Loading...
HomeMy WebLinkAboutApproved Minutes - 2009-09-29 SpecialQ, LAR[ OJW CITY COUNCIL SPECIAL MEETING MINUTES September 29, 2009 aE� Mayor Jack Hoffman called the special City Council meeting to order at 6:39 p.m. on September 29, 2009, in the City Council Chambers, 380 A Avenue. Present: Mayor Hoffman, Councilors Jordan, Hennagin, Moncrieff, Olson, Tierney, and Johnson. Staff Present: Alex McIntyre, City Manager; David Powell, City Attorney; Robyn Christie, City Recorder; Joel Komarek, LOIS Project Director; Guy Graham, Public Works Director 3. STUDY SESSION 3.1 System Development Charge Overview (no written report) • Introduction Mayor Hoffman noted that John Ghilarducci of FCS Group and Metro staff Chris Deffebach and Miranda Bateschell were here to discuss SDCs. He indicated that, in Lake Oswego, the City imposed SDCs when it pulled the building permit, which was after the fact. Mr. Komarek indicated that SDCs in Lake Oswego totaled roughly $18,000 for a single-family residence Mayor Hoffman commented that the region needed $30-$40 billion to repair present infrastructure needs. He mentioned that the recommendation of the Metro Chief Operating Officer (COO) to concentrate the region's resources within the existing UGB included the idea of repairing existing infrastructure. He described infrastructure as a resource that required preservation and maintenance. Mr. Komarek mentioned that the previous City Council established a goal of updating SDCs for all the City's utilities. He noted that Parks & Recreation updated their SDC a couple of years ago. He described the process they used to update the SDCs, beginning with a technical analysis of the utility master plan. Staff selected the water SDC to work on first because its 2001 master plan was the most recent utility master plan that the City had. He indicated that staff went through that technical analysis for the water SDC. He noted that the analysis included considering the impact of on the SDC of Lake Oswego's partnership with Tigard (based on a recent study of that partnership). He reviewed the technical analysis findings presented to the Council on July 14, 2009. He said that the City needed to increase its water SDCs for a typical single-family home with a'/ inch meter from the current rate of $2,300 to a little over $6,000. He recalled that, during the discussion of the ways to implement the increase, Mayor Hoffman had mentioned the recent work done by Metro regarding how a jurisdiction could influence certain types of development in communities through SDCs. He said that the Council decided to hold off on its decision about any changes in methodology until after staff talked with Metro regarding the report referenced by the Mayor. He indicated that the Metro staff here tonight would make a presentation following Mr. Ghilarducci's "SDCs in the State of Oregon 101" presentation. Mayor Hoffman commented that now was a good time for jurisdictions to discuss SDCs because of the lack of development at this time. He noted that, in 1988, the Council made a policy decision City Council Special Meeting Minutes Page 1 of 13 September 29, 2009 not to pursue full cost SDCs for transportation. He indicated that today many cities were discussing what the system buy -in was for new homes. SDCs in the State of Oregon 101 Mr. Ghilarducci gave a PowerPoint presentation. He discussed the legal framework of SDCs in Oregon. He stated that SDCs were one-time charges paid at the time of new development. Redevelopment only paid SDCs if it would increase the need for capacity in the system. He indicated that a jurisdiction could only spend SDCs on capital expenditures. SDCs were for general facilities, as opposed to local facilities, as they represented a share of capacity in the system. He discussed the reimbursement fee component of the SDC, which was the existing cost component for purchasing an amount of system capacity. The reimbursement fee was cost -based. In the calculation, staff had to take out anything that was free to the City, including grants, gifts, and donated or contributed assets. He confirmed to Mayor Hoffman that parks were a good example of gifts/grants. He indicated that future users could have no more than an equitable share in the calculation of the reimbursement fee. He emphasized that a city could not spend the reimbursement fee on growth - related costs, which gave a jurisdiction more flexibility in spending the reimbursement fee revenues. He discussed the improvement fee component, which recovered the growth -related costs. He explained that they based this calculation on the eligible costs of an adopted list of capital improvements. He explained that eligible costs were those costs for increasing capacity in the system. He indicated that the City tracked the improvement and reimbursement fees separately because it could spend one on growth -related costs only, while it could not spend the other on those costs. He presented the specifics of the reimbursement and improvement fee calculations. He reiterated that an SDC represented a one -share capacity in the infrastructure needed to serve the new development, which included the existing and future cost components. He discussed the SDC credits allowed by the law for developers required to oversize projects as a condition of development. Mr. Komarek indicated to Mayor Hoffman that the zone of benefit used by developers in the Lake Grove/Lake Forest area used a similar concept. Mr. Ghilarducci emphasized that the law set only the minimum requirements for SDC credits; a jurisdiction could be more generous with its SDC credit policy. Mr. Ghilarducci noted that the City's existing water SDC was $2,485 for a typical new residence in Lake Oswego. He reviewed a rough list of comparables in the area (all SDCs, including local and county impact fees), ordered from highest to lowest. He discussed the policy and technical issues reflected in the SDCs. He explained that the basis of charging boiled down to charging based on potential demand (meter size, number of fixtures) versus estimated demand (future usage by land use). Mr. Komarek indicated to Mayor Hoffman that the City's transportation SDC used an estimated usage demand per type of