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HomeMy WebLinkAbout06/27/2019 - Building Review Board - Summary Agenda - Regular MeetingBuilding Review Board Page 1 June 27, 2019 Alan Cram, Chair City Council Chambers Tim Johnson, Vice Chair City Hall West Brad Massey 300 Laporte Avenue Bernie Marzonie Fort Collins, Colorado Katharine Penning Eric Richards Staff Liaison: Justin Robinson Russ Hovland Chief Building Official The City of Fort Collins will make reasonable accommodations for access to City services, programs, and activities and will make special communication arrangements for persons with disabilities. Please call 221-6515 (TDD 224-6001) for assistance. Agenda June 27, 2019 1:00 PM • CALL TO ORDER • ROLL CALL • AGENDA REVIEW • PUBLIC COMMENT ON ITEMS NOT ON THE AGENDA • DISCUSSION AGENDA 1. MINUTES OF FEBRUARY 28, 2019 The purpose of this item is to consider approval of the minutes from the February 28, 2019 regular meeting of the Building Review Board. 2. 2019 CAPITAL EXPANSION FEE & UTILITY FEE UPDATE DESCRIPTION: This purpose of this item is to provide information about the 2019 Capital Expansion Fee & Utility Fee Update. Staff is seeking thoughts and feedback from the board that can be shared with Council Finance Committee in August. STAFF: Jennifer Poznanovic, Senior Manager of Sales Tax & Revenue Lance Smith, Utility Strategic Finance Director Building Review Board Packet Page 1 Building Review Board Page 2 June 27, 2019 3. HALLIGAN WATER SUPPLY PROJECT DESCRIPTION: The purpose of this item is to update the Building Review Board on the current status of the Halligan Water Supply Project (Project), including a project summary, key milestones, and activities planned for 2019. STAFF: Donnie Dustin, City Manager, Water Engineering 4. GRANT EVERITT APPEAL OF DENIAL OF ONE TIME EXEMPTION OF CLASS D1 LICENSE TO BUILD A CLASS C2 LICENSE-LEVEL PROJECT (5-PLEX MULTI-FAMILY) DESCRIPTION: The Board will hear an appeal of the Chief Building Official’s decision regarding a contractor licensing issue. The Board will make a ruling as to whether to uphold, overturn, or modify the decision of the CBO. STAFF: Russ Hovland, Chief Building Official • OTHER BUSINESS • ADJOURNMENT Packet Page 2 Date: Roll Call Johnson Marzonie Massey Penning Richards Robinson Cram Vote absent     absent  5 present 1 – February Minutes Penning Richards Robinson Marzonie Massey Johnson Cram Yes abstain absent Yes Yes absent Yes 4:0 4 - Grant Everitt Appeal - Modification - Mentorship Marzonie Massey Johnson Penning Richards Robinson Cram Yes Yes absent Yes Yes absent Yes 5:0 Roll Call & Voting Record Building Review Board 6/27/2019 Agenda Item 1 Item 1, Page 1 AGENDA ITEM SUMMARY June 27, 2019 Building Review Board STAFF Gretchen Schiager, Administrative Assistant SUBJECT CONSIDERATION AND APPROVAL OF THE MINUTES OF THE JUNE 27, 2019 BRB MEETING EXECUTIVE SUMMARY The purpose of this item is to approve the minutes of the June 27, 2019 meeting of the Building Review Board. ATTACHMENTS 1. BRB June 27, 2019 Minutes - DRAFT Packet Page 3 DRAFT City of Fort Collins Page 1 February 28, 2019 Alan Cram, Chair City Council Chambers Tim Johnson, Vice Chair City Hall West Brad Massey 300 Laporte Avenue Bernie Marzonie Fort Collins, Colorado Katharine Penning Justin Robinson Staff Liaison: Russ Hovland Chief Building Official The City of Fort Collins will make reasonable accommodations for access to City services, programs, and activities and will make special communication arrangements for persons with disabilities. Please call 221-6515 (TDD 224- 6001) for assistance. Regular Meeting Minutes February 28, 2019 A regular meeting of the Building Review Board was held on Thursday, February 28, 2019, at 1:00 p.m. in the Council Chambers of the Fort Collins Municipal Building at 300 Laporte Avenue, Fort Collins, Colorado. • CALL TO ORDER Chair Cram called the meeting to order at 1:00 p.m. • ROLL CALL PRESENT: Cram, Johnson, Massey, Marzonie, Penning ABSENT: Robinson STAFF: Hovland, Gerber, Van Hall, Depew, Kadrich, Yatabe, Schiager • PUBLIC COMMENT ON ITEMS NOT ON THE AGENDA None • DISCUSSION AGENDA 1. CONSIDERATION AND APPROVAL OF THE MINUTES OF THE OCTOBER 25, 2018 MEETING. Mr. Johnson moved to approve the minutes of the October 28, 2018 meeting. Ms. Penning seconded. The motion passed 5-0. Building Review Board ITEM 1, ATTACHMENT 1 Packet Page 4 DRAFT City of Fort Collins Page 2 February 28, 2019 2. JASON JONES APPEAL OF DENIAL OF ONE TIME EXEMPTION OF CLASS D1 LICENSE TO BUILD A CLASS C2 LICENSE-LEVEL PROJECT (4-PLEX MULTI-FAMILY) DESCRIPTION: Jason Jones currently has a Class D1 license allowing him to build new housing of not more than two (2) dwelling units. Jason has built four (4) new single-family detached homes in city limits and is in good standing. Jason would like to be approved as the permit holder and general contractor (GC) to build a 4-unit multi- family building (4-plex) which requires a higher-level Class C2 license. Chair Cram asked the Appellant to introduce himself, and then reviewed the procedures for the hearing. Staff Presentation Mr. Hovland presented the staff report noting Mr. Jones has never built dwellings that included fire sprinkler systems or dwelling separation walls. Appellant and Parties-in-Interest in Support of Appeal Arguments Mr. Jones provided copies of his work history and business information to Board members and staff. He explained his work experience and stated he is qualified to build this 4-plex as he has installed interior sprinkler systems in the past and the separation walls are uncomplicated. He requested a one-time exemption for this project noting he and his wife intend to keep the property for a rental. Staff Response None Appellant Rebuttal None Board Questions of Staff and Parties-in-Interest Ms. Penning asked Mr. Hovland whether a test is required for the C2 license. Mr. Hovland replied in the affirmative stating the C2 exam is the commercial exam under the IBC. Mr. Massey asked if Mr. Jones has taken any commercial construction courses. Mr. Jones replied in the negative. Mr. Massey asked if a single permit is required for the 4-plex. Mr. Jones replied in the affirmative. M. Massey asked Mr. Jones if he has carefully reviewed plans for installing a fire partition. Mr. Jones replied his plans call for a 2-hour fire separation between each unit that extends from the foundation through the attic space. He intends to place two layers of sheet rock in between the units. Mr. Massey asked Mr. Jones if he understands the nuances of the installation. Mr. Jones replied he feels he has the knowledge and resources to properly install the walls and pass inspections. Mr. Massey asked about an option for Mr. Jones to work under another individual's license. Mr. Hovland replied Mr. Jones could seek out a C2 licensed contractor who would act as a mentor. Mr. Jones stated he would consider that but would prefer to do the work himself. He stated he does have three individuals with C2 licenses who would be willing to work with him; however, they are worried about future liability and he would like to structure future liability to be held with his company. Mr. Marzonie asked about this setting a precedent. Mr. Hovland replied that is a possibility and noted this type of request has typically not been approved. He stated he would want to formalize any mentorship type of agreement and would work with the City Attorney's to ensure the City has the authority to do that. Mr. Massey asked if Mr. Jones would gain the necessary experience for a C2 license by completing this project under a mentor. Mr. Hovland replied he would need three projects of this type in order to gain the experience necessary. Mr. Johnson noted it is difficult to gain necessary experience to get the C2 license without being an employee of a company. Mr. Hovland and Ms. Gerber agreed. Mr. Massey suggested the architectural drawings be redone to expand detail and expressed doubt Mr. Jones is prepared to fill existing gaps with his past experience. ITEM 1, ATTACHMENT 1 Packet Page 5 DRAFT City of Fort Collins Page 3 February 28, 2019 Public Comment None Board Discussion Chair Cram stated the biggest issue is the difference between residential and commercial and expressed concern about the lack of specification in the drawings. He recommended Mr. Jones get more detailed drawings if he is given the opportunity to build this project. Ms. Penning stated she would only approve this moving forward with a C2 licensed supervisor. Motion Mr. Massey moved to modify the decision of the Chief Building Official to allow Mr. Jones to act as a general contractor and permit holder for this project with supervision by a current licensed C2 contractor in a mentorship role. Mr. Marzonie seconded. Board Discussion None The motion passed 5-0. Mr. Hovland clarified this would allow Mr. Jones to obtain the permit under his license level with supervision from a current C2 licensed contractor. Mr. Jones would therefore hold the liability for the project. Mr. Massey stated that was the intent of his motion and accepted the clarification. Ms. Penning seconded. The motion passed 5-0 3. PROPOSED BUILDING CODE CHANGES TO REQUIRE MIXED CONSTRUCTION AND DEMO WASTE BE SENT TO NEW COUNTY RECYCLE SORTING FACILITY DESCRIPTION: Honore Depew, Senior Sustainability Specialist for Waste Reduction and Recycling, will present the details of a proposed ordinance to amend the I-codes to help divert construction and demolition debris (C&D) and enable the construction of a new C&D sorting facility. This item will be considered for first reading by City Council at its March 5th regular meeting. Staff Report Mr. Depew explained these changes would amend Section 12 of the general Municipal Code in addition to the I-Codes. He discussed the impending closure of the existing landfill and stated a new county landfill in the north part of the county will be constructed along with a central transfer station, composting facility, sorting facility for mixed loads of construction waste, and an improved recycling center at the existing landfill area. Mr. Depew stated this ordinance would direct all mixed loads of construction and demolition debris to a County-owned facility starting once it is operational, around 2022, and continuing for 10 years. He requested feedback on the proposed changes. Board Comments Ms. Penning commended the proposed changes as being a good way to ensure recycling and composting is happening, particularly with smaller projects that cannot sort onsite. Mr. Johnson asked why the period of 10 years is included. Mr. Depew replied the County is not trying to compete with the private sector; therefore, after the public investment in this facility and its use for 10 years, the development of a comparable facility by the private sector would be permissible. Mr. Johnson asked if the quantities of each debris category could be captured to help qualify construction for LEED certification. Mr. Depew replied in the affirmative stating the new facility will provide receipts of materials received. ITEM 1, ATTACHMENT 1 Packet Page 6 DRAFT City of Fort Collins Page 4 February 28, 2019 Chair Cram noted there is currently a problem with the lack of a market for recycled materials. He asked about the possibility of that happening with construction materials. Mr. Depew replied the global recycling markets for traditional curbside recycling has been disrupted by China's decisions; however, that condition does not apply to building materials as they are so heavy and voluminous that they tend to be used more locally or regionally. Chair Cram asked about construction dumpsters being contaminated with items from the public. Mr. Depew replied challenges would exist with hazardous waste; however, this should alleviate the issue as non-recyclable items can be sorted at the facility. Mr. Massey asked about the threshold for C&D recycling. Mr. Hovland replied a scope of work of at least 1,000 square feet triggers the C&D requirement. Ms. Penning asked if the threshold could be reduced. Mr. Depew replied that could occur in the future; however, the intention at this time was to not introduce anything that would deviate from the norm beyond this one change triggered by future completion of the facility. Mr. Marzonie asked if the cost of this facility is comparable to the existing facility. Mr. Depew replied it is a bit difficult to quantify as costs vary by the type of project and the material volume. The cost of dropping material at the proposed sorting facility will be more expensive than the cost of putting material into a landfill. The estimated cost per ton for trash is $29 per ton and $37 per ton for C&D. Mr. Johnson stated there is value in having the operations all in one place. Public Input None Board Deliberation Mr. Massey moved to support the new program to require use of the future Larimer County landfill transfer station as presented. Ms. Penning seconded. The motion passed 5-0. 