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2000-06-05 CITY COUNCIL PUBLIC HEARING MEETING MINUTESMINUTES OF A PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, HELD ON JUNE 5, 2000, 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 City Manager City Attorney City Secretary Tom Reid Klaus Seeger Helen Beckman Richard Tetens Larry Marcott Glen Erwin Darrin Coker Young Lorfing Absent: Councilmember Larry Wilkins due to recent eye surgery. Others in attendance: Director of Finance Jim Causey; Project Manager Michael Ross; Project Assistant Gene Simeon. 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 Project Manager, Michael Ross, addressed Council and stated that this is a Public Hearing on impact fees. Mr. Ross gave a brief overview of when the legislature stated allowing impact fees and their purpose. An impact fee is a charge or assessment imposed by a city at the time of the utility connection, in order to generate revenue for funding or recouping the cost of capital improvements or facility expansions necessitated and attributable to the new connection. A city must update the land use assumptions and capital improvements plan at least everythree years, thereby, justifying the amount charged. Based on comments from the builders, developers, land owners, and the Economic Development Corporation, as well as comments that were solicited in writing from the development community the purposed Impact Fee Study from the previous time presented has been revised. On May 1, 2000, the revised Plan was reviewed at a City Council Workshop. At that workshop there were no additional comments from the Council to indicate that the fees should be revised any further. The purpose of tonight's meeting is to listen to comments from the Public regarding the proposed Impact Fees. The timing on this proposed Impact Fee process is Page 1 of 6 - 6/5/2000 critical. After tonight's public hearing the City must adopt this Impact Fee Study within thirty calendar days or lose the ability to collect impact fees. The Staff plans to bring the Impact Fee Ordinance to Council for the first reading on June 12, with the second and final reading scheduled for June 26, 2000. The City's current Impact Fee Study expires on August 11, 2000. Ron Bavarian, Walsh Engineering, gave a presentation regarding the Water and Wastewater Impact Fee Study Update. Mr Bavarian stated that as of May 1999 the City contains approximately 39.75 square miles of land which includes the Shadow Creek Ranch Development. In 1988 the City contained 7,721 service units and as of June 1999 this number has gone up to 18,150. He further stated that the City has doubled in population in one decade. Mr. Bavarian further reviewed several of the tables contained in the report. Based on $10 million worth of water capital improvements the Impact Fee that is proposed is $1,576 and for the wastewater the proposed capital improvements of approximately $9 million. The Impact Fee proposed is $1,392 for a total of $2,968. The Impact Fee eligible is $4,229. The existing Impact Fee is $1,997. The Shadow Creek Ranch study was a supplemental report that the City Staff requested for the 1999 update, and everything in the Shadow Creek development has been kept separate because Shadow Creek Ranch was not in the city 1996 and prior to that time. Based on 10,528 connections and approximately $28 million worth of water and wastewater capital improvement in Shadow Creek their Impact Fee computes to be $2,678, which is approximately $300 less than the City's. He further discussed some of the capital projects. CITIZEN COMMENTS Bud Koza, Developer, addressed Council and stated that he has submitted a letter and asked that the fees be to be held to an amount that would be comparable to other surrounding cities and other suburban cities to Houston. He further stated that $2,968 is slightly higher than it would need to be to accomplish the expansion that is in the plan. He is also concerned that Shadow Creek's fees are less than the rest of the City. Renee West, 6302 Broadway, addressed Council that she is also concerned about the difference between the impact fee that the City pays and Shadow Creek Ranch's impact fee. She said she feels that it is a misrepresentation of numbers when you consider that Shadow Creek is going to be doing the same type of development as the developers in the City. She further addressed a $24 million surface water plant and is concerned that it helps everybody existing in the City. She said that she does not understand why developers have to pay the cost, when it helps everybody. She said she feels there is a lot discrepancy with the numbers in the study. She also stated that the developers are creating taxable value that will give the City back to be able to solve some problems in areas like McGinnis, Yost, Shadycrest, West Lea, and she is all for that. She asked that Staff go through and take out the items of a portion of the cost that relates to the existing development. Page 2 of 6 - 6/5/2000 Tom Alexander, 3208 Nottingham, addressed Council and stated that he presented each Councilmember with a letter with his comments about the Capital Recovery Fee. He furthered addressed a subdivision he developed in the eighties. He stated that he does not see consideration given to the people that have been paying taxes more than fifty years and have not gotten water and sewer in the Old Townsite. He stated that is not a fair way to treat people that have been supporting the City. He further addressed the need he has had in the Old Townsite for water and sewer and it cost the residents more than he feels it should have. He asked for consideration for those individuals that have been supporting the City for all these years. Charlie Eason, 2510 Anthony Drive, addressed Council and stated that he has lived in Pearland since 1968. He asked Council to consider what they are doing when they raise the Impact Fees. He further stated that Shadow Creek Ranch should not be a separate city from the rest of this City. In closing he stated thatthe fees are going to be raised, raise them fair for everybody. If development is stopped, it will kill Pearland. Jeff Paceson, owns a rent house in Pearland, addressed Council and stated that there is a huge group of people that are going to pay these fees and they are not here. They are the people who will be buying the homes that will be paying the Impact Fees and are only represented by builders and developers. He said he is only successful when he can keep the cost of homes down. Stella Roberts, 2918 Green Tee, addressed Council and stated that she is concerned with the people in Pearland who has been here for a long time, that do not have water and sewer. In time she is sure they will have water and sewer available to them. She said after years of not having water and sewer connections they will be paying the Impact Fees when they hook into water and sewer, and that will also mean that the newly annexed residents will have to pay the fee. She asked if is possible to exempt from this charge people who are in either of