development based on national historical studies. Mr. Ghilarducci noted that charge basis per fixture worked for encouraging condominium development, as a 1,000 square foot condominium had fewer fixtures than a 2800 square foot single-family detached house. Mayor Hoffman observed that a policy question was whether the Council wanted to encourage 1,000 square foot condominiums through its choice of SDC charge basis. Mr. Ghilarducci mentioned that one of the advantages of the potential demand approach was avoiding negotiating the SDC with the developer, which could occur with the estimated demand approach. Mayor Hoffman commented out that if a jurisdiction had a system in which it negotiated fees with developers, as opposed to using a set, calculated fee, then it could simply add SDCs to City Council Special Meeting Minutes Page 2 of 13 September 29, 2009 the bundle of negotiated fees. He referenced their recent trip to Vancouver, B.C., where that City negotiated many fees with the developers. Mr. Ghilarducci indicated that negotiated fees were a policy choice. He mentioned that that system has led to abuses in other cities and to perceived unfairness. Ms. Deffebach noted that the appendix to the Metro SDC report provided some examples of jurisdictions using an estimated demand charge basis without negotiated SDCs. She referenced the table that those jurisdictions had created in assigning a different ERU ratio to different housing sizes. Mr. Ghilarducci commented that the table was particularly useful for creating stratification within the class of single-family residence. Councilor Jordan recalled a presentation made to the Council regarding a green building under development in Portland, which would handle its own utilities on site. However, the City Code required its connection to the grid as a failsafe mechanism. She asked if there was a separate category in SDC structuring for encouraging green buildings. Mr. Ghilarducci indicated that one of the cons to a potential demand approach was that one size did not fit all. He discussed the estimated demand approach. He noted that a pro was the ability to tailor the fees to individual customers, while a con was the need to track redevelopment over time as the land use changed. He discussed area specific or location -based SDCs. He explained that this involved different charges in different parts of the service area based on the level of capital targeted for those areas. He noted that it was an equitable method and recovered costs in the areas where the costs occurred. He mentioned that this method could either reward desired development or have the unintended result of reverse incentives. He indicated that people found it difficult to accept this method, if they paid a different charge than the resident across the street. He pointed out that this method could impose an undue burden on areas with proposed facilities and a small customer base or little growth. He reiterated that whichever method the Council chose was a policy question. He observed that there was a logic to a non-specific area approach in which folks in one part of the city helped build facilities in another part of the city, with the reverse occurring when their turn came. Mayor Hoffman gave an example of an area specific approach for sewer SDCs, which would allow developments in Foothills to pay lower SDCs because they would not use the sewer interceptor. Mr. Komarek explained how that scenario could create an inequity because everyone in the City paid for the system upstream, yet new development in Foothills would not reimburse those who had already paid. Mr. Ghilarducci indicated that the most common structure that jurisdictions used was to identify those systems that served everyone and apply that charge throughout the service area. Then, a jurisdiction identified those systems that served a specific area and applied that charge as an overlay to the general charge for that area. He indicated that Corvallis and Gresham did this with their water SDCs for storage facilities. He observed that an area specific approach could also work for storm water SDCs, in that specific facilities served the distinct basins. Councilor Tierney commented that he would find it helpful if the Metro staff would comment on the policy issues surrounding an area specific approach. Mr. Ghilarducci discussed the planning period component, which could be as long or as short as a jurisdiction wanted it to be. He indicated that he preferred the longer planning period because working from a comprehensive list of all facilities needed out to build out allowed for full cost recovery. However, the longer term planning was not as accurate as the shorter term planning. He noted that the shorter planning period had the con of volatile charges over time, resulting in the users in the short term disproportionately bearing the costs of a big project. City Council Special Meeting Minutes Page 3 of 13 September 29, 2009 He discussed the allocation methodology alternatives, which included the capacity approach, the incremental cost approach, the causation approach, and the credit approach. He noted that, to date, Lake Oswego has used the capacity approach. He said that recent changes in the SDC statute effectively precluded the causation approach, as the statute disallowed including the costs of correcting existing deficiencies in the SDC. He pointed out that the question regarding the credit approach was whether the City wanted to exceed the minimum legal requirements, such as providing credits for public improvements not considered `qualified public improvements.' He commented that, while credits could provide an incentive to developers, this practice also left a city with less money than it needed to build out its project list. This could effectively leave a city subject to the developer's priorities, as opposed to its own priorities. He indicated to Councilor Moncrieff that Lake Oswego currently provided credits close to the legal minimum. He discussed functional charges, which were a method of calculating an SDC for different components of the system, (i.e., storage, treatment plant, transmission). He indicated that this could work well for large undeveloped areas in rapidly