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HomeMy WebLinkAbout03/14/2011 B A K E R S F I E L D @-/dL4&, Committee Members: Staff: Xhonda ~ m i l d j t /Harold Hanson, Chair Assistant to the City Manager Sue Benham Ken Weir AGENDA SUMMARY REPORT REGULAR MEETING OF THE PLANNING AND DEVELOPMENT COMMITTEE Monday, March 14,201 1 1:00 p.m. City Hall North -Conference Room A 1600 Truxtun Avenue Bakersfield, CA 93301 The meeting was called to order at 12:OO PM 1. ROLL CALL Committee members present: Councilmember Harold Hanson, Chair Councilmember Sue Benham Councilmember Ken Weir Staff ~resent: Alan Tandy, City Manager Jim Eggert, Planning Director Rhonda Smiley, Asst. to the City Manager Phil Burns, Building Director Steve Teglia, Asst. to the City Manager Raul Rojas, PW Director Chris Huot, Administrative Analyst Brad Underwood, PW Asst. Director Robin Bice, Clerk Typist Marian Shaw, PW Civil Engineer Ginny Gennaro, City Attorney Chris Clark, TRIP Nelson Smith, Finance Director Tom Nellteton, TRIP Others ~resent: Barry Nienke, K.C. Roads Eileen Carroll, D.C.S. David Cates, Lenox Homes Donna Carpenter, H.B.A. Laura Lollar Wolfe, Arts Council of Kern Bob Decker, H.B.A. Matt Towery, Towery Homes Roger Mclntosh, Mclntosh & Assoc. James C. Nickel, Nickel Family, LLC. Nate Kelly, KGET 17 News Gretchen Wenner, Bakersfield Californian AGENDA SUMMARY REPORT Planning and Development Committee Monday, March 14,201 1 Page 2 2. ADOPT DECEMBER 13,2010 AGENDA SUMMARY REPORT Adopted as submitted 3. PUBLIC STATEMENTS None 4. NEW BUSINESS A. Discussion and Committee Recommendation Regarding the Feasibility of Reducing Fees during the Economic Downturn -Tandy /Gennaro City Manager Alan Tandy provided an overview of the Building Fee Comparison chart for 201 1 prepared by the City's Building Division. Mr. Tandy also provided an overview of the most recent update to the traffic impact fees which took two years to complete. Mr. Tandy explained traffic Impact Fees are one of the sources funding the TRlP projects. Based on the current environmental document processing and the current schedule of TRlP projects, there will not be enough match money from the projected traffic impact fees in three years. This would necessitate an issuance of bonds to fund multiple projects as they move into the construction phase, including 24th Street Widening, Rosedale Highway Widening, and Highway 178 Widening. The reduction in traffic impact fees as discussed could cause complications in the bond issuance process for the Centennial Corridor project, which is over $1 00 million in match money. Transportation development fees, the utility surcharge, and the gas tax would all be used as the local match requirement for the bond issuance. The bonding capacity will depend on the city's revenue generated during the five year period prior to the issuance of the bond. Circumstances out of the City's control have led to recent increased development cost. For example, a new building code adopted by the State of California, adding over $3,000 in costs for residential fire sprinklers and other new requirements; the County of Kern assessing mitigation requirements on County developments, and developments that are coming into the City through annexation. Assistant to the City Manager Steven Teglia provided a brief summary on the Metro Area House Prices and Affordability report provided by by the Home Builder's Association (HBA). The report indicates how much income a household would need to qualify for the purchase price of a median new home and how many households in the community met that threshold. According to the November 2010 Crabtree Report, home prices for new and existing homes are on the decline. There are many reasons for the decline, including an increase in the number of foreclosures, surplus inventory, a high unemployment rate, and a restrictive lending market. AGENDA SUMMARY REPORT Planning and Development Committee Monday, March 14,201 1 Page 3 In conclusion, City Manager Alan Tandy provided the Committee with the following options: 1) Leave the current fee as is. 2) Revise the traffic impact fees by changing the grid, changing the growth assumptions, and changing the street carrying structure, to reflect a slower growth rate, more internal growth, less external growth, etc.. A reduction could jeopardize the City's ability to legally justify our traffic impact fees and to meet existing future financial obligation for our local roads projects. 