The October 8th, 2018 Public Utilities Board for Denton.
We do have a quorum, that was a close call there.
We do have a quorum.
What I'd like to do is we have a closed meeting
scheduled today and I'd like to move that
to the end of the agenda.
That'll be a little more efficient for staff
to be able to handle that item.
So our first item is a work session item
to receive a report and hold discussion
on the five-year update of the water
and wastewater impact fees.
- Good morning.
DSR, Director of Wastewater Utilities.
This is the update for the impact fees
and I just wanna go through a little bit
about why we have impact fees.
When a new development comes in, in the city,
whether it is commercial, industrial, or residential,
it creates a need for water or wastewater service.
That need is an impact, creates an impact
on the water wastewater system.
And state law allows cities to charge for that impact
on the water wastewater system.
So how we go about it, you know,
this was done through the developers back in 1987.
They actually went to the legislature
and had this impact fee law put into practice
because it creates a level playing field
for all the developers in the city.
There are prescribed methods that we have to use
to calculate the impact fees
and it requires land use assumptions for 10 years out
and based on the land use assumptions,
which show what will be the residential, commercial,
or industrial use of that land,
we determine the population
and then what impact it's going to have on the system.
And that impact can be on the existing capacity
or it may need new water stream lines,
pump stations, or addition to treatment plants.
So we can charge for that impact
and that's how there's a lot of calculation
that goes behind it.
There's a lot of computer models
that we use for water wastewater
to develop those impact fee projects.
There's a lot of financial analysis that goes behind it.
We do this every five years.
We started in 1998 with impact fees for water wastewater.
We had an update in 2003, 2008, 2013,
and now we are doing in 2018.
We went through RFQ process
and through the RFQ process,
we selected Kimley-Horn to do the analysis for us.
So with that, I'm going to turn this over to John Atkins
with Kimley-Horn to go through that.
(papers rustling)
- Thank you, PS.
I think PS just gave half the presentation right there.
(Karen laughing)
But that's okay.
We can repeat that.
Things like this, if it's new to you,
it's kind of like the rule of,
you need to hear something about four times
before it kind of sinks in a little bit
so it doesn't hurt to repeat particular items.
All right.
Let's get.
Let's set up here.
Okay, let's be sure, yeah.
Okay.
First of all, I'd like to thank staff,
specifically Tim Fisher and PS Aurora.
They've been a part of this for the last 20 years
of doing this work.
And obviously we consulted and leaned on them
back and forth quite a bit on doing the project.
And we want to appreciate their efforts
and guidance on the particular project.
All right, let's first start out
with the water impact fee update.
Okay, we're gonna go through some,
there's gonna be a lot of words on the screen
over probably the next three or four slides
just talking about kind of administrative type stuff
and definitions and that sort of thing.
We'll start out with what is an impact fee?
PS mentioned it.
It's a one-time charge assessed to new development
for a portion of costs related to
a specific capital improvement program.
Now what we're talking about is
what PS mentioned earlier.
The projects are identified
through your master planning process
and then additional growth over the next 10 years
is defined and then that's where
the one-time charge comes to the new development
as it comes in.
I'll just rattle through here.
Impact fees are a mechanism for funding
the infrastructure necessary to comment
new development.
So we're talking about new development here,
the predominant thing.
Impact fees are limited to water,
wastewater, roadway and drainage.
What we're talking about here today
is just water and wastewater.
Roadways, y'all do have that in y'all's
city's program also, but that's on a different
time schedule than the water and wastewater.
Okay, principles, purpose of why cities do impact fees.
The fundamental thing here is growth
in the form of new development should basically pay
its fair share as it comes in.
If growth doesn't pay for that,
the burden becomes, leans back on your current rate payers.
So what you're trying to do is take the burden off
your current citizens that pay through utility rates
and you're trying to put a little bit of that burden
back on the new development that's coming in
to the community.
And that's if we walk through here,
new development pays for a share of the city's cost
to provide water and wastewater capacity improvements
that will serve the proposed development.
