Loading...
03132008CouncilMinutes - Work Session CITY OF AMMON CITY COUNCIL WORK SESSION MINUTES THURSDAY, MARCH 13, 2008 AGENDA : CITY OF AMMON 2135 SOUTH AMMON ROAD CITY COUNCIL AGENDA – WORK SESSION THURSDAY, MARCH 13, 2008 - 4:00 P.M. Discussion Items: 1.Impact Fee Presentation from Tom Pippin, BBC Research, Denver CO 2.Traffic Level Presentation (Lance) 3. Misc. MINUTES The meeting was called to order by Mayor Ard at 4:20 p.m. in the City Building, 2135 South Ammon Road, Ammon, Idaho, with the following City Officials present: City Officials Present: Mayor Bruce Ard Councilmember Dana Kirkham Councilmember Lee Bean Councilmember Rex Thompson Councilmember Randy Waite Councilmember D. Ray Ellis Councilmember Brian Powell City Clerk Leslie Folsom City Engineer Lance Bates City Planning Director Ron Folsom City Officials Absent: None MINUTES DISCUSSION ITEMS : 1. Impact Fee Presentation from Tom Pippin, BBC Research, Denver CO: Leslie Folsom introduced Tom Pippin from Galena and Associates and Tim Smith. They do presentations with AIC on different impact fees. Tom Pippin, BBC Research from Denver, explained he is here with Tim Smith to give a PowerPoint presentation to Council. He talked about fiscal impact analysis and impact fees. He focused on answering the question, “Does growth pay its own way?” – for operations or for capital. He explained they do a lot of work in Idaho and they team with two ladies in Boise, Ann Wescott and Joanne Butler. He explained they won an impact fee study in Bonner’s Ferry. He has been at BBC for 19 years and has done this type of work all over the US. He has never seen a concentration of impact fee analysis like he has seen in Idaho the last couple of years. He believes this is in part because of Idaho’s growth and Idaho’s constitution limits. He explained the challenges facing Idaho cities. If you have a deficit, fiscal analysis can help you size the deficit. He explained it should not be the “end all, be all”. It is a model, but is an important piece of data. He talked about common questions you can answer with fiscal impact analysis. He explained the Fiscal Impact Model which is done in Excel with spreadsheets linked. At the end of the process, they train the City’s staff. The goal is for it to become part of your reports for annexations, rezoning, etc. It will show if a project might show a surplus or a deficit. It is figured with a multiplication table. He gave examples of the how the model was used in Meridian, Idaho. He explained the numbers are the best analysis. They do sensitivity analysis also. He showed a 9 box grid that showed the potential high and lows for a comprehensive plan. He talked about the myths and realities of growth finance. Most municipalities in Idaho get between 50 - 70% of their budget out of property tax. He explained how the Local Option Sales Tax can make a difference. He explained how commercial development cannot always be good for your budget. He talked about growth not paying its own way unless you are taking care of the capital. Negotiated exactions work and so do impact fees to get City Council Work Session Minutes 03/13/2008 -- 1 enough money for capital. He talked about mitigating the deficit with the help of developers. As a condition of annexation in the development agreement, you would direct your staff to talk to the builder/developer about trying to mitigate costs. He explained it can be giving you land, making a cash payment, maybe giving a site for a fire station, etc. He explained it has to be a voluntary annexation. Councilmember Bean inquired about mitigation. Tom explained it is up to policy makers and you have to weigh the pros and cons for the community when presented with a project. You may have to bear a deficit, if you feel it is good for the city overall. Councilmember Bean inquired if he had ever seen a city decline an annexation because it was in a deficit. Tom stated yes. Councilmember Bean inquired if he has seen a city decline one that has the growth, as you see in Bonneville County where if you decline it, they will just go ahead and build it anyway. Tom stated yes, but it depends on the relationship between the municipality and the county. It was discussed with the situation here, we have less negotiating power. Councilmember Bean inquired even if the County were to do that, he does not see how you can mitigate an operational deficit over a period of time. Tom stated it is done with an annexation fee. He explained impact fees are only for capital. It can only be spent on things that have a useful life of more than 10 years, such as land, building, dump trucks, fire trucks, etc. If you have an ongoing budget deficit, you can mitigate that with an exaction fee at annexation time. You would essentially take the 20 years of red ink; you present value it back to today. If each home pays $800 upon