3) Build an economic recovery period into the calculation of the fee; with the reduced fees being recovered in the out years. County Counsel's legal opinion regarding this option would have to be reconciled. If Council decides to proceed with this option, it would result in a different fee than the County's, and the City Council may need to meet with the City Attorney to review any legal issues. Roger Mclntosh with Mclntosh Mclntosh & Associates stated the Council should look for alternatives to generate revenue needed for matching funds for projects. Mr. Mclntosh provided suggestions including: imposing a fee on resold homes and imposing a half cent sales tax, reviewing the list of facilities with the County on an annual basis to see if there are facilities on the list which don't need to be included in order to reduce the fee, an extension of vesting rights for final maps, reviewing commercial and residential development fees ensure equal application of the impact fee, and reviewing the truck study published by Kern COG, to determine if the percentage used in the current assumption can be increased to reflect their traffic which could help reduce the traffic impact fee. Matt Towery with Towery Homes stated that since the fees have been increased, there has been a decrease in the amount of building permits being requested. Mr. Towery agreed with Mr. Mclntosh and encouraged the Committee to seek alternatives to help create revenue including providing a credit to developers. City Attorney Ginny Gennaro stated the Nexus document would need to be altered to decrease the amount of liability. Ms. Gennaro also indicated that research would need to be done to investigate if other jurisdictions have done anything similar with imposed fees and if so, what process they followed. There could be an issue with Prop 218. City Manager Alan Tandy stated that the City does not have the ability, under current California law, to unilaterally impose an increase in sales tax. To impose a half cent sales tax would require voter approval, stated Ms. Gennaro. Public Works Director Raul Rojas stated a review of costs was conducted prior to the approval of the program. The bid pricing included in the Nexus document was probably the lowest seen in the current economy. Various construction projects, like the Mohawk Bridge, Seventh Standard, and the AGENDA SUMMARY REPORT Planning and Development Committee Monday, March 14,201 1 Page 4 Westside Parkway Phases one and two, were all going through the bidding process during the time prior to the approval of the program. Mr. Rojas stated many projects listed in the facilities list actually assist the developers with costs associated with building roads. Barry Nienke with Kern County Roads stated the fee was recently reviewed by the County in October and November of 2010 during their annual review process. Public Works Civil Engineer Marian Shaw stated the maps under discussion have already expired so they cannot be extended. Ms. Shaw also stated that there are approximately a dozen maps which are due to expire within the next year. City Attorney Ginny Gennaro clarified that the current Council policy, at the time of the Nexus study, was to not extend the vesting rights on maps. With that assumption, the figures of the fees for those maps were included with the data used for the Nexus study. Committee member member Ken Weir asked staff what would happen if the amount of revenue received from TIF fees decreases substantially and If the revenue generated for the TRIP matching requirements stay the same for the next few years, what kind of bonding capacity would that provide the City. Finance Director Nelson Smith stated the bonding capacity will depend on what revenues are considered by the lending party at the time of the bond Issuance. Committee member Weir requested staff prepare and report describing any effects if the TIF fee were lowered for a length of time phased out over a period of time based on economic indicators like sales tax increases, and permit issuance increases. Committee member Sue Benham asked if the Council reduced the TIF fees, would it require a new Nexus study, and if so, how long would it take to complete it. Ms. Gennaro recommended that the Council re-do the Nexus study under those circumstances. An addendum or a supplement to lower the fee for a year to spur economic growth can also be be done. Ms. Gennaro indicated It could take a couple of years to complete a new study, but not as long to complete an addendum or supplement. Staff would also need to contact the County, and Council would need to be briefed on potential exposure to litigation. Committee Chair Harold Hanson stated that the City of Bakersfield is growing and unfortunately, short sales, and foreclosures are in demand. Individuals are lowering their asking prices, which affects everyone in the industry. Committee Chair Hanson also asked when staff would begin reaching out to lenders for the bond issuance. AGENDA SUMMARY REPORT Planning and Development Committee Monday, March 14,20 1 1 Page 5 Mr. Tandy stated that since the initial analysis was completed a few years ago, staff has maintained contact with various underwriting firms. Periodically, staff will update the information they have, in order to be prepared on a continuous basis. Mr. Smith stated that the bond issuance is driven by the City's ability to spend the money in a specific time frame. Projects would have to be ready for construction so that the improvement funds can be used within a short time. The money cannot be put into a reserve account for a later time. The Committee continued this item to the next committee meeting. B. Discussion and Committee Recommendation regarding the 201 1 Committee Meeting Schedule -Smiley Adoption of the 201 1 Committee Calendar was postponed to allow the Committee members to review their calendars. 5. COMMITTEE COMMENTS None 6. ADJOURNMENT The meeting adjourned at 1 :25: PM