>> Good afternoon and welcome to this meeting of the Capital Improvement Advisory Committee.
The Planning and Zoning Commission does serve as this committee.
And with the quorum present, I will call the meeting to order at 4.01 PM.
Our one item of business today is receive a report, hold a discussion,
give staff direction regarding the update to the roadway impact fees.
Becky, I will give it to you. >> Thank you so much for having us today.
Myself along with Pete Kelly will be here to give you the presentation.
I'm going to ask Pete to come up here in just a minute.
I want to remind you, we gave you a copy of the study.
Hopefully you saw it as exhibit three. I know it was a lengthy report.
Also a copy of the presentation in the AIS. I also want to mention to you that the calendar
that's at the very end of the presentation is going to be updated.
Some of those dates are going to move out just because of the council calendar
and us meeting some of the statutory requirements of the 30 days with posting.
Our goal here today is to receive feedback from you, not only on the land use to assumptions
map that was presented to you in the study, also the capital improvement plan packet that was a
part of the study and then of course some direction from you on percentages or other
percentages that you would like for us to look at. We did meet with council and had conversations
with them. They've asked us to come back looking at 30%, 40% and 50% and we will be having that
presentation January 24th. As you might know, last night was the last council meeting for the
month of December and then we are going to be taking a break until getting through the holidays.
We will not be on the January 10th council meeting. At this time we'll be on the January 24th.
So Pete's going to make sure, Tina's going to make sure, the entire team, we're going to really work
to make sure we meet the intent of the state law today by receiving all the feedback that we need
from those three different items from all of you and we look forward to the conversation. So I am
going to open the presentation and get it started. So really just kind of an overview and then I'm
going to have Pete come up and talk about the feedback we received from you last time and really
appreciate it. I know it takes a little bit of time out of your day to get here early tonight and
it can make for a long meeting so I do appreciate all of your attendance today. Our overview really
is to talk about the final maximum fee results and calculations. That report is completed. You
saw that in the overall study. Talk about collection rate options. You'll see three options that we're
going to present to you. As I mentioned, council actually asked us to come back with a couple of
different options. Talk about some comparison cities. I want to caveat this comparison city.
It is extremely difficult to compare cities. There are no two cities alike. There are no two cities
that think the same way or collect fees in the same fashion. I will also mention to you that the
comparison cities that were selected, some were based on the fact that they are college towns.
You'll see College Station. You'll see New Bronze Fools. You'll see Lubbock. We like to compare
ourselves to other college towns. One thing that's interesting about the city of Denton is not only
do we have our own water and wastewater systems, we also have our own electric system. It makes the
city operate in a little bit different fashion so we like to use comparable cities and there are some
of those that you'll see. You'll also see some cities that are local that sometimes we compare
ourselves to. We don't grow exactly the same way they do and they have a little bit different
information as far as collection rates and you'll see that. We'll talk about the existing fees.
Transportation funding options is something that we want to discuss because impact fees
are just one way of funding transportation from the development perspective of those fees being
accounted for during the development process. You might be aware that there is a roadway funding
strategy conversation that's ongoing through the finance department and our department,
capital projects engineering department and also I also manage the street strategy and traffic
department so it's kind of an ongoing conversation amongst of all those individuals talking about
transportation funding options. There is a topic that will come up discussion of a possible roadway
user fee and so that's a little bit different conversation. So when we show this to you,
understand this is kind of the cafeteria plan of different ways roadways can be funded
and that overall roadway funding strategy is currently slated for the same council
meeting as the roadway impact fees which is on the 24th and then next steps and schedule.
Sorry, I've been struggling. I haven't had a voice this week and now I have a voice but I'm still
having a hard time talking. So we'll talk about that. You'll see a preliminary schedule but there
are going to be some dates that are going to slip just because of the time it takes to get on the
council calendar right after the first of the year. Like I mentioned with the month gap it does
make it difficult for all departments to really work to try to get on the agenda. So with that,
I'm going to turn it over to Pete, let him talk about the final roadway impact fee calculations
and move forward through the process. So Pete, come on up.
All right, thank you Becky and good afternoon commissioners. So as Becky mentioned, we wanted
to come back and present the results, the final results of the impact fee calculations for you.
So the table that we're looking at right here is a condensed version of the maximum accessible fee
table that's in the report, that's table nine. So on the first line here there's actually a
number of calculations that take place before this but essentially we start with what is the cost to
build out the thoroughfare plan, what's the overall need in the city, and then we remove the costs
that are outside of the 10-year window that we're constricted to for impact fees. So this is after
those costs have been removed, that's where we're starting at the top of this table. And then we look
at how much growth are we expecting over the next 10 years and that's in the service units is a
vehicle mile which is the capacity consumed by a one-mile vehicle trip. And then we also add in
the cost of financing and the ad valorem tax credit which was done by new gen and associates.
That's another stipulation of state law that needs to be done and so that brings us to
our maximum impact fee per vehicle mile which is the light blue row or the the fourth row in the
table. So you can see how that comes out for each of the service areas and that's what's actually
presented and calculated in the study. The red line, the red row here for a single family home
is really just a calculation similar to what will be done on the back end when the fees are assessed
but that's not actually provided shown in the study. Instead there's a table that shows how
many vehicle miles are generated by each different land use. So we've kind of done some of the math
there for you to show how much per single family home the maximum accessible fee will be. So it's
average around, we have the average on the next slide, but around $20,000 per single family home
for the maximum accessible fee across the service areas. And as a comparison of what's being done
now, we've covered this a couple times, it's close to just under $10,000 a single family home
and we're currently collecting about 20% of that in the city.
As Becky mentioned, the three collection rate options that we showed council consists of 20%,
50%, and 100% rate options. Just to provide a little bit more context to what this slide is
saying in the red columns, that's our existing maximum accessible fee from the 2016 study and
the adopted collection rate which is roughly 20%. The average maximum fee per vehicle mile for 2022
is just over $4,400. And then as you look at the collection rate for single family homes in the
bottom row on the far right columns at 20%, it would be $4,100 a home just over that.
And at a 50% collection rate, it would be just under $10,300 per single family home.
And if we were to collect the maximum accessible fee, it would be just over $20,500 a single family
home. And as a reminder again, you currently have a discount on non-residential uses,
so they're paying 25% less than residential uses per vehicle mile.
And on to the comparison data that Becky mentioned we were going to talk about. Like she said,
we do have a few cities here that have universities. We do have a few cities here that
are a little bit closer to Denton that could be geographically more of a competitor, but there's
obviously definitely some characteristics that are different about some of these other cities.
But just to help provide some context for what other cities with roadway impact fees are doing,
and all of these have been updated or adopted within the past three years. So I'll explain
a few of these and kind of walk through them. So with the city of Lubbock, they just adopted
impact fees for the first time in 2021, and they do have eight service areas and quite a variation
of their service areas. So what you're seeing is the average maximum fee is higher in some areas
and lower in others, and they're collecting 50% of their max right now. That still results in a
fairly low fee based on their growth and the infrastructure needed. Taking a look at Frisco,
Frisco is a good example of you have certain parts of the city that are growing quickly still and
other parts that are built out. So their most built out service area is the maximum fee is $2,700,
just under $2,800, and they're collecting 70% in every service area for residential uses. So
they're actually discounting residential uses, and they're collecting 100% for non-residential
uses. Just wanted to point that out. So some cities do it differently where they discount
residential or discount non-residential. But if you look at the service area that's growing
right now that has a lot of infrastructure needs, that maximum fee is quite a bit higher. That's
at $6,000 for a single family home, and they're again collecting 70% of that. So they don't have
a flat rate across service areas like Denton currently does and like some other cities do. So
that is another approach to consider, whether to maintain a flat rate or to maintain a percentage
of the maximum fee in each service area. And going down to New Braunfels, that study is actually a
couple years old. So the maximum fee is based off of 2020 costs, but at the time the plan was to
escalate the collection rate over the next couple years. So the reason it says 2022 there is because
the assessed rate was recently changed, but the study was done a couple years ago. And so they
moved up to collecting 100% of their maximum fee in New Braunfels. And Flower Mound as well adopted
100% of their maximum fee in 2021. And with Flower Mound, the town is also very,
there's very different areas in Flower Mound. We have the west that's got a lot of growth happening,
a lot of infrastructure needed, so the maximum fee is much higher there. Whereas on the east side
of town and then their service area A, the maximum fee is lower. So that brings it to an average of
12,000 single family home in Flower Mound. Again, just showing the same values we saw on the previous
slide of the 20%, 50%, and 100% collection rate options for Denton. So we hope this is helpful to
give some context in terms of what similar, some cities with similarities in geographic proximity
are doing to help with that discussion. And it's also important to put that in the context of what
are the other development fees that are being collected. We are aware that the whole package
of development fees in Denton is higher than a lot of surrounding cities. And so this slide
just gives you an idea. Again, at the 20%, 50%, and 30%, or excuse me, 100% would look like when
you add in all the other development fees, around 21,000, 27,000, and 38,000 per single family home
when you incorporate all the fees plus the potential roadway collection rates.
