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01-20-2011 Capital Improvement Advisory Committee Minutes for the Meeting on Thursday, January 20, 2011 1:30 p.m. Utilities Center Conference Room 218 Committee Members Present: City Staff Present: Kirk Clifton, Chair Jorge Garcia, Utilities Director Jeffrey D. Mann, Vice-Chair Mike Johnson, Public Works Director Judd Singer, Committee Member Loretta Reyes, Engineering Services Administrator Maryln Zahler, Committee Member David Weir, Community Development Director Travis Brown, Fire Chief Committee Members Absent: Andrew Bencomo, Deputy Fire Chief Scott Witt, Committee Member Lori Romero, Utilities Office Asst. Senior Other Attendees: John Stott, Duncan Associates Consultant W. Ron Camunez, W.R. Camunez &Associates Meeting began at approximately 1:35 p.m. 1. Acceptance of the Minutes Regular Meeting of November 18, 2010. Clifton: Okay I am going to go ahead and call the meeting to order and we will just move item two to the back of the agenda so we can "knock" through the CIAC business. So I do call this meeting of the CIAC to order at 1:35 pm. Please note that we are still waiting for the consultant to arrive for the presentation and with that said, do I have a motion to approve the minutes? Zahler: So moved. Mann: Seconded. Clifton: Moved and seconded, all in favor? Zahler: Aye. Singer: Aye. Mann: Aye. Clifton: Okay, minutes are approved. Next Meeting Date. Clifton: Let us go ahead and assume that we are going to meet again and that would be February 17th at 1:30 pm. Zahler: I do not think I will be here. CIAC Minutes, 1/20/11 1 2. Committee General Discussion Impact Fee Capital Improvements Plan for Maior Roads, Drainage & Public Safety Clifton: Okay committee members do you have anything? Singer: I have nothing to add. Actually I will say this, I am in the process of finishing up the draft of last year's CIAC annual report so I will have a draft completed probably by next week and then I will send it out to the committee members for a review and then we will go ahead and present it at the next meeting. Clifton: Okay. Zahler: I will not be here February 17th; I will be in Phoenix, Arizona. Clifton: Okay so noted. Zahler: So hopefully you will still have a quorum. Clifton: Okay. Mann: Then I have one item. I have been successful on being on a team that is going to be doing the update for the Parks and Recreation Plan. We have teamed up with Conservation Techniques out of Portland for the Parks and Recreation Update. So with regards to matters on that plan, that plan will involve an impact fee update process as well. I will not be involved with that; I will be involved with the public participation part of that project but still I will be on that team. So I will most likely have to recues myself on matters related to that plan that are presented before this board. Clifton: Okay, I do not see that as a problem. Mann: Thank you. Clifton: Does staff have anything for us? Zahler: Did we accept the minutes yet? Clifton: Yes. Zahler: Okay. Johnson: Okay we are ready. Clifton: Are you ready? Would you like a five minute recess Mike to kind of settle in and get ready? Johnson: Yes that would be good. Clifton: Okay, let us take a five minute break to let staff and consultant get ready for the presentation. CIAC Minutes, 1/20/11 2 Committee took break. Meeting resumed at 1:37 p.m. Johnson: Okay, thank you for your patience while we were getting everything situated here. As most of you know we have embarked on a long process and there was a John joke the other day that he was a junior partner when this started and I was a senior partner that was told before the City Council. So anyways we need to do two items; we need to accomplish two things as outlined in our State Statutes and John will certainly go into this in much more detail. The Land Use Assumptions was the first document that we reviewed and approved. City Council has done that as well as the Capital Improvements Advisory Committee. This is the first draft and the first presentation on the Phase II project or report that will actually calculate the impact fees for our Transportation, Drainage and Public Safety fees and it also provides a listing of the proposed projects those fees will be used to construct. It also calculates the fees themselves and the process that was undertaken to come to that conclusion of what the fees should be. That is where John will certainly; when I read it I am still learning quite frankly so I will turn it over to John and let him present it to you. Our intention at this point is just to present it to you for information to receive feedback. We are going to present to the BIA, the Building Industry tomorrow morning and the realtors in the afternoon. We also have two different public impact meetings, public meetings scheduled just for the public, the general public over the next four to six weeks. Ultimately we would like to, this is a hopeful place to maybe come in March for approval of the CIAC of this document. At that time we would hope to have had extensive public participation and input and if we can not agree on everything, we could at least try to work towards some common ground in most areas. So at this point and we do need written, official written comments from the CIAC in the end according to, I believe the Impact Development Fee Impact Ordinance, the comments from the CIAC must be written, signed by the Chairperson to maintain what is required of our ordinance. So with that I will turn it over to John so he can present it to you and then we will be glad to answer any questions. Stott: Hello again, sorry to keep you all waiting, I was cutting it a little short but I am here. Let us get started, a little bit of an overview I would like to just kind of tell you where I am finally going with this presentation. I am going to talk about the legal framework and the background and then get into some of the details about the Capital Improvements Plan and them some of the proposed fees and then touch briefly on some implementation issues and I think those are going to come up a little bit more tomorrow I assume, tomorrow when we have our meetings with some of these other groups. Why impact fees? Why am I here? I like the sunshine, it is nice to come here but we have been doing this, working on this for a while and I think it is useful to remind you all why we are here. I am not here because I think, because I came through town on a wagon and said, oh you all need impact fees. I am here because we were asked to come here, there were problems. There are, the current system which is frontage improvements, you can not fund system priorities and you have to wait for a developer to sub-divide along some missing frontage improvement. There were scalloped roads sections around town especially in some of the developing areas. You have developers who would avoid sub-dividing frontage kind of play the game of not having to make any improvements because they do not have to sub- divide the frontage which is the requirement for making frontage improvements. The thought as well, we really need a level of playing field for the developers and we really need to be able to fund improvements that are not related to frontage. I mean, you have arroyo crossings in many of these areas and they are very expensive and they have to get built but if no one's willing to step up to the plate and build them, look at this picture, you get this situation, the road ends. There are houses over there, how do those people get to those. I think this has been rectified since the picture was taken. Johnson: No, that is still there, that is Roadrunner Parkway, north of US 70. CIAC Minutes, 1/20/11 3 Stott: You know you can wait and wait for this to get built. The City obviously does not have other funds and when they start reviewing, well how are we going to pay for some of these improvements, impact fees is one way, it is a tool, it is not your only solution, it is not going to be paying for everything and this impact fee that I calculated in this report after it went back and forth on some of the old fee calculations and came back with this. It is not designed to pay for everything; it is you know a pretty minimal fee. So let me tell you about the Development Fee Act, where we are at and I will get more of the fee stuff. Right now we are talking about the Capital Improvements Plan, the Development Fees Act said, you know, can not exceed ten years; this is a ten year plan, will get updated I believe every five years by law if it is implemented. You can only charge the proportionate share of costs necessitated by which you build to new development. You can recoup costs of excess capacity that might come up if you had put up a bond and bonded a bunch of like well water treatment plant. You put a bond and you have all this excess capacity, you can recoup some of that cost. That is not the case in any of the fees that we were doing here and then you must provide credits for developer contributions and I will get into that a little bit and tell you about the fee. What is the Impact Fee Capital Improvements Plan? Well this is the study that kind of develops what the fee is going to be. It includes a