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Workshop Minutes - 11/15/2007 SPECIAL COUNCIL MEETING / WORKSHOP MINUTES NOVEMBER 15, 2007 TAPE READING Side A ~ DATE. COUNCIL CHAMBERS, CITY HALL, CITY OF WOODBURN, COUNTY OF MARION, STATE OF OREGON, NOVEMBER 15, 2007. CONVENED. The special meeting convened at 7:00 p.m. with Mayor Figley presiding. 2 ROLL CALL. Mayor Councilor Councilor Councilor Councilor Councilor Councilor Figley Bjelland Cox Lonergan McCallum Nichols Sifuentez Present Present Present Absent Present Absent Absent Staff Present: City Administrator Brown, City Attorney Shields, Acting Public Works Director Rohman, City Recorder Tennant Consultant: John Ghilarducci, FCS Group Mayor Figley stated that Councilor Sifuentez was unable to attend this meeting due to illness and Councilor Nichols was on vacation. 1.4 PALOMAR GAS TRANSMISSION PROJECT - RESPONSE TO ENVIRONMENTAL IMPACT STATEMENT. BJELLAND/LONERGAN... authorize the Mayor to sign letter to respond to the Federal Energy Regulatory Commission about the potential impacts of locating a 36-inch diameter natural gas pipeline within the Woodburn Urban Growth Boundary. The motion passed unanimously. 2.0 ADJOURNMENT INTO COUNCIL WORKSHOP ON SYSTEM DEVELOPMENT CHARGES FOR TRANSPORTATION IMPROVEMENTS. COX/MCCALLUM... adjourn into a Council workshop. The motion passed unanimously. The Council adjourned into the workshop session at 7:02 p.m.. Administrator Brown stated that this workshop was called in order to provide the Council with advanced information on policy items that are being considered in this proposal, an opportunity for the Mayor and Council to modify policy recommendations, and to review the assumptions used by the consultants to develop the proposed system development charges before it becomes a more formal document for public review. 3.3 John Ghilarducci stated that the purpose of the study is to update the City's existing transportation system development charge (also known as Traffic Impact Fee), and to Page 1 - Special Council Meeting / Workshop Minutes, November 15, 2007 SPECIAL COUNCIL MEETING / WORKSHOP MINUTES NOVEMBER 15, 2007 TAPE READING develop a separate system development charge for the area directly served by the interchange. He reviewed background information on state legislative intent to provide equitable funding for orderly growth and development by allowing imposition of system development charges for capital costs that can be assessed for new development or for re- development that increases the demand on infrastructure systems. The two components of system development charges are (1) a reimbursement fee which is a fair share of unused existing capacity and (2) an improvement fee which is fair share of future planned capacity for growth. Oregon State law places limits on how system development charges can be spent with reimbursement fee receipts available for any non-growth related capital facilities expenditures, and improvement fee receipts available only for capacity- increasing facilities expenditures. The City currently tracks these receipts separately since there is flexibility available for reimbursement. State law also requires developers to be given a credit against the improvement if a developer is required to oversize a qualified capital improvement. The legal minimum credit is up to the amount of the improvement fee but in many cases cities will credit the developer for the full oversizing costs even if it exceeds the improvement fee since it would have been money the City would have had to spend anyway. If a credit exceeds the improvement fee amount, it can be a paper credit that the developer can use on a future project rather than giving the developer a cash reimbursement. He stated that his firm would like to recommend in their report that the City adopt a Transportation SDC credit policy that would provide a credit for the full excess capacity cost of a qualified improvement only and the City would provide the developer a cash reimbursement of those credits as development and building permits are pulled by builders who subsequently develop on the site. Compared to the current City credit policy, the proposed credit policy is more generous for qualified public improvements and less generous for non-qualified public improvements. He also felt that the proposed policy protects the City's cash flow since the credit will only be disbursed after builder fees are paid. Lengthy discussion was held regarding credits as it relates to different methods of returning the credits, determining actual costs related to the added capacity, and when developers would be eligible for credits. Mr. Ghilarducci reminded the Council that developers should only get a credit for oversizing an improvement that provides a capacity that others can use and that the project meets the qualified improvement criteria If a developer is required to build a standard street to their development for the purpose of connectivity, a street improvement for this purpose would not necessarily meet the criteria for receiving a credit. Developers will only get reimbursed for their credits as their own property is developed and not through SDC funds received from other developments. It was also mentioned that generally there is a 10-year limit in which credits would be reimbursed back to the developer. 