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2003, 05-15 Study SessionCITY OF SPOKANE VALLEY CITY COUNCIL WORKSHEET — STUDY SESSION NOTE: AT COUNCIL STUDY SESSIONS, THERE WILL BE NO PUBLIC COMMENTS, EXCEPT COUNCIL RESERVES THE RICHT TO REQUEST INFORMATION FROM THE PUBLIC AND STAFF AS APPROPRIATE Council Study Session, May 15, 2003 5 /14/2003 3:12 PM C1.TY HALL AT REDWOOD PLAZA 11707 East Sprague Avenue, First Floor Spokane Valley, Washington Tuesday, May 15, 2003, 6:00 p.m. COUNCIL REQUESTS THAT ALL ELECTRONIC DEVICES BE TURNED OFF WHILE IN ATTENDANCE AT THE COUNCIL MEETING SUBJECT DISCUSSION LEADER ACTIVITY DISCUSSION COAL Administration Cary Driskell Junk vehicles, code compliance other nuisance Consensus regulations (45 minutes) Administration David Mercier Discussion of general policy on cost recovery Consensus for services (45 minutes) 1 MEMO CITY OF SPOKANE VALLEY 11707 Sprague Ave, Spokane Valley WA 99206 Tel: (509) 921 -1000. Fax (509) 921 -1008 e -mail 1 waltanfal5pokaneval lev. or TO: Dave Mercier FR: Lee Walton SUB: Discussion Notes — Recovery of Costs Date: 5/15 As the City emerges from the chaos of its start -up period there is time now to review interim policies and their long range implications. This discussion memo will address two of these interim policies as follows. 1. Review policy regarding the recovery of costs associated with processing land use applications, building permits and Right -of -Way permits. 2. Consider the feasibility of recovering costs associated with the cost of infrastructure needed to serve new residential developments. Should new development be expected to "buy its way in" or should the existing community be expected underwrite the cost of financing amenities such as parks and street improvements that are primarily needed to serve the new residents. These are important issues because Council's decision will affect the City's "bottom line" and service levels in a very material way over the years. At the risk of over simplification, I will suggest three possible scenarios for dealing with the item (1) above and provide some discussion points. 1 will also offer a "wishy washy" recommendation at the end. There are certainly other possible variations but these three alternatives should offer a good starting point for Council discussions. Development Permitting and inspection The City could seek to recover all or most of the costs associated with new development and permits with each specific project expected to carry its full share of direct costs. This policy would minimize or at least lessen the need to subsidize new development from the General Fund. 11. The City could simply mirror existing Spokane and County fee schedules even if these fees have no direct relationship to the actual cost of services. III. The City could seek to recover only a portion of direct costs based on the theory that new development will eventually reimburse its cost by increasin the tax base and/or producing additional sales tax revenues. 1 DISCUSSION - Typically, most cities, by policy, attempt to recover all or a major part of direct costs associated with all new development and permit services. Partial or even full exceptions for commercial or industrial projects are not uncommon when the new development will clearly result in net revenue to the City over a fairly short period of time. This flexibility also allows the City to compete more effectively for the more desirable developments that will enhance the City's tax base. Less common, but not unheard of, are exceptions for bonafide charitable (not religious) organizations. Building fees generally follow the fee schedules found in the Uniform Building Code with minor variations reflecting local conditions. These fees tend to be less controversial because they are fairly uniform in cities and counties throughout the State. Planning, plan review and right -of -way fees are more controversial because they often reflect the relative strength of the development/construction industry in each area. Cities and Counties generally seek to recover these costs while developers and contractors naturally lobby to transfer these costs to the General Fund in order to improve their profit margin. For Spokane Valley, the task of fixing fees that fairly reflect actual cost of service is difficult because we have not yet accumulated enough "history" to allow accurate cost allocations. Simply comparing our fees with the County and other cities in this area is of limited value because in most cases it appears that they are arbitrary and not based on a cost accounting formula. Decision matrix- At this early stage I suggest the Council be encouraged to "buy time" by approving some broad principals for cost recovery along with an interim fee schedule for the various services. An example of "Principles" might be the following. -The City of Spokane Valley seeks to avoid the subsidization of new development and right -of -way improvements by the General Fund. However it is recognized that a partial subsidy may be appropriate in certain instances where the cost of service can reasonably be expected to be recovered from tax payments. A partial subsidy may also be appropriate for charitable or non - profit enterprises that provide an important service to the City. Specifically; 1 Permit fees for building permits prescribed in the Uniform Building Code except as it may be amended to reflect a specific local condition. 