list of improvements, how much they are going to cost in current dollars or the current estimated cost over the next ten years, calculate the growth share of costs, identify sources of funding that have been used, so that you do not double, you do not get the double payment issue, you get a demand equivalency table for various land uses and then you calculate the impact fees by the land use. The methodology we use is we are basing the fees on what is called the current level of service, the current service standard with a caveat for the road fee and the drainage fee. The existing level of service for Public Safety is 1.82 billion square feet, equivalent building per square feet per equivalent dwelling unit. I say equivalent square feet because the fee just does not include buildings, this includes land that the buildings are on and that is what is allowed on the New Mexico Development Fee Act and capital equipment that is more than $10,000 and has a life of ten years. Okay, so obviously if you are going to have a service standard, you have to kind of factor that in, so I call it building equivalent square feet, anyway in the slide. You take the number of square feet buildings and divide it by the replacement cost of all this stuff and you get the equivalency of square feet and we can talk about that and I can answer your questions about that and when I get to the section on the slide on Public Safety. For roads, VMC is Vehicle Miles Capacity that is how much capacity your road has. VMT is Vehicle Miles Traveled that is how much travel is occurring on your road. You currently have an actual VMT of 1.63, VMC to VMT the ratio is 1.63 so you have more capacity than actual demand. You have a little excess capacity but in a road you want that because you are really designing your road for the peak hour, your peak travel so you need that excess capacity. The fee unlike the prior literation of this fee definition, we are not targeting new development to replace the existing, to maintain that existing level of service of 1.63. This fee is only going to charge a one to one; how much demand is associated with the land use is how much they pay. They are not going to pay any more than that equivalent demand. That is what the 1.0 assumption is. So the fee is based on a lower level of service than the existing service. These fees we want to, yes? Singer: In your document, you list the level of service currently for our roads in Las Cruces as a "D„ CIAC Minutes, 1/20/11 4 Stott: "D" is the assumption we used in the study so we are actually even using that lower right because "C" is an ideal, "D" is. Singer: Below obviously. Stott: Right. Singer: I guess the question I am asking is the level of service at a "D" the actual service level of our roads or is that what we are using for the fee calculation? Stott: That is what I am using for the fee calculation. Johnson: That would be a pretty good assessment; I would tell you if you took a combination of what we have now you could get certain segments in different places and they would probably be better but you are going to have certain segments that are not. Singer: Yes I guess what I am just trying to determine is that when we do a level of service determination, are we measured against a national average, the road quality, the capacity, etc. Stott: Those "C's", "D's" those are all a national average. Singer: I realize they are but I mean when we determine what our local level of service is, is that how it is calculated? Johnson: Yes. Singer: Okay. Clifton: You do not think that is a bit excessive? I mean an "F" is failing. Singer: Failing, yes. Clifton: I mean "D" is not far from "F". Johnson: Well I mean I guess we can discuss. Stott: "D" is a more conservative assumption for the impact fee but I am just going to say we are not even using the actual level of service so it almost becomes irrelevant because we are using one and so it is lower than the level of service. It would be more relevant if we had done what we did before which is perfectly legal and that is to charge basing on level of service but we are not, we are basing it on this one to one ratio which is lower than the existing level of service which leads me to believe that you actually have a level of service higher than a "D". You know if that was below one, things would be really bad. Then we want to prevent double charging so we look at how you funded roads in the past, what sort of debt maybe has been issued for Major Roads, for Public Safety too and Drainage and then state funding, federal funding and kind of calculate credits for those sorts of things. Another element of that is this idea of credits to developers who do build facilities after the ordinance is in place. Some developers still may opt to make improvements, road improvements or they may be required to if they are not located near necessary facilities; that may just be a requirement of their subdivision approval; that does happen in other cities. Then you need a provision to provide credits to those developers who do opt to build facilities or who are required to build facilities. CIAC Minutes, 1/20/11 5 So for major roads, again we talked about this at the last meeting, the growth area and the exempt area. The central "infill' area is not included in the fee calculation; none of the roads in that area, none of the interior roads in that area are included in our measurement of level of service, none of the traffic in that area, it is just sort of, it is excluded. There will be fees collected, what year mark will only be spent in the growth area, no impact fee improvements would be done in the "infill' exempt area. Let me just also give you an example of something that would come up. Someone would say, well that is not fair, someone who lives there is going to go shop at a new Wal-Mart in the growth area, should they be paying. Well when we do a determination of the impact fee by land use, it is just the number of trips, is the one way trips. So the house in that area that is going to a store, the Wal-Mart, so that trip gets assessed but it is really only getting assessed for the fee that you know in some extract way only occurs on a arterial road outside of the "infill' area. So if that question comes up I can get into that a little later. I probably should not be bringing up some of these confusing things because I might just confuse people but they are questions that come up. Arterial roads only, I think the last fee is collected too and so this is a pair down, we are only talking about arterial roads. Arroyo crossing costs are excluded and the last one they were part of you know over all road projects, also included the costs of the arroyos associated with that and then the drainage fee in that last study was a whole separate, a more traditional drainage fee that would have included buying land for retention ponds and infrastructure for dealing with drainage. In this case, the drainage fee is the arroyo crossing so we will talk about that in a second. Right-of-way costs are excluded and that might have still been the case in the last fee, the right-of-way costs were excluded. The last fee, where you all on the committee when this last time, when the last one came up couple of years ago? Singer: Yes. Stott: So for roads, the level of service "D", the cost is, the cost that we use in the study were from the City and they are about a cost per lane mile. The average cost per lane mile is $599,000. So in the table in the report, you can see all the different road projects, some are a little cheaper; some are more expensive. The average cost would be $599,000. Clifton: For what type of facility? Stott: That is for the roads; arterial roads. Clifton: Minor or major or principal? Stott: They are both. Clifton: Collector? Stott: Not collectors. Clifton: Just arterials. Stott: The calculation of fees excludes collectors, so the list of road, end road projects is only arterial road projects. Singer: So when we do that calculation, arterial has specific definition being curbs and bike lanes, etc. right? CIAC Minutes, 1/20/11 6 Stott: Yes, it is based on kind of the plans. So if you look, some of them are real inexpensive because there is already a road, you know, part of half of a road there. Some of them are expensive, it think that Porter Road is one of the more expensive ones, where as you have a road like Engler Road which is a $197,000 per lane mile. So we are taking into account the whole group of roads that are planned and coming up with this sort of average cost per lane mile. Johnson: It includes the asphalt, medians, bike trails, street lights and sidewalks. Singer: It is an all inclusive and you are saying roughly what, $600,000 per mile? Stott: Yes. Clifton: Okay, is that for all four lanes or literally per lanes? Johnson: Per lane. Clifton: So per lane times, so actually it is times four. Johnson: So you are looking at a mile of a major arterial to be built to full section would be about two million dollars. Clifton: You guys going to find another contractor. Singer: So that is more like $400 a foot, isn't it? That is close to $400 a foot. Johnson: We actually scaled that number back. Stott: I would say in my experience