37.0 Administrator Brown expressed concern about returning more of the credit than what is legally required since the developer is able to use the improvement immediately rather than waiting until other property owners elect to build or contribute to the improvement. He suggested that the Council think about the policy options as to whether or not the City Page 2 - Special Council Meeting / Workshop Minutes, November 15, 2007 SPECIAL COUNCIL MEETING / WORKSHOP MINUTES NOVEMBER 15, 2007 TAPE READING should go beyond what the law requires to the full cost of the improvement or to stop at the SDC amount. If the credit is limited to the SDC amount, then the City could retain SDC dollars for cost overruns on future eligible SDC projects. Councilor Bjelland felt that if a development has significant improvements from which other property owners benefit then establishing a reimbursement district would be another way for the developer to be reimbursed for eligible project costs. It was the consensus of the Council to limit the SDC credit and Mr. Ghilarducci stated that he would make the change in the SDC credit policy to provide for an amount up to the SDC. Side B .2 Mr. Ghilarducci stated that the existing SDC charge is $343.32 per average daily trip with the single family residence charged for 9.57 average daily trips or $3,286. The Institute of Transportation Engineers (ITE) Trip Generation manual is the document used to determine the average daily trips for all types of uses based on type of land use and size of the development. In evaluating the City's existing charges, the consultants have made the following additional recommendations for Council consideration: 1) Change from average daily trips as a charge basis to peak-hour trips since SDC's are a share of capacity in a system and a transportation system is built to meet peak loads. Changing the charge basis will shift costs between the different land use types but the single family residence charge will remain about the same. It was also noted that the peak-hour trip data is more accurate than the average daily trip data. 2) Less than 5% of certain bicycle and pedestrian facilities are included in the planned costs of alternate modes of transportation. 3) Trip generation estimates for retail land uses have been adjusted to sustain allowance for diverted linked trips or pass-by trips. 4) The SDC's will be indexed to annual cost escalation due to inflation as allowed under state law. 5) Adopt an additional SDC to apply only in the Interchange Management Overlay District based on a portion of the City's interchange cost. Mr. Ghilarducci reviewed the assumptions used in developing the proposed charges which include 1) planned projects providing system capacity to year 2020,2) reimbursement fee basis is limited to facilities constructed with SDC's, 3) an adjustment for anticipated developer participation in projects, 4) a City-wide trip growth calculated from 2020 traffic modeling plus additional development in the Interchange Management Area,S) an eligible interchange cost split of 50/50 between City-wide SDC and Interchange District, and 6) a 49% deduction of traffic volumes which originate and end outside of the City limits. He reviewed the fee calculation formula and, for comparison purposes, stated that the SDC for a single family residence would be $3,315 per Peak Hour Trip versus the current charge of $3,286. It was also noted that SDC's have not been adjusted since 1999 and, for a single family residence, the proposed charge is about 3% higher over an 8-year period. In cases of an office building or some industrial Page 3 - Special Council Meeting / Workshop Minutes, November 15, 2007 SPECIAL COUNCIL MEETING / WORKSHOP MINUTES NOVEMBER 15, 2007 TAPE READING development, there will be a higher charge over current rate since they experience higher peak hour trips versus average daily trip generation. As part of an appeal process, businesses would be able to submit documentation to the City to show that they are different than the Institute of Traffic Engineer's (ITE) peak hour trip generation manual and the charge could then be adjusted based on the documentation. He briefly reviewed the SDC Transportation Improvement Plan list and it was suggested that staff take a closer look at the percent of local trips value for each of the listed proj ects and, if necessary, adjust to a more accurate percent number based on the project. Mr. Ghilarducci then reviewed the fee calculation for the Interchange Development Charge which resulted in a peak hour trip charge of$I,109 utilizing a 50/50 cost split. He stated that their recommendation is to only have one-half of the interchange development costs used in the calculation which spreads the cost more evenly to all land uses and it was noted that the interchange district will pay both a system development charge and an interchange development charge towards future costs on interchange capacity improvements. 29.9 Acting Public Works Director Rohman stated that the state statute provides specific time frames relating to adoption of SDC's. The City must give a 90-day notice to interested parties prior to the public hearing and a completed methodology must be available for review 60-days before the hearing. Staff sent out the 90-day notice on November 13, 2007 to interested parties, Mr. Ghilarducci will have the methodology completed by December 13, 2007, and the public hearing will be held on February 11,2008. Once the fees are adopted, they can be implemented immediately but there is a 60-day period in which a challenge can be filed in Circuit Court. The proposed effective date of the new charges will be April 1, 2008. 33.5 ADJOURNMENT. MCCALLUM/LONERGAN... meeting be adjourned. The meeting adjourned at approximately 8:20 p.m. ATTEST fJJi::i.:~~ Mary/Te nt, Recorder City of Woodburn, Oregon Page 4 - Special Council Meeting / Workshop Minutes, November 15, 2007