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HomeMy WebLinkAboutMinutes CC - 01/12/2015 - MINS 01 12 15 WS (Migrated from Optiview)Work Session of the Milton City Council Monday, January 12 , 2015 at 6:00 pm Page I of 10 This summary is provided as a convenience and service to the public, media, and staff. It is not the intent to transcribe proceedings verbatim. Any reproduction of this summary must include this notice. Public comments are noted and heard by Council, but not quoted. This document includes limited presentation by Council and invited speakers in summary form. This is an official record of the Milton City Council Meeting proceedings. Official Meetings are audio and video recorded. The Work Session of the Mayor and Council of the City of Milton was held on January 12,2015 at 6:00 PM, Councilmember Joe Longoria presiding as Mayor Pro-tem. Councilmernbers Present: Councilmember Karen Thurman, Councilmember Matt Kunz, Councilmember Burt Hewitt, and Councilmember Joe Longoria presiding as Mayor Pro-Tern. Absent: Mayor Joe Lockwood, Councilmember Bill Lusk, and Council member Rick Mohrig. Councilrnember Joe Longoria, Mayor Pro-tern: • Work Sessions are an informal setting to update Council on business items. • No votes will be taken during these sessions. • There are two (2) items on our Agenda tonight. • Public comment is allowed that is germane to an Agenda Item. • If you wish to speak you are required to fill out a comment card and turn it into the City Clerk staff. • Public comment will be allowed for a total of 10 minutes per agenda item and no more than 2 minutes per person. • Public comment will be heard at the beginning of each Item. • Once the item is called, no other comment cards will be accepted. Agenda Item #1 was read. I. Discussion of Health Insurance Benefits for Elected Officials. (Todd Bryant , President -Ascension Insurance, Inc.) Sam Trager, Human Resources Director Todd Bryant is at home sick so he is not able to be here tonight. However, I had a chance to ask him a question that was brought up at our last meeting which was, "Can we differentiate a claim submitted by a councilmember versus an employee?" Todd's answer was "no". Blue Cross Blue Shield looks at the City of Milton as a whole. They are not able to put anyone group into a separate category for purposes of calculating the annual premium. BCBS will let us know how many employees had claims exceeding $25,000. They do not identify those employees by name but by diagnostic code and the total cost of the procedure. The last report I saw was from October 2014 and we had three employees whose claims exceeded $25,000 in claims. These three employees accounted for about 33% of our total claims against the plan. Work Session of the Milton City Council Monday, January 12,2015 at 6:00 pm Page 2 of 10 The other question mentioned at the previous meeting was regarding what other cities and counties are doing. Do they offer health insurance for their councilmembers? As you can see from the chart below, it is about 60/40. Sixty percent of the surrounding cities offer health insurance to their councilmembers and forty percent do not. Are health benefits offered to Council Municipality Members/County Commissioners? City of Johns Creek No City of Milton No City of Sandy Springs No City of Suwanee No City of Dunwoody Yes City of Alpharetta Yes City of Brookhaven Yes City of Union City Yes Fayette County Yes City of Roswell Yes Note: Roswell is not a client of Ascenion Agenda Item #2 was read. 2. Discussion ofImpact Fees . (Bill Ross ofROSS+associates) How are benefits paid? N/A N/A N/A N/A Same employer and employee contributions as regular employees Same employer and employee contributions as regular employees Same employer and employee contributions as regular employees Same employer and employee contributions as regular employees Same employer and employee contributions as regular employees Same employer and employee contributions as regular employees Kathy Field, Community Development Director Just to give you a little background , we hired Bill Ross and associates. Bill is here tonight with his colleague, Paige Hatley, and they have both been working on the assessment report. You should have received a copy of this report. In order to complete this report, we met with all of the directors of the departments that we are looking to collect impact fees. In addition, at the front table tonight we have members of the Impact Fee Advisory Committee which is a required entity by state law that must be formed to review the process, reports, and programs as we move forward with this initiative. We are about half way through the process. Bill will give you an update. Work Session of the Milton City Council Monday, January 12,2015 at 6:00 pm Page 3 of 10 Bill Ross, Ross + associates Tonight, we will give you a briefing on the assessment report. I would like to recognize Paige Hatley who did most of the work on this project. Michele McIntosh-Ross has also put a lot oftime into this project by keeping us straight, arranging meetings, reviewing reports, and coordinating with department heads. The Department Heads have also been very cooperative and involved in helping us put together all of this information. This is a preliminary report/assessment report. The purpose of it is to decide which facility categories to move forward on. We recommend that you move forward on all four facilities that are proposed. The purpose of this briefing is to review and approve the growth forecasts for the city through 2035, which is a twenty year outlook. We want to confirm the level of service standards. Most of these standards the city has already adopted. We will also discuss future projects which the city has already approved in previous plans. We will review the forecasts we have predicted regarding