Allows cities to recoup a portion of the cost
providing improvements.
Ensures that fees spent in a particular area
are where that development occurs.
And then it provides a systematic structured approach
to assess the fees.
And then the bottom line here is,
it facilitates growth paying for a portion of that growth.
Okay, the legislative basis for doing the project,
or doing the program in itself.
Like PS mentioned a little bit ago, 30 years ago,
the actual home builders,
a lot of people think about developers
not wanting impact fees in communities.
Well, it's actually the real estate
and development community that brought forward
the sponsored legislation that wanted impact fees in cities
.
Basically what it was is each,
the developments wanted to be treated fairly
across the board when it came to their capital
that they may or may not have to provide
for the new facility coming in.
So this allows and created a level playing field
where they'd be treated the same when it came associated
to cost and their usage on the system.
So to rattle through here, no impact fees
except as authorized.
So the legislation's authorizing cities
to move forward with this.
And as the city decides to do so,
they're allowed to do that.
There's some details in here,
precise methodology prescribed.
We define service area very specifically
that has to be defined.
Service units is another thing,
that's the growth component.
We're looking at what's gonna happen
over the next 10 years.
Another term that you'll see in the study
and then also in this presentation for service units
is also called single family equivalent.
What we're talking about is we define a service unit
in the study as the amount of water usage
that a 5/8 by 3/4 inch meter uses.
And that's equivalent to what a single family home
typically uses.
So you'll hear that service unit
and single family equivalent term interchangeably
a little bit, but they're basically the same thing.
And then we look at capacity analysis that PS mentioned
and also the land use assumptions,
which we worked with the planning department
and then also ties to the water
and wastewater master plans that were already done.
Complex adoption procedure,
where we're talking about that,
it has to go through a capital improvement advisory
committee,
which is typically the city's planning
and zoning commission plus ad hoc member from the ETJ.
That's represent that we'll bring the same type
of information forward to them and get input from them.
And then it has to move forward to council.
So it goes through PUB, it gets looked at,
it gets looked at by the capital improvement advisory
committee and then it gets looked at again by the council.
So it's a very thorough vetting through the governing body.
And then lastly, the administrative rules
for how you process it and deal with it administratively
gets set by the law, so once again,
it was initiated in '87, it's not a new thing.
Sometimes because it only gets talked about every five
years,
it can be unfamiliar to boards and commissions
that may turn over a little quicker than that.
So sometimes when people hear about it, they think it's new
and it's actually been established around
for a fairly long period of time now.
Okay, assumptions, here's some of the detailed assumptions
that were built into the study that was done.
Land use determines the type of growth you have.
Like I said, we worked with planning
and your master plannings are all using
the exact same growth information.
And then that's what we segue and use that
in the impact fee study.
Growth requires additional capacity
in the form of capital program.
The water and wastewater system models
accurately determine the additional capacity needed,
types of projects meet those needs
in the approximate timing.
So we utilize the city's overall capital improvement
program
to then narrow down on an impact fee
capital improvement program.
They're close, but they're not exactly the same.
The capital cost estimates are accurate for this timeframe
and then the growth, once again, the last statements
about growth projections for the 10-year window.
So when we do the study,
it's looking at a 10-year timeframe
starting in 2018 through 2028.
And then it gets revisited every five years
because your growth in the economics
are just the way things may happen
in both the local economy or nationwide
can make that fluctuate.
So you try to revisit it every five years.
You can do it sooner than that if you'd like,
if there's some pretty dramatic changes,
but you don't have to.
Okay, a little bit of history on the update.
The city of Denton's been doing this since 1998.
So this is the fifth go around.
State law requires it to be done every five years.
And then one unique feature with Denton is it's not unusual
,
but we have three impact fee zones for the water system.
And we have one impact fee zone for the wastewater system.
We'll show you a map of that here in just a few minutes.
And the next thing, this is pretty busy screen here
about how impact fees are calculated.
