Loading...
03-17-2011 Capital Improvement Advisory Committee Minutes for the Meeting on Thursday, March 17, 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 Robert Kyle, Community Development Bldg. Official Travis Brown, Fire Chief Other Attendees: Andrew Bencomo, Deputy Fire Chief Clancy Mullen, Duncan Associates Lori Romero, Utilities Office Asst. Senior John Stott, Duncan Associates Eddie Binns, Binns Construction W. Ron Camunez, W.R. Camunez &Assoc. Scott Witt Meeting began at approximately 1:39 p.m. 1. Acceptance of the Agenda Clifton: I call this meeting to order, I apologize for my tardiness. Let us go ahead and do the minutes, if we may, any comments? Singer: No comments. Zahler: Wait a second, acceptance of the agenda. Clifton: Yes that is on there. Zahler: Yes. Singer: I make a motion to accept the agenda. Zahler: I second. 2. Acceptance of the Minutes Regular Meeting of February 17, 2011. Singer: Or I mean the minutes. Clifton: That is fine. Mann: Second. Clifton: All in favor. CIAC Minutes, 3/17/11 1 Zahler: Aye. Mann: Aye. Clifton: Aye. Singer: Aye. Clifton: Accepted minutes for February 17th approved. Before we go on to "New Business", this is not an action item so I am assuming that we are probably okay. I would like to recognize Mr. Scott Witt for his service to the City of Las Cruces, the citizens, the building community and the Capital Improvements Advisory Committee. I believe staff has something for Mr. Witt. Would you like to come give a ten minute speech? Here you go and congratulations. Witt: A lot of stuff yes thank you very much. Zahler: Well you got to show us. Singer: Yes. Zahler: I want to see. Clifton: Scott has been a very educated and reasonable voice of this committee for a number of years and I know myself and Judd have worked with him a long time and our fairly new members. Johnson: You have to show us what it is. Zahler: Is it a rat trap? Witt: You guys save everything, it is like recycling, Scott Witt, Vice-Chair, oh and this is when I first started, back when I knew nothing. Do you think I can show this to my wife and be important maybe in our (inaudible)? Singer: Not a chance of that. Witt: This is an envelope. Johnson: Letter from the Mayor. Witt: Oh this is from the Mayor? Should I read it? Zahler: Sure. Singer: You have been hired. Zahler: It is your paycheck. Singer: Yes it is your paycheck. Clifton: Your City paycheck. CIAC Minutes, 3/17/11 2 Zahler: Zero, zero, zero. Singer: It is your back pay. Clifton: But with PERA, your take home is zero. Witt: That is what it comes down to. Clifton: Yes. Singer: It is going to push you into a higher tax bracket. Witt: Yes very nice. Zahler: Read it. Witt: Dear Scott, it has recently come to my attention that you are resigning your appointment to the Capital Improvements Advisory Committee, you (inaudible) while I certainly regret to see you leave (inaudible) please accept my sincere thanks for serving on this Board for the past four years. I very much appreciate your time and expertise in making Las Cruces CIAC so successful. Once again thanks for your generous donation of time and knowledge, thanks for your service, signed the Mayor, very nice. Singer: Nice. Mann: Nice. Witt: There is a big box here of something, I wonder what it is. Zahler: Wow. Witt: It is heavy though. Singer: Dartboard, cool. Zahler: What is it? Clifton: It is a Nambe. Witt: Is it a (inaudible) cover? Singer: With your name engraved on it. Witt: (Inaudible) from the plant? Zahler: Oh look at that. Witt: Nice, very nice. Zahler: Oh boy. CIAC Minutes, 3/17/11 3 Witt: Oh yes, it says Scott on it, it is very nice, in appreciation 2007 March to 2011 March, Capital Improvements Advisory, very nice. Zahler: Oh that is what you can look forward to after four years. Clifton: Unless you get "kicked" off. Witt: Yes you know that Lori called and I thought I had unfinished business or something I had to sign or something. Mann: One last vote. Witt: Anyways as I said in my letter, thanks to you all, it has been number one, the privilege to serve with the members, we have been entirely professional during the whole course of my service here. It has been certainly great working with Dr. Garcia and Mike and the staff and everybody who were very, very patient with me, the first three years while I still could not figure things out; finally got it right the last year I guess. So thanks again so much for your appreciation and I promise not to be back. Clifton: I thought he was going to stick around for the meeting. Zahler: I thought he was too, boy. Clifton: He put a lot of time into it. 3. New Business a. 2010 CIAC Annual Report Clifton: Okay, let us go on to New Business and could I get a motion to suspend the rules so that we can discuss items A thru E collectively, is that okay with staff? Zahler: Say that again. Clifton: We need to suspend the rules so we can discuss the advertised items A thru E. Johnson: Mr. Chairman, Item E is the Annual Report. Clifton: Oh let us strike A. Johnson: You don't want to do A first? Clifton: Yes do A, do we have any? Singer: You want to do A? Clifton: Yes. Singer: Okay want to make a motion to accept, I will make a motion to accept the CIAC 2010 Annual Report. CIAC Minutes, 3/17/11 4 Mann: Seconded. Zahler: So moved. Clifton: Motion seconded; all in favor? Zahler: Aye. Mann: Aye. Singer: Aye. Clifton: Aye. Singer: No discussion? Clifton: No discussion. b. Recommendation of Approval for Maior Road, Drainage and Public Safety Impact Fee Capital Improvement Plan Clifton: Now can I get a motion to suspend the rules on items B thru E. Zahler: So moved. Singer: I will second. Clifton: Okay moved and seconded; all in favor? Zahler: Aye. Clifton: Alright when we come back to the vote we will unsuspend the rules and go back to the itemized voting and just real quick Mike, I think personally I have heard this (inaudible), do you have anything new to add or just a brief presentation? Johnson: We have a brief presentation Mr. Chairman; at the end we kind of address some of the specifics. Clifton: Okay. Johnson: What is our recommendation, when the payment is made, what is our recommendation regarding pre-ordinance credits, post ordinance credits, things of that nature. So I would like to provide the presentation to you and then as we indicated B thru E and then go through and have a vote on each of those items and move forward. We have had remember the Realtors group, the Homebuilders, we had a public hearing, we are having this meeting, we plan to have another public hearing after this but we can also get into that after we are done. We do have John Stott and Clancy Mullen from Duncan and Associates here so we can be brief, some of it you have seen before but I think at the end you will be a little bit more on the specific side what the final recommendations are. CIAC Minutes, 3/17/11 5 Clifton: Do you have the ordinance that we had discussed at the end of the last meeting, the draft ordinance that you were going to prepare for us? Johnson: No, that would be the next steps that we would do. The CIAC's recommendation at this point is to recommend and we read it in the positive, approval of the CIP, Capital Improvements Plan Phase II document and then vote on each of the individual fees, the three fees that we are considering. Those votes go forward; the final draft is then for the ordinance is then prepared for Council consideration at that point. Clifton: Okay. Johnson: So with that I would like to introduce Mr. John Stott and Clancy Mullen also will be presenting. Stott: Yes and my "stuff' is the (inaudible) right? Singer: Do not take it personally John. Stott: Oh no that is fine you are going to make it easy for me I think because I am not I will not run on on all of this "stuff' because we have presented it a couple of times now and when I am done I am going to turn it over to my colleague Clancy Mullen who is working with staff and on the policy, more on the policy and the ordinance issue so well I will turn it over to him to talk more about those things. You know so we have talked about why we are doing this, we have been through this a number of times in all of these and the Impact Fee Act and where we are and this process with what the act says we have to do and some of the other provisions in the Act and stop me if I am just going to go through this, just kind of lightly go through this "stuff', stop me if you want me to talk about any of these in any more detail. We did present this to you guys last month or two months ago now and then here we are talking about the ICIFP which is the document in front of you today for approval. The methodology we use is a methodology that is common for all these fees in the United States and in New Mexico, so we are not doing anything fancy and new here; it is pretty straight forward for Impact Fees. The Roads are only going to be in the "growth area", we talked about that several times now. Drainage is just going to be arroyo crossings and then Public Safety is for Fire, EMS and Police. This is the fee schedule we are talking about for approval today for all three fees. Johnson: Mr. Chairman real quick, we are recommending to you the flat rate option for the single family homes. Stott: Right, I think that might be on another slide. Johnson: Okay you are going to see that on another slide but I just wanted to point that out at this time, we have not had a lot of discussion about that. Stott: And I think the reason for that is when we did the model for these variable rates just the difference between the lowest variable rate and the highest is not that great for the City. Singer: It is like a $100 wasn't it? Stott: Yes it is not that high; sometimes we see much higher differences in some areas between the number of people living in smaller houses than the number of people living in larger houses which is one of the main determinates of demand, just the factor that drives the fee schedule. CIAC Minutes, 3/17/11 6 Comparison to the prior proposal as you all know is the second time this has come before you and it is about half of what it was last time. We came back, went through a process of eliminating certain things from the fees and taking