growing communities. Mr. Komarek agreed with Mayor Hoffman that a functional charge might be appropriate for the wastewater SDC in Foothills. Mr. Ghilarducci indicated that his team did look at the Metro report, "Promoting Vibrant Communities with SDCs." He reviewed the main points that they drew out of it. He noted that his team included recouping full cost recovery, including the planning and calculation costs (but not the financing costs). He said that they did not incorporate the recommendation to use area specific charges in the water SDC, although it would be appropriate for storm water and transportation. Mayor Hoffman asked how the underserved areas in the city limits, or within the City's USB, fit in with a water SDC. Mr. Komarek clarified that areas such as Lake Forest, Lake Grove, and Forest Highlands already had water infrastructure in the area, although they might not have sewer or surface water infrastructure. Mr. Ghilarducci noted that Metro recommended that jurisdictions use a technical -based approach in setting SDCs, as opposed to a policy -based approach. He indicated that he interpreted 'technical -based approach' to mean cost -based, with credits and adjustments used only if a developer actually reduced his/her development's impact on the system. • Metro Ms. Bateschell gave a PowerPoint presentation. She clarified that this month Metro limited its report on SDCs to working within current State legislation. She explained that the questions Metro had wanted answered in this report were how different locations and different development types would affect costs and system impacts at the local, but not the regional level. If so, could a jurisdiction calculate SDCs to show those differentials and thus create a more equitable SDC fee schedule based on impact? She indicated that the report provided recommendations for infill, redevelopment, and greenfield development. She said that it also looked at how to address both existing and future capacity in calculating SDCs, as well as how to use SDCs to promote broader community development goals at a local level. She reported that they found that building size, number of occupants, density, configuration, and location all mattered in terms of having different impacts on different infrastructure systems, and thus, different costs to serve. She noted the additional factors that influenced a development's impact, such as design, land features, proximity to service, and demographics. She presented examples illustrating each of these factors. She clarified to Councilor Olson that the graph correlating building size to number of occupants assumed that more people lived in a City Council Special Meeting Minutes Page 4 of 13 September 29, 2009 larger house than in a smaller house. She acknowledged the Councilor's point that the same number of people could live in the larger house as lived in the smaller house. She noted that the graph on lot size showed a strong correlation between the size of the lot and the amount of water consumed. She pointed out that, with respect to the configuration factor, the research on the national level found that mixed-use developments reduced road impacts by 30% or more, or by 50% if connected to multi -modal transit. However, few SDC programs recognized this factor in their schedules. She mentioned a study on transit oriented development, which included Portland in its analysis of five cities. The study found that projects with mixed-use buildings focused around transit station areas in Portland had a 48% reduction in impacts to the transportation system. Mayor Hoffman commented that bringing the streetcar to Foothills could support the argument to charge Foothills developments a lower transportation impact fee. Councilor Jordan pointed out that, although this might take cars off the road, it also meant providing the infrastructure for multi- modal transportation. Ms. Deffebach noted another report recommendation to include the right projects in the capital project list in order to meet capacity needs for a multimodal transportation system. For Lake Oswego that could include bicycling facilities, the streetcar, and pathways. Mr. Ghilarducci cautioned about putting the same trails on both the SDC list and the parks list. Ms. Deffebach commented that Metro spent time on the legal question of what one could or could not include in an SDC. She spoke of making sure that a jurisdiction correlated SDCs to increasing capacity as opposed to improving conditions for existing system users. Mr. Komarek mentioned that the Lake Oswego transportation SDC already included auto only and multi -modal components. He indicated to Councilor Hennagin that the City added the multi- modal component on to the auto only component, but it was a smaller figure. Ms. Bateschell concurred that multi -modal facilities, such as bike lanes, cost much less to build than roads. Mr. Komarek confirmed to Councilor Hennagin that SDCs could not cover the cost of maintaining a road that SDCs paid for. Councilor Hennagin argued that they would need the same number of roads in the higher density, transit -oriented developments to serve those driving to the retail businesses and to park the cars of those living in the transit -oriented development. He agreed that a higher density spread the cost over more people, thus lowering the per person cost. Mr. Komarek concurred with Mayor Hoffman that Lake Oswego based its transportation SDCs on demand, as opposed to the square footage of the road in the area. He confirmed that the figures for the average daily trips came from the Institute of Traffic Engineers (ITE) manual. Mr. Ghilarducci commented that the data in this study was valuable because it supported a higher trip reduction for mixed use than the 10% that his team had used for Corvallis and Oregon City. Ms. Bateschell discussed the Metro report's finding that site and building designs that integrated green practices could reduce the impact on infrastructure systems, especially on surface water. She indicated that computing separate cost elements for each system component provided a technical basis for discounting specific SDC components related to green design. She mentioned that local jurisdictions and the State of Oregon have chosen to use both this technical approach and a policy -based approach to discount SDCs for green practices. Councilor Jordan pointed out that green street design and integrating a green design into an existing system cost money. She asked how that balanced out. Ms. Bateschell explained that, at a system level, the increased costs for green street design and the reduced need for storm water management effectively balanced out. Mr. Komarek indicated to Councilor Jordan that the reason why Lake Oswego had a comparatively low storm water SDC was because there was a complete disconnect between what City Council Special Meeting Minutes Page 5 of 13 September 29, 2009 the City charged and what it should be charging to address existing needs/deficiencies and future capacity. He said that they needed to update the 1992 storm water master plan. Ms. Bateschell mentioned that jurisdictions could also include streetscape improvements in the downtown in the SDCs as long as it was all part of the system cost. Mr. Komarek indicated to Mayor Hoffman that if the City put a parking garage in its Transportation System Plan, then it could include it in the transportation impact fees for new development. Mayor Hoffman observed that infrastructure plans then became policy documents, if the City included projects in the plans that encouraged the kind of development that the City wanted to see. Ms. Deffebach concurred. She commented that this could provide important incentives for the mix of financing of development projects as well. Ms. Bateschell spoke of looking at priorities and criteria with respect to the list of transportation improvement projects, citing Portland as an example. Ms. Bateschell noted that the location impacts to infrastructure systems included distance to services (the further the distance to services, the longer the trip and the more trips per household). She mentioned additional factors increasing costs, such as areas with less services (as opposed to adding additional capacity to fully served areas) and topography. She cited the example of Wilsonville, which charged a supplemental SDC to the developments near the new interchange in order to pay for the interchange because the trip generation to those developments necessitated the new interchange. She mentioned Gresham's park district SDCs as another example of charging SDCs by location. She discussed the impacts of population density. She pointed out that the higher the density, the lower the infrastructure cost because a jurisdiction needed less linear feet in infrastructure to serve the same amount of units as it would to serve a less dense area. She noted that higher density also impacted trip distance and number of trips per household. She mentioned that Metro heard presentations from the City of Prince George, British Columbia, and Sacramento, California, regarding how they changed their SDCs to be more impact -based. One Prince George tactic encouraged developers to build higher density single-family homes by reducing the SDC by 12% for developments with more than eight lots per acre. She noted Metro's recent look at different development types in researching what an equitable share would be for the different types based on impact, as opposed to having one fee across a jurisdiction. She indicated that they also looked at how to recognize the reduced infrastructure impacts without reducing revenue. Here they found it imperative to keep SDC schedules current and responsive to frequent changes in facilities plans and implementation costs. She mentioned including planning costs in the SDC. She noted a best practice of a sliding scale SDC fee system based on a development's impacts on the system, which would create an incentive for more efficient use of the infrastructure systems. She spoke of having an overall SDC system that was as neutral as it could be. She presented other examples of how impact -based SDCs could help support the region's 2040 vision and local aspirations for growth. She explained that Sacramento made a policy decision in 2002 to use impact -based SDCs to encourage infill in certain locations in the city. By 2006, over 19% of all development occurred in the identified infill areas, which the City recognized was due to market factors as well as the impact -based SDCs. She indicated that the City of Prince George created a new impact -based SDC methodology in response to their City Council's policy directives to support sustainable growth. They used area specific SDCs, incentives for higher density development, and a waiver of drainage SDCs for developments installing onsite storm water ground recharge systems. She mentioned Prince George's policy changes and new programs in water and sewer to encourage development and redevelopment in their downtown as part of their overall strategy for directing where and how growth occurred. City Council Special Meeting Minutes Page 6 of 13 September 29, 2009 She gave examples of cities in the Metro region using impact -based SDCs to help implement the 2040 concept. She discussed how Portland incorporated transportation infrastructure projects that supported 2040 in the calculation of its SDC fees, including the Portland Streetcar. She noted Oregon City's reduction of its SDCs by 10% in their regional center as an example of an SDC fee system that helped implement 2040 by promoting infill and redevelopment in the centers and corridors. She reviewed the key recommendations that came out of the Metro SDC report. She spoke of leveling the playing field for infill, redevelopment, and green design by changing the current system (which might not be equitable) to take into account the cost differentials. Ms. Deffebach drew a linkage between the information that the Council heard tonight and what it heard last week from Metro Councilor Colette regarding the COO's recommendations for making the greatest place. She mentioned the three most important types of recommendations in the COO's report. First, to make the most of what they had in the region by leveraging the previous investments and addressing decaying infrastructure. Second, to leverage both strategic investments and innovative policies to accommodate most of the