What I'd like to do, some of the items you see on the left,
the land use assumptions, population, five-year CIP,
and the consumptive use and the single-family equivalent
are items that go into this.
What I wanna just focus on a little bit here is
because this is water, it's divided up into three zones.
So you see a zone 1A, a 1B, and a two.
An example at the bottom here,
some of the math you see here is an example
focusing on zone 1A.
So what I wanna show you here,
let's just jump to the bottom a minute.
And the actual calculation of an impact fee
per service unit is a pretty simple math calculation.
What we're looking at is the 10-year maximum recoverable
cost
by that zone, which we've determined to be
a little over $27 million,
divided by the amount of growth
that's assumed to happen within that area.
Based as, you can call it a single-family equivalent
or a service unit.
And so the math is fairly easy mathematically.
It's just cost divided by growth.
And so that's the exercise that go through.
Now you see a lot of additional line items here
to get down to the bold $27 million number.
And those are some of the details that are in the report
with regards to financing, existing fund balances,
and pre-credit calculation.
That's kind of the sum of that.
And then what we do is that one last item
is a credit for utility revenue.
And what we're talking about here is
the term double-dipping is used.
And what it's talking about here is
if someone comes in, new development comes in,
they pay their impact fee.
What you don't wanna happen is,
is then they also pay in their utility rate
a portion of growth.
So what you do is take that portion of their growth
that's in the utility revenue calculation,
you take that out of the impact fee.
So you basically credit back a portion
of the utility revenue that is for growth.
You take it out of the impact fee value.
So you're not double-dipping somebody that comes in
and pays an impact fee.
That's kind of a unique feature.
What happens is if the city doesn't go through an exercise
to actually determine that number
using a financial consultant, which we did on this project,
you have to immediately cut the number by 50%.
So the legislature says, hey, if you do an analysis,
you can come up with the actual number,
this little, the $900,000 number.
If you don't, then you have to cut
basically the $25 million number in half
and then run the calculation.
So it's always of good value for most communities
to do the analysis.
Okay.
What's payable and not payable?
Run through the list here.
Components that can be paid by the program.
The biggest item is typically construction cost
for the capital improvements,
survey and engineering fees
to design those capital improvements,
land acquisition, cost, including court awards.
That's part of the design phase of those projects.
Debt service for the impact fee projects
and also studies and updates.
For example, our cost for doing the study
for you guys is rolled into this
and growth pays for the cost of our services provided today
.
Things that aren't on the list.
Projects not included on the CIP.
So it's really important that the map that's in here,
that defines what projects can be paid for.
That's the law, it's very specific about that.
Repair and operation and maintenance.
Those are things that are occurring on the system today
that you don't have future development paid for.
Upgrade to existing service
and then administrative costs for operating the program.
So staff costs for administrating the program
and stuff like that can't be part of the calculation.
Okay, now we're gonna jump to some
of the real numbers here a little bit.
The three zones we talked about.
Let me do something real quick.
We talked to Kenny about this to illustrate what this is.
I'm gonna jump down real quick here and I'll jump back.
Okay, I'm going, the zones you'll see here in a minute,
I wanna show you an illustration of that.
We've been looking at a lot of words on the screen.
So this is the water CCN boundary.
This defines the boundary that can be the service area
or multiple service areas.
Okay, this blue area you see here.
Now what the city has done is divided
on the water service area side
is divide the city up into three zones.
One A, one B and two.
And so to get a visual representation
of what I'm gonna go back to in just a minute
with regards to the values by zone,
these are the zones that we're talking about here
that I wanted to show you.
So I'm gonna jump back up real quick.
Okay, so service area zone one A, one B and two.
If you look over the right hand side to the SFE
or the single family equivalent growth for those zones,
you can see a little over 7,000,
you got 7,001 in one A, a little over 7,001 B
and then two has a little over 600,
totaling a growth of about 15,773 service units
throughout the entire area.
