4. Approve Agreement - Impact Fee StudyPost Office Boy 1997, Kalispell, montane 59903-1997 -Telephone (406)758-7720, Fax (406)758-7831
REPORT TO: Mayor and City Council
FROM: James C. Hansz, P.E., Director of Public Works
SUBJECT: Impact Fee Study Consulting Services Agreement
MEETING DATE: 20 June 2005
BACKGROUND: The Montana Legislature recently passed SB 185 which allows cities to set
and collect impact fees for a variety of municipal services which are adversely affected by
growth. Following this legislative action, City Council assigned staff with a high -priority task to
develop a comprehensive impact fee system and to engage the services of a consultant
experienced in this field. Senate Bill 185 establishes specific requirements for impact fees that
closely match the process and procedures followed by the consultants who performed the City's
recently completed (2003) utility rate and impact fee studies. Based on their excellent
performance on that project, IHDR/EES was asked for a proposal for this project. Staff s May 13,
2005 request for proposal and a copy of SB 185 is attached for information and reference.
In response to the City's request, HDR/EES has prepared a detailed scope of work, dated
June 3, 2005, from which a satisfactory consulting services agreement was negotiated. These are
attached for information and reference. The scope of services anticipates developing impact fee
recommendations for the City's utilities, storm water, police, fire and parks operations which are
fully consistent with the specific technical requirements of SB 185. The consultant will also
conduct meetings and presentations, and will assist with drafting the SB 185-required
resolutions/ordinances to implement the recommendations. The consultant has estimated this
work can be done within 6 to 8 months from notice to proceed, contingent upon availability of
data and the timely performance of work by others. The cost of this work is estimated to be
$79,847.00. The consulting services agreement has set a project ceiling of $80,000.00 to account
for any small unanticipated costs. We anticipate this work will be conducted in the next fiscal
year and budgets of affected departments have been presented which include funding for the
June 20, 2005 Impact Fee study Consultant Agreement.doc
work. Any minor amount of work conducted prior to the start of the next fiscal year can be
readily funded front the current budget with uncommitted funds currently available.
RECOMMENDATION: In order to meet the City Council's stated goal of implementing
impact fees as soon as possible, staff recommends acceptance of this proposal and authorizing
execution of the Consulting Services Agreement with HDRIEES.
ACTION REQUESTED: AT CITY COUNCIL MEETING OF JUNE .20 — MOTION TO
ACCEPT THE HDRIEES PROPOSAL AND AUTHORIZE CITY MANAGER TO EXECUTE
IMPACT FEE CONSULTING SER VICES AGREEMENT WITH HDRIEES, INC.
FISCAL EFFECTS: Expenditure of funds from various budgets totaling not more than
$90,000.00,
ALTERNATIVES: As suggested by the City Council
Respectfully submitted,
_..
C. Hansz, P.E. James . Patrick
Director of Public Works 1 ty E ineer City Manager
AtF�ri-imanto- P UP .C'R 1 RS PrnnnvaI Xi Q m-a nt
June 20, 2005 Impact Fee Study Consultant Agreement.doc
°t City of Kalispell Public Works Department
Post Office Box 1997, Kalispell, Montana 59903-1997 - Telephone (406)758-7720, Fax (406)758-783 t
13 May 2005
Randall P. Goff
HDR-EES, Inc.
I I I SW 5th Ave., Suite 1670
Portland, OR 97204
Re: RFP for Impact Fee Analysis and Recommendation
Dear Randy:
Attached is a copy of a recent law passed in Montana that allows Montana cities, like Kalispell,
to establish and collect impact fees for a variety of municipal services which are being adversely
affected by growth. This new law sets out very specific requirements on how fees are
determined. These requirements very closely match the methodoloav used by EES to determine
the City's water, sewer and storm rates and system development fees. In view of this, the City
would like your proposal for conducting a comprehensive Impact Fee Analysis and
Recommendation for the following:
• Water (validate lAW SB 185)
• Sewer (validate IAW SB 185)
• Storm (validate IAW SB 185)
• Streets
• Police
• Fire
• Parks (calculated as a separate item for later authorization)
We have reviewed the various elements involved in our previous rate setting effort and believe
the following items reflect, to our current ability, a preliminary scope of work upon which we
ask you to develop a detailed scope, cost and schedule for this project.
• Collection and review of operating cost and future project cost data that is
available within the Public Works Department, Finance Department,
Police and Fire Departments and Parks Department.
• Review data within the various facility plans prepared by the
aforementioned departments and incorporate the data into the impact fee
analysis.
trfi032005. doc
• Participation in City Council workshops, impact fee advisory committee
meetings and public information meetings (estimated at three of each).
• Perform a complete cast analysis and impact fee analysis for each utility.
• Recommend a system of impact fees for Streets, Police, Fire, Storm
Drainage, and Parks that reflect the cost impacts for current growth related
needs and future growth related needs.
• Preparation of draft and final reports.
• Prepare all work products and reports in conformance with SB 185.
The City Council believes creation of a comprehensive impact fee system is critical for Kalispell
to successfully address the urgent needs created by rapid growth and development. As a result,
they have given this project the highest priority. They would like to begin work as soon as
possible after agreement is reached on scope, cost and schedule. In order to achieve the City
Council's goal as soon as possible, I would appreciate you letting me know what additional
information I can provide you to facilitate the fastest possible response to this request.
cc: James H. Patrick, City Manager
Charles Harball, City Attorney
Torn Gould, HDR-EES, Inc., Bellevue, WA
59th Legisiature
SB0185, 03
1 SENATE BILL NO. 185
2 INTRODUCED BY MANGAN, LAIBLE
3
4 A BILL FOR AN ACT ENTITLED: "AN ACT AUTHORIZING COUNTIES, CITIES, TOWNS, AND
5 CONSOLIDATED LOCAL GOVERNMENTS TO IMPOSE IMPACT FEES UPON NEW DEVELOPMENT TO
6 FUNDALLORA PORTION OFTHE PUBLIC FACILITYCAPITAL IMPROVEMENTS AFFECTED BYTHE NEW
7 DEVELOPMENT; PROVIDING DEFINITIONS; PROVIDING A METHOD FOR CALCULATING, IMPOSING,AND
8 COLLECTING IMPACT FEES; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE ANDANAPPLICABlLt
9 DATE."
10
11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
12 (Refer to Introduced Bill)
13 Strike everything after the enacting clause and insert:
14
15 NEW SECTION. Section i. Definitions. As used in (sections 1 through 41, the following definitions
16 apply:
17 (1) (a) "Capital improvements" means improvements, land, and equipment with a useful life of 10 years
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IQ Ur IIIVr6 i1/C1i �i�Wre-iwuv yr i�i�prv•a;: ar.v — ra�.v vvE✓ur.ear va ra+a.n� wanct�.
19 (b) The term sloes not include consumable supplies.
20 (2) "Connection charge" means the actual cost of connecting a property to a public utility system and
21 is limited to the labor, materials, and overhead involved in making connections and installing meters.
22 (3) "Development" means construction, renovation, or installation of a building or structure, a change
23 in use of a building or structure, or a change in the use of land when the construction, installation, or other action
24 creates additional demand for public facilities.
25 (4) "Governmental entity" means a county, city, town, or consolidated government.
26 (5) (a) "Impact fee" means any charge imposed upon development by a governmental entity as part of
27 the development approval process to fund the additional service capacity required by the development from
28 which it is collected. An impact fee may include a fee for the administration of the impact fee not to exceed 5%
29 of the total impact fee collected.
30 (b) The term does not include:
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1 (I) a charge or fee to pay for administration, plan review, or inspection costs associated with a permit
2 required for development;
3 (H) a connection charge;
4 (iii) any other fee authorized by law, including but not limited to user fees, special improvement district
5 assessments, fees authorized underTltle 7 for county, municipal, and consolidated government sewerand water
6 districts and systems, and costs of ongoing maintenance; or
7 (iv) onsite or offsite improvements necessary for new development to meet the safety, level of service,
8 and other minimum development standards that have been adopted by the governmental entity.
9 (6) "Proportionate share" means that portion of the cost of capital system improvements that reasonably
10 relates to the service demands and needs of the project. A proportionate share must take into account the
11 limitations provided in [section 21.
12 (7) "Public facilities" means:
13 (a) a water supply production, treatment, storage, or distribution facility;
14 (b) a wastewater collection, treatment, or disposal facility;
15 (c) a transportation facility, including roads, streets, bridges, rights -of -way, traffic signals, and
16 landscaping;
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1 7 (d) a SWOI 111 YtCital 4NFlG4tlL1F, retentFV1l, dote ntlon, NGQiEl lent, o Vltsposall facility VI qa I10ow Control lacilily;
18 (e) a police, emergency medical rescue, or fire protection facility; and
19 (f) other facilities for which documentation is prepared as provided in [section 21 that have been
20 approved as part of an impact fee ordinance or resolution by:
21 (1) a two-thirds majority of the governing body of an incorporated city, town, or consolidated local
22 government; or
23 (ii) a unanimous vote of the board of county commissioners of a county government.
24
25 NEW SECTION. Section 2. Calculation of impact fees -- documentation required -- ordinance or
26 resolution -- requirements for impact fees. (1) For each public facility for which an impact fee is imposed, the
27 governmental entity shall prepare and approve documentation that:
28 (a) describes existing conditions of the facility;
29 (b) establishes level of service standards;
30 (c) forecasts future additional needs for service for a defined period of time;
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1 (d) identifies capital improvements necessary to meet future needs for service;
2 (e) identifies those capital improvements needed for continued operation and maintenance of the
3 facility;
4 (0 makes a determination whether one service area or more than one service area is necessary to
5 establish a correlation between impact fees and benefits;
6 (g) makes a determination whether one service area or more than one service area for transportation
7 facilities is needed to establish a correlation between impact fees and benefits;
8 (h) establishes the methodology and time period over which the governmental entity will assign the
9 proportionate share of capital costs for expansion of the facility to provide service to new development within
10 each service area;
11 (i) establishes the methodology that the governmental entity will use to exclude operations and
12 maintenance costs and correction of existing deficiencies from the impact fee;
13 0) establishes the amount of the impact fee that will be imposed for each unit of increased service
14 demand; and
18 (k) has a component of the budget of the governmental entity that:
16 (i) schedules construction of public facility capital improvements to serve projected growth;
17 (ii) projects costs of the capital improvements;
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15 (M) allocates collected impact fees for construction yr the capital improvements; and
19 (iv) covers at least a 5-year period and is reviewed and updated at least every 2 years.
20 (2) The data sources and methodology supporting adoption and calculation of an impact fee must be
21 available to the public upon request.
22 (3) The amount of each impact fee imposed must be based upon the actual cost of public facility
23 expansion or improvements, or reasonable estimates of the cost, to be incurred by the governmental entity as
24 a result of new development. The calculation of each impact fee must be in accordance with generally accepted
25 accounting principles.
26 (4) The ordinance or resolution adopting the impact fee must include a time schedule for periodically
27 updating the documentation required under subsection (1).
28 (5) An impact fee must meet the following requirements:
29 (a) The amount of the impact fee must be reasonably related to and reasonably attributable to the
30 development's share of the cost of infrastructure improvements made necessary by the new development.
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1 (b) The impact fees imposed may not exceed a proportionate share of the costs incurred or to be
2 incurred by the governmental entity in accommodating the development. The following factors must be
3 considered in determining a proportionate share of public facilities capital improvements costs:
4 (i) the need for public facilities capital improvements required to serve new development, and
5 (ii) consideration of payments for system improvements reasonably anticipated to be made by or as a
6 result of the development in the form of user fees, debt service payments, taxes, and other available sources
7 of funding the system improvements.
8 (c) Costs for correction of existing deficiencies in a public facility may not be included in the impact fee.
9 (d) New development may not be held to a higher level of service than existing users unless there is
10 a mechanism in place for the existing users to make improvements to the existing system to match the higher
11 level of service.
12 (e) Impact fees may not include expenses for operations and maintenance of the facility.
13
14 NEW SECTION. Section 3. Collection and expenditure of impact fees -- refunds or credits --
15 mechanism for appeal required. (1) The collection and expenditure of impact fees must comply with [sections
16 1 through 4]. The collection and expenditure of impact fees must be reasonably related to the benefits accruing
17 to the development paying the impact fees. The ordinance or resolution adopted by the governmental entity must
18 include the following requirements:
19 (a) upon collection, impact fees must be deposited in a special proprietary fund, which must be invested
20 with all interest accruing to the fund.
21 (b) A governmental entity may impose impact fees on behalf of local districts.
22 (c) If the impact fees are not collected or spent in accordance with the impact fee ordinance or
23 resolution or in accordance with [section 21, any impact fees that were collected must be refunded to the person
24 who owned the property at the time that the refund was due.
25 (2) All impact fees imposed pursuant to the authority granted in [sections 1 through 41 must be paid no
26 earlier than the date of issuance of a building permit if a building permit is required for the development or no
27 earlier than the time of wastewater or water service connection or well or septic permitting.
28 (3) A governmental entity may recoup costs of excess capacity in existing capital facilities, when the
29 excess capacity has been provided in anticipation of the needs of new development, by requiring impact fees
30 for that portion of the facilities constructed for future users. The need to recoup costs for excess capacity must
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1 have been documented pursuant to [section 21 in a manner that demonstrates the need for the excess capacity.
2 [Sections 1 through 41 do not prevent a governmental entity from continuing to assess an impact fee that recoups
3 costs for excess capacity in an existing facility. The impact fees imposed to recoup the costs to provide the
4 excess capacity must be based on the governmental entity's actual cost of acquiring, constructing, or upgrading
5 the facility and must be no more than a proportionate share of the costs to provide the excess capacity.
6 (4) Governmental entities may accept the dedication of land or the construction of public facilities in lieu
7 of payment of impact fees if:
8 (a) the need for the dedication or construction is clearly documented pursuant to [section 21;
9 (b) the land proposed for dedication for the public facilities to be constructed is determined to be
10 appropriate for the proposed use by the governmental entity;
11 (c) formulas or procedures for determining the worth of proposed dedications or constructions are
12 established as part of the impact fee ordinance or resolution; and
13 (d) a means to establish credits against future impact fee revenue has been created as part of the
14 adopting ordinance or resolution if the dedication of land or construction of public facilities is of worth in excess
15 of the impact fee due from an individual development.
16 (5) Impact fees may not be imposed for remodeling, rehabilitation, or tither improvements to an existing
17 structure, or rebuilding a damaged structure, unless there is an increase in units that increase service demand
18 as described in (section 2 (1)0)[. If impact fees are imposed for remodeling, rehabilitation, or other improvements
19 to an existing structure or use, only the net increase between the old and new demand may be imposed.
24 (6) [Sections 1 through 41 do not prevent a governmental entity from granting refunds or credits:
21 (1) that it considers appropriate and that are consistent with the provisions of [section 2) and this chapter;
22 or
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24 chapter, between the governmental entity and the individual or entity being assessed the impact fees.
25 (7) An impact fee represents a fee for service payable by all users creating additional demand on the
26 facility.
27 (8) An impact fee ordinance or resolution must include a mechanism whereby a person charged an
28 impact fee may appeal the charge if the person believes an error has been made.
29
30 NEW SECTION. Section 4. Impact fee advisory committee. (1) A governmental entity that intends
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1 to propose an impact fee ordinance or resolution shall establish an impact fee advisory committee.
2 (2) An impact fee advisory committee must include at least one representative of the development
3 community and one certified public accountant. The committee shall review and monitor the process of
4 calculating, assessing, and spending impact fees.
5 (3) The impact fee advisory committee shall serve in an advisory capacity to the governing body of the
6 governmental entity.
7
8 NEW SECTION. Section 5. Transition. A general powers local government that is imposing impact
9 fees ADOPTED ON OR BEFORE ITHE EFFECTIVE DATE OF THIS ACI] shall bring the impes-,10— -€ those fees into
10 compliance with [this act] by October 1, 2006.
11
12 NEW SECTION. Section 6. Codification Instruction. [Sections 1 through 4] are intended to be
13 codified as an integral part of Title 7, chapter 6, and the provisions of Title 7, chapter 6, apply to [sections 1
14 through 41.
15
16 NEW SECTION. Section 7. Saving clause. [This act] does not affect rights and duties that matured,
17 penalties that were incurred, or proceedings that were begun before [the effective date of this act).
18
19 NEW SECTION. Section 8. Effective date. [This act] is effective on passage and approval.
20
21 NEW SECTION. Section 9. Applicability. (1) [This act] applies only to THE PORTION OF an impact fee
22 ordinance or resolution enacted or amended by a self-governing local government on or after [the effective date
23 of this act).
24 (2) Except when an impact fee ordinance or resolution is amended as provided in subsection (1),
25 nothing in [this act] may be construed to affect ANY PORTION OF an ordinance or resolution enacted prior to [the
26 effective date of this act].
27 - END -
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June 3, 2005
Mr.. James C. Hansz, P.E.
Director of Public Works
City of Kalispell
Post Office Box 1997
Kalispell, Montana 599034997
Re: Proposal to Conduct an Impact Fee Study for the Streets,
Fire, Police, Parks, Storm water, Water and Sewer Systems
Dear Mr. H-Hansz:
Presented herein is HDR Engineering, Inc. (d.b.a HDR/EES) letter proposal to the City of
Kalispell (City) to prepare impact fees for the street, fire, police, park, storrh water, water and
sewer systems. Presented in this letter proposal is a discussion of the scope of services, the
project personnel to be assigned to this project and the estimated project fees.
Introduction
The Montana legislation recently passed Senate Bill No. 185, which allows cities such as
Kalispell to impose impact fees for public facilities. Public facilities are defined as water supply,
sewer collection and treatment, transportation, storm water collection, police, emergency medical
resource or fire protection facility and other facilities that have been approved as part of an
impact fee ordinance. In 2003, HDR/EES prepared system development charges or impact fees
for the water and sewer systems. At the same time, HDR/EES also prepared a draft analysis for
the storm water system.
The City has requested that new impact fees be prepared for the street, fire, police and parks
systems. Additionally, HDR/EES will also update the storm water impact fees for approval by
the City. In accordance with Senate Bill No. 165, the water and sewer system development
charges or impact fees must be brought into compliance with the act by October 1, 2006.
Detailed 'Description of Proposed Scope of Work
The scope of services outlined below will provide the City with a better understanding of our
team's depth of knowledge and skills in performing municipal impact fee studies. The scope of
service is based on our current understanding of the City's needs and requirements. This scope of
services can be expanded or contracted to meet the needs and requirements of the City.
Mr. James C. Hansz, P.E.
June 3, 2005
Page 2
Task 1—Initial Project Meeting
Task Objective: Bring HDR/EES and the City together, at the start of the project, to assure that
both parties have a mutual understanding of the goals, objectives, issues and concerns related to
the study.
An initial project meeting is important to the overall success of this engagement since it forms
the foundation for the study process. The initial project meeting is used as a starting point in
developing a strong. working relationship between. HDR/F S and the City. This meeting will
allow both parties to discuss the overall goals and objectives for this study, while at the same
time identify any issues and concerns that either party may have. The project time schedule will
also be discussed during this meeting. It is proposed that the initial project meeting be a hall -day
meeting.
Deliverables as a Result of Task ]—Initial Project Meeting. From the work accomplished
above, the deliverables for this task will be as follows:
■ An understanding of the study's goals, objectives, issues and concerns by both parties.
■ Face-to-face meeting to get the study off to a positive start.
Task 2--Data Review, Assessment and Collection
Task Objective: Review the City's existing data, assess it and accumulate the necessary data to
conduct the impact fee analysis.
The team will begin this task by reviewing the City's codes, practices, procedures, past studies,
and the accounting and customer information. From this review, we will develop an initial
written data request for the City that details the data and information required to conduct the
impact fee study. This data and information should be, for the most part, readily available
information (e.g. financial, statistical, customer, etc.). For those areas where the data is not
readily available, or will require significant labor and expense on the City's part to provide, the
team andthe City will. determine the "sensitivity" or "importance" of the data required and if
alternative data sources are available. As with any study, it is imperative that the City provides a
timely response for the data requested.
Deiiverables as a Result of Task 2 Data Review, Assessment, and Collection. From the work
accomplished above, the deliverables for this task will be as follows:
■ A review of the City's existing data, practices and past studies.
■ An initial written data request to the City.
■ Identification of any data constraints.
Task 3—Development of Impact Fees
Task Objective: Develop impact fees for the street, fire, police park, water, server and storm
water systems for imposition on new development that are cost based, fair, equitable and
defensible.
Mr. James C. Hansz, P.E.
June 3, 2005
Page 3
HDR/EES, as part of this task, will provide for a complete calculation of the City's impact fees
for the street, police, fire and park systems. The water, sewer and storm water fees will be
updated to reflect current costs and assure compliance with the new Montana law. The new
Montana law requires that the amount of the impact fee must be reasonably related to the
developments share of the cost of improvements made necessary by the new development and
may not exceed a proportionate share of the costs incurred or to be incurred in accommodating
the development.
In order to meet the proportionate share requirement, the impact fees will be calculated based on
the actual cost of the plant construction and the City's Capital Improvement Plan. To meet the
reasonably related to and attributable requirement, HDR/EES, as part of the analysis, will first
examine the planning criteria used by the City in the design and construction of the various
systems. For streets this is commonly done on the basis of the number of trips, for fire and
police the common allocation is assessed valuation and for parks acres per 1,000 population.
This information will be utilized as the basis for determining the amount of infrastructure
necessary to serve new customers. Additionally. HDR/EES will examine the City's fixed asset
records to determine those current assets utilized to serve new development and include
applicable interest rates. HDR/EES will also utilize the City's Capital Improvement Plan to
determine the amount of infrastructure that will be utilized to serve growth. Utilizing these two
factors, HDRJEES will then develop the cost -based impact fees. The results of this calculation
will provide both a reimbursement and improvement fee impact fee for the City.
HDR/EES will also review any associated credits required to be reflected in the impact fee
calculation to assure that new development does not "pay twice", that is, once through rates, gas
taxes and/or property taxes and again through the impact fee. This will include review of any
payments by property taxes and hence are paid for whether or not the user has been paying
through rates or not. Additionally, any associated debt, which may be paid for through revenue
bonds, will also be reviewed for applicable credits. A review of contributed capital will also be
undertaken to assure compatibility with the City's current line extension policies.
The calculation of the impact fee will also include any administration costs as allowed under the
statues. This will include any accounting, administrative and planning costs as appropriate.
Deliverables as a Result of Task 3-Development of Impact Fees. From the work accomplished
above, the deliverables for this task will be as follows:
■ Impact fee for the various systems that are cost -based, equitable and legally defensible.
Task 4—Report Documentation
Task Objective; Provide a well --written report to summarize the findings, .conclusions and
recommendations of the impact fee study.
Upon completion of the study, the City will receive three (3) draft reports of our findings,
conclusions and recommendations. This written report will be a comprehensive document and
Mr. James C. Hansz, P.E.
June 3, 2005
Page 4
will discuss the development of the impact fee analyses for each of the fees reviewed. Any
comments, suggestions or corrections from the City will be incorporated into the final report.
Fifteen (15) copies of the final report will be provided to the City.
HDR/EES, as part of this task, will also work with the City attorney to develop an ordinance or
resolution for enactment of the impact fees which meet the requirements of Montana law.
Deliverables as a Result of Task 4-Report Documentation. From the work accomplished above,
the deliverables for this task will be as follows:
■ A draft and final written report.
■ Assistance in the development of the impact fee ordinance or resolution.
Task 5--Ordinance Assistance
Task Objective: Assist in the development of the ordinance required by Montana law.
HDRJEES, as part of this task, will work with the City attorney to develop an ordinance or
resolution for enactment of the impact fees which meet the requirements of Montana law.
HDR/EES's role will be to provide the required information as set forth in Section 2 of SB 185
and review the ordinance.
Deliverables as a Result of Task 5—Ordinance Assistance. From the work accomplished above,
the deliverables for this task will be as follows: .
■ Assistance in the development of the impact fee ordinance or resolution.
Task 6—Meetings and Presentations
Task Objective: Provide for meetings and public presentations of the findings, results and
recommendations of the impact fee study.
A requirement of the new Montana impact fee law is that an Impact Fee Advisory Committee be
established. The Impact Fee Advisory Committee is charged with reviewing and monitoring the
process of calculating, assessing and spending of impact fees. Given that these will be new fees
for the City, HDR/EES believes that this portion of the study is critical to the overall project
success and gaining support for the implementation of the fees. The process will assure public
"buy -in" to the impact fee development process. Four (4) meetings with Impact Fee Advisory
Committee have been included in the budget. The purpose of the meetings is to educate the
Committee, while discussing each of the fees. As currently envisioned, the four Committee
meetings will cover the following topics.
■ Meeting I --- Review the Montana legislation and the process of setting cost -based rates
■ Meeting 2 — Review each of the systems/fees, the impacts of growth on each system/fee
■ Meeting 3 --- Review the draft impact fees and gain Committee feedback
■ Meeting 4 -- Determine the Committee's recommendations to the City Council on the
proposed fees
Mr. James C. Hansz,, P.E
June 3, 2005
Page 5
HDR/EES has also planned on two (2) public presentations to the City Council. Any additional
meetings requested by the City would be billed on a time and materials basis.
Deliverables as a Result of Task 6—Meetings and Presentation Services. From the work
accomplished above, the deliverables for this task will be as follows:
■ Four (4) meeting with the Impact Fee Advisory Committee.
■ Two (2) meetings with the City Council and the public to discuss the findings, results and
recommendations of the study.
Schedule
A project of this nature takes between 6 to 8 months to complete. HDR/EES's goal is to have the.
rates implemented by the end of the year: In order to accomplish this time frame, it will be
necessary for the City to provide timely responses to information requests and comments on draft
analyses. Another factor that will be critical to meeting the schedule will be formation of .the
Impact Fee Advisory Committee and scheduling of meetings. HDR/EES as part of the intial
project meeting will develop a detailed schedule with the City to meet the end of the year
deadline.
Project Personnel
The project personnel to be assigned to calculate the impact fees for the City are discussed
below. Both individuals were the lead on the calculation of the City's water and sewer impact
fees and hence are very familiar with the City. Randy Goff will be the Project Manager. Randy
calculated the water, sewer and stormwater for the City in 2003. Tom Gould will provide quality
control and oversight on the project. Tom was the project manager for the water and sewer rate
study conducted for the City in 2003.
Project Manager, Randy Goff, Project Principal.
The proposed project manager for this study will be Randy Goff, a Project Principal at
HDR/EES. Randy is located in HDR/EES's Portland office. Randy has almost 23 years of
experience in the area of cost of service, rates and impact fees. One of the strengths that Randy
brings to the City's project is his experience in communicating complex rate and impact fee
issues to the various municipal groups and the public.
As Project Manager, Randy will provide overall project quality control. Randy has worked with
water, sewer, street, park and storm drainage utilities across the U.S. and Canada on various rate
and impact fee -related issues. In addition to his expertise in impact fees, Randy is also widely
recognized as an expert in the area of cost of service and rates. He has extensive experience in
dealing with City Councils which will be beneficial in the presentation of the results of this study
to the City.
Recent projects for which Randy has served as the project manager include the following:
Mr. ,Tames C. Hansz, P.E.
.Tune 3, 2005
Page 6
■ City of Hillsboro, Oregon, water SDC update
■ City of Klamath Falls, Oregon, water, wastewater and park SDC development
■ . City of Kalispell, Montana, water, wastewater and storwater SDC development
■ City of Union Gap, Washington, water and wastewater SDCs
■ City of Shelton, Washington, water and wastewater SDCs
Joe Healy, Rate Analyst
Joe Healy, a financial/rate analyst will assist in the development of the technical analyses as they
relate to the impact fee analyses. Joe is highly skilled at spreadsheet models and has developed
similar SDC models for a number of clients. Joe has assisted in the development of financial
analyses for a number of complex rate studies since joining HDR/EES. Joe has recently worked
on street SDCs for the City of Wilsonville and completed sewer SDCs for the City of Union Gap,
WA. Joe is located in the Portland office of HDR/ EES.
The above noted individuals will provide the bulk of the required efforts for this project. Each
individual has also worked extensively with City Councils, staff and the public to ensure that the
goals and objectives of the utility are accomplished in a successful manner_ Should additional
personnel be required for a specific issue, HDR/EES has additional personnel that can address.
any financial, rate, resource or engineering issue that may arise out of this project.
Project Fee Estimate
HDR/EES proposes to bill the City for this project on a time and material basis. The project fee
estimate and associated billing rates and expenses are provided in Table 1.
Mr. James C. Hansz, P.E.
June 3, 2005
Page 7
1
Initial Project Meeting
8
8
0
0
1
3,112
2
Data Review and Assessment
0
4
12
2
1
18
2,054
3
impact Fee Calculation
Streets
0
32
56
2
1
90
11,243
Fire
0
16
40
2
1
58
6,827
Police
0
16
40
2
1
58
6,827
Parks
0
24
56
2
1
-82
9,766
'Stormwater
0
8
24
2
1
34
3,889
Water
0
8
24
2
1
34
3,889
Sewer
0
8
24
2
1
34
3,889
4
Report Documentation
8 .
16
6
2
12
38
6,289
5
Ordinance Assistance
0
16
0
2
12
30
3,996
6
Meeting and Presentations
16
32
8
0
4
44
10,058
Total Labor.