annexation, and take that and put it in our general fund and earn interest over time, that up front, one time cash payment that has the 20 year present value budget deficit built into it – that will allow us to break even over 20 years. Councilmember Powell inquired if the value of those homes will increase to offset the deficit. Tom stated that would be true if your level of service holds constant and your property value escalates. He tends to see that the level of service goes up in step with the property values. Councilmember Bean inquired if you have seen a city charge an annexation fee plus the negotiated impact fee. Tom stated yes. He explained that is the way to fully cover your budget. Tom talked about the second portion of the presentation, impact fees for capital analysis. He explained that impact fees are charged at the time of building permit – (you cannot charge earlier than building permit). There are 4 major categories of impact fees allowed by State law: 1) police and sheriff (not valid for Ammon right now), 2) fire impact fee, 3) parks and recreation, and 4) road and bridge. Councilmember Bean inquired how to figure impact fees. Tom explained he will give a real life example and it is based on a CIP, Capital Improvement Plan. He stated in Idaho, impact fees have to be based on CIP’s. He will explain this more as we go on. He explained impact fees are only paid by new development. In the case of redevelopment, an impact fee would only be due if density increases. He explained you have to define your level of service and then as you grow, you have to determine what you need to maintain that service. He explained you cannot charge impact fees to raise your level of service. You can negotiate a higher level of standard. Tom explained that exaction fees and impact fees can often co-exist. You might exact project improvements and an impact fee is for system-wide improvement. Typically the distinction is exaction fees are project specific improvements and impact fees are system improvements. If you exact something from someone, you cannot also charge an impact fee on it. Not all capital costs are associated with growth. Councilmember Bean inquired how you assign an impact fee to a specific development, is it a proportionate cost to that. Tom stated no, it is a price per home, a price per apartment, and a price per square foot. They typically do not build costs over 20 years. Councilmember Ellis inquired how you assign proportional benefit to 100 already existing structures. Tom explained it is only charged on a forward looking basis, whatever growth and development you have already built – you cannot go back and charge. It is a change in system from when you start it. Councilmember Ellis commented on upgrading a street to A. Tom explained you cannot upgrade a street to an A with impact fees. Impact fees will make sure you stay at F. If you want to go to A, you will have to bond for it, negotiate for it, or get a big ITD grant. Councilmember Powell inquired about impact fees applying to non-tangible assets. Tom explained water, waste water, and storm drainage are also allowable impact fee categories, but most of their clients choose not to have impact fees for those because it is assessed through an enterprise fund. It is usually done through a different process. He explained with impact fees you need to have an advisory committee with 5 people on it with 2 being part of the building community. You also have to have 2 Public Hearings to adopt impact fees, one at Planning and Zoning and one at Council. He explained Planning and Zoning can be your Impact Fee Committee, if you have two members that have some tie to the building community. When they write an ordinance for the City Attorney to review; they put a clause in there that is an “inflation clause” and typically use the E&R Index or Army Corp of Engineers to figure that. Councilmember Bean inquired about figuring the impact fees for different areas of the City. Tom explained they prefer to have one impact fee for the entirety of the city. The reason for preferring that is because it is administratively and technically easier. It is separate from the general fund. Councilmember Bean inquired about the Capital Improvement Plan and if it is calculated for 20 years. Tom stated it can be for no longer than 20 years with most clients choosing 10 years. He explained you could do 5, 10, 15 or 20 years. It was discussed you can revisit it every year. Tom stated according to Idaho law, your advisory committee has to meet once a year. You don’t have to change anything, but you have to brief the committee. At a City Council Work Session Minutes 03/13/2008 -- 2 minimum, you have to update every 5 years. He explained they leave the client with models and training, so you don’t have to hire them again in 5 years. He also talked about the impact