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03/09/09 SP City Council MinutesA SPECIAL MEETING OF THE KALISPELL CITY COUNCIL WAS HELD AT 70000 P"MI MONDAY, MARCH 9, 2009, IN THE COUNCIL CHAMBERS AT CITY HALL IN KALISPELL, MONTANA, MAYOR PAMELA B. KENNEDY PRESIDED. COUNCIL MEMBERS JIM ATKINSON, KART GABRIEL, BOB HAFFERMAN, RANDY KENYON, TIM KLUESNER, HANK OLSON, AND WAYNE SAVERUD WERE PRESENT, COUNCIL MEMBER DUANE LARSON WAS PRESENT VIA TELEPHONE. Also present: Interim. City Manager IVlyrt Webb, City Attorney Charles Harball, City Clerk Theresa White, Chief of Police Roger Nasset, Acting Fire Chief Dan Diehl, Public Works Director Jinn Hansz, Budget Resource Manager Terri Loudermilk, Finance Director Any Robertson, Parks and Recreation Director Mike Baker, Economic and Community Development Director Kellie Danielson, Planning Director Tom Jentz, Human Resources Director Terry Mitton, Information Technology Director Erika Less, and Recording Secretary Judi Funk. Mayor Kennedy called the meeting to order and led the Pledge of Allegiance. A. AGENDA APPROVAL Atkinson moved approval of the Agenda. The motion was seconded. There was no further discussion. The motion carried unanimously upon vote. B. PUBLIC COMMENT Clara LaChappelle, 3580 Farm to Market Road, referred to an article in the Daily Interlake regarding Chad Wolford7 s default on a loan and asked if we really want hint doing business here. She also implored the Council once again to change the northern location of the bypass. Brent Hall, Lakeside, defended Wolford by stating the default had nothing to do with Wolford Development, adding it is a private matter. Denise Smith, Flathead Business and Industry Association Executive Director, urged the Council not to pass the impact fees, especially in this economy, and emphasized that business owners are also taxpayers. Mayre Flowers, Citizens for a Better Flathead, distributed more petitions and encouraged the Council to move forward and adopt the fees as they stand. Joe Unterreiner, Chamber of Commerce President, urged Council to give serious consideration to not passing the impact fees as a way to stimulate job recovery, stating this is not a good time economically. Kalispell City Council Special Meeting Minutes March 9, 2009 Page 1 George Culpepper, Jr., Flathead Building Association Government Affairs Director, read an email that he sent to Council today stating Bozeman is considering a request to lower their impact fees in order to stimulate investment and growth. C. REPORTS/RECOMMENDATIONS AND SUBSEQUENT COUNCIL ACTION Mayor Kennedy asked for general discussion on the entire Transportation Impact Fee issue. Olson remarked that he is not in favor of grandfathering any projects with preliminary plats, but he would be agreeable to 75% of the fees. He also said the current list of roads should remain the same, however, we also should give credits to any developer who builds roads around their development. He emphasized that businesses pay taxes out of profits, but little old ladies pay taxes out of their social security checks and after two years of study we need to move on with these impact fees, adding we can always change there later. Hafferman commented that he believes the proposed fees are way too high and he is in favor of grandfathering projects for a period of six years from preliminary plat approval; he is also in favor of a 33 % rate. He explained how the extension of services plan works and stated it has been in existence for 25 years and it should take care of everything, adding that reasonable impact fees and SIDS can be good tools for connecting roads between developments. He also detailed what impact fees can and can not pay for and finished by listing the roads he'd like to see removed from the CIP list. Kenyon asked Hansz and Harball questions and stated that we need to pass the impact fees based on the original study, including all of the roads on the CIP list. He said that credits would be reasonable for work done by a developer, but he is hesitant to support grandfathering unless it is very specific, especially not for six years. Kenyon concluded by stating he will side with the taxpayers and vote for these fees. Kluesner also had questions for Hansz and Harball and stated we are piggybacking an unknown tax burden onto taxpayers if we pass these fees because we never bothered to save any money to build these roads. Using Costco as an example, he stated we risk losing property tax revenue for the county and schools and we cannot afford to lose any tax base. He commented that supporting the local economy is more important than spending less time in traffic and we should reduce the number of road projects and grandfather projects in order to mitigate effects. Iluesner noted we need to stimulate the economy and now is not the time for these fees. Saverud remarked that according to public testimony everyone sees this as a black or white issue, but in his mind it is shades of gray. He said the fees must be reasonable, fair, and equitable and if they are they should not hold up any projects. He suggested that we establish a reasonable fee and if the economy needs stimulating, we can delay the implementation for one or two years. Saverud stated he favors Alternative No. 2 and that the Impact Fee Committee should start reviewing the fees immediately without waiting the two years. Kalispell City Council Special Meeting Minutes March 9, 2009 Page 2 Atkinson noted that impact fees are tools that were given to us and we should utilize them; the question is whether we reduce the number of roads or the amount of the fees. Atkinson feels we do not need to drop the fees or grandfather projects, but we could reduce the number of roads on the list. He concluded by stating that the study is legitimate, therefore the fees are legitimate, and we need to keep this as simple as possible. Larson, via telephone, remarked that all of the comments have been between two groups of people who have distinct views. He said he would like to see the impact fees fall somewhere between full implementation and nothing at all, and give developers a