4. PROPOSED BUILDING CODE CHANGE TO ALLOW SHORT-TERM RENTALS IN MULTI-FAMILY BUILDINGS DESCRIPTION: Building Services and Poudre Fire Authority have identified a short-term rental (STR) licensing policy that conflicts with current Building and Fire codes adopted by the City. The Chief Building Official (CBO) recommends adding language to the occupancy description section of Chapter 3 in the adopted 2018 IBC to allow R-2 multi-family buildings to have not more than 25% of units/dwellings with occupants that are transient in nature thereby keeping the primary use of the building permanent residents. The building would then not be considered a change of occupancy. Staff Report Mr. Hovland presented the staff report stating multi-family units are treated in two different ways, one with transient uses and one with non-transient uses and detailed the conflicting policy. He discussed his proposal to amend the Code wording. Board Questions and Discussion Ms. Penning asked if there are situations in the city where short-term rental properties make up more than 25% of a building. Mr. Hovland replied in the affirmative stating 68 licenses are currently in question; this change would reduce that number to 6 or 7. Mr. Massey asked if units must be specifically identified, stating that could be a challenge, specifically with multiple owners. Mr. Hovland replied the City has a consultant that tracks all short-term rentals in the city, and it is anticipated this will become part of that tracking. It is true that if one unit in a 4- plex becomes a short-term rental, the other 3 units could not hold a short-term license. Assistant City Attorney Yatabe noted short-term licenses are associated with a property owner, not with a property; therefore, any buyer would have to apply for the license themselves. ITEM 1, ATTACHMENT 1 Packet Page 7 DRAFT City of Fort Collins Page 5 February 28, 2019 Ms. Penning asked how the 6 or 7 existing licensees that are over 25% will be handled. Mr. Hovland replied the plan is to meet with owners and inspect the properties to determine how those buildings can be brought up to code. He noted variances may be required in some cases. Ms. Penning asked if short-term rental licenses expire. Mr. Hovland replied they are all one-year licenses. Public Input Elizabeth Derbyshire stated the IBC treats short-term rentals similarly to hotels and motels; therefore, allowing short-term rentals in multi-family units without certain safety features violates that code and putting an arbitrary 25% cap on short-term rentals puts those units at risk. She asked if it is okay for all units in a multi-family dwelling to be short-term rentals if the IBC codes are met. She stated she found nothing about multi-family dwellings in the short-term rental ordinance and suggested allowing short-term rentals in multi-family dwellings is going to make the housing shortage worse. She requested the Board recommend denial of the proposal. Kathryn Dubiel expressed concern there has been little citizen outreach for this change and stated the proposed change would have a huge negative impact on the housing market for those who rent, and the lack of affordable housing would be further exacerbated. She requested the Board withhold recommendation of the change based on its impacts. Paul Patterson suggested delaying this item to allow more time for citizen outreach. Board Discussion Ms. Penning stated there is currently no cap on multi-family short-term rentals; therefore, this adds controls and matches what the IBC states as being appropriate. Mr. Johnson asked about the original short-term rental program. Mr. Hovland replied there was not much discussion around multi-family short-term rentals; however, given that they are occurring, the intent of this change is to meet codes while still allowing some flexibility for property owners. Mr. Johnson asked if this could trigger a discussion about the original short-term rental ordinance. Laurie Kadrich, Planning, Development, and Transportation Director, stated it was part of the original ordinance to allow short-term rentals in multi-family units and there was no citizen objection at the time. Mr. Johnson asked how short-term rentals are currently reviewed and if they are inspected. Mr. Hovland replied the application includes a checklist of minimum life and safety items but there is no inspection. Ms. Penning noted this item is only related to the code, not the entire short-term rental ordinance; therefore, she expressed support for the change. Chair Cram expressed concern that certain properties are not expected to meet the code Mr. Massey stated affordable housing is not part of the Board's purview. He asked if there is a cost associated with the annual short-term rental license. Mr. Hovland replied in the affirmative. Board Deliberation Ms. Penning moved to support the proposed building code change as presented. Mr. Massey seconded and requested a friendly amendment clarifying the purview of the Board from a Building Code standpoint noting the larger context of affordability lies with City Council. Ms. Penning accepted the friendly amendment. The motion passed 5-0. • OTHER BUSINESS o Election of Officers Mr. Marzonie nominated Mr. Cram for Chair and Mr. Johnson for Vice Chair. Mr. Massey seconded. Motion passed 5-0. ITEM 1, ATTACHMENT 1 Packet Page 8 DRAFT City of Fort Collins Page 6 February 28, 2019 ADJOURNMENT Chair Cram adjourned the meeting at 2:39 p.m. Minutes prepared by Tara Leman, Tripoint Data, and respectfully submitted by Gretchen Schiager. Minutes approved by a vote of the Board on __________. _________________________________ ______________________________ Russell Hovland, Chief Building Official Alan Cram, Chair ITEM 1, ATTACHMENT 1 Packet Page 9 Agenda Item 2 Item 2, Page 1 STAFF REPORT June 27, 2019 Building Review Board STAFF Jennifer Poznanovic, Senior Manager of Sales Tax & Revenue Lance Smith, Utility Strategic Finance Director SUBJECT 2019 Capital Expansion Fee & Utility Fee Update EXECUTIVE SUMMARY Coordination of Council approved fees began in 2016 to provide a more holistic view of the total cost impact. Previously, fee updates were presented to Council on an individual basis. After the 2019 fee update, fee phasing will be complete with regular two and four-year cadence updates beginning in 2021. 2019 fee updates include: Development Review fees, Electric Capacity fees, Water Supply Requirement fees, Wet Utility Plan Investment Fees and Step III of the 2017 Capital Expansion Fees. Staff proposes the following fee changes: • Wet Utility PIFs as proposed • Electric Capacity Fees as proposed • Water Supply Requirement Fee as proposed • 100% of proposed 2017 Capital Expansion Fees (Step III) • Transportation Capital Expansion Fees (inflation only) Development Review Fees have been decoupled and will be brought forward at a later date. BACKGROUND Since the fall of October 2016, staff has worked to coordinate the process for updating all new development related fees that require Council approval. Development related fees that are approved by Council are six Capital Expansion Fees, five Utility Fees and Building Development Fees. Type of Fee Fee Name Capital Expansion Neighborhood Park Capital Expansion Community Park Capital Expansion Fire Capital Expansion Police Capital Expansion General Government Capital Expansion Transportation Utility Water Supply Requirement Utility Electric Capacity Utility Sewer Plant Investment Utility Stormwater Plant Investment Utility Water Plant Investment Building Development Development Review & Building Permit Fees Packet Page 10 Agenda Item 2 Item 2, Page 2 Previously, fee updates were presented to Council on an individual basis. However, it was determined that updates should occur on a regular two and four-year cadence and fees updates should occur together each year to provide a more holistic view of the impact of any fee increases. Impact fee coordination includes a detailed fee study analysis for Capital Expansion Fees (CEFs), Transportation Capital Expansion Fees (TCEFs) and Development Review Fees every four years. This requires an outside consultant through a request for proposal (RFP) process where data is provided by City staff. Findings by the consultant are also verified by City staff. For Utility Fees, a detailed fee study is planned every two years. These are internal updates by City staff with periodic consultant verification. In the future, impact fee study analysis will be targeted in the odd year before Budgeting for Outcomes (BFO). In years without an update, an inflation adjustment occurs. Below is the current fee timeline: Phase I of the fee updates included CEFs, TCEFs, Electric Capacity Fees, and Raw Water/CIL and were adopted in 2017. Phase II included Wet Utility PIFs and step II of CEFs and TCEFs, which were approved in 2018. Development review and building permit fees were originally included in Phase II but were de-coupled from the 2018 update. Due to the concern in the development and building community around fee changes, Council asked for a fee working group to be created to foster a better understanding of fees prior to discussing further fee updates. In August of 2017, the Fee Working Group commenced comprised of a balanced group of stakeholders – citizens, business-oriented individuals, City staff and a Council liaison. The Fee Working Group met 14 times and was overall supportive of the fee coordination process and proposed fee updates. The 2019 phase III update includes Development Review fees, Electric Capacity fees, Water Supply Requirement fees, Wet Utility Plan Investment Fees and Step III of the 2017 Capital Expansion Fees. After the 2019 fee update, fee phasing will be complete with regular two and four-year cadence updates beginning in 2021. 2019 Utility Fee Updates The proposed changes to Utility Fees for a single-family, residential home include a 1.7% increase to the Electric Capacity Fee (ECF) and increases to the three Wet Utility Fees ranging between 1.5% and 6.7%. The Water Plant Investment Fee (PIF) is proposed to increase 6.7%, the Wastewater PIF is proposed to increase 1.5% and the Stormwater PIF is proposed to increase 3.3% from current fee levels. The two main drivers for the increases include: • New capital project spending, which increases the overall value of the system • Annual increases in construction costs, which also increases the replacement value of existing system Packet Page 11 Agenda Item 2 Item 2, Page 3 The proposed change to the Water Supply Requirement increases the cost of 1 acre-foot of required raw water from $17,300 to $21,500, or 24%. The primary drivers for this increase are: • Updated construction cost estimates associated with the Halligan Water Supply Project • Increasing costs of future water rights that will need to be acquired to optimize the water rights portfolio The chart below summarizes the proposed Utility Fees for a single-family home, assuming an 8,600 square feet lot and 4 bedrooms: 2019 Capital Expansion Fee Updates The chart below shows the current and proposed fee updates for CEFs: Step III fees are an 11% increase from current fee levels (Step II). CEF fee increases are 100% of full fee levels recommended in 2017. The CPI-U index for Denver-Aurora-Lakewood is used for CEF inflation. An inflation estimate of 3.2% has been used, but an update will be available in August 2019. Step III - Full fees proposed in 2017 Land Use Type Unit N'hood Park Comm. Park Fire Police Gen. Gov't Current Total Step III Total w Inflation % Increase w Inflation Residential, up to 700 sq. ft. Dwelling $1,721 $2,430 $421 $236 $574 $5,152 $5,724 11% Residential, 701-1,200 sq. ft. Dwelling $2,304 $3,253 $570 $319 $774 $6,911 $7,679 11% Residential, 1,201-1,700 sq. ft. Dwelling $2,516 $3,552 $620 $347 $845 $7,543 $8,381 11% Residential, 1,701-2,200 sq. ft. Dwelling $2,542 $3,589 $630 $352 $858 $7,630 $8,478 11% Residential, over 2,200 sq. ft. Dwelling $2,833 $4,001 $701 $392 $955 $8,502 $9,447 11% Commercial 1,000 sq. ft. 0 0 $531 $297 $1,451 $2,182 $2,424 11% Office and Other Services 0 0 $531 $297 $1,451 $2,182 $2,424 11% Industrial/Warehouse 1,000 sq. ft. 0 0 $124 $69 $342 $512 $569 11% Packet Page 12 Agenda Item 2 Item 2, Page 4 Outreach Plan In an effort towards better communication, outreach and notification of impact fee changes, staff plans to meet with 15 organizations across the City in the summer of 2019. Below is the 2019 fee roadmap: RECOMMENDATION Informational. Looking for thoughts and feedback from the board that can be shared with Council Finance Committee in August. ATTACHMENTS 1. Fee Group Position Paper 2018-09-12 2. Staff Presentation Organization Staff Affordable Housing Board All Building Review Board All Economic Advisory Commission All Fort Collins Board of Relators All Local Legislative Affairs Committee All Northern Colorado Homebuilder's Association All Super Issues Forum All Development Review Advisory Board Dev. Review Downtown Development Authority Dev. Review Housing Catalyst Dev. Review North Fort Collins Business Association Dev. Review Planning & Zoning Board Dev. Review South Fort Collins Business Association Dev. Review Energy Board Utilities Water Board Utilities March May June June/July August October 1/1/2020 Capital Expansion Fees CFC Outreach CFC Council Effective Transportation CEFs Electric Capacity Fees CFC Outreach CFC Council Effective Water Supply Requirement CFC Outreach CFC Council Effective Wet Utility Fees CFC Outreach CFC Council Effective Development Review Fees CFC CFC CFC Outreach CFC Council Effective Packet Page 13 Finance Administration 215 N. Mason Street PO Box 580 Fort Collins, CO 80522 970.221.6788 970.221.6782 - fax fcgov.com Fee Working Group Position Paper Presented for Fort Collins City Council September 2018 ITEM 2, ATTACHMENT 1 Packet Page 14 2 Table of Contents PART I – BACKGROUND ............................................................................................................ 3 Overview and Why the Group Formed ....................................................................................... 3 Original Group List: A Blend of Citizens, Industry and Staff ................................................ 4 Group List Through 2018 ....................................................................................................... 5 Fee Group Objective ............................................................................................................... 5 Overview of Meetings and Topics Covered ............................................................................... 6 Impact Fee History .................................................................................................................. 6 Fee Methodologies and Calculations Reviewed ..................................................................... 6 Capital Expansion Fee Background and Discussion .............................................................. 8 Transportation Capital Expansion Background and Discussion ............................................. 9 Utility Plant Investment Fees (PIFs) ....................................................................................... 9 Development Review Fees ................................................................................................... 10 City Revenue Overall ............................................................................................................ 10 Fee Comparison to Other Communities ............................................................................... 11 City Impact Fees and Median New Home Sales .................................................................. 13 Revenue sources considered by Council since 2012 ............................................................ 13 Progressive Fees.................................................................................................................... 14 Affordable Housing Fee Waivers ......................................................................................... 14 Academic Research ............................................................................................................... 14 Capital Expansion Fee Audit ................................................................................................ 16 PART II – FINDINGS .................................................................................................................. 17 Impact Fee Mechanics, Calculations & Methods ..................................................................... 17 Fee Audit: Collection & Spending ............................................................................................ 17 Impact Fee Economics .............................................................................................................. 17 Impact Fee Communication ...................................................................................................... 17 Park Impact Fees ....................................................................................................................... 18 Alternatives to Impact Fees & Fort Collins Total Revenue ...................................................... 18 Summary of Findings ................................................................................................................ 19 PART III - RECOMMENDATIONS ........................................................................................... 20 Impact Fee List ............................................................................................................................. 21 Glossary of Terms ......................................................................................................................... 22 References ..................................................................................................................................... 22 ITEM 2, ATTACHMENT 1 Packet Page 15 3 PART I – BACKGROUND Overview and Why the Group Formed Since the fall of October 2016, staff has worked to coordinate the process for updating all new development related fees that require Council approval. Development related fees that are approved by Council (see a full list at the end of the paper) are six Capital Expansion Fees, five Utility Fees and 45 Building Development Fees. Previously, impact fee updates were presented to Council on an individual basis. However, it was determined that updates should occur on a regular two and four-year cadence and fees updates should occur together each year to provide a more holistic view of the impact of any fee increases. Impact fee coordination includes a detailed fee study analysis for Capital Expansion Fees (CEFs), Transportation Capital Expansion Fees (TCEFs) and Development Review Fees every four years. This requires an outside consultant through a request for proposal (RFP) process where data is provided by City staff. Findings by the consultant are also verified by City staff. For Utility Fees, a detailed fee study is planned every two years. These are internal updates by City staff with periodic consultant verification. In the future, impact fee study analysis will be targeted in the odd year before Budgeting for Outcomes (BFO). ITEM 2, ATTACHMENT 1 Packet Page 16 4 Below is the current impact fee timeline: In June of 2017, Council approved the following Phase I impact fee updates (effective as of October 2017): 2017 CEFs and TCEFs full fee proposals showed significant increases from the previously approved fees. These impact fee changes reflected updated asset values. Asset values have significantly increased since the last fee update due to higher construction costs and land values. These changes caused consternation in the development and building community, and Council directed a stepped implementation for CEFs and TCEFs. Bringing impact fees together to City Council for approval allowed an understanding of the full impact of the fees; however, it was difficult to explain given the complexity of different methodologies and qualitative aspects. Due to the consternation in the development and building community around impact fee changes, Council asked for a fee working group to be created to foster a better understanding of impact fees prior to discussing further fee updates. In August of 2017, the fee working group commenced comprised of a balanced group of stakeholders – City staff, business-oriented individuals, citizens and a Council liaison. Original Group List: A Blend of Citizens, Industry and Staff Council Liaison: Ross Cunniff: District 5 Industry: Sean Dougherty: Fort Collins Board of Realtors Ann Hutchison: Fort Collins Area Chamber of Commerce Greg Mediema: Homebuilder’s Association of Northern Colorado Moira Bright: Spirit Hospitality LLC ITEM 2, ATTACHMENT 1 Packet Page 17 5 Chris Banks: Odell Brewing Citizen: Diane Cohn: Affordable Housing Board Rebecca Hill: Water Board Rick Reider: Building Review Board Linda Stanley: Economic Advisory Commission Ragan Adams: Parks and Recreation Board City Staff: Mike Beckstead: Project Sponsor Tiana Smith: Project Manager/Fee Owner Capital Expansion Fees Lance Smith: Fee Owner Electric Capacity Fees Tom Leeson: Fee Owner Development Review Fees Josh Birks: City Staff/Economic Health Group List Through 2018 Council Liaison: Ross Cunniff: District 5 Industry: Will Flowers: Fort Collins Board of Realtors Ann Hutchison: Fort Collins Area Chamber of Commerce Doug Braden: Homebuilder’s Association of Northern Colorado Moira Bright: Spirit Hospitality LLC Citizen: Diane Cohn: Affordable Housing Board Rebecca Hill: Water Board Linda Stanley: Economic Advisory Commission Ragan Adams: Parks and Recreation Board City Staff: Mike Beckstead: Project Sponsor Jennifer Poznanovic: Project Manager/Fee Owner CEFs Lance Smith: Fee Owner Electric Capacity Fees Tom Leeson: Fee Owner Development Review Fees Josh Birks: City Staff/Economic Health Fee Group Objective Below is the objective of the Fee Working Group: What: Improve understanding with stakeholders of the City’s impact fee process. How: Semi-monthly meetings that present information on the mechanics, alternatives, and impacts of the City’s impact fees that are approved by City Council. Why: Foster a common understanding of why and how impact fees are calculated, in addition to collecting feedback to share with City Council on future fee calculations and processes. ITEM 2, ATTACHMENT 1 Packet Page 18 6 Overview of Meetings and Topics Covered The fee working group meetings commenced in August of 2017. The group met fourteen times, six meetings in 2017 and eight meetings in 2018. Topics covered included: detailed review of fee methodologies, inputs, calculations, City revenue sources, alternative revenue sources, academic economic research on impact fees, a third-party impact fee audit review and impact fee comparisons to other communities. Impact Fee History Capital Expansion Fees provisions were adopted in 1996 to impose certain fees to be collected at the time of building permit issuance for the purpose of funding the provision of additional capital improvements as the City’s population increases. Fees are intended to ensure new growth and development in the City bear a proportionate share of costs of capital expenditures necessary to provide community park, library, police, fire and general government capital improvements (currently police, fire, general government, community and neighborhood parks). Transportation Capital Expansion Fees, formerly the “Street Oversizing Program” was created in 1979 to ensure that new development, in a fair and equitable manner, contribute toward the construction of arterial and collector roadways so that essential municipal services, in this case the development of a safe and reliable transportation network, could keep up with the continued growth of the City. Utility Plant Investment Fees are industry standard and have been in place for decades. Utility PIFs have served as a catalyst for economic growth in the Fort Collins community by allowing each utility to build the infrastructure and capacity ahead of such growth. These fees provide a mechanism for new development to reimburse existing utility customers for such investments. Fee Methodologies and Calculations Reviewed The group discussed the four types of methodologies used in calculating the various fees: level of service, plan-based, hybrid and cost recovery, along with information needed for these calculations. The chart below shows methodologies for the impact fees within this group’s scope along with high-level calculations that the group discussed in detail. ITEM 2, ATTACHMENT 1 Packet Page 19 7 Level of Service: This methodology is standards-based, and fees are based on the existing level of service. As the community grows, capital facilities and equipment have to be expanded proportional to growth and cannot exceed the cost of maintaining the existing level of service or pay for deficiencies in current service or future needs. Capital Expansion Fees, Electric and Stormwater Plant Investment Fees all use the standards- based or level of service methodology. Fees are set by assessing City’s capitalized assets or level of service and an estimate of who can use the asset (functional population or equivalent dwelling unit (EDU)). Calculation inputs include development and construction costs and land cost. The asset value is divided by who can use the asset. Impact fees can only be used to develop new infrastructure and cannot be used to correct existing deficiencies or add features to existing infrastructure. Plan-based: Fees are set based on a Capital Improvement Plan (CIP), and development pays a portion of their impact on that plan. Impact fees cannot be used to correct existing deficiencies, for operating costs, or for maintenance. Transportation Capital Expansion Fees (TCEFs) are plan-based. The calculation used for TCEFs, is Vehicle Miles of Travel (VMT) multiplied by the growth cost per VMT. Hybrid: Fees are calculated using aspects of both plan-based and level of service. Water and Wastewater Plant Investment Fees and Raw Water/Cash-in-Lieu Fees have a hybrid methodology. The Water and Wastewater Plant Investment Fees set fees based on a CIP along with current asset values. Raw Water/Cash-in-Lieu Fees are calculated using the cost of future water storage plus the value of current assets. Cost Recovery: Fees are calculated based on recovering all or a portion of the cost of administering a particular program. Development Review Fees are set at 80% cost recovery per City code. ITEM 2, ATTACHMENT 1 Packet Page 20 8 Capital Expansion Fee Background and Discussion Capital Expansion Fees include fire, police, general government, community and neighborhood park impact fees. CEFs at the City are standards-based, meaning these fees are based on the existing level of service. In the 2017 impact fee study conducted by Duncan Associates, comparison across the Front Range indicates universal use of the standards-based methodology for CEFs. The City began charging CEFs in 1996. CEFs were updated each year for inflation using the Denver-Aurora-Lakewood CPI and continue to be updated on an annual basis. A consultant was hired in 2013 to perform a thorough review and update of methodology and inputs to these impact fees. CEFs were updated as a result, and at that time, staff committed to updating fees every four to five years. With consultant Duncan Associates, CEFs were again updated in 2017 based on this commitment. As the community grows, capital facilities and equipment must be expanded proportional to growth to maintain the same level of service. CEFs cannot pay for deficiencies in the current level of service in existing assets or facilities. As an example, park impact fees cannot be used to upgrade or add features to an existing park. John Duval, Deputy City Attorney spoke with group in detail further on legal aspects. Community and Neighborhood Park Impact Fees Within the group there has been much discussion around impact fee increases, particularly the parks fees. The 2017 impact fee levels for parks increased more than for any other fee. As part of the 2017 fee update, staff hired Ditesco Engineering to provide current costs to build existing parks and assets, using the last three parks built for both community (Twin Silo, Spring Canyon, Fossil Creek) and neighborhood parks (Waters Way, Registry, Radiant). Their calculations show that the 2017 increases were driven by significant increases in asset values based on increases in construction costs, land values, water costs, etc. As one example of the discussion within the group, initial perception of some group members was that Twin Silos was designed with excessively costly features. Kurt Friesen, Director of Parks Planning, presented a breakdown of the costs of park construction. This showed that land, water and construction costs are the largest factors in the cost of parks. Shifts in features, amenities and park elements have had a relatively minor impact on the cost to build new parks. Kurt Friesen also discussed parks standards for future parks with the group. He noted that some parks today do have more amenities than other older parks because park system needs have evolved and changed, but the different features, amenities and park elements do typically balance out. Kurt also explained the park system development strategy of an even distribution of parks throughout the City, with a community park within every four-square miles and a neighborhood park within every mile. ITEM 2, ATTACHMENT 1 Packet Page 21 9 The group felt that it was important to note that parks are the only category where impact fees pay for 100 percent of new park development. There are no other revenue streams for building new parks. This is not the case for fire, police and general government. Police, Fire & General Government Impact Fees The group had detailed discussions around the inputs and calculations on the police, fire and general government fees. Ann Turnquist, Administrative Services Director of Poudre Fire Authority, joined the group to discuss the details of the fire fees and how they are used. The majority of the conversations focused on parks fees, as there was little disagreement on these impact fees. Transportation Capital Expansion Background and Discussion Transportation Capital Expansion Fees (TCEFs), previously “street oversizing” fees, were created in 1979 and prior to the 2017 study, the last major update was in 2003. TCEF methodology is plan-based such that new development pays its proportionate share for growth- related infrastructure needed to maintain current transportation standards. TCEF revenue is used to expand or provide additional facilities to keep up with development. The 2017 study with TischlerBise raised residential fees and lowered commercial fees, due to a shift in the calculation from using trip generation to using vehicle miles travelled (VMT). Not all trips are the same in length; on average residential trips are longer than commercial. Categories were simplified in the study, they were reduced from 43 to 8 categories. In June of 2017, Council approved Option B for TCEFs. Option B provides approximately 80% of necessary funding to mitigate proportional impacts of development based on the currently approved Transportation Master Plan. Whereas Option A includes 100% of the proportionate cost attributable for mitigation of the impacts of new development on the transportation system including new streets, intersection improvements, and multi-modal improvements that were added to the most recent Transportation Master Plan. Staff is proposing Option A be adopted in the next round of fee updates in discussion fall of 2018. In the fall on 2017 Dean Klinger, Director of Engineering and Kyle Lambrecht, TCEFs Program Manager joined the group to review TCEFs. Utility Plant Investment Fees (PIFs) Lance Smith, Utility Strategic Finance Director, reviewed Utility PIFs with the group. There was little discussion on Electric PIFs and Raw Water Cash-in-Lieu as these fees have been consistently coming to Council every two years. ITEM 2, ATTACHMENT 1 Packet Page 22 10 Wet Utility PIFs (water, wastewater, stormwater) updates plan to be proposed to Council in the fall of 2018. These impact fees are largely changing based on the investment that has been made on asset and infrastructure of these three utility services. Across the three utility fees, staff is proposing 7 to 11 percent increases. These fees are also on a two-year cadence as with the Electric PIFs. Development Review Fees Development Review Fees are currently being analyzed with an external consultant and were not ready to be discussed with the fee group. As such, these fees have been decoupled from the fee updates in 2018 and will come forward at a later date. City Revenue Overall Impact fee revenue goes into specific funds for CEFs, Transportation and each Utility Enterprise Fund. Revenue can only be used for the intended purpose of the fee. For example, police fees cannot fund parks and parks fees cannot be used to upgrade existing parks. As seen in the chart below, impact fee revenue from 2005 to 2017 is volatile due to development volatility. ITEM 2, ATTACHMENT 1 Packet Page 23 11 The overall City government revenue was reviewed by the team consistent with the chart below. The discussion can be summarized as: • Sales and Use tax account for about 50% of governmental revenues. • Property tax accounts for about 8% and per the Intergovernmental Agreement (IGA) with the Poudre Fire Authority (PFA), 68% of property tax revenue is dedicated to PFA. • Charges for Services are 17% of governmental revenues and these funds are used specific to the service the fees pay for. • All revenue coming into the City are utilized for various costs and activities. The group noted that if CEFs were decreased, one or a combination of the following would be required: 1) an alternative revenue source to make up the shortfall, requiring de-funding something that is currently funded; 2) the delay of building the future assets; and/or 3) decreasing the scope of those assets to match the available fee revenue. Fee Comparison to Other Communities Fee comparisons to other communities were also presented to the group. The chart below shows that Fort Collins impact fees are consistent or lower than other Front Range communities. ITEM 2, ATTACHMENT 1 Packet Page 24 12 When comparing median home sales prices with impact fees in neighboring communities, it was apparent that other factors such as amenities and location are primary drivers of home prices. For example, the chart below shows that Timnath has the lowest fees and highest home prices, whereas Wellington has the lowest home prices and the highest fees. In other words, the amount of impact fees within a community do not correlate strongly with home prices. Some in the group noted that there is often a higher level of service in Fort Collins compared to these neighboring communities. When comparing Fort Collins impact fees to those of neighboring communities, the group had a conversation on what communities get from impact fees and what the level of service is in Fort Collins compared to other communities. For example, Timnath recently opened a new small park, whereas the level of service provided at Spring Creek or Twin Silos parks in Fort Collins is higher. Fort Collins also has amenities such as undergrounded utilities, public transportation and sign code, arguably adding to the ITEM 2, ATTACHMENT 1 Packet Page 25 13 desirability and value of homes. Some in the group suggest social capital plays a role and that could be weaved into a third dimension on the charts. City Impact Fees and Median New Home Sales While impact fees are a sizable portion of the price of new homes, from 2012 through 2017, this proportion decreased from 13 to 10 percent of the median new home sales price (see chart below). New median home sales prices have been increasing while the percentage of fees to median new home sales has been decreasing. The team considers home location, land values and the cost of construction to be the primary drivers of the increase in new median home prices. Revenue sources considered by Council since 2012 When discussing alternatives to impact fees, the group reviewed the revenue diversification options discussed with Council and the Community in 2014 and 2015. Starting in 2012, the City explored various alternatives with a goal to be revenue neutral and to reduce dependency on sales tax. Staff looked for replacement revenue sources to broaden the base and to lower the current tax rate. An increase in property tax is very unlikely as it would require a structural change at the state level. Also, income tax is not allowed per current Colorado state constitution. Alternatives considered include: tax on services, differential sales tax rate, transportation utility fee, increasing property tax, making quarter cent taxes permanent, occupational privilege tax, park/trail maintenance fee and an Xcel franchise fee. In 2015, Council suggested three alternatives to be further researched – tax on services, transportation utility fee and occupational privilege tax. Staff talked to business-oriented groups, and they were unanimously unsupportive. ITEM 2, ATTACHMENT 1 Packet Page 26 14 Progressive Fees Some in the group suggest that impact fees be more progressive, i.e. lower impact fees for smaller homes and higher impact fees for larger homes, or potentially add more steps within the impact fees. Legally, impact fees cannot be artificially adjusted to achieve a more progressive fee structure. Impact fees must be based on data and the number of people estimated to live within various size homes. The CEF fee study consultant used 2013 census data for current CEF fees, but City staff had the consultant go back and look at 2015 western state census data. The 2015 census data indicated fewer people in smaller homes and more people in larger homes than the 2013 census data. Using the 2015 data would reduce CEF fees on smaller homes and increase CEF fees for larger homes. There is more progression using the 2015 census data, but important to note is that the formula would stay the same, only the inputs would change to add more progressiveness. The City currently has six different dwelling unit size categories. The CEF fees could get more progressive by expanding the number of categories. Currently, around 90 percent of building permits are 2200 square feet and larger (the current largest dwelling unit category). Affordable Housing Fee Waivers Diane Cohn, Fort Collins Affordable Housing Board Chair, presented research on economic impact of development fees on affordable housing. The group acknowledges that increased fees may be a barrier for affordable housing production. The current fee waiver policy is limited. Some in the group suggest the City reconsider the Area Median Income (AMI) level for waivers to include greater than 30%, especially for affordable home ownership, like those homes built by Habitat for Humanity, who currently serve families at 35-60% of AMI. In addition, perhaps longer requirements for affordability (beyond 20 years) could be coupled with greater AMI limits. The group also suggested a more nuanced approach to fee waivers for affordable housing be explored, for example, waiving some fees or portions of fees, such as parks and transportation, but not others like utilities or police/fire fees. Critical to any new fee waivers is accountability and compliance of the terms for length of affordability commitment. In addition, some in the group suggest the City evaluate any negative impacts that changes to fee policies may have on the City’s affordable housing developments. Academic Research Linda Stanley, Senior Research Scientist at Colorado State University (Ph.D., Economics), presented impact fee academic research to the group. Below is a summary of the findings with references found at the end of the paper. ITEM 2, ATTACHMENT 1 Packet Page 27 15 The effect of impact fees on housing prices: The increase in the price of a home due to the imposition of an impact fee varies significantly by the value of the home, by the community, and by the type of fee. o Value of home. The increase in price resulting from an impact fee is proportional to the value of a home, with higher priced homes having a greater increase in price, often with over-shifting (i.e., the increase in price is greater than the increase in the fee). (Burge and Ihlanfeldt, 2006; Mathur, Waddell, and Blanco, 2004) o Type of fee. There is less effect of water/sewer fees on housing prices, with some research finding no effect (Burge and Ihlanfeldt, 2006). Impact fees that fund highly visible and valued amenities are likely to increase housing prices of both new and existing homes (Mathur 2013). Demand-driven increases in willingness to pay are, in large part, responsible for these price increases (as opposed to a reduction in supply due to cost increases). There are two main demand side effects. o Impact fees create infrastructure valued by community residents. This is why impact fees that fund highly visible and valued amenities are likely to increase housing prices of both new and existing homes. o Impact fees offset future tax liabilities that are capitalized into the price of a home. In other words, consumers are willing to pay more for a home with lower property taxes than that same home with higher property taxes. The academic evidence finds that, in growing areas, market demand is the primary determinant of housing prices, whether growth management programs, including impact fees, are present or not. The effect of impact fees on housing stock: Effects on both supply and demand interact to determine whether impact fees will slow down, speed up, or have no effect on residential construction rates. Thus, the empirical findings are nuanced. (Burge and Ihlanfeldt, 2006 and Burge 2016) • Non-water/sewer impact fees have positive effects on construction rates in suburban areas and negligible impacts on rates in central city and rural areas. • Non-water/sewer impact fees increase construction of large homes but not affordable ones in outer suburban areas. • Water/sewer impact fees are an insignificant determinant of construction rates for all size categories of homes and across all parts of a metropolitan area. • Burge (2016) notes, “It is crucial that state and local government officials become familiar with the more recent evidence to support the idea that impact fees may not reduce residential growth at all in the long run.” The effect of impact fees on employment and the economy: Impact fees do not appear to reduce employment growth overall, but there may be sector specific effects. • Nelson and Moody (2003) found a significant positive association between impact fees collected per building permit in one year and job growth over the next two years. ITEM 2, ATTACHMENT 1 Packet Page 28 16 • Jones (2015) found that the use of fees was positively related to service-sector employment growth and, to a lesser extent, negatively related to manufacturing employment growth. There was no relationship of impact fees to retail jobs. Capital Expansion Fee Audit In April of 2018, the Fort Collins Area Chamber of Commerce, Northern Colorado Home Builders Association and the Fort Collins Board of Realtors sponsored a third-party audit by Development Planning & Financing Group, Inc. (DPFG). The City reviewed and responded to the findings in the DPFG Review both with the audit sponsors and later with the fee working group. The City collected and spent approximately $54M in impact fees from 2012 to 2016. DPFG did not identify any issues with how fees are collected or with how the City has spent its police, fire, general government and community parks CEFs. The DPFG Review questioned $3.8M of transportation ($1.4M) and neighborhood “parks” ($2.4M) expenditures. The City’s analysis of the DPFG review found $3.4M of the $3.8M in question to be allowable overhead costs based on the City’s current code language. Of the remaining $387k in fee expenditures, staff determined $257k to be appropriate and $130k to be inconsistent with current understanding of how park fees should be used. Of the charges questioned, $257k are related to costs incurred during the two years after the park was largely completed. The maintenance costs for new parks transfers to the Park Department two years after parks are established. This is related to general warranty periods from construction and the need to make sure features and vegetation are sustainable prior to turning over to the Parks Department for ongoing maintenance. The $257k of costs in question are related to water costs while vegetation is taking root, equipment replacement associated with warranty issues, costs related to maintaining property of parks to be constructed, landscaping, and expenditures for future parks. The remaining costs in question, approximately $130k, are largely for the installation of new equipment in existing parks. Staff had previously understood park CEFs could be used for new features in old parks. This understanding has been corrected and staff is now aware this is not an allowable expenditure of CEFs and will not occur in the future. In summary, of approximately $54M in impact fees collected and spent in 2012 to 2016, only $130k or 0.24% should not have been charged to Parks Planning. ITEM 2, ATTACHMENT 1 Packet Page 29 17 PART II – FINDINGS Impact Fee Mechanics, Calculations & Methods From the meetings in 2017 that largely focused on impact fee mechanics, calculations and methodology, the group acknowledged that the City’s impact fee methodologies are sound and legally defensible. Impact fee calculations align with industry practice and the methodologies, data requirements and calculations became clearer after detailed review with City staff. Fee Audit: Collection & Spending After reviewing the third party DPFG Review, the group agrees that the system is in compliance and that the City has done an excellent job in managing fee allocations and expenditures. In the five years, from 2012 to 2016, the City collected and spent approximately $54M in CEFs. Of the $54M evaluated only $130k was not allowable expenditures. A majority of the group thinks the $130k used from the neighborhood parkland should be transferred to the general fund. The Fort Collins Board of Realtors has agreed to share the findings (see references). Impact Fee Economics The group agrees that impact fee amenities add to property values, however differ in views as to what extent. For example, living right next to a park or just being in Fort Collins with community and neighborhood parks throughout the City. Some in the group also consider the increased demand from amenities as an undesirable effect as it pushes growth out of the City – cheap and easy vs. high rise density along with less homeownership. Regardless of demand, some in the group want to highlight that rising costs of impact fees do have an impact on housing costs, whether supply or demand driven. However, the portion of median home sales prices accounted for by impact fees has decreased from 13 percent in 2012 to 10% in 2017. Impact Fee Communication Bringing impact fees together for review and forming of the fee working group has been beneficial to better understand the full impact of Council approved impact fees for new development. The group agreed that impact fees are complicated and difficult to communicate across the community. The City must better explain the basis, calculation and usage of impact fees to stakeholders. For example, when the business community was shown that Fort Collins impact fees are lower than the fees of other Front Range communities, some in the group and business community initially took the message to be that impact fees are going up because the market will ITEM 2, ATTACHMENT 1 Packet Page 30 18 bear it while others thought that the City was increasing its impact fees because they were lower. While comparisons are important, they should be shown in context. The underlying message on the need for updates due to changes in the inputs in the calculations may not have been heard. Going forward the City needs to be mindful in how it messages. Comparisons should have context, such as level of service, total cost and looking at best practices. Park Impact Fees Many of the group conversations on impact fees revolved around CEFs, namely park fees. The fee levels for parks increased more than for any other impact fee due to large increases in the inputs to the fee calculations (i.e., land and water prices; construction costs). Although some in the group noted that parks may have too many amenities, this was a small percentage of the cost of building a new park. Parks are the only category where impact fees pay for 100 percent of what is built; there are no other revenue streams for building new parks. This is not the case for fire, police and general government. Some in the group want to highlight that the 2008 parks and recreation policy plan did realize a potential inadequacy of park impact fees to fund new parks. Council supported full build out but did not identify additional revenue streams to fund parks. The 2008 plan discusses the need for additional funding streams for development and subsequent maintenance and emphasizes that the plan for park development should recognize the cost of subsequent maintenance. Alternatives to Impact Fees & Fort Collins Total Revenue If lower impact fees are approved than was recommended in 2017, as an example, the City could build lower cost parks, which would lower levels of service. Some in the group suggest not to rule out public involvement such as philanthropy and considerations of regional cooperation. The group acknowledged that reallocating revenue from the General Fund would require lowering levels of service across the City. It is also unclear if home prices would drop if impact fees were decreased or even eliminated. Other alternatives discussed include: sales tax increase, property tax increase, occupation tax, or looking into Metro Districts to build parks and streets, most of which staff previously worked on from 2012 to 2016 regarding revenue diversification. Group consensus is that the general community would be in favor of impact fees on new development instead of supporting other revenue sources, such as increasing taxes or reallocating General Fund monies to pay for impacts of new development. This would need to be further examined as the group does not fully represent the community. Given the limitations on total revenue, if full impact fee increases are not implemented, the City will need to turn to alternatives or reallocate revenue from the General Fund. Limited revenues and endless needs make for choices. If Council elects to continue to implement less than recommended, the group suggests exploring alternative revenue sources. ITEM 2, ATTACHMENT 1 Packet Page 31 19 Summary of Findings • Bringing impact fees together for review and formation of the fee working group has been beneficial to better understand the full impact of Council approved impact fees for new development. • The group acknowledges overall sound methodologies, calculations and inputs. • The third-party fee audit revealed that the City manages impact fee expenditures very well how the City spends and collects impact fees is sound. • Regarding economic data, the group agrees that amenities paid for through impact fees add to property value, but views differ as to what extent they impact demand and supply. Academic research showed that home price increases in growing areas are mainly demand driven. • The group agreed that impact fees are complicated and difficult to communicate across the community. They recommend better messaging to stakeholders and the general public. • In the 2017 study, park impact fees increased more than other impact fees due to increases in the costs of land, water and construction. These fees are the only category where impact fees pay for 100 percent of what is built. • The group acknowledges the need to identify new revenue sources for park refresh and maintenance. • If Council approves lower fees than the staff recommendation, alternative revenue sources will be needed. If Council goes this direction, it will be for the community to decide what alternatives to pursue. ITEM 2, ATTACHMENT 1 Packet Page 32 20 PART III - RECOMMENDATIONS 1. Better Communication, Outreach and Notification of Impact Fee Changes: Predictability of when impact fees change and communication to the community should be more transparent. Bringing impact fees together for review on a two and four-year cadence along with better communication on when specific impact fees are locked in, will aid in transparency and predictability. Communication around impact fee updates and comparisons with other communities needs better clarity and messaging going forward. Comparisons should have context, such as level of service, total cost and looking at best practices. The group also suggests finding a better way to communicate level of service vs plan-based methodologies. 2. Repayment from Impact Fee Audit: The full group recommends paying back the $130k identified in the DPFG audit review. 3. Progressive Fees if/where Possible: Some in the group suggest that impact fees be more progressive, i.e. lower impact fees for smaller homes and higher impact fees for larger homes, or potentially add more steps within the impact fees. Staff plans to incorporate more home size grouping in the next update in 2021. 