32
188
292
20
37
520
S
71,840
Technology Charge
$
2,132
Misc
500
Airfare (8@$450)
3,600
Car Rental (7@$75)
525
Meals
250
Hotel (8Q$125)
1,000
Total Expenses
$
8,007
Total project Fee Estimate
$
79,847
Thank you for your time and attention to this matter. HDR/EES looks forward to the opportunity
to work with the City on this very exciting project. If you have any questions or require
additional information, please do not hesitate to call.
Very truly yours,
HDR Engineering .Inc. (d.b.a. HDR/EES)
Randall .P. Goff
Project Principal
Cc: Thomas Gould
HDR ENGINEERING, INC.
CONSULTING SERVICES AGREEMENT
This Consulting Services Agreement is made between HDR Engineering, Inc., (hereinafter "HDR") and the City of
Kalispell, whose place of business is located at 312 First Avenue East, Kalispell, MT 59901 (hereinafter "CLIENT")
for a Project generally described as a Impact Fee Study,
I. SCOPE OF CONSULTING SERVICES
HDR will provide the following services under this Agreement:
The scope of services to be provided is more fully described on Attachment A to this Agreement.
HDR shall render its services in accordance with generally accepted professional practices. HDR shall, to the best of
its knowledge and belief, comply with applicable laws, ordinances, codes, rules, regulations, and permits in effect on
the date this Agreement is signed. Notwithstanding any other provision(s) herein, nothing in this Agreement shall be
construed so as to raise the standard of care otherwise applicable to HDR' services provided hereunder. HDR makes
no warranties, express or implied, under this Agreement or otherwise, in connection with HDR's services.
11. COMPENSATION & REIMBURSEMENT OF COSTS
Services provided and costs incurred by HDR under this Agreement will be compensated on the basis as follows:
Per Diem (labor) and reimbursable expenses as indicated in Attachment A of this Agreement. The total amount of this
agreement is $80,000; including a total labor and reimbursable expenses.
Compensation terms are defined as follows: (use only applicable definitions)
Per Diem (labor) shall mean an hourly rate to be paid as total compensation for each hour an employee
works on the project, plus Reimbursable Expense.
Reimbursable Expense shall mean out-of-pocket travel, food, lodging and incidental expenses incurred by HDR
that are reasonably associated with the provision of services under this Agreement. Out-of-pocket expenses to be
reimbursed by CLIENT to HDR will be verified by separate invoices and/or receipts. A charge of three percent (3%)
will be added to all incident expenses including photocopies, telephone, telex, or other expenses for taxes (if any) and
administrative costs. HDR will add five percent (5%) to invoices received by HDR from subconsultants and
subcontractors to cover supervision, administrative, and insurance expenses.
HDR will submit monthly invoices to CLIENT for work completed and reasonable expenses incurred to the date of the
invoice. All invoices will be itemized to reflect the task performed, the employees performing each task, the billing rate
for each employee and the hours worked. CLIENT shall have no right of set off against any billings of HDR for
disputed claims or services. In the event CLIENT disputes any items in HDR's invoice for any reason, including the
lack of supporting documentation, CLIENT shall promptly notify HDR of the dispute and request clarification and/or
correction.
All invoices sent by HDR to CLIENT shall be paid within thirty (30) days of receipt. All billings that remain unpaid after
thirty (30) days shall bear interest until paid at the rate of twelve percent (12%) per annum or the maximum rate
allowed by law, whichever is less. If CLIENT fails to pay any invoice within thirty (30) days and such failure continues
ten (10) days after HDR gives CLIENT notice of such failure, HDR shall have the right to terminate this Agreement
immediately without liability to CLIENT. The right to terminate under the terms of this section shall be in addition to all
other legal, equitable, or contractual remedies available to HDR,
HDR shall be entitled to a change in compensation and/or time for performance for any changes made in the scope
of the services made by CLIENT, so long as such changes do not arise from the negligence of HDR. The costs of
any additional design services undertaken, together with any costs and additional compensation that may be due
HDR hereunder, shall be paid to HDR monthly as provided in this section, and the Contract Estimate and Project
Schedule shall be equitably adjusted to reflect the change. HDR shall not be required to perform any work connected
with a change unless and until the parties have agreed on the amount of time and/or compensation associated with
the change.
Page 1 of 5
III. TERMS & CONDITIONS OF CONSULTING SERVICES AGREEMENT
1. Timing of Work, HDR shall commence work upon notice to proceed from the Client
2. Opinions of Cost, Financial Considerations, and Schedules. In providing financial analyses or opinions of
cost, economic feasibility and scheduling for the Project, HDR has no control over: costs or prices of labor and
materials; unknown or latent conditions of existing equipment or structures that may affect operation or
maintenance, or other costs; competitive bidding procedures; market conditions; time or quality of performance
by third parties; quality, type, management, or direction of operating personnel; or other economic and operational
factors that may materially affect the ultimate Project cost or schedule. Therefore, HDR makes no warranty that
the CLIENT'S actual Project costs, financial conditions, economic feasibility or schedules will not vary from HDR'
opinions, analyses, projections or estimates. When the CLIENT requires that HDR prepare quantity and material
take -offs and/or opinions of cost from plans and specification that are less than one hundred percent (100%)
complete, the CLIENT shall release, indemnify and hold HDR harmless from any and all losses, liabilities or
claims resulting therefrom.
3. Access to Facilities and Property. The CLIENT will make its facilities accessible to HDR as required for HDR'
performance of its services and will provide labor and safety equipment as required by HDR for such access.
CLIENT shall perform, at no cost to HDR, such tests of equipment, machinery, pipelines and other components
of the CLIENT'S facilities as may be required in connection with HDR' services, unless other arrangements are
agreed upon in writing. CLIENT will be responsible for all acts of CLIENT'S agents or personnel or other third
parties retained by CLIENT.
4. Advertisements, Permits, Access. Unless otherwise agreed to in the Scope of Services, the CLIENT will
obtain, arrange and pay for all advertisements for bids, permits and licenses required by local, state, province or
federal authorities, and land, easements, rights -of -way and access necessary for HDR' services.
