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1999-11-30CAPITAL IMPROVEMENTS ADVISORY COMMITTEE (CIAC) MEETING November 30, 1999 Ift. MINUTES CIAC Members Present: Chairman Ann Creighton; Members: Michael Boutte, Ann Creighton, Kenneth Horne, Dennis King, and C.D. Peebles Staff Present: Assistant City Manager Shana Yelverton, Director of Economic Development Greg Last, Senior Planner Chris Carpenter, Finance Director Sharen Elam, Public Works Director Ron Harper, Asst. to the Public Works Director Valerie Bradley, Senior Civil Engineer Shawn Poe, City Engineer Charlie Thomas, Planner Kenneth Baker, Fiscal Planning Consultant Lewis McLain and Deanne McLain, Terry Watson, Wayne Kurfees, and David Hallion with Kimley-Horn & Associates, Eddie Cheatham with Cheatham & Associates, and Secretary to the City Manager Kim Bush. Agenda Item No. 1, Call to order. The meeting was called to order by Chairman Ann Creighton at 7:00 p.m. Agenda Item No. 2. Administrative Comments. Assistant City Manager Shana Yelverton announced the birth of a baby girl to Administrative Secretary Tammy Smith. There were no other administrative comments. �., Agenda Item Nos. 3-7, Discussion. Lewis McLain, Fiscal Planning consultant and coordinator for the project, presented the information for all discussion items on the agenda as one formal presentation. His goal was to pull together all the pieces of the study to begin to draw things to conclusion. He began by reviewing the major components of the study that had already been presented to the CIAC and then introduced a list of new material for discussion. Examples of new material for discussion included the following: • Land Use Assumptions were reduced slightly from earlier versions to reflect an aggressive but realistic growth scenario. • Roadway vehicle -mil projections were adjusted to reflect the significant load carried by state highways. • Upward cost revisions for water projects related to the regional water system. • Calculation of financing costs and study costs. • Summary accounting of impact fee monies collected, interest earned, amounts spent since inception and resulting fund balances. • Issues related to collections levels. He noted that the Land Use Assumptions have been refined upon further study, however, the numbers still represent an aggressive growth scenario. He then pointed out that the traffic engineers developed an adjustment to reflect loads carried by state highway facilities so that the supply and demand ratios were more accurate. He pointed out that a further revision had been made to the water CIP to cover all facilities included in the regional system. CIAC- Meeting November 30, 1999 Page 2 of 4 Mr. McLain pointed out that there have been significant changes to the Land Use Plan from the 1996 study. These changes reflect the shift in zoning philosophy and densities. The population expected through buildout has been reduced, but the employment population expected during the ten-year window had dramatically increased. Total employment absorption is about the same, however, its growth has begun to accelerate. The impact of these changes on the water/wastewater study is minimal. The changes do not justify a downsizing of the system. (Example — the Denton Creek Pressure System lines have been built to a certain size and this does not change based on the new figures.) Impacts to the wastewater were also minimal. C.D. Peebles asked about revisions to the land use assumptions and wanted to know why the employment expectations have been reduced. Chris Carpenter explained the further research that had been done to ensure that the projections for the ten-year window were realistic. The ultimate figures were determined to be appropriate, but the absorption rates for the ten-year window were thought to be too aggressive. This caught staff's attention because square footage calculated with the most recent projections were roughly equivalent to four times the size of Grapevine Mills Mall. C.D. Peebles asked if the absorption rates used were Southlake specific or based on northeast Tarrant County averages. Chris Carpenter noted that staff focused on DFW Airport studies. Kenneth Horne asked if staff discussed the development of the Timarron tracts. Chris Carpenter and Greg Last relayed the content of those discussions, pointing out that the developers were able to provide square footages and projections that were helpful to the process. Dennis King asked for clarification of discussion of absorption rates with Timarron representatives and then with experts who analyze trends. Did staff structure new projections as a hybrid. Kenneth Horne stated that S.H. 114 would be under construction during the first several years of the ten-year window. Greg Last noted that the study is reviewed every three years. C.D. Peebles pointed out that he wanted to make sure we do not miss the mark, and then asked about the impact of land use assumptions on the water and sewer system. Lewis McLain pointed out that water and wastewater capacity is usually installed ahead of growth and sized early. Greg Last pointed out that an adjustment to population/employment figures would normally not result in an incremental reduction in the size of the line. Ann Creighton asked for more information on the adjustment methodology for state highways. Lewis McLain pointed out that the state highways will accommodate much of the traffic generated in certain service