4. Explore Alternative Revenue Source for Parks Buildout: The group recommends considering alternative revenue sources for building new parks as it is the only category that is fully funded by impact fees. 5. Investigate Revenue Alternatives to Support Parks Refresh and Maintenance: When the City is at buildout, what will be the funding source to refresh parks? Some also recommend a deeper dive may be useful to better understand if plan based or level of services is best for the City’s park fees. 6. Explore Stronger Supports for Affordable Housing Fee Waivers: Some in the group recommended the City reconsider the Area Median Income (AMI) level for waivers to include greater than 30%. In addition, perhaps longer requirements for affordability (beyond 20 years) could be coupled with greater AMI limits. The group also suggested a more nuanced approach to fee waivers for affordable housing be explored, for example, waiving some fees or portions of fees, such as parks and transportation, but not others like utilities or police/fire fees. ITEM 2, ATTACHMENT 1 Packet Page 33 21 Impact Fee List Type of Fee Fee Category Fee Name CEF Permit Fees - Building Permits Parkland: Neighborhood CEF Permit Fees - Building Permits Parkland: Community CEF Permit Fees - Building Permits Transportation Capital Expansion CEF Permit Fees - Building Permits Fire Capital Expansion CEF Permit Fees - Building Permits Police Capital Expansion CEF Permit Fees - Building Permits General Gov. Capt. Exp. Utility Development Fees Cash-in-lieu of the Water Raw Water Requirement & Excess Water Use Surcharge Utility Development Fees Electric Development Fees Utility Development Fees Sewer Plant Investment Fee Utility Development Fees Stormwater Plant Investment Fees Utility Development Fees Water Plant Investment Fee Dev Development Review - Addition of Permitted Use Additional Rounds of Review Dev Development Review - Annexation Transportation Development Review Dev Development Review - Basic Development Review Transportation - Initial - (flat fee) Dev Development Review - Basic Development Review Transportation if detached single family Dev Development Review - Basic Development Review Transportation if multi-family/other residential Dev Development Review - Basic Development Review Transportation if commercial, industrial, retail Dev Development Review - Basic Development Review Transportation - size of development Dev Development Review - Basic Development Review Transportation - Final (flat fee) Dev Development Review - Water Water Development Review Dev Development Review - Sewer Sewer Development Review Dev Development Review - Stormwater Stormewater Development Review Dev Development Review - Easments and Right of Ways - Dedications Transportation Development Review (Easement) Dev Development Review - Easments and Right of Ways - Dedications Transportation Development Review ( Right-of-Way) Dev Development Review - Easments and Right of Ways - Vacations Processing Fee (per easement) Dev Development Review - Easments and Right of Ways - Vacations Processing Fee (per Right-of-Way) Dev Development Review - Major Amendment Initial Transportation Development Review Dev Development Review - Major Amendment Final Transportation Dev Development Review - Minor Amendment Transportation Development Review Dev Development Review - Modification of Standards Transportation Development Review Dev Development Review - Overall Development Plan Transportation Development Review Dev Development Review - Project Development Plan - Initial Transportation (flat fee) Dev Development Review - Project Development Plan - Initial Transportation if detached single family Dev Development Review - Project Development Plan - Initial Transportation if multi-family/other residential Dev Development Review - Project Development Plan - Initial Transportation if commercial, industrial, retail Dev Development Review - PDP Final Transportation Re-review Dev Development Review - Rezoning Transportation Development Review Dev Development Review Road Projects Dev Development Review - Wireless Telecomm - Initial Transportation Dev Permit Fees - Building Permits Building Permits Dev Permit Fees - Building Permits Over-the-counter (No Review) Residential Building Permits Dev Permit Fees - Building Permits Building Plan Check Dev Permit Fees - Building Permits Poudre School District Impact Fee - Single Family Attached Dev Permit Fees - Building Permits Poudre School District Impact Fee - 1-4 attached dwelling units Dev Permit Fees - Building Permits Poudre School District Impact Fee -5 or more attached dwelling units Dev Permit Fees - Building Permits Thompson School District Impact Fee - Single Family Detached Dev Permit Fees - Building Permits Thompson School District Impact Fee - 5 or more attached dwelling units Dev Permit Fees - Building Permits Larimier County Reg. Road Dev Permit Fees - Building Permits Elec. PILOTS Dev Permit Fees - Building Permits Elec: Secondary Service (Service A & B) Dev Permit Fees - Building Permits Elec: Temp Pedestal Dev Permit Fees - Building Permits Water PIF Dev Permit Fees - Building Permits Water Right Dev Permit Fees - Building Permits Water Meter Dev Permit Fees - Building Permits Sewer PIF 22 Glossary of Terms References Been, V. (2005). Impact Fees and Housing Affordability, Cityscape, A Journal of Policy development and Research 8(1), U.S. Department of Housing and Urban Development. https://www.huduser.gov/periodicals/cityscpe/vol8num1/ch4.pdf Burge and Ihlanfeldt (2006). Impact Fees and Single-Family Home Construction. Journal of Urban Economics, 60, 284-306. https://www.sciencedirect.com/science/article/pii/S0094119006000222 Burge and Ihlanfeldt (2006). The Effects of Impact Fees on Multifamily Housing Construction. Journal of Regional Science, 46, 5-23. https://onlinelibrary.wiley.com/doi/abs/10.1111/j.0022-4146.2006.00431.x Burge, Gregory (2016). Impact Fees in Relation to Housing Prices and Affordable Housing Supply. http://www.impactfees.com/publications/burge-Impact_Fees_in_Relation_to_Housing_Prices-2016.pdf City of Fort Collins (2008). City of Fort Collins Parks and Recreation Policy Plan. http://citydocs.fcgov.com/?cmd=convert&vid=236&docid=2242785&dt=DEPT+REPORTS Development Planning & Financing Group, Inc. (2018). Capital Expansion Fee Review prepared for the Fort Collins Area Chamber of Commerce, Northern Colorado Home Builders Association and the Fort Collins Board of Realtors. (see attached) Ditesco (2017). Park Development Fee Analysis prepared for the City of Fort Collins. https://www.fcgov.com/finance/pdf/parks-fee-analysis.pdf?1488231835 Duncan Associates (2017). Capital Expansion Fee City prepared for the City of Fort Collins, Colorado. https://www.fcgov.com/finance/pdf/capital-expansion-fee.pdf?1497285402 Jones, AT (2015). Impact Fees and Employment Growth, Economic Development Quarterly, Vol. 29(4) 341 –346. http://journals.sagepub.com/doi/abs/10.1177/0891242415589368 AMI Area Median Income CEFs Capital Expansion Fees CIP Capital Improvement Plan Equivalent Dwelling Unit The ratio of the average household size of a dwelling type to the average household size of the typical single-family detached unit – the service unit used for parks Functional Population The number of people present at a land use expressed in full time equivalents, the service unit used for fire, police and general government Level of Service Ratio of the replacement cost of existing facilities to existing service units PIFs Plant Investment Fees TCEFs Transportation Capital Expansion Fees VMT Vehicle Miles of Travel Wet Utility PIFs Water, wastewater and stormwater plant investment fees ITEM 2, ATTACHMENT 1 Packet Page 35 23 Mathur, S., Waddell, P, & Blanco, H (2004). The Effect of Impact Fees on the Price of New Single-Family Housing. Urban Studies, 41(7), 1303-1312. http://journals.sagepub.com/doi/abs/10.1080/0042098042000214806 Mathur, S. (2013). Do All Impact Fees Affect Housing Prices the Same? Journal of Planning Education and Research. http://journals.sagepub.com/doi/pdf/10.1177/0739456X13494241 Nelson, AC, Pendall, R., Dawkins, CJ, Knaap, GJ (2002). The Link Between Growth Management And Housing Affordability: The Academic Evidence. A discussion paper prepared for the Brookings Institution Center on Urban and Metropolitan Policy. https://www.brookings.edu/research/the-link-between- growth-management-and-housing-affordability-the-academic-evidence/ Nelson, AC & Moody, M. (2003) Paying For Prosperity: Impact Fees and Job Growth. A discussion paper prepared for the Brookings Institution Center on Urban and Metropolitan Policy. https://www.brookings.edu/research/paying-for-prosperity-impact-fees-and-job-growth/ Nelson, AC, Bowles, LK, Juergensmeyer, JC, & Nicholas, JC (2008). A Guide to Impact Fees and Housing Affordability, Washington DC: Island Press. https://www.brookings.edu/research/the-link-between- growth-management-and-housing-affordability-the-academic-evidence/ TischlerBise (2017). Transportation Capital Expansion Fee Study prepared for the City of Fort Collins, Colorado. https://www.fcgov.com/finance/pdf/transportation-capital-expansion-fee-study- 2017.pdf?1497285409 Yinger, John. 1998). The Incidence of Development Fees and Special Assessments. National Tax Journal. 51(1), 23-41. http://www.impactfees.com/publications%20pdf/v51n1023.pdf ITEM 2, ATTACHMENT 1 Packet Page 36 2019 Fee Update 1 Building Review Board Agenda 2 • Fee Scope & Timeline • 2019 Fee Updates • Utility Fees • Capital Expansion Fees - Step III • Feedback & Next Steps 1 2 ITEM 2, ATTACHMENT 2 Packet Page 37 Fee Coordination 3 Objective: • Review fee updates together to provide a holistic view of the total cost impact • Bring impact fees forward per a defined cadence….. 2 - 4 years Type of Fee Fee Name Capital Expansion Neighborhood Park Capital Expansion Community Park Capital Expansion Fire Capital Expansion Police Capital Expansion General Government Capital Expansion Transportation Utility Water Supply Requirement Utility Electric Capacity Utility Sewer Plant Investment Utility Stormwater Plant Investment Utility Water Plant Investment Building Development Development Review, Building Permit & Engineering Fees Fee Timeline 4 • Detailed fee study analysis every 4 years for CEF, TCEFs & Development fees • Detailed fee study analysis every 2 years for Utility fees • Conduct fee study analysis in the odd year before BFO • In years without updates, an annual inflation adjustment occurs • 2019 Fee Group – Development Review fees only Phase 1 Phase 2 Phase 3 2016 2017 2018 2019 2020 2021 Capital Expansion Fees Update Step II Step III Update Transportation CEFs Update Step II Update Electric Capacity Fees Update Update Update Water Supply Requirement Update Update Update Wet Utility Fees Update Update Update Development Review Fees Update Update Fee Working Group Active Active Active 3 4 ITEM 2, ATTACHMENT 2 Packet Page 38 5 Utility Fees Utility Fee Current Charge 2020 Charge $ Change % Change Electric Capacity Fee $1,537 $1,563 $ 26 1.7% Water PIF $ 3,826 $ 4,084 $ 258 6.7% Wastewater PIF $ 3,537 $ 3,590 $ 53 1.5% Stormwater PIF $ 1,548 $ 1,600 $ 52 3.3% Water Supply Requirement* $11,160 $13,838 $ 2,678 24.0% • Assumes residential, single-family home with an 8,600 square feet lot and 4 bedrooms *Charges for going over annual water allotment are tied to increase in Water Supply Requirement 6 Water PIFs Customer Class Criteria Current Charge 2020 Charge $ Change % Change Single Family 8,600 sq ft 3,826 4,084 $ 258 6.7% Duplex & Multi‐family 3,435 sq ft 1,423 1,546 $ 123 8.6% Commercial Meter Size 3/4" by tap size 7,930 8,790 $ 860 10.8% 1" by tap size 20,960 23,060 $ 2,100 10.0% 1 1/2" by tap size 43,510 45,610 $ 2,100 4.8% 2" by tap size 72,450 78,820 $ 6,370 8.8% WATER Plant Investment Fees 5 6 ITEM 2, ATTACHMENT 2 Packet Page 39 7 Wastewater PIFs 2018 2020 Change in Proposed % Customer Class Volume Volume Volume PIF Change GPD GPD GPD $ Single family residential 230 229 -0.4% 3,590 1.5% Duplex and Multi-family 170 165 -2.9% 2,590 0.1% Commercial Meter Size - inches 3/4 490 492 0.4% 7,710 2.6% 1 1,080 1,096 1.5% 17,190 3.8% 1.5 2,070 2,063 -0.3% 32,350 2.0% 2 4,300 4,281 -0.4% 67,120 2.0% Wastewater Plant Investment Fees 8 Stormwater PIFs Rate Class 2019 2020 $ Change % Change Gross Area Developed (sq ft) 8,600 8,600 Common Area Allocation (sq ft) 6,156 6,156 Base Rate (per acre*) $9,142 $9,447 Runoff Coefficient 0.5 0.5 Total Fee $1,548 $1,600 $52 3.3% Gross Area Developed (sq ft) 43,560 43,560 Base Rate (per acre*) $9,142 $9,447 Runoff Coefficient 0.8 0.8 Total Fee $7,314 $7,558 $244 3.3% Commercial Stormwater Plant Investment Fee Residential 7 8 ITEM 2, ATTACHMENT 2 Packet Page 40 Capital Expansion Fees Step III 9 • Step III fees are an 11% increase from current fee levels (Step II) • CEF fee increases are 100% of full fee levels recommended in 2017 • 3.2% Inflation Estimate: CPI-U index for Denver-Aurora-Lakewood update available in August 2019 Step III - Full fees proposed in 2017 Land Use Type Unit N'hood Park Comm. Park Fire Police Gen. Gov't Current Total Step III Total w Inflation % Increase w Inflation Residential, up to 700 sq. ft. Dwelling $1,721 $2,430 $421 $236 $574 $5,152 $5,724 11% Residential, 701-1,200 sq. ft. Dwelling $2,304 $3,253 $570 $319 $774 $6,911 $7,679 11% Residential, 1,201-1,700 sq. ft. Dwelling $2,516 $3,552 $620 $347 $845 $7,543 $8,381 11% Residential, 1,701-2,200 sq. ft. Dwelling $2,542 $3,589 $630 $352 $858 $7,630 $8,478 11% Residential, over 2,200 sq. ft. Dwelling $2,833 $4,001 $701 $392 $955 $8,502 $9,447 11% Commercial 1,000 sq. ft. 0 0 $531 $297 $1,451 $2,182 $2,424 11% Office and Other Services 0 0 $531 $297 $1,451 $2,182 $2,424 11% Industrial/Warehouse 1,000 sq. ft. 0 0 $124 $69 $342 $512 $569 11% Fee Comparison: For Median New Home Sales Price $488K* 10 Fort Collins Proposed Fees in the Upper-Middle of the Pack 9 10 ITEM 2, ATTACHMENT 2 Packet Page 41 Neighboring Cities Fee Comparison 11 Deeper Dive with Local Builders to Compare Fees Across Water Districts With and Without Raw Water Neighboring Cities New Median Sales Comparison with Fees 12 Fort Collins Fees are Inline with Neighboring Cities 11 12 ITEM 2, ATTACHMENT 2 Packet Page 42 Fort Collins Fee Stack Median New Home Sales 13 Fort Collins Fees & Code Cost Impact is Leveling % of Median New Home Sales Price Summer 2019 Outreach Plan 14 Organization Staff Affordable Housing Board All Building Review Board All Economic Advisory Commission All Fort Collins Board of Realtors All Local Legislative Affairs Committee All Northern Colorado Homebuilder's Association All Super Issues Forum All Downtown Development Authority Dev. Review Housing Catalyst Dev. Review North Fort Collins Business Association Dev. Review Planning & Zoning Board Dev. Review South Fort Collins Business Association Dev. Review Energy Board Utilities Water Board Utilities 13 14 ITEM 2, ATTACHMENT 2 Packet Page 43 2019 Roadmap 15 • All fee categories update in 2019 except for Transportation CEFs • Phasing complete after 2019 with regular two and four-year cadence beginning in 2021 March May June June/July August October 1/1/2020 Capital Expansion Fees CFC Outreach CFC Council Effective Transportation CEFs Electric Capacity Fees CFC Outreach CFC Council Effective Water Supply Requirement CFC Outreach CFC Council Effective Wet Utility Fees CFC Outreach CFC Council Effective Development Review Fees CFC CFC Outreach CFC Council Effective Next Steps 16 1. Next Steps • October 8th: Council Work Session • November 5th & 19th: Ordinance readings subject to Council direction • 2021 updates effective January 2022 2. Feedback & Questions • Thoughts and feedback? 