The projects, we have 17 existing projects on the list.
We have 15 proposed, adding up to 32.
And those total project costs are just under $400 million.
Now this isn't the cost that's in the impact fee,
but this is the total project cost
that the city is looking at from the study.
Okay, this is a breakdown of one of the tables in the study
.
It's pretty busy.
It's not all the project list.
If we tried to put all the project list on the screen,
it'd be tiny.
So what we did was kind of chop a little bit off
and show you the upper part
or some of the existing projects that are on the list,
the lower are future projects on the list.
To kind of understand what's going on,
we got a project description.
You can see the project names here.
The capacity of these projects used in 2018.
How much of those projects will be utilized in 2028?
The next column is just the difference between those two.
So simple math, for example, 90%, 100% minus 9%, 10%.
So that's how much gets utilized.
And then here is, what you see over here
is the total project cost that added up
to that close to 400 million earlier.
And then what you do is multiply that value
times the column here, 10%.
And that's what you get is the recoverable cost
in the 10-year window.
So that's the critical number.
So you see at the bottom, the total cost values here.
Okay, I'm gonna drill down a little bit more
on this particular item.
And we've highlighted a few projects we'll talk about.
The first one I wanna talk about is actually project three.
And what we have here,
wrap your hand, this is the 54-inch
finished water transmission line.
It's existing, it's an existing project.
What we show is that 35% of that project
is already utilized today.
So you can't charge for that.
It's being used by your current citizens.
25% of that same pipeline is gonna be utilized
over the next 10 years.
So that falls into the impact fee 10-year window.
So this is the value that we wanna try to recover
over the next 10 years.
And then what we have out here at the 40%
is future recoverable costs beyond the 10-year window.
So what happens is when you travel five years from now
and you update again,
you'll be able to recover a portion of this
into the future.
So it allows you to maximize recovery of a project
through its life.
Yes, ma'am.
- So we already paid for this
and we're just dividing it up the way existing?
- Yes, that is correct.
Yeah, what happens--
- Just wanted to clarify that.
- Yeah, just any kind of infrastructure, for example,
a 54-inch pipeline is a large line.
It's gotta last into the, in perpetuity, but basically,
at least 50 years, if not more.
And so you oversize it when it first gets built
because you don't wanna go out there
and build a 12-inch line
and then five years later build a 20-inch line
and then five years later take it out
and build a 30-inch line.
So you build the 54 now.
And then, so it's got a significant amount of capacity
when it first gets built.
And I can show you another example of that
here in a minute.
And then, so you slowly can recover it over time
as you continue to administer impact fees over time.
- I just wanted to make that clarification, yeah.
- Yes, thank you.
Okay.
This is a, we're gonna jump to the next two projects
that were highlighted on there.
We have the existing Ray Roberts Water Treatment Plant,
and then there's a proposed expansion
in the near future.
And we're gonna talk about this.
As you travel along in the next 10 years
in your impact fee window,
this is an example of what's happening.
So existing capacity in the existing Ray Roberts,
we've utilized 60% already.
We're gonna utilize another 40% over the next,
over into the future.
Right now, the proposed Lake Ray Roberts expansion
doesn't exist.
So there's gonna be 100% that's eligible
in the near future, but not today.
As we travel over the next five years,
we're gonna utilize more of the Ray Roberts plant
and can recover 20% of that over the next 10 years.
And this is what it would be in five years.
And then we've got additional capacity
that we can recover the additional 20%
in the next following five years.
We're looking at kind of on a phase basis here.
And you can see that we still haven't built
the expansion yet, but we will in the near future here.
And that's what the third analysis is.
As we get to the 10-year build out,
or the 10-year planning window,
we've now fully utilized
all of the Ray Roberts facility.
So we were looking at recovering the 60 and the 40.
And then we've built the expansion
and we get to recover about 4% of that,
of the expanded treatment facility
in the 10-year timeframe.
And as we go past that,
we'll be able to recover more and more.
