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02/06/12 City Council MinutesAlso present- Interim City Manager Charles Harball, City Clerk Theresa White, Lieutenant of Patrol Wade Rademacher, Assistant Finance Director Rick Wills, Public Works Budget Resource Manager Terri Loudermilk, Revolving Loan Fund Manager Wade Elder, and Deputy City Clerk Judi Funk. Mayor Fisher called the meeting to order and led the Pledge of Allegiance. Gabriel moved to approve the Agenda. The motion was seconded. There was no discussion. The motion carried unanimously upon vote with Saverud absent. 1. Council Minutes - Regular Meeting - January 23, 2012 2. Proclamation - Turner Syndrome Month Kenyon moved approval of the Consent Agenda. The motion was seconded. Hafferman asked the minutes, on page 3, be amended to read "Appleway looks like a dead-end road." The motion carried unanimously upon vote with Saverud absent. Scott Davis, 448 5th Avenue West, Quiet Skies, read his recent email regarding the plane crash and requested that all northern take offs and landings be prohibited. Scott Richardson, 1507 Ist Avenue West, Suite E, read a letter from David Jack Kenny, Manager of the Air Safety Institute, outlining the history of aeronautical accidents at the Kalispell airport. Pauline Sjordahl, 234 3rd Avenue West, said she is concerned about information received that sewer gas can affect planes and she asked council to look into it. Kalispell City Council Minutes February 6, 2012 Page 1 The City Council accepted public comments on amending the 2011/2012 budget in order to provide authority to reimburse the Transportation Impact Fees collected during the past three years. Mayor Fisher opened the public hearing. Opponents Bill Goodman, 50 2nd Street East, #105, commented Resolution 5546 was brought forward illegally because council members cannot vote on items they have an interest in; Mayor Fisher is employed by Northwest Health Care who owes approximately $88,000 in transportation impact fees. Karlene Kohr, Main Street property owner and Chairman of the Impact Fee Committee, remarked she keeps hearing the transportation impact fee study is flawed, but she believes what is really flawed is the council's understanding of impact fees. Brenda Talbert, 34 Empire Loop, Impact Fee Committee member, said impact fees are part of the expense of living here and growth will return to Kalispell with or without impact fees. Jim Cossitt, 12316th Street West, stated the budget amendment was not adequately noticed and the agenda does not inform the public of the proposed council action. Sharon DeMeester, 415 Chestnut Drive, Impact Fee Committee member, remarked impact fees are a small portion of the total cost of a project and questioned who will have to pay the costs if they are repealed. Proponents Chad Graham, 105 Moes Run, commented alternative funding plans are being discussed and clarified that impact fees do not pay for maintenance. Jeff Claridge,131 Taelor Road, remarked he is in favor of repealing the impact fees because he sees them as cherry picking. Mayor Fisher closed the public hearing. (Letters received prior to and during the public hearing are attached hereto and made a part of the official record) ORDINANCE1MENT — WEST SIDE URBAN l READING Ordinance 1711 amends the existing plan to include the demolition and remediation of under-utilized Kalispell City Council Minutes February 6, 2012 Page 2 or vacant structures/lots, and public infrastructure improvements including the Meridian/Appleway intersection and the Colorado Street water main looping. Ordinance 1711 passed on first reading January 23 on an eight -to -one vote. Public Comment None. Atkinson moved second reading of Ordinance 1711, an ordinance relating to the modification of the Kalispell, Montana Vest Side Urban Renewal Plan (the Urban Renewal Plan) to approve certain capital projects as urban renewal projects. The motion was seconded. Council Discussion Hafferman commented he voted against the first reading and he will vote against the second as well. There was no further discussion. The motion carried upon roll call vote with Atkinson, Gabriel, Guiffrida, Kenyon, Kluesner, Zauner, and Mayor Fisher voting in favor, Hafferman voting against, and Saverud absent. Resolution 5546 repeals the Transportation Impact Fees adopted in March 2009 and authorizes reimbursement of any fees collected. Harball gave a report and answered questions. Mayor Fisher thanked Goodman for bringing up the issue of her employment, stating she has researched the issue and because she has nothing to do with the construction department, she can vote on the matter if she chooses to. She said she has also submitted a letter on the issue to the Commission on Practices. Public Comment Joe Unterreiner, Chamber of Commerce President, said the chamber supports the proposed resolution and suggested that alternate sources of funding be found. Bill Goodman, 50 2nd Street East, #105, noted the whole country has experienced a decrease in private investment and a loss of jobs, not just Kalispell. John Hinchey, 534 4th Avenue East, spoke against repealing the fees and urged council to just suspend them. Kalispell City Council Minutes February 6, 2012 Page 3 Tim Caloway, property owner of 1079 Meridian Road, said property taxes on improvements will pay for everything and suggested council suspend all fees until the growth comes back. Patti Gregorson, Flathead Building Association, 21 West Reserve, said there is a whole industry waiting to get back to work and offered to help work on a committee to find alternatives. Terry Kramer, President of Kramer Enterprises,102 Cooperative Way, said he has been involved in numerous developments around the state and fees do kill projects. Scott Hadwin, McDonalds, said businesses are usually willing to pay their fair share, but not more, and impact fees are not business friendly. Scott Davis, 448 5th Avenue West, commented he wanted to spend lots of money to improve his house, but could not because of zoning regulations; he would like to see them changed. Dennis Beams, 732 Kookoosint Trail, stated they don't want any barriers to rehabbing buildings and