doing these, that is a pretty modest but you know in some places the price per lane mile varies a lot and even within the scope of the projects that are here, as I say, the price per lane mile varies. There are some roads that are cheap and some roads that are not quite as cheap. Singer: These are obviously at government services rates then, right? Stott: It is what the City pays, yes. Singer: Yes, okay. Stott: For drainage, we developed this also fee for the growth area as well. It is limited to the arroyo crossings on the major arterial roads. It may be adopted as part of the major road impact fee or as a separate fee or as a stand along fee. This fee calculation utilizes (inaudible) of roads that you may have. The arroyos associated with, all the arroyos associated with all the roads, the public land roads and all the volume of capacity on all those roads, calculated cost per capacity and it excludes the cost of land which I do not know that is such a, I do not know. For that one, the cost per capacity for the arroyos is $32 per Vehicle Miles Capacity. For Public Safety, the single city-wide fee for Fire/EMS is the least that equipment that is eligible for being included in the impact fee municipal code. It includes the cost of buildings, land and vehicles and then again equipment with the life of ten years or more. For Public Safety, the service unit which is the demand, how the demand is measured is functional population which is equivalent CIAC Minutes, 1/20/11 7 to what would be considered a full time equivalent of people in land use. That is used very commonly and it is probably the best measure for determining how many people are at a land use and the nexus that is the connection between the demand for service and the people at a land use is very high for Public Safety because most public safety calls are related to people in some sort of situation, whether they are on fire or in an accident or having a heart attack. The fee based is on a cost to maintain existing level of service after the credits for debt, etc.; so this one is based on a cost to maintain the existing level of service. This is the proposed fee schedule; did you release the updated schedule? Johnson: Yes. Stott: I am just going to talk about the idea of proportionality here. This fee, all these fees, when we say, oh the total fee for single family is 2,000, 1 think when we came back from the old model of the fee was like $6,000 and we said we need to go lower, so we paired it back, we stripped out a lot of things from the major roads. We stripped down storm water fee, the drainage fee and things from arroyo crossings and we got there. The fee schedule is based on the proportion of each land use and so it varies in land use where each one is higher, where houses most but those kinds of land uses do not have many people on them typically and they do not generate a lot of traffic, so that is the determinating factor of those proportional ities. That is just a little overview of the comparison; I threw in the Parks, Water and Sewer, even though we are not updating them just to show you the total. This is the potential fee; the New Mexico average fee in red; the national average excluding California because you would just have a hard time calculating what fees would be like in California. Singer: Yes, is Florida included in that? Stott: Of course, you would include Public Safety here. So nationally excluding California, all the fees that we are doing right here are lower, all the proposed fees are lower than the New Mexico average approach to Public Safety and even the existing fees. So even the proposed fees are lower than those existing New Mexico averages; they are lower than the national averages and you know you can see the total. Clifton: When you compare New Mexico, what are you talking about, Albuquerque, Bernalillo County? Stott: Now we are talking about cities that have fees, so every city has fees. I would have to go look at and I do not have our survey with me. Clifton: Development Impact Fees or just. Johnson: Santa Fe, Albuquerque. Stott: Yes, Santa Fe, Albuquerque. Johnson: Rio Rancho. Stott: Rio Rancho. Singer: I think Clovis has it. Stott: Yes there is one more. CIAC Minutes, 1/20/11 8 Singer: Ruidoso. Stott: Ruidoso, great. So yes the cities with fees. Now we our firm does a survey every year, we update it every year so that is the source of this. It was not done for you all; it is just something we do as part of our professional duty when we have a conference every year for this kind of stuff, so we always update our survey. The final one when we start talking about some of these policy things, one of them is variable single family fees. In some places the differences are a lot higher. We do have a methodology for figuring out what variance and demand you have in smaller homes versus larger homes and in some places it is much more significant than here. So I am not sure from a policy perspective, if it is worth pursuing but it is a smaller break for you know those smaller homes which is presumably the idea is, is that it is a small break for housing affordability with smaller homes being the more affordable homes. I think like in a place like Las Cruces where we have a lot of retirees, the larger homes are not as different as smaller homes because there are probably a lot of larger homes that have two people in the household that are retired that can afford it. Singer: Like $230 difference between them. Stott: Yes it is not large, like I said; sometimes you know I see a spread here. Singer: Is that an arbitrary thing that has been done or is that based on some sort of. Stott: It is based on, we use a methodology. Singer: Okay there is a methodology agreement. Stott: Census data will tell us for Las Cruces the average household size by square feet, you know how many people are leaving in there so that we can kind of figure it out. Singer: No, I guess what the question is, is the amount of money that is differentiated between say about the 2,800 square foot house and say the less than 1,500 square foot house. Is that an arbitrary number, in other words could we be suggesting that that number be a larger spread, the difference? Stott: No. Singer: No, so there is a difference. Stott: No, the idea has to be proportional, so our methodology to measure demand, this is reflected in here. Singer: Okay. Stott: So it is proportional to demand. Singer: So the demand is based on the number of homes that are built in those sizes, is that what it is? Stott: Demand is based on the data that we have available that tells us how many people live in houses less than 1,500 square feet versus 2,500 square feet. CIAC Minutes, 1/20/11 9 Singer: Oh okay. Stott: Okay. Singer: Okay, I see. Stott: Then we have the other one that might be a little sticky and we are going to have to go through this when we are drafting the ordinance, is the Developer Credit options. It is kind of two areas that you have to look at; when you have not had fees before you have to deal with pre-ordinance credits. Developers who made improvements to arterials and those improvements are done and the development is you know processed, for those it is very typical that you have the fee reduced in the development for which these improvements were made. I give some examples in the report about how that would be calculated, so if you have questions about that I would refer you to look at some of those sections. In general, I would discourage, it is a policy decision but ultimately a fairness issue, and discouraging developments that have already been built out and closed out and are not there any more from giving that developer credit. They have already taken the idea of how much they had to; they knew how much they had to spend on improving a road to get to their sub-division. If they are a decent business first then they would have figured that out in the Performa analysis of that development and the developments closed out and they you know already accounted for hopefully if they are a good business person they already accounted for the expense thing already made. This would be more equitable for developments that have not been built out; they still maybe have 50 lots available and a credit would need to be made available to them based on what improvements that have made. Typically the Pre-Ordinance Credit Provisions will say, you have a year, as a developer you have a year to come in and work with staff on calculating your credits and allocating those credits, so that is just something to consider. Post-Ordinance Credits, there are two main types and then there are probably a lot of different shades of gray between how the different cities do it. The first would be kind of what I call credits run with the land. This means that the fee is reduced in developments for which improvements were made and the reduction of fee does not go, there is no reimbursement beyond what would be owed. So if a developer would make a million dollar improvement and they are only to generate $500,000 in impact fees for the development, they get only $500,000 reimbursement. There are benefits to that; it is easier to track, you do not have to deal with the negotiations but