fee study being recoverable by building in the cost for consulting. He explained their prices have gone down since then, they charge $5,000 – 6,000 per category. You can add the cost of that into the CIP’s. He explained they do not charge unless they have to come out here. Their goal is to leave you empowered. He explained the Fiscal Impact Study is not included in the Impact Fee Study cost, Fiscal Impact Fee would run about $6,000 – 8,000, which is a one time fee. Councilmember Powell inquired if you need to do an upgrade but you have not collected enough funds from the impact fee, can you borrow against future impact fees. Tom stated yes, you can either borrow it from the general fund (if you have enough property tax or sales tax) or if you need to borrow by issuing bonds, you can’t securitize or get bond insurance – you would have to pledge another form of revenue. You could certainly make your bond payments with the impact fees. Tom explained if you grow faster or slower it will not change the impact fees. You could change the fees every year, if you look at it every year. Tom stated you do not have to adjust every 5 years, most of their clients bump the fees by inflation once a year and then re-examine everything in 5 years. Tom talked about the difference in fees for residential versus commercial. Residential is a fixed cost because the size of the home doesn’t necessarily change the amount of impact. Commercial is a variable cost. Councilmember Bean inquired if you could charge a fixed rate up to a certain amount of square footage on residential property and then change it to variable based on square footage. Tom stated you could, but it depends on the risk tolerance of the Council. There is nothing in Idaho Code that says you can’t do that, but he would not recommend it. Councilmember Powell inquired if we are looking to have our own Police Department in 20 years, can we start charging impact fees for the capital improvement. Tom stated yes, but not in totality because the Police Department will serve existing residents plus growth. Most police fees are based on office space, jail space, weaponry, and emergency response vehicle. It tends to be the smallest amount because stuff doesn’t last 10 years. Councilmember Bean inquired about planning for an annex to the City Building. Tom stated yes to the extent, that the people going into the extension are Parks, Roads, Fire and Police. General government is not impact fee eligible. Councilmember Bean inquired to Councilmember Ellis how he feels about the potential of annexation fees here, but not in the County. Councilmember Ellis stated it comes down to the economics of it. He feels it depends on where you get the most for your buck. He talked about no national standard for the companies like this. He stated the builders would get on board, if they can see that growth is paying for growth and that is the extent of it. Councilmember Bean talked about the differences between growths in the City versus the County. He is concerned about the effect it will have on development for throwing in extra fees. Tom stated to not look at them paying “extra”, because part of that the builder is already paying through exactions. Councilmember Kirkham commented it will increase pressure on our staff because they will be managing the projects versus the developer managing the project. Tom stated if you collected the money you could add project managers and do the bids yourself. It could be a downside, if that is not the direction the City wants to go. Councilmember Ellis talked about the cost to our residents. Tom explained that according to State law, you must expend your impact fees within 8 years. Councilmember Kirkham commented if that comes to fruition, you have to give the money back. Tom stated in reality it does not happen, because it is not 8 years total – it is 8 years for every dollar. The dollars you collect in year 1 you have to spend in year 8, the dollars in year 2 have to be spent by year 9. He explained accounting for impact fees is very straightforward. Councilmember Bean inquired if you have an impact fee for Parks, can you go to a developer and ask them to donate land. Tom stated yes. He stated if you impose an impact fee, you can still get donations or exactions. He explained your CIP essentially is your shopping list for what you need. If a builder/developer donates it as part of a development agreement, their fee goes down dollar for dollar. He gave an example. He talked about how developers can market his impact fees prepaid if he had donated land, etc. for his share of impact fees. Councilmember Bean inquired if we could have the impact fee and still grow the level of service through exaction. Tom stated yes. Leslie Folsom inquired if we have a 5 acre park per development, could that be part of the impact fee. Tom stated typically he