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2003-01-06 CITY COUNCIL PUBLIC HEARING MEETING MINUTES201 MINUTES OF A PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, HELD ON JANUARY 6, 2003, AT 6:30 P.M., IN THE COUNCIL CHAMBERS, CITY HALL, 3519 LIBERTY DRIVE, PEARLAND, TEXAS. The meeting was called to order with the following present: Mayor Mayor Pro -Tem Councilmember Councilmember Councilmember Councilmember City Manager City Attorney City Secretary Tom Reid Woody Owens Richard Tetens Charles Viktorin Larry Marcott Klaus Seeger Bill Eisen Darrin Coker Young Lorling Others in attendance: Deputy City Manager Alan Mueller; Executive Director of Community Services Tobin Maples; Executive Director of Economic Development Corporation, Fred Welch, City Engineer John Hargrove; Public Affairs Liaison Lynn Munford. PURPOSE OF HEARING - AMENDMENT OF IMPACT FEES To consider the amendment of land and use assumptions and a capital improvements plan and the imposition of an impact fee in the service area encompassed by the city limits. STAFF REVIEW OF PROPOSED AMENDMENT City Manager, Bill Eisen, stated periodically the City is required to update the assumptions with regard to land use as well as the assumptions with regard to new facilities that will be required as a result of new growth. All of those assumptions are required to be evaluated periodically to reexamine the impact fees that are currently in place. Ron Bavarian, Freese and Nichols gave a Power Point presentation regarding the proposed Impact Fee Study. Deputy City Manager, Alan Mueller, Executive Summary stated the report represents an update of 1999 Water and Wastewater Impact Fee Study. The Report is prepared Page 1 of 5 - 1/6/2003 20?, pursuant to Chapter 395 of Texas Local Government Code (with 1989 and 2001 amendments). The report studies a 20 -year period however, for the impact fee assessment only those costs and service units associated with the first 10 -year period are accounted for. The 1999 report included a separate supplemental impact fee study for the Shadow Creek Ranch (SCR) development. For 2002 update, the supplemental impact fee study for the SCR development is also updated. Pearland City limits encompass approximately 44.57 square miles or 28,525 acres of which 5.41 square miles or 3,467 acres is in the Shadow Creek Ranch development. The Census 2000 reports a population of 37,640 people for Pearland. The mid 2002 population is estimated to be 45,153 people. The year 2012 and year 2022 projected populations are 68,009 and 83,859 people, respectively. For the purpose of impact fee assessment, all types of uses are converted to an equivalent service unit, being a single-family dwelling. Currently, the City has 16,626 connections of different types. Using the conversion factors stated in the report, this equals to 18,199 equivalent service units. The 10 -year and 20 -year equivalent service unit projections are 26,301 and 32,331, respectively. For the purpose of impact fee computations, the net equivalent service unit increase between current and the first 10 -year period, or 8,102 is used. The city's current water supply sources consist of 8 water wells and one surface water connection in Green Tee Subdivision, totaling approximately 7,963 gallons per minute capacity. The McHard Road surface water connection in the far northwest quadrant of the City is currently under construction thus not accounted for in this update. Available ground and elevated storage capacities are 3,295,000 gallons and 2,500,000 gallons, respectively. To meet the current and projected service units demand, the City will need approximately 2,957 gallons per minute well capacity for current demand and 7,818 gallons per minute and 11, 436 gallons per minute for years 2012 and 2022, respectively. There will be a shortage of 130,100 gallons of elevated storage for year 2012 and 733,100 gallons for year 2022. City's current wastewater treatment system consists of three plants, totaling 7.100 MGD capacity. Based on the average annual flows for the past two years, there is currently 2.695 MGD reserve capacity. To meet projected service units demand, 0.629 MGD and 2.347 MGD capacity expansions are needed for year 2012 and year 2022, respectively. To meet the current and future demands, water and wastewater projects were developed for this report update. Twenty-six water and twenty-seven wastewater projects were identified. Some of the projects costs include the 10 -yr. debt service due to their funding method. The total water projects exceed twenty-six due to the number of water wells needed to meet demand however, except for one, the rest have been costed but not identified due to uncertainty on location. The estimated total cost of all water projects is $29,457,591. The estimated total cost of all wastewater projects is $27,185,217. Therefore, the total eligible water and wastewater projects cost is projected to be $56,642,808. The 2001 amendment to Chapter 395 of Texas Local Government Code requires that municipalities either give a credit for the portion of ad valorem tax and utility service revenues generated by new service units during the program period (10 Page 2 of 5 - 1/6/2003 20 years for Pearland) back to the development, or a