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HomeMy WebLinkAboutCAP 2005-04-07 Minutes MINUTES OF THE REGULAR MEETING OF THE CAPITAL IMPROVEMENTS ADVISORY COMMITTEE OF THE CITY OF NORTH RICH LAND HILLS, TEXAS APRIL 7, 2005 1. CALL TO ORDER The meeting was called to order by Acting Chairman Bill Schopper at 5:52 p.m. 2. ROLL CALL PRESENT Vice Chair Ex-Officio Bill Schopper Don Bowen Randy Shiflet Scott Wood Ken Sapp Mike Benton ABSENT Chairman Richard Davis Brenda Cole CITY STAFF Assistant City Manager City Attorney Director of Planning Planner Director of Public Works Building Official Recording Secretary Bo Bass George Staples Dave Green Donna Jackson Mike Curtis Dave Pendley Holly Blake 3. CONSIDERATION OF THE MINUTES OF NOVEMBER 18, 2004. APPROVED Randy Shiflet, seconded by Don Bowen, motioned to approve the minutes of November 18, 2004. The motion was approved (5-0). 4. Page 1 04/07/05 Capital Improvement Advisory Committee REPORT ON IMPACT FEES APPROVED Mike Curtis, Director of Public Works, explained the Impact Fees report. City Council adopted the new impact fees on March 28, 2005. Impact fees are a way for the City to collect money to pay for improvements that are needed due to development. The basis for the impact fee is the Comprehensive Land Use Plan, the City's adopted plan for development. The Water CIP Program identified in the impact fee update represents those water system improvements that are tied to the impact fee. At the City of North Richland Hills there is a CIP Plan that is budgeted for every year. That plan is the Comprehensive Plan. This CIP Plan that is identified in the impact fee study is the improvements that are needed due the development. This plan is part of the Comprehensive Plan that is adopted every year by City Council. These projects will be in that plan, but this plan is not the total Comprehensive Plan. The adopted plan has 17 water projects that include improvements to the system. These improvements will total a little over 20 million dollars ($20,806,276.00). Only 13 million is eligible for impact fees. Worst case scenario, the City would have to come up with an additional 7 million. The projects range from line improvements to booster pump station improvements and new storage facilities. Ken Sapp asked if some of these projects will be started before the impact fees are collected. Mike Curtis replied that some could, but currently there are no projects proposed in next year's (2006) CIP budget. In the past, if the City did not have the money to pay, the City entered into a City Developer Agreement to pay them off over a period of time. Randy Shiflet asked about the responsibility of 7 million out of the 20 million. Is 65% of this non-tax dollar? George Staples, City Attorney, stated that there are two different problems. One, the City tries to make sure that the rate payers pay for these projects, and two, of the eligible improvements we can only pass on 50% of the cost. Mike Curtis stated that the reason for the 50% of the cost is the adopted fee. City Council adopted 50% of the maximum rate. Out of the amount that is eligible, only 50% of the fees will be used for improvements. Randy Shiflet asked if as the developers come in with new development are they paying at least 50% of their fair share to upgrade the infrastructure? Page 2 04/07/05 Capital Improvement Advisory Committee Mike Curtis answered yes. On the wastewater side, most of the improvements consist of making upgrades to the trunk maintenance. Most of the projects include upgrades along major treatment areas. There are 12 projects with a total estimated cost of 11 million on the wastewater side. It is the same as the water. The adopted impact fee is 50%. Bill Schopper asked if the City has a list of what other cities are charging. Mike Curtis handed out a chart showing what other cities are charging and their usage. There is not a lot of control on which improvements are needed due to development. Some cities may be further along. For example, Hurst has slightly lower impact fees. Hurst doesn't need to make the improvements because Hurst is more built-out than North Richland Hills. George Staples mentioned that North Richland Hills will have that same situation in about five years. Ken Sapp stated that 50% is paid through impact fees. He asked if the other 50% is picked up by the taxpayers. George Staples answered that cities of North Richland Hills' sophistication generally produce a profit from the water and sewer operations. In small cities, taxpayers have to subsidize. There is usually an effort to make sure that the water and sewer systems pay their own freight. Even the bonds that are issued are double secured with the GO. They will be paid off with the revenue from the water and sewer. Keith Reed, Reed Municipal Services, came forward. Some of these projects that were completed were done with revenue bonds. The source of funding does not matter; it is the projects