Okay, we showed you that.
We showed you the service area boundaries here.
Here's a photo of the capital improvement plan map,
the impact fee CIP map.
It's in your report.
And here are the recoverable values.
This is what we wanted to get down to.
This is, so right now,
in 2013, the maximum recoverable fee,
you can see for the three service area
are listed across here.
So the max fee for 1A, a little over $3,000.
1B was a little over 5,000.
And two was a little over 5,500.
Your current fees, what the council approved for,
was a little bit less than those values that you see here.
So this is where your current fee is today.
The 3,100, the 3,900, and the 4,500 for the areas.
The new, what we've calculated in this report,
is a recoverable fee, a new recoverable fee,
that you could potentially charge would be 35,69, 35,
I mean, 53,52, and the 73,68.
Okay?
And this is carrying that same slide down
with a staff recommendation noted at the bottom.
So the current fee, what the recoverable fee could be,
and then this is the staff recommendation.
And the staff recommendation is,
basically represents the current fee
adjusted for a 2% inflation for the next five years.
So it's basically an inflation growth
from your current fee you're at today,
and then staying with inflation, raising that rate,
in a five year timeframe, but it would stay there
until you do the five year study again,
and then you get to reevaluate that.
So that is the water presentation.
You can ask questions specifically about water,
or I can go ahead and show you the pieces of the wastewater
that are similar at the back end here,
just to see the values, and then open it up to questions,
or you can go ahead and just focus on water
at this particular time.
- What do y'all think?
I'm just proceeding and ask all the questions?
Okay. - Okay.
Okay, so let me switch gears here real quickly.
This will jump straight.
It won't go through the front end stuff that you saw.
So we're gonna jump, I'm gonna go back to the,
jump to the map again real quick.
Wastewater's a little simpler.
You have your CCN boundary, and you have one service area.
So it's the same thing.
So it's a single service area for the entire city.
Go back to the,
the numbers.
For one service area, we're seeing a single family
equivalent growth of 12,041 additional SFEs,
or service units for the system.
The cost, the impact fee cost, existing 21 projects,
19 proposed, a total of 40.
For a total of 156, approximately $156 million
were the capital projects.
We talked about the, what the,
the table looked like for the projects.
Here's another representative, very similar to the water.
And so we're gonna focus on this particular project,
similar methodology, where you see that
of the South Wet Weather Lift Station and detention pond,
48% of that's being utilized today already.
This is an existing project.
We're expecting to recover 14% over the next 10 years,
and then we'll look at recovering the last 37%
as we move into the future.
We looked at the maps.
Here's the CIP, impact fee CIP map for the wastewater.
And here's the values here, similar graph
that I showed you just a minute ago.
The maximum fee calculated in 2013, $2,800, 2851.
Your current fee is 2,200.
The potential recovery number for 2018 now
from the new study is 4716.
And to go to looking at the recommendations from staff,
from your current fee at 2,200,
if you use the same methodology on the 2% inflation
over the next five years, this number going to this number,
the staff recommendation is 2450.
So that's it in a nutshell.
I'll be happy to answer questions.
I know staff has got, PS and Tim especially,
have a long history of working on this
and the involvement of the impact fee capital program
over the last 20 years.
They've been here for all of that.
And so they probably have the best responses
if you're looking at historical kind of information
and that sort of stuff.
So feel free to ask whatever questions you'd like.
- I just have a very basic question
is why is staff not recommending the maximum fee?
- I'll let staff respond to that.
(laughing)
Kenny or Tim?
- Good question, Karen.
That's really totally a policy decision
that we'll get feedback from the board,
feedback from the customer advisory committee
and then the council,
but staff is looking more at maintaining
kind of status quo on fees.
Some of that also gets into looking at
where do our rates compare relative to other communities
and then where do our impact fees compare
relative to other communities.
- Well, we just did a very thorough
and complicated study and came up with a number
and then just kind of ignored the number.
Is that what happened or?
