a regional tourism and services
hub it is inevitable that Bozeman will experience significant use of its street network by
persons who are visiting as tourists, coming to shop or visit professional services, or otherwise.
4) Tracking needs and when items are required – The long (20 year) range transportation
plan (LRTP) formally inventories and evaluates existing conditions and future needs for
transportation. This plan provides an early warning of expected major projects.
Construction of major roadway projects are major undertakings and usually require several years to complete design, bidding, and construction processes. In addition to the formal transportation plan processes, the city and the state conduct annual traffic counts
on corridors and intersections. These counts provide key information on where within the
transportation system activity is increasing.
The city often receives additional information through the development review process. Many subdivision applications include a traffic study of surrounding areas as part of their submittal material. As part of the review of these application an evaluation of service
capacity is made to determine if the roads will continue to function at an acceptable level
of service after the development is complete. The City uses all of this information in
preparing the capital improvements plan selecting specific projects for funding and construction over the short (5 year) term.
In addition to traffic counts and level of service analysis the LRTP also contains standard
configurations for roadway construction and expected numbers of vehicles expected to be
able to use those configuration. As the Staff evaluates existing and proposed traffic
counts and forecasts, they can compare the demand numbers against the physical configurations. This helps identify when expansions of roadways are likely to be needed and what scope of work is required. After this initial scoping is completed formal
engineering design studies refine the scope of work prior to finalizing the decision to
proceed.
5) Use categories – Should restaurant and retail be consolidated into a single category or remain separate. – Please see the segment on use categories of Section E, page 6 for this response.
6) Fees paid in other communities and related alternate funding sources – Please see Section
F, Funding Mix and Alternate Transportation Funding segments, pages 9-10 for this
response.
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7) Payment timing – Please see comment 2 under the Economic Development
Considerations segment of Section F, page 16 for this response.
8) Credit process – exact cost or estimates to establish credit values – Please see the Section
F, Generally Applicable Items segment, Credit Management item on page 11 for this response.
B. Summary History: The City funds its water, sewer, fire/EMS, and transportation systems
with multiple funding sources including impact fees. The City of Bozeman initially
adopted impact fees in 1996. Fees were initially adopted at a fraction of the calculated cost of service to provide a transition period. The percentage of the fees collected has varied by time and type of fee. It is necessary from time to time to update the study which
documents and sets the upper limit for the unit costs for each type of impact fee.
The City adopted updates to the various facility plans which provide much of the base
information for the impact fees for transportation in 2001 and 2009, fire in 2006, and both wastewater and water in 2007. The City retained consultants in 2006 to update the fee studies. The four fees were updated and adopted over the following 14 months.
The City has adopted a three year cycle to update the impact fee studies and a five year
cycle to evaluate and if needed update the facility plans. In 2011, the City began the
consultant selection process to again update the impact fee studies. TischlerBise was selected as the consultant for this update cycle with the contract being signed in June 2011.
C. Process: The City conducted a request for qualifications followed by a request for
proposal process to select a consultant to assist the City in updating the four fees. A
contract with the selected consultant, TischlerBise, was completed on June 29, 2011. Since that time, the consultant has been collecting and reviewing data, preparing analysis
and draft reports, and meeting with Staff and the Impact Fee Advisory Committee
(IFAC). The IFAC is the body required by statute and formed by local resolution to
advise the City Commission relating to impact fees.
The IFAC conducted public hearings on August 16th and September 13th to hear input from members of the public on the draft impact fee studies. After conducting the public
hearings the IFAC voted on motions to recommend approval of the individual fee studies.
The Committee recommended favorably on all four studies having found that the studies
were consistent with the requirements of state law regarding impact fees. The minutes of
the IFAC hearings are attached and provide greater detail on their actions. Minutes of all of the IFAC meetings are available through the Planning Department.
On October 8th the City Commission received the reports and heard a presentation from
TischlerBise regarding the reports. No action on the studies was taken. The meeting was
for receiving information, hearing from the public, and formulating questions from the
Commission to be answered at a future meeting when all Commissioners are present.
The Commission set November 26th for follow up action on the water study. This action
was moved to December 10th. The Commission passed Ordinance 1843 making structural
changes to the impact fee ordinance language which will be in effect on December 5th.
These changes specify that adoption of the new water impact fee study is by resolution. A
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draft resolution has been prepared for Commission action should the Commission wish to
take action on December 10th.
A resolution of the Commission can be effective immediately. Staff recommends a delay
in the effective date of the implementing resolution in order for implementation procedures to be set up and information to be provided to the public. Staff recommends the effective date to be January 1, 2013 and the draft resolution includes that effective
date.
D. Common Study Elements and Changes:
Each fee is the subject of an independent study as each fee is legally independent of the others and relies on different data and demand characteristics. The introductory material
in each study is very similar. There are three main sections of each report: 1) Introduction
to impact fees, 2) Impact fee calculations for each fee type, and 3) Implementation and
administration. The second section of the report contains the data sources and analysis
and presents the resulting fee calculation broken into cost per demand unit. This section will be most interesting to most people.
Several significant changes are occurring with this round of impact fee updates. Data was
available on home sizes from the MT Dept. of Revenue for the first time. This in
conjunction with other data sets enabled the consultants to perform analysis to document
certain demands for service by home size. Please see the Setting the Stage document for this analysis on home size and occupancy. They were then able to expand on this analysis
with each individual fee study for those elements unique to that fee type as documented
in Appendix A of each study.
All four of the fee types now base residential fees on expected occupancy per size of
home. The same home size range was used for all four fees with a lower end of 1,400 square feet and an upper end of 3,000. The range is broken into 200 square foot
increments so movement between increments will result in a small impact fee charge.
The consultant had analyzed the home range originally for detached and attached home
styles. After discussing the results with the IFAC it was decided to consolidate the two as
there was a substantial amount of overlap between the size increments. There is also a special residential category for group living which is distinguished by population rather
than dwelling area. The occupancy level per home in the studies reflects the population
spread across all housing units constructed from 1990 to 2010. This represents demand at
any given point in time and accounts for vacancies without being tied to a particular
vacancy rate. As a result the occupancy per home used in the calculation is slightly less than the actual number of residents expected to live in an occupied dwelling.
These are averages over large samples of the City housing stock. Therefore, some homes
will have different demands above or below the average at any given point in time.
However, the overall system should equalize to the average. This occupancy approach
has the effect of recognizing the differences in occupancy and demand which come from smaller and larger homes and reduce fees on units which generate less demand. This is
consistent with the City’s overall encouragement for land efficient development.
Because of this change all residential fees are on home size. Attached and detached
homes are no longer separate categories. Affordable housing distinctions to individual
categories are also removed since the primary difference was also related to size of homes.
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Sustainability: Impact fees are a tool used to provide infrastructure and maintain levels of
service in essential systems. Having adequate infrastructure facilitates urban
development. Enabling land efficient urban development patterns reduces energy
consumption both from municipal operations and from private development and land use. Construction is very energy intensive. Having funding to coordinate facility over sizing
with private development reduces the number of times construction must be undertaken.
This reduces energy consumption from delayed expansions and needless repairs. The new
approach for water distribution and sewer collection systems directly rewards land
efficient development. Land efficient development is more likely to support pedestrian and bicycle travel and reduce motor vehicle emissions and energy consumption.