region's growth in the existing communities. Third, to measure the region's performance over time to see whether they were achieving their outcomes. She observed that great communities needed great infrastructure. She referenced the regional infrastructure report, which identified $30 to $40 billion in needed infrastructure by 2035 for the region, and $10 billion needed to maintain what already existed. She indicated that Metro roughly estimated that the region had the resources to pay for about half that cost. She pointed out that SDCs were local and community-based. Therefore, they did not include the costs for highways and other regional infrastructure. If the region totally allocated all its infrastructure needs, the cost would be $60 to $70,000 per household. She mentioned that Metro's inventory of all the SDCs for the cities in the region found an average SDC cost of $17,000 per household, which was a significant contribution to the needs. She noted that this was a national problem, with a national need of $250 billion annually over the next 50 years to meet infrastructure needs. She indicated that currently the country spent 40% of that figure on infrastructure. In addition, the federal share of dollars spent on local infrastructure has been decreasing since 1975. She commented that the information presented tonight was right on in terms of the infrastructure financing questions the region faced in trying to develop the kinds of communities desired in the region. She described SDCs as a significant financing tool, especially in light of the diminishing federal and state resources. She emphasized the importance of keeping SDCs updated through current capital project lists, and the use of SDCs to reflect policy directions for growth and promotion of equity. She mentioned that Metro started this process thinking about cost differentials, and then heard from the people about the importance of equity. She discussed how policy -based SDCs could result in loss of revenue versus technical -based SDCs, which tended to be revenue neutral. She acknowledged the challenge faced by communities wanting to use a policy -based SDCs to encourage a particular development through reduced SDCs. She spoke of the policy decisions facing Lake Oswego, such as full cost recovery, achieving equitable SDC distribution based on impacts, and including the right infrastructure projects that implement the community's aspirations. Mayor Hoffman recessed the meeting at 8:00 p.m. for a break. He reconvened the meeting at 8:15 p.m. 3.2 Water System Development Charges Update Mr. Komar k indicated to Councilor Jordan that the City charged SDCs to the developments on lots resulting from a partition of a lot with a house on it. He confirmed to th Councilor that, a City Council Special Meeting Minutes Page 7 of 13 September 29, 2009 developer or a resident could apply for storm water fees abatement if all storm water was disposed of subsurface and none left the property to enter the right-of-way. Mr. Komarek explained to Councilor Hennagin that the City applied a strict formula for calculating SDCs for multi-family housing, such as Mr. Prell's new condominiums on 1St Ave, although it depended on the particular SDC. He said that the City based both its water and wastewater SDCs on meter size, while it based the surface water SDC on the amount of impervious area created by the development. He indicated that the City based its transportation SDC on the number of trips for that particular land use, as given in the ITE manual, and its parks SDC on the number of people in the dwelling. He indicated to Councilor Hennagin that any townhouse on a separate lot of record had its own water meter and wastewater lateral, even if it shared a common wall. Condominiums grouped on a single lot of record shared a single meter and the residents apportioned the bi-monthly cost amongst themselves. Councilor Hennagin observed that the larger 2 to 3 inch pipe used for a large multi-story condominium building with one water meter could carry a significantly greater volume of water than the % inch for single family. Mr. Komarek confirmed to Mayor Hoffman that there was a formula for determining the SDC in that case. Mr. Komarek indicated to Councilor Olson that the City already included adjustments for inflation and increasing costs in its SDCs. He explained that staff updated the SDC costs every year with the Master Fees and Charges Schedule update, relative to the Engineering News-Record's construction costs index. He clarified that construction costs did not go down in 2008/2009, although they climbed less steeply than earlier years. Councilor Olson noted the Metro report's point that the law required a policy-based SDC methodology to demonstratably justify itself. She expressed interest in seeing how Wilsonville and Oregon City justified their policy-based SDCs. Mr. Graham indicated to Mr. Komarek that Gresham's transportation SDC was technically based, given the reduced impacts of transit-oriented development. He referenced the earlier comment that Gresham had area specific SDCs for surface water, transportation, and parks. He explained that it had not made sense to spread the cost of those three services equitably across the city to pay for the expansion of those services to Springwater and Pleasant Valley, after Metro brought those areas inside the UGB. He noted that the SDCs in Pleasant Valley were up to $28,000. He recalled, from his time at Gresham, when staff went to the City Council with an over-doubled wastewater SDC and a letter of support from the Homebuilders Association because staff was able to show the math and demonstrate the cost of the improvements needed to support the new developments. Mr. Ghilarducci indicated to Councilor Moncrieff that, if the City stayed with its current water SDC structure, then the development and administration of a new water SDC would not increase the administration burden. Mr. Komarek reviewed the three issues brought to Council in July. First, did the Council want to move forward with the methodology presented in July? Second, did the Council want to implement the methodology all at once or phase it in over time to reduce the impact? Third, did the Council