that provide the services for new growth. That can either be paid with generated revenue as a profit with bond funds or out of regular operating money. However it is only for those services and facilities for future growth. Schedule 1: Meter Unit Equivalents (MUE). Chapter 395, Legislation states that some basic unit of measure that is of engineering approved. An MUE is an approved unit of measure; %-in. meter is 1.0 MUE, 1-in. meter is 1.67 MUE, 2-in. meter is 5.33 MUE. Standard sewer service is four inch service line for a single family residence. Schedule 2: Presentation of 7 ~ years of MUE growth for water counts. This is presented on a monthly basis with totals for each quarter and then an annual total. Those totals are compared to the estimated growth in MUE that were used to calculate and prepare the impact fees 7 ~ years ago. Page 3 04/07/05 Capital Improvement Advisory Committee Schedule 3: Growth in sewer MUE. Same format, monthly, quarterly, semi- annually and annually. Sewer is generally lower than water. The reason for that is due to a sprinkler system installation which is usually a 2-in. meter. It is coded as sprinkler system only and showing 5.33 MUE for water and zero for sewer. Another reason for water being much higher than sewer in this report was due to a new school and new athletic complex that was added in 2002. These were added to the utility facility. All the sprinkler systems for the athletic field and school grounds were counted as MUE not sewer. The Financial Offer Rates: For accounting and presentation purposes, the two periods of been matched. The impact Fee Fund period and the Expenditure and Revenue period, those are the same time periods beginning October 1, 1997. The first number is $469,000 (Water) that was for projects that were underway at the time that this program was approved. From the $469,000, $360,000 was for water projects. Since this plan was approved, $1,713,646 impact fees were collected for water service during this 7 ~ year period. That amount as earned $152,000 interest income giving a total of $1,868,000 of collection during the period. Projects have been completed. The next first number is $108,000 (Sewer), during the 7 ~ years $871,000 has been collected, and earned $77,000 in interest, giving a total of $948,000. Projects have been completed or in the process of being completed. When those projects are finished there will be a zero balance. The 1997 impact fee program will be inoperative and closed out when those projects are completed and the documents are submitted. This is how the plan has worked for 7% years. Ken Sapp stated that the zero balance is good. Is there ever a time that there is a surplus or deficit? If so, what happens? Keith Reed stated that legislation states that with any surplus or any kind of excess funds, those funds do not go back to the developer, the funds go to the owner of record on the day that it is determined there are excess funds. Whoever owns the property that day is due the overpayment. The assumption being that money expense goes with the property every time it sold. If there is not enough money, the City pays it. George Staples stated that the City has 10 years to spend impact fees. If you have the money that was collected 10 years ago, it has to be paid back with interest to the current owner. Bill Schopper stated for the audience seated, there are two separate issues being discussed. Mr. Curtis spoke about impact fees that are being created for the City's next program. Mr. Reed is finalizing out the 1997 program. Mr. Reed stated that this program that is being closed out was done after North Richland Hills and Watauga separated the system. Prior to that time the impact fees were calculated for both Watauga and North Richland Hills because North Page 4 04/07/05 Capital Improvement Advisory Committee Richland Hills owned the entire water system. Once Watauga purchased their system, North Richland Hills had to do another impact fee plan which is the one that is currently being closed out. In 1988, the State Legislature adopted legislation that would allow cities to collect. Prior to that time, there was no legislation. Some cities were devastating developers with astronomical charges. Bill 366 was introduced by the Home Builders Association. It had all the requirements in it: 1) how to calculate impact fees, 2) how often it needs to be redone, 3) what has to be done with the money, and 4) the plan for the capital improvements program. Each year that piece of legislation gets a new look and a few changes. It is now classified as Chapter 395 in local government code. Ken Sapp, seconded by Don Bowen, recommend approval of the Impact Fee Final Report, in writing, over the Chairman's signature, to City Council. The recommendation passed unanimously (5-0). 5. ADJOURNMENT The meeting was adjourned at 6:23 p.m. lù~,~~~-__ William Schopper, Vice Chair Page 5 04/07/05 Capital Improvement Advisory Committee