- No, if you look at what happened five years ago,
we did not go maximum.
If you look way back at 2000 or 1998,
we did do maximum.
We did maximum in 2003.
But as the aggregate capital costs got larger and larger,
then we started detouring from maximum.
Maximum is an option,
but if you look at where you would land
on impact fee surveys,
that probably puts you pretty high.
So then you have to balance where are you
on rate competitiveness versus where you are
on impact fee competitiveness.
- I think your question is, it's a good one.
And I don't like the use of the term maximum.
It's really not what it is.
It's really necessary.
When you look at impact fees,
it really is an equity buy-in to the system
that all of our current customers
have already started paying into.
And the other thing, in the past,
I think there's been a concern about
is it getting too high,
the price is too high to develop future lots.
And I think that's really a political discussion,
but we will move forward with the recommended fee
based on the necessary buy-in.
I think that the point is to get across,
it didn't really come across that well today,
but if the fees do get knocked down,
that simply means existing customers
are subsidizing new growth.
And I think we can lay it out a little bit better.
I really appreciate you asking the question
'cause we still haven't communicated
as crisply as we're trying to.
- Okay, thanks.
- So, I'm not charging the mic,
which I appreciate when I don't let.
Does that just extend the recovery time
because you don't lose it,
it just takes longer to recover?
Is that correct?
Am I living that right?
- Yeah, I think there's a couple problems
with not recouping that fee upfront.
I mean, first of all,
you're also looking at a static cost and time.
And as we're moving on,
it's only gonna get more expensive.
So what happens is if you're not recovering
the entire recommended rate upfront,
it basically gets rolled into the rates.
Those dollars have to come somewhere.
And so that's what I'm saying.
Karen's question's a good one
because if you knock it down,
then that small portion that's knocked down
just is absorbed into the rates.
Our costs are our costs at the end of the day.
And we've already incurred some debt
for these types of things.
So that's exactly what happens.
- Brendan?
- I have a couple questions.
For water, we created the three zones.
How come there aren't any zones for wastewater?
(audience member coughs)
In water, there's a lot of connectivity.
In wastewater, we have pretty defined areas.
And there are areas in water side
where there's not enough water infrastructure,
especially on the southwest side.
So there's a lot of expense going on in that direction
that needed to be recovered through lots
that are bought by other developers
and city needed to recover that at a little bit higher rate
.
On the wastewater side, we don't really have that issue.
We have sewer lines generally in place at this time.
And to keep it simple that way,
we chose to have one zone.
That way we have same impact fee for the city,
whether you develop north of the loop
or develop south of the loop
or in the southwest side or the southeast side.
- Okay.
Thank you.
And then one more question.
- Oh, go ahead, Anand.
- I'm sorry.
I just wanted to know how new development was defined.
- New development is defined.
As you saw, it's 10 year growth we have to look at.
So from 2008 to 2000, sorry, 2018 to 2028,
the land use assumptions are there.
The projections are there as to based on the,
what land use will be there based on the zoning
that we have in place.
And looking at the data from planning department,
master and cog, we look at what industrial use
will be there, what residential use will be there,
what commercial use will be there.
So those are called assumptions.
That's why they're called assumptions.
- I guess more specifically, it says new development
and it's in italics, I think.
And I was curious what, so does that mean
we're talking about somebody who's coming in
and putting houses on undeveloped land completely,
or we assess this on somebody who tears down
a single family home and puts up a four unit apartment?
- Yes, if they tear up an existing home,
like close to the campus area,
and make it a multifamily, if you will say,
they put four or six on there,
what we do is we give them credit for the existing meter
they already have.
If they need a larger meter,
because they need to service more units there,
so which are the difference for it.
- So all based on that five eighth inch.
- It goes back to the service equivalence.
- Okay, thank you.
- Alan's got another one.
Go ahead.
- Not to make this too complicated,
but this difference in fees and recovery.