E. Transportation
General methodology of incremental expansion: This is similar to the presently used
methodology in that it focuses on identifying an amount of additional capacity need per
unit of new development. This capacity is generally applied to the system. Specific project identification for construction is then driven by the transportation plan, five year
CIP, and location needs within the community as demand occurs over time. This provides
considerable flexibility for the City to partner with other non-impact fee funding sources
to meet needs as they arise. Commission directed use of this methodology on March 5,
2012.
Categories of Uses: The fee calculated must be applied to a demand calculation which
can be applied to specific proposed construction. Staff and the advisory committee
discussed with the consultant the possibility of revising how the schedule of fees is
developed. Several changes to current practice are proposed in the draft study and are
described below.
1) Residential Uses: Current impact practice in Bozeman is to charge impact fees
primarily on the basis of type of residence with some size distinction for detached
homes. The proposed fee structure would use the size of the home by 200 sq ft
increments approach as described in the common elements section and would not
distinguish between attached or detached homes. There is also a special category for group living which is distinguished by population.
2) Non-Residential Uses: The current schedule of fees uses a variety of demand
measures depending on the characteristics of the use. It has more than 35 different
categories. This can be beneficial in supporting the proportionality of the fee to a
specific site. However, over time as a building is reused additional fees may become due as the uses in place change from one category to another. There are
also some categories that are infrequently used.
The consultants proposed to consolidate the number of non-residential categories.
A less detailed set of categories simplifies the day to day administration of the
program and is advantageous to some users. It also reduces the likelihood of additional fees being due with reuse of an existing building. This corresponds
with the Commission’s direction to be more business friendly and encourage
rehabilitation/reuse of existing structures. Fees are paid for the building lifetime
use as a given category. The Commission accepted the recommendation and the
new fee study uses a much consolidated list of non-residential uses.
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The primary impact of the change is the consolidation of retail and restaurants
into a single category. As a result of blending the two the cost per unit has gone
up for retail and significantly reduced for restaurants. One of the most common
changes between use categories on a particular site is between retail and restaurant. Having them in a single category will reduce the number of times a new user has to pay transportation impact fees to occupy an existing building.
Impact fees are supposed to consider the uses over the life of the building. A more
general category provides a more consistent measure on average although there
will be some outliers where the structure remains a single use over its entire service life. Page 22 of the transportation impact fee study presents the proposed list of use categories. The current list of categories is attached to this memo.
Examples of these changes are included with the fee examples.
The question of whether or not to combine the retail and restaurant categories was
raised at the October 8th Commission meeting. The consultant provided the following written response to that question.
“As requested, the text below from Trip Generation, ITE 9th edition, can be used
to support our recommendation for using ITE land use 820 Shopping Center for
general commercial development.
A shopping center is an integrated group of commercial establishments. Shopping centers, including neighborhood, community, regional, and super
regional centers, were surveyed for this land use. Some of these centers
contained non-merchandising facilities, such as office buildings, movie theaters,
restaurants, post offices, banks, and health clubs. Many shopping centers, in addition to the integrated unit of shops in one building or enclosed around a mall, include out parcels (peripheral buildings or pads located on the perimeter of the
center adjacent to the streets and major access points). These buildings are
typically drive-in banks, retail stores, restaurants, or small offices. Although the
data herein do not indicate which of the centers studied include peripheral buildings, it can be assumed that some of the data show their effect.
The shopping center trip generation rates are based on 302 studies with an r-
squared value of 0.79. The latter is a goodness of fit indicator between the
individual studies and the regression curve. R-square values range from 0 to 1,
with higher values indicating the independent variable (floor area) provides a
better prediction of the dependent variable (average weekday vehicle trip ends). If the r-squared value is less than 0.50, ITE does not publish the value because
factors other than floor area provide a better prediction of trip rates.
City Commissioner asked about the possibility of maintaining separate categories
for restaurants. In the current fee schedule, Bozeman has fees for Quality
Restaurant (ITE 931) and Fast Food with Drive Through (ITE 934). The trip rates are based on 15 and 21 studies, respectively, with no published r-squared value.
Based solely on difference in trip generation rates, the impact fee for a quality
restaurant would be 2.1 times higher [18,960.77], per thousand square feet, than
the proposed fee for general commercial [9028.94]. Similarly, an impact fee for a
fast food restaurant with drive through would be 11.6 times higher [104,735.70], per thousand square feet, than the proposed fee for general commercial.”
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Trip Exchange District: Downtown – The 2008 impact fee update introduced the Trip
Exchange District (TED); a way to identify areas of town with demonstrably different
trip generation characteristics and resulting differentiated transportation impact fees
within the larger service area. The consultants have reevaluated the TED in this update. Recent research, see attached, has demonstrated that in a mixed use development
environment there is an overall 29% reduction in vehicle trip generation when all users
are blended together. The 2008 TED provided cost reductions for only selected use types
for which data was available. The 2012 TED has spread the cost reductions to all types of
uses, but are a more generalized approach and some uses will receive less of a cost reduction. In both cases the TED was applied consistent with the best available data. The
2012 TED is proposed to be slightly expanded to include both the B-3 zoning district and
the downtown tax increment district boundary. The TED is discussed in detail in
Appendix C of the Transportation Impact Fee study. Fully implementing the
recommended expansion to the TIF boundary would require a municipal code amendment.
Percentage collected: The transportation impact fee is the one impact fee which is not
presently collected at the full calculated cost of service. No recommendation is made in
the fee study on this issue. Additional discussion on this topic is in the future issues
section, Section F, Economic Development Considerations segment.
F. Issues for Future/Additional Discussion related to Transportation. Several of these items
are generally applicable to all impact fees and are repeated with each individual
Commission cover memo. Notes on action are shown at the end of each segment in italic
text.
Transportation Specific
Transportation System Improvements: The definition of what is the ‘transportation system’ determines what streets can be improved with impact fees and is a major element
in the calculation of the demand component of impact fees. The current definition of the
transportation system is in Section 2.06.1630.A.14, BMC and includes all those arterial
and collector streets identified in the transportation plan. The language is attached. Figure 9-2 from the transportation plan which maps those streets is attached. All local streets are
excluded from the impact fee system costs and eligibility for funding. The interstate
system is also excluded.
The Commission directed the consultant to use the major street network, meaning
arterials and collectors as the basis for the study. The inventory of these streets is shown in Figure 6 and 7 of the report. Each street type represents about 50% of the major street
network. A greater portion of the arterials were excluded from consideration in the fee
study as they have been built to their maximum standards and don’t represent opportunity
for additional expansion. Some of the collectors were also excluded for the same reasons.
Individual elements of the network could be removed with a reduction in fee directly proportional to the length of lane miles included in the street segment removed.
The consequence of reducing the scope of the network would be to reduce the number
and location of the projects which could qualify for impact fee funding and would
therefore reduce total impact fee cost/contribution in the system. It would also have the
effect of eliminating some projects from impact fee funding eligibility and therefore other non-impact fee funding sources would have to be found to make up the difference. Since
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those road segments would be removed from the basis for calculating the fee it would be
inappropriate to expend the fees on them. The alternate sources may result in different
minimum construction requirements or a need to commit or generate other dedicated
funding such as general obligation bonds or special improvement districts. This would also have the potential to place more burdens on adjacent development and the timing of executing private projects. For example, if collectors were removed from the impact fee
calculation no impact fee funding or credits would be available to assist with
signalization of or widening of the collector. The collector streets play a very important
role in Bozeman’s major street network. Staff does not support removing collectors from the major street network for the purposes of impact fees. To remove collectors from the definition of the major street network would require an ordinance.