there is also a fairness issue. So other cities have gone with negotiated reimbursements with the developer where that access credit, the $500,000 that is not owed on their development will get reimbursed from the impact fees that are paid by other developments. You can see that being the case if the developer built a sub-division ten miles out, had to build a road ten miles long and then there is obviously going to be development that comes in later, that fills in and those people are going to be generating money; then that developer is getting reimbursed from the impact fee account. One problem that we run into there is cash flow and the ability to fund things. If a city does not put a "cap" on reimbursements it can wipe out all the money in the impact fee. Some cities have adopted a 25% "cap" as an example, so that in any given year they are only going to reimburse developers up to 25% of the impact fee revenue that they got; those credits. Then the next year developers will get some more but it just will not happen in one lump sum; it is going to happen over time. Again, I think it is a very important provision to consider because you can cause problems in your ability to plan and spend impact fees on other things and you might not maybe be generating enough revenue to reimburse in one year, so that has to be negotiated in this year. In all cases, credits should really; any credit really assumes a full cost fee so if the fee is CIAC Minutes, 1/20/11 10 adopted at half, they would still get credit for the full thing even though the fee does not really represent the full fee, you know if it was adopted at 50%. So that is a couple of things to think about and I can open it up to questions on my presentation or on the report. Clifton: Real quick, back on the negotiated reimbursements, have you thought that process through?Are we talking going to City Council to negotiate, staff level negotiations? Johnson: I would say that it is probably going to be more at the policy level; it will have to be established. I think there were some good examples in the report. We talked about perhaps only including non-completed phases of developments that perhaps a roadway was built that is on our ICIP for all three phases and the developer is only through Phase I at this point so potentially Phases II and III may get credits. Ultimately I see having to write a policy document, having that approved by Council and then ultimately the developer or whomever is requesting that credit would have to go to Council at that point in the transition period. Now credits themselves once we get into the policy that the developer were want to come in and build the roadways, we may not be able to do that. At this point we could give credits to the developer if there were to do certain roadways that we have. I would ask if John could really touch up on, the platted lots and how State Statues; I guess I can do it too. When you are enacting an impact fee, the State Statue allows protection from an increase from an impact fee for platted lots for a period of four years. However when you are implementing a fee that does not exist, there is no protection for any lots, so I think that is important. Then one other thing that I would like to mention to you that we do not really have a slide on but we spent a lot of time talking about the fee and the components and things about the fee. I think it is also important to look at what we are proposing to do with the fee or the revenue that is generated, what we plan to build. So I would tell you the roads are on page 27 that if you wanted to determine that, the drainage, the arroyo crossings you wanted to build, they are on page 33, and the public safety facilities that are being proposed are on page 43. So it is important to note that we are not just throwing, I think we get lost in the discussion, you are just enacting something but what are you going to do with it, with the revenue that ultimately gets generated. Singer: I have a question regarding that in the Public Safety list, I know that there has been some discussion previously regarding the fire station or some facility up at either the airport or the West Mesa Industrial Plant area and I noticed that that is not in the projected capital improvements on page. Stott: Oh well it is beyond a certain number of years. Brown: Mr. Chairman, Mr. Singer, I think if you look at the first project, Fire Station #7, Fire and Police Training, that is the station at the Airport. Singer: Oh okay that is where that would be. Brown: That is what that one is referred to. Singer: Okay, thank you. Johnson: Now I also put out, it is for discussion purposes also, the projects that you see in the report, they are not prioritized and I can tell you what I would like to do and you can try and go down it. I was asked today, what would be the first arroyo crossing you would build if you had an impact fee for drainage and I said it would be Sandhill Crossing on Roadrunner Parkway. You know Fire Department has indicated that we could considerably cut down on emergency CIAC Minutes, 1/20/11 11 response time in that area; we could significantly reduce traffic off of other areas. So that would be the first thing I would do, the Drainage Impact Fees if I had to develop them. Singer: That determination will be done at the staff level for the most part, right? Johnson: Well ultimately I would see that occurring as part of; I mean if the fees were to be impacted I would see that as a subsequent step that would be at CIAC. Here are our groups of projects; here is our potential revenue at that point, what projects would you like to see at that point? You know we would have some discussions and prioritization with you as well with the City Council as part of our Capital Improvements process. Singer: What is your projected assuming that things progress on a timeline that you are projecting right now which would be sometime in March, what would be your projected implementation date? Johnson: Ideally? Singer: Yes might as well. Johnson: Well we stated this in 2006 Singer: Yes, ideally what would you think? Johnson: I mean I would ultimately, I think ultimately the implementation date itself would be subject to when the Council would recommend. I would like to be done potentially in front of Council for approvals no later than June of this year, I would say. Singer: So mid-summer. Johnson: Well that is kind of a goal; now when they would want to implement that, I am not really, like I could say this budget year, I could say mid-year. Singer: But your budget year is also June-July right? I mean it is not calendar year. Johnson: We are not too far down the road. We are going to start getting the criticism that our Land Use Assumptions are no longer current and we end up in the vicious cycle, where we really never get anywhere. We are trying to get off that wheel right now. Clifton: Have you considered kind of like how we handled Park Fees a few years ago, a graduated fee. You know go 18 to 24 months at "x" amount and then after that time, it goes to the actual amount, just to kind of. Johnson: Well I think that is possible and certainly in our earlier drafts we did have an implementation fee, you really will not see one here, there is a discussion I think inside the report. What we run into is how do we balance that against potential requests for credits? If you are only implementing the fee and the percentage, the revenue generated from that fee may not be enough to offset what the developers may be requesting. So I think ultimately we are trying to go to implementing all three of the fees at the fullest amount that we can from day one. Now potentially the Council could say, this is what we were just talking about, let us not do the fees until December 2011, you know at least we have six months and let us implement them at that CIAC Minutes, 1/20/11 12 point or something to that affect, which could potentially at least give a "buffer" to the outcome. I called it a mini incentive. Clifton: And not to complicate the collection of these fees because I think it is going to be extremely cumbersome for Dave's department and you guys and Finance. I mean I remember the Park Fee debauch of the High Range of years past and I think that was on going for many, many years and I do not know if we ever got a handle on those fees but at any rate, you know one of the biggest issues I have with these impact fees is that me as a citizen that will probably live and die here, buys three more new houses. I keep hammering on this but to me it is an issue. So I keep paying the same impact fee as I move even though I am the only impact. Now have you considered maybe a set up like the Water Impact Fee where it is financed and say I move out of my house in Sonoma Ranch in three years. I finance that fee so I am paying it off over whatever the term may be. The next guy comes in and buys a house that is already built, that had been there, he now has to pay that impact fee and I move on about my business. Johnson: It has been discussed. I think you potentially as a buyer you can finance the impact fee, I think there is a reference in either the Municipal Code or State Statues. There has also been