15 16 ITEM 2, ATTACHMENT 2 Packet Page 44 Backup 17 Why Do We Have Impact Fees 18 Capital Expansion Fees • New developments pays a proportionate share of infrastructure costs to “buy-in” to the level of service • Fee revenue used to build new service capacity • In place since 1996 Development Review Fees • Fees are intended to recoup the cost to the City for ensuring compliance with: • Planning, zoning and architectural/design standards • Adopted master plans • Building codes / resident safety Utility Plant Investment Fees • Provides a mechanism for new development to reimburse existing utility customers for existing infrastructure • Fee revenue used to build additional infrastructure The concept of growth paying for the impact of growth is a policy decision that City Council made and continues to support Fee Revenue Used to Add Infrastructure Needed Because of Growth 17 18 ITEM 2, ATTACHMENT 2 Packet Page 45 Fee Overview: Methodologies Different methodologies used across fee categories: • Level of Service or Buy-in: Fees are set by assessing City’s capitalized assets or “level of service” and who’s using the assets. Development “buys in” to that level of service • Plan-based: Fees are set based on a capital improvement plan and development pays a portion of their impact on that plan • Hybrid: fees assessed using aspects of plan and level of service • Cost Recovery: fees are assessed based on recovering all or a portion of the cost of administering a particular program 19 Overview of Fees 20 Fee Methodology Calculation Capital Expansion (CEFs) Level of Service Asset Value/ Who’s Using Transportation Capital Expansion (TCEFs) Plan-based Capital Improvement Plan & Vehicle Miles Travelled, Type of Land Use Utility Plant Investment: Electric PIFs, Stormwater Level of Service Asset Value/ Who’s Using Raw Water/ Cash-in-Lieu Hybrid (recommended) Future water storage + Value of current assets Utility Plant Investment: Water, Wastewater Hybrid Capital Improvement Plan & Current Asset Values Development Review Cost Recovery Cost Recovery at 100% per code 19 20 ITEM 2, ATTACHMENT 2 Packet Page 46 2017 Recap 21 Council directed stepped implementation for CEF & TCEF in 2017 Success Factors: • Bringing fees together was good for understanding the full impact of fees • Formed citizen/staff working group Lessons Learned: • Fee increase recommendations were significant, caused confusion in the community • Difficult to explain with different methodologies and qualitative aspect Fee Status as of October 2017 Next Steps CEFs • 75% of fees implemented • Phased in approach - three steps TCEFs • 80% of fees implemented • Phased in approach - two steps Electric Capacity • 100% of fees implemented • Every two years Raw Water • 100% of fees implemented • Every two years 2017 – Drivers of Fee Increases 22 Capital Expansion Fees (2017 proposed increase 71% to 79%): • Fee based on replacement cost of existing infrastructure • Cost of construction, land, water up significantly since last fee revision Transportation Capital Expansion Fees (2017 proposed changes -32% to 114%): • Cost of construction up since last fee revision • Current transportation plan & calculation shift Electric Capacity Fees (2017 changes approximately -50% to 40%): • Change in methodology from plan-based to “buy-in” Raw Water Fees (effective 1/1/2018): • New fee model - value of the existing water rights portfolio & growth related capital expenses Large Increase Created Significant Business Community Concern 21 22 ITEM 2, ATTACHMENT 2 Packet Page 47 2018 Recap 23 Fee Group overall supportive of the fee coordination process and proposed fee updates • Council asked for a fee working group to foster a better understanding of fees prior to further fee updates • Balanced group of stakeholders – citizens, business-oriented individuals, City staff and a Council liaison • Met 14 times Fee Status as of January 2019 Next Steps CEFs • 90% of fees implemented • Phased in approach - three steps TCEFs • 100% of fees implemented • Phased in approach - two steps complete Utility PIFs • 100% of fees implemented • Every two years 24 • Review of impact fees together is beneficial for understanding the full impact of fee updates • Overall, sound methodologies, calculations and inputs • The third-party fee audit revealed how the City spends and collects impact fees is sound • Impact fee amenities add to property value, but views differ as to what extent they impact housing costs Key Findings • Impact fees are complicated and difficult to communicate across the community • Park impact fees are the only category where impact fees pay for 100 percent of what is built • Need to identify new revenue sources for park refresh and maintenance in the future • If less than recommended is approved, alternative revenue sources will be needed Fee Group Findings Fee Group Validated Integrity in Fee Development and Expenditures 23 24 ITEM 2, ATTACHMENT 2 Packet Page 48 25 Recommendations 1. Better Communication/Outreach & Notice of Fee Changes 2. Repayment of the $130k Identified in the Impact Fee Audit 3. Progressive Fees if/where Possible 4. Explore Additional Revenue Sources for Parks Buildout 5. Investigate Revenue Alternatives to Support Parks Refresh & Maintenance 6. Explore Stronger Supports for Affordable Housing Fee Waivers Fee Group Recommendations Recommendations Reviewed with Council Finance in September…. Implemented as Appropriate Over Time What if Impact Fees are not Updated? 26 With Limitations on Total Revenue, if Full Fee Increases are Not Implemented the City Will Need to Turn to Alternatives Implications if full impact fee increases are not implemented: • Wait to build new infrastructure and service capacity • Lower current levels of service • Alternative revenue sources ‒ Sales tax increase, property tax increase, occupation tax… 25 26 ITEM 2, ATTACHMENT 2 Packet Page 49 Agenda Item #3 Item 3, Page 1 STAFF REPORT June 27, 2019 Building Review Board STAFF Donnie Dustin, City Manager, Water Engineering SUBJECT HALLIGAN WATER SUPPLY PROJECT EXECUTIVE SUMMARY The purpose of this item is to update the Building Review Board on the current status of the Halligan Water Supply Project (Project), including a project summary, key milestones, and activities planned for 2019. The Project is needed to meet treated water demands of future Utilities customers and will provide added reliability for all Utilities customers, in case of prolonged drought and uncertainties such as wildfires or infrastructure failures. The U.S. Army Corps of Engineers (Corps) plans to release the Draft Environmental Impact Statement (DEIS) this year as the Project reaches a key milestone in the federal permitting process. At the same time the City will release a Conceptual Mitigation Plan for the Project and an Operations Plan for the Enlarged Halligan Reservoir. Release of these documents marks a key milestone when the public will be able to review and comment on the project. BACKGROUND Halligan Reservoir is an existing reservoir on the North Fork of the Poudre River (North Fork). It is located 24 miles up the North Fork from the confluence with the mainstem of the Poudre River at Gateway Park. The Project includes raising the existing Halligan Dam by approximately 25 feet to increase reservoir capacity by 8,125 acre- feet, from the existing 6,400 acre-feet to a total of approximately 14,525 acre-feet. Water in the existing 6,400- acre foot Halligan Reservoir is currently used and operated by the North Poudre Irrigation Company (NPIC). After the enlargement of Halligan Reservoir, NPIC will continue to use and operate 6,400-acre foot of capacity in the reservoir. Triple bottom line benefits of the Project are demonstrated by supplying a cost-effective, reliable water supply, while providing significant environmental benefits to the North Fork of the Poudre River downstream of Halligan Reservoir. The City has been involved in the Halligan Project since the late 1980s, and the federal permitting process began in 2006. ATTACHMENTS 1. Halligan Water Supply Project – Quick Facts 2. Staff Presentation Packet Page 50 WHAT IS IT? If approved, the Halligan Water Supply Project will enlarge Halligan Reservoir, an existing reservoir on the North Fork of the Poudre River, to provide added protection for Fort Collins Utilities water customers from future service interruptions during emergencies. The reservoir will expand from about 6,400 acre- feet to roughly 14,500 acre-feet by increasing the height of the existing 70-foot dam by 25 feet, providing approximately 8,100 acre-feet of additional water storage for future use. HALLIGAN WATER SUPPLY QUICK PROJECT FACTS PROJECTED COST $75 million Total The project is primarily funded by water fees assessed on new developments and fees acquired from commercial customers who use more than their annual water allotment. Costs are based on one design concept and will continue to be refined. WHY? • Without additional storage, future generations of Fort Collins Utilities’ water customers are vulnerable to interruptions in water availability and delivery, particularly during emergencies and drought and uncertainties associated with climate change. • Utilities currently owns very little raw water storage, only Joe Wright Reservoir, which holds roughly 7,100 acre-feet. We own less water storage set aside per person than other Front Range communities. • Current water supply is not enough without water restrictions in the event of a prolonged drought for the projected population and commercial growth within the established Fort Collins Utilities service area. • Conservation has reduced water demands, but it’s not enough to provide the resiliency needed to meet our growing service area’s needs. FORT COLLINS LIVERMORE WELLINGTON I-25 I-25 US 287 HWY 14 Red Feather Lakes Rd. Cache la Poudre River HWY 14 FORT COLLINS UTILITIES WATER SERVICE AREA North Fork Cache la Poudre River HALLIGAN RESERVOIR HORESETOOTH RESERVOIR FEWER ENVIRONMENTAL IMPACTS Currently, there are multiple reservoir projects located in the Poudre River watershed, including Glade Reservoir (NISP) and Seaman Reservoir enlargement. The Halligan Project is substantially smaller in scale than these projects and will result in relatively fewer environmental impacts. PROJECT BENEFITS The Halligan Water Supply Project: Eileen Dornfest, Special Projects Manager halligan@fcgov.com, 970-416-4296 Sign up online for periodic updates. fcgov.com/halligan HALLIGAN WATER SUPPLY PROJECT Will help provide a safe, reliable water supply for future generations. Will enhance river flows downstream of the reservoir on the North Fork of the Poudre, leading to fishery and habitat improvements. WE ARE HERE Did You Know? The original dam was built in 1909. Will enlarge an existing reservoir instead of building a new one, creating fewer negative environmental impacts. Will rehabilitate an aging dam that will require repairs in a few years. Is the most cost-effective option to meet our water storage needs. Is a gravity-fed project—no pumping needed—which requires no energy or greenhouse gas emissions. Did You Know? The water from Horsetooth Reservoir could fill up to 10 enlarged Halligan Reservoirs. PROJECT STATUS Before Halligan Reservoir can be enlarged, the project must receive federal, state and local permits. The Halligan Water Supply Project has been in permitting since 2006. The U.S. Army Corps of Engineers (Corps), the lead permitting agency, plans to release a draft Environmental Impact Statement (EIS) in 2019. Auxiliary aids and services are available for persons with disabilities. V/TDD 711. Esta información puede ser traducida, sin costo para usted. 