break during these tough economic tunes. He said a good compromise would be to pass ordinance 1656, remove some of the road projects from Resolution 5345, and grandfather projects for two years. Gabriel commented that she feels it would be appropriate to table the fees for one or two years to allow the local economy to recover, and to allow those projects already in progress to be completed. She said we need to have something in place, but if we implement these fees immediately we are cutting business off at the knees and going back on contracts. She finished by stating we should either table this or grandfather it for two years, and she agreed with Larson that we need to be somewhere in the middle on fees. Kenyon noted that he has not seen any credible evidence that these fees would negatively impact the economy, and that a local economy boost is almost impossible right now. He said we're not going to have any impact with these fees because we are held hostage by the global and national economy; we need to move forward. Mayor Kennedy remarked that after listening to all of the comments she agrees with almost everything that has been said except she believes that we can affect the local economy. She stated this has been one of the most difficult tasks to deal with in this Council's tenure, and contractors and builders are out of work because people are postponing building. Mayor Kennedy said we must make Kalispell a user friendly place, which won't happen if we continue to put additional fees in place. She concluded by stating she is in favor of ordinance 1656, removing five or six of the roads from Resolution 5345, and tabling or reducing the fees for Resolution 5346. Kluesner asked what the Legislature is working on in regard to impact fees. Webb answered there are no significant changes. Hafferman noted that if the resolutions do not pass, then the ordinance should not be passed because we will have no way to fund the rebates. Olson commented that we need these impact fees; we are smart enough to control them, and we should not throw them away. Kalispell City Council Special Meeting Minutes March 9, 2009 Page 3 C/1. ORDINANCE 1656 —AMENDING ORDINANCE 1587 —IMPACT FEES — 1ST READING - This ordinance amends ordinance 1587 establishing the procedure for contributions in lieu of impact fee payments to fund capital improvements. Olson moved first reading of ordinance 1656, an ordinance amending portions of Ordinance 1587 enacted on October 16, 2006 codified as Kalispell City Code 8-32 authorizing and establishing the procedure for contributions in lieu of impact fee payments to fund capital improvements in the City of Kalispell and declaring an effective date. The motion was seconded. Ilarball answered questions and explained that this ordinance was written to amplify the existing impact fees, not just the transportation impact fees. There was no further discussion. The motion carried unanimously upon roll call vote, C/2. RESOLUTION 5345 —AMENDING RESOLUTION 5291 —TRANSPORTATION GROWTH RELATED CAPITAL IMPROVEMENT PLAN This resolution amends the City's Transportation Growth Related Capital Improvement Plan adopted in August, 2008. Olson moved Resolution 5345, a resolution amending Resolution 5291 that approves and adopts the City of Kalispell transportation growth related Capital Improvement Plan for fiscal year 2008-2009 and beyond, with Exhibit 4 of the Alternative 1 Report attached as Exhibit "A". The motion was seconded. There was discussion regarding MSN 9 (Rose Crossing to Highway 93) still being on the list. Larson noted he supports the motion as it is a reasonable compromise. Atkinson remarked that he is at a loss. we are reducing the roads and the fees and he wondered if there is something subversive going on that we can't vote for Resolution 5346 first. Mayor Kennedy and Harball explained Resolution 5346 contains the grandfathering clause. There was no further discussion. The motion carried upon roll call vote with Gabriel, Hafferrnan, Kluesner, Larson, Olson, Saverud, and Mayor Kennedy voting in favor, and Atkinson and Kenyon voting against. Kalispell City Council Special Meeting Minutes March 9, 2049 Page 4 C/3. RESOLUTION 5346 —ADOPTING SCHEDULES AND CLASSIFICATIONS — TRANSPORTATION IMPACT FEES Resolution 5346 adopts the schedules and classifications to set impact fees to be imposed on new developments that place additional demands on the City's transportation facilities. Gabriel moved Resolution 5346, a resolution adopting schedules and classifications to set transportation impact fees to be imposed upon construction of new improvements for uses that place additional demands upon the transportation facilities of the City of Kalispell and to set an effective date, with the language in Alternative B. (Alternative B reads as follows: "Section II. That the transportation impact fees established by this resolution shall be imposed at the rate of 75 % of the scheduled fee for any new construction that applies for a building permit within two years of the effective date of this resolution..") The motion was seconded. Kluesner moved to table Resolution 5345, with Alternative B, to March 7, 2011. The motion was seconded. The motion to table failed upon roll call ,vote with Gabriel, Kluesner, Larson, and Mayor Kennedy voting in favor, and Atkinson, Hafferman, Kenyon, Olson, and Saverud voting against. There was further discussion. The main motion carried upon roll call vote with Atkinson, Gabriel, Hafferman, Kenyon, Larson, Olson, Saverud. and Mayor Kennedy voting in favor, and Kluesner voting against. D. MAYO COUNCIL CITY MANAGE BPARTMENT SUPERVISOR'S REPORTS JNo Action) Mayor Kennedy thanked the citizens of Kalispell for their participation in the impact fee process. Olson also thanked the Impact Fee Committee members and staff for all of their hard work. Webb informed Council that he, Hansz, and Burnham met with DEQ and more information will be forthcoming. E. ADJOURN The meeting was adjourned at 9:34 p.m. ATTEST: , f Theresa White T City Clerk Approved March 23, 2009 Kalispell City Council Special Meeting Minutes March 9, 2009 Page 5