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HomeMy WebLinkAboutMinutes - Finance Committee - 06/14/2010 -_____C .Finance Administration_____I 0 215N Mason —a •I 2~FloorL..~.e4 ,,~~ii:s%nrt)I L ~.~IJLL II I~Fort Collins,CO 80522 970.221.6788 9702216782 fax Council Audit ft Finance Committee Minutes 6/14/10 10:30 a.m.12:00 p.m. Council Attendees:Mayor Doug Hutchinson,Mayor Pro Tern Kelly Ohlson,Ben Manvel City Staff Attendees:Darin Atteberry,Chuck Seest,John Voss,Kraig Ecton,Steve Mason,Josh Birks,Ann Turnquist, DeLynn Coldiron,Steve Dusch,Diane Jones, Christina Vincent,Heather Shepherd Others:David May,Chamber of Commerce;Kevin Duggan, Coloradoan;and John Gallager,Red Oak Consulting. Approval of the Minutes from the May 17,2010 Meeting Ben Manvel moved to approve the minutes and Doug Hutchinson seconded the motion. Minutes were approved unanimously. NECO Project Update (Northeast College Corridor Outfall) Josh Birks stated this topic wiLl be coming forward as an urban renewal item to Council. Project background: *provides a unified regional storm water and water quality system. *resolves existing adequate public facilities deficiency *total cost of approximately $10 million. *phased-initial phase=Backbone or regional pond and primary outfall. *listed as a very high priority in the North College infrastructure funding plan. Proposal is for the URA to consider lending the $325,000 to purchase the pond today. Impact to the URA would be: *incur financing charges of approximately $5,000 annually (based on 10 year treasury bill) *when future adjacent infill development occurs,the URA will be reimbursed for $325,000 and any financing charges incurred. Pros Cons Regional stormwater and water quality -more URA bridges timing gap at approx $5000 cost efficient use of land.annually Adjacent parcels have seen significant Reimbursement depends on infill dev.on development interest adjacent parcels. 0 r€~n~LLIns Doug Hutchinson suggested that it wouLd be beneficiaL to get a summary of the benefits of this project to the City’s economic heaLth. KelLy OhLson said more time is needed to review the data before making an informed decision.He aLso asked why there is no mention of environmentaL factors of this area. Ben Manvel requested getting more detaiLed numbers on how much money is coming from stormwater,etc. This topic may be revisited at the August Council Finance Committee meeting. Fee Study Update Darin Atteberry said the purpose of the study is for the City to ensure we are using our resources according to best practices. John GaLLager suggested reviewong section 1.2 in the document prepared for Committee members,as it is an overaLL summary. City PoLicy:Fees recover 80%of costs. *87%in 2007 *60%in 2008 *44%in 2009 BuiLding permit and pLan review fees. *valuation based on 2006 IBC *fees based on 1982 UBC PLanning deveLopment review fees *established in 1993 *updated through 2002 CPI Over-the-counter permit fees *City poLicy:charge reasonabLe fee. KeLLy OhLson asked why 1982 is the year that UBC fees are based on.The response was that about a year ago,this topic was mentioned and investigated,but at that time,it was determined that is was not a good time to raise fees. Darin Atteberry asked why the City wouldn’t have raised fees periodicaLLy over time and Mike Freeman said that in terms of the total mix of City fees,Fort Collins had remained competitive with other comparabLe Cities.These fees had been reviewed over the years and it was a conscious decision not to raise fees,for that reason.ALso there is a Limit on the percentage amount the City can actuaLLy charge in fees,and if it had been raised several times City wouLd have been charging over 100%on fees. KelLy OhLson proposed having a scheduLe for these fee amounts to be reviewed by City CounciL (every two or three years)and not just staff review. r r Fort CoLLins Recommendations: Building permit plan review fees: *use 2009 IBC valuation tables and more recent tables to calculate fee. Planning development review fees: *determine cost of each development review activity Over-the-counter permits: *determine cost of each development review activity Diane Jones stated that when reviewing/determining costs,we also have to consider efficiency. Capital Expansion Fees *90%of revenues are coming from capital expansion fees. *fees were established in 1996 (and earlier) *based on industry standard methodologies *updated annually using ENR or CPI Recommendations: *comprehensive update needed at least every 5 years to include proper level of service, asset value and system capacity *use ENR or similar construction cost index to annually update all fees *use most recent US census data to establish persons per household (1990 current basis) City Manager’s OfficeCityof300LaPorteAvenueIPOBcx58OFort~DoLIins 80522 07 fax MEMORANDUM TO:Council Finance Committee FR:Darin Atteberry,City Manager Ann Turnquist,Policy and Project Manager DT:JunelO,2010 RE:Fee Study Draft Report In March,I asked Red Oak Consulting to conduct a review of the City’s existing development related fees,including Capital Expansion Fees,Development Review Fees and Utility Plant Investment Fees.The purpose of the study is to review the existing fees and determine whether any changes should be recommended to City Council for future consideration.The City has a number of existing fees to ensure that new development pays a fair share of the cost of growth. The City has identified several main purposes for the study: •Evaluate the City’s development impact fees to assess their effectiveness in covering the appropriate costs of development •Compare the City’s development impact fees to those charged by other regional communities •Ensure that fee levels are properly calculated and are up-to-date •Develop a system for tracking fees over time which will ensure regular updates and on going alignment with other regional communities,where appropriate Red Oak has completed a draft of the Study,which is attached for your review.In summary, they made several significant findings: •As we know,the Development Review Fees currently charged by the City are not meeting the City’s policy goal of 80%cost recovery.This has been especially true for the past two year with low number of permits being issued.These fees should be revised and adjusted as appropriate. •The City should address Building Permit Fees and their calculation.While fees are calculated based on current values,the City uses an outdated schedule for calculating these fees.As we discussed last summer,adjusting the IBC charge table to a more current schedule could increase fees substantially,so we may wish to increase these fees over time with a phased approach. C ~DOCUME I ~HSHEPI1 I iLOCALS I Temp~XPgrpwise cover memo june finance Comm doc cD 0 In reviewing our non-utility Capital Expansion Fees,Red Oak found that the City used an appropriate methodology when the fees were adopted,but that,in addition to the annual inflation adjustments that have taken place,the fees should be fully recalculated and updated every 3-5 years. •Red Oak also reviewed our competitive position in the regional market for development costs.It is interesting to note that the City’s policy to ensure that growth pays for the cost of non-utility capital expansion leads to higher-than-average fees in this category. Overall capital expansion fees are in the middle of the market when we take into account our Plant Investment or Utility related CEF’s,which are not collected by all cities. I believe that the draft study points to several actions that the City should undertake to adjust our development related fees over the coming 6-12 months.These actions should include: Development Fee Update Work Plan Timeline Action Summer 2010 •Adjust Building Permit Fee schedule •Evaluate price of “Over the Counter”fees for effectiveness Fall 2010 •Conduct a review of costs for providing Development Review services and adjust various fees to align them with actual costs.Discuss 80%cost recovery goal with Council to balance cost-recovery with costs to projects Winter 2010 •Conduct full recalculation of other non-utility Capital Expansion Fees •Recalculate and revise Police Capital Expansion Fee Spring 2010 Establish calendar for regular review of all fees within the BFO process •CEF’s every 3-5 years •Development Review Fees every 2-3 years •Other fees annually I look forward to discussing the Draft Report with the Finance Committee on June 14.