2 Planning, Plan Review, Right -Of -Way and obstruction permits or inspection fees shall be based on a best estimate of direct cost to the City less a "special safety factor" of 20% for 2003 calendar year. 2 ti 3All such fees will be reviewed at least annually and the "safety margin" reduced to reflect improvements in cost accounting. At each review, the City Manager shall provide a revised estimate of actual cost and recommend a cost recovery target for each service. The City Council will review this recommendation and revise the Master Fee Schedule as it may determine. Recoverie Infrastructure Costs DISCUSSION New Residential developments almost never pay for costs associated with the additional infrastructure needed to serve the new residents. I don't know what the current figure is but a couple of years ago in Western Washington it was calculated that only homes exceeding $800,000 in value come close to actually paying their way in the form of property taxes. In Spokane County, residential developers have been rather successful recently in avoiding many direct development costs and virtually all costs necessary to provide basic amenities such as parks and new schools required to serve new residents. This policy has enabled developers to sell new homes at a lower cost but their success has simply transferred the cost of these necessary improvements to the existing community. No provisions, for example, are currently made in Spokane County to require developers to provide funds or even reserve land for parks or schools. They do require the developer to upgrade nearby streets that fall below adopted levels of service but I suspect these levels may be inadequate for this City. This policy has meant that new parks and street improvements are often simply not provided or the entire community is asked to pay higher taxes in the form of bond payments. An example of this policy is an almost total reliance by local school districts and fire districts on bonds to build new facilities that primarily serve new residents. This policy seems to work in Spokane County because the population has traditionally been very supportive of these institutions and has been willing to accept the burden of financing facilities to serve their new neighbors. However, communities tend to be less willing to subsidize the cost of parks and street improvements to serve newcomers. For this reason many cities and counties in Washington have establish high "level of Service" standards and policies that require developers to "buy in" by paying a fair share of the cost to meet these standards. This is accomplished by having the developer of new residential units pay development and impact fees sufficient to underwrite a fair share of the cost of facilities as determined by the Comprehensive Plan and concurrency requirements. Of course the developers simply pass this cost on in the price of the house so the buyer is ultimately paying for these iniprovenments that benefit him. In spite of its fairness it would be difficult to recommend imposition of impact fees on new residential development in the Spokane Valley over those now authorized by the County Comp Plan which has been adopted by reference. In drawing boundaries for the new City, the Boundary Commission carefully excluded undeveloped areas adjacent to Spokane Valley but within the Urban Growth area. These properties are now being 3 developed. Since other than some off site street improvement the County does not now have a "buy in" policy, our imposition (even if we could) of impact fees for parks or schools would put new projects within the City at a competitive disadvantage compared with the new housing in he unincorporated areas. The end result is that at some point in the future these developments will be annexed to Spokane Valley and the City will then be faced with the burden of financing facilities to serve the new residents. Apparently, at one time the County did approve an ordinance adopting impact fees for parks, roads and fire districts and perhaps schools. However the Court voided this ordinance because the County failed to develop "Level of Service" standards that were in compliance with the State Growth Management Act. The County also had no concurrency standards in place or documentation to support the projected level of service. I do not know if the County is interested in correcting these deficiencies so they could re- adopt appropriate impact fees. Obviously since we are currently using the County Comp plan by reference, Spokane Valley would be unable to adopt such charges until the City has adopted it's own plan and developed valid concurrency standards. Liberty Lake does not have an impact fee for new parks but they have been able to persuade developers to include parks as part of each major project. They do have an impact fee for a road improvement project and may consider impact fees for new school in lieu of future bond issues. I understand that