a slightly different approach for arroyo crossings, reducing the overall fees that are proposed. Comparatively this question came up; well what communities are in these comparative fees, for all of them the proposed fees are lower that what the average fees are that we found in New Mexico and nationally. The survey includes City of Santa Fe, Santa Fe County, Ruidoso, Albuquerque, Rio Rancho, Las Cruces, Bernalillo County and Los Lunas. Someone had said, oh what about Farmington and Roswell, I think it was at the Builders meeting but when I searched on-line, I could not find anything, anything in Muni-Code any schedules for Farmington or Roswell, I could not find anything on their website. There was a reference to consideration of a Park Fee but if anyone can find a schedule, we could incorporate that but I can not even find anything on that and their websites were not very useable. This is a new slide I put in after some discussion last time just kind of show you what sort of revenue we are talking about. Now be mindful of the fact that the ICIP and the IFICIP is kind of a wish list of all the, you know the kind of the things that could be funded. So you are not going to fund everything and we are coming in with reduced fees and you are not going to have as high revenue as you would have under some of the other proposed fees schedule. So you know you are not going to fund everything with the Impact Fee and the CIP over ten years but it is a down payment , I think you should consider that. Those sorts of revenues are going to free up some general fund for other projects, your flood control, street maintenance funds for other priorities, you are in a diversified CIP revenue sources and in some of my other roles in my work we look at how are cities funding projects and it is getting harder and harder and diversity of funding sources I think is one of main things you can do to make it a little easier to find funds and provide matching funds whether you are trying to get some federal, state project funding, grants or even leveraging by getting some funding for bonds. So now I am going to have Clancy, he is going to talk about the policy recommendations and talk about some of the things in the ordinance. Mullen: Thanks John, good to be back, it has been a little while since I have been to Las Cruces. We have been doing this project for so many years that, how many years did we figure? Is it three? Stott: Five. Mullen: Oh is it, no, it has been five? Stott: Four, five. Johnson: Almost six. Mullen: Wow, okay it has been a long time. So we developed some policy recommendations in consultation with you guys, obviously with the Building Industry Association, with the Association of Realtors, there was a public hearing that was held that you are aware, staff had some input into it. We looked at best practices and came up with these recommendations about how to proceed with basically implementing these potential fees. One issue, kind of big issue is, well how are we going to handle credits and credits are a big part of this particularly for the Road Fee. If you are going to have a Road Fee essentially what that is going to do is to a large extent replace, not replace developer actions but supplement developer actions. I mean developers are still going to probably make improvements but under this system, developers CIAC Minutes, 3/17/11 7 that make improvements are going to be on a more level playing field than developers who do not make improvements because everyone is paying a fee. If you have frontage on a road that needs improvement or not, you are still paying a fee at least if you are in the growth area not in the "infill" area. So really there are two kinds of credits, there are credits that we call pre- ordinance credits and post ordinance credits. So pre-ordinance credits are credits for improvements that were made before you had a Road Impact Fee. So essentially this applies to projects that are in the development process, they have been started, an improvement has been made and they have not built out the project yet. If the project is already built out there is not an issue of these pre-ordinance credits. So what you have to do is go back and look at the value of the improvements and here we are looking just arterial streets because we rationed down the Road Impact Fee, we excluded collectors, we are not looking at right-of-way dedications, so we are just looking at basically frontage improvements to arterial streets that were made on behalf of the development project; that improvement had to be listed and adopted CIP or plan, transportation plan. The fees will then be reduced in the development for which the improvements were made. So what we will do is compare the amount of the improvement, the value of the improvement that was made to the impact fees that would be generated, would have been generated by the project. If the fees are more than would have been generated by the project, if the value of the improvement is more or equal to what the fees would have been then the fees would, no fees will be collected in that subdivision. If it is less, then the fees will be some percentage of what would be charged otherwise. Singer: Clancy how did we arrive at the one year figure? Mullen: That is just a recommendation; the idea here is that you want to basically find out at some point what your obligation is in terms of credits; get that you know so developers will have a year after the ordinance, pretty typical provision. You got a year to come in and negotiate an agreement with the City on what the value of that improvement was and what the credit should be. It is not written in stone, it does not have to be a year but there should probably be some kind of time limit, so you will not have somebody coming in ten years later and saying, oh yes built this, I checked twenty years ago. Singer: Well you mentioned ten years and just because you mentioned it I will pick that as the number but I noticed if I wanted to buy a piece of equipment for Fire Public Safety the equipment has to last ten years, the number you just picked for it to qualify for Capital Improvement Funds or CIAC or Infrastructure or Impact Fee Funds. I guess you know when I think about roads and I think about arroyo crossings, I think those are the kind of structures that do not last only a year. Mullen: Sure. Singer: Obviously more than ten years but so I guess my question is, why would we not look at a ten year window? Johnson: Mr. Chairman I do not know if this is exempt but maybe that is the window to apply for the credit it is not saying it has to be built within the one year period, I mean of action of fees. Singer: Oh I see. Johnson: It is not putting a timeline on anything. CIAC Minutes, 3/17/11 8 Singer: I am glad you clarified that because some of the infrastructure that has been built is built may take more than just a year to build the infrastructure. Mullen: Yes well you know some ordinances do have time limits on how long the credits last. We have not proposed to put in any time limit on that. Johnson: This is just to say within a year you have to tell us what you want potentially. We can remove that obligation from the picture at that point. Singer: Okay. Mann: Mr. Chair, yes so assuming a plat built an arterial piece of road five years ago but has not built out there is not a time limit on them you know coming in and saying we have some credit coming because it has been even though it has been five years we are not built out yet. Johnson: Only time that ends up in City Council. Mullen: Right the only time limit we are talking about with credits is the time that one year to come in and get an agreement. Mann: Okay and we are not making any recommendation on that today. Mullen: Or application. Singer: And that is the one year from the time this fee ordinance is adopted. Mullen: That the ordinance is adopted. Singer: Okay, thank you. Mullen: So you need to apply within a year, then there is probably going to be some time required to negotiate the agreement and then the City Council would ultimately have to approve the agreement. So that is the process for those pre-ordinance credits. Then you have the post ordinance credits, going forward if a developer wants to build an improvement or the City wants to have a developer build an improvement to support a project, the credit would only be for projects that are included in the Impact Fee Capital Improvements Plan and we got a pretty extensive list of improvements there. Developers would need to enter into an agreement with the City on the cost of the improvements prior to construction, so there is going to be a, okay this is what it is going to cost, we are going to be in the business of looking at receipts and trying to you know it is going to be okay this is a reasonable estimate of what the costs are, the City needs to agree to that. The fees would then as with the pre-ordinance credits be reduced within the subdivision proportionally or I mean there are a number of ways you could do it. You could have you know, first come, first served; you could have everybody you know until the credit is used up. Probably easier to administer would be just to say, well in this subdivision the fees are 50% of what they would otherwise be. There may be situations where you have excess credits, in other words the value of the construction was more than the impact fees would be for the subdivision. Now you notice in pre-ordinance credits, we were not talking about any excess reimbursement, you know it is a little late to negotiate that for those projects and the assumption is going to have to be the developer tried to at least to the extent he could to recover that cost through the sale of lots or whatever. In the going forward what we are going to do if the value of the improvement exceeds the cost of the improvement, the amount of the fees, I am sorry, if the CIAC Minutes, 3/17/11 9 value in the improvement exceeds the amount of fees that would be collected at subdivision, that excess credit would be reimbursable to the developer. How that reimbursement would occur? The idea is that it would come from other impact fee funds, so basically