Initial Street Construction Requirements: One of the differences which gave a different
cost per lane mile of construction between the 2008 and 2012 studies is when the
construction happened. The 2008 study had construction costs resulting from projects where collector and arterial roadways were expanded after initial construction. The 2012 study has projects where the center turn lane was included with initial construction. The
difference in timing results in considerably different costs.
The new study relies on the costs for the initial construction approach which are quite a
bit less costly. This reduces overall capital costs but increases the number of lane miles being maintained. The City currently maintains 235 miles of streets and alleys. The City
has adopted an initial minimum construction standard of two travel lanes for all streets.
The City could consider modifying this standard to require that three lanes be constructed
with the initial street construction to minimize capital costs. These ‘third lane’ projects
would be potentially impact fee credit eligible to offset the additional expense of the third lane. This approach would require the City to set aside some funds for this which would
lessen funds immediately available for other projects. To change the initial construction
requirements would require an ordinance.
Funding Mix: The funding for expanding, operating, and maintaining the transportation
network comes from several sources. Some funding such as the annual municipal streets assessment is dedicated for daily operations and maintenance and deferred
maintenance/reconstruction. Other funding sources such as Urban Funds which come
from the gas taxes paid by existing systems users are an intergovernmental transfer of
money from the Federal and State government. Urban funds can be used for both
maintenance and for capacity expansion but only on certain streets designated as ‘urban routes’. The Commission on March 5, 2012 directed that 75% of urban funds would be
designated for maintenance and 25% for capacity expansion to offset capacity needs for
non-impact fee payers and corrections of existing deficiencies. Existing deficiencies are
shown in the transportation report in section 4 beginning on page 11.
The Montana Department of Transportation (MDOT) is responsible for coordinating the Urban Routes program statewide. The location of urban routes is modified once every ten
years following the federal census. The MDOT has begun this process and we are now
working to schedule a meeting to consider changes to the local map of urban routes.
Urban routes are typically collector or arterial streets. The number of miles allowed to the
city is generally fixed so adding the urban route designation to one street means another must be removed from the list.
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The amount of money available for use on the urban routes is set by the Federal
commitment of transportation funding provided in the transportation bill. This was
recently reauthorized as MAP-21 which restructured several federal transportation
programs. Dollar allocations for urban funds have been trending downward. The current annual allocation is $805,177. The gas tax has been a fixed number of cents per gallon of motor fuel sold and has not changed for many years. As the costs of construction have
escalated the funding available has not kept pace with increased need for funding.
Alternate transportation funding: The transportation impact fee is the one impact fee that
is presently collected at less than the calculated cost of service. The City Commission when adopting the 2008 transportation study decided to collect the fee at 60% of the calculated cost of service. Therefore, the City is required to find other funds to make up
the 40% difference to maintain levels of service. Over the past four years the City has
collected $4,248,392 in transportation impact fees. This means that the 40% discount
results in an alternate cumulative funding need of $2,832,261. This alternative funding would only be for capacity expansion and not for any maintenance or correction of existing problems. At this point, a single federal earmark used to expand South 19th
Avenue has offset the discount. However, at some point this will no longer be the case
and additional funds will need to be found if the discount is to continue. To change the percentage of transportation impact fee collected would require an ordinance.
There are different methods which could be used to make up this difference. A single mil
of general property tax is valued at approximately $83,000. An annual levy of 7.68 mils
would meet the annual average need for alternative funding over the past four years. This
spreads the cost to the general tax payers. The City recently received an appropriation
(earmark) of $5,000,000 from the federal government. These funds were used to expand South 19th Avenue from 3 lanes to five lanes thereby increasing system capacity.
Earmarks are unpredictable in their frequency and amount.
The City could use SIDs to pay for portions of work along roadway corridors. Such
special districts would require the City to demonstrate a particular benefit to those within
the district from the additional charges. Depending on the type of road and nature of the improvements this can be a difficult standard to satisfy. An SID must be designed and
approved on a case by case basis for each project. The SID formation process is largely
directed by detailed state statutes.
State law authorizes the County to establish a local gas tax of up to two cents per gallon.
Establishment and distribution of such funding would require an interlocal agreement and countywide voter approval. This seems an unlikely option at this time.
One alternative option is to create an alternative funding source. The City of Billings has
established an assessment program which they use to construct arterial and collector
streets. The structure is very similar to the program that Bozeman uses for street
maintenance. These funds could be used for target fee reductions to specific industries or could be used to provide a regular source of capacity expanding funding. In the second
circumstance, the amount of funds needed to offset the present 40% reduction in the fees
collected would be approximately $710,000 per year. This figure is based on an annual
average of the impact fee collections for the past four years. To raise this amount of
revenue would be equivalent to 25% of the current street maintenance assessment for FY2013. No change to the impact fee ordinance would be required for this approach.
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Creation of such a program and any new charges would likely be coordinated with the
annual budget process which typically occurs in April-June.
Intersections: The manner and amount of funding intersection improvements has
generated community discussion. A determination of what is new work and what may be a maintenance item will vary by intersection and the proposed work. Each intersection must be evaluated individually for its existing conditions and how a proposed project
may alter those conditions. As a basic standard, impact fees may not be spent on
maintenance. Intersections were one of the items the consultant was asked about during
the study update process. This item is related to the funding mix and alternate street funding items above. There are two different elements to this question: 1) What should be calculated going forward; and 2) how do you use funds received both before and after
updated studies.
An average cost approach as suggested by TischlerBise applies the cost of improvements
to all users of the intersection. A marginal cost approach as used by the City previously applies the cost of improvements to the new/future users of an intersection. As an
example: an intersection presently serves 5,000 vehicles per day, post improvements will
serve 10,000 vehicles per day, and the work will cost $500,000 and will only add new
hardware and turning lanes making no changes or repairs to existing components. An
average cost approach would charge each of the 10,000 vehicles both new and old $50. A marginal cost approach would charge each of the additional 5,000 vehicles $100.
This issue is also related to the manner in which level of service is measured. Intersection
level of service is measured by delay; corridor level of service is measured by number of
vehicles passing through in addition to delay. The transportation plan describes these
measures in Section 2.2.4 and identifies locations where known problems exist and future problems are likely. Concerns over this item may be best addressed by creating a
definition of ‘maintenance’ for inclusion with the impact fee standards in the municipal
code. Creation of a definition of maintenance would require an ordinance.
Generally Applicable Items
Capital Improvements Program (CIP): One of the responsibilities of the IFAC is to advise the Commission regarding the spending of impact fees. This is fit into the regular CIP
document which the City Commission considers and adopts annually. The CIP covers a
rolling six year window with the current budget year and five future years. A point of
discussion at the IFAC is the relative merits of how to list projects on the CIP.
Three options were discussed. First, having a short list of high priority projects which are all funded and leave no material uncommitted funds and no unfunded projects on the list.
Second, have a lengthy list of projects which are impact fee eligible but which
collectively are beyond the five year financial reach of the program in order to
communicate possible options for the future. Third, have a short list of high priority
funded projects and deliberately leave an uncommitted balance in the program to enable the City or individual developers to ask for partner funding as opportunities arise. No
action is required related to the study on this item. This is more of a preference for the
Commission to express as it considers the CIP update.
