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Home My WebLink About2015 Impact Review Notes from Meetings.pdfImpact Review Notes from Meeting: 02/12/2015: Those attending: Richie Webb, Troy Kartchner, Judy Hobbs, Wayne Clark, Matt Nielson, Jared Kay, Richard Horner Meeting duration: Approximately 2 hours from 4:00 to 6:00 PM at City Hall We reviewed the following material as shown below: These capacity fees are calculated by utilizing a construction and building index (attached below) to determine the present value of the system necessary to produce and distribute water and collect and treat wastewater. We then divide the system value by the average capacity GPD (gallons per day) for the whole system to determine a cost per gallon per day. We then determine the GPD for the various categories (single family home, single apartment, family housing, non-residential) at their peak, which is typically August for water. The GPD is much lower for sewer, which is determined by their sewer average, which is derived from their water usage during the winter, when you are not watering lawns, etc. We use the peak because we have to provide a system that will meet the peak demand, regardless of whether the user needs to meet that demand every month of the year. After reviewing the water and sewer capacity fees, we reviewed the Facility Assumption sheets for Fire and Law Enforcement, which are shown below. There was discussion regarding the cost per square foot and the group felt that the prices for government facilities per square foot for construction are much higher than for privately owned facilities, which is how it seems to be based on the actual bids received. We looked at the costs for our recent fire station upgrade, which includes approximately 5,600 new square feet and a remodel of the old square footage. Our lowest bid (had multiple bidders) was approximately 1.92 million, which puts the cost per square foot close to $257 if you assume a ¼ of the cost was for the remodel, which is still higher than the suggested $254 per square foot on the Fire Facilities Assumption Sheet. The cost per square foot for Law Enforcement Facilities was lower at $229 because these facilities are not as complex as those for Fire. The Park Facilities Assumption Sheet included an update in the design/engineering costs to more accurately portray our actual costs being charged on current projects being desinged and engineered by our City Engineering Department. The rate was 20% of the project cost. We next reviewed the Street Impact Fee Calculation shown on the next page. The item updated on this sheet included the other funds calculation, which was changed to reflect our estimate of the costs on those street projects originally identified in the street fee study that will likely be paid for by a contribution from another source, such as an Urban Renewal Agency. The group also reviewed the Impact & Capacity Fee Deficits sheet that shows the estimated deficit that would exist in each respective capacity or impact fee fund if we had reimbursed for or constructed all of the qualified projects to this point in time. See sheet below. The last item we reviewed was the Impact and Capacity Fees Comparison shown below, which also shows the full cost as compared to the current fees. After reviewing the comparison, the group did not recommend going to full costing at this time. Mr. Kartchner expressed concern with making a decision without having more complete information and understanding of how the numbers were derived. He also expressed concern regarding changes that may have occurred since the original studies were completed over 10 years ago (9 years ago for streets). One concern was on the densities of new apartments, which have been more dense than originally projected due to changes in our zoning and allowance of PEZ (Pedestrian Emphasis Zones) and other more dense construction projects. More dense projects would not actually impact the Parks, Law Enforcement, or Fire Impact Assumptions and fees because these are derived using population estimates. More dense projects could have an impact on street fees, which use trips per day per dwelling unit to determine the Street Impact fees. Mr. Kartchner also expressed concerns that we make sure that all development is paying their fair share of the costs through development agreements and not affecting the impact rates. He suggested that in the future we look at doing an update of the studies (we estimate a cost to do this of $50,000 to $100,000) and diving into the details more with the group so they can make a more informed decision in the future. The group also discussed the cost of building in Rexburg versus other communities and that we should consider the impact this has on growth and attracting new growth in our community. Some members felt that Rexburg is much higher to build in than other like cities in Idaho, which may be true in year 1, but not necessarily true over time. Some of the reasons for this include land prices and the fact that we charge impact fees and other communities may not. Part of the reason we charge impact fees is because we have a lower levy rate than many other communities and a higher percentage of exempt properties that don’t pay property taxes. The chart below shows the 2014 Property Tax Levies & New Home Costs. When you compare us to Idaho Falls, you see that in the first year the fees are more expensive in Rexburg, but after 10 years, it is actually cheaper in Rexburg and those savings continue to grow substantially over time because of the City of Rexburg’s lower levy rate. It was also discussed that although Rexburg may have a higher cost for permits and fees for construction, yet the value when sold is also higher and the amenities offered by Rexburg in good parks, streets, police and fire safety and available water and sewer services was important and also a draw for investors to build here. It was mentioned that in comparison to, for example, Blackfoot, people are more willing to build here regardless of higher initial cost and also get a better return on their investment here. In conclusion, the group ultimately decided that it is important to at least try to cover the cost of inflation using the indexes and suggested that we look at a 4% across the board increase for each category (home, family apt., singles apt, commercial). They recommended that city staff decide which categories (water, sewer, parks, police, fire, streets) to adjust so that the total increase is 4% and to email this out to each Committee Member and let them review it and decide via email whether to move forward with the recommended change of 4%. City Staffs conclusion was that going forward, it will be very difficult to do more than increase the fees based on the indexes/inflation without hiring a consultant to review the current impact fees and revising the numbers as they recommend with the help of the Committee and other Associations, such as the Home Builders Association as suggested by Mr. Kartchner. City Staff would also recommend that this does not necessarily need to happen in the next year, but should occur if the City begins to look at annexing more properties in the future. It is staff’s opinion that the assumptions used have not changed dramatically because we have done very little annexing since the inception of the impact fees and the projects for streets have not changed since performing the original Streets Development Impact Fee Program/Capital Improvement Plan in 2006. It may be best to look to adjustments for inflation using the cost indexes in the next few years until we decide that a full review by a professional consultant of the fees is necessary. Via email and through a few phone calls, the general consensus from the group in their communication to our Consultant Richard Horner was to recommend the 4% Changes as shown below: