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HomeMy WebLinkAbout12/10/2013 Study Session MinutesSTUDY SESSION MINUTES 11555 W. Civic Center Drive, Marana, Arizona 85653 Council Chambers, December 10, 2013, at or after 6:00 PM Ed Honea, Mayor Jon Post, Vice Mayor David Bowen, Council Member Patti Comerfard, Council Member Herb Kai, Council Member Carol McGorray, Council Member Roxanne Ziegler, Council Member STUDY SESSION CALL TO ORDER AND ROLL CALL. Mayor Honea called the meeting to order at 6:00 p.m. Town Clerk Bronson called roll. Council Member Ziegler was excused; Council Member Bowen joined the dais at 6:05 p.m. There was a quorum present. PLEDGE OF ALLEGIANCE/INVOCATION/MOMENT OF SILENCE. Led by Mayor Honea. APPROVAL OF AGENDA. Motion to approve by Council Member McGorray, second by Vice Mayor Post. Passed unanimously S-0. CALL TO THE PUBLIC . No speaker cards were presented. DISCUSSION/DIRECTION/POSSIBLE ACTION D 1: Presentation: Relating to Development; presentation on the status of the Town's 2014 development impact fees for roads and parks. Presented by Keith Brann, who introduced Curtis Lueck, consultant. Mr. Brann began with a discussion of the various transportation funding sources. Impact fees do become a very important part of the blend of money to build construction projects within the town. Under state law, they can only be used for capital construction. He then named some of the things they cannot be used for: maintenance; credits for non-new construction; to improve an existing deficiency. As impact fees are assessed, we must be sure that they are determined to be a proportionate share on the development that is paying them. Under the new impact fee legislation, we have to have our new impact fees in place by August 1, 2014. The town has had impact fees in place since 1999, when they were Study Session Minutes —12/10/2013 used on the Lower Santa Cruz Levee, followed by the South Transportation Fee which was the Twin Peaks Interchange fee. After that the fees were used for projects that varied due to growth that determined the fee. Other regional players using impact fees for similar projects are Oro Valley, City of Tucson and Pima County. The Town of Sahuarita does not have impact fees at this time as most of their development does not have to be upgraded. He then discussed why the current impact fee makeup is changing, including a brief review of SB 1525, passed two years ago by the state legislature. The legislation changed how municipalities must assess fees and invalidated the town's current fees as of August 1, 2014. SB 1525 prohibits certain fee uses that are not necessarily something considered to be a public service for the general public. Other changes were to remove the current impact fee structure. We are now required to study our fees every 10-15 years, depending on the type of infrastructure. A long adoption process was created, and our annual indexing process was removed. Another major change is that if a residential fee, or any fee at all is charged, we are required to study and charge commercial impact fees as well. We will begin submitting to the biennial audit/advisory committee and will be back every five years before Council to look at assumptions made and determine if they are still valid. Mr. Brann then reviewed the fee adoption process under the new legislation. If any of the development projects change, staff would have to come back and re-evaluate our growth studies. For some of the major developments in the community such as Sanders Grove and Saguaro Bloom, staff stays in constant contact to make sure everyone is on the same page. Once the growth assumptions are made, that will be used to do traffic modeling, devise an infrastructure plan and fee categories, all on a 10-year cycle. The last stage of the process will be to prepare the development fee report which will analyze all data in the first two phases to come up with a fee per residence, per apartment unit, per 1,000 feet of retail and for any other type of other industrial use or per hotel bed. Tonight we have done the land use assumptions and prepared draft versions of the roads and parks infrastructure plans. Staff is looking for any feedback that Council may have in advance of a public hearing that will occur on January 7, 2014. From there, we will take any final direction from Council, wrap up the reports and bring them back for adoption in February. Once that is completed, staff will start working on the actual fees for each type of use. When that is finished, there is a 75-day wait period before collection of those fees. He then turned the presentation over to Mr. Lueck to discuss some of the more technical aspects of what went into the reports. Mr. Lueck addressed Council and noted that the Land Use Assumptions (LUA) for a 10-year plan are a little unique. Most assumptions plans are for a 20 or 40-year horizon. These assumptions were reviewed up to subdivision level — about 60 subdivisions that were looked at individually for build-out, entitlements, new homes and new employees or businesses expected in each type of subdivision. Town staff and Pima Association of Governments (PAG) provided a lot of good information for this study. Population growth was allocated to the fees areas and transportation analysis zones. For the next 10 years, estimates are for about 7200 new homes, representing 19,400 new residents; roughly 401 acres of commercial and industrial development which equates to about 6200 new jobs. The Streets