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2008-05-05 CITY COUNCIL PUBLIC HEARING MEETING MINUTESMINUTES OF A PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, HELD ON MONDAY, MAY 5, 2008, AT 6:30 P.M. IN THE COUNCIL CHAMBERS, CITY HALL, 3519 LIBERTY DRIVE, PEARLAND, TEXAS. Mayor Reid called the meeting to order at 6:47 p.m. with the following present: Mayor Mayor Pro -Tem Councilmember Councilmember Councilmember Councilmember City Manager City Attorney City Secretary Tom Reid Steve Saboe Woody Owens Helen Beckman Felicia Kyle Kevin Cole Bill Eisen Darrin Coker Young Lorfing Others in attendance: Jon Branson Parks and Recreation Director; Trent Epperson Project Director; Mike Hodge Assistant City Manager; Narciso Lira City Engineer; Fred Welch Executive Director of Economic Development Corporation; Theresa Grahmann Senior Planner. PURPOSE OF HEARING - 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. Mr. Narciso Lira, City Engineer. STAFF REVIEW OF PROPOSED AMENDMENT OF 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. Mr. Narciso Lira, City Engineer. Ron Bavarian, Freese and Nichols, Inc. stated their firm has been hired by the City to update the 2002 Water and Sewer Impact Fees once every five years. Freese and Nichols, Inc. has been working with City Staff for several months to update the land use populations, projects, cost estimates, and other items. The land use estimations only include areas other than Shadow Creek Ranch. The information will be provided at a later date. The total for the 2006 land use was 15,500 acres; the projected for land -use 2016 is 14,400 acres, and 2026 would be 23,700. The numbers were based on five- year increments, but only the first ten years were used for the computations. There are thirty-one water projects, of which eleven are designated for the first ten years that were used to calculate the rate. The ten-year project with the carry-over from past projects that have reserve capabilities total $42,000,000. Fifty percent of the $42,000,000, divided by 10,832 or the net number of connections, was used to calculate the updated proposed water rate of $1,973. There were sixteen proposed sewer projects with Page 1 of 4 — 5/5/2008 eleven being included in the first ten-year period. The total cost, which includes the eleven proposed and any carry-over projects, will be $62,000,000. The proposed sewer rate is $2,867. The current water and sewer rate is $3,496 and the proposed water and sewer rate is $4,840. The current water and sewer rate for Shadow Creek Ranch is $2,672. The proposed Shadow Creek Ranch water rate is $1,085 with a proposed sewer rate of $3,536 for a total rate of $4,621. CITIZEN COMMENTS Gary Cook, Shadow Creek Ranch Development, 2947 E. Broadway, addressed Council and stated he attended the previous Workshop regarding the Impact Fees and worked with Staff on a few issues at that time. There are a few points he would like to mention. He does not feel this report is as accurate as it could be on the projections. The first item is that the methodology in arriving at the cost of the future sewer plant was less than scientific. It consisted of taking the highest cost from the previous year and adding 45% to cover future costs increasing in engineering. He does not feel this is the correct approach and feels that costs have gone in the other direction. Their company has recently taken in bids on sewer work which were 30% less than estimates from the previous year. Shadow Creek Ranch originally speculated they would need three two - million gallon phases. According to City Staff, the development is currently using between 30% and 40% of the two -million gallon capacity that has been constructed. With Shadow Creek Ranch having 60% of the projected homes constructed and several hundred homes in the area, outside of Shadow Creek Ranch, included in this capacity, they do not feel that they will need $20 million in plant expansions. There has also been between $9 -million and $10 -million in impact fees collected from the Shadow Creek Ranch Development with no real explanation of where the amount collected was applied. COUNCIL/STAFF DISCUSSION Councilmember Owens stated, when the City reviewed water system improvements, they discussed the improvements taking them to the year 2013 and the report states 2026. There is $120 million assigned to the water plant project and he feels this is a pretty large amount. Ron Bavarian, Freese and Nichols, Inc. stated the number is large, but the project is projected to be within the next ten years and it is not included in the computation. Councilmember Owens stated, if the City is required to have a plant of this magnitude, a large portion of that would come in from the 2007 to 2016 fees and he feels the information should be moved to that timeframe. Page 2 of 4 — 5/5/2008 Assistant City Manager Mike Hodge stated the City will actually need that water beginning in 2016. With the growth rate, it is possible this could be pushed out a year to 2017. This information will be continuously reviewed and adjusted every five years. City Manager Bill Eisen stated these numbers can be monitored every five years or more often as the time period gets closer. The City will have the option to review the information earlier. Councilmember Owens asked if the information regarding where the funds collected from the Shadow Creek Ranch Development had been distributed. City Manager Bill Eisen stated to his knowledge, the information had been provided and if there was something that had not been included, that information could be retrieved from the accounting records. Councilmember Beckman stated Gary Cook made a good point regarding low water use appliances and would like to know if this had been considered. Discussion ensued between Council and Ron Bavarian, Freese and Nichols, Inc. regarding the report. Councilmember Kyle stated, because of the rapid growth of the City, these numbers should be reviewed more often than once every five years. Mayor Pro -Tem Saboe stated there was a recent article that stated there is possibly an end to the recent madness in the price of projects. The difficulty is to look into the future and estimate a number. Ron Bavarian, Freese and Nichols, Inc., stated he has to make these projections for all his clients and they are all scared of the numbers. It is difficult to estimate what costs will be in 10 years, but based on his experience, the numbers in this report are an accurate estimation at this time. Discussion ensued between Council, Assistant City Manager Mike Hodge, and Ron Bavarian, Freese and Nichols, Inc. regarding the report. Gary Cook, Shadow Creek Ranch Development, 2947 E. Broadway, stated the information does not seem to make sense. Shadow Creek Ranch, at the current rate of construction, will be completed in approximately four years. If the next phase of the Water Treatment Plant will not begin until after Shadow Creek Ranch is complete, then they should not have to pay for the next phase. The development does not need one - million gallons of infiltration capacity when there will only be two -million gallons of plant capacity being used. Page 3 of 4 — 5/5/2008 ADJOURNMENT Meeting was adjourned at 7:29 p.m. Minutes approved as submitted and/or corrected this the 9th day of June, A.D., 2008. Tom Reid Mayor ATTEST: Page 4 of 4 — 5/5/2008