that every dollar counts. Jim Cossitt, 12316th Street West, remarked he is a former Impact Fee Committee member and that impact fees are about growth 20 years into the future. He said the fees discourage marginal development and that demand will drive whether projects are appropriate. Chad Graham, 105 Moes Run, commented that businesses are the largest taxpayers in the city, and repealing these would create an incentive for business owners to create jobs. He said the fees are flawed because all they look at is formulas. Sharon DeMeester, 415 Chestnut Drive, said she owns property on Main Street but cannot lease her building or get funds to do any remodeling, adding we also need to look at property taxes because every fee goes up every year. Mayre Flowers, 35 4th Street West, Citizens for a Better Flathead, asked council to postpone a decision until there is another plan in place, stating that businesses want to know the community is planning for its future. Pam Carbonari, 14 3rd Street East, representing Great Bear Builders, urged council to either not pass the resolution or table it and take the opportunity to review all the information. She also suggested bringing a diverse committee together to work on the problem. Marc Rold, 118 Main Street, Flathead Business & Industry Association, stated the transportation impact fees are unfair and this issue divides the community; we are all in this together and we need to address the situation. Karlene Kohr, Chairman, Impact Fee Committee, said she does not believe that the fees can be suspended by law. Kalispell City Council Minutes February 6, 2012 Page 4 Guiffrida moved Resolution 5546, a resolution eliminating City of Kalispell transportation impact fees previously imposed, authorizing and directing the reimbursement of transpor- tation impact fees paid and approving the necessary budget amendment for such reimbursement. The motion was seconded. Council Discussion Guiffrida commented that this issue has been addressed and vetted; it is a broken fee and we need to look for equality in the fee structure. Hafferman remarked that the committee acted on information presented to them, but the information is the problem; the consultants didn't take everything into account. He said there is no other source than impact fees and the regulations are clear involving utilities, but not roads. Kenyon noted he considers this action arbitrary and capricious and to eliminate the fees in two weeks is not in the best interest of the city. He said we need a plan to cover the costs in place and suggested tabling the matter until development starts back up again. Atkinson read an example of impact fees supporting and allowing growth, stating this is a tiny part of what it will cost us in the future. He said that getting rid of the fees is not logical and urged council to vote against the resolution. SO no MM11B.2111V WIII, 16 The motion to table failed upon roll call vote with Atkinson, Kenyon and Hafferman voting in favor, Gabriel, Guiffrida, Kluesner, Zauner and Mayor Fisher voting against, and Saverud absent. Mayor Fisher commented that she has struggled with this for two years, but the formula is flawed and the system doesn't work. She said it is not fair to put it all on the backs of the homeowners or the businesses and we need to support a local option tax. Atkinson responded that lots of things in life aren't fair, and that impact fees are a way of legally taxing people to pay for future needs. Atkinson moved to suspend the fees for six months. The motion was seconded. Atkinson remarked they will still be on the books even if we have to pay back the $140,000. Hafferman noted he will vote for another source of funding. Zauner clarified that we would have to return the $140,000 at some point. Guiffrida stressed that he is very concerned about this and he feels it will open the city up to a lawsuit. Kalispell City Council Minutes February 6, 2012 Page 5 The motion to amend failed upon roll call vote with Atkinson, Hafferman and Kenyon voting in favor, Gabriel, Guiffrida, Kluesner, Zauner and Mayor Fisher voting against, and Saverud absent. There was no further discussion. The main motion carried upon roll call vote with Gabriel, Guiffrida, Kluesner, Zauner and Mayor Fisher voting in favor, Atkinson, Hafferman and Kenyon voting against, and Saverud absent. E/3. RESOLUTION 5547 — RESOLUTION OF INTENT TO AUTHORIZE THE ISSUANCE OF WEST SIDE TAX INCREMENT URBAN RENEWAL DISTRICT REVENUE NOTE This resolution authorizes city staff to solicit proposals from local qualified financial institutions for the purchase of a revenue note for the West Side Tax Increment Urban Renewal District. Harball gave a report and staff answered questions. Public Comment Pam Carbonari, 14 3rd Street East, representing the Business Improvement District and Kalispell Downtown Association, said they continue to support these projects. Gabriel moved Resolution 5547, a resolution relating to West Side Tax Increment Urban Renewal District Revenue Note, Series 2012 and preliminarily authorizing the issuance thereof and directing city staff to solicit proposals from local qualified financial institutions for the purchase thereof. The motion was seconded. Council Discussion None. The motion carried upon roll call vote with Atkinson, Gabriel, Guiffrida, Kenyon, Kluesner, Zauner and Mayor Fisher voting in favor, Hafferman voting against, and Saverud absent. Mayor Fisher, responding to public comment, stated council will discuss the airport in mid March, and expressed council's relief that no one was seriously injured in Saturday's plane crash. Mayor Fisher also requested a work session on ethics and setting up a new committee to look at various fees. Kalispell City Council Minutes February 6, 2012 Page 6 Hafferman stated he wants to make a decision on the airport before the new city manager comes in and proposed a schedule. Guiffrida commended the police and fire response at the airplane crash scene. Kenyon asked for an update on the city manager search. The meeting was adjourned at 10:06 p.m. Theresa White City Clerk Approved February 21, 2012 Kalispell City Council Minutes February 6, 2012 Page 7