want to look at something completely different, such as the newer SDC methodologies presented by the Metro staff this evening. He gave his personal opinion that going with a newer methodology would be great, but it meant that staff needed to step back and think about the overall objectives for development in the community. He commented that policies on the types of encouraged developments would be a first step, followed by looking at the SDCs. City Council Special Meeting Minutes Page 8 of 13 September 29, 2009 He concurred with Councilor Moncrieff that a good time to consider best practices and green development incentives through SDCs was during the development of the infrastructure master plans. Mayor Hoffman commented that he heard Mr. Komarek saying that the community had to decide what kinds of development it wanted to encourage. If it wanted to encourage development in the town centers and discourage infill in the neighborhoods, then the City would provide incentives for the private marketplace to build in the centers and corridors, including SDC incentives, but someone had to make that decision. Mr. Komarek mentioned hearing tonight that certain types of SDCs, such as transportation and wastewater, would benefit from an alternative to the conventional way of looking at SDCs. He cited the slide with the data supporting a 30% to 50% reduction in the use of transportation systems from the compact urban form and access to multi -modal facilities. Councilor Hennagin asked how the City would encourage development through incentives in an objective and equitable fashion, so that developments were still paying their fair share. He held that there would be a million different ways to do that. Mayor Hoffman referenced Ms. Bateschell's discussion of the policy -based versus technical -based SDC. Councilor Tierney described the situation as a pie that had to be distributed. The reimbursement fee and the improvement fee set the pie. If the City decided to reduce the slice of the pie paid by one group, then the other groups had to pay more to make up the full pie. He commented that the water SDC seemed to be one of the more straightforward ones for creating incentives in recognizing the cost differentials involved with fewer people living in a smaller house using less water than more people living in a larger house would. Mr. Ghilarducci argued that the system capacity share bought with a water SDC was the maximum flow that one could get through the meter size. He clarified to Councilor Tierney that the usage component came not in the SDC, but rather in the rate: the less one used, the less one paid. However, with the transportation SDC, if staff had good information demonstrating a reduction in trip generation, then they had a technical basis to reduce the SDCs for mixed-use developments. Councilor Olson commented that she thought that the City's infill policies would have a greater impact on incentivizing or disincentivizing developers than SDCs. Mayor Hoffman commented that he assumed that there was data out there that supported the City of Prince George charging lower SDCs for multi -family, as stated in the Metro report. He wondered whether it would be useful for staff to come back with an analysis that looked at the data of a policy -driven impact fee differential. Councilor Moncrieff commented that Mr. Graham's information about the Homebuilders Association supporting the Gresham SDC because the methodology and numbers strongly supported the charge resonated with her. She indicated that she was comfortable moving forward with adopting the recommendation on the water SDC, as the City's tiered water rate structure encouraged lower usage. She held that the City's best opportunities to use SDCs to encourage green development lay in the transportation master plan and in surface water management. She commented that the information that one could get an abatement for treating all one's own storm water was an invaluable piece of information for the public because it was a monetary incentive that would have a huge benefit to the entire city. Councilor Johnson concurred with Councilor Moncrieff. She spoke of the importance of having updated master plans as they moved forward in looking at how to implement these SDC policy issues. She observed that right now they did not have a good idea of what the City was trying to accomplish, particularly in storm water management. City Council Special Meeting Minutes Page 9 of 13 September 29, 2009 Councilor Jordan concurred, stating that she did not feel comfortable trying to design a new water SDC at this point. She noted that staff has provided good documentation for the recommended methodology. She spoke to keeping the SDC updated in light of the new water system the City was building. She pointed out that single-family house development would likely be slow over the next two years, which would give the Council time to figure out what kind of incentives it wanted to pursue. She recalled that the parks SDC included some sort of sliding scale that took into account affordable housing. She asked if the City had something similar for other utility SDCs. Mr. Komarek indicated that he was not aware of sliding scales in the SDCs. He mentioned that an affordable housing development might be charged a lower transportation SDC because the ITE manual data showed that that type of land use generated fewer average daily trips, but he did not know if the parks SDC included something like that. Councilor Jordan suggested looking at that as an incentive in the future as the population aged and changed. Mr. Komarek asked whether the community wanted to encourage the senior population to stay in the community by creating the types of facilities and amenities that the seniors needed, and how would the community do that. Councilor Hennagin pointed out that, if they were adopting an SDC that would apply to future development in Foothills, he did not know what the capacity would be in that area, or whether the City had existing infrastructure there sufficient to serve the potential density. He asked whether they should look at Foothills differently if they needed to build new water mains as opposed to utilizing the existing infrastructure. He