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Credit management: One of the public comments during the public hearings before the
FIAC was related to how credits are managed. This is related to the CIP item above. The
current approach used by the City requires CIP listing prior to work being eligible for
funding with impact fees either as a city project or as a developer request. The request was to allow as credit projects all qualifying work whether or not CIP listed and would
establish the value of credits available based on the CIP listed values. Staff has
considered this option and believes it would cause several difficulties in managing the
impact fee funds and in showing that fees were expended appropriately. No action is
required related to the study on this item. This change would require an ordinance.
Data tracking: The revised approaches for assessing the impact fees by home size and water and sewer by lot size will require additional data tracking. Coordination among
departments will be needed to ensure consistent collection and retention of the needed
information. It is believed that this can be accomplished with existing software tools. No action is required related to the study on this item.
Facility Plan and Impact Fee Study Updates: As noted above, the City relies upon its
facility plans as essential information in preparing and administering the impact fee
program. The City has completed several major projects in the various plans and in some
cases the documents were prepared several years ago. The City’s ordinance requires a
periodic review, and if needed update, to these foundation documents. It is likely that updates to the water, wastewater, and fire facility plans will be needed before the next
impact fee update. These are major endeavors and use a lot of staff and commission time
and financial resources. It is advisable to begin this process soon so as to be completed
before the next required study update.
The City has established a schedule of updates in Section 2.06.1700.J, BMC. This schedule was put in place at a time of high growth rates and when the impact fee program was new. The impact fee and facility plan updates require significant investments of
money, staff and Commission time, and time from the public. It is recommended to
consider the possibility to lengthen the cycle time. Recent inquiry to Missoula shows that
they don’t have a fixed update cycle for their impact fees studies but do so about every five years. There are advantages to coordinating the processes to review and update the monthly service rates and the impact fee study updates. No action is required related to
the study on this item. Changes to the update schedule requirement require an ordinance.
No action on this item is required before adopting the updated fee study.
Deferred payment: A member of the IFAC raised the question of timing of the required payment of impact fees. Presently the fees are due at issuance of building permit or
connection to water or sewer systems. The Commission has considered this issue several
times before and concluded the benefits were not adequate to justify the change. It is
important to remember in discussing this topic that the amount of immediate impact
varies among the different fees. The individual fees may be treated differently for the manner in which they are collected although this would add complexity. An additional
matter is whether there is a minimum threshold of cost below which fees would not be
deferred. Additional discussion on this item is presented under the economic
development segment below. A change of timing for required payment of fees would require an ordinance.
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Economic Development Considerations
How does the implementation of a revised impact fee methodology synchronize with the
Commission’s established economic development goals, priorities and policy initiatives?
Specifically, how will the application of a new impact fee methodology impact the implementation of the adopted economic development plan?
It is important to discuss if, and how the implementation of a new impact fee
methodology will complement, or challenge, other guiding economic development
principles and priorities of the Bozeman City Commission. For context please refer to
the City’s broad economic development policy direction shown in Sections 1 – 4 below.
Section 1.
The adopted 2012 – 2013 Work-Plan includes the following priorities:
1. Implement the adopted economic development plan, integrating
economic development principles throughout the organization;
2. Adopt comprehensive strategies and financial plans to address deferred maintenance;
3. Improve parks and recreation amenities;
4. Complete an integrated water resources plan;
5. Create a storm-water utility;
6. Enhance downtown development opportunities;
7. Support Gallatin College programs;
8. Implementation of the community climate action plan; and
9. Develop a legislative agenda.
Section 2. In 2009 the Bozeman City Commission adopted its first economic development plan.
Since adoption, the City’s Economic Development Council and city staff implement
programs, practices and partnerships that add value to the City’s economic development
efforts and builds capacity to serve more businesses in the area. The tenets of the
economic development plan are:
1. Support the expansion and retention of existing businesses and
economic clusters that will continue to strengthen and diversify the
economy and create higher paying jobs in Bozeman.
2. Maintain and upgrade infrastructure to support current and future
needs of business.
3. Support education and workforce development initiatives to
provide Bozeman with the qualified workers to meet the needs of
business.
4. Leverage local, state and federal economic development resources
to enhance economic growth in Bozeman.
5. Create a more collaborative and effective working partnership
between the business community and the City of Bozeman and
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effectively manage the City of Bozeman’s regulatory environment
to accomplish goals without hindering business expansion and
economic growth.
6. Maintain the high quality of life that is considered an important asset to the business community.
Section 3.
Additionally, from the adopted plan, the EDC delineated the following priorities
and recommendations:
1. Commitment to a business-friendly process with a focus on
retention and expansion of existing local businesses.
2. Stabilize existing local incubators and create a full service business
incubator program to achieve a healthy business ecosystem.
3. Core Services and Infrastructure.
4. Identification and Establishment of Business Incentives.
5. Workforce Development.
Section 4.
The City of Bozeman’s economic development goals are rooted in a job creation and industry diversification strategy adopted in the 2009 Economic Development Plan. The City has determined that supporting the start-up, growth or relocation of the following
high growth potential sectors will create high paying jobs and add diversity to the local
economy:
1. Manufacturing and fabrication;
2. Bio-Sciences and Bio-Technology;
3. Hi-Technology ;
4. Photonics; and
5. the Outdoor industry.
Support for high growth potential sectors includes creating partnerships where others can take the lead in areas of workforce training, appropriate incentives, business resources. The City has taken the lead on streamlining the development review process and
facilitating economic growth by strengthening and creating partnerships and matching
businesses with resources.
Impact Fees and Economic Development
New development relies upon the availability of infrastructure to move forward in a
timely manner. Delay can be a strong disincentive to investments. Impact fees help
provide infrastructure in a timely manner thereby avoiding delays. Impact fees help
provide predictability in short and long term cost structures to business by identifying
costs up front and avoiding unplanned large tax or user fee increases in the future. Different users are more or less sensitive to the known and upfront costs compared to
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more predictable long term costs over the average business lifecycle. The impact fee
ordinance makes allowance for the City to provide financial support to offset the effects
of impact fees on desired development. The City can take advantage of this to focus
efforts on desired economic sectors. The change in the transportation impact fee to consolidate non-residential uses for initial use and reuse should be supportive of reuse and redevelopment in existing facilities.
A well integrated policy and regulatory environment is advantageous for both the public
and private entities who work with the regulations. The effect of the new impact fee
methodology on the adopted work plan and implementation of the City’s Economic Development Plan should be considered in the overall impact fee implementation discussion.