impact fees paid by other developments. It may be, have to be over a period of time, so that would have to be negotiated and it would have to be the City Council to approve the agreement prior to beginning construction and this is a process similar which is used in Park and Utility Fees. Payment timing and phase in we are recommending fee collection at the time of building permit that is the earliest time you could do it under the New Mexico Act. It is the most common approach, virtually all communities, well I do not know, there are some communities that collect at certificate of occupancy which is certainly an option but by far, the majority collect at building permit. That is really the first time you really know what the amount, what type of development, what it is really going to be. Some communities try to do it at an earlier stage but you do not really have that option in New Mexico. There is less risk of default if you collect it at building permit. Someone has suggested that, I think the Utility Impact Fees are collected; there is an option to pay them over time and have it added to your utility bill and we can explore that option with the Utility Department, we are going to be looking at that. The recommendation is to implement the fees beginning January 1, 2012, so basically six to eight month window there, and sort of fair warning that the impact fees are coming. You know some communities adopt it at 50% and you adopt it at 75% and phase it in that way. These fees are actually relatively small and to phase them in over a number of years and you also when you do a phase in, you get a, you have sort of this strange issue with credits, you are giving a 100% credit but you are only charging 50% of what the fees are there is kind of the mismatch, it may make if difficult to meet your obligations in terms of credits. So we typically recommend that you do not, I mean that is why we took this forward the first time and there was a lot of resistance on the part of the City Council, the amount of these fees and we thought, well it is better to take stuff out of the fee, do not say you are charging a fee that is covering all road improvements and right-of-way costs and all drainage improvements. We are just covering arroyo crossings on arterial streets and arterial streets themselves, no right-of-way costs are in here or anything else. So it is better to have that, that is what we are giving credit for that is what we are charging the fee for rather than charge a very small percentage of the fee. So these are recommendations for you to consider for action; one would be for you to accept the Impact Fee Capital Improvements Plan document to forward to the City Council and then the other ones refer to adoption of each of the major, each of the fees, the Major Road Fee, the Drainage and the Public Safety Fee, each with the flat rate option for single family and each starting January 1. So that really kind of covers it, do you have any questions? Clifton: Yes I have a question for staff procedurally Mike, Item B is Recommendation of Approval for the Plan itself but the plan does include the fees, so I mean in essence if we approve the plan, wouldn't that by default approve the fees or conversely if we deny the plan as a recommendation, would that deny the fees? Johnson: Mr. Chairman, no, you are approving the plan and you are approving the projects, you are approving how the fees were calculated you are not necessarily approving the individual specific fee that is why we broke that down for three of the items. You could approve the plan, approve only one or two of the fees and not a third fee or something of that order and that is how it would move forward. Clifton: So it would probably when we get to the point guys, members of the Committee to be prudent to amend a motion or state in the motion that by approving the plan the Committee is not recommending approval of the fees as written, they will be taken up on an individual basis. CIAC Minutes, 3/17/11 10 Johnson: Mr. Chairman perhaps you would like to since you suspended the rules maybe you would like to approve the Capital Improvements Plan last after you have broken down which fees are which. Clifton: That is probably a good idea; do you guys concur with that? Zahler: Yes. Clifton: It seems like we are putting the cart before the horse. Johnson: Okay that way you are doing it last and then everybody has an idea what the fees are that you have approved at that point. Clifton: Okay, good idea, thank you. Okay members of the Committee, do you have anything? Singer: I guess I have a question for staff and that is with regards to the pre and post ordinance credits. Well is there a plan to re-address construction standards as a part of the Impact Fee Capital Improvement Plan as it relates to pre and post credits, maybe I can clarify my question. I will try to use an example I think that would be the best way to do this. If you for example are required to build a collector as part of your development in the City you might be required to build both halves of the collector or you are certainly required to dedicate the right-of-way for both halves of the collector even though you may not be creating impact to build both halves of the collector. My question is in regards to post and pre credits, will there be any tie in together with how that is done? I mean you have to donate; you may have to provide 100% of the land, you may only build a portion of the right-of-way and then you are going to apply for a credit. Impact fees are they going to finish the balance of the roadway with that I guess there is a question in the type of the actual construction standards and ordinance there. Johnson: Mr. Chairman from a transition stand point, I would tell you once we determine for instance if the Road Impact Fee is approved, we would then go back and revise our Roadway Design Standards which require the developer to build their half or their pro-rata share of arterial. Obviously that is being covered by an impact fee at this point so that requirement from an arterial stand point would be taken out of our Design Standards and conversely we would have to go through and amend each of those items to bring that into conformance with the Road Impact Fee. Singer: There would be a procedure that would have to take place. Johnson: Yes, that would be the next step. Singer: Okay. Johnson: That is also another reason why we are not implementing fees until the 1St; it gives us time to procedurally get all of those items to align. Singer: Okay, that was my question. Clifton: Mike could you put it back to the slide just for our benefit that shows the actual fee amounts for the residential and commercial. Johnson: There you go. CIAC Minutes, 3/17/11 11 Clifton: Thank you. Jeffrey? Mann: My question kind of falls on the right-of-way, you say it is not included in the cost, so for the developer who has arterial adjacent to his property, he will be required to dedicate the right- of-way but will not get credit for it against his impact fees. Johnson: At this point, the right-of-way is not included in the fee, so there would be no credit for him, you are right. Mann: Okay just yes so that is, we probably covered that but I just want to make sure I am clear for that for me and so also the methodology for reimbursement that is apparently what you are going to be working on between before this is implemented. I mean because it is the whole timing; the number of lots that are built on over the life of the development (inaudible) it seems that the methodology and I do not know if that will be coming back to us for that methodology seems pretty important should be pretty important for the City because is that paid on a time of anyways I just I do not think you want to build presented for that fee. Johnson: Well in terms of you talking about credit or pre-ordinance? Mann: I am talking about if the road costs more than what they have paid in the impact fees and you know then you have to pay for the, reimburse for the, I guess you either reimburse or you reduce the per lot fee, is that right? Johnson: We are kind of treating those on a case by case basis on an individual basis so that would be for instance, Mr. Binns would request for us to take a look at a certain development, we would do that, make our recommendations at that point, ultimately it would end up at City Council. Singer: But I think to address his question, I think he is asking the extent of the credits would be limited to the number of lots that you put in your subdivision, in other words, if you had to build a million dollar road to get to your subdivision, you only got ten lots at your subdivision, you know might not be a real prudent business decision. Mann: Yes right. Singer: When you walk in to ask for credits, he is not going to pay you back the million dollars, he is going to say, you have "x" number of dollars per lot that is the maximum credit you can get; do I understand that correctly? Mullen: Right yes the most credit you can get, well no if we are talking post ordinance credits. Johnson: Pre. Singer: Pre. Mullen: Oh we are talking pre-ordinance credits? Singer: So I had to build a (inaudible). Mullen: So the most credit you could get is there would be no impact fees charged. CIAC Minutes, 3/17/11 12 Singer: Okay. Mullen: Correct. Mann: I was actually talking post. Mullen: Well for post; then there is the possibility of the excess credit reimbursement. Mann: So in this scenario, he pays the million dollars, he only gets ten lots and so he only ends up with $30,000 impact fees, the City owes him you know, $970,000. Mullen: So in that case. Singer: I do not think the City is going to pay him $970,000. 