Improvement Plan is based on the travel demand model that was updated working with PAG. There are some minor changes, but it basically retains the current service areas. The LUA were put into the Travel Demand Model, Study Session Minutes —12/10/2013 2 which tells us how much traffic is likely to happen with incremental growth. That helped define what the roadway needs will be to accommodate the new population and jobs. That impact was separated by land use categories which will be used in the fee study in about two months from now. Staff excluded a fee for the use of existing capacity from the Streets Improvement Plan. Under statute, we're allowed the charge the new residents for the use of the available capacity. Under the Streets Fee Area, there's a northeast, northwest and a south area. There were minor changes to this from what's currently in place. Under Credits for Existing Revenue, statute mandates that there's a credit toward the impact fees for the incremental increase above our standard two percent of the local sales tax on contracting-related activities. Construction Sales Tax credit for a new single family residence is about $2500 which is fairly consequential. For multi-family residential, it's about $1100 per unit, and for commercial and industrial development, it's roughly $1 per square foot. The other quantifiable existing revenue credit would be for the Highway User Revenue Fund (HURF). The town's HURF revenue is used almost exclusively for maintenance, and only a small portion is used for capital construction. So for this study 10 percent of the HURF is going to be used for future capital construction which can then be credited back toward the impact fee. For the Parks & Recreation Plan, they used a town-wide service area as well as a different method for calculating the impacts — an incremental expansion method. The process is to inventory all of the current park equipment, services, land, etc. and create a replacement cost for those and then divide by the population. Only new facilities will be built to serve new development. The impact fee will not be used to make improvements to the built-up area. So there are two fee categories. So there are basically two fees - a fee for single family residential and another fee for multi-family residential which is two-thirds the rate of single family resident. This is based on the average population and applies primarily to residential rather than commercial or industrial development. Keith Brann then described some of the projects expected to be funded by the impact fees. He noted that there are some roads that the town is committed to build through the Regional Transportation Authority (RTA) such as Tangerine and Silverbell Roads. There is also a major park to be built in Saguaro Bloom within the next 10 years as build-out occurs. Also, a district park on the northeast section of town, and extension of the shared use paths and trails. As far as the street fee categories, it has been broadened from the current residential fees mainly because the town is taking some pseudo-residences like congregate care and hotel/motel. We'll have to determine what impact fees are for those. They've been lumped with residential based on bed count or room count even though they are non-commercial. He stated that we are starting to branch out of our traditional fees for non-residential streets fee categories. Staff looked at other jurisdictions throughout the state, and it runs the gamut from industrial and retail to very specific big box, or not big box, bank and drive-thru banking. Most of the categories are the headings for the traffic manual that staff uses in the town and in the nation. For retail, they have been looking at three size tiers — 15,000 sf, 75,000 sf and 150,000 sf and beyond. We are looking at the possibility of creating a fourth tier for a"mom and pop" type store. There is high traffic retail users and pass-by capture users, industrial — heavy. Light, Study Session Minutes —12/10/2013 3 warehouse, storage; general office; medical use; institutional uses such as schools and recreational uses such as theaters and gyms. Mr. Brann concluded and reminded that staff is looking for feedback prior to bringing the item back for public hearing in January. Council Member Bowen asked about Hotel/Motel being included in the residential fee categories. Mr. Brann responded that they were lumped in there because that can be quantified as a unit rather than square foot in a hotel. He also explained congregate care as well as a question from Mayor Honea about the new law requiring commercial to be impacted for transportation if we have residential and who asked if it applies to anything else. Mr. Brann stated that it applies to any impact fee studied. If you charge at all, you have to charge across all uses. D2: Presentation: Relating to Utilities; presentation on the Utilities Department Infrastructure Improvement Plan and draft proposed impact fees for water service, wastewater connection, and water resource development. Presented in conjunction with D1 by John Kmiec. For Utilities, we also have to do a 10-year planning report, and that they worked with other departments to make sure our land use assumptions are in line with other service areas. On November 22, the Utilities Department posted their land use assumption plans online and with the Daily Territorial. The Utilities Department timeframe is a little different from roads and parks. The initial draft review process for Utilities is going on