Ideally, in its’ consideration of the implementation of an impact fee policy, the
Commission discuss the synchronization of the impact fee program with the
Commission’s established economic development goals, priorities and policy initiatives. The Economic Development Council (EDC) discussed the issue of impact fees on
numerous occasions, hosting various experts on the issue. Through their staff liaison, the
EDC submitted the following discussion points for Commission consideration:
1. Prepare materials to educate potential investors, business owners and
entrepreneurs, on the short and long-term investor-advantages of charging impact
fees when compared to other fee recovery solutions;
2. Identify specific sectors, job creating, industry diversifying sectors with high
growth potential, for deferral of commercial impact fees, or a percentage thereof,
until the application for Certificate of Occupancy.
i. Manufacturing and fabrication (industrial production, in which raw
materials are transformed into finished goods on a large scale
which may include but are not limited to textiles, outdoor goods
and products, bio-science and technology products and photonics)
ii. Bio-Science and Bio-Technology (including but not limited to
technological applications that use biological systems, living
organisms or derivatives thereof, to make or modify products or
processes for specific uses)
iii. High-Technology (including but not limited to aerospace, artificial
intelligence, information technology, electrical engineering,
information systems, nanotechnology, nuclear physics, robotics
and telecommunications)
iv. Photonics (including but not limited to laser manufacturing,
advanced measuring devices, biological and chemical sensing,
medical diagnostics and therapy, display technology, and optical
computing)
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v. the Outdoor industry (active outdoor recreation businesses
including but not limited to manufacturers, distributors, suppliers,
marketers, sales representatives and retailers in the industry)
3. Commit to training and educating employees that interface with investors and
developers because there is value in appreciating that the City competes locally,
regionally and nationally to attract new and retain existing business. City
attitudes, customer service, professionalism and shared values for business
attraction and retention each play a part in the business decision. Economic
development is everyone’s business.
4. Regularly compare the City’s development fee schedule against the development
fee schedules of other communities;
5. Identify specific sectors (see sector details in 2. i – iv above) for targeted impact
fee assistance.
6. Work deliberately to make raw land developable as appropriate (with respect to
subdividing and infrastructure development);
Options to address EDC comments:
Comment 2: There are several options for changing the time fees are due. Changes in payment
timing should likely be made uniformly across all users. Careful legal review would be needed to
restrict procedural benefits to only some users.
1) The time of payment was originally set prior to permit issuance as it provides the most surety of payment prior to impacts on the systems beginning. This timing of payment is the current
standard. The city has the funds in hand and can therefore have the greatest ability to carry
forward construction of necessary improvements to meet demands for service. Payment prior
to permit means the fee is paid early in the process. It a project is abandoned after permit issuance and before construction begins fees can be refunded as no impact has yet occurred. Early payment of a fee requires greater financial commitment by the private party earlier in
the construction process but provides the least risk to the City.
2) The next most reliable time would be prior to issuance of an occupancy permit. An
occupancy permit is certification by the Building Division that the requirements of the building code have been met and the building is ready for safe use. Not all types of construction which generate new service demand require an occupancy permit and would
therefore need some exception to this timing requirement to ensure fee payment.
The positive argument for this change is that it does not require as much financial
commitment as early in the process which may reduce interest paid on a loan or simplify financing for certain owner constructed homes. A review of a recent sample of single detached homes showed a time range between permit issuance and certificate of occupancy
of 53-204 days with an average of 132 days. Deferral to occupancy could then possibly
provide an opportunity to avoid interest charges on $9,455 for a median size home and lot
assuming 100% collection of cost of service. Commercial construction is more variable in demand and is expected to take longer. Therefore no commercial example is provided. As a
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single point in time payment the occupancy permit approach is less complicated than a
distributed payment.
The negative argument is that it is more likely that a project will reach completion and have
exhausted its available budget and not have the funds to pay the impact fee. The City would then be in the position of having to deny occupancy of a completed building after significant expense. It may be possible to help mitigate this risk by requiring provision of an escrow of
funds to ensure the fees are held and available although not paid immediately. This would
require development of appropriate procedures both internally and with the lending
institutions. Also, by deferring availability of funds it adds some complexity in planning for expenditure of the funds. This also has potential for additional stress on Building Division personnel who must handle the issuance of the certificates of occupancy and who are the
receiving point for the impact fee payments.
3) A third option is payment over a period of time. Kalispell has set up this process but also
requires payment of any outstanding amounts upon sale of the property. The sale requirement would make this approach less beneficial for many residential projects which sell shortly after completion. Selection of duration of the time period would be up to the City. Use of the
approach requires several steps and has some direct costs for recording documents at the
Clerk and Recorder’s office.
The positive argument for this change is the deferral of costs which reduces the upfront expenses of development. However, it is important to note that this does not reduce the total expenses and if interest on the deferral is charged as Kallispell does may actually increase the
end cost.
The negative argument is that significant additional legal and procedural complexity is added
for an undependable amount of benefit. The additional complexity adds costs to the process of collecting and administering the impact fee program. There is no judicial sanction for this approach at this time in Montana. Contact with Kalispell staff indicates that the option is
infrequently used. Staff does not recommend this approach. A change of timing for required
payment of fees would require an ordinance.
Comment 4: Comparison to Other Communities: Settlement and development of the Gallatin Valley has been actively ongoing since the 1860’s. People have chosen to settle in many different locations for many different reasons and have created several villages, towns,
municipalities and other settlements in our area. These decisions came long before any
discussion of impact fees. Location of resources, costs, service quality, timing of land
availability, and many other factors affect the decision to choose a particular site. At this time three of the four municipalities in the Gallatin Valley have adopted impact fees. A comparison sheet is attached showing Bozeman, Belgrade, and Manhattan; Missoula is also included. This
sheet shows impact fee costs for various types of development. Please note that the orange
highlight shows those costs which are highest in the comparison. Some communities have
reduced the percentage of the fee they collect. The cost comparisons for other communities shows actual collected amounts. The Bozeman column shows actual cost of service as determined by the new studies and does not reflect any reductions. Conversation with the other
communities indicates that they do not have a funding program in place to make up the
uncollected portion of the impact fees.
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A second comparison sheet is provided which summarizes costs from three types of non-
residential uses: manufacturing, retail, and office. This comparison is based on costs per
thousand square feet for sample projects applying the proposed methodology of the four fee
update studies. Please note that for purposes of simplifying the comparisons the actual project costs are divided to be presented on a cost per thousand square feet although not all fees are assessed in that manner. The referenced 271 city averages are from the attached impact fee
survey by Duncan. Please note the fact that differences in revenue options affects reliance upon
any particular funding source. There are a wide range of types of fees and costs of fees imposed
as shown in that study.
A set of four reports produced by the Montana Building Industry Association is also provided. This set tracks single detached home construction statewide in counties and larger cities. The
report set is provided on a quarterly basis. The second quarter (April-June) is provided for 2009-
2012. As shown in this data set, even during the significant downturn of the past few years and
as the economic recovery has begun Bozeman has remained more active with construction than most locations in the state.
Not all fees charged to expand system capacity are called impact fees. They are also called
system development charges or system investment fees among other names. These fees can be
charged by water and sewer utility providers under a different statutory authority than the impact
fee program relies upon. Three examples of this are those charged by the Rae Water and Sewer district west of Bozeman, Helena, and by the City of Billings. Copies of the fee amounts they charge are attached. All these use the equivalent of meter size to determine the fee for various
commercial and multi-household developments. Costs vary as would be expected as the
infrastructure necessary to provide service also vary across communities. Note that Billings
made the policy choice to charge a single amount for all residential meter sizes thereby choosing to undercharge multi-household users.
A comparison and contrast with other communities must also look at more than just impact fees.
The following table from the FY2013 City of Bozeman budget depicts mill levy rankings.
City 2010 Census
Populations
FY2012 Mills Levy Rank As a % of
Bozeman’s Levy
Havre 9,310 241.26 1 145%
Missoula 66,788 233.34 2 140%
Livingston 7,044 209.06 3 125%
Great Falls 58,505 183.24 4 110%
Kalispell 19,927 175.93 5 106%
Billings 104,170 168.73 6 101%
Bozeman 37,280 166.75 7 100%
Belgrade 7,389 156.69 8 94%
Helena 28,190 155.82 9 93%
Whitefish* 6,357 120.40 10 72%
West Yellowstone* 1,271 88.21 11 53%
*West Yellowstone and Whitefish both utilize Local Option Resort Taxes as an alternative or supplement to property taxes, which the City of Bozeman is currently prohibited from doing by
state law.
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There are many different comparisons between communities on this issue which could be made.
When determining comparisons to make in this report it was decided by Staff that the scope
must, of necessity, be restricted to keep the discussions focused. Evaluation of specific
communities outside of Montana brings in additional factors such as different tax and infrastructure financing tools and statues. This increases the level of complexity beyond what could be achieved with the resources available.
Comment 5: This comment discusses the possibility of creating methods to offset costs for
targeted industries which significantly advance the City’s economic development goals. The
impact fee program does not specify who needs to pay the impact fee. Section 2.06.1700.H states that the City may pay impact fees from other funding sources to advance economic development. The City does not have a ready source of revenue besides the general fund with
which to offset the impact fees. Please see the discussion on alternate transportation funding
options above.
Comment 6: Impact fees make certain costs of land development explicit instead of hidden in land costs or monthly bills. They therefore help to provide better information for decision making. They also act to overcome one of the principal barriers to availability of land which is
the lack of needed infrastructure. For example, it is very difficult for a single development to
overcome a barrier such as a needed but not funded traffic signal. However, when costs are
shared and that development may pay a small portion of the cost of the needed traffic signal and move forward both time and dollar expenses are reduced. This helps to make land more readily
available for development. Effectiveness of public infrastructure investments can be increased by
more active coordination between long range facility planning, CIP scheduling, and operational
activities in the Public Works, Economic Development and Community Development
departments. This does not require any change in ordinance. UNRESOLVED ISSUES: As shown in Section F there are implementation items needing
additional discussion. However, the primary focus of the November 26th meeting is to decide
whether or not to adopt the Resolution accepting the water impact fee study update. Additional
discussion, consideration and actions will be necessary to carry out the options presented under Section F of the memo and these may occur after adoption of the study.
ALTERNATIVES:
Study:
1) Adopt the transportation impact fee study as presented. 1) Delay adoption to a future time.
2) Adopt the transportation impact fee study with directed changes after having made
findings to demonstrate why the changes are needed.
3) Decline to adopt the transportation impact fee study and continue to use the study now in
place. Implementation:
1) Discuss the various options described under Section F and give direction on which ones
to pursue further.
2) Defer discussion to a future date.
FISCAL EFFECTS: The fiscal effects of this specific policy discussion are not immediate.
These proposed studies directly impact the amounts the City will collect in Impact Fee revenues
in the coming years. Expenditures of the fees will enable continued new construction which
contributes on-going revenues and which will incur on-going expenses for provided services.
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Below are the total Impact Fee revenues collected for each of the past 5 years. The street fee
collection reflects the 40% discount now in place. How much the city collects each year depends
on a number of factors: 1. The level of the fee charged to the developer/property owner. (i.e. 60%, 80%, 100% of the study amount.) and,
2. The mix of projects built in the City each year. (A Drive-Thru Restaurant will have a
higher Street Impact fee than a Single Family Residence; a change in use to remodel an
office might require additional street impact fees but no water impact fees, etc.) City Impact Fee Collections FY08 FY09 FY10 FY11 FY12 TOTAL FY08-FY12
Street Impact Fees $1,948,550 $1,198,319 $ 751,223 $1,208,135 $1,090,715 $ 6,196,942
Fire Impact Fees $259,726 $186,690 $187,476 $190,292 $245,250 $1,069,434
Water Impact Fees $1,237,939 $768,363 $744,557 $713,387 $981,095 $4,445,341
Sewer Impact Fees $1,306,893 $663,766 $667,909 $636,878 $986,905 $4,262,351
$4,753,108 $2,817,138 $2,351,165 $2,748,692 $3,303,965 $15,974,068
These studies also affect the policies around how Impact Fees may be spent. For instance,
• if the adopted Fire Impact Fee study only supports 75% contribution to Fire Stations, our
Capital Plans will need to be updated and/or changed to reflect this change in policy. We will need to find another source of revenues to offset 25% of the costs of building future fire stations.
• if the Water Impact Fee study no longer contains an element related to Water Supply
development costs, we will need to change our funding plans for some of the future
IWRP outcomes and projects.
• If the Street Impact Fee Study does not contain collector streets then additional funding
sources must be identified and implemented.
Attachments: Commission Resolution 4424
Transportation Impact Fee Study dated 9/23/2012
Definition of Transportation System from 2.06.1640
Figure 9-2 from the transportation plan List of current transportation categories City of Billings arterial levy materials
The remaining attachments listed below are the same as and provided with the agenda item
materials for the Water Impact Fee and Commission Resolution 4421 and are relevant but are not
duplicated with this agenda item. Impact Fee Advisory Committee minutes from 8/16 and 9/13
Examples of applied and current fees
Comparison of I-90 corridor impact fees
Comparison of Bozeman to national averages National impact fee survey 2012 Impact fee reduction Study – Florida 2010
Bozeman building permit history
MBIA housing starts
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Rae system investment fees
Billings water and sewer system development fees
Helena system development fees Report compiled on: 11/29/2012
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Resolution 4424 Page 1 of 5
COMMISSION RESOLUTION NO. 4424 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, ADOPTING THE TRANSPORTATION IMPACT FEE STUDY PER ARTICLE 2.06, BMC.