5. Relationship of Parties, No Third -Party Beneficiaries. HDR is an independent contractor under this
Agreement. This Agreement gives no rights or benefits to anyone not named as a party to this Agreement, and
there are no third party beneficiaries to this Agreement.
6. Subcontracts. HDR may use the services of independent contractors to perform portions) of its obligations
under this Agreement. Services performed by independent contractors will be billed to CLIENT by HDR at actual
cost plus five percent (5%).
HDR will comply with CLIENT'S directives in utilizing the services of owner -specified contractors and/or minority
and women owned businesses on the Project. The liability of HDR arising from the work of its subcontractors will
be limited to proceeds available from its subcontractors' insurance(s) to the extent permitted by law.
7. Insurance.
a) Insurance of HDR. HDR will maintain throughout the performance of this Agreement the following types
and amounts of insurance:
i) Worker's Compensation and Employer's Liability Insurance as required by applicable state or federal law.
ii) Comprehensive Vehicle Liability Insurance covering personal injury and property damage claims arising from
the use of motor vehicles with combined single limits of $1,000,000.
iii) Commercial General Liability Insurance covering claims for personal injury and property damage with
combined single limits of $1,000,000.
iv) Professional Liability (Errors and Omissions, on a claims -made basis) Insurance with limits of $1,000,000 per
claim for protection against claims arising out of the performance under this Agreement caused by negligent acts,
errors, or omission for which HDR is legally liable.
b) Insurance for Owner. CLIENT shall be made an additional insured on Commercial General and
Automobile Liability insurance policies and certificates of insurance will be furnished to the CLIENT. HDR
agrees to indemnify CLIENT for the claims covered by HDR' insurance.
c) Interpretation. Notwithstanding any other provision(s) in this Agreement, nothing shall be construed or
enforced so as to void, negate or adversely affect any otherwise applicable insurance held by any party to this
Agreement.
Page 2 of 5
B. Mutual Indemnification. HDR agrees to indemnify and hold harmless CLIENT and its employees from and
against any and all loss, cost, damage, or expense of any kind and nature (including, without limitation, court
costs, expenses, and reasonable attorneys' fees) arising out of injury to persons or damage to property (including,
without limitation, property of CLIENT, HDR, and their respective employees, agents, licensees, and
representatives) in any manner caused by the negligent acts or omissions of HDR in the performance of its work
pursuant to or in connection with this Agreement to the extent of HDR' proportionate negligence, if any.
CLIENT agrees to indemnify, defend and hold harmless HDR and its employees from and against any and all
loss, cost, damage, or expense of any kind and nature (including without limitation, court costs, expenses and
reasonable attorneys' fees) arising out of injury to person(s) or damage to property (including, without limitation,
property of CLIENT, HDR, and their respective employees, agents, licensees and representatives) in any manner
caused by the negligent acts or omissions of CLIENT or other(s) with whom CLIENT contracts ("CLIENT'S
agents") to perform work pursuant to or in connection with this Agreement, to the extent of CLIENT'S or CLIENT'S
agents proportionate negligence, if any.
9. Interpretation. Releases from, indemnifications against, limitations on, and assumptions of liability and
Iirnitations on remedies expressed in this Agreement shall apply even in the event of breach of contract or
warranty, fault, or tort including negligence, strict liability, statutory or any other cause of action (except for willful or
reckless disregard of obligations) of the party released or indemnified, or whose liability is limited or assumed, or
against whom remedies are limited. Party, as used herein, includes the named parties, their officers, employees,
agents, subcontractors, and affiliates.
10. Limitation of Liability. HDR's and its employees total liability to CLIENT for any loss or damage arising out of
or in connection with the performance of services or any other cause, including HDR's and its employees
professional negligent acts, errors, or omissions, shall not exceed the limits as set forth in Section 7 and
CLIENT hereby releases and holds harmless HDR and its employees from any liability above such amount.
Each party's liability for damages provided under this Agreement shall be limited to liability for direct
damages and shall in no event include liability for the other parties or their respective agents or employees
remote, punitive, consequential or indirect damages for lost profits, loss of use, lost opportunity, financing,
interest expense, business interruption or productivity or production loss, regardless of the breach of
contract, breach of warranty, tort (including negligence and professional negligence), strict liability, or
otherwise.
! [ 1EN T" agrees to .t-y —, wn4- --ir.r r.r n„1�n�nir-�.nFr.r .—k— -- r,nrf.�.rm L—A, ir. r.nnnnr•Fin.� .a,i�F nr--L,;;-- {,nn
i,J Fr{LIV 7 Qg1eGJ L1 I IV Lily —1y VVI III gL,.Lasl VI 3li f.i4i/I III GVLVI YYI FV A5—)r Hti FI VI III yr Vl i% ill VVI 11—[ LFVI I YY ILII MI 11 IUl IE IV L.I w7G
of any design, report, or study prepared by HDR of such limitation of liability and require as a condition precedent
to its performing the work a like limitation of liability provision as to injury or damage to persons or property,
design defects, errors, omissions, or professional negligence. In addition, CLIENT shall, in any agreement
between itself and others (including contractors and suppliers), require notice and a reasonable limitation upon
delay and impact damages.
11. Delays. HDR will not be liable to CLIENT for delays in performance under this Agreement or for the direct or
indirect cost resulting from delays that may result from labor strikes, riots, war, acts of governmental authorities,
extraordinary weather conditions, natural catastrophes or other events or occurrences beyond control of HDR.
In the event CLIENT suspends or interrupts the services of HDR for the convenience of CLIENT, an equitable
adjustment in the project's schedule and in compensation to HDR shall be made.
12. Data, Documents and Records. HDR shall be entitled to rely upon the accuracy and completeness of all data
furnished by CLIENT to HDR that is used by HDR in the providing of services under this Agreement. HDR has
the right to retain and use all data furnished to it and all plans, designs, specifications and other work product
created by HDR in providing services hereunder.