population, households, housing units, and jobs. The forecasts establish the level of service and the need for future facilities to serve future growth. Every statistical trend analysis we projected forward resulted in a population greater than you have the capacity to accommodate based on available land. So, we decided we would not project more growth than land that you have available to grow. We were more generous with regard to job growth. It is still very limited but we are projecting an increase in employment opportunities from approximately 7,800 employees in the city today to about 13,000 over a twenty year period. However, we were influenced by your Transfer of Development Rights Program in which TORs can be used for non-residential growth. In the North Fulton Super District which includes Alpharetta and Johns Creek, they will continue to get the majority of non-residential growth. Milton will grow at a faster pace than those cities and will increase the share of employment in the North Fulton area from about 7% of the total today to approximately 10%. However, the surrounding cities will add about 21,000 more jobs compared to Milton's 6,000. But, you will actually increase your total percentage of the three cities collectively. The next chart compares Milton to the entire North Fulton area. Milton is growing faster in regards to percentages but starting with a much lower number. Employment will not be very much but will increase its percentage as part of the North Fulton Super District. Parks and Recreation: Each public facility category has its own chapter. The level of service is to what extent you have facilities that serve the population in the city and to what extent you would serve new growth in the future. Levels of service were converted to the number of components per housing unit. We used the adopted standards Milton already had for the Parks and Recreation Plan. That plan goes to 2025, but in terms of actual service we could calculate 2035 level of service which will also mean that more park and recreational facilities are needed by 2035 than are planned for 2025. This report accommodates for that. The trails are a different situation. We only have a little over two miles existing today. The Trail Plan will result in about 91 miles by 2035. We did not want to take two miles and project that forward. Instead, we said by 2035 we will have 91 miles of trails causing us to back that up into a level of service which also means you have a shortfall right now. And, as you can see we have a shortfall in just about all of the parks and recreation facilities based on the level of service. Work Session of the Milton City Council Monday, January 12, 2015 at 6:00 pm Page 4 of 10 The bottom table shows you how we calculate using the level of service for what Milton should have now for the existing population. It shows we need to buy more acres , build more fields , and serve the existing population. In addition , the future growth will have demands for new facilities to serve them and maintain that level of service for everybody for the next 20 years . So , we ended up adding the existing shortfall plus needs for the future into a grand total. Of those facilities that need to be built or those acres that need to be purchased , new growth will be responsible for a portion of that cost. The existing tax base will be responsible for their share as well. It all boils down to fair share between who owes what on these facilities. The next table summarizes the whole level of service, how many facilities will be needed, the costs of those facilities, and how much of that cost is impact fee eligible. All of these components are used to determine the new growth share. Ultimately , we will calculate the maximum impact fee that you can charge because the law states that you cannot charge new growth and development more than their fair share. When you get the Methodology Report that has these calculations in it , we are not recommending that you adopt the full maximum impact fee; you just need to know the ceiling you cannot go over. The Impact Fee law requires that all of these dollar calculations be done in net present value based on expected year of expenditure. Net present value is the current cost inflated to the year of expenditure, and then reduced to 2014 using a discount rate. I should also mention that none of the footnotes are on these tables. We took the cost estimate for projects and added a 15% contingency cost and 7% for architecture and engineering services. This is reflected in the gross cost column. Fire Protection: The level of service is based on what you have now in your inventory to serve the people that are here. We use the da y/night population here because it is a 24 hour service and we add the number of residents and number of employees together. We took the existing level of service and projected that forward with regards to how much you will need in the future for new vehicles and square footage. The one exception is with the emergency warning sirens. We have ten and they are already installed throughout the city. They are positioned where no additional sirens are needed to the system because they cover the areas where growth is going to occur, but these sirens serve populations that are not here yet. So, instead of using existing levels of service and adding for the future, we do not have to do that here because we have all the sirens we need . We just take the 2035 number and divide it by the 2035 day/night population to get a level of service. When you back that up , about four of the siren's costs that are in place are impact fee eligible . You have spent the money and you will recover it on future impact fees as people move into the city . Councilmember Kunz Do we need to take a census of our city to determine the number of people who have