would say it would be separate. He talked about other cities requiring a pocket park, a top lot or a playground. The impact fee is for regional parks, recreational or aquatic centers. Paul Hepworth, 571 Aspen Drive – Rigby, stated he is a developer, banker and represents the Home Builders Association. He inquired how are the hook up fees, connection fees and building permit fees, so far exempt, factored into all of this. He is very much in support of this, but these other fees are so arbitrary from city to city. Mayor Ard explained our sewer fees should be $3600 because that is what we will have put into it per household. He talked about when the sewer systems were built and trying to improve them. Paul talked about development abilities in the County. He stated the level of service is not higher in our local municipalities and that is the problem we need to address. Councilmember Kirkham stated they have to address this with their area of City Council Work Session Minutes 03/13/2008 -- 3 impact with the County and asked them at this point in time, they have to meet our standard because we will be absorbing them at some point. Councilmember Powell commented if the growth continues in the County, you are going to see the same problems that Ammon is currently experiencing. Paul inquired about the legislation on the CIDs that is currently on the legislative floor and how it might change the face of impact fees. Tom Pippin addressed the questions. He stated in the Local Land Use Planning Act and related statutes, Idaho municipalities have the power to set those fees. The big standard there is if there is an increase of more than 5% a year, there has to be a Public Hearing. Idaho Code does not mandate a process like that for those fees. He talked about the CIDs and how neighboring states allow infrastructure of improvement districts. He thinks it is a good tool and thinks it helps with appropriate planning. He explained it still has to be managed. Communities have to allow the CID; developers could not create it on their own. He thinks the bill will eventually pass and be a good thing for Idaho. 2. Traffic Level Presentation (Lance): Lance Bates gave a presentation on PowerPoint. He explained what a level of service is. A level of service is a quality measure describing operational conditions. In order to get a quality measure, you look at different things within the system – existing conditions, speed, travel, gaps, etc. He explained safety is not one of those things. It is not in the level of service. He explained how you determine level of service which is based in the field calculations. They are rated A – F. He showed the level of service criteria. Councilmember Powell inquired about traffic being backed up due to stop lights, four way stops, etc. Lance stated you have to account for the street setting differently than intersections. It is all based on quantitative data. He explained what A – F means. Level C is more acceptable for intersections. Lance talked about arterials and aiming for Level C and for minor road or intersections with not a lot of action, then Level D is what we need to use to design. He talked about the ones we have now that are projected to go from C to D, he does not think that is a big deal. Maintaining the level of service is what the impact fees, from the previous discussion, does. Lance explained ITD in urban settings uses Class D for design. The City of Ammon does not have a level of service standard. Alot of Ammon’s are B and they would like to maintain that. Lance stated you have to take a critical look at what we have and decide what you want your level of service to be. Councilmember Bean inquired about Twin Falls. Lance stated they are going to do impact fees; they are in the process of establishing a committee. Councilmember Bean inquired if they have to do a traffic study, in order to establish levels of impact. Lance stated they had alot more data in Twin Falls and it was mainly for twelve main roads. It was discussed we would probably factor in our arterials. Lance talked about Brogan Creek and how impact fees would impact them. Councilmember Kirkham asked Lance to email a copy of his presentation to everyone. Lance stated he would. 3. Misc.: Councilmember Bean stated he asked Lance to have Keller & Assoc. come next Thursday to report where they are at and give us a timeline. Councilmember Ellis motioned to adjourn. Councilmember Waite seconded. Roll call vote: Councilmember Ellis – Yes, Councilmember Waite – Yes, Councilmember Kirkham – Yes, Councilmember Bean – Yes, Councilmember Thompson – Yes, and Councilmember Powell – Yes. The motion passed. The meeting adjourned at 6:30 p.m. ___________________________________________ C. Bruce Ard, Mayor ______________________________________ Leslie Folsom, City Clerk City Council Work Session Minutes 03/13/2008 -- 4