1 am pretty sure you can expect to never see that "jacket". Mullen: Yes. Mann: I am saying the methodology for that again when you represent, when you show them, you are going to reimburse where the cost of the road, arterial is more than what their impact fee is, you are going to reimburse that? Johnson: Ultimately we are going to prepare a policy document that will address that. I think we need to do that at this point. Mann: Okay yes because you do not want to a check presented at a certain point saying you owe us that much. Johnson: Right. Mann: And again while he is still building out lots, if the developer is still building out lots, probably want that pro-rata, pro-rated across the lots. Mullen: Yes. Johnson: We need a set of guidelines and then kind of. Mullen: Yes in terms of reimbursements, that is going to have to be negotiated because you are now going to have to look at what do we have in the Impact Fee account you know because that is where the money is going to have to come from. So in a sense you are not, you have not collected anything yet, so if anybody wants to build a permit, you can not promise he is going to get a reimbursement. Johnson: I think at that point, it is going to say, here is what I want to build and here is what we have in the fund and then it is going to be like, well I would not, you know if you build it this is all we are going to give you kind of discussion, so it is kind of how the developer would move forward at that point knowing what the parameters are on the City's perspective. Singer: Welcome to the club. CIAC Minutes, 3/17/11 13 Mullen: Which is another reason not to adopt the Road Fees particularly at 25% some nominal amount, you are not going to collect money you are not going to be able to make it because it really requires the reimbursements to really make it a sort of level playing field, a fair system. Zahler: I am still in a learning curve here so could you explain why the right-of-way is not included, I mean why there are no fees given to the developer for the right-of-way? Johnson: Right-of-way fees are normally donated to the City when the developers' build the project and we took that terminology when we created the fee plus the right-of-way, the cost of the right-of-way was included in the fee, the fee would be much higher also. Clifton: So to simplify it basically. Johnson: We kind of sort of pulled it out, it is on the, it is required on the developers now to give the City the right-of-way as part of building it but instead of us paying for it, we just let them still give it to us at this point; so the fee just essentially just building the road itself. Clifton: And it is typically 50% for arterials and collectors and 100% for the local roads? Johnson: Right. Mann: The following question here if I could. Zahler: Why the developers have to donate to the City; I mean developers, builders are in for a profit making and they are going to make profit, why would they donate anything to the City? Johnson: We have a (inaudible) plan that says, specific arterials will be you know Sonoma will be here and Mesa Grande will be here so any time anything any frontage is developed on those particular streets the developer is required to donate that as part of our Roadway Design Standards. Singer: And if they own it, they are going to be responsible for the maintenance on it, it is usually a fair trade for the developer, give away the liability of accidents happening on the road, maintenance. Johnson: It provides access to the development. Zahler: Okay it was not explained; okay so then it becomes the City's responsibility for anything like that, alright then it is fair. Mann: The Capital Improvement, the list of projects on the Capital Improvement Plan for Roads we are going to be collecting fees from plats perhaps that are not on those roads and you are going to need to go and acquire right-of-way; is that included in your costs of your CIP, acquiring right-of-way for those off site, "off site" peak segment of roads you are going to have to get? Johnson: No. Mullen: No there is no right-of-way costs in there. CIAC Minutes, 3/17/11 14 Johnson: Yes again developers and correct me if I am wrong, but if the City is willing to come and build arterial for you; I think developers will be more than glad to give us the right-of-way to do that. Mann: Okay so you are still looking at the (inaudible). Johnson: Smaller owners may not be as agreeable but I think some of the. Singer: It is always going to come down to the affect it has on the property owner at the time of the requested donation. I mean if you are actually actively farming a piece of property, splits it right in half, not going to be very happy about it but on the other hand, you are planning a development for of property it was maybe desert ground, it is not actively an agricultural, fertilable ground. I think you would be happy to get your million dollar improvement, sort of speak on your property. Johnson: The value of the property would go up with the paved roadway and infrastructure for that property at that point. Clifton: Mike, I had raised this question, I do not know a couple of months ago and the commercial retail impact fee per 1,000 square feet. In my mind, it is not just as simple as saying, 1,000 square feet period because you take a proto type super Target that could locate here possibility; a 150, a 145,000 square foot unit, 15 of that on the high side might be used for warehousing and that is not including the outside storage. Are you guys, is there something that if I bring a customer or a client into the office and here is our floor plan, am I going to pay for the everything or could you break out, like often times we would do on parking that okay, you have 15,000 square feet of warehouse; so you are going to use the 600 or whatever that is. Singer: 621. Clifton: 621 fee. Singer: $6.21 or 62 cents a foot. Mullen: Well typically the way it is done is you base it on the primary use of the property, so typically you do not get into splitting it out. If you got a, if it is a normal accessory type use, you know sometimes you may look at it and say, well if it is over 25% of your square footage or some threshold like that, then maybe then I would want to take a look at it. If it is a normal part of a retail operation that has warehouse space for example, then they have to have storage space for the merchandise. Singer: Yes kind of describe it as frontage road type properties where they have little retail, few hundred square feet in the front to take orders but everything is in a warehouse in the back. How are we going to look at that? I would tend to think that I am looking at commercial office or commercial retail space because there is a retail element to that little sales office that is in the front of the thing but maybe 75% of the building or even maybe 80% of the building is actually warehouse. Clifton: Like Delta. Singer: Yes like Delta is a good example, kind of a project or property, you know there are good examples in El Paso of these sort of, they literally look like your mini storage but just in the front CIAC Minutes, 3/17/11 15 they have little retail meaning that the whole thing is really warehouse in the back. So how is the City going to classify that, is it going to be based on the zoning of the property or is it going to be based on the actual use that you are putting out? Mullen: Well it is going to be based on the use or the proposed use of the property and so yes there is going to be some judgment calls. I mean I think the way we typically draft these ordinances, if you got a shopping center that place is retail, you do not worry about an individual, so you got a free standing use. We are not talking existing buildings here because we are talking new buildings so if someone wants to come in and build a new building and yes it is going to be 75% warehouse and some retail, they have to make a judgment call, is that primary classified out you know, warehouse or do we classify it as retail. Clifton: That is an issue, now you are leaving it up to the poor staff person that has to deal with me, a difficult customer with a major retail who would like to relocate here saying, show me where I have to pay that $1,000 for my 30,000 square feet of warehousing. I mean I think it needs to be written somewhere. Johnson: I would say, I think again. Singer: In the ordinance section. Johnson: We need to write specifically or make an effort to show what is industrial, what is institutional, what is commercial retail. Clancy mentioned something that had 25% of storage and could be designated; I have a problem giving up 25% of credit for storage. Clifton: Because we are going to be "beating" up on Robert and staff so. Johnson: That is Robert's job. Singer: You have a couple of questions? Johnson: Maybe from a Fire standpoint. Clifton: Mr. Binns had a question and Chief Brown did you? Binns: My first question was, was it appropriate for the public to have input and discussion as we progressed or what is your comfort zone? Clifton: Well I will leave that up to the Committee. I was kind of hoping to go into Public Comment after we hash this out because it is such a. Binns: I was going to help you hash it out. Clifton: Okay well I mean it is not like we have 50 people out there, we could have interactive public commentary while we discuss it, I mean if you could hold off Mr. Binns, we will let Chief Brown go. Brown: Yes Mr. Chairman, Committee Members, I was just going to say, Robert turned around and looked at me and you know that is something that we have to do very typically when it comes to new construction, under the Building Code, the Fire Code looking at those things, so I would think that we could work to put when the ordinance is drafted and work within that as you CIAC Minutes, 3/17/11 16 are aware the types of occupancies you are talking about, very small retail front warehouse for us as a Fire Department they are two distinct patterns. We would look at that primarily more as a use of a warehouse, so I think we can resolve some of those issues that is a very valid point but I believe we have some pretty good parameters to work within the Building Code and Fire Code that we are used to using and can put some of those down on the (inaudible). Singer: That might be appreciated. Clifton: Mr. Binns. Binns: Kind of reinforce the conversation you had and the downtown for example, if it were identified as commercial that would mean there would be a $100,000 impact fee on that structure it would make it totally attractive to a consumer, so it is something that is a big impact. I will parallel it to