City of Spokane Planning Commission is currently looking at impact fees. (Heather Trautman @625 -6060) Decision Matrix Following is an array of policy options that might be used as a basis for discussion. A- Direct staff and Planning commission to expedite the preparation of a new Comprehensive Plan that establishes higher standards of service for Parks, schools and roadways than presently exist in the Interim Comp Plan. That a schedule of impact fees based on these new standards be adopted and that a mechanism be developed that would fairly distribute the costs for these improvements between new and existing development. B- The City will explore the feasibility of imposing impact fees on new development that would underwrite a fair share of the costs necessary to provide infrastructure and amenities necessary to serve these new developments. In doing so the City will confer with other public agencies serving the City and surrounding communities to determine if a uniform policy is possible that would avoid competitive distortions in the development industry. C- The imposition of impact fees or other "buy in" charges that exceed those now levied by Spokane County on new development for infrastructure, parks or school is not appropriate at this time. Such a fee would increase the price Footnotes: of new residential units and if applied only in Spokane Valley would discourage the construction of new housing in the City. Any consideration of impact fees should be avoided unless and until the County and Liberty Lake adopt similar fees. (1) A current example is the pending development of. 100 homes served by South 32 " St. Immediate adjacent is another approved 140 home unit which will also impact 32 As I understand it some improvements on 32 are being required which are adequate to meet currently adopted service standards but appear to be insufficient to meet realistic future needs. Also, 1 understand that current service levels do not require impact fees or dedication of land for a fair share of the cost to provide a future park that will be needed to serve that area. You can bet your britches that within a few years, these new residents plus those to be annexed later will make increasing demands for street improvements and recreations facilities. They will have forgotten that the cost of their home was 54- 6,000 less because the builder was excused from paying a fair share of these ultimate costs. The only realistic option then will be to ask all property owners in the City to support a bond issue to provide these facilities that are now being so skillfully avoided. Incidentally, 1 can't confirm it but am told that, perhaps 20 -30 years ago the County actually sold some park properties that then existed in the Valley. 5 May 13, 2003 Spokane . The Spokesman- Review Attention: Classified Advertising P. 0. Box 2160 Spokane, WA 99210 -2160 Re: Leeal Publication Please publish the following legal notice of special meeting in the Wednesday, May 14, 2003 edition (regular) of The Spokesman - Review. Thank you. Sincerel \ Ruth 1V1itIl Interim City Clerk Sent by FAX: 509- 622 -1189 11707 E. Sprague Ave. • Suite 106 • Spokane Valley, WA 99206 (509) 921 -1000 • Fax (509) 921 -1008 • cityhall @spokanevalley.org LEGAL NOTICE NOTICE IS HEREBY GIVEN THAT A SPECIAL MEETING HAS BEEN SCHEDULED BY THE CITY OF SPOKANE VALLEY CITY COUNCIL. THIS :SPECIAL MEETING IS FOR TIIE PURPOSES OF HOLDING A STUDY SESSION FOR DISCUSSION OF NUISANCE ABATEMENT REGULATIONS AND GENERAL POLICY ON COST RECOVERY OF' SERVICES. THE SPECIAL MEETING: WI I3E HELD ON THURSDAY, MAY 15, 2003 FROM 6:00 P.M. TO APPROXIMATELY 8:00 P.M. AT CITY HALL, 11707 EAST SPRAGUE AVENUE, SUITE 101. RUTH MULLER INTERIM CITY CLERK BACKGROUND OBSTRUCTION PERMITS • PROGRAM PROPOSAL• The City's current obstruction (ROW) permit program and fee schedule are patterned after Spokane County's. Most permits cost applicants $10 plus actual engineering review and inspection fees at the rate of $50 /hr. The City budgeted no staff for this program; permits are issued by the Building Department with guidance, engineering review and some inspection provided by Public Works. The County estimates an annual workload for the City of Spokane Valley at 2,500 permits annually, and in the past employed two full - time and two seasonal staff to operate this program in Spokane Valley. They admit that the program operation received major financial subsidy. EVALUATION To minimize budget impact and still run a responsible program, it is recommended that initially this program be staffed with a full -time Permit Specialist and a seasonal Public Works Inspector. The specialist would be in charge of administering the program, including conducting minor engineering reviews and conducting some inspections. The seasonal inspector would handle the bulk of the inspection responsibility. The current hourly fee of $50 should cover the cost of engineering reviews and inspections, since they are all charged to the permittee. The salary and direct benefit cost of the permit specialist will be approximately $50,000 /yr. Allowing for the seasonal nature of the obstruction permit program and employee leave, admin time, and other program