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HomeMy WebLinkAbout12-05-12 Economic Development Council minutes/ City of Bozeman Economic Development Council (EDC) Meeting Minutes December 5, 2012 10:45 – 12 pm City Commission room, City Hall, 121 N. Rouse Members Attending: Anders Lewendal (Contractor) Cheryl Ridgely (Bozeman Deaconess Hospital), Stuart Leidner (Prospera Business Network) Daryl Schliem (Bozeman Chamber of Commerce), Deputy Mayor Jeff Krauss (liaison), Teresa McKnight, (Montana State University Innovation Campus), Erik Garberg (Civil Engineer) Members Absent: Tracy Menuez (Human Resource Development Council) Staff Present: Brit Fontenot (City Director of Economic Development and Community Relations), Aimee Brunckhorst (Deputy City Clerk) Guests / Public Present: Rob Gilmore (Northern Rocky Mountain Economic Development District Director) NOTE: These minutes are not word for word and should be considered in addition to the audio recording of the meeting. Call to Order Chairperson Daryl Schliem called the meeting to order at 10:53 a.m. Public Comment Daryl Schliem opened public comment. Seeing no public comment, he closed public comment. Minutes – November 15, 2012 Motion and Vote to approve the minutes of November 15, 2012. It was moved by Cheryl Ridgely, seconded by Stuart Leidner to approve the minutes of November 15, 2012 as submitted. Motion passed unanimously. Chairperson Daryl Schliem welcomed new Council member Erik Garberg to the group. Action Item EDC Impact Fee Policy Implementation Discussion Points (Fontenot) Brit Fontenot introduced this subject providing a brief review of the discussions the Council has had on this item in past meetings. Deputy Mayor Jeff Krauss began the discussion regarding how property taxes contribute to the system and whether or not development has a positive impact on the community. If you use impact fees to collect money all up front and the developer goes elsewhere, you lose that positive contribution to the tax base. Jeff Krauss said he thinks the evidence is there that impact fees chase developers to other locations. He asked Council members to consider the long term contribution of commercial and industrial property taxes in the calculation of impact fees and the overall economic well being of the city. Since 1991, there has been a huge increase in the tax base. He feels there is plenty within the tax base to soak up what impact fees are paying for. Mr. Fontenot clarified that there is a larger discussion here. The intention is to elevate the conversation on the implementation side. Deputy Mayor Krauss would like to talk about economic development and how impact fees impair that. Mr. Fontenot spoke regarding synching impact fee strategy and economic development. Anders Lewendal said this conversation should be about whether impact fees damage or do not damage economic development and whether businesses choose to locate elsewhere because of impact fees. Answering Mr. Lewendal, Daryl Schliem said that yes, companies do look at the entrance costs and timing when deciding where to locate. They also look at other factors such as education, location, etc. He spoke regarding item #2 in the recommendations document, the deferral of impact fees and the importance of getting this into the dialogue. This Council should look into whether it would be possible to lower or remove impact fees for a cluster that we are after. There is no reason we cannot offer a 100% rebate. You can get a developer to put infrastructure in and then pay the developer back with TIF districts. All the residents take advantage of a new subdivision or developer coming in. Mr. Schliem feels it is a deterrent up front unless we have a good explanation of why we have higher impact fees. Mr. Schliem worries that manufacturers and developers will go outside the city limits to avoid impact fees. Deputy Mayor Krauss emphasized that impact fees cannot be used for maintenance. Impact fees are only for added capacity. Mr. Fontenot said if the policy is in place we need to characterize what value there is in impact fees. Mr. Lewendal asked, ‘Does it damage or influence growth or not?’ Stuart Leidner said businesses are going to look at the bottom line. Growth has occurred in the community regardless of the impact fees that have been in place a long time. We continue to see that growth. He understands the question, but it is easy to go to the anecdotal without having any real proof to back up why a business may choose to go somewhere else. He also spoke regarding the clusters and that technology clusters will want to be close to the University. Until the City changes a fundamental way they look at general funds from tax programs, impact fees are the only means of gathering money for capacity needs for the future. Deputy Mayor Krauss said we are not here to advise the Commission regarding how they pay for infrastructure. This Council is only here for economic development. He spoke to the building