WHEREAS, the City of Bozeman is committed to addressing the community’s
expressed needs and desires for services; and
WHEREAS, the City of Bozeman is committed to meeting those desires and demands
for services in a fiscally responsible manner; and
WHEREAS, the City of Bozeman is committed to meeting those desires and demands
for services in a manner which recognizes the fiscal and legal interests of all of the system users
now and in the future and not a limited subset of users; and
WHEREAS, the City of Bozeman has developed and adopted a transportation facility
plan which examined current and future needs and provides a lawful, logical, balanced,
operationally sound, and cost effective basis upon which to maintain and develop the City’s
transportation system; and
WHEREAS, the City Commission has chosen to utilize impact fees as one element of
an integrated approach to fund and provide transportation services; and
WHEREAS, Sections 7-6-1601 through 7-6-1604, MCA provide specific authority
and guidance regarding the documentation necessary to establish an impact fee and procedures to
adopt and administer an impact fee; and
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Resolution 4424 Page 2 of 5
WHEREAS, the City contracted with TischlerBise, Inc. to provide professional
services in development of an updated transportation impact fee study (the “Fee Study”);
WHEREAS, TischlerBise, Inc. reviewed the existing demand and needs for
transportation facilities, the existing facilities available to meet that demand, and the method of
financing the existing systems and needed new facilities; and,
WHEREAS, TischlerBise, Inc. also reviewed the contribution made or to be made in
the future in cash or by taxes, fees, or assessments by property owners towards the capital costs
of transportation facilities; and,
WHEREAS, TischlerBise, Inc. reviewed and relied upon the City of Bozeman’s level
of service (LOS) standards and facility cost assumptions as established by recently constructed
projects in recommending transportation impact fees; and,
WHEREAS, TischlerBise, Inc. has prepared a transportation impact fee study dated
October 24, 2012 including the assumptions, population and residential and non-residential
development projections, capital infrastructure and impact fee calculations, which study has been
submitted to and reviewed by City staff and Impact Fee Advisory Committee and City
Commission; and,
WHEREAS, in addition to the Fee Study, TischlerBise, Inc. and the City have
prepared, updated, and relied upon other documentation, as required by Section 7-6-1602 MCA,
in developing the transportation facilities impact fees adopted pursuant to this Resolution
including but not limited to the following which has been summarized in the required service
area report:
(1) Greater Bozeman Area Transportation Plan Update;
(2) Chapter 38, Unified Development Code; BMC;
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Resolution 4424 Page 3 of 5
(3) City of Bozeman Design and Specifications Manual;
(4) Street Impact Fee Capital Improvement Program;
(5) Adopted Capital Improvements Program for General Fund, Street Maintenance
Fund, and Street Impact Fee Fund;
(6) the City Budget; and
(7) Specified bid tabulations; and
WHEREAS, the City develops its transportation facility plans, and its capital
improvements program in a manner open to the public and accepts and responds to public
comment and input; and
WHEREAS, the City and TischlerBise Inc. developed the transportation impact fee
study in a manner open to the public and accepted and responded to comment and input; and
WHEREAS, the City of Bozeman Impact Fee Advisory Committee considered and
made a recommendation to the City Commission on the Fee Study; and
WHEREAS, the Impact Fee Advisory Committee conducted public hearings on the
subject of the transportation impact fee study on August 16, 2012 and September 13, 2012, and
the City Commission conducted a public hearing on October 8, 2012, and a public meeting on
December 10, 2012; and
WHEREAS, public comment was received and considered; and
WHEREAS, the City Commission reviewed and discussed the Fee Study and accepts
and agrees with the content of the Fee Study and recognizes that updates and modifications will
be made to the fee schedule in the future in accord with the annual cost adjustment requirements
of Chapter 2, Article 6, Division 9 BMC; and
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Resolution 4424 Page 4 of 5
WHEREAS, the City Commission found that all required elements necessary for
compliance with standards for development of an impact fee have been satisfied.
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of
Bozeman, Montana, that
1. The October 24, 2012 draft of the Transportation Impact Fee Study Update, as
contained in Exhibit "A", attached hereto and by this reference made a part hereof,
is hereby adopted.
2. As of the 1st day of January 2013, any person who seeks to obtain any of the forms
of development listed 2.06.1640, BMC must pay the a Transportation Impact Fee
pursuant to the schedule included in Exhibit A of this Resolution.
Effective Date.
PASSED AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the _____ day of ________, 2012. This resolution shall be in
full force and effect on January 1, 2013.
___________________________________
SEAN A. BECKER
Mayor
ATTEST:
________________________________________
STACY ULMEN, CMC
City Clerk
APPROVED AS TO FORM:
___________________________________
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Resolution 4424 Page 5 of 5
GREG SULLIVAN City Attorney
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2.06.1630.A.14, BMC
14. "Transportation system" means capacity-adding improvements to collectors or arterial
roads of three lanes or more, which are included most current long range transportation plan or
the city's impact fee capital improvement program, and which will benefit new development as
required by law and this division. The transportation system includes only those bicycle and
pedestrian facilities built in conjunction with and included in a capacity-adding transportation
facility improvement otherwise eligible for impact fee funding pursuant to the terms of this
division. The "transportation system" does not include project-related improvements.
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0 5,0002,500
Feet
Interpretation of MapThis map presents the Recommended Major Street Network. It shows how the street network should develop over time and is intended to be used as a planning tool. It will assist in theevaluation of long-term traffic needs when planning future developments. The route alignments shown are conceptual in nature.The actual alignments may vary based on development patterns, geographic features, and other issues unknown at this time. The community planners will strive to designthe roads to fit the character of the landscape and minimize impacts on natural features such as wetlands, mature trees, and riparian corridors.Most of these routes are not recommended for construction at this time. The development of these conceptual routes will take decades to become reality, and will only become roadsif traffic needs materialize as a result of development in the area. Many of the existing roads identified as arterial routes are currently functioning as collectors or local streets and will beupgraded as traffic needs increase.It is important to note that although this major street network is recommended as part of the Transportation Plan, it does not reflect the federally approved functional classification criteriawhich is based on current conditions rather than anticipated future conditions.
Existing Major Street Network andFuture Right-Of-Way Corridor NeedsFigure 9-2
Greater Bozeman Area Transportation Plan(2007 Update)Legend
Local Roadway
Detail Area
Urban Boundary
City Boundary
Interstate
Principal Arterial
Minor Arterial
Collector
Future Principal Arterial*
Future Minor Arterial*
Future Collector*
Note:Future links identified where no roadcurrently exists will be constructed asthe surrounding are develops.
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STREET IMPACT FEE SCHEDULE - General
ITE
LUC
Type of Land Use Unit Measure
Amount Due Per
Unit*
RESIDENTIAL:
210 Single Family (Detached)
Less than 1,500 sf and very low income(2)dwelling unit $1,465.37
Less than 1,500 sf and low income (3)dwelling unit $2,124.14
Less than 1,500 sf dwelling unit $2,678.30
1,500 to 2,499 sf dwelling unit $3,642.16
2,500 sf or larger dwelling unit $4,105.19
220 Apartments dwelling unit $2,253.74
230 Residential Condominium/ Townhouse dwelling unit $1,988.47
240 Mobile Home Park dwelling unit $1,075.23
LODGING:
310 Hotel room $2,067.45
320 Motel room $1,132.61
RECREATION:
430 Golf Course hole $8,298.81
411 City Park acre $368.54
444 Movie Theaters 1,000 sf $4,362.36
INSTITUTIONS:
610 Hospital 1,000 sf $4,065.37
620 Nursing Home bed $257.17
520 Elementary School student $212.62
530 High School student $321.96
540 University (7,500 or fewer students) (4)student $411.06
550 University (more than 7,500 students) (4)student $357.06
560 Church/ Synagogue 1,000 sf $1,638.84
565 Day Care 1,000 sf $5,017.08
OFFICE:
710 50,000 sf or less 1,000 sf $2,684.37
710 50,001-100,000 sf 1,000 sf $2,445.43
710 100,001-200,000 sf 1,000 sf $2,081.62
710 greater than 200,000 1,000 sf $1,660.44
720 Medical Office 1,000 sf $6,468.95
RETAIL:
820 under 50,000 sf 1,000 sf $6,329.91
820 50,000-99,000 sf 1,000 sf $6,470.98
820 100,000-199,000 sf 1,000 sf $6,298.18
820 200,000-299,000 sf 1,000 sf $5,782.50
820 greater than 300,000 sf 1,000 sf $5,496.99
812 Building Material/ Lumber 1,000 sf $14,315.52
813 Discount Super-Store 1,000 sf $18,221.60
817 Nursery/Garden Center 1,000 sf $12,759.03
851 Convenience Store 1,000 sf $30,108.57
931 Quality Restaurant 1,000 sf $14,873.73
934 Fast Food Rest w/ Drive-Thru 1,000 sf $41,325.29
841 New/Used Auto Sales 1,000 sf $8,121.96
890 Furniture Store 1,000 sf $1,136.66
912 Bank/ Savings Drive-in 1,000 sf $21,400.73
INDUSTRY:
110 General Light Industrial 1,000 sf $1,545.69
140 Manufacturing 1,000 sf $843.72
150 Warehouse 1,000 sf $1,098.18
151 Mini-Warehouse 1,000 sf $546.73
* Represents 60% of cost of service per Section 2.06.1640 BMC
CY 2012-v1 Effective January 1, 2012
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Ordinances of City of Billings, Montana.