actually moved here so we can retroactively pay ourselves back on these sirens? Bill Ross You will be charging people as they move in up until 2035 when Milton will be built out. With regard to population, you may grow faster than projected or maybe slower but you are going to run out of land at some point. With regard to employment, we like the projections we have but we may be off. Bear in mind you will need to update this whole Capital Improvement Plan about every five years. When you update your Comprehensive Plan , the plan now calls for a chapter for anyone who has impact fees to be included in the report. Our next Comprehensive Plan update is scheduled for 2016. Work Session of the Milton City Council Monday, January 12,2015 at 6:00 pm Page 5 of 10 Councilmember Longoria Lacking official results from the U.S. Census every ten years, does the state just go with our projections? I think Matt's point was that we could make up some really good numbers so we could get paid back quicker. How do we get certified projections that we are going to use for these fees? Bill Ross Keep track of your building permits. You know how many houses are being built and you can apply your own average household size with regard to population. You can also look at new non-residential construction. These numbers are great for today but in five years they are going to be out of date. One of the things about impact fees is that they are self-regulating because they are based on building permits getting issued. If growth occurs a lot faster than anticipated, you will need the facilities to serve new growth sooner but you will also be collecting the impact fees faster. And, the opposite holds true as well. If we have another recession, you will not need those facilities to serve new growth nor would you be receiving the impact fee either. It self-regulates over time. Police Services: We looked at the square footage that is currently occupied by the Police Department. We looked at the level of service generated in terms of the future number of square feet that could be impact fee eligible. Then, we came up with a percentage. Basically, this impact fee is structured by what you have now and what you will need in the future based on the level of service. And, the net result shows no justification for all of the square footage that will be built in the new building under this approach. The square footage needed to serve future growth is less than the total proposed; yielding only a percentage that is eligible to be recovered through an impact fee. However, there is another way to look at this. By the year 2035, the city's population will be at its maximum. The city is projected to need an 8,500 square foot headquarters building and some square foot storage on and off site. We can back this up just like we did with the trails in parks and recreation earlier and by 2035, we are going to need an 8,500 square foot headquarters. We then need to calculate the fair share for new growth and development to pay versus the existing folks and use that percentage. I have not run the numbers this way but I am planning to. I will use whichever number comes out most beneficial to the city and put that number in the Methodology Report. Roads: First, we identified all of the currently planned road projects in the Capital Improvement Plan, the Comprehensive Transportation Plan, as well as, some recently identified projects by the Transportation Engineer that will increase the traffic capacity of the road network throughout the city. We cannot pay for maintenance or fill pot holes, but we can include in the impact fee program any improvement that actually increases capacity because it is capacity that deals with new growth that the impact fee is based upon. We looked at the following: • How much traffic is on the roads generated by existing development today; city residents and city businesses? • How much traffic is there going to be in 2035 when the population and employment forecasts are realized? Work Session of the Milton City Council Monday, January 12, 2015 at 6:00 pm Page 6 of 10 That number came out to be 40.1 % and that is how much more traffic is going to be on your roads. Therefore, the fair share of future growth and development would be to pay 40.1 % of the cost of these road improvements that are creating new capacity. The problem is that while the state law requires you to adopt a level of service, we are recommending that you adopt the level of service which most of the state has adopted. However, you are not necessarily going to achieve that level of service on everyone of these improvements. In many cases, you are going to make things better while only being at a level of service when you get through , but you are handling more traffic. So , we characterized the level of service as the level you will strive for but not necessarily achieve on each and every project. The basic point is that whether it is an intersection improvement, a signalization improvement, or a road widening project, you are creating capacity for more traffic which is new growth and development. We have left out the cross commutes; the people that drive through the city but do not live here. We have left out all of the state and federal funding and made the general theory that you are getting those grants and assistance because those funds are paying for the improvements needed for the people to use our roads who do not live here. We can focus on the city's traffic and its increase compared to the mone y that the city has to pay toward these road improvements. That is how we balance those out. The table lists all of the projects that are capacity related. There are other road projects that you have planned that are not eligible because they do not create capacity , they just help the situation. I want to emphasize that