If I'm looking at this right,
you're trying to treat the resident, the existing
population
fairly, but you gotta be competitive
to encourage new growth on your impact.
You don't wanna charge the maximum
because that's gonna be a greater cost
to the developers, et cetera.
And if you don't have new growth,
then you don't have new economic income, taxes,
and so up here above the base,
you are getting more revenue in
because of that new growth,
and to me it's almost an extended cost
to encourage that growth,
and that creates more revenue also.
Is that correct, or am I looking at that wrong?
- You have just made the holistic political argument.
So that is the rationale people would use
to knock down the field a bit,
but it assumes that we're seeing growth
as economic development versus both the water
and sewer utilities, which are standalone systems.
So we don't co-mingle funds,
and what we're seeing is the total cost
of the burden on both the water
and wastewater systems is what it is.
If you assume that you're gonna intermingle dollars
and that it'll sort of all work out in the end,
then you can make that argument,
but that really is, that's the subtlety
and why you see impact fees sometimes get knocked down.
But the issue is you've got the burden already,
and you're oversizing that
based upon future income coming in.
But yeah, this is why it's not such a clean discussion.
We look at it from a fund perspective,
an accounting perspective, is it is clean,
and we're trying to keep those costs segregated.
But you'd also, on the flip side with the taxes,
yeah, I mean, there's no question
there's an argument to be made that new growth,
they spend more dollars in your community,
and you see it on the general fund side of the house.
- Right. - Right.
- And the higher that impact fee gets,
the higher the cost of housing in the community
becomes too. - That's true.
- And so you need to try to balance that out a little bit.
- That's true.
- I did have a question back on the water zones,
just to wrap my head around.
1A is the downtown area,
and because that is pretty much developed,
and you're gonna be just probably taking something down
and replacing it, that's why that recovery cost
is so much lower, correct?
- Correct. - Okay.
- And the zone 1A, the reason that 1A
as opposed to a one, two, three,
we started out with a single zone system,
it had a single zone system for many years.
About the third update,
we had a lot of growth pressures in focus,
a lot of zoning master plan communities
in the far southwest,
and we were struggling with economic ways
to try to deal with that.
And so we created this zone two.
It has some cutouts in it.
Well, what are those cutouts?
Well, those are actually developments
that we had already negotiated some solution for them,
and so from an equity standpoint,
we felt they needed to be in the same citywide zone.
One of them was actually a litigation
situation where they were paying a surcharge premium,
and the language in that agreement
required them to be paying citywide impact fees.
So that's the country likes area down here, ropes,
and we had some negotiations with also.
So we created that zone.
Well, a lot of interest and policy direction
came out of the council historically in long term.
Well, why do we have impact fees downtown?
You know, the infrastructures there was the argument,
and while that's a good argument,
some of the infrastructure's there,
but the infrastructure it consumes
is very common to citywide water plants,
lakes, transmission into town.
So that zone 1A that was a section of the zone one
was created, and it matches the planning boundary
for the infill zone.
And when we ran the numbers, it showed that,
well, there's a little bit of cost shift,
and so that's why we have the three tiered system.
So that was just created the last go around.
We didn't really see any reason to complicate it
or change that.
We just stayed with it when we did this update.
That helped.
- All right, thank you.
- I have one more question, sorry.
- Go ahead, no, go ahead.
- Are these fees assessed when a developer
does a platting of land or when they actually begin
building
or when the meters are put in place?
- When the original impact fee legislation came out in '87,
you had a choice to do it at the time of platting
or the time of building permitting.
We chose at that time to do it
at the time of building permitting.
Impact fee legislation changed along the way,
and then it restricted you to only do it
at the time of building permitting.
So when someone pulls a building permit
and wants the meter to support that new building permit,
then as a part of the building permit fee application,
they have to pay the impact fees.
- That kind of makes sense, 'cause if it's the plat,
you're just saying you're gonna do it.
You're not doing it.
- There's a lot of front loading to charging by the plats.