those situations. Mrs. Roberts further stated that the City did not have impact fees for about four years, and it did not kill development in the City. It did short the Impact Fee fund of what would have been collected during that time. She asked that the fees be set as low as possible and increase them as necessary, and she also addressed Commercial Impact Fees, and the possibility of the Economic Development Corporation supplementing new businesses coming to town. Mrs. Roberts further stated that she would like to see the Economic Development Corporation spend some of their money to create this infrastructure that is necessary, not just for the businesses, but for the City as a whole. Jamie Cornelius, 3131 McKinney, addressed Council and stated he is a new developer to Pearland, and what drew him to Pearland was the attention and quality that the City has planned and has put in place as the City has begun growing in the last few years. He said that he has had several other successful developments in the Houston area and sought out Pearland, because of the planning that has gone into City. He said the average home price Page 3 of 6 - 6/5/2000 is much higher than it has been historically, and from his perspective the average new home is $150,000 today. He asked that the Council to consider applying 20% of the tax revenue to bond retirement, the City could support more than $2,222 in bond indebtedness cost per home based on the home. Mr. Cornelius further stated that the Houston area he has not incurred an impact fee that is approaching $3,000, and to bear in mind that it was increased from $997 to $1,997 and now another $1,000 in three years. Clinton Wong, Developer, addressed Council and stated that the Impact Fee has been looked at for some time, and he believes that the fee is prepared because the City wants growth. He said that with growth capital has to be raised to serve the present and future needs, but at the same time if it is not properly monitored we could also have the reverse situation of declined growth. Buyers are very sensitive of purchasing homes, you can see the effect by the spending power to buy a house today is not what it was four months ago. He said does not want to hash out the weaknesses in the study, he can see there are projections made between the developer across Highway 288 and a few developers over here. He stated that he has employed a financial consultant outside, who has spent a lot of time understanding all of these numbers, and have the City Manager if he would meet with him to review the numbers and hear the consultant's recommendation. Mr. Wong stated that he is here to put together a plan that works and will promote growth and not to defeat it. B.V. Barnett, addressed Council and stated that he is interested in what is going to become of Pearland. He said he reached a point in his life he is doing some things, and he feels like he wants to see Pearland enhanced in way that will be enticing for people to come here. He stated he encourages people to come to Pearland, and he has visions to do greater things in Pearland, and this may affect some things he might be doing. In closing he stated that he would like to see everyone work together harmoniously and see the City grow without placing a burden on those coming in and those that are already here. Tom Sullivan, West Lea Subdivision, addressed Council and stated that he is interested in the impact fees too, but he would like the services that he has not received yet. He would like to see sewer and fire protection. He stated that it appears that he is being glossed over and not anything is done toward getting the sewer system. He further stated that Harkey Road is not far from him, but he is not going to get it unless the lines are installed to take it there. He said the water is another deal. He is not sure how that is going to work out. COUNCIL/STAFF DISCUSSION Mayor Reid stated that he had clipped an article out of the Chronicle regarding the City of Houston's Impact Fees, and they are anticipating a fee increase to $3,881. He further stated that he had asked several other cities the size of Pearland, why their Impact Fees are lower than ours. The response was that they are not having much growth right now, Page 4 of 6 - 6/5/2000 however, when the growth starts again they are going to have to look at the Impact Fees again. In order to help pay for the additional infrastructure growth requires they will have to have a bond issue or shut down building permits. Mayor Reid further stated that in a sense the City is entering into that arena in the Pearland area to some degree. The Mayor reported that the City does not have a main line that can be tapped into, the City has to install new lines in order to provide the services needed, and that is a significant impact on the residents that live here that does not want to have bond indebtedness to fund those projects. He also stated that the City's growth rate is an accelerated rate, considerably higher than other areas, and the reason for that is this is a community that people want to move into. Mayor Reid further stated there are areas in the City that do not have service, a lot of people think when you pay taxes, and you are annexed you automatically get water and sewer. He further explained that is a fee for service type of service that is provided by the City. In closing Mayor Reid stated that the increase in Impact Fee is needed if we want to develop Pearland in the right way. Councilmember Beckman told the Mayor that his statements were well said, and she did not have anything to add. Project Manager Michael Ross stated that Shadow Creek Ranch is being charged 100% of their eligible amount based on the capital improvements that are projected. He further stated that the remaining part of the City is about 70% of their eligible amount that they could be charged. Councilmember Seeger commented that Shadow Creek will. eventually be a large entity itself, and his thoughts of keeping their Impact Fees independent of the rest of the City, for example like right now they are in a favorable situation. They could well go into an unfavorable situation in the future where their Impact Fees may go up. If they were combined with the entire City, it could be an enormous impact on the entire City. He further stated that they are taking their risk out there, and that is why he favors keeping them independent. Councilmember Beckman stated that the new users will have to pay for what they are costing the City or all of the citizens will have to pay for what all the new construction is costing the City. She further stated that this seems like the fair way to go. Mayor Reid stated the Impact Fees really amounts to a user fee. " Additional discussion ensued between Council and Staff regarding the Impact Fee Study. Mayor Reid stated that people come to Pearland, because it has so much to offer. Page 5 of 6 - 6/5/2000 ADJOURNMENT Meeting was adjourned at 7:34 p.m. Minutes approved as submitted and/or corrected this 26th—day of ,lune A.D., 2000. Tom Reid Mayor ATTEST: Page 6 of 6 - 6/5/2000