And as a reminder, again, just going back to the collection rate slide,
council can choose to set any percentage or any specific dollar amount they want as long as it's
less than the maximum accessible fee. So there's definitely more options than just what's shown on
this slide. And as Vicki mentioned, she will be coming back in January to discuss the holistic
transportation funding approach and all the different tools that can be used. And so the main
thing we want to focus on today is the fact that impact fees are one of those tools. And the main
question to answer is with the impact fees, which are focused only on growth, is how much does the
city of Denton want growth to pay for its impact towards the transportation infrastructure? And
that's really the question we're looking at with impact fees. And as a reminder, the things that
can be paid for by impact fees, because it is growth-oriented, it can pay for construction of
capital improvements on the CIP, surveying and engineering fees, land acquisition costs, debt
service of impact fee CIP projects, and the cost of updating the study itself. But any costs
associated with roads that are not on the CIP or repair and maintenance of existing facilities or
upgrades to serve existing development, those would not be impact fee eligible. And again, we'll be
revising and working on this schedule, but we'll be coming back to Council at the earliest in late
January to reconvene and get more feedback in terms of what direction you want to move forward with on
the collection rate. In terms of the feedback and action we're looking for today, we want to look at
it in terms of two separate topics, two separate items. One is on the study itself, in other words,
the technical aspect of the roadway impact fee update, on whether there's any questions or
concerns or comments about that, or if you're willing to recommend approval of the study. And
then the second component is on the policy aspect of the roadway impact fee update, on if you have a
recommendation to Council on what you'd like to see them collect or what uses you'd like to see
discounted potentially, so that they can take that feedback into consideration. With that, I'll ask
if you have any questions. Commissioner Smith? Thank you, Chair. In your experience, how many other
cities, how long have you been doing these types of consulting presentations and whatnot? Me or
Kim Lee Horne? I guess you, because I'm going to ask about your personal experience about a jump that
I saw within there that I didn't see the first time I was. I've missed one CIAC meeting, so there
might have been a conversation between there that I might have missed, but you personally? Yeah, I've
been with Kim Lee Horne for nine years, been working on impact fees since day one, and been
presenting and working on impact fees as a licensed engineer since 2016. Cool. I'm not questioning
your expertise. More just wanting to know. Happy to answer. Because I'm specifically about
Service Area B within the city. Sure. I mean, that difference between the 2016 and now, it jumped
200% from maximum fee being $6,000, maximum fee being $18,000. How often do you see Service Area,
I get understanding Service Area is increasing and over time it's cost of development and then
growth in a certain area, but how often do you see that big of a jump just between five years,
six years? Yeah, that's a good question. We're seeing certainly much bigger jumps in the studies
we've been doing this year than we have in my whole time doing impact fees, and that's directly
related to a steep increase in construction costs that we've seen just in the past three years
that's been faster than I've seen before that. And one of the things, one of the big things we
we've looked at again is the cost of drainage improvements, bridges going over creeks and things
like that. We think based on our analysis that those costs were likely underestimated in the 2016
study and that we made a focus on getting those costs right, as close to right as we can for this
study, but we certainly see the jump there. We definitely want to, we looked at it in terms of
we looked at it in terms of how can we be as accurate as possible with our construction costs
for 2022, and then we worked with city staff and looked at recent construction projects to make
sure our unit prices were reasonable and in line with what they're seeing, and so as we did that,
but also making sure that we don't go too conservative that if prices jump again in
the next two three years that the impact fee program is going to suddenly fall behind because
those prices have increased. Okay thanks. In your opinion as a consultant as well, why do you see
cities go with a static pricing when it comes to their enforceable fee whenever you see different
service areas that have different needs and you just brought up, we talked about service area B
specifically, having more accurate pricing I think in your words and what you answer to, but why does
the city go in and say okay well we're just gonna effectively enforce underneath our 2016 update for
you know for impact fees, 2000 across all when clearly each service area has different needs.
Why do cities go and do it statically rather than doing it dynamically and doing it by service area?
Yeah that's a good question. There's a number of reasons. I the most common reason is to
for to lessen the administration of the program, the to make it easier for not only on the city
side to administer the program but also on the development side to a greater degree of predictability
if I know wherever I go in the city this is going to be the rate I pay so it just lowers the
complexity increases the predictability and makes the administration easier on on staff.
So even going with a graded 20% graded 50% or 100% the recommendations are kind of put forth in that
and that impact fee analysis you did I mean essentially that those are those are even then
are just still guidelines not really decisions there that if if the desire is to be efficient
for administration for development then even then it's like well we're just gonna enforce something
that we think 50 50 percent's the best then we're just gonna say 10,000 flat for example right so
they're really just kind of even more guidelines to give us clarity within that. On that point
you mentioned how Frisco does its differences in the built-out area the more growth area.