of 19th and 7th Avenues, not being paid for with impact fees. He said the tax base of School District 7 outside of the city has grown faster than the tax base of School District 7 inside the city. Cheryl Ridgley spoke to the discussion from the last meeting. The Council did not feel that they had enough information to support some of the recommendations such as whether a certain percentage of impact fees should be charged and if so, what that should be. Ms. Ridgley said that we have a system in place now and we really cannot go back. The question is, how can we go forward in a smart, productive way so that we have the information available to relay. The revised document really speaks to the changes the Council asked for during the last meeting. She feels item #2 was the most significant recommendation from our group. This new document narrowed the conversation down and focused on what we felt comfortable recommending. Ms. McKnight said she goes back to the bottom line: whatever fees you add to whatever project, the end user will have to pay for those costs. What are we trying to do to try to soften the results on the end user? There are not a lot of research parks, etc. Has growth been in the areas that we feel are critical to the community? Deputy Mayor Krauss provided an anecdotal about proposed dormitories just to the west of the campus. They came to the staff and were concerned about 3.2 million dollars of impact fees. Staff responded that the new way to calculate fees would actually cost $600,000 more. Before you apply any kind of application to reduce, there are many places within the city that should have a different impact fee because they are mixed use zones. They should see a break in the transportation costs. We should look at reasons why we are struggling with these high impact fees. He does not agree with recommendation #1 regarding educating why impact fees are a good thing. He also does not like the idea of combining retail and restaurant into just one category. This strategy does not make sense for larger retail. Cheryl Ridgley spoke regarding the intent of recommendation 1 saying there is no clear explanation at this time to explain how impact fees are to be calculated. The intent of education was to make the process less confusing. Anders Lewendal said he feels recommendation 1 is poorly worded and asked whether recommendations 2 and 5 provide preferential treatment. Mr. Lewendal feels 6 is not impact fee related, leaving just recommendation 4. Stuart Leidner said that recommendation 2 follows the plan recommendations directly and everything the Council has had in place all along. Daryl Schliem said the Council does not have anything in a document going to the Commission. While this document may not have the teeth some of us may want, this is part of a working document. He urged council members to come to the commission meeting and individually speak up at public comment. Mr. Schliem said this document was worded to be wide open and that we need a study to compare Bozeman to other cities and information on whether there are other finance alternatives. Mr. Fontenot said he had no intention or allusion that the Commission will adopt these discussion points. Monday night’s discussion is about the adoption of the study. The goal was to add this to the conversation of the implementation of the study. This document was intended to add to the discussion. Ms. McKnight spoke regarding a closure statement to this document that would talk about our concern regarding economic development. Ms. McKnight clarified that on item #3 the reference to employees was ‘city’ employees. This needs to be identified. On #4 she asked what regularly means. She would like to see more detail. She also wonders what deliberately means within the context of the document. Ms. McKnight feels that as a Council we do have concerns regarding the impact of those fees. Mr. Fontenot said the short amount of time he has had to prepare this document precluded going into the fine details within the document. Mr. Lewendal made a motion to adopt items 2, 4 and 5 in the EDC recommendation. The motion died for lack of a second. Cheryl Ridgely made a motion to combine items 1, and 3, reword item 1 to omit “short and long term investment advantages of charging when compared to other fee recovery solutions subject to ….. to educate potential investors, business owners and entrepreneurs on the impact fee program that is currently in existence.” Combine that with #3 and include #2, and based on Teresa’s suggestion earlier, define what regularly means and include #4 and add in a closure statement that we have concerns regarding the economic impact of fees. Erik Garberg seconded. Discussion on the motion. Mr. Leidner asked whether the closure statement could be amended to say we would like to have more research on what impact these fees have on development. We don’t know what these are. Several members said they do know that impact fees