areas. Terry Watson noted that state highways were considered during the 1996 study (58% level) — when the demand was reviewed this year, the consultants looked at the system zone by zone for commercial growth and the use of state highways. C.D. Peebles discussed the collateral effects of the growth on local roads. Terry Watson pointed out that local roads are accounted for as part of the adjustment. Discussion then focused on the appropriateness of the adjustment, and the CIAC reviewed each zone by zone. Greg Last further clarified that the adjustment is only applied to commercial properties, thus, the consultants are assuming F.M. 1709 and S.H. 114 will accommodate 80 % of the traffic, leaving 20 % to be accommodated by local roads. CIAC-Meeting November 30, 1999 Page 3 of 4 Discussion was held about the consultant's process and the need for a rational nexus. Ms. Creighton asked if some numbers could be run to assess the effects on the bottom line — while it is appropriate to explore the nuances of this new adjustment concept, if minor changes have little effect on bottom line then so be it. The consulting engineers agreed to review each adjustment. Lewis McLain resumed his discussion of the study components. He compared cost per vehicle mile for 1996 vs. 1999. The 1999 study reveals a significantly higher cost per vehicle mile and the range or spread between totals by service areas. He points out that the maximum fee is lower than the total cost per vehicle mile due to deficiencies resulting when you have more demand than supply. Having more supply than demand does not change total/maximum fee because the excess is allocated beyond the ten-year window. Mr. McLain then discussed the highlights of the water and wastewater fees, pointing out the increased costs for the CIP and the study costs. He discussed his equilibrium fee adjustment to account for the fact that homeowners who pay impact fees then become utility customers whose rates also help pay for the debt service on capital projects. He noted that in 1996 the maximum fee advertised was actually the equilibrium. For this study, he has also calculated an adjustment of 50 % - mirroring the HB2045 requirement which almost became law during the last legislative session. Even with this adjustment, the proposed fee would be increased almost $400/SFLUE for water. C.D. Peebles commented that in his opinion the committee should comment only on the maximum fee, but if they were going to comment on the collection fee he would need more information. Lewis McLain reiterated that the CIAC could choose any approach they would like. Mr. McLain continued to explain that the 50 % adjustment for wastewater still allows for an increase over the current collection rate. Mr. McLain asked the committee if they wanted to review the detailed supporting schedules for roadway fee calculations. The committee then discussed the impacts of the demand/supply in certain services areas. Lewis McLain explained that deficiencies essentially drive down the fees in some areas. The deficiencies indicate more demand than supply. This is true, in spite of a large and aggressive CIP. He then discussed the cost allocation by existing/ten-year/future capacity demands. Essentially $35 million is attributable to this study's ten-year window. To illustrate cost variations by service area, Mr. McLain showed the proposed CIP improvements by component and by service area. This information was also shown in vehicle miles. Signals, intersections, ROW, and other components account for the variances in cost and fees by service area. The committee then spent time comparing the projects to be built as a result of the ten-year CIP. The 1999 study shows a much larger CIP with more allocation within the ten-year window to account for the urgency to build projects. To meet the statutory requirement of providing a periodic financial report to the CIAC (to be forwarded to the City Council), Mr. McLain presented fund balance information by fee. He showed that $3.5 million in water fees had been collected for a total of $3.8 million in revenues (including CIAC.Meeting November 30, 1999 Page 4 of 4 interest income) and the City has spent $2.2 million. In wastewater, total collected is $5 million and total spent is $3.16 million. Roadways have resulted in collections of $1.4 million. Little has been spent to date, but was not anticipated that there would be expenditures during the first three years. The committee was provided with an analysis of how financing costs that can be paid through impact fees were calculated. Interest costs were calculated to range from 25-34%, depending on bond market rates. The remaining steps for the study were then reviewed. Lewis McLain pointed out that the staff/consulting team sincerely wants to provide the information needed so the CIAC might draft comments to present to City Council. He pointed out that the comments can consist of anything the CIAC wants. The committee discussed meeting on December 9 at 6:00 p.m., prior to the regular Planning and Zoning meeting, to formulate items to include in the comment letter to City Council. Shana Yelverton will provide copies of previous minutes and pull together suggested points to include in the comment letter. Agenda Item No. 8. Adjournment. There being no further business to discuss the meeting adjourned at 10:00 p.m. Chairman Ann Creighton ATTEST: Kim Bush Secretary to the City Manager