right now. We will be back on January 21, 2014 for a public hearing to talk about water and wastewater. Our goal is also to have our fees in place by August 1, 2014. Mr. Kmiec reviewed the several water systems around the town, noting that there are two primary benefits areas where we anticipate expansion over the next 10 years. One is the North Marana benefit area, which encompasses the traditional downtown Marana and Gladden Farms area to the I-10 interchange as well as all the way west to the wastewater treatment plant is located. The other area is the Twin Peaks benefit area which includes Continental Reserve, Picture Rocks, Twin Peaks, Hartman, Oasis and any new development that occurs in those areas. Some of the new projects are a San Lucas Interconnect, where we currently have a six-inch interconnect going under I-10 east. As needs increase over the next 10 years due to future development, we'll upsize to a 16-inch line to give more redundancy to that system. We also plan to upsize the Tangerine commercial reservoir and booster station. This is potentially a new service area for Marana utilities. This is located about a mile east of I-10 along Tangerine. There is a lot of commercial interest and development activity in that area. The W+ the X zone booster is along Tangerine Farms Road to provide more pressure. Further out in our plan is adding an additional well at Ora Mae Harn Park to the North Marana system as well as putting a redundant reservoir next to the reservoir that currently exists on the north side. To support any potential growth with Sanders Grove, we'll increase the pipeline size to a 24-inch extension. In the Twin Peaks area, we're planning to upsize the reservoir and booster station at the Twin Peaks Vista reservoir which will support the (former) Spectrum development and development along Twin Peaks. As well, we want to make an interconnect on the Twin Peaks system on the east side of I- 10 and the river with the Continental Reserve system on the west side. We believe that interconnect is going to allow a greater redundancy and support the full systems and turn that into one system over time. There is a Picture Rocks interconnect between Continental Reserve Study Session Minutes —12/10/2013 and Picture Rocks that we want to upsize there and make into one system. In the future, the Airport/Lambert system will be referred to as the Saguaro Bloom System. Moving to wastewater, he discussed the 10-year window and the current upgrades to reach peak capacity. Staff sees expansion of the plant from 0.5 MGD to 1.5 MGD within the 10-year window. Staff is also looking at paying half the (County) settlement with the impact fees, and the impact fees will also be adopted such to support the Saguaro Bloom force main that has been agreed on in the last several weeks to get that extension into downtown Marana. The last impact fee is referred to as the water resource fee. Both the current water resource fee and the water impact fee were adopted in January of 2006 and haven't changed since then. The water resource fee is the fee generated to allow the utility to look for future sources of water and to help with renewable water supplies. One-half of the water resource fee will be to help pay for the settlement with Pima County. The other portion of that is to acquire an NIA allocation of CAP water. We should know in the next several weeks if we're going to get that; it's a new CAP allotment. This will also help develop the groundwater recharge facility outside of the current wastewater system. He then discussed the current and estimated fees in the water connection fee areas. On the water side, the current water impact fee is $864, a flat fee for a single family residence. The highest estimated fee increase will be in the North Marana and Twin Peaks benefit areas due to substantial growth. The other areas, Saguaro Bloom, Palo Verde, Airport and Falstaff are anticipated to have a modest water connection fee. On the wastewater fee, the current impact fee is $4,544; we're estimating in the 10-year projection that the fee should be slightly lower. On the water resource fee, it's currently $1,467; that fee will be across all the water provides and will increase from $1,800 to $2,000. This is due to the uncertainties with CAP water and future allocations and the cost to acquire those. Next steps are to come back to Council on January 21, 2014 for the public hearing on the utilities portion of the impact fees. Vice Mayor Post asked about improvement districts or facilities districts and how they will relate to impact fees or the need for them. Mr. Brann responded that currently, the improvement district we have as well as infrastructure that was built and accepted into community facilities districts, the value of that is credited against the impact fees. Vice Mayor Post asked if, as we move forward, we are planning to insist that sizeable developments with public infrastructure have those for the ongoing maintenance portion of the district? Mr. Brann responded that that is a policy decision that Council must make for staf£ Vice Mayor Post said he doesn't know how the town will maintain all the public infrastructure that has been discussed tonight. Mr. Davidson interjected that it's one thing to talk about the upfront capital investment and how to build residential or commercial areas. It's what you inherit long-term regarding maintenance. A CFD -- not having a property tax town-wide -- is a way you can maintain infrastructure in a localized area, and I think it's something we absolutely should explore in terms of making sure that money that is collected on the maintenance side of things. The CFD for Gladden Farms helped do that during the recession. So it's something we need to be thinking about, and it's a policy decision that the Council has to make in terms of how we apply what size developments need to have CFD's so that we have the long-term maintenance component. Vice Mayor Post Study Session Minutes —12/10/2013 5 asked Mr. Davidson if there is any way to do that concurrently with all of the work we're doing right now. Mr. Davidson replied that it's a conversation that Council needs to have in terms of what they want to have in place so that when a developer/builder, whether residential or commercial, comes into the town, we know what triggers us having the conversation we need to have for a CFD. Is it the number of homes, the size of the commercial area? Then it just becomes an automatic thing to discuss when we're dealing with the private sector. We know exactly what we're going to need in terms of the creation of the CFD and then coming to Council with the proposal and you being comfortable moving in that direction. We currently have a number of CFD's, some of which are active and some aren't. Vice Mayor Post: even if we only organize those CFD's for the use of their maintenance component, it's extremely important to keep our neighborhoods well-maintained without struggling to find money out of our general budget to do that. He asked Mr. Davidson if this something he can talk about among staff, put together and maybe go ahead and bring this along with what we're doing here or catch it up to it. Mr. Cassidy stated that the way the statutes work for impact fees, the credit for any creditable improvements installed by a CFD will be credited out anyway for that neighborhood. He doesn't think there's a strong need necessarily to do this in conjunction with the impact fee, especially since by having such a shortened timeframe under the (10 years out), we're really looking at pretty major infrastructure, and CFD's tend to do more localized infrastructure, so a lot of their infrastructure is not going to be creditable. Obviously, we've already seen some creditable infrastructure with Gladden Farms and Tangerine Farms Road, and we would expect that Saguaro Blaom, once they're building Twin Peaks Road, they'll be a credit there. But those credits will work into the existing framework. That doesn't mean that we don't necessarily want to study it, but I'm just trying to point out that it doesn't have to be linked to this process. Vice Mayor Post: And my main concern is not the actual capital dollars; it's the ongoing maintenance dollars that I'm concerned about. And making sure that we have the necessary vehicle in place to acquire those maintenance dollars, so we're not talking about big dollars per home. I want to make sure that we have discussed policy and have it in place so that when these developments happen quickly, we have a policy in place to do this. Mr. Davidson stated that one of the things that we could do, and I agree with Frank, is to have parallel tracks. We wouldn't want to hold up this whole process because there are very strict timelines that are involved with it. But I think this could fit in with Council discussion in terms of the Strategic Plan process. We could embed that type of statement as a policy statement about how we maintain this community long-term, and the Community focus area could be a very appropriate place for that. There could be analysis done on how that would work and what those thresholds are; we could certainly do something like that. Mayor Honea: If we do a$.30 standard maintenance fee with CFD's which is the only property tax we have in Marana that we actually impose for new neighborhoods for maintenance and new facilities, it might get kind of touchy when we start trying to come up with the funding mechanism if it's tied to a property tax. Vice Mayor Post: And I agree, but that's why we need to do it before those homes come out of the ground, so that when people buy those homes, they know that they're paying to maintain the quality that hopefully they bought in to. And that's all they're paying for; they're not paying for other neighborhoods; just their own. Study Session Minutes —12/10/2013 Mayor Honea asked for any other comments. He thanked staff and Mr. Lueck. Executive Session pursuant to A.R.S. §38-431.03 (A)(3), Council may ask for discussion or consultation for legal advice with the Town Attorney concerning any matter listed on this agenda. 1: Executive Session pursuant to A.R.S. §38-431.03 (A)(3), Council may ask for discussion or consultation for legal advice with the Town Attorney concerning any matter listed on this agenda. FUTURE AGENDA ITEMS Notwithstanding the mayor's discretion regarding the items to be placed on the agenda, if three or more Council members request that an item be placed on the agenda, it must be placed on the agenda for the second regular Town Council meeting after the date of the request, pursuant to Marana Town Code Section 2-4-2(B). ADJOURNMENT. Motion to adjourn at 6:53 p.m. by Vice Mayor Post, second by Council Member McGorray. Passed unanimously. CERTIFICATION I hereby certify that the foregoing are the true and correct minutes of the Marana Town Council meeting held on December 10, 2013. I further certify that a quorum was present. Jocelyn C. Bronson, Town Clerk Study Session Minutes —12/10/2013