As a consultant where do you see Denton falling into that type of model? I know it's a discussion
that we had as an advisory committee at one point in time was there really certain service areas
that need more attention and some that don't so from your consulting standpoint how do you see
Denton fitting into that model if at all? Yeah the service areas we have for Denton are much more
balanced in terms of infrastructure the ratio of infrastructure to growth. With the lowest service
area being service area E which encompasses most of the downtown area so there's more built-out
infrastructure and less growth so that's the lowest fee service area but most of the service areas are
within a thousand dollars a vehicle mile so they're relatively balanced. Okay no other questions.
Commissioner Villarreal. Thank you I apologize if you mentioned this at the beginning of your
presentation but I was watching the council discussion on this last week two weeks ago
and I was trying to figure out where they were landing in terms of roughly which option they
were going towards and just from my recollection it seemed that two were for option one two were
for option two and two for option three is that roughly what you got from that meeting as well?
Yeah I heard 75 80 percent so that wasn't an option that we presented was that was
a couple of the recommendations our council member Watts was okay with 30 percent possibly
with the next escalation in there a couple other council members I think supported somewhere between
20 and 50 yeah so we we saw similarly that
averages about 50 percent in terms of recommendations 40 50 percent. Got it yeah and I know there was
concern from some council members about if we increase the fee somewhere closer to 75 to 100
percent that the majority of that fee would be pushed onto the home buyer from your experience
and your expertise do you believe that could be the case if we increase the fee towards that 100
percent mark that nearly 100 percent of that fee cost would be pushed onto the home buyer?
I would say not not being a home builder that that's what I sort of hear often from the home
builders I couldn't say that I'm certain that that's what's going to happen I certainly have
been told that that's what it that's what happens regardless of where the fee is set so I don't think
that from what I've heard that where you set the fee is going to change whether or not the cost
gets passed the home buyer or not but that's what I've been told is that it typically does get passed
on to the home buyer. Right and no matter if we increase the fee or increase taxes it's still
gonna somehow go back to the home buyer eventually right the the cost for road repair and drainage
repair and whatnot and improvement. Yeah again it depends on the decision that the developer
and the home builder makes ultimately on that but yes that is a consideration to to keep in mind
in terms of how much of that cost is borne by the home buyer and by
current citizens. Right got it thank you.
Commissioner Perot. Thank you Chair.
So first to follow up on that and then I'll go back to just a couple of technical questions
in the report do you recall when I guess at the last council work session when the staff report
brought back the consensus of our cake committee from last time what their reaction was did they
have any feedback about hearing what we had expressed? I don't recall them commenting on
what what your comments were on what CIC had recommended or expressed before. Okay what was
our consensus shared to them in the meeting? It wasn't shared in the meeting it may have been
shared I can ask that staff if it's been shared outside the meeting. Thank you just a couple of
quick questions on the on the report. Sorry okay first I think we had some discussions at the last
cake meeting about how many units and some of those were in the ETJ and some of them were internal.
Seeing the breakdown in single family and multi-family it's a little bit of a different
breakdown because our comp plan splits out attached in two to four unit buildings separately but
looking at the numbers it it looked like including or if you assume the ETJ
numbers that you mentioned earlier were primarily single family then we would be ahead of linearity
on growth of single family over the next 10 years and behind linearity and multi-family it is
is my impression correct or is there something else going on in the numbers there?