CLIENT will examine studies, reports, sketches, drawings, specifications, proposals and other documents
submitted by HDR and obtain advice of other professionals whenever CLIENT deems appropriate in a timely
manner so as not to delay the work of HDR.
Record drawings, if required, will be prepared, in part, on the basis of information compiled and furnished by
others and may not represent the exact location, type of various components, or exact manner in which the
Project was finally constructed. HDR is not responsible for any errors or omissions in the information from
others that are incorporated into the record drawings, and CLIENT hereby agrees to release, defend, hold
harmless and indemnify HDR for the same.
Page 3 of 5
13. Ownership and Use of Documents and Electronic Media Deliverables. All completed reports and other data
or documents provided or prepared by HDR in accordance with this Agreement are the property of CLIENT, and
may be used by CLIENT. Ownership shall transfer to CLIENT only if HDR has been paid in full for services under
the terms of this Agreement. HDR does not convey, assign or transfer the intellectual property rights it has in
the processes that were developed to create the Work Product so as to limit CONSULTANT'S ability or right
to develop, design or work on other projects of or for its other clients. CLIENT shall release, defend, indemnify
and hold harmless HDR from all claims, costs, expenses, damage, or liability arising out of or resulting from the
use, subsequent use or modification of any reports, data, documents, drawings, specifications, or other work
product prepared by HDR except unaltered use by CLIENT on those portions of the project for which such items
were originally prepared by HDR.
Any post -delivery changes to HDR' electronic media or Computer -Aided Design (hereinafter cumulatively "CAD")
deliverables by anyone other than HDR shall be the responsibility of the CLIENT. CLIENT agrees to remove
the title blocks off of HDR's CAD files if CLIENT alters such files and further agrees to defend, indemnify and
hold HDR harmless from all claims, costs, expenses, damages or liabilities arising out of or resulting from
use, subsequent use or modification of any CAD deliverables that have been altered by CLIENT or anyone else
to whom CLIENT may have provided such CAD deliverables. HDR' record set of CAD files shall control in
determining whether any alterations have been made to such files.
Because data stored on electronic media can deteriorate undetected or can be modified without HDR'
knowledge, CLIENT agrees that HDR will not be held liable for the completeness, correctness, readability, or
compatibility of the electronic media after a period of thirty (30) days after delivery of the electronic files. HDR
stands by the accuracy of the sealed drawings that accompany the electronic submittal. During the thirty (30) day
period, CLIENT may review and examine the electronic files; any errors detected during this time will be corrected
by HDR as part of the basic Agreement. Any changes requested after the acceptance period will be considered
additional services to be performed on a time and materials basis, at HDR' standard cost plus terms and
conditions.
14. Resolution of Disputes. The law of the State of Montana shall govern the interpretation of and the resolution of
disputes under this Agreement. The venue for any dispute resolution shall be the 11th District Court of Montana. If
any claim, at law or otherwise, is made by either party to this Agreement, the prevailing parry shall be entitled to its
costs and reasonable expenses including but not limited to expenses for experts and aitorney's fees, including
fees incurred before trial or arbitration, at trial or arbitration, and on appeal.
15. Termination of Agreement. Either HDR or CLIENT may terminate this Agreement upon thirty (30) days
written notice to the other sent to the address(es) listed herein.
In the event CLIENT terminates this agreement, CLIENT specifically agrees to pay HDR for all services rendered
through the termination date. In addition, CLIENT specifically agrees to reimburse HDR for its lost profits and all
costs reasonably incurred by HDR to start and terminate its performance of services under this agreement, even
if costs to terminate performance are incurred after the termination date.
16. Integration, Modification and Severability. This Agreement, including all Addenda, shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns. This is the entire agreement
between the parties, there are no other agreements or representations not set forth herein, and this Agreement
incorporates and supersedes all prior negotiations, agreements, and representations. This Agreement may not
be modified except in writing signed by an authorized representative of each party.
If any provision of this Agreement is deemed by law to be void, invalid or inoperative for any reason, or any phrase
or clause within such provision is deemed by law to be void, invalid or inoperative, that phrase, clause or provision
shall be deemed modified to the extent necessary to make it valid and operative, or, if it cannot be so modified,
then such phrase, clause or provision shall be deemed severed from this Agreement with the remaining phrases,
clauses and provisions continuing in full force and effect as if the Agreement had been signed with the void,
invalid or inoperative portions so modified or eliminated. In addition, a phrase, clause or provision shall be
substituted which is consistent with the intent of this Agreement and the severed phrase, clause or provision.
17. Incorporated Documents. The following exhibits and attachments are incorporated in this agreement as if fully
set forth herein:
Attachment A: Proposal to Conduct an Impact Fee Study dated June 3, 2006
Page 4 of 5
18. Notices. All notices, requests, demands, and other communications hereunder shall be deemed given only if in
writing signed by an authorized representative of the sender and delivered by facsimile (with a hard copy mailed),
or, when sent by a courier or express service guaranteeing overnight delivery to the receiving party.
Notices to HDR shall be delivered to:
Notices to CLIENT shall be delivered to:
HDR Engineering, Inc. City of Kalispell
1001 SW 5:h Avenue, Suite 1800 P.O. Box 1997
Portland, OR 97204 Kalispell, MT 59903-1997
ATTN: Randall P. Gaff ATTN: James H. Patrick, City Manager
19. Headings, Assignment and Waiver. The headings in this Agreement are inserted for convenience only and
shall not constitute a part hereof. Neither party to this Agreement shall assign its duties and obligations
hereunder without the prior written consent of the other party. A waiver by any party of any provision or a
breach of this Agreement must be provided in writing and shall not be construed as a waiver of any other
provision or any succeeding breach of the same or any other provisions herein.
20. Execution of Agreement. The parties agree that the language in this Agreement pertaining to
Indemnification, Limitations of Liability and Insurance are clear and unambiguous and were mutually
negotiated by the parties.
HDR EN INEERING, INC..
B :
ich el Read
Title: President
Date: � 1-11 r 0
By
Title: City Mana er
Date.
Page 5 of 5