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Planning Comm MINS 07-01-2009 K:\Planning Commission\2009\Meeting Summary 07-01-09.doc CITY OF FEDERAL WAY PLANNING COMMISSION July 1, 2009 City Hall 7:00 p.m. Council Chambers MEETING MINUTES Commissioners present: Merle Pfeifer, Hope Elder, Lawson Bronson, Wayne Carlson, Tom Medhurst, Tim O’Neil, and Sarady Long. Commissioners absent: none. Staff present: Senior Planner Margaret Clark, Public Works Director Marwan Salloum, City Traffic Engineer Rick Perez, Assistant City Attorney Peter Beckwith, and Administrative Assistant Tina Piety. Chair Pfeifer called the meeting to order at 7:00 p.m. APPROVAL OF MINUTES The minutes of May 20, 2009, were approved as written. AUDIENCE COMMENT None ADMINISTRATIVE REPORT None COMMISSION BUSINESS PUBLIC HEARING – Traffic Impact Fee Commissioner Long recused himself as he is the city’s project manager for the Traffic Impact Fee (TIF). He asked if it would be acceptable for him to remain in the audience to be available to answer questions. Chair Pfeifer replied that would be acceptable. Mr. Perez delivered the staff report. He explained that currently the city uses a concurrency analysis to determine if traffic mitigation is necessary. The city uses a pro-rata share mitigation method (which can result in fees ranging from zero up to $5,600 per trip) to arrive at the mitigation fee. For projects in the city center, a set fee (as determined by the City Center Planned Action) is used. SEPA mitigation is used for construction improvements beyond projects identified in the program and site-specific impacts. The city is proposing a set TIF as opposed to the pro-rata share mitigation method. The concurrency analysis would still be done and SEPA mitigation will not change. Mr. Don Samdahl with Fehr & Peers/Mirai continued the presentation with information on the reasons to have a TIF, state requirements, and how the proposed amount of the fee was developed. Mr. Perez stated that the city worked closely with a Stakeholders Group. That group agrees with the city’s proposal, with the exception of when the payment of the fee should be made. The Stakeholders Group believes the payment of the TIF should occur at the time of the issuance of the Certificate of Occupancy (CO). The city believes the fee should be paid at the time of building permit issuance. The pros and cons are Planning Commission Minutes Page 2 July 1, 2009 K:\Planning Commission\2009\Meeting Summary 07-01-09.doc as follows: Certificate of Occupancy (CO) Pros: - May lower financing cost for development - Payment of mitigate fee coincide with timing of actual impacts Cons: - Staff may be pressured to grant Certificate of Occupancy to projects that are completed with exception of fee payment - Projects often change hands during the construction process and the end user may not realize that fees are tied to Certificate of Occupancy - Increased staff time to: develop a new system, track deferred fees, and collect delinquent fees - High delinquency rate as demonstrated in Pierce and Kitsap County - Impact fee may be higher at time of collection than at building issuance Building Permit Issuance Pros: - Consistent with most or all of cities with impact fee program - Minimal staff time to administer with high collection rate without institutional enforcement - Predictability as impact fee would be assessed and payable at the same time - Consistent with current practice for school impact fee Cons: - May add financing cost for development due to financing charges Commissioner O’Neil asked if under the current system, unused funds are returned. Mr. Perez replied that funds are retuned if they have not been spent on the designated project within five years. Commissioner O’Neil how much has been returned in the last ten years. Mr. Perez stated that he has been with the city about 13 years. In that time the city has, on average, collected over a million dollars a year in traffic mitigation. Of the total funds collected in those years, the city has had to return less than $10,000. Commissioner O’Neil asked how often the TIF amount will be adjusted. Mr. Perez replied that it will be adjusted annually for inflation and a new rate study will be performed every three years. Commissioner Carlson commented that this is one of the best TIFs he has seen. He believes that in light of the pros and cons, collection should be done at the building permit issuance. A number of other jurisdictions collect a TIF and do so at the building permit issuance stage. Commissioner Carlson expressed some concern with the projected Capital Improvement Program (CIP) project cost of approximately $320 million. Does it reflect potential impacts from surrounding communities, or just growth within Federal Way? Mr. Perez replied that it is based on historical averages for growth within Federal Way. Growth in surrounding communities could increase the amount. Vice-Chair Elder commented that she would prefer that the TIF be collected at the building permit issuance stage in order to protect a new homeowner from a possible unexpected fee at the time of the CO. Commissioner Medhurst asked if a contractor’s cost of improvements would offset the TIF. Mr. Perez replied that it would depend upon the location of the project; whether it was on the Transportation Improvement Plan (TIP) and if so, it is possible that the cost of improvements could offset the TIF. Mr. Perez stated that due to the current economic climate it is possible the TIF could be regarded as a new fee, as opposed to a replacement of the current system. Because of this, staff recommends that Planning Commission Minutes Page 3 July 1, 2009 K:\Planning Commission\2009\Meeting Summary 07-01-09.doc implementation of the TIF be deferred to July 1, 2010. Commissioner Bronson noted that the current project map shows only one project on a state highway. Does the state help pay for improvements on 99? Mr. Perez replied that city attempts to obtain state funds, but the state focus is on major freeways and does not have much money for smaller highways. Chair Pfeifer asked if other cities use our current system of the pro-rata share mitigation method. Mr. Perez responded that some do use it, but more and more cities are moving to a TIF because of its predictability. Chair Pfeifer asked if the TIF amount is more expensive than the current pro-rata share mitigation method. Mr. Perez responded that while it would depend upon the project, the staff’s research showed that for many projects the overall TIF cost would be lower than the current method. Specifically, the Rivera Office/Medical building paid $258,019 under the current system, but under the proposed TIF it would have been $129,500. The Fred Meyer fuel project paid $207,664, but would have paid only $83,030 under the proposed TIF. Finally, the Sound Credit Union Bank, which is a city center project, paid $255,551, but under the proposed TIF would have paid only $52,454. Commissioner O’Neil commented that according to Staff Report Exhibit B, the amount of the TIF varies greatly between cities. Mr. Samdahl responded that one reason for that is that the cities use different methods to arrive at the TIF amount. Commissioner Carlson moved (and it was seconded) to recommend adoption of the staff recommendation with collection of the TIF to occur at the building permit issuance. There was one abstain and six yes; the motion passed. The public hearing was closed. ADDITIONAL BUSINESS Ms. Clark stated that the Planning Commission regularly scheduled meeting of July 15th has been moved to July 22, 2009. At that time, the Planning Commission will hold a public hearing on Plat and Land Use Application Time Limit Extensions and Vesting Clarification. AUDIENCE COMMENT None ADJOURN The meeting was adjourned at 8:05 p.m.