the state law indicates "road improvements " not transportation. So , you have to be improving a road and creating capacity regardless of what else is hooked onto that project. The last road table summarizes the new growth costs versus the total costs. When we add up all of these road improvements in net present value you have $38M in just these capacity related roads, of those , that 40.1 % ends up being $15M that could be included in an impact fee. The Summary Table puts all this together in terms of what level of service is recommended for each type of project that could be included in the city 's impact fee program . The total cost is expected to be experienced in constructing the projects (in current dollars) and the amount that would be eligible to be assessed in impact fees. The net present value of the impact fee eligible costs is also shown. Next Steps Table: The steps that are labeled here are summarized on the drawing. The first step is to get concurrence that we should precede with the impact fees study. Once that is complete , we will officially begin the impact fee process. A public hearing will need to be held to begin the process. A public hearing is a requirement to any amendment to the Comprehensive Plan . The Capital Improvements Element is an amendment to the Comprehensive Plan , so we have to follow the Comprehensive Plan amending process in the DCA regulations. We will then draft an Impact Fee Methodology Report. The Impact Fee Methodology Report requires performing a forecast, listing all projects, and then calculating what the maximum impact fees can be. This document becomes the bible for calculating and controlling your Impact Fee Program over future years. The forecasts and projects go into the Capital Improvements Element. It is called an element because that is what DCA calls all the chapters in the Comprehensive Plan. But, only a portion of what is in the Methodology Report is needed for the Capital Improvements Element. DCA is not interested in your fee calculations. Basically, it indicates your future needs and what you are going to do about them . The first two categories out of the Methodology Report, the Forecast and the Work Session of the Milton City Council Monday, January 12, 2015 at 6:00 pm Page 7 of 10 Projects, go into the CIE. After the advisory committee and my team have finalized the Methodology Report it will come to you for discussion and adoption. Once adopted, we will put together the Capital Improvements Element using those portions of the Methodology Report. Then , we will have another public hearing to gain public comment and to adopt a Transmittal Resolution. At this point, you are not adopting the Capital Improvements Element, you are only authorizing that it go to DCA for review. It will be submitted once you pass the Transmittal Resolution. While this review is going on, we will start on the Impact Fee Ordinance and the Impact Fee Schedule that will go into that ordinance. This takes two hearings to be adopted. Once the Advisory Review Committee process is completed, we will be able to coordinate the adoption of the Impact Fee Ordinance and Fee Schedule and the adoption of the CIE as an amendment to the Comprehensive Plan. We will be working with staff and training them how to collect these fees, how to calculate impact fees and when to submit appeals, exemptions, etc. There is a lot of information that goes into fUIUling these programs and we will be working with staff to educate them. So, when you adopt the ordinance they can start collecting fees immediately because they will be prepared to implement the program. Councilmember Thurman Regarding the impact fees, once the fee schedule is adopted, is the same amount charged for all single family residential or is it based on square footage or the number of bedrooms? How is that determined? Bill Ross An impact fee for a resident is based on it being a housing unit. It is the same fee whether if it is a single family house or a townhouse or an apartment. It is the same fee because we have to maintain what is called a rational nexus. There has to be a relationship between the fee we charge and the service we provide. There is no relationship between the size of the house and the services they provide. Bigger houses do not need more fire stations or parks. Housing unit is the basic level of service. Councilmember Thurman In the cities around here that have impact fee ordinances, what would be the typical impact fee that is adopted for a single family home? Bill Ross We are redoing Alpharetta's right now. I am not sure what they currently charge. Roswell's grand total impact fee for all services that they provide in their impact fee plan for residences is somewhere around $2,025. Councilmember Hewitt Going back to forecast, specifically population, all of that is flushed out in the Methodology Report and DCA when they look at it, is that correct? Bill Ross The only thing that ARC and DCA will review is whether or not we have complied with the law and their standards with regard to the items addressed. The ARC process is one of coordination. They will send a copy of your community's Capital Improvements Element to all affected governments and they will invite comment and a public hearing to see if they get any comments. ARC will handle the review process along with DCA and they also have the opportunity to comment. Of all the CIE's they have Work Session of the Milton City Council Monday, January 12,2015 at 6 :00 pm Page 8 of 10 reviewed they have never commented on any of them and I doubt they would comment on our population and employment forecast. Councilmember Hewitt So it is self-policed? Bill Ross Yes. They have to be reasonable of course. The bottom line is that if you end up in court on anything about impact fees, you have to be able to explain to the