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HomeMy WebLinkAboutCC - Minutes - City Council - 2/18/2014PRESCOTT CITY COUNCIL SPECIAL MEETING TUESDAY, FEBRUARY 18, 2014 PRESCOTT, ARIZONA MINUTES OF THE SPECIAL MEETING OF THE PRESCOTT CITY COUNCIL HELD ON FEBRUARY 18, 2014, in the COUNCIL CHAMBERS located at CITY HALL, 201 SOUTH CORTEZ STREET, Prescott, Arizona. ♦ CALL TO ORDER Mayor Kuykendall called the meeting to order at 3:00 P.M. Councilman Blair led the Council and audience in the Pledge of Allegiance. ♦ ROLL CALL Present: Absent: Mayor Kuykendall None Mayor Pro Tern Lamerson Councilman Arnold Councilman Blair Councilman Kuknyo Councilman Lazzell Councilwoman Wilcox I. REGULAR AGENDA A. Presentation and discussion of Development Impact Fees Project — Preliminary Fee Report and associated Infrastructure Improvement Plan Mark Woodfill, Finance Director, said Council will hear a preliminary impact fee report as well as look at the Infrastructure Improvement Plan(IIP) and the Land Use Assumptions(LUA), which must be updated every five years according to the Arizona Legislation. Mr. Woodfill introduced Rick Giardina and Andrew Rheem from Raftelis Financial Consultants. Mr. Giardina, Executive Vice President, Raftelis Financial Consultants, Inc. showed a PowerPoint presentation of the Preliminary Development Impact Fees Report and Associated Infrastructure Improvements Plan that included: • Project Overview and Status Prescott City Council Special Meeting February 18, 2014 Page 2 Mr. Giardina noted that an impact fee is a tool a community uses to reflect a philosophy of having growth pay its way. He said communities have been driven toward impact fees due to the increasing unit cost of providing new capacity. Mayor Pro Tern Lamerson asked if they take into consideration constraints that face communities, like water and the limited amount of natural resources. Mr. Giardina answered, yes; the LUA do not project growth in the case of water beyond what they believe can be met. He noted that all projects are not growth related and funding sources needed to be identified for those projects. • Land Use Assumptions (LUA) and Infrastructure Improvements Plan (IIP) Summary Mr. Giardina noted that the LUA identify current and future service units and then project growth needing non -utility and utility services. He noted that fees were calculated from that information. He discussed population, housing and non-residential assumptions for the next decade. The increase of employees is used based on the land availability in Prescott to estimate the square footage of new development that will occu r. Craig McConnell, City Manager, noted that there is a parallel study going on that is looking at public safety. He said they are doing extensive analyses for calls for service. There has been a view expressed that, regarding setting impact fees for police or fire, the City should wait until they have more detailed information that can be presented to the Council. Mr. Giardina said that legislation requires municipalities to look at and define service areas. He said this was done with a careful process that defines service areas that reflects the facilities that are necessary to serve those areas. Councilman Lazzell asked why the state was legislating impact fees. Mr. Giardina said the legislation is driven by the development community and perceptions that there is no uniformity to how impact fees are calculated. With the legislation, the development community knows the fees they are paying are a proper reflection of the cost. • Preliminary Fees and Considerations Andrew Rheem, Senior Consultant, Raftelis Financial Consultants, Inc. addressed the Council. He explained the process for calculating fees and discussed fire and emergency medical service fees. The preliminary fee is just under $320.00 per housing unit and the range for a non-residential property of 1,000 square feet is $215.00 to $718.00. Mr. Rheem noted the City identified expansion at existing police headquarters. Overall the primary construction cost is 50/50 between existing and new development. The results of this in terms of future projects, ties into the existing facilities. Looking at the Prescott City Council Special Meeting February 18, 2014 Page 3 growth related plans of the future police station expansion costs resulted in cost per service unit of $71.00. He said that was $113.00 per housing unit and a range of $77.00 to $250.00 for non-residential. Mayor Pro Tern Lamerson asked why a single residential family unit would use police less than an office building. Mr. Rheem explained the methodology of the assessment. Mayor Kuykendall asked if the staff had considered consumption on a per unit basis. Mr. Giardina said they are committing capacity and the ability for the customer to use that capacity. The capital commitment the City is making is intended to be recovered through the impact fee. He said it is not intended to