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NOTE:

IN ACCORDANCE WITH PROVISIONS OF THE ARIZONA REVISED STATUTES AND THE FLAGSTAFF CITY CHARTER THE SUMMARIZED MINUTES OF CITY COUNCIL MEETINGS ARE NOT VERBATIM TRANSCRIPTS.  ONLY THE ACTIONS TAKEN AND DISCUSSION APPEARING WITH QUOTATION MARKS ARE VERBATIM.  AUDIO RECORDINGS OF CITY COUNCIL MEETINGS ARE ON FILE IN THE CITY CLERK’S OFFICE.

 

SUMMARIZED MINUTES

SPECIAL COUNCIL MEETING

 

September 8, 2008

6:00 p.m.

 

A meeting of the Flagstaff City Council was held on September 8, 2008 convening at 6:24 p.m., in the Council Chambers at City Hall, 211 West Aspen Avenue, Flagstaff, Arizona.

 

CALL TO ORDER

 

The Special Meeting was called to order by Mayor Presler.

 

1.      PLEDGE OF ALLEGIANCE, READING OF THE MISSION STATEMENT, AND INVOCATION

 

Mayor Presler asked those present to stand for the Pledge of Allegiance, the reading of the Mission Statement, and the Invocation.

 

2.      ROLL CALL

 

On roll call, the following were present:

 

 

Mayor Presler

 

Vice Mayor White

Councilmember Brewster

Councilmember Evans

Councilmember Haughey

Councilmember Overton

Councilmember Swanson

 

 

Also present were:

 

 

City Manager, Kevin Burke

City Attorney, Patricia Boomsma

 

3.

Consideration of Public Hearing:  New Chapter 10-18 (Development Fees) as part of the Land Development Code.  (Development Fees).

 

 

RECOMMENDED ACTION:

Open the public hearing.

Receive citizen input.

Close the public hearing.

 

Vice Mayor White moved to open the public hearing, seconded by Councilmember Evans.  The motion passed on unanimous vote.

 

Jim Cronk, Planning and Development Manager, provided a brief history of the project to date.  The City hired TischlerBise in 2006 to complete a study for a development fee program.  The consultant has provided over 500 similar studies nationwide.  This study examined the City’s need for infrastructure improvements to support the development policies contained in the Flagstaff Area Regional Land Use and Transportation Plan.  The study was modified in 2007 to reflect changes in State statutes.  TischlerBise presented their findings to the Council on April 21, 2008 and the Council directed staff to prepare the required 60-day notice of intent resolution.  Resolution 2008-26 was subsequently adopted by Council on May 6, 2008.

 

The City Council may choose to have the City pay the development fees for affordable housing projects and infill incentive districts.  All building permits received before the proposed effective date of January 4, 2009 would be exempt.  Over the past two years, several public meetings were held with the following:  (1) Northern Arizona Builders’ Association; (2) Chamber of Commerce Government Affairs Committee; (3) League of Women Voters; (4) Northern Arizona Board of Realtors; and (5) Multi-Family Home Builders’ Association.

 

Community and staff recommendations include: (1) eliminating the land component for neighborhood and community parks from the parks and recreation fee; (2) eliminating the transportation fee; (3) reducing total residential fee by an average of 49%; and (4) reducing total nonresidential fees by an average of 74%.  If these recommendations are accepted, the single-family detached house maximum would be $7,112.00, and the 25,000 sq. ft. commercial property maximum would be $98,000.00.  Development fees cannot be used for the maintenance of parks and open space.

 

Council requested staff to provide figures for the Utilities Department’s development fees for commercial properties at the next Council meeting.

 

Citizens opposing the adoption of development fees included:

 

 

Helen Hudgens-Farrell, BOTHANDS, Inc.

 

 

Rick Lopez, Flagstaff resident and realtor

 

 

Bill Ring, Flagstaff land use law and development attorney

 

 

Joe Galli, Flagstaff Chamber of Commerce and No. Arizona Association of Realtors

 

 

Julie Pastrick Flagstaff Chamber of Commerce

 

 

Judy Loukes, Flagstaff resident

 

 

The speakers noted that:

 

 

Development fees will raise the cost of housing, cause the debt/income ratio to be even more unworkable, and make it more difficult to qualify for a home loan.

 

The fees will slow growth, which in turn will mean less State shared revenues.

 

Flagstaff’s growth rate, at less than 3% annually, does not justify fees for future facilities.

 

The consultant needs to recalibrate the study based on today’s reasonable expectations of growth.

 

Hiring decisions based on future revenue streams is not good government.

 

Every time the City increases fees, it adds to the cost of living in Flagstaff.

 

New homes and businesses pay property taxes, and, therefore, are already paying for new growth.

 

It is not a good time to consider additional fees, considering the nation’s economic crisis.

 

Individuals speaking in favor of development fees included:

 

 

Cynthia White, Friends of Flagstaff’s Future

 

 

Eva Hatchner, Flagstaff resident

 

 

The proponents felt that:

 

 

There will be a cost to new development, even at a growth rate of 2%, and someone has to pay for that growth.

 

20% to 25% of new homes are built as second homes, whose owners do not pay their fair share in sales tax.

 

Sales tax is the most regressive form of taxation, impacting the poorest of the poor and the middle-wage workforce.

 

Development fees are a viable tool to generate revenue for new infrastructure.

 

The proposed development fee structure allows for reimbursements for affordable housing.

 

Impact fees protect the most vulnerable of the community by shifting the financial burden to those causing the growth.

 

The current, short-term economic situation should have no effect on long-term policies.

 

Vice Mayor White moved to close the public hearing, seconded by Councilmember Overton.  The motion passed on unanimous vote.

 

4.

Consideration of Resolution No. 2008-47:  A resolution declaring the document entitled “Infrastructure Improvement Plan and Development Fee Study” to be a public record.

 

 

RECOMMENDED ACTION:

Read Resolution No. 2008-47 by title only.

Adopt Resolution No. 2008-47.

 

Vice Mayor White moved to read Resolution No. 2008-47 by title only, seconded by Councilmember Swanson.

 

Councilmembers opposed to the passing of the resolution observed that:  (1) the cost of living in Flagstaff is 18.4% above the national average; (2) the implementation of development fees is staff driven; and (3) the resolution would pass on to future generations the costs that the City has right now.

 

The motion to read passed on majority vote with Mayor Presler, Vice Mayor White and Councilmembers Brewster, Evans, and Swanson in favor, and Councilmembers Haughey and Overton opposed.

 

Title was read as follows:

 

 

Resolution No. 2008-47

 

 

 

A resolution declaring the document entitled “Infrastructure Improvement Plan and Development Fee Study” to be a public record.

 

 

Vice Mayor White moved to adopt Resolution No. 2008-47, seconded by Councilmember Swanson.  The motion passed on majority vote with Mayor Presler, Vice Mayor White and Councilmembers Brewster, Evans, and Swanson in favor, and Councilmembers Haughey and Overton opposed.

 

5.

Consideration of Ordinance No. 2008-28:  An ordinance amending the Flagstaff City Code by adding Chapter 10-18 “Development Fees,” adopting procedures for the imposition, calculation, collection, offset, expenditure and administration of development fees to be imposed on new development; adopting an infrastructure improvement plan and development fee study; and providing for an effective date.

 

 

RECOMMENDED ACTION:

Read Ordinance No. 2008-28 for the first time by title only.

 

Jim Cronk provided corrections to Ordinance No. 2008-28 at Section 10-18-010-0001, Parks and Recreation Development Fee for Residential Development as follows:

 

 

Development Type

 

Single-Family, Detached

Multi-Family

All Other Housing

 

Per DU

 

$5,590 $3,376

$4,433 $2,676

$5,384 $3,251

 

Vice Mayor White moved to Read Ordinance No. 2008-28 for the first time by title only, amending the action to apply only to Police Protection Development Fees and Fire Protection Development Fees.  The motion was seconded by Councilmember Swanson.

 

Jim Cronk explained that it is difficult, but not impossible, to implement transportation improvements with slow-growth development fees because they take such a large amount of money and time to complete.  If Council postpones the implementation for a year or two, the study would need to be recalibrated with current commodity costs and growth rate numbers.

 

Councilmembers favoring the ordinance noted that: (1) police and fire impact fees is a good first step, and one that the public can get behind; (2) development fees are not about raising cash, but about cost recovery; (3) it would be irresponsible for the Council to not the raise the funds necessary to provide the services that the citizens ask for; (4) development fees could be collected at the completion of a project, rather than at the start; to ease cost outlay issues for builders; and (5) the fee structure allows for reimbursements for affordable housing.

 

Michael Kerski, Community Investment Director, commented that most of the larger developments under way, such as the science park, the airport, and the Hawkins project, will be exempt from development fees because they all have development agreements in place.  If a builder were to redevelop a property, they would receive a credit for the existing square footage.

 

Jim Cronk related that if the impact fees are assessed only for police and fire, those funds can only be used for new-growth police and fire items such as new radio equipment and new rolling stock, but not personnel.

 

The Council continued the discussion stating that:

 

 

Council directed staff to hire a consultant and move forward with a 60-day notice of intent; thus the process has not been staff driven.

 

The Land Development Code rewrite should happen first.

 

Homes will sell for what the market demands.

 

$705 is a reasonable amount for a single-family detached home and will not ultimately make a home unaffordable.

 

The cost per unit on rental housing is a concern.

 

Development should pay for its impact, but due to the slow rate of growth, the fees may not accomplish the desired goal.

 

Development fees are one tool in the toolbox.

 

A step-up approach that begins with the essential services of police and fire makes sense.

 

A funding source has not been identified for the affordable housing reimbursements.

 

The rate of the proposed annual adjustments has not been established.

 

Councilmembers opposed to the ordinance remarked that: (1) the proposed fees, in addition to existing fees, will open the door to further fees; (2) the fees are for capital only and will not provide for long-term maintenance and operation; (3) the Land Development Code tools have been utilized so rigorously that people have been prevented from coming to Flagstaff; (4) growth is healthy, but the fee will discourage any kind of growth; (5) the initiative will discourage the dense growth and infill programs that the City is encouraging; (6) even with the amendment, the commercial fees are still out of order; (7) impact fees will have far-reaching, unintended consequences; and (8) taxpayers will shoulder the burden of impact fees at a time when it is already too expensive to do business in Flagstaff.

 

The motion as amended passed on majority roll-call vote as follows:

 

 

Mayor Presler

Aye

 

Vice Mayor White

Aye

 

Councilmember Brewster

Aye

 

Councilmember Evans

Nay

 

Councilmember Haughey

Nay

 

Councilmember Overton

Nay

 

Councilmember Swanson

Aye

 

Title was read as follows:

 

 

Ordinance 2008-28

 

 

 

An ordinance amending the Flagstaff City Code by adding Chapter 10-18 “Development Fees,” adopting procedures for the imposition, calculation, collection, offset, expenditure and administration of development fees to be imposed on new development; adopting an infrastructure improvement plan and development fee study; and providing for an effective date.

 

 

There being no further business to come before the Council, the Special Meeting was adjourned at 9:16 p.m.

 

 

 

 

                                                                         

MAYOR

 

ATTEST:

 

 

 

 

                                                                           

CITY CLERK

 

CERTIFICATION

 

STATE OF ARIZONA,

 

Coconino County.

)

)

)

 

 

ss.

I, MARGIE BROWN, do hereby certify that I am the City Clerk of the City of Flagstaff, County of Coconino, State of Arizona, and that the above Minutes are a true and correct summary of the Special Meeting of the Council of the City of Flagstaff held on September 8, 2008.  I further certify that the Special Meeting was duly called and held and that a quorum was present.

 

DATED this 4th day of November, 2008.

 

 

 

 

                                                                           

CITY CLERK