existing commercial property that exists on Telshor; I have a project to plan there for 100,000 square feet and looking at these numbers, I am going to have 100,000 times. Singer: $2.19 or 91 cents per foot. Binns: I have a tremendous cost going on that project and the construction of North Telshor was paid for by the developer years ago when it was developed and put together. So it could be difficult to come back and debate it, so I want credit for paying for that street 20 years ago or 15 years ago to offset against the impact fee and that impact fee is not going to do any benefit whatsoever for a consumer at that location. It is going to be a compounding of fees that take place because the cost of those improvements were incorporated in the land and escalated his price to the level it is because of the cost to get there. That commercial impact fee is a rough number; it is the same thing that I relayed back when you look at the multi-family. Multi-family means I am going to have to increase the rate on each and every apartment approximately $15 a month to cover the impact fees that is going to be placed on and boy that is a bite on the community because we are talking about a lot of people in apartments that can not afford it. It is a tough bite to some of those kinds of numbers at these kinds of industries that are trying to survive and come in. Another point to think about gentlemen and we have seen it happen in the federal government where our representatives and our senators pass a law and then they turn it over to the staff to write the regulations after the fact and the regulations that get wrote are no where close to what we were discussing at the time that we were writing the laws. So it is a tough one to pass something and put it together without knowing what we are approving underneath it. There are a lot of variables underneath here that are going to be a big impact on industry of what happens. Now if I am negotiating today with Mike, Mike is not going to be there ten years from now and I am going to be negotiating with somebody that was not privy to these types of discussions and the intent of the Committee at the time they were generated. Clifton: Mr. Binns, I have a question for you. Binns: Sure. Clifton: When you sell a single family home, when you go to closing on that disclosure sheet, do you pay a gross receipts tax on that transaction? Binns: Absolutely, it is paid on everything except on the price of the lot. Clifton: Okay so that is money. CIAC Minutes, 3/17/11 17 Binns: The price of the lot is exempt from gross receipts. Clifton: So that is money the City receives on a new home sale? Binns: That is correct. Clifton: Okay. Binns: So the gross receipt of this impact fee goes in at the cost of the project and raises it at 7% on $2,000. Clifton: So you filter that up? You build a 40,000 square foot office facility for an individual, there again there is gross receipts tax charged on that sale as well. Binns: The same thing takes place. Clifton: Wal-Mart builds a structure. Binns: (Inaudible). Clifton: Okay and not to mention if you carry it down you pay you typically pay some sort of a GRT eventually on supplies, on labor. Binns: Correct, correct. Clifton: Okay. Johnson: Mr. Chairman just for the record, we have no problem being a little bit more specific on what would fall under each category as well as defining you know the Delta is a good example, if you look at Road Fee we are concerned about impacts on our road system by the development of that square foot space. Obviously if a great majority of it is warehousing, it is not creating trips on our roadway. Singer: Well I do not know, I have been hearing argument that it is all those heavy trucks that tear up my road, that will be the. Johnson: Well you might sell a lot of the to get all those heavy trucks. Clifton: Well that is when the design standards change to concrete. Singer: We are dying to sell a lot of tile. Johnson: No but we will further define that prior to moving to our next step. Binns: Is it visionary that there are a lot of unanswered questions and a big void of the final regulations and they are going to evolve out of this. Singer: Right. Johnson: Well no and I agree. CIAC Minutes, 3/17/11 18 Binns: In the community. Johnson: I had a question earlier today because I was reading the Statutes; government entities are not exempt from the impact fees, so I asked the question, which one of these is a school? Singer: That is right. Johnson: And it is institutional. Singer: It is institutional right. Johnson: But Las Cruces Public Schools have to pay that institutional fee. Singer: That is right. Binns: You think you can get it out of them. Johnson: I am just telling you but it is very clear in the State Statutes that government entities are not exempt. Clifton: What about a non-profit? Johnson: It does not talk about it. Clifton: Non-exempt does that mean they have to pay as well? Okay. Zahler: Not for profit have to pay what? Clifton: Impact fees. Zahler: Try and get it from them; they will take you to court. Mullen: I think that will be a court issue. Zahler: It really will. Singer: Is there any kind of structure that would be exempt from an impact fee in your mind? Clifton: Sure. Johnson: Council can exempt affordable housing. Singer: But they can issue a waiver is what you are saying? Johnson: A waiver, yes. Singer: A waiver but Council would have to pay that, the fee. Johnson: It has to be made up from another funding source other then the impact fee. You can not raise the impact fee. CIAC Minutes, 3/17/11 19 Singer: But I guess my question is, is this really does close the loop there would not be construction of any kind of a structure that you could think of that would not fall under one of these categories involved, this is all encompassed. Binns: Eddie Binns, kind of reinforce the one year debate we were just discussing; I can hardly get a building permit out of the City in one year or a water line built that goes and ties itself together out here in one year. Johnson: How about you must submit your request within a year. Binns: Well it is a process that does not move as rapidly as people think. Johnson: You must submit your request for that within a year. Binns: Well I have been requesting. I have a request right now that has been going on for two years or longer and it is not being addressed yet. Johnson: You must write the letter asking for the request. Singer: Yes submit the letter at the same time. Johnson: You have to submit all the documentation requesting the. Binns: I would like to see you think about extending that well beyond the one year timeframe because to gather up all the documentation that substantiates the cost of that have gone into the construction project with a divided boulevard, it is going to have to be a good package otherwise the City is not going to accept it and it is going to take a while to get everything together that we put together. Clifton: Is the one year specified in the plan or is that something that we are going to have to hash out in the ordinance when it goes to Council? Mullen: It will be in the ordinance yes. Clifton: I think that is kind of why we were in a (inaudible). Johnson: Well we just put them, they were requesting of us, well how about order reification must be made of the intent to ask for. I am flexible about that; the idea behind it is not to go five years down the road and then get a request of something that happened which I know you will not do but I mean you never know. Singer: There may be an advantage to having a longer window for that request and the advantage could be that it allows more firms to roll into the impact fee accounts so that there are funds to reimburse when somebody does make a request if there is more time to come in. Kyle: Robert Kyle, City of Las Cruces we are just saying that within that year you have to give, put the City on notice in some factor that you want to discuss this. Mullen: Yes we are not saying that you have to submit that documentation at that time, it is just (inaudible). CIAC Minutes, 3/17/11 20 Singer: It is really just a notification process. Johnson: We could really write it out in that regard. Singer: Okay. Clifton: Mike just I think we kind of touched on this at the last meeting just briefly but you know I, believe me there is nothing more then I would like to get past these impact fees and move on to Utilities, that would be really nice by April but I am a little uncomfortable moving on this without seeing what exactly is going to be on this ordinance. I mean we are talking about yes we will address that, oh yes we will fix it where staff comes in and they had something but I do not see it and I mean all too often in all my years dealing with the City and working there, it is always if something is missed and staff has to deal with it you know, (inaudible) Park Fees for example. Johnson: You want us to, you identify what you want us to address before it goes to Council. It is on the record, this record must be forwarded to the Council at the time they consider. Mann: Well as an add on. Johnson: So specifically you know we will put the year, we have talked about some other things for further identification, how we are going to identify the types of properties. Those are, we do not have a problem doing that at this point. Mann: Would it be possible for the, I mean as an add on to this issue, I mean would it be possible I do not know what is our role but to see that, see the methodologies before they go to the Council? I mean we could I guess put this, the concept of the fee but then the methodology implementation, I mean this policy things and look at as a separate you know as far as implementation. Clifton: Well and really in my mind that is something that could be included in the plan; I mean that is what a plan is. I mean you take the plan from concept to ordinance ideally. Johnson: I would like to move these forward I guess I am just saying as quickly as I can at this point. What we can do, I am thinking inside my brain right now and Loretta probably has a calendar in front of her right now but there is a CIAC meeting before the Council would consider