operation time not directly billable, it is assumed the available permit specialist "counter time" for permit issuance will be 1250 hours annually. Permit issuance during April averaged 4/day, but has risen to 10 /day in May, and is expected to rise even more in June, July and August. If 2500 permit applications are received and 1250 net hours are available for processing, it would appear that 1 FTE for permit specialist should be adequate to administer the program (1252 hours _ 2500 permits = 0.5 hours /permit.) Until more actual program operational data is generated, this would appear to be a reasonable assumption. To be fully self - supporting, the $50,000 staff cost of the specialist would have to be borne by the 2,500 applications, for an average cost of approximately $20 per permit. The current application fee is $10, except for a relatively few $25 driveway approach permits. The projected annual program subsidy required of the City, on this basis, would be about $25,000. PROPOSAL • Hire a full -time permit specialist and seasonal inspector as soon as possible. • The basic permit application fee for full cost recovery: $20 plus $50 /hr of actual engineering review and inspection. 5/14/03 • Current basic permit application fee: $10 plus $50 /hr of actual engineering review and inspection. • Option: full recovery as above, or the following discount schedule applied to the basic application fee: Discount Basic Fee Discounted Fee Program Subsidy None $20 $20 None 10% $18 $5,000 20% $16 $10,000 30% $14 $15,000 40% $12 $20,000 50% $10 $25,000 (Current fee schedule) dt Department of Community Development Code Enforcement Program • Overview • Pending County Cases • New City Cases • Graphic Examples • Issues / Concerns • Policy Approach • Proposed Solutions • Summary Siorkat Valley Overview • Council to Consider 3 Issues: 1. Direction - Passive ' Aggressive - Reactive Proactive 2. Resources 3. Support S jUalley Animal Nuisance Illegal Business Solid Waste Junk Auto Signs 21 8 43 119 167 400( +) Setback Fences Illegal RV Property Line Clear -view Landscape 11 14 16 14 7 10 Pending County Cases • Files received are organized, well investigated and concise. • Not all files are present. S1� jUalley Animal Nuisance Illegal Business Solid Waste Junk Auto Signs 12 16 10 37 27 2 ■ Setback Fences Illegal RV Property Line Clear -view Landscape 1 1 4 1 0 7 Current City Cases • 30 Day snapshot. • New case load average 7 per day for month of April. • Ability to effectively service all cases is questionable. SIR 'Wane ley li. Graphic Examples • Illegal Dwelling /RV Far left trailer occupied, no sewage hookup. SNkane jUalley Trailer occupied, hookup to old septic system. Issues and Concerns • Process and Goals • Priorities • Citizen Expectations (critical mass) • Volume • Backlog Cases - Pending Legal Actions - Signs Passive Ordinance Aggressive Ordinance Process Process Language generalized without specificity Time allowed to respond, comply, appeal is excessive Language is very detailed and specific. Time frames for action short but reasonable. Abatement Abatement Language generalized without specificity Cure is difficult. more revenue (fine) onented Pnmary focus is on curing the problem Detailed procedure satisfies due process allowing much less opportunity and basis to appeal Fines Fines One or two levels in low monetary amounts Provides little incentive for remedy Multiple levels Amount dependent on type severity of violation and history Collection Of Fines Collection Of Fines Weak and ineffective Direct language Ability to file Dens, foreclosure Dens and pursue collection Summary Summary Reflect policy choice of low pnonty in abatement Reflect policy choice of low fine collection choice Never - ending cycle Reflect policy choice that nuisances will not be tolerated Quick and decisive abatement. Violators will be charged with and will pay in a variety of ways Policy Approach .Val ley Proposed Solutions (Solid Waste) • Aggressive Organized Solid Waste Collection • Use of Gieger Correctional Facility Crews in conjunction with a City Wide Clean -up. • Financial Commitment Required - 7 Man crews capable of removing up to 400 lbs. - Self Contained and Supervised. - Local S.C.O.P.E. identifies problem homes in specific sectors. - City will establish prior permission of resident. - Crews rotated through sectors on a weekly basis. - Capable of 2 -3 properties per day. - Solid non - hazardous waste in excess of 400 lbs. removed via contract with an approved facility. • Use of Community Volunteer Groups • Use of awarded vouchers to County Transfer Site Upon establishment of Indigence. • Required Waste Removal Service S p 1 4 *mm jUalley • Adopt an aggressive Ordinance. - w- galley Department of Community Development Code Enforcement Program Summary • Scope of Enforcement Issue • Policy Considerations - Adopt and Fund Aggressive Solid Waste Clean- up Program - Adopt and Fund Junk Auto Ordinance • Direction, Resource, Support • Immediate positive effect on Community Development .0 %. Spokana" e .Valley • Greg McCormick, Long Range Planning MGR . Kim Lyonnais, Current Planning MGR • Chris Berg, Code Enforcement Officer • Cary Driskell, Deputy City Attomey •