TOWN OF EASTON, MARYLAND
Impact Fee Workshop
January 10, 2005
Councilmember Moonyene Jackson-Amis
Ms. Carol Callahan, Controller; Ms. Sharon Van Emburgh, Assistant Town Attorney, Mr. Karge the Town Clerk, Mr. Paul Tischler and Ms. Julie Herlands of Tischler and Associates were also present.
CONVENING
At 6:30 p.m., the President of the Council called the meeting to order.
WORKSHOP
The President of the Council stated that this workshop is informal. He encouraged the staff and council members to interrupt when they have questions.
Mr. Paul Tischler stated that the purpose of this workshop is to make everyone more comfortable with what impact fees are and how they are derived.
Mr. Tischler discussed:
Presentation Overview
o Methodologies
o Maximum possible amounts
Impact Fees
o Timing of improvements (normally within six years)
o Geographic service areas
o Accounting and expenditure controls.
Mr. Tischler stated that an annual report would be necessary to represent the amount of money collected and how it is being appropriated. He stated that impact fees have nothing to do with operating expenses which are the main cost of the budget. He stated that capital improvements are generally 10 to 20% of the budget and the rest is all operating. Mr. Tischler stated that all the sales tax generated by retail stores goes to the state; the municipality is only getting property tax on this use.
Common Impact Fee Methods
· Cost Recovery (past)
o Oversized and unique facilities
· Incremental Expansion (present)
o Formula-based approach documents level-of-service with both quantitative and qualitative measures
He discussed the annual cost for capital infrastructure today to serve that type of housing unit.
· Plan-Based (future)
o Common for utilities but can also be used for other public facilities with non-impact fee funding.
General Process for Tischler Associates Study
· Demographic Analysis
Mr. Tischler stated that they forecast the population, housing and employment to really help with the cash flow analysis. He stated that impact fees rarely pay the full amount. He stated that it is to say that if you grow at this pace, what are the demands for service going to be; what are the costs and remedies going to be. He stated that impact fees rarely pay the full amount of your capital needs. Sometimes they only generate a portion of the increased needs as in roads. He discussed the connector road and stated that when it is built, it’s not solely due to new growth; everyone will benefit from that road. New growth will only pay its fair share.
· Determine Capital Costs
· Evaluate Credits
· Public Participation
· Decisions by Elected Officials
o Percentage of Maximum Supportable
o Multi-Year Phase-In
Easton Fee Categories
· Parks and Recreation
· Municipal Facilities and Vehicles
· Transportation
· Police
· Fire
Methodologies Used
· Incremental Expansion
o Parks
o Municipal Facilities/Vehicles
o Transportation Building/Vehicles
o Police Vehicles/Equipment
o Fire Vehicles/Equipment
· Plan-Based
o Road Improvements
o Police Station
o Fire Stations
Mr. Tischler stated that new growth is going to pay its fair share. He discussed the Maximum Supportable Impact Fees. Mr. Tischler stated that commercial/retail has a $4.70 per square foot impact to the town of additional retail. He stated that these findings are based on trips by type of land use and the cost for the project, etc. Office is a much lower figure due to the fact that there are fewer trips. He discussed parks and recreation methodology; parks input variables and parks impact fees.
The Town Attorney asked why some to a degree of Parks and Recreation is not attributable to commercial and office uses. The Town Attorney stated that people come to Easton to go shopping then they go to the park.
Mr. Tischler stated you need to have statistical data to support the percentage of non-residents that actually use the park. He stated that you have to have good numbers and show statistically that the parks are used by non-residents.
Mr. Tischler discussed Fire Impact Fees outside Easton within fire service area. He stated that the fire impact fee outside of Easton is higher than inside. Mr. Tischler stated that the residents outside of Easton don’t get a debt service credit.
Discussion occurred concerning the General Assembly addressing impact fees in regards to Fire Departments.
The Town Clerk stated that he had asked how a municipality might collect fees outside of town limits. The response given to the Town Clerk was that there could be an intergovernmental agreement.
Mr. Tischler said not to forget that the County has just instituted fees and certain fee categories which the county anticipates new residents of the town to pay.
The Town Clerk stated that historically, the town has invested in excess of what the county has invested.
Ms. Julie Herlands discussed the Parks and Recreation methodology. She stated that they included community parks, land improvements; trails cost and a small portion for skatepark which was considered a buy-in.
Discussion occurred regarding neighborhood parks and developers contributing land. The Town Clerk stated that we should make sure that the land that we are getting for a park has a relevant value that equates to what the fee is such as if the developer offers 20 acres but it is all non-tidal wetlands that you can’t put anything on.
Mr. Tischler stated that the question has been raised if there are revenue constraints such as having enough money for operating expenses, one of the things they are finding in many communities is them getting out of the neighborhood park business such as the annual cost of operating and maintaining, replacing equipment, etc. He stated that you need to be aware of not only the capital but also the operating.
Mr. Tischler stated that these studies are meant to be updated every three to five years due to cost increases and land values.
Discussion occurred regarding the community park land cost per person and input variables. Ms. Herlands stated that the costs are right in line with Talbot County’s study so they have a regional view of what the costs are.
The Town Attorney discussed recouping fees for professional and staff services.
It was Tischler and Associates’ findings that the total cost per person for parks is approximately $443. For multifamily/other residential, the total fee is $771. These fees are second highest under transportation.
Ms. Herlands stated that this is just a draft and can be updated before the final.
Discussion occurred regarding municipal facilities methodology. She stated that this is the beginning of the residential and nonresidential development. Ms. Herlands stated that they calculated a 24 hour period on how much of the community is made up of residents and non-residents that work here.
Municipal facilities input variables were discussed. Ms. Herlands stated that you end up with $38 per person for residential and $20.23 for nonresidential per job.
Ms. Herlands discussed municipal facilities maximum supportable fees. She discussed having to increase municipal facilities due to new growth.
Transportation methodology was discussed. Ms. Herlands stated that they used the Institute for Transportation Engineers, the standard industry trip generation manual. She stated that they also used a trip adjustment factor which ensures that they do not double count a trip. She stated that the two main components for the transportation fee are road improvements and transportation vehicles and facilities. The planned road improvements listed are eastside collector, east-west connector and the five-corner roundabout. Ms. Herlands stated that you do these road fees if there is a commitment on the Town’s part to actually build them.
The Town Attorney stated that the east/west collector road is not necessary without the build-out. He stated that the political process of the Town of Easton for years has decided that although the east/west collector might be desirable, it is not necessary to maintain the quality of life and level of service due to the fact that no one has ever built it. If we start with the premise that we can look at public decisions that communities make at a variety of ways; you can look at what they have in their plans or you can look at what they actually spend money on which is a truer test of where the community thinks its priorities are then say that the current elected officials make a judgment that the east/west connector road or the eastside collector are necessary.
The Town Attorney asked if we could say that the east/west connector is driven by new development; some in the Town of Easton, some outside of the Town of Easton and some new development outside of Talbot County and shift the cost to the new development and recover the proportionate cost that we can with our legitimate tax base through impact fees within the town.
Mr. Tischler stated that we would need a letter from a traffic engineer who would say that if you didn’t grow anymore, you would not need to build the east/west connector which would only maintain the level of service; it would not enhance it.
The Town Attorney discussed a traffic study which may be done in the near future to validate findings regarding the east/west connector road.
Discussion occurred regarding the costs of planned road improvements.
Mr. Tischler discussed changing the capital improvement program to change projects. He stated that if you were able to revise it so that the necessary improvements are clearly due to growth, then you could change money pegged for certain projects and justify it.
Ms. Herlands stated that the transportation input variable net capital cost per trip would for residential and commercial/shopping centers would be $207.38.
Transportation maximum supportable fees were discussed.
Ms. Jackson-Amis wondered why you can’t take the money from developers where there is growth and put it into an interest bearing account to be used when the road is necessary due to the fact that the road will be built eventually.
Mr. Tischler stated that there are some acts or ordinances for utilities and roads where it is held up to 15 years.
The Town Attorney stated that the Maryland Attorney General issued an opinion about three weeks ago regarding Taneytown talking about trying to give that community some guidance how impact fees can work; not really getting into time frames, which has attracted a lot of attention. The Town Attorneys stated that he thinks that the legislature is going to try to help clarify the situation.
Ms. Herlands stated that they recommend that the fees be increased annually to keep up with the increase in costs.
Collecting impact fees for two different jurisdictions were discussed.
Police methodology was discussed. She stated that capital cost of the police station and the capital cost of vehicles were included for a net capital cost of $28.71. She stated that they used the approximate cost of three million dollars from a local architectural firm for their estimate of the police building. She stated that the police maximum supportable fees are $258 for residential single family detached and $646 for commercial/shopping center. Ms. Herlands stated that this is the same kind of situation as with the roads where the impact fees only cover a portion of the full cost for two reasons; 1) your existing development will benefit from the facility and 2) the credit that you are not getting back.
Ms. Herlands discussed Fire Methodology. She stated that there is an EMS component with the fire service and tends to be a higher proportion of the calls that support EMS so they used jobs as a better demand generator rather than non-residential trips. She stated that they included planned costs of the new substation as well as the existing facility. Ms. Herlands stated that the capital cost is the apparatus but they have included a debt service credit for the outstanding debt. Ms. Herlands stated that they calculated the space on the Easton Volunteer Fire Department’s service area. She discussed fire input variables inside the town of Easton and outside Easton with Fire Service area and maximum supportable fees. She stated that the net capital cost for residential is $150.48 and nonresidential is $159.74. Ms. Herlands stated that this is based on the current space and the planned future space as used by the Easton Volunteer Fire Department plus all of their apparatus.
Ms. Herlands discussed the potential cash flow.
Potential Cash Flow
· Projected 10-year revenues: $4.2 million
· Projected 10-year costs: $18 million (primarily the bulk being the road; $12.5 million)
· Plan-based fees projected shortfalls:
o Police: ~$2.75 million ($275,000 per year)
o Fire: ~$672,000 ($67,000 per year)
o Transportation: $10 million ($1 million per year)
Mr. Tischler stated that if there is not sufficient money in the General Fund to provide enough operating expenditures and if your capital improvement plan is artificially constrained now, that is a symptom of a jurisdiction that does not have sufficient revenues so if you continue to grow, there is a chance of a continued shortfall.
Mr. Karge, the Town Clerk stated that in most places when you do the capital improvement plan, there is some objective standard based by which they arrive at what they are going to do. He stated that this is something that we are going to have to come to terms with here that we have talked about over a number of years. He stated that historically, up into the last few years, we have been able to fund the things that are most required today.
The tax cap was discussed. The Town Attorney stated that the cap is a $.40 per $100 of assessed evaluation. The Town Clerk stated that we are at $.44 per $100 due to the debt service.
Mr. Tischler stated that every month that goes by, you are losing out on revenues and impact fees and there are polices that need to be made.
The Town Attorney thanked Mr. Tischler for coming to the meeting and congratulated him on the lucidity of his presentation.
ADJOURNMENT
There being no further business, Mr. Ford adjourned the workshop at 8:31 p.m.
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Town Clerk