this for the first time in April. So we could certainly bring that information back to you here at that point. Zahler: I guess I did not hear that, you mumbled just then Mike. Are you saying you are going to bring it first to the Council and then we get it afterwards or are we going to get it first? Johnson: We would like to take it to Council, what is the date Loretta? April? Reyes: April 18tH Johnson: April 18tH Singer: Next Council meeting. Johnson: And that would be actually the first read, Council is not going to make any because this is an ordinance. CIAC Minutes, 3/17/11 21 Clifton: Just (inaudible). Johnson: Right and that would be considered in May, so at that point we could come back at the April Council, CIAC meeting and present specifics on what we were talking about at this meeting. Reyes: April CIAC meeting will be on the 21St 3rd Thursday of the month. Johnson: Right. Zahler: Mike, when do you think you will have? Johnson: We could certainly move it in front of the Council though if we needed to. Zahler: When do you think you will have the ordinances ready? Johnson: We were planning on moving that forward after this meeting within the next two weeks. Zahler: Next two weeks. Johnson: What was that? Zahler: Well we will see. Johnson: Well we will bring you something back at your April meeting. I would like a vote today on this with specific reservations on the specifics to come back next time. Clifton: Okay I think we need to discuss this collectively; Mr. Binns real quick. Binns: Yes on one of your earlier slides you indicated there have been presentations and negotiations implied between the industry and the homebuilders and the realtors and that is a little misleading. I think there was a presentation made and there were a number of requesting challenges and recommendations but there was never a conclusion that we endorse the plan, we did not agree with the plan and there were a number of things that we were obscured by before we were to endorse it, then it implies that meetings had taken place and negotiations had been taking place and we are all on the same boat, we are not. Johnson: No we did not negotiate; I think we met with you. Binns: You met with us and told us what you wanted us to do. Johnson: Well we heard your feedback. Binns: You heard but we have not heard or seen any addressing of our requests. Johnson: Well there is something that is worked within the process. I will tell you the Realtors wanted the fee paid at permit; they made that pretty clear to us. Binns: We want it paid at the certificate of occupancy. If it is paid at the certificate of occupancy, then (inaudible) are proposing, you by-pass the gross receipts tax. CIAC Minutes, 3/17/11 22 Johnson: You also have a greater risk of default. Binns: There is no gross receipts tax on impact fees being paid at occupancy. Johnson: But there is a greater chance of default. Binns: But you got to control that they do not have a certificate of occupancy (inaudible). Stott: There are plenty of homes that are being occupied without CO's. Kyle: My concern with that is that there are a number of homes that I know. Clifton: Okay let us move on here guys just I need to ask the Committee what is your preference we are in kind of an awkward situation here. Singer: You know I guess I will start off at the end of the table here. My comments I have to say quite frankly, my concerns would be IFICIP; the proposed Impact Fee schedule is less without the aggregate individual fees for Roads, Storm and Public Safety but more about the accumulative fee. When I look at commercial retail as a fee that reads to me like $2.91 actually $2.92 a square foot and you know in my experience it tends to cost about $60 less a square foot to build that kind of structure and so $3 a foot out of$60 a foot just seems like a big number to me and I have to just say to you, that is one of the areas that gives me very specific concern. Office buildings you know if you are talking about building a "shell" for an office building so that I am thinking out loud to myself and that is I go and I build an office building complex, really I am just building the "shell" as I get tenants they are going to build out their interiors so I am going to pay, let us just use 10,000 square feet as an example, a 10,000 square foot building. I am going to pay $2, 1 am sorry $1.74 a square foot as the developer of that warehouse and then I can only assume that each time one of my tenants come in to build out an interior square footage, they are going to pay that fee again and that, no? Johnson: No. Singer: No, why not, they are going to have to take out a permit to build that interior space out so maybe you can help me because that is what I understand. Johnson: Well what is the comment, I am sorry I did not. Singer: If I am building a let us say I am building an office building, let us use a great example like the Steinborn Realty building up there on Telshor, new building, build that big building we will say it is a 100,000 square feet for lack of me knowing how big it is, it is a 100,000 square foot building when I build that as the developer; I am just going to build the "shell" I mean I am just putting up four walls and I am not building the interior space out and that is the way it typically works. Then I get Mr. Mann he is going to come in and he is going to open up his business in my building; well he is going to say, Judd I got to build out the interior square footage and he is going to hire my construction company to do that, well my construction company is going to have to take out a building permit to build out that 100,000 square feet again. Clifton: And that would be considered new commercial or commercial remodel? Johnson: The fee is only charged once. CIAC Minutes, 3/17/11 23 Singer: Looking for that kind of application right now. Kyle: The impact fees have already been collected on that property we would not assess those a second time. Singer: I guess my question is how I know you know it but when I get there to the office and that person behind the glass is there. Johnson: But I guarantee you that you are going to know that you paid it and if you are asked for it a second time, I guarantee you I know Mr. Binns more than holds us accountable, he will show us immediately. Singer: I think it is a logistical question that I have that it seems to me a legitimate logistical concern. Clifton: Some people may not know that they may come ten years later in that "shell" because the economy is rather slow if you have not noticed and get a new permit. Johnson: The fee will be charged once. Clifton: How will we know; I mean but where will it say that, will it say that in the ordinance. mean that is another gray area that needs to be addressed. Johnson: We can address that at that point. Singer: So maybe it needs to be addressed as part of your staff process. Johnson: I do not think we have ever charged any other impact fees twice so. Singer: No and I do not know that you do but when I think about commercial office type construction, it is a little different because so often if I respect building a commercial office building I would just build a "shell" and they may not come back to me to finish out the interior. I may lease it and they may not like my price and they may go to the next guy and he is going to walk through the door and know I paid the fee. So it is not just a matter of me knowing that I paid the fee; I have to make sure that there is a process in place that prevents the possibility of double collection of a fee, in that scenario and those are really the issues that I have. Kyle: It would be reflected in the property records that the fee has been paid. Clifton: Well in which property records though, at the County, at the City? Kyle: No, in the Permit Department. Singer: Since I tend to do a lot of the work, work part of the work, I do get caught up in the minutia of those details so. Johnson: The work, work part of work. Singer: The work, work part you know. I mean I just do not send one of my guys out there to have them tell me what happened; I do it myself so that is why I asked that question and that is CIAC Minutes, 3/17/11 24 why it concerns me and really again it is not the individual fees to the extent that they are too high individually; it is the cumulative totals that make me nervous. Kyle: Most builders when they come in, their first question is what are my impact fees? So we have to go look now, we have to check, when was the plat filed? So we know which set of fees it is under. This would be you know different, what impact fees do I have to pay? Well okay this building was built "x", the impact fees were this, they were paid so you are okay here, you are just paying your permit value, you meter fees. I do not think that that would get in these instances; I would be surprised if it got over (inaudible). Mann: Okay what you are saying is cumulative in terms of "shell" versus internal improvement, that kind of cumulative as opposed to that figure that is on the. Singer: Well no I am talking about the figure at that very end because we have. Binns: You can eliminate that by putting it in at certificate of occupancy. Mann: Because you would not have to. Singer: It is still going to cost you the $2.91 a foot. Binns: The fee is very high but if you did it at certificate of occupancy there is no double payment. Clifton: And to throw another twist on that commercial issue and we could go and have what ifs all day and we will be here until midnight but that 100,000 square foot "shell" that you build, it builds out, I come in and Judd I see that you got all that space; I want to do a 10,000 square foot addition, how will that be assessed, will I be lucky enough to you know, oh Judd already paid my impact fee for me or will the addition be assessed an additional fee? Johnson: You would have additional square feet; it would be additional impact on 10,000 square feet. It is an additional impact on each of those systems, the Road, Storm Water and Public Safety. Clifton: Again, will it say that in the ordinance just. Johnson: It said that in the ordinance per 1,000 square feet. Clifton: You guys are, you are