discussion, when we pay the fee; I do not think we have determined that at this point, that you can pay at building permit. I know there was a proposal at one point to something similar to what you were talking about to finance it over a period of time on your utility bill. Clifton: Well one thing I am sure. Johnson: Or something to that affect. Clifton: Yes, one thing that you heard from our former head of the BIA and I actually disagreed with him at the time was trying to set it up when you collected it at a closing. I mean that would be absolutely catastrophic in the private industry for the citizen. Johnson: That kind of puts a bind on somebody right there when you close. Clifton: That would be, I hope that that is not even under consideration. Singer: Every marginal builder that gets themselves in trouble before closing, all that it is going to do is make it even worse for them which are going to involve your homebuyers; they have the money in the beginning. Johnson: I think we if had our (inaudible) I think we would probably issue it at building permit. Singer: That is when it is collected now and you know I know there are alternatives. I have even pushed for you know collection at the time of CO's and see this as sort of a delayed gratification, if you will but the more I think about it and in the current economic climate, if the economic had not changed, had we implemented a system where it was collected at the end of the process, I think the City would be seeing uncollectable impact fees. You would have houses that were under construction that did not get completed, never even applied for CO's that were being foreclosed on, impact fees and then the bank would figure out a way to not to be able to pay those impact fees. So my suggestion is that we retain it the same way and take it at the time of building permit. Regardless, I understand the hurt from the builder's perspective, he starts paying interest on that right away. Again, going back to what Kirk said, if there is a way to work out a financing system for the fee, I think it is a smart approach for two reasons. I think what Kirk says is very legitimate. As a builder I can tell you that it is not uncommon for builders CIAC Minutes, 1/20/11 13 to build a house, move into it, keep it for two years and then move into another one, which when you think about it from a builder's perspective, whatever they thought they might be saving by doing that kind of a thing, you know all they are going to be doing is dropping out $5,000 impact fees every time they do their new house and they will just keep paying one impact, one customer, just continuously paying that fee. So there may be some thought that you guys or suggestions that you guys can give to that. Stott: You know on that point I think it is easy to say, oh well that is the case but you have to realize that we are talking about demand in the aggregate. So yes you build a new house. I keep building new houses; I am adding a new house to the stock of housing. I am adding space somewhere along the line. One space is being added it is not like I am moving out of a house and abandoning it. Now if I built a house and tore down the house, then I am not adding any capacity to the overall aggregate number of houses and the aggregate demand on the system. So I think that is the distinction, it is easy to start getting caught up, oh my gosh I am not adding, I am not adding any demand because I am moving from this house to this house. I have always been a resident here but you are by moving to a new house; aggregate demand is going up. Clifton: Well I do not disagree with that statement but your demand is not going up, you are basically paying for the other peoples impact that are moving into the old house. I mean that one person is paying for others; it is an issue of equity. Johnson: You are assuming the burden yourself for three other. Singer: It is an issue of the burden being spread. Johnson: You know just one other thing I wanted to touch on. You had mentioned the Parks Impact Fees but I think the intent would be obviously as we get a handle through our Land Use Assumptions on the revenue that would be generated in each of these fees. The City would look at "bonding" and moving forward, building the projects, so we are not "bumping" up against that seven year requirement for refunds and there is no plan to just collect and put it in the bank and try to "drizzle" the sum at that time to go build a project. I do not think that the development community would let us do that, quite frankly. Singer: You would end up hearing, well you did that once. Johnson: Well there is going to be an expectation when the fees are implemented we are going to build some infrastructure that is going to benefit development, right? Singer: I would say there probably is not going to be that expectation only because circumstances sort of suggested that they probably want to see that. Clifton: You know the single family fees are actually much lower than we had actually discussed probably back in 2006 and all the on going discussions that we have had but the climate in the private sector and the economy and the banking industry has changed dramatically and I hope you guys understand what is really going on out there and not only the difficulties that the builders face but what the consumers are facing right now and what I worry about is, you go in, a builder takes in a set of plans into a bank, they do an appraisal, a paper appraisal and you know all of these fees are relevantly low, we are going to start thinking about if and when residential fire sprinkler systems are required, building permit costs, just the costs just to get the permit. What is that going to do when working with a lending institution, Judd maybe you could answer that because you have pulled loans recently? CIAC Minutes, 1/20/11 14 Singer: The only thing I could say is that the new reality that we deal with is that whatever you want to buy that you want to finance, you need more money now. So the higher the cost of whatever it is you are going to buy, the more money you need down and that is probably the single biggest change, is that the down payment amount has dramatically increased for most people where that requirement in order to get a loan; that is where we are seeing probably the biggest problem. Clifton: That is really going to affect affordable home ownership. I am not talking about affordable housing but about affordable home ownership for first time homebuyers, growing families, etc. I think I still contend this is the worst possible economic time to even be considering impact fees but that is neither here nor there because apparently they are going to get approved one way or the other. The other concern that I think the City needs to take extremely seriously and I can lay out commercial clients right now that this will impact dramatically, are your commercial impact fees. I mean if I read that right that is per every thousand square feet. Stott: That is correct. Clifton: Okay, so that is a project "killer', I mean you are looking, you guys need to ask yourselves, you know, okay is $400,000 in impact fees for a 160 or 170,000 square foot commercial retail structure or 200 room hotel. You know is that worth the risk of these people walking out of Las Cruces, New Mexico. You know quite frankly there are some people in the community and probably some people in the Council that would say well go we like it the way it is here but the reality is we need those tax dollars. They stimulate your economy; our economy. I mean, I really think this needs to be looked at. Stott: Can I just kind of comment on this because I have worked on this a lot in a lot of places and I have yet to find any evidence that any one would walk away from a project. They look at so many factors and the demand is you know important and it might be if you had some inter- jurisdictional competitive issues. You know you say half Las Cruces and half something and they are identical, they are split in the middle and one has a fee and one does not have a fee. They might go oh we will go over there; you might see that but the determination and I was trained as an economist, so I know what real estate people are looking for; they are looking for location and it is let us try for this location, location, location. Everywhere I have worked, they have not turned away an Applebee's and Applebee's has not walked away as an example. I have never heard of that happening. The threat is sometimes there but just as a matter of fact, I just worked with Smearnall in Tennessee and they have an impact fee and they just got a Nissan plant. Did Nissan say, no we are not going to Smearnall because you have impact fees even though their neighbors did not have impact fees? They went there, so I do not really, I never really seen evidence that suggests that development walks away. Will marginal development, someone who is doing a speck "strip" mall, oh that Performa might not work out but as an economist I would say, well their Performa is going to work when they really should be building that thing and not now when they maybe should not be. You know so in the end it will work out. Johnson: On