indicated that he was not comfortable moving forward on the water SDC right now. Mr. Komarek stated that staff was not asking the Council to adopt the water SDC methodology tonight. He reviewed the legal process that the City had to go through before the Council could adopt the SDC. He asked the Council for direction on whether staff should start that legal process for the adoption of this SDC methodology. He commented that, in Lake Oswego, the water system was essentially built out and capable of serving the community. He indicated that, if they did not have to move the infrastructure around the Foothills area in order to accommodate the layout of the development, it would likely cost very little to upsize the mains to the capacity needed to serve the increased density. Mayor Hoffman said that he shared Councilor Hennagin's concern. He mentioned that staff has presented two methodologies. While staff has provided data to back up the traditional methodology, the discussion on the innovative methodology has been theoretical and lacking hard data. He indicated that he would find it helpful if staff could develop additional creative methodology alternatives using the data in the Metro report for support, in order to allow the Council to compare apples to apples. Mr. McIntyre commented that the information that the Mayor was asking for was still vague because the Council has not set a policy of creating incentives for particular types of development. He concurred with Councilor Tierney that the pie was a fixed size. If an incentive reduced one group's piece of the pie, then someone else had to pick up the difference. He indicated that he has not heard from Council who would pay that difference, yet his instincts told him that it would be the single-family and commercial developers paying it. He pointed out that this could fly in the face of existing Council policies. He stated that staff could do the recalculations as requested, but not in 90 days. Councilor Tierney pointed out that other factors involved included the Comprehensive Plan, the City's visioning effort, and the Metro plan. Given that those decisions would not likely be made in a year, the challenge facing the Council was whether to maintain the status quo or to move forward with the staff recommendation. He commented that other utilities, such as transportation and storm water, were more attractive vehicles for incentives than the water utility. City Council Special Meeting Minutes Page 10 of 13 September 29, 2009 He indicated that the questions he heard Councilor Hennagin asking were more site specific than policy specific. He commented that if they had a policy in place, but a specific development turned out to be an exception to that policy, then they needed to figure something out, as opposed to using an SDC to guide that specific development. He said that he supported moving the water SDC forward at this time, knowing that the Council could change it in a year. Councilor Olson concurred that the Council could change the methodology later on. She described the Council goal as updating the master plans and keeping SDCs more current in the future. She agreed with moving forward now and increasing the SDCs using the traditional methodology. She spoke of looking at SDCs in light of the many policy issues involved with the Comprehensive Plan or infill policies. She asked for discussion of the capital improvement projects and whether or not to include interest costs in the SDC. Councilor Moncrieff reiterated her support of moving forward with the staff recommendation. She pointed out that the traditional methodology was for equalization of payment. She mentioned learning at the Regional Emergency Preparedness Summit that Lake Oswego's existing water supply ran directly along a fault line, which made updating the water system necessary for more than addressing future growth. Mr. Komarek confirmed to Councilor Hennagin that the City allocated the portion of the pie not covered by any SDC to the ratepayers. Councilor Hennagin observed that the Council would be adopting a policy on how much of the cost of improvements the City allocated to new development and how much to the rest of the ratepayers. Mayor Hoffman indicated that the majority supported directing staff to move forward with the process for the traditional methodology. Mr. Komarek said that staff would begin the statutory process. Mayor Hoffman raised the question of the three alternatives. Mr. Komarek clarified that Alternative 1 implemented the increase all at once, while Alternatives 2 and 3 allowed for implementation over several years. Mr. Ghilarducci explained that the Council did not have to choose an alternative now, but it could wait until the public hearing to do so. Councilor Tierney suggested that the report that staff would prepare as part of the process be reflective of which policy the Council wanted to follow, so that the public hearing would be on policy. Mr. Powell indicated that only changes to the basic SDC methodology required renoticing. The Council could make adjustments after the public hearing, as long as it did not change the basic methodology. Mayor Hoffman observed that Alternatives 1 and 3 were basically the same, while Alternative 2 raised the SDC amount from $2500 to $9000. Mr. Ghilarducci indicated to Councilor Jordan that Alternative 2 included the financing costs on debt. He said that their approach recommended not including those costs. Mr. McIntyre argued that the Council should consider including the financing costs because those were part of the cost factor. He acknowledged that keeping the rates low as an incentive was one argument, but he contended that the City needed to recoup 100% of the costs, no matter what they were. He recalled that last year the Council took the brave step of authorizing 100% recovery of costs from the Parks SDC. He indicated that he would want the conversation at the public hearing to start with the larger number, from which the Council could pull back if it wanted to. Mayor Hoffman spoke to having a discussion of the pros and cons of Alternatives 1 and 2 before the public hearing. Councilor Tierney noted that there was more than one memo discussing the three alternatives. He suggested that staff stipulate to which of the memos they were referring in order to avoid confusion. City Council Special Meeting Minutes Page 11 of 13 September 29, 2009 Mayor Hoffman confirmed to Mr. Komarek that staff had direction to begin the noticing process. He indicated that they would also discuss the three alternatives at a meeting. 