So if I if I understand your your question correctly is does the mix of single family
versus multi-family in the impact feed does it match what's shown in the comp plan? Right once you
assume a certain amount of development in the ETJ. My answer is I would say yes
to that question we we took the data directly from the the comp plan so the comp plan did its
projections based off of traffic analysis zones throughout the city and there's a certain number
of households within each traffic analysis zone and by year so we took that that data by year and
then we we met with planning staff to look at what kind of adjustments need to be made in terms of
making sure our 10-year projections are accurate are accurate based off of new development data
that we that we have most recently and so there there could be some minor discrepancies in terms
of how much single family how much multi-family but we do expect that most likely in the ETJ it's
going to be more heavily single family and within the city limits it's going to be more heavily
multi-family and that and we believe the numbers are reflected that way in the impact feed okay
these assumptions thank you and then as I look through the the tables and the maps of the included
roadways I saw some roadways just not to pull anything particular out that currently are not
built to the cross-section that we normally do for some of the collector roadways and that sort of
thing and then when I delve into the details the the traffic analysis on those segments sometimes
said that there was zero percent or the capacity that they had even though they were under the
cross-sectional guidance in our transportation criteria manual was not under the projected
need over the 10-year period so sorry if I'm using too many words this is where I should have said
so started is that there's three different colors used in the key of those of these maps one is new
segments obviously those are included sure the second is widening segments I would assume those
are generally included and then the third is other thoroughfares right and and so some of those other
existing thoroughfares are are those in general included within the list of eligible roadway
segments or not included or is it some of which and some of some and some of the other and how's that
determined that's a good question so if it's a if the black line on the maps if it's an other
thoroughfare those are roads that were not included as impact fee eligible projects okay and that
that's a combination of either they've they've been fully built out and there's no current debt
service on that roadway or if it's a text out roadway or if it's a roadway that's in a existing
development agreement that developers fully going to be building those roads that those be those
show up as black roads okay yeah all right thank you that's it right now okay commissioner mcday
thank you thank you madam chair yeah i'll just carry us on your
city comparison as the city didn't ever model itself after in your studies have they ever modeled
themselves after other cities or they just pretty much want to see what's you know why i know they
want to see what everything is like and then just bring it back to the to the city i mean have they
ever just say okay i like this plan you know let's let's go with it or i don't know how long you've
been here so i don't know yeah i was involved in the 2016 uh update or the the first study i should
say in denton and one of the conversations then was to draw some some inspiration from the way
that ford does their program and the the initial recommendation was to start out three thousand
dollars a house which is what they were collecting at the time to be similar or in competition with
the fort worth market and that that changed shortly before adoption to being two thousand
dollars a house uh so that that was one of the initial comparisons with how to develop a roadway
impact fee in the same uh in the same vein the conversation of having a flat fee across the
service areas which at the time they've since moved away from that with their their latest update but
that's uh one of the conversations that was had all right thank you commissioner smith
yeah and uh thank you uh becky yeah and i will just mention as well that uh like i said fort worth
just went to a percent of the maximum in each service area and they've gone up to 50 percent
of the maximum rate in their any service areas with an escalation up to 65 over the next three
years uh that's a residential for non-residential they're going to stay at 40 percent of their
maximum each of the service areas and they also by the way saw a big jump in infrastructure costs as
well um how is that escalation measure do you know they're they're just choosing to go five
percent a year so each year on i see june 1st each year it's going to raise five percent for
the residential uses understand commissioner thank you um i know you're looking for one approval of
the study which i think we'll probably have to take an official vote for correct i know you're
looking for two things today there's an approval approval study and then a recommendation for us
to make two on the real impact impact fee to city council correct so yes well i guess we'll come
back to the approval of the study piece when it comes to being more uh formal um my input just on
what i'd like to see it as a recommendation to city council on this i like the idea of going to
30 percent with a scaling over the next three years to 50 i think that makes the most amount of sense
the uh i think just want to make this point that these are these are hypothetical single family
residential properties right they're not existing we're not not directly impacting by making this
change any current citizens and so really it is a change that's made to future citizens i think
that's something important to remember about impact fees that impact fees in my opinion are
probably one of the greatest ways we control growth um i've had a very large you know uh amount of
single family residential properties that have come into the city uh since my time on p and z
which are great excited to see the growth i think we also need to start taking our foot off the gas
pedal uh just where we are economically with interest rates rising and so i think that this
would help slow that down um and would be the best way of not only one not impacting current
citizens obviously but two really protecting them because eventually as commissioner villarreal said
that if we don't raise it that eventually current citizens are going to have to pay for impact fees
by just having their taxes raised or having to be you know on the hook as the ad valorem taxpayers
for a bond that gets issued out to cover for cost of of roadways so for me it's it's really not it's