retiring after this is done, you are gone Mike. You know we just got to make sure. Singer: You are out, your so long man. Clifton: Those of us that unfortunately have to work in this industry and have to make a living, when we come back into the office in ten years and none of you guys are here, we want to get the same answers because that has not happened in the past. You go in now; you still get a different answer. Mullen: It will be very clear in the ordinance. Zahler: Is it my turn? CIAC Minutes, 3/17/11 25 Singer: Ron? Zahler: Okay let them. Camunez: Go ahead, go ahead Maryln. Zahler: Okay, Mike I am going to be as honest as I can about this, I am not a builder, I am not a developer okay but I do hear things in the community and I happen to know from one of my neighbors who is no longer living here, she is living in EI Paso but her son tried to build a gym here in town is well known in that sports field and what happened was and this happened a couple of years back. He tried to buy the building that is the boxing place that is on Solano and he ran into so much trouble with your department okay. The same thing that these gentlemen are talking about each person has a different view point. He would go to one person with his plans and they would say okay, he would go to the next department, oh no you got to add this or add that to it. Now I come from New York and it is a little different I guess there because they have policies and procedures in that department, so it does not matter if you retire or the next guy retires. Johnson: What does my retirement have to do with it? Zahler: Well I do not know but at least they all have. Johnson: I do not know something here? Zahler: Wait a second I am talking please; they all have the same rules and regulations. I do not see that with the City and you know I have been involved with three different Mayors and I have been on Committees and I have seen this in different departments and so I think you have an obligation to these men, to these developers to set up those ordinances; set up a policy and procedure handbook that ten years from now, twenty years from now they will be able to follow things and maybe they will have to make some changes but I for one will not vote on this today because I think you know you want to give us the ordinance after the City sees it; I think that is part of our job and if we go back to reading all the things that it says under the State and maybe we need to read those things every time we have a meeting out loud. I think you are beating around the bush for us and I think you need to develop these kinds of plans and everything and I think these gentlemen are right and I am saying it as a private citizen on this Committee but you need to do things better for the community and that is what I have to say. Clifton: Thank you; Jeffrey do you have something you would like to add? Mann: Well one quick question to start with and that is I mean there is no cumulative impact in terms of going down the Land Uses, I mean if it is single family you stop at single family so there is no cumulative going as far as I can see, going down the Land Uses, there is obviously cumulative if you are adding up these you know, Major Road, Storm Water and Public Safety and we have the cumulative number there. Is there any other impact fee other than these per say, I mean is Water and Wastewater a fee or is it more of a capacity fee that is charged? Johnson: There are your impact fees that we currently have; Parks, Water and Sewer. Mann: Yes and those are those three, right. Garcia: Right, they are impact fees. CIAC Minutes, 3/17/11 26 Mann: Yes, Water and Wastewater. Garcia: They are impact fees. Mann: Water and Wastewater are impact fees right and they are collected and so we really just cumulatively on a single family home. Singer: Is it seven? Dr. Garcia? Johnson: The Park Fee is 800 1 believe. Mann: Yes I got that; I am looking at Table 2 in the Executive Summary; I got Parks. Garcia: Mr. Chairman, Mr. Mann they are based on meter size so if you are a single family owner that wants an eight inch meter, you would pay the same as a business that has an eight inch meter. Mann: Okay. Garcia: Most likely it is a 3% inch to a 1 inch meter is residential and then it goes up from there. Mann: Right. Garcia: Based on. Mann: The fee amount for a 3% meter let us say a standard single family home. Garcia: I do not have it in my head right now, $1,800 the total fee between the builder and the developer and the property owner. The difference with the Utility Impact Fee is that approximately 22% of the fee is paid by the ratepayer, by you and me for each home that gets built. Mann: I see. Garcia: And 30% of Wastewater and that was unique, the City Council in 1995 decided to split the fee, after the fact after they had determined it. Zahler: Okay. Garcia: So they ratepayers, every time a fee gets collected, the ratepayers match that 22% and the 30%. Mann: Okay, alright. Garcia: And I can get you the fee schedule, if you do not have it in there. Singer: When we talked about as the CIAC about having potentially part of the bill for this impact fee on the utilities bill that is essentially a similar idea that was previously proposed with regards to Wastewater where the public would actually then pay a visible portion of their pro- rata share of that impact fee. CIAC Minutes, 3/17/11 27 Garcia: Well I will let Mr. Johnson answer. There are two different things, the customer portion of the fee, half of the utility fee is the builder, 22% is the rate base and that gets paid not in installments, gets paid at the minute the builder pays we reconcile and the utility operating fund pays to match that builder. The property owner, the portion that is the end customer is the one that can be deferred. Singer: They just get a payment schedule. Garcia: It is a payment schedule that is what it is. Clifton: Dr. Garcia, is there any way to use some of that money on some window blinds back there? Garcia: Mr. Chairman, we will first replace the broken glass and then we will put some blinds. Clifton: Okay, thank you. Zahler: Okay. Clifton: Mr. Camunez and Mr. Binns and then we probably need to wrap this up. Oh I am sorry Mr., Jeffrey. Mann: Yes so I mean are we just kind of generally hanging on this. I having worked with impact fees in other jurisdictions I mean I think you know other then the policy decision of the City as far as commercial I think the commercial one is a critical one in terms of just economic development. As far as the fees themselves, I mean even comparing with our own State, the fees appear to me to be very reasonable for these uses and especially if we pick theflat rate. As far as separating the approval of the plan from the ordinance, I kind of raised its in the minutes the last time, the last meeting I was hoping to get the ordinance so we could, I thought that was kind of what we were recommending on to the Council; you are kind of splitting that out and saying you are recommending the plan and the implementation part of it which will be in the ordinance is kind of a separate deal that will present to the Council. I was hoping to be able to move that on as a, you know recommend it on as part of a package and have these kind of questions kind of answered. You know I am comfortable voting, separating this, voting on the plan and if you know again up to the Committee, Mr. Chairman whether we look at the implementing pieces of this in a separate meeting before the Council, I am up to that but I am comfortable voting on this as a separate item. Clifton: I think we can move forward with a vote today. I would just regardless how it shakes out I do think we need to see the ordinance at the April 21St meeting. Johnson: We can bring that at that time. Clifton: Okay let us try to get this going guys, Mr. Camunez, Mr. Binns. Camunez: Yes Mr. Chair, members of the Committee, I am a private citizen, I do not own, I am not into real estate business nor am I a developer. I think after seeing what is going on I feel for you guys that are in this, it is tough but what I do is I look at the political implications on what we do as committees for the City or Council itself. As I look at these figures and all, I am concerned what impact it is going to have on us growing and on the people that have to pay for this. You CIAC Minutes, 3/17/11 28 know some homeowner, new couple that just get married and is going to buy this. One of my real areas that I believe I am a pretty good expert at is Public Safety as far as emergency services and management. We for so long in this community, we have put that to the back burner. I have been an advocate that we need a 911 Call Center. I want to know that $639 how much is that projected to go as revenue into that we are looking at down the road will generate money to help these guys in providing the levels of services that we really need in this community. I would like to see that maybe you adapt maybe just the Public Safety portion of this plan. I think it will go better with the community; they will "swallow" it better than everything else. I think from that standpoint you have a better shot at getting this passed to the community at this point, I am not saying down the road but right now the economic climate; you building a lot of "stuff' and we are looking at this? I am not trying to be sarcastic, yes I am but anyway I think we need to really look at that and 1 agree with the Chair, I think that we need to take our time. do not like when I got to Council myself and they want to get things passed right now because they are being told it is suppose to be and there is a lot of unanswered questions still left and I think that is unfair to the elected officials, that is unfair to us private citizens, I think that is unfair to staff, I think we need to answer these questions before we know exactly what real impact this is going to have on us; thank you Mr. Chair for your time. Clifton: Thank you Mr. Camunez. Mr. Binns? Binns: A comment a while ago that 1995 is when your other impact fees went in, there was a portion of those fees that were absorbed by the ratepayers sort of speak and that was put in