3.3 Vancouver Trip Councilor Tierney stated that, because the Council dealt with so many public policy issues related to development, he had found it valuable to spend time in a community that has done similar things to Lake Oswego but in a different manner. He indicated that the use of on -the -ground examples by the industry experts in the seminar on all the different processes, including policies, implementation, and SDCs, helped him understand the differences and the similarities. He spoke also of the value of interacting with the Metro staff and other elected officials in the Metro region. He reported that Jeff Gudman brought it to his attention that the Budget Committee had cut this Vancouver trip from the budget. He indicated that Mr. Gudman held that the Council members would have to reimburse the City. He pointed out that the Council budgeted money for unspecified travel, which it could use as it chose. He indicated to Mayor Hoffman that he recalled that the justification for asking for an increase in the Council travel budget had been to go to Vancouver to attend this New Urbanism Seminar, but the Budget Committee decided to cut it. Councilor Moncrieff concurred with Councilor Tierney regarding the value of the trip, especially seeing development projects functioning with the people using them. She mentioned Port Moody in particular as being similar to Lake Oswego in demographics, size, and physical location. She also found it valuable to talk with the Metro staff and other elected officials. She recalled conversations about how to turn a sewage treatment plant into a community amenity, which some communities in the U.S. have done. Mayor Hoffman presented a slide show of photos he took during the trip. He said that important lessons they learned were that design mattered and that landscaping was very important in terms of softening a development and keeping it at a pedestrian scale. He showed an example of a Voonerf, usable by both pedestrians and autos. He indicated that nearly all parking in Vancouver was underground. He showed examples of infill developments, noting that the one at 10th and Vine was designed specifically to fit into the neighborhood. Councilor Moncrieff mentioned the parking access through the alley and the height restricted by the height of the trees. Mayor Hoffman showed several examples of mixed residential/retail developments. Mayor Hoffman mentioned the seminar emphasis on development along corridors or in centers. The participants looked at corridors on Friday and centers on Saturday. He reiterated the experts' emphasis on the importance of design. He showed an example of a seven -story tower located on a corner of the Safeway surface parking lot. He showed examples of the use of step back and landscape in corridors, especially in infill projects. He showed an infill project of another house built right behind the main house that was not an accessory dwelling unit but rather an owner -occupied house. He mentioned that he and Councilor Tierney thought it would be a good idea to have the signs announcing development applications as big as those used in Vancouver. He showed the spans connecting the waterway to the rest of the Old Town of Westminster. Councilor Moncrieff reported that Gordon Price said that that design (going up two flights to cross an auto -sized road) did not work; one needed to reduce the road to pedestrian scale. Mayor Hoffman commented that the take away from this was looking at Hwy 43 in terms of whether the community accommodated Hwy 43 or whether Hwy 43 accommodated the town center. He mentioned another take away as the need to emphasize pedestrian scale; everything else would follow from that. He reiterated the importance of landscaping. He presented slides of the Olympic Village in discussing Vancouver's development plans for that area. He noted how Vancouver carefully separated the bicyclist from the pedestrian physically City Council Special Meeting Minutes Page 12 of 13 September 29, 2009 using different materials textures. He reiterated that the main take aways were design was everything and landscaping was important. He commented that, as the Foothills development plans progressed, it might be worthwhile for the whole Council and the planning staff to go up to Vancouver. He mentioned another important take away from this trip, which was discretionary zoning. He described it as 'let's make a deal,' in which upzoning from a base zone was a contracted and negotiated deal. The City told developers what it would allow in a zone that was not strictly part of the zone in exchange for certain amenities. He noted that the process was very transparent, in that the neighborhoods knew what the pro forma was for the developer. The Council discussed the invitation to Gordon Price to address the Council on November 18 regarding design. It discussed whether to restrict the attendance to the City (including the Planning Commission, the Development Review Commission, and the Lake Grove Town Center Committee) or whether to open the meeting up to other communities' officials. The Council decided to not to open up the meeting. Councilor Jordan referenced the e-mail she forwarded with the template for the community covenant for the armed service members and their families. She indicated that the proponents wanted to have this in place before Veterans Day. Mr. McIntyre reminded the Council to meet at City Hall at 3 p.m. for the Foothills Tour next Monday, October 5. He asked the Council members to let staff know if they had a conflict for part or all of the tour, as staff would backfill their spot with staff. 4. ADJOURNMENT Mayor Hoffman adjourned the meeting at 9:37 p.m. Respectfully submitted, Robyn C ristie City Recorder APPROVED BY THE CITY COUNCIL: ON-Decemlaer 1. 2009 - Hoffman; City Council Special Meeting Minutes Page 13 of 13 September 29, 2009