judge how you complied with all the laws and requirements. Councilmember Hewitt So, in 2035 if we are not at that 61,000 number but we have made a good faith effort assuming that is going to be the population , we should not have any issues, correct? Bill Ross If you do not get to that population until 2040, you are only charging new growth as it occurs. So , when you get to 2035 , you have only charged the number of houses that were built. Then , you can continue the impact fee until you collect all of the money that is the fair share of the 61,000 people. Councilmember Kunz There is a lot of good information here. For our department heads, is this manageable? How easy would this be to assimilate? Would we need added personnel? Kathy Fields The administration of collecting impact fees would come through my department because the impact fee would be collected at the time the building permit was issued. We would purchase software that we would use to input all the data and then it would calculate the cost of the impact fee. From an administration view it is very minimal in terms of what would be needed. Council member Kunz Implementation is easy. We would have to make an investment in software? Kathy Fields Software comes with the contract. Councilmember Kunz No other personnel would be needed? Kathy Fields No. Bill Ross I think the question was broader. The bad news is that impact fees can only be used for Capital Improvements and those Capital Improvements have to have a life of at least 10 years. So we cannot do computers, patrol cars, maintenance or administration. The good news is that the information in the assessment report is drawn from plans you already have (recreation plans, fire stations, police headquarters, roads, etc.) Whether you have impact fees or not you would have to pay for the additional -~-----------------~-~~----~ --~~- Work Session of the Milton City Council Monday, January 12, 2015 at 6:00 pm Page 9 of 10 staff, etc. to go with the improvements but the difference is you would not be collecting a fee toward paying those on the capital side of it. Council member Kunz I have a question for the ARC. What have you done in the process so far and have you been in agreement with everything that has been said tonight? ARC We have been informed of how the process is going to work and it looks like we will have more input going forward. Bill Ross This report is very much what the city has already adopted. The real value of the ARC is when we start calculating the fees. The real question is, "How are you going to pay for all of this?" Of all of these Capital Improvements in this assessment report, only about half are actually impact fee eligible. So, we will be in discussion with the City Manager, the Finance Department, and you on how we will finance all of these improvements. You have to remember that you do not collect the last impact fee until the last house is built or the last business moves in and you often need those improvements a lot sooner. We will prepare the Methodology Report in a conservative way. If you can never tell me in the months to come how you are going to finance these improvements that is okay because we will be using a credit calculation against the general fund, which is the most conservative kind of credit for future tax collection we can do. You may recall Alpharetta was the first city in the state to have impact fees. They passed a bond issue and impact fees simultaneously. We can go with a conservative approach and guarantee that you will not cross that line beyond a fair share. To actually combine a realistic funding approach in the plan is better and more complete but you will have to wrestle with the idea that you are going to need money to pay for some Capital Improvements before you can actually collect the impact fees to help pay for them. This is especially true for services like fire. You don't wait until the last house is built before you put a fire station in, it is too late. To be prepared, you need to anticipate growth. It is a timing issue you will have to deal with. We will be talking to the ARC about how to deal with that issue. Councilmember Thurman How deep do we go when we are determining the impact fee schedule? Do you have an impact fee portion for parks; what level do you go to? Bill Ross The impact fee schedule will break out the four categories but then they will list the land uses. Parks and recreation will only be charged against residential development. The other three categories will be charged for residential and non-residential development. Councilmember Hewitt On the residential side, is that typically charged to the developer when he comes in and he has 15 lots or is it charged for each individual house? Work Session of the Milton City Council Monday, January 12 , 2015 at 6:00 pm Page 10 of 10 Bill Ross Under law it cannot be charged any earlier than when the building permit is applied for. Now, some jurisdictions have delayed collections, you can pay the impact fee when you pull your building permit or you can delay but it has to be paid before the Certificate of Occupancy is issued. Councilmember Longoria I think this whole concept brings a level of understanding on how we came up with these fees and what it costs the city to provide services. Bill Ross Kathy tells me this does not really need an official vote to proceed unless you want to. How do you want to proceed? Councilmember Longoria Since it is a work session we cannot vote on anything. If we want to take a vote it will have to wait until the next meeting. Councilmember Thurman Move forward. Councilmember Kunz I am okay with proceeding. Councilmember Longoria I would agree with that. Councilmember Hewitt Same. Bill Ross I will move forward with the process. Thank you. Date Approved: February 2, 2015 Sudie AM Gordon, City Clerk