partly as some of the negotiations I was involved in with the people at that time. Some weeks back I asked the City to consider some pro-ration of participation by the City to reduce the mitigation or the impact of these dollars so the City would participate in some form or fashion on a percentage of this and looking at the numbers and I had to agree with Ron on one subject; that the community will go for Public Safety and one thing to think about and evaluate is to pull the Public Safety out of the impact fee and put the Public Safety Fee on the entire community rather than just the new homebuyer or the new customer coming in because the whole community is going to benefit from a 911. The whole community is going to benefit from more fire stations and such and I do not question whether we need them but I would like to see that put on the taxpayer because the taxpayer will buy that, they are not going to necessarily buy building a road out here in one of my projects as compared to the Public Safety in general. So one form of community participation may be to "shoot" the Public Safety portion of this back to the City to use on a total tax base and litigate or lighten the other impact fees that are being generated on the consumers no matter whether it is apartments, houses or commercial but it is something that I had mentioned at a couple of these hearings to think about, evaluate and I was hoping that maybe our consultants might have come up with some thoughts to expand on that idea that I had expressed to them earlier. Clifton: Mike? Johnson: Mr. Chairman, isn't there a 1/8th gross receipts tax already in place for Public Safety? Brown: Yes Sir, Mr. Chairman, Committee Members there is a 1/8th gross tax that goes to pay salaries for Police and Fire and the other thing that I would just as I responded last time to Mr. Binns comment, that for Public Safety we are talking about a facility, the rest of the City is still going to bear the burden of the cost of filling that facility with firefighters with police officers, so it is a little bit different then perhaps a road or a drainage structure because the impact fee will build us a new station but the personnel for that station which is an on-going cost and is going to far out weigh the cost of the station itself is going to be, can not be paid with impact fees. So CIAC Minutes, 3/17/11 29 that will be paid for through general fund, through the current support of the GRT and those things and that cost in my opinion will be borne by the entire community and not just by the people in that within that growth area. The other thing in talking to the consultants earlier this morning, we will we can not replace existing equipment with these impact fees so there is still you know our current budget we have that everyone is paying for that is still going to be there. So I do think there will be involvement and the entire community is still going to be paying for these services, this is getting us facilities and there are lots of other things in our case but that is one thing. Clifton: Okay, thank you. Mann: But also in the plan this the Public Safety Impact Fee is City-wide. Johnson: That is correct, any new building, city-wide. Mann: It is a city-wide. Clifton: Even in the no growth areas. Singer: Or the "infill". Mann: The other two are for growth but the Safety one is city-wide, correct? Singer: So "infill' area just to clarify, "infill" areas would not be exempt from the $639 Public Safety Fee but would be exempt from the Road Impact Fee of the Drainage Impact Fee. Clifton: Okay we will go ahead and close it to Public Participation, are there any additional comments by the Committee? Mann: None. Zahler: None. Clifton: I guess just my only comments would be you know we are still trying to recover in the economy and three years ago this would have been a great idea I think you guys would have made a lot of money which would have been good, right now it is not, two years from now maybe but unfortunately whether City staff, the elected officials want to believe it building and development is an (inaudible) part of our vitality here in this region, not all of us have government jobs or military or NASA that is just reality, there is a lot of moving pieces and I do not personally believe this is the time to be discussing this. I have great concerns on what the commercial impact fees will do; a 145,000 square foot retail facility is going to cost $422,000 in impact fees. Consultant made a comment, well a Wal-Mart should be able to afford that, I am not going to spend their money; that is private money. I mean I have no right nor does staff spending their money or making that assumption. $1,200 for a room for a hotel, you know have, it is funny in the last year a lot of my business is in the County, I do not think I have to go any further than that. I am greatly concerned you know we are marginal right now attracting businesses, you know we really are. I mean it is hard getting businesses to come here and when many of us, there are many good people in the community that work hard depending on putting food on their table through construction industry, real estate and what not, it is just a horrible time to be even talking about this. I asked a pointed question to Mr. Binns, do you have to pay gross receipts tax on a real estate transaction? So essentially he is they are getting CIAC Minutes, 3/17/11 30 double dipped on it. How much more can the industry bear, would be my question? I really do not think the industry can bear much more right now. It is not a "soap" box, it is reality and I hope that some point through this process, it is understood. I would be more than happy to discuss it in two years because if the economy comes back we have to address and be a little bit more fiscally responsible how we are collecting fees to pay for this infrastructure, with that said let us go into the vote. c. Recommendation of Approval for Road Impact Fee Clifton: If I could just get a motion to unsuspend the rules. Singer: I will make a motion to unsuspend the rules. Zahler: I will second it. Clifton: All in favor? Zahler: Aye. Singer: Aye. Mann: Aye. Clifton: And then again could I get a motion to move Item B, last behind Item E that would be moving the actual report to the last item we vote on? Mann: So moved. Zahler: Seconded. Clifton: All in favor? Singer: Aye. Zahler: Aye. Mann: Aye. Clifton: Okay can I get a Recommendation of Approval of Road Impact Fees? Mann: So moved. Clifton: Second? Singer: I will second. Clifton: Okay discussion, is there any discussion? Singer: We are discussing the Road Impact Fees at this time? Zahler: Yes. CIAC Minutes, 3/17/11 31 Singer: I guess the only discussion point I have about the Road Impact Fees is I am just concerned about the size, not of the specific fee as it relates to the calculations that we made that determine the fee but simply as the aggregate dollars of additional fees and costs to housing and that is my only comment. Clifton: Any additional comments? Zahler: No. Clifton: Okay so that just to clarify we keep the "housekeeping" straight here, this should have been written in the affirmative, so if we vote "No", a "No" vote is a denial, a "Yes" vote is approval, simple as that, okay, so all those in favor of approving? Zahler: Why don't you go one at a time, one person at a time for a yes or no? Clifton: Yes, Mr. Singer? Singer: No. Clifton: Mr. Mann? Mann: Yes. Clifton: Ms. Zahler? Zahler: No. Clifton: And Chair votes no. Zahler: Denied then. d. Recommendation of Approval for Drainaae Impact Fee Clifton: Okay motion for Approval of the Drainage Impact Fee. Zahler: So moved. Clifton: Do I have a seconded? Singer: Seconded. Clifton: Mr. Singer? Singer: No. Clifton: Mr. Mann? Mann: Yes. Clifton: Ms. Zahler? CIAC Minutes, 3/17/11 32 Zahler: No. Clifton: Chair votes no. e. Recommendation of Approval for Public Safety Impact Fee Clifton: And can I get a motion on the Public Safety Impact Fee. Singer: So moved. Clifton: Seconded? Zahler: Seconded. Clifton: Mr. Singer? Singer: I vote yes. Clifton: Mr. Mann? Mann: Yes. Clifton: Ms. Zahler? Zahler: Yes. Clifton: Chair votes yes. Okay do I have a motion on the actual plan itself? Zahler: That is "B"? Clifton: Yes that is "B", "B" moved to the last. Singer: So moved. Zahler: Seconded. Clifton: All in favor, Mr. Singer? Singer: I vote yes. Mann: Yes. Zahler: Yes. Clifton: Chair votes no. Johnson: Mr. Chairman. Clifton: Yes. CIAC Minutes, 3/17/11 33 Johnson: We will bring back the ordinance for you for draft at the next CIAC meeting and then we plan on moving this forward to City Council with your recommendations as part of that packet, the first meeting in May for the first "read" and then final consideration by Council at the second meeting in May which in believe is the 2"d7 Reyes: The 2"d, Johnson: The 2nd and 16th of May. Singer: Okay let me clarify those dates again, the 2nd of May and the 16th of May. Johnson: May 2nd will be the first "read" and May 16th will be the Council final consideration and we will bring you the ordinance for comment, the draft ordinance at the next CIAC meeting which is. Zahler: April, April 18th? Johnson: The 21St of April. Clifton: Yes, April 21St at 1:30 p.m. Johnson: Thank you. Clifton: Thank you staff, we got passed that one finally. Zahler: Whew finally. 4. Committee General Discussion Clifton: Any Committee General Discussion? Zahler: Yes sir. Clifton: Yes. Zahler: I would like to put on the agenda for next month regarding the minutes. Clifton: The verbatim versus. Zahler: Yes. Clifton: Okay. Zahler: Yes verbatim versus just the short term. Clifton: Summary minutes? Zahler: Summary minutes. 5. Next Meeting Date CIAC Minutes, 3/17/11 34 Clifton: Okay next meeting date April 21 at 1:30 p.m. 6. Public Participation. Discussion held earlier. Clifton: Any additional Public Participation before we close out? 7. Adjournment Clifton: Okay, do I have a motion to adjourn? Zahler: So moved. Mann: Seconded. Clifton: All in favor? Singer: Aye. Mann: Aye. Clifton: Aye. Zahler: Aye. Clifton: Meeting adjourned. The meeting adjourned at approximately 3:03 pm. Kirk Clifton Date CIAC Chair CIAC Minutes, 3/17/11 35