inconsequential to whether that cost gets eaten by the developer or gets eaten by the home buyer of
those new ones because these are all hypothetical and um if the home buyer is going to pay for it
honestly at the end of the day the developer the builder is going to be a business owner and they're
going to look at it and say doesn't make sense financially for us to even develop if this is the
impact that has been stated so the graded gives time for our development community to catch up
and i think to be able to make those adjustments to projects because single family residential
property developments don't happen overnight they're not decisions that are made in a quarter or in a
year they're taking a lot of time into it so i think the grading makes a lot of sense to let them
adjust secondly on that recommendation of city council it wasn't really mentioned here other than
the briefly saying there's a 25 discount on commercial developments i would like to see
in service areas a c and d specifically a heavier discount towards commercial developments those
areas and maybe a is thrown out because it's so industrial but those areas are areas that we have
a lot of residential growth coming just based off last past projects seen the last five and a half
years and are areas that solely but surely we as a commission the city council have essentially
encouraged food deserts or lack of mixed use or blended use of commercial and residential uses and
so i think this would even be if this is part of the conversation of encouraging a discount to be
even higher for commercial developments to encourage commercial developments in maybe areas of the city
that would possibly create less impact to our roadways because citizens aren't having to drive
across town to be able to get to commercial services they need so those are my two points
i'll sum them up rather than doing my soliloquy i'll go over again graded 30 to 50 over the next
three years my recommendation and then encouraging a heavier commercial discount for impact fees
and the service areas a c and d thank you commissioner villarreal so i like the vice
chair smith's idea about increasing the discount for commercial development i am a bit more
aggressive in terms of impact fees i know i said at the last ciac meeting roughly 100 maybe 75 to 80
to match what mayor pro tem beck and councilman davis proposed so i'd be somewhere around that 75
to 80 percent of the maximum fee thank you commissioner prove it thank you chair i'm
in a similar vein as commissioner of real real i also like the idea of the you know increasing
fee just to keep up with times let me understand the the maximum that can be charged until another
study is done is it limited by the nominal dollar amount computed by the study or is it limited
to the nominal dollar amount adjusted by some cpu or or other inflation metric between those
two times it's it's set by the study itself so the nominal okay so so i would just say that
who knows what happens in five years but we're in an inflationary time to to set something that
does not have an automatically increasing value on it or percentage is to guarantee that the value
of that impact fee goes down over time until the next study is made so i i would be melding the two
and and i would really like to see starting above 50 and going as close to 100 as we can
and the reasoning for that is i think in the last ciac meeting we had um um scott mcdonald shared
that you know when you have communities that an impact fee jumps really the immediate change there
is that maybe the builders will start putting less amenities in those homes and that sort of thing
i look at this as not an impact fee to the new home buyer but rather a discussion of how much
subsidy the existing taxpayers are going to pay for the roads that those new home buyers are going
to be going to be needing essentially um and and i don't think our existing taxpayers should be
paying taxes to subsidize new residents granite countertops so thank you thank you
um becky i have a question um you mentioned that you're giving up that council asked you for i
guess more information more data that's going to be part of your presentation on 24th right so what
what new data are you collecting for them the really or is it just numbers the only things that
are really different they had a few questions that they'd like for us to answer um we've been
working through those they also asked us to look at 30 40 and 50 the options we presented today are
20 50 100 so they'd like to just see some of those variations like just see the numbers you mean
that's correct just see that the math worked out okay that's correct okay what else am i missing
there were a couple of other things they talked to us about um really the fee was the main trigger
item yeah um there was some discussion about if you raise the fee a certain percentage what does
that do to the tax rate we have to charge in order to keep up the roads um also what impact does that
have to your potential to capture sales tax essentially how much development uh can you can
you keep up commercial development coming in if you raise the rate and keep commercial uh tax
revenue coming in those are a couple of the the requests to present okay i was just trying to
understand exactly um what they want to see and part of the conversation that someday you know as
we look at the transportation funding options we'll have the roadway funding strategy conversation
where roadway user fee could be one of those conversation pieces and you know that's why we
wanted today to present the chart that shows here's city ways to to fund you know major roadway
improvement projects currently to date are being funded using bond programs um versus you know how
the development community um you know is using but impact fees is a way and a tool that's used you
know you can see throughout the state you know i think the other thing we've learned and one of the
things we want to make sure we share with council next time and it's kind of to some of the questions
that commissioner pruitt asked specifically um so the comparison cities and i guess commissioner
mcdade also sir but some of the comparison cities have not done their updates in a year or two
and even the differences we've seen in construction costs from 2020 to 2021 now using 2022 numbers it's
substantially increased we've seen you know any anywhere in the upwards of 30 to 40 percent increase
in construction and construction materials so that's one of the things that's made it
difficult to make the comparison because it is not an apples to apples comparison no never is
um yeah i think the consensus obviously is that we need to collect more than we're collecting um
commissioner smith i guess what i would just say with yours i don't the going 20 is just not