970-212-2900 18-20574 Anticipated Project Timeline 2006 City of Fort Collins entered permitting process 2019 Draft EIS expected from the U.S. Army Corps of Engineers, followed by public review and comment period 2020-2022 Final EIS and permit decision 2024-2025 Design and construction 2026 Enlarged Halligan operations Schedule subject to change depending on federal permitting process ITEM 3, ATTACHMENT 1  &LW\RI)RUW&ROOLQV%XLOGLQJ5HYLHZ%RDUG 'RQQLH'XVWLQ:DWHU5HVRXUFHV0DQDJHU -XQH  /HJHQG +DOOLJDQLVIRU8WLOLWLHV¶ ZDWHUVHUYLFHDUHD )RUW&ROOLQV:DWHU'LVWULFWV ITEM 3, ATTACHMENT 2 Packet Page 53 :KDWGLIIHUHQWLDWHV+DOOLJDQ"  3URSRVHG+DOOLJDQ5HVHUYRLU aDFUHIHHW +RUVHWRRWK 5HVHUYRLU aDFUHIHHW                            6WRUDJH&RQWHQWV DFUHIHHW 0RGHOHG<HDU +DOOLJDQ5HVHUYRLU(QODUJHPHQW6WRUDJH /HYHOV 8WLOLWLHV3RUWLRQ 5HOHDVHVWKDW LPSURYHIORZV 5HOHDVHVGXULQJ GURXJKWSHULRGV  :K\+DOOLJDQ" )XWXUH 'HPDQG 5HOLDELOLW\ &RVW (IIHFWLYH 7ULSOH%RWWRP /LQH%HQHILWV ITEM 3, ATTACHMENT 2 Packet Page 54   +DOOLJDQ(QODUJHPHQW  *UDYHO3LWV  $JULFXOWXUDO5HVHUYRLUV  ([SDQGHG*ODGH  1R$FWLRQ (,6$OWHUQDWLYHV ‡ ,QXQGDWLRQRIZHWODQGV ‡ 6HDVRQDOLQXQGDWLRQRI ôPLOHVWUHDPFKDQQHO ‡ 3UHEOH¶V0HDGRZ MXPSLQJPRXVH ‡ &RQVWUXFWLRQ  ,PSDFWV ITEM 3, ATTACHMENT 2 Packet Page 55  5LYHU,PSDFWV 6OLJKWGHFUHDVHLQIORZVGXULQJ UXQRII 6OLJKWGHFUHDVHLQIORZVGXULQJUXQRII 0RVWPRQWKVRSHUDWLRQVRQ ZRXOGLQFUHDVHIORZV ‡ (QVXUHV\HDUURXQGIORZVRQ1RUWK)RUN ‡ 5HFRQQHFWVPLOHVRIULYHU ‡ ,PSURYHVZDWHUWHPSHUDWXUHV ‡ 5HKDELOLWDWHVDJLQJGDP  %HQHILWV ITEM 3, ATTACHMENT 2 Packet Page 56 1RUWK)RUN+DELWDW,PSURYHPHQW ‡ 0LQLPXPIORZV ‡ 5HFRQQHFWLRQ ‡ 7HPSHUDWXUH ‡ :DWHUTXDOLW\   3DWK)RUZDUG 'HYHORSDQG ,VVXH'UDIW(,6 3XEOLF &RPPHQW 3HULRG 3UHSDUHDQG 3XEOLVK )LQDO(,6 5HFRUGRI 'HFLVLRQ     2WKHU3HUPLWWLQJ &RQVWUXFWLRQ 3UHOLPLQDU\DQG)LQDO'HVLJQ  6FRSLQJ3XUSRVHDQG1HHG$6FRSLQJ3XUSRVH 1HHG$OWHUQDWLYHV6WXGLHV OWHUQDWLYHV6WXGLHV  ITEM 3, ATTACHMENT 2 Packet Page 57 fcgov.com/halligan halligan@fcgov.com 'RQQLH'XVWLQ:DWHU5HVRXUFHV0DQDJHU  Agenda Item 4 Item 4, Page 1 Staff Report June 27, 2019 Building Review Board STAFF Russ Hovland, Chief Building Official SUBJECT GRANT EVERITT APPEAL OF DENIAL OF ONE TIME EXEMPTION OF CLASS D1 LICENSE TO BUILD A CLASS C2 LICENSE-LEVEL PROJECT (5-PLEX MULTI-FAMILY) EXECUTIVE SUMMARY Summary Grant Everitt currently has a Class D1 license allowing him to build new housing of not more than two (2) dwelling units. Grant has built 30 new single-family detached homes in city limits and is in good standing. Grant would like to be approved as the permit holder and general contractor (GC) to build a 5-unit multi-family building (5- plex) which requires a higher-level Class C2 license. Appeal Grant requested from the Chief Building Official (CBO) a one-time exemption for a Class C2 level license to be allowed to perform as the GC for a new 5-plex using his existing Class D1 license. This request was denied by the CBO on May 22, 2019. Grant feels strongly that based on his knowledge and resources he can successfully complete such a project and thinks the request should be approved. See supporting attachments and documentation. The Board’s jurisdiction for this appeal is Municipal Code Section 5-27(11) Section 113.1, which empowers this Board to hear and decide appeals of decisions by the CBO relative to the application and interpretation of the Municipal Code and Section 15-158(a)(2), which relates to the contractor licensing requirements of the City of Fort Collins. Staff Recommendation A 5-plex is a multi-family building under the International Building Code (IBC), and a different type of construction project compared to a single-family house (e.g., dwelling separations, fire sprinklers systems, etc.) built under the International Residential Code (IRC). When a GC can show they have supervised the building of at least two (2) multi-family buildings, the CBO does approve a third project under the current lower license and this project can then be used to apply for the higher license as one of the three required project examples. Grant does not have this required experience and needs additional training and guidance on new multi-family construction. I recommend denial of a one-time license exemption for said project. Packet Page 59 Agenda Item 4 Item 4, Page 2 Board or Commission Actions The Board may vote to: • uphold the decision of the CBO and find that the Mr. Everitt cannot perform as GC and obtain the permit for this multi-family project; • overturn the decision of the CBO and allow Mr. Everitt to act as the GC and permit holder for this project under his current D-1 license; • modify the decision of the CBO. For example, the Board may allow Mr. Everitt to act as GC and permit holder for this project with occasional supervision by a current licensed C contractor in a mentorship arrangement. (See attached sample agreement.) ATTACHMENTS 1. Appeal Application 2. Appellant Letter to the Board 3. Appellant Project List 4. Mentorship Agreement (example used in prior case) Packet Page 60 ITEM 4, ATTACHMENT 1 Packet Page 61 Spaces rooted in excellence. Dear Date: Board 6/12/members 19 Fort Please Collins. consider approving my appeal for a one-time variance to my D license to build a 5-Plex building in In to complete consideration a 5-plex of my building. appeal, I have provided projects that I feel have given me the experience necessary Attached addition, under my I’ve you E license. worked will find The on 30 commercial many single-commercial family projects projects tenant have I have finish given built projects me in experience Fort in Collins Fort in Collins under working and my with surrounding D license. fire sprinkler In areas protection construction with wood and framed with fire fire single-rated sprinklers assemblies. family homes, and 1-The hour I believe proposed firewalls that 5-the and plex 5-floors building plex will between I be hope similar units. to build in Given regards is wood my to experience framed the wood framed protection related to construction. the and valuation the percentage Also, for I the have related 5-plex. listed to The for over you scope all all project and the nature commercial valuation. of the projects Please commercial compare that used projects this fire to I sprinkler have the percentage completed sprinkler required fire work. sprinkler work and in certain cases was a higher percent of the project than the 5-plex I complete believe between the 5-plex my project commercial with excellence. experience and my residential home building experience, I can Thanks Grant Everitt for your consideration. Everitt Grant@Construction EverittConstructionCo.Com ITEM 4, ATTACHMENT 2 Packet Page 62 Featured #1: 2160 W. commercial Drake-Intersect projects: Brewery 1 hr. wall between brew house and tap room ITEM 4, ATTACHMENT 2 Packet Page 63 Commercial #2: 2701 S. College-Maxline Brewery Fire sprinkler protection throughout ITEM 4, ATTACHMENT 2 Packet Page 64 Featured Residential New Single Residential Family #1: 122 home 3rd Projects: Street Fort Collins ITEM 4, ATTACHMENT 2 Packet Page 65 Residential #2: 2021 Kerry Hill Fort Collins New Single Family home ITEM 4, ATTACHMENT 2 Packet Page 66 Grant Everitt's Single Family homes in order of most recent DATE: 6.12.19 NO. Address Project Value Permit number License Holder No. Certificate Holder No. 1 122 3rd Street $ 600,000.00 B1804568 Everitt Construction D-826 Grant Everitt 2533-D1 2 2021 Kerry Hill $ 360,000.00 B1504656 Myrtle Tree Contracting D-681 Grant Everitt 2533-D1 5 5621 Northern Lights $ 400,000.00 B1400191 Myrtle Tree Contracting D-681 Grant Everitt 2533-D1 6 5615 Northern Lights $ 350,000.00 B1400863 Myrtle Tree Contracting D-681 Grant Everitt 2533-D1 3 708 Campfire $ 300,000.00 B1407231 Myrtle Tree Contracting D-681 Grant Everitt 2533-D1 4 726 Campfire $ 300,000.00 B1407232 Myrtle Tree Contracting D-681 Grant Everitt 2533-D1 7 2303 Bellwether Lane B0603183 Jamestown Builders D-566 Grant Everitt 2533-D1 8 2302 Bellwether Lane B0603132 Jamestown Builders D-566 Grant Everitt 2533-D1 9 2275 Bellwether Lane B0605833 Jamestown Builders D-566 Grant Everitt 2533-D1 10 2269 Bellwether Lane B0700769 Jamestown Builders D-566 Grant Everitt 2533-D1 11 2250 Bellwether Lane B0701644 Jamestown Builders D-566 Grant Everitt 2533-D1 12 2321 Bellwether Lane B0702725 Jamestown Builders D-566 Grant Everitt 2533-D1 13 2327 Bellwether Lane B0702750 Jamestown Builders D-566 Grant Everitt 2533-D1 14 533 Coriander B0602813 Jamestown Builders D-566 Grant Everitt 2533-D1 15 545 Coriander B0602968 Jamestown Builders D-566 Grant Everitt 2533-D1 16 515 Coriander B0605590 Jamestown Builders D-566 Grant Everitt 2533-D1 17 526 Basil B0602967 Jamestown Builders D-566 Grant Everitt 2533-D1 18 538 Basil B0605361 Jamestown Builders D-566 Grant Everitt 2533-D1 19 532 Basil B0601914 Jamestown Builders D-566 Grant Everitt 2533-D1 20 2268 Tarragon B0603610 Jamestown Builders D-566 Grant Everitt 2533-D1 21 2333 Tarragon B0603610 Jamestown Builders D-566 Grant Everitt 2533-D1 22 2303 Tarragon B0603700 Jamestown Builders D-566 Grant Everitt 2533-D1 23 2256 Tarragon B0604116 Jamestown Builders D-566 Grant Everitt 2533-D1 24 2308 Tarragon B0605072 Jamestown Builders D-566 Grant Everitt 2533-D1 25 2327 Tarragon B0605609 Jamestown Builders D-566 Grant Everitt 2533-D1 26 2321 Tarragon B0605646 Jamestown Builders D-566 Grant Everitt 2533-D1 27 2309 Tarragon B0600831 Jamestown Builders D-566 Grant Everitt 2533-D1 28 2315 Tarragon B0700829 Jamestown Builders D-566 Grant Everitt 2533-D1 29 2262 Tarragon B0761073 Jamestown Builders D-566 Grant Everitt 2533-D1 30 2320 Tarragon B0703491 Jamestown Builders D-566 Grant Everitt 2533-D1 Grant Everitt's Commercial Experience in order of most recent NO. Address Project Value Fire Sprinkler Valuation % of project 1 hr Fire walls? Permit no. License Holder No. Cert. Holder No. Proposed 903 Blondel st/Proposed 5-Plex $ 1,200,000 $ 14,562.00 1.21% Yes Proposed TBD 1 2601 S. Lemay #12 $ 138,000 $ 5,795.00 4.20% B1810684 Everitt Construction D-826 Grant Everitt 2533-E 2 215 Mathews-2nd floor build out $ 326,000 $ 5,786.00 1.77% ceiling B1805280 Everitt Construction D-826 Grant Everitt 2533-E 3 155 Boardwalk $ 276,100 $ 8,310.00 3.01% Yes B1804670/B1804669 Everitt Construction D-826 Grant Everitt 2533-E 4 3500 JFK Parkway-Tenant finish $ 295,000 N/A B1805733 Everitt Construction D-826 Grant Everitt 2533-E 5 4864 Thompson Parkway-C3 $ 146,000 $ 2,995.00 2.05% 18-7778 Everitt Construction Johnstown, CO permit 9 2243 Centre ave #210 $ 270,000 $ 3,903.00 1.45% B1700632 Myrtle Tree Contracting D-681 Grant Everitt 2533-E 6 1500 Academy Court $ 146,000 $ 2,995.00 2.05% B1701488 Myrtle Tree Contracting D-681 Grant Everitt 2533-E 7 2160 W. Drake-Intersect Brewery $ 328,000 N/A B1601198 Myrtle Tree Contracting D-681 Grant Everitt 2533-E 8 2701 S. College-Maxline Brewery $ 400,000 $ 4,795.00 1.20% Yes B1507982 Myrtle Tree Contracting D-681 Grant Everitt 2533-E 10 1250 Hover st-Screamin Peach $ 143,700 $ 1,000.00 0.70% yes B201701446 Myrtle Tree Contracting Longmont, CO permit Spaces Rooted in Excellence APPELLANT PROJECT LIST ITEM 4, ATTACHMENT 3 Packet Page 67 General Contractor Mentorship Agreement On February 28th, 2019, the City of Fort Collins Building Review Board approved a variance, pursuant to City Code Section 15-156, for NAME (the “Builder”) from the C-2 licensing requirements of City Code Section 15-159(7) to allow the Builder to build 4-plex, 4-unit R-2 apartment building (the “Project”). This agreement is meant to ensure the Builder and Project complies with the Board’s order. This is an agreement between the property owner, the Builder, and MENTOR NAME, the supervising C-1 licensed mentoring general contractor in good standing who has the correct license level to construct/supervise the Project (the “Mentor”). ‘ The Builder agrees to do the following related to the Project: 1. Be the acting general contractor and ultimately be responsible for the project including liability insurance and related general contractor requirements as specified in chapter 15 of City of Fort Collins municipal code. 2. Receive direct, personal and ongoing on-site construction supervision of the Project from the Mentor. 3. Be available to the City of Fort Collins Building Official, or his or her designee, to answer any questions about the Project, including the Mentor’s involvement in the Project. 4. Submit a passing ICC license exam of the required level for this project within 12 months of signing of this agreement. The Mentor agrees to do the following related to the Project: 1. Directly supervise the Builder and provide direct, personal and ongoing on-site construction supervision of the Project undertaken by the Builder. 2. Be available to the City of Fort Collins Building Official, or his or her designee, to answer questions about their involvement in the Project. I/we, the undersigned, understand that failure to comply with any of the above may result in revocation of any permits associated with the above Permit Application number, forfeiture of any fees that have been collected, and a Stop Work Order for the Project, as well as any additional penalties and remedies allowed by City Code or law. __________________________________ Owner __________________________________ The Builder __________________________________ The Mentor Approved by the City of Fort Collins, Chief Building Official: ______________________________________ CBO ______________________________________ Date Planning, Development & Transportation Services Community Development & Neighborhood Services 281 North College Avenue Fort Collins, CO 80524 970.416.2740 fcgov.com ITEM 4, ATTACHMENT 4 Packet Page 68  (LOHHQ'RUQIHVW3URMHFW0DQDJHU    ITEM 3, ATTACHMENT 2 Packet Page 58 Packet Page 52 SEAMAN RESERVOIR US 287 US 287 HALLIGAN RESERVOIR SURFACE AREA Halligan Dam Existing Surface Area (253 acres) Enlarged Surface Area (383 acres) N ITEM 3, ATTACHMENT 1 Packet Page 51 Dev Permit Fees - Building Permits Stormwater PIF ITEM 2, ATTACHMENT 1 Packet Page 34