credit equal to 50 percent of the total projected cost of implementing the 10 -yr. capital improvements plan. The City of Pearland proposes to give the 50 percent credit. Therefore, the total proposed projected water and wastewater projects cost would be $28,321,404 (50% of $56,642,808). To compute the proposed water and wastewater impact fee rate, the proposed projected cost of $28,321,404 is divided by the projected 10 -yr. service units of 8,102, to obtain a proposed rate of $3,496. The City's current rate established in 1999 is $2,968. For the Shadow Creek Ranch development, the projected 10 -yr. service units is 11,538. To meet future demand, two water and three wastewater projects were identified. The total eligible water and wastewater projects are estimated to be $30,827,772. This total cost includes 10 -yr. debt service for some projects currently underway. To compute the impact fee rate for the Shadow Creek Ranch development, the above cost is divided by 11,538 projected service units to obtain a rate of $2,672. The Shadow Creek Ranch development current rate established in 1999 is $2,678. The proposed impact fee is 100% of the eligible rate. This is due to the development agreement between the City and Shadow Creek Ranch development in which the development is to compensate the City for any rate less than 100% assessment. Deputy City Manager, Allan Mueller, also gave a brief overview of other comparable Cities Impact Fees Mr. Mueller further stated that Pearland's Impact Fees is higher than other places primarily due to the City's large surface area and the development is spread out from one end to the other. The City started with a very small compact system and as development has occurred there has been a lot of major upgrades that has to cover long distances in order to make everything fit together. In closing he stated the City has a tremendous amount of growth and there is a lot of demand. CITIZEN COMMENTS Tom Alexander, 3208 Nottingham, addressed Council and stated he feels the older part of Pearland is being discriminated against. He stated there has been two Bond issues and those obligations have not been complied with. There is no sewer service available in the old town site today. Mr. Alexander said he feels he has paid four times for sewer and water in the old town site. He further stated that Impact Fees for the older part of town is discrimination. In closing Mr. Alexander stated he would like a responses to his inquiries in the future. Mike Klaus, 5016 Groveton, addressed Council and stated they he feels the proper notification was not given regarding this Impact Fee Public Hearing. He also stated that someone that is not aware of the Impact Fees may not have factored them into their project. Page 3 of 5 - 1/6/2003 204 COUNCIUSTAFF DISCUSSION City Manager, Bill Eisen, stated there are certain things written into the State law with regard to the notice that is given. All of the requirements were complied with. He also mentioned the maximum Impact Fee that can be charged in most of the City is approximately $3,500. There is already an Impact Fee in place and has been for some time of $2,968. Councilmember Seeger briefly discussed the other Cities comparison fees with Deputy City Manager, Alan Mueller. Mayor Reid stated the City will get a response to Mr. Alexander regarding his concerns with the Impact Fees. Councilmember Viktorin stated he is not a fan of Impact Fees to begin with. The "con" against Impact Fees is for a business coming onto the City, that business asked why they have to pay Impact Fees where existing businesses do not. He further state he is also concerned that Pearland is the highest in comparison to other Cities, and also concerned if the Economic Development Corporation has experienced any businesses not wanting to come to Pearland because of the Impact Fees. Pearland Economic Development Corporation Executive Director Fred Welch stated he is not aware of the Impact Fees slowing down the rate of development, or anyone ever stating that is their reason for not coming to Pearland. Mayor Reid stated he has talked with several developers who like the Impact Fees for the simple reason that they know they can complete their project because the money goes into new development of facilities. If the City did not have that and depended on a Bond issue, the City probably could not pass a Bond issue just to put in water lines for new development. Councilmember Marcott stated he is in favor of Impact Fees. The fees pay for the new development and the existing residents of the City is not burdened with that responsibility of paying for the new growth. Mayor Pro -Tem Owens asked why is there a difference in Shadow Creek Ranch's Impact Fees. Page 4 of 5 - 1/6/2003 Deputy City Manager, Alan Mueller stated because there is a lot less improvements that is needed. In looking at the other portion of the City, improvements are substantiality higher because of the improvements needed. Lengthy discussion ensued between Council and Staff regarding Impact Fees. ADJOURNMENT Meeting was adjourned at 7:25 p.m. Minutes approved as submitted and/or corrected this ATTEST: 27th day of January, A.D., 2003. Tom Reid Mayor Page 5 of 5 - 1/6/2003 207 THIS PAGE LEFT INTENTIONALLY BLANK