ORDINANCE NO. 08-5478
AN ORDINANCE OF THE CITY OF BILLINGS, MONTANA
PROVIDING THAT THE BILLINGS, MONTANA CITY CODESECTION 22-LOO3 PROVIDING FOR AN ARTERTAL
CONSTRUCTION FEE, PROVIDING FOR A PROCEDURE
WHEREBY FEES CAN BE DETERMINED, IMPOSED, AND
APPEALED, ESTABLISHING AN EFFECTIVE DATE, AND
PROVIDING A SEVERABILITY CLAUSE BE AMENDED FOR
CLARIFICATION.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BILLINGS,
MONTANA:
Section 1. That the Billings, Montana City Code Section 22-1003 be amended to read as
follows:
(a) For the purpose of paying the cost of construction and/or reconstruction of arterial
roadways and depreciation and replacement of arterial roadways to provide safe facilities on
which citizens and visitors may travel, including the principal and interest on all revenue bonds
to be issued for that purpose, as authorized by MCA Title 7 Chapter 7 Part 44 or Title 7
Chapter 13 Part 43, as amended, an annual arte1ral construction fee is imposed and made
applicable to all premises within the city limits. The financial services manager shall report to the
city council when all revenue bonds issued for the construction or reconstruction of such artenal
roadways, and bond refunding the same, have been fully paid and redeemed, and the city council
shall then provide for the reduction of the charge to such amount as will be sufficient to pay the
reasonable expense of the construction or reconstruction of arterial roadways. The charge shall
be based on both the area of the parcel of land and its zone classification. Charges against
properties zoned Residential-s000 (R-50), Residential-6000 (R-60), Residential 6,000Restricted (R-60R), Residential-7O0O (R-70), Residential 7,000 Restricted (R-70R),
Residential-80O0 (R-80), and Residential-9600 (R-96) shall be capped at a maximum of the
applicable rate for that zoning classification times 9600 square feet per parcel. Other residential
zoning classifications created in the future will be similarly treated, except that Residential
Multi-Family (RMF), Residential Manufactured Home (RMH), Residential Professional (Rp),
and Residential Multi-Family-Restricted (RMF-R) will not be subject to any such maximum
square footage cap. Planned Development (PD) zones will be charged based on their underlying
zoning classifications and will be subject to the maximum 9600 square footage cap for the
underlying zorung classifications of R-50, R-60, R-60R" R-70, R-70R" R-80, and R-96. All other
underlying zonrng classifications will not be subject to any such maximum square footage cap. If
the underlying zoning does not match any zoning classification listed bele¡¡r in ArtÍcle 27-300,
Zoning Districts and Official Maps, the parcel will be charged at the rate of the most
reasonably comparable zoning classification. If there is no reasonably comparable zoning
classification, the parcel will be charged at the Planned Development (PD) zoningrate. The city
council may provide an exemption to commercially zoned and Residential Manufactured
Home @MH)-zoned properties that are currently owner-occupied as a single-family residence.
The property owner must annually request the exemption through the public works department
389
Ordinances of City of Billings, Montana.
by August 31 of each year. The per square foot charges for each parcel shall be as-felle+vs set by
resolution and shall be made to the owner of the parcel as the same shall appear according to the
tax code number or account number thereof in the office of the Department of Revenue,
Yellowstone County, Montana:
TÂBtE INSET:
Zenfu-+repesee+ate-
r W
R#-0s03++-
R-T 0s0@+-
R=+r OW
RlÆ{-eÆe417
RS-0,00+t+
PÞ 0$0s85-
R-60-0sggr-
RP-0s069+
R}4F+0Ãeæ+-
rur4f 0,00748
NêL_0s0+69-
N+0s0s24-
BL+0s08?t--
lúel4Ð-0s08se-
e+0s08+9-
BL+0s099+
PÆ_0s089+
H+gs09g+-
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BTT CIs09+?-
@in6-0s0r++
390
Ordinances of City of Billings, Montana.
The arterial construction assessment rates shall be established on an annual basis
consistent with state law by resolution passed by a simple majority of the city council, but the
assessment rates may only be changed through passage of a resolution by a super-majority of the
city council consisting of at least two-thirds (213) of all council members present and voting. The
zone classification shall be that which is on the official map on record at the city-county planning
department.
(b) The financial services manager shall, on or before the last day of October of each
year, cause to be mailed by the county treasurer to every owner of a lot or parcel within the city,
on the same date and in the same manner as are real property taxes, a separate statement of
arterial construction charges setting forth the annual charge to be assessed on the lot or parcel for
arterial roadway construction thereto. Such charge shall be due and payable on or before 5:00
p.m. on the thirtieth day of November of each year. Upon failure of the owner to pay the charge,
the same will be in arrears and delinquent on December 31st of such year, and shall be collected
by the financial services manager according to the provision and authority of MCA $$ 7-1-101
through 120, and the City Charter.
(c) All arterial construction charges shall be collected as provided in this article and
credited to a fund to be known as the "municipal arterial construction system fund", which fund
shall be at all times segregated and maintained by financial services manager on the books of the
city as a separate and special fund. Upon adoption by the city council of a resolution authonzing
the issuance of revenue bonds of the city payable from arterial roadway construction charges or
otherwise establishing a system of funds and accounts for such charges, all arterial construction
charges shall be applied and accounted for in the manner provided in such resolution.
(d) Any party who considers the charges applicable to his premises unfair, inequitable or
unreasonable may apply to the public works director for adjustment thereof, stating the facts and
grounds of complaint, and the public works director may notify the owner of any premises as to
which he considers the rates and charges to be inadequate. In either case, the public works
director shall cause appropriate investigation and report to be made by himself or his duly
authorized representative.
(e) The public works director, or his duly authorized representative, shall consider each
and all of such complaints and reports and communicate his findings with respect thereto to the
city council. The city council shall have the right to order a public hearing as to any such matter
and, if convinced that an adjustment of the charges for such premises is necessary to provide
reasonable equality with those charged to others, it shall so provide, either by ordinance
amendatory hereto, or by resolution fixing special charges for individual premises during the
period of continuance of special circumstances which make the standard charges unfair,
inequitable, unreasonable or inadequate.
Section 4. EFFECTTVE DATE. This ordinance shall be effective thirty (30) days after
second reading and final adoption as provided by law.
Section 5. SEVERABILITY. If any provision of this ordinance or the application thereof
to any person or circumstances is held invalid, such invalidity shall not affect the other
provisions of this ordinance, which may be given effect without the invalid provisions or
application, and, to this end, the provisions of this ordinance are declared to be severable.
PASSED by the City Council on first reading this 8th day of September, 2008.
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2008.
Ordinances of City of Billings, Montana.
PASSED, ADOPTED and APPROVED on second reading this 22nd day of September,
CITY OF BILLINGS
Cari Matin, City Clerk
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