other thing Kirk too just to kind of follow up here. I know you have heard me make this argument before but I will argue that the roads and storm water fees are in the market now. They are in the market because the developers built in that road or that arroyo crossing already or participated in that or at least costed that back into that property. So it is there when they buy the property or they lease the property; that fee would be there. CIAC Minutes, 1/20/11 15 Mann: Out of their own pocket you mean as opposed to. Johnson: Well what I am saying is, we are simply assuming the building of that arterial that arroyo crossing from the private sector, now we are the responsible party. The advantage to the City is we can do a when we need it, where we need it and how we need it as opposed to the checker boards that we get through developing groups right now. Stott: Right this gets back to this issue of I think the only people who are getting away with not doing anything are the people who are not subdividing, every one else is paying. I think we had an analysis of that in other presentations we have done especially with that old fee and it turned out that you know they are paying more now but not everyone has to pay. So the idea was well we need to make this equitable, it goes back to why am I here? I am here because there were problems and there are still problems. They are not as acute right now because there is not so much development but you know that road is a good example but it is still not there it is obviously still a problem. Johnson: I agree with you Kirk, I think perhaps some of you more local could be impacted by the impact fee but I would also argue with that that is already probably out there in the market. I know that I think I was telling, maybe it was Judd about it, we have talked to Wal-Mart, we have been trying to get Wal-Mart to come to Las Cruces. They have property, everyone knows that. We have had conference calls, not recently but the last two to three year period and I remember telling Wal-Mart on the phone, if you come in now you can avoid 70 or $80,000 impact fees and the guy chuckled. He was kind of like, that is all. You know that is the kind of the type of response I got back. Clifton: But conversely, I mean the start up businesses. Johnson: No I know. Clifton: Philosophically, I have a huge problem when the government inhibits the ability of an American entrepreneur to try to succeed in life and I would just hope that as you progress you know go through this process and the Council will at least recognize that you know we do need to consider that. I mean you could be taking some guy who does want to start a business and essentially "killing" it and whether it is in the Performa or not, you know the bottom line is at the end of the day what is really going to happen when this occurs with commercial impact fees. Johnson: I would hope that the private component would have a lower lease rate or lower sale price based on the fact that they did not have build that infrastructure that was required for that business. Stott: I would also remind you that there is in this proposed impact fee a huge area of city that has no fee at all and if for a company like that you know maybe they would find something there to start with or rent an existing space. You know there is sensitivity and I think that the City has addressed it some what; I know a whole area that is exempt. Clifton: Yes but then you start getting issues with zoning and subdivisions and the legal nonconformity issues and you are hung up in an entirely different process then and all of a sudden time is a killer, because time is money unfortunately. Johnson: Now there is a good point. CIAC Minutes, 1/20/11 16 Singer: I have a question regarding the institutional fees. What I mean I would see the City of Las Cruces, I would call that institutional. So they are going to pay $1,145 per thousand square foot but are the Public Schools? Wouldn't that be institutional? Stott: Yes that would be institutional. Singer: Aren't they exempt? Johnson: I think they are exempt by State Statutes; I am not sure. Singer: Yes I think they are. Mann: They are exempt. Johnson: They are not? Mann: They are; I am pretty sure they are. Johnson: Yes I am pretty sure they are. So technically I think if you read State Statute, they do not even have to come to the City to build. Singer: So when we talk about institutional construction, who are we really targeting then, just the City? Mann: Churches, hospitals. Johnson: Hospitals. Singer: Oh okay that would be considered not commercial. Stott: Nursing homes. Singer: Okay that is not commercial. Stott: Right. Mann: Of course, church is being exempt too, though. Clifton: Yes church is like a non-profit. Singer: Yes I am just curious about the definition because I think that is going to be a question. My thought is that gees the only person that is going to pay that fee is the City of Las Cruces, why would we want to have every City building that class. Stott: It would be defined in the ordinance. Singer: There will be a definition then? Stott: Yes, all of those will have a definition. CIAC Minutes, 1/20/11 17 Singer: Okay. Brown: Mr. Chairman, Mr. Singer, just as far as the building code, fire code is concerned institutional occupancies are generally hospitals, nursing homes, those types of facilities that are providing some type of care and so forth and so looking at the rest of the list, I would kind of come to the conclusion that that is probably what is being discussed there is really that type of care occupancy. Singer: Okay, yes I just wanted to make sure I understood what institutional really encompassed. Clifton: Are you guys, just kind of the legality of it are you convinced that you stand on solid footing with the irrational nexus? Stott: Yes. Clifton: And then when you go down the road and you are collecting and applying the impact fees Mike, are you guys absolutely sure that that would not be challenged? I mean you basically could justify it. Johnson: I think we stand on solid ground to be able to. Stott: Our firm has done hundreds of these and we have never had one successful challenge, ever. So I think that that is pretty good confidence in saying that we should not be worrying about that here. This is pretty conventional stuff. Clifton: Okay and then you talk about a handful on instances where development has not, like the Sandfork or the. Singer: Sandhill. Clifton: The Sandhill Arroyo and other cases, Sonoma Ranch that we are familiar with that did not get improved because of you know, non-development activities or other activities but could not that also be attributed to failure of the design standards; not necessarily non-collection of an impact fee? Johnson: Yes when you tell me a failure of the design standards, I guess we could modify it, you know where I am going to go with this. Clifton: Yes. Johnson: We could modify the design standards and just require full build out with Planning and Development. That is probably not leading into the most fair method because you are putting a burden on somebody who wants to develop at that time. You talk about putting a tremendous amount of cost on a particular development. I mean we could always require full build out back to the nearest paved road but that is going to get into. Clifton: I just do not want this, I guess my point was, I do not want this picture painted that oh it is this horrendous problem and it is City-wide. I mean I bet you could go back through to 1980 and count on both hands how many instances where that occurred. Del Rey is an obvious factor. CIAC Minutes, 1/20/11 18 i 3 Johnson: Del Rey and quite frankly, I lived through Sonoma Ranch, we could not go North or South. The City was booming we had tremendous growth and a large number of residents were calling me on the phone and asking me what the City's problem was. I can not get out of here; you know you have a temporary traffic signal, you know Golf Club Road and Roadrunner because everything was funneled west. Clifton: I think every Monday you were getting questions too. Johnson: Oh yes, I had a, I can get pretty excited about it if you get me talking about living through that period because we were getting "chewed" out, staff, Public Works, on a regular basis as to why that road infrastructure, that drainage infrastructure, those arroyo crossings were not in place to get there. If you look at the list, you will actually see a proposed Sonoma Ranch from Lohman to Dripping Springs as one of the proposed projects. So that is probably not the top project because one of our goals would be to finish areas that you know the Del Rey, the Roadrunner. We went back and forth on Elks; we did not include Elks on here. The Department of Transportation, the NMDOT is in the process about 12 to 18 months out of the Engler crossing of 1-25 so we are actually coming with a NMSD project trying to connect Elks at this point. Clifton: So where do you get the money when you run short on one of your needs. Is the City going to if you walk out on a development, I just did a little math here, around a 200 lot subdivision averaging the middle; you are looking at collecting about $320,000. Johnson: Well I think ultimately when you look at when you read the report and I think it said it was over a million dollars on an annual basis for the next ten years. We go to the bond market and we say, what can we get for that kind of repayment plan, that lump sum and then we target it towards a specific project. We have had dialogue with developers and users through our Capital Improvement Process to go build these roads. Clifton: So we will see activity instead of, well we do not have enough money; we have not collected enough in impact fees to do that roadway. Johnson: I think you would see activity; now is there enough there, I think that may be another discussion, I do not know at this point. Yes I think that would depend how growth goes. Clifton: And then conversely, you guys are going to get pressure from quite frankly other developers, you know build my magic road to the golf course; I want those development impact fees and conversely I would hope you would look at that and say there is no rational nexus to put that money into that infrastructure that you know you got 30 trips per day on. Johnson: There is a lot of competing interest, boy I will tell you that with the discussions we have had. Mann: That comes down to the list of projects and priorities. Johnson: Yes I think we have to prioritize any projects. We, ultimately I just can not pick it up and say I am going to build a project, me, myself ultimately Council will. Clifton: Based on traffic studies. CIAC Minutes, 1/20/11 19 Johnson: You are going to have to look at why. You will see Mesa Grande built in there between the start of Hwy 70 and going into Lohman. Where is this City really going to go next, right? That is the next step as we slowly move forward depending on how growth goes. Singer: Earlier when we were talking about the Development Fee Credits, we talked out negotiated reimbursement versus and I missed that, what is the alternative? Stott: That would be impact fees runs of the land; I call it impact fees runs of the land so if you have a 200 unit development you only get credits for the 200 units here. Singer: So you are phrased for that version. Stott: I call it, impact fees runs with the land. I do not know legal counsel would go with that. It is not called that, I guess what it is in practice. Singer: But that is essentially a predetermined reimbursement versus a negotiated. Stott: Yes based on development size; no more than the development is. Singer: Thank you. Johnson: Additional comments? Mann: There was a slide there that talked about not getting reimbursed for putting in some infrastructure that is oversized for growth. Now is there a mechanism right now if a developer puts in a pipe for example that is sized for everybody upstream from him but it is larger than he needs to put in, is there a process for reimbursing or getting a credit for that? Johnson: I believe there is and I would say that has been done quite frequently in our Utilities Department. Garcia: Mr. Chairman, Mr. Mann, yes we have a line extension policy where we decide how much the capacities the developments will use and any extra capacities can be credited, either the Utilities pays the developer and collects back from the next property owner or we make arrangements so that we collect from the next property owner and give it to the developer that we currently have and that mechanism is always out there. Stott: That would be like that other option, the not the credit runs with demand but negotiated where we are allowing excess credits. Singer: Well I think you guys have done a lot of work. I thought it was a pretty clear document. I did not really have a bunch of questions based on what I read here. However I know that when we start to present this to the development community, building community, they will all start to come up with questions because they will all have their own agendas and so forth. So I would just like to thank you for the work you guys have done on this, I think it has been good work. Johnson: Mr. Chairman, we will report back here to you at the February meeting comments we have received and status at that point. So I would encourage you also to if you have any comments or further questions, please feel free to bring them forward. CIAC Minutes, 1/20/11 20 Clifton: And if you guys, the committee, plans on going to any of these public meetings, you may just want to just let Mike know so that way we can avoid a quorum and the whole notification thing. Yes I guess three or more. Zahler: Can you give us those dates again, Mike? Johnson: Dates for? Zahler: The public hearing or you do not have them. Johnson: We, I think we said February 8tH. We tentatively scheduled some of them but at this point we need to finalize them. There are meetings tomorrow with the building industry. Mann: Just a note that the consolidated plan is having forum meetings on the 8tH Stn and 10tH of February. Johnson: Okay, so we do not want to conflict with that. Mann: No, if you feel that is a conflict. Johnson: We purposely scheduled to avoid one or more. Mann: I just had a question, there was a mention that we had to have formal written comments, when, at what point is that. Singer: And are the written comments, questions or are they comments? Johnson: Ultimately I would see that as part of your final approval process. Clifton: Could the minutes, the discussion. Johnson: What you could basically say is the following would be written comments, maybe A, B, C, D; we approve the document based on these written comments. Clifton: Okay I would think that the minutes would suffice. I mean that is a written document. Johnson: We could certainly check with our legal staff. I mean you do not have to write a position paper. Mann: But that would be meeting after we actually act on this at a later date. Johnson: Yes. Stott: Prior to that meeting. Johnson: Yes. Zahler: Mike, I would like to ask a question since I still do not understand a lot of things. What is the life span of a road considering the heat, the cold and traffic? CIAO Minutes, 1/20/11 21 Johnson: Well if we built a road and left it alone, it is going to fall apart after 20 years, I would say. We have a preventative maintenance program in the City right now; we have a dedicated gross receipts tax that is dedicated to maintain existing City streets. Clifton: Typically that is ten years, didn't you guys use to factor a ten year cycle? Johnson: We have different treatments between seven and ten; we are looking at crack seal, fog seal. Ten to fifteen you want to micro surface and then each time you do one of those treatments, you extend the life that much longer, so your curb keeps moving down the road, sort of speak. Zahler: Who checks the roads? Johnson: We do, in fact, we have been over the last five or six years, I think we have increased the maintenance money that is specifically targeted to maintaining the roads, asphalt, overlays from 400,000 to I believe it is 2.5 million this year and it is going to go over 3 million next year and we are still short of what we need to keep up. In fact, we recently, if City Council approves it, we recently brought forward the approval or the implementation of pavement maintenance software. We are working with a company to inventory all of our roads, get them in the system, evaluate them and determine the treatments needed and ultimately we are going to determine what our financial need is to get there. Ideally we want to be putting the fog seal and the crack seal down as opposed to milling two inches of roadway and putting down two inches of asphalt. You want to avoid that, that is expensive, that is 11 to 12 dollars a square. Zahler: Well you sure have been doing a lot on Spruce and on Solano. Johnson: Well we have been focusing a lot of our money on our major roads, where we have a major amount of traffic. Zahler: Okay, thank you. Clifton: Anything else? Johnson: That is all we have. Clifton: Chief? Brown: Mr. Chairman, just if I could and I recognize that the roads and drainage are where a lot of the concentration is and I just want to remind the committee that we as public safety, police and fire, we do not have access on a road to any other sources so we are concerned, is this money going to sit on the shelf? I will give you my personal promise that if and when this is implemented, we are going to try to move very quickly because we are behind as I have shared with you before; it has been over 12 years since we have opened a fire station in this community. So even if these fees came into affect tomorrow, by the time we go through architectural, engineering and design and construction, we are two to three years away from our next fire station and that is going to put us almost 15 years for a community that has increased by 25 to 30 thousand people before adding a fire station. So we are very eager to have some type of revenue stream that we can bond against so we can start some of these projects, get them going as quickly as possible. So again I just want to emphasize that I know it is very easy to get caught up on the roads, that is where the problems have historically been but at the same CIAC Minutes, 1/20/11 22 time some of the reasons we do