have a negative economic impact. Ms. McKnight said she does have concerns. Mr. Lewendal said there are impacts, we just don’t know how great they are – it is worth studying. Mr. Leidner said there are many factors that site selectors look at in economic development and attracting businesses here besides impact fees. He is interested in having a better understanding on what impact, impact fees have on incoming development. Concern connotes a negative impact. That may well be, but Mr. Leidner would like to understand it more thoroughly. Erik Garberg said he does have a direct concern. Vote on the motion to combine items 1, and 3, reword item 1 to omit “short and long term investment advantages of charging when compared to other fee recovery solutions..…. On the impact fee strategies”; and include #2 and define what regularly means and include #4 and add in a closure statement that we have concerns regarding the economic impact of fees. The motion passed with one No. E. Non-Action Items 1. Welcome Erik Garberg to the EDC (Schliem) Daryl Schliem introduced and welcomed Erik at the beginning of the meeting. Erik Garberg introduced himself saying he was born in Whitefish in 1975 and went to MSU from 94 – 99 where he met his wife. He is currently a civil engineer so deals on a daily basis with economic development issues. He served on the Whitefish City Council for 4 years and the Whitefish Planning and Zoning Board and is currently serving on the Bozeman Planning Board and Zoning Commission. He has two kids and is excited to work with the Council. Daryl Schliem asked whether the Council wanted to discuss the closing statement further. Several council members said they felt what was in the motion for the closing statement was enough. Mr. Fontenot said he would incorporate that language and the changes the Council would like made and email the final product to the Council members. FYI/Discussion Ms. Ridgely suggested that as the Council starts a new year she would recommend pulling out the work plan, for review and adjustment in 2013. Mr. Fontenot explained he has a lot going on and possibly it would be helpful for him to update the Council on the many projects on the horizon and get a sense of what resources we have to apply to those projects. Mr. Fontenot confirmed that the Council would like this added to the January agenda. Deputy Mayor Krauss said he has observed that various people have come to Council meetings and given pitches to the Council. Instead we should move back into the focus of bringing businesses here and promoting Bozeman as a business destination and become more pro-active and less an advisory board and more of a board that puts stuff out there for people to see. He would like to see us flip our focus a bit and work with various people and ask them what they want. We should ask the vice president of research and development Tom McCoy what he would like to see from us, or talk with Joe Shaw. What are potentials out there we can go after right now? Krauss also spoke regarding talking with Ms. Ridgely about bringing in hospital vendors who may want to go into the commercial section across from the hospital, etc. Mr. Fontenot said we have built many strong partnerships around the community. It is a very decentralized process and we try to work with the strengths of our partners. For example, we are setting up a network group with the photonics cluster that Joe Shaw is involved with. He is taking part in a lot of different projects, but may not be front and center in all of them because of the nature of the way we have been working to support and strengthen our partners that have the same goals. Ms. McKnight thanked Brit Fontenot because he has worked effortlessly and takes his position very seriously and has been very supportive of what they have done with the Innovation Campus. Ms. McKnight said Thom McCoy is one of her bosses and she and Brit have had multiple conversations in regards to what the Innovation Campus is doing and how the city can support it. Ms. McKnight said they would not have made the progress they have to date without the support of Brit and the talent he brings. From a Council side, we need to ask what we can do to help support him to alleviate some of the responsibilities he has taken on. Stuart Leidner and Daryl Schliem are also doing fantastic things. She is amazed at how much team effort is involved in this community. Adjournment Daryl Schliem adjourned the meeting at 11:58 a.m. * NOTE – Full audio of this EDC meeting is available at: http://weblink.bozeman.net/WebLink8/0/fol/46967/Row1.aspx _______________________ _____________ Daryl Schliem, Chairperson PREPARED BY: ____________________________________ Aimee Brunckhorst, Deputy City Clerk Approved on: February 7, 2013 Economic Development Council meetings are open to all members of the public. If you have a disability that requires assistance, please contact our ADA Coordinator James Goehrung, at 582-3232 (TDD 582-2301).