represent the way each person will use the facility. Mr. Rheem noted that collection of fees may be deferred to a date certain until sufficient funding is available. Councilman Arnold noted that if money were collected for a new fire station and within ten years, the City did not have the money to build and/or operate the station; the money would have to be refunded to the property owners with an interest rate. He said that he is concerned with obligating future Council and the community to this project. Mr. McConnell said that early in this process there was a review of the existing impact fees. According to the legislation, some of the fees could no longer be assessed. He noted that some fire stations may not be optimally located. That discussion is not about new growth, but about service delivery and response time. He said that fire and police were added into the project so that they could be examined. As the process proceeds Council and staff will have the opportunity to ask all of the right questions to determine their conclusions. Mr. Giardina said that under the philosophy that growth pays for growth, the existing community has made that investment and growth needs to buy into it. Councilman Blair noted that legislation dictates the way the City of Prescott treats their sewage and the process now has to be changed. He noted that it is not always growth that is causing the City to spend money on a new sewer plant. Mr. Giardina said the cost of that plant, related to meeting new regulations to serve existing customers is not in the impact fees. Councilman Arnold said Council is currently discussing whether this will be a funding source for new fire stations, or if they need to look at alternative methods. Mr. Rheem continued with street facilities and noted that the projects identified for potential fee recovery are Sundog connector roundabout, SR89 (Granite Dells Parkway Interchange) and SR 89 Side Road connector roundabout. He discussed the land uses in each of the area and the preliminary street fee. Mayor Pro Tern Lamerson asked if the impact fee was going to be assessed to retail. Mr. Rheem said yes, based on projected zoning in that service area. Prescott City Council Special Meeting February 18, 2014 Page 4 Mr. Rheem noted that reimbursement of Streets Fund for debt incurred from previous improvements is not allowed and the City does not currently have identified capacity expanding projects in the area of streets. He said the City is restricted in the service area on how the money is spent and restricted in what the money may go towards. There is no additional capacity improvements programmed in the five year Capital Improvement Projects Mr. McConnell said it was confusing; if the fees were adopted, the City would be keeping impact fees but there would be no projects. Mr. Rheem continued with Utility Fee Components and said that fees are tied to the capacity of the major facilities and are different from street fees. Mr. McConnell said the Infrastructure Improvement Plan is a conservative plan that has been scaled back. He said the anticipated population growth is reasonable. He noted that the City of Prescott has enough land within its existing city limits to exhaust its available water without annexing any more property. There was a discussion about the water system fee. Councilman Arnold asked if the City of Prescott were to look toward centralization of the wastewater treatment plant in the next few years, would the Council and staff have to re-evaluate the fees. Mr. McConnell said yes, as they are also required to re-evaluate the fees every five years. Mr. Giardina continued the discussion with preliminary fees versus the fees the City of Prescott has in place. He noted that the fees that are labeled as preliminary are the maximum allowable fees. The Council is free to adopt any fee up to that amount. He noted that the new legislation said that if a police fee, for instance, were adopted, it would have to be assessed to all land use categories. He then discussed preliminary impact fee examples. Next Steps Mr. Giardini showed a schedule with everything geared toward the August 1, 2014 effective date. He said fees can be charged anytime after that date. Mr. McConnell said that the February 25, 2014 date was to consider. The adoption of the IIP and LUA, but that adoption does not commit Council to adopt a fee. Jon Paladini, City Attorney, noted that if new fees do not go into effect August 1, 2014, the old fees do not continue. Prescott City Council Special Meeting February 18, 2014 Page 5 Councilwoman Wilcox asked if there were other states with similar legislation. Mr. Giardina said Texas, Utah and California and the legislation had not been challenged. II. ADJOURNMENT There being no further business to be discussed, the February 18, 2014, Prescott City Council Special Meeting adjourned at 5:16 P.M. Gr� MARLIN D. KUYKEN ALL, Mayor ATTEST: DANA R. DeLONG, City Cleryl