not have those problems at Public Safety is because there has not been anything to allow us to grow and expand, so with that I appreciate your time. Clifton: I think if it was just a Public Safety Impact Fee Chief, there would be no discussion; we would probably already be approved. Brown: And I appreciate that Mr. Chairman, however we need roads and arroyo crossings also to get there so it really is one large system and we need that infrastructure as well in order to serve the community to the best of our abilities. Singer: So I will since you are bringing up the Public Safety, I will ask a question about the calculation to calculate the apportioned share or the appropriate share of new development costs because that seemed like a vey complicated kind of a calculation. Stott: It is, you know, I think that going back to what I had initially said on that, the easiest way to understand that is that it is trying to represent full time equivalency, full time, FTE's, people at a land use over the course of a week in a 24 hour day. The residential side is pretty easy because you have an average household size and then you can make the, you know, how many hours a day typically people can spend. So you kind of, that block of time comes out so the family, the house, the residential side is pretty easy. Now when you start looking at the non- residential side you have to look at visitors, people coming in and out of shop and employees and then those are part of that equation, employees and people coming in and out of shop. Singer: I guess what I am getting at, my interest in that number or that calculation relates to my past experience with Park Impact Fees where we got them an impact fee and Parks Department was very happy with it but seven years later, geez it was great but it never bought me anything. I would like to make sure that if we are at the point where we are implementing impact fees for Public Safety, that that calculation of the fee is sufficient to make it work correctly to actually bond the projects. Stott: You know none of these fees are going to get you everything; they are not, they are not high enough. Yes I think look at the Capital Facilities Plan with the fee that is calculated for Public Safety, projected impact fee revenue of 7.7 million over the ten years but you know that 33.2 million dollars worth of projects on that list, so not everything can be funded with impact fees. As far as comparing Parks to Public Safety, for example, I do not know, I am not offhanded with your Park Impact Fee but I do know it is not charged to non-residential because there is not a nexus between residential and non-residential. Singer: Yes I definitely understand that; what just concerns me is that there was probably a great deal of emphasis when it came to Park Fees spent on the actual fee itself and making of sure this group was happy and that group was happy and everyone was happy about the fee and ultimately everyone is happy about the fee except the buy having to do something with the r fee. I just want to ensure if we are spending the time and making the effort and we are doing it we are not going to be able to revisit that fee again for a period of time, I just want to make sure it makes sense. Mann: Aren't you kind of asking that based on this fee, based on our Land Use Assumptions and using that fee, Public Safety and then I guess to answer that question; you would almost want to say, okay based on all those factors, what is your bonding capacity and what would it get you, I mean, could we get a representation of what this would result in getting you as far as money to actually build. k CIAC Minutes, 1/20/11 23 Johnson: Another point too is you have to revisit any impact fee every five years. Singer: Well that is why I say it is going to be a period of time before we revisit that number and you know we will want to have Chief Brown five years down really appreciated that fee but we did not get much because it was not sufficient to you to generate the revenue that we need. That is what happened in Parks, you know, people still paid the fee but we did not get the results because we negotiated that fee down so low that we got no results. I just want to make sure that this particular case especially with regards to Public Safety, that that is not the ultimate case. Stott: We did negotiate this fee down; I think is pretty close to what it was the last time we came around Singer: Okay. Brown: Mr. Chairman, committee members, I would just add my I guess non-technical understanding I think part of what is driving the fee the way I understand it is that we can not, it happens based on the current level of service, if I am getting that correctly. So the fact that we have not built a station for 12 years and the fact that based on independent evaluations by Insurance Services Office and so forth, we are a station or two behind and some ways that perhaps is keeping that fee lower because our level of service when you look at our number of full time employees and so forth is really lower than where we believe it should be and compared sometimes to a national average. So I think that is one thing. Secondly, if I recall this little bit over seven million dollars in ten years was only for based on the residential part of the fee and that was not based on any of the commercial, I was thinking. Johnson: No. Brown: Was that everything overall? Okay, so you know, seven to eight million dollars over a ten year period that very likely can get us a couple of fire stations, a perhaps a fire station and East Mesa Command Station for the police department. So there is money there as was said, it is not going to get us everything on the list and we recognize that we are still going to have to look at other funding sources and other avenues to try to get maybe caught back up but seven to eight million dollars over that period will again build us a couple of fire stations, will build us the fire station and we believe an East Mesa Command Station that is in discussions with Chief Williams. You know for us that would really be our priority once this get implemented, that would be the project we would be coming back I think saying, we believe this is where the impact fees really should be going because that is where the majority of grow is. You mentioned fire stations at the airport, Station #7 that is within the growth area but that need is really based more on economic development and business and their insurance rating and things and so forth. It is not so much driven by growth as what we call Station 8 which would be in the Sonoma Ranch area, Lohman area so it is going to help considerably because otherwise we have nothing. We sure can not do it with nothing; this will definitely get you something maybe not as much as ultimately the community or we would like to see but I think it is going to start us down that road to getting caught up to where we should be. Singer: Okay, thank you. CIAC Minutes, 1/20/11 24 Clifton: One last question I have Mike, okay I am a developer I come in with a 200 lot subdivision on the East Mesa and I want to know where are you going to spend my impact fees? Are you guys going to have an answer or just, we would like to put them over here? Johnson: I think you would go to your ICIP five year plan and say what are the projects. Ideally we are already going to maybe build the road you are going to need. You came in on Mesa Grande and you know ideally you are going to come to me and I want to build just south of Onate High School and we will need to give consideration as to what we need to do that. Ultimately if it does not meet your timeline, you have the ability to build the necessary improvement and receive credit for them. Singer: Right. Clifton: But the money. Johnson: Is it always going to match up? No probably not but ideally we can be a little better judge of where we actually need the full roads and things of that nature as opposed to requiring pro-rata shares and checker board as we go down the road with development. Clifton: Well at the end of the day the fee has to be spent on something caused by an impact of that development. Johnson: Well yes but just because the development is on Roadrunner Parkway does not mean the or just because the development is on Sonoma Ranch does not mean that the development impact fee for the road can not be spent on Mesa Grande. I know we had that argument, because ultimately they may use Mesa Grande to get to that business on Sonoma Ranch. Clifton: Anything else by the committee? Zahler: No. 3. Next Meeting Date. Discussed earlier in the meeting. 4. Public Participation Clifton: Members of the public, Ron? Camunez: I have no comment; I am just here to listen for a change. Clifton: Okay, thank you. Okay, is there anything else from staff? Johnson: No. 5. Adjournment Clifton: While you were out we went ahead and set up the next meeting date for February 17th and took care of other business. Do I have a motion to adjourn? Zahler: So moved. Clifton: Second? CIAC Minutes, 1/20/11 25 Singer: I will second. Clifton: Moved and seconded, we are adjourned. The meeting adjourned at approximately 2:52 pm. Kirk Clifton Date CIAC Chair CIAC Minutes, 1/20/11 26