enough and it hasn't been enough and we're behind for sure throughout the city um raising it to 30
i don't think it's going to do anything i mean not much um i think i do think we have to be a
little bit more aggressive than that to me to to have um the proper impact of the impact fee
so um i i'd probably want to see something like starting at 50 and then with some kind of escalation
over over some time um getting to 100 i don't even know if that's a i don't know if that's a
doable thing just yet um if ever um here especially with all the growth that we have
i feel like 100 collection fee would happen when we've got more build out than we have
um but i'll give the floor back to you commissioner smith thank you no i think to
commissioner prude about the point of you know does that does that increase in the fee even what
but you know um scott mcdonald said is that does that ruin amenities or those kinds of things for
those new homes i think that's why the 30 to 50 percent that i recommended i know this is not
not battling for a vote here or making recommendations but i didn't give i don't
think maybe the full thought process behind why i said 30 to 15 even going to 30 percent on a
average of 20 20 000 per single family residential across the across the board
that's still a 200 increase to where our current impact fee is um for those developers and it to
me like a thought to commissioner prude's point and that's a more gradual rather than throwing
them in the deep end or throwing them somewhere in the three foot section of the pool uh and
letting them uh letting them let them figure out how that is going to go and then graduating to 50
to commissioner villarreal and to prude's points of saying over 50 percent and even to you chair
of saying over 50 i think at the end of the day the 50 percent is obviously a percentage and
there's dollar amounts to come from that but 50 as a principle speaks to the fact that this is a
partnership and we recognize the developers without them bringing projects to the city we don't have
sales tax revenue and ad valorem tax revenue that we can get i think that number speaks more to a
a true partnership type of mindset in the city versus us coming in saying hey we need you to pay
85 or 90 percent of this and thanks for thanks for your business now we're charging you the
full premium for that it it seems like it's more of an attitude of um we're kicking you in the shin
for bringing us something nice and so um that's that that's a piece that i think gets included
earlier but yep thank you anybody else um so i guess one commissioner cole hang on a sec
um it sounds like thank you chair it sounds like um the council was two two and two so i mean that
means there's four that aren't going to go for the hundred percent sounds like so
maybe the conversation should go 50 you know a nice down the middle
you know i don't think you can go wrong that way well yeah i think i think it'd be difficult to
uh go from 20 to 100 personally um and i just want to mention the 20 percent that i know
i'm just reiterating but i know uh pete said this earlier 20 is just really the basic to get us to
current construction cost right um so you know going from two thousand dollars in 2016 to
forty two hundred dollars in 2022 you know that's that's really just the cost escalation that we've
seen so um i just wanted to make sure i pointed that out sure thank you commissioner perot thank
you chair yeah i guess i just just tack on a couple things and that is that obviously the way it goes
is the way it's going to go um right now it's not so much that we've got development community in a
two-foot pool and we're going to take them to a three-foot pool it's that we've got development
community there and then we have the the rest of the citizens in the seven-foot deep end right and
we're talking about okay who are we going to let drown first right a lot of these developments if
they don't come in we don't have to build the roads so it's lower cost to the city i mean i
i just don't understand how um there's a tacit assumption that um
existing residents should always pay some portion whatever that is whether it's the 80 percent that
it is now which is really more like 90 with inflation or whether it's 50 or 10 or whatever
of the cost to serve new growth i just don't understand um and and then lastly as far as the
increasing amount i know there there may be psychological limitations to uh how high that
can go i would just point out that if you're talking about going to 90 or something five years
from now that won't be 90 percent of the cost at five years from now that might be 50 of the cost
five years from now so thank you commissioner villarreal i do hear commissioner cole's point
and as we're trying to reach consensus i'd be in favor of starting at 50 and graduating eventually
to 80 i'm sure commissioner pruett would somewhat agree with that as well if we're trying to reach
somewhere in the middle here so yeah i mean it's a difficult discussion um to reach consensus on as
we can as we've been discussing this now how many meetings and um and council's asking you for even
more information than the hundred pages we have in front of us so um so as far as what you need from
us today um so i believe your recommendation you know across the board kind of from the different
fees i've been taking notes okay um so i have that level of information we also would like to
have concurrence or feedback on the land use assumptions um we use the land use assumptions
that were a part of the 2040 comprehensive plan um that's what pete and team used to
develop the overall impact fee study and then we will also want your understanding and concurrence
with the capital improvement plan that's a part of the overall study so there's really three things
that we're kind of wanting to see if you have any feedback for us on or if you're in alignment with
so i believe as far as percentages we understand kind of where you all stand um but i think those
are the other two pieces that we'd like to hear some feedback on okay good commissioner smith
i think the uh i think the land use assumptions are spot on and i think that's i just keep the
feedback good job there um and then the um the impact study that you guys did was great and i
think that's perfectly fine there commissioner prudet yeah i think it's it's really encouraging
to see how um the investment that we made in the comprehensive plan and the traffic study
mobility plan is now being used carried forward for these types of studies and in the past it's
been a little bit more hodgepodge so this i completely support that uh my only comment on the
the the roadways that are included is whether staff thought through uh certain roadways that were
not built up to the standards so just as means of one example but i'm sure there's a few more that