And so this was kind of a builder initiated legislation,
and so it kind of restricted cities to do it
at the time of building permit.
- Okay, thank you.
Other questions?
And so we don't really take action, we're just direction?
- We were looking for a kind of recommendation
that what the staff presented is acceptable to the board.
It's not state mandated,
but we have always come back to the board
and ask for here's the impact fee
that the board agree so that we can take it
as a recommendation to the council.
And we'll do the same thing
with the CIE, State Capital Improvement Advisory Committee.
- Okay, so just a head shake, yeah,
you're going in the right direction.
- For us, that would be sufficient.
- Okay, so, right direction?
- Yeah. - Yeah, okay.
- I think just in general,
just clarify why you're not going for maximum,
'cause to me, that was a big puzzle.
- I feel that's not-- - Yeah.
- And maybe show what the other communities
impact fees look like. - Yeah.
- 'Cause if it would put us way out of whack,
obviously we're not gonna do that.
- One of the things I think it's important to point out
with regards to the staff recommended
is that it's a staff recommended minimum.
Currently our fees are actually lower
than the full recovery fee that was in the 2013 study.
And so as a result, a portion of the rate base
is actually picking that cost up.
So we made a recommended minimum
by using that inflation-based adjustment
so that the rate base would not be more burdened
than it currently is.
So the, if you go above that value,
then you're actually shifting more
on the recovery fee for the development.
If you're keeping it at the recommendation,
you're basically preserving that portion
that's being paid for by the rate base.
So it's really a political discussion
as to whether or not you want to go above
a particular value or all the way to the maximum.
Our recommended minimum is if you went below that value,
then you're pushing a larger proportion on the rate base
than is currently being paid.
So that's all we were trying to portray by that minimum.
So that's why I say recommended minimum,
it is not a staff recommendation.
- Still good to move forward?
- Sure.
- Thank you.
Since we moved to closed session,
we're going to the consent agenda.
Does any board member wish to pull one of the items
from A through G?
No?
Brendan's looking very carefully.
- No, no, no. - No?
Okay.
Then do we have a motion to approve
the consent agenda items A through G?
- So moved.
- Second.
- All in favor say aye.
- Aye. - Aye.
- Opposed?
- Yes.
- Let's go into items for individual consideration.
Previously we had approved some of the board meetings
by affirmation by just saying if there weren't any changes
that then they're approved as presented.
So seeing the two board members that were here,
(laughs)
are there any changes or corrections to the board minutes?
No?
All right.
Then they stand approved as presented.
ACM update.
- Madam Chair, members of the board,
real quick, nothing really to the report on the ACM update.
You have your matrix there and there are a couple of items
that'll be coming here in the next, excuse me,
in the next few meetings by solid waste.
However, at your place,
there was an informal staff report that was left for you.
It was presented or sent to the city council last Friday
on a, we had a wastewater failure last week.
And so just provide you a summary of what occurred
and a picture there of some of the work that's been done.
And we'll include this in your packet next time
so that it's in the file.
- Okay, thank you.
And concluding items,
I did wanna bring up the secretary position again.
I do think we need to address that and get somebody elected
because unfortunately last board meeting I was missing,
Brendan was missing,
and we didn't have a third person to chair.
So if we could maybe move that forward
in the next meeting or two.
All right, so then do we just go into closed session?
Is that what we do now or do we have to?
Formally adjourn?
Where are you, Larry?
Okay.
Oh, wait.
- Prior to adjourning, I'd like to request that we add
to a future agenda,
an assessment of how the Ditton Energy Center
performed this summer.
- Sure.
- I mean, since we had some questions about
how it would actually perform
and how it was proposed it would perform,
we actually have a few months that we could look at
to see how we did, if it was a swing and a miss
or if we hit it out of the park.
- Thank you, Brendan.
I didn't see you going.
- Sorry, I can always be loud.
- So then motion to adjourn?
- By motion, we adjourn.
- Second.
- All in favor?
- Aye.
- Going to closed session.