might make sense to look at um up north on hercules there's that section kind of east of 77 well it's
not 77 there but east of locust street 21 something it changes numbers thank you um between there and
river pass where there's a there's like a narrow bridge that widens down that sort of thing um i
just didn't know if if those were not included because it gets too complex and it's not worth
penciling out a project um or if if it would make sense to include some of the
the smaller collectors um in case there was a project that came through especially i'm thinking
the ones um that that might coincide with some of the more major bike routes that are established
in in that mobility plan um just to be able to have more flexibility on the funding sources
so if i if i understand the the question correctly there's some collectors that are not built out
to their ultimate configuration and they're shown you're talking about the they're shown as
black roads on the map that are they're not colluded included yeah i saw a couple i didn't
go through every single one yeah there are some where it is a decision to be made um
whether that's that's that's in the plan uh coming up soon uh or whether there's really that much
capacity to be added or if there's right away challenges there so there's a lot of different
specific situations we ran into when we were looking at that uh but for the most part we
tried to include try to be on uh have a bias to include as many roads as possible so there's
flexibility built into the program yeah i mean if staff has already gone through and and made a
determination based on the things i'm talking about about those segments there's no need to
to go back and rehash it i was just wondering whether those types of thought processes had come
up in the process of identifying the roadways that would be included yes multiple individuals
reviewed each map of the service area we actually went back and forth several times as to even
how to show it where it made sense um the beginning stages of those maps had different criteria than
what it is currently shown and the legend was actually a little bit more explicit um we decided
to move in that fashion because keep in mind the cip map specifically for the roadway impact fee
is based on projects that are anticipated over the next 10 years and being that hercules for
example was just improved we don't anticipate a capital project in that area over the next 10
years okay that helps yeah no that does thank you for that additional information i mean with that i
i totally support the the um the report i think it was very thorough and uh i certainly learned
a few things it's reading through it so thank you agreed commissioner cole thank you chair
great work guys thank you so much for your hard work i mean you spoil us to death all of you so
thank you does that does that help is that uh absolutely okay good i believe based on
you know what we're needing is just understanding that you're in concurrence with the study the
document we've received the feedback on the percentages um we will be like i said making
that council presentation um and we'll use the feedback in minutes from this meeting as the
representation of the cia that's exactly what i was just going to ask you next do you need anything
else because i know you need to yeah meet the state law requirements so will that serve then
as in writing i believe is what you need it yes we're working to have this as be be the minutes be
okay in writing portion for the state law component so okay um i want to thank you all i know this is
extra time out of your day like i said to be here um early and i know you've had to do this now on
three different occasions it's very important that we receive your feedback you're the the board and
body committee that receives all of the developments that come through the process to begin with and so
it's very important that we receive your feedback so thank you so much for taking this extra time
pete and i have really enjoyed working with all of you and it's been a learning experience for all
of us so uh commissioner prude it's been something we've all learned through the process so i believe
commissioner prude has uh something more thank you chair just thank you for all that really um and
last point i would have i know there's going to be over ongoing conversations about um um infill
overlays and and what sort of things because that kind of came up in both bodies um i would advocate
within our written remarks to include a suggestion that at least council be consulted about the
strategy of drawing uh the um sectors at the next impact fee update um just because i feel like
that's something that some of the council members were surprised they weren't um consulted on before
and and it was just kind of a carryover from previous if that makes sense so when you say
sectors are you mentioning service areas thank you i couldn't think of the specific term the a3d
okay no problem sectors i think of roadways so i was wanting to make sure that i'm not wanting to
help them help me draw on the map every single roadway but sure you know i think um as the next
round of an impact fee update comes forward and keep in mind this is something that has to be done
at a bare minimum every five years um this was simply just an update but as the time frame comes
forward to make the next round of updates um and it like i said it's at a bare minimum five years
we can make the decision to make those updates sooner if development changes growth changes and
we feel like it's a need or even for that matter the economy changes right um and the city makes
that decision so at such time we definitely can evaluate service areas it has been a question
that's been brought up and so i appreciate that no problem i think um one one more thing to to make
sure um that is understood i think it's the consensus of this body to have the um uh the
commercial development discounts and and whatnot with as it relates to impact fees correct
it's my understanding we heard that about service area a c and d um in areas where wanting to make
sure that there is a commercial discount greater than 25 percent to allow for yeah just a little
more incentive correct i did understand yes thank you very excellent i want to make sure that got
taken forward okay thank you commissioner you're set okay good no no worries i just wanted to make
sure okay thank you very much for a great discussion super hard work um and good luck going
forward we'll be watching thank you okay thank you okay um i've got concluding items on this
agenda is there anything else to add concluding items from the commission or i should say the
committee in this regard okay with that i will close our capital improvement advisory committee
meeting at 458 p.m.