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HomeMy WebLinkAboutCity Council Meeting - Council Workshop - Minutes - 10/05/1999 COUNCIL WORKSHOP October 5, 1999 COUNCIL MEMBERS: Leona Orr, Sandy Amodt, Tom Brotherton, Connie Epperly, Judy Woods, Rico Yingling STAFF PRESENT: Gary Gill, John Hillman, Don Wickstrom, Dena Laurent, Tom Brubaker, Brent McFall, Jackie Bicknell PUBLIC PRESENT: Paul Lanspery, Liz Warman, Gary Young Report of Transportation Mitigation Task Force Director of Operations Brent McFall introduced Gary Gill, City Engineer, and consultant Paul Lanspery of C112M Hill. Paul Lanspery—The committee was formed in February and met from March until July. We met eight times, typically from 10-12:00 for about two hours per meeting. My job, along with theories,was to give them good information and to facilitate discussion. The report, hopefully, reflects their points of consensus and their thinking. One of the things we did was a little thing called quota bowls where they could individually express themselves. The task force purpose was generally broad to investigate alternatives for corridors and other forms of transportation • needs, to explore alternatives for transportation funding, how the impacts of growth can be mitigated, and specific concerns as to the Council over fairness of the current practice. Property owners were surprised to learn they were responsible for LID payments. So we looked broadly and specifically and tried to use this as the mission for the task force. EMAs in brief: An EMA is that authority for an environmental mitigation agreement through SEPA. They are a no protest agreement allowing for payments over time. You have used EMAs to focus on your three corridor projects: 277"', 228`h, and at 196`h. In your$68,000,000 6-year transportation CIP, you've got about$8 million earmarked from the EMA payments to finance that $68 million. A little more than 10% of the revenue is expected from that. In looking at those who will pay the $8 million, about 3/4 is commercial and 1/4 is residential. The committee did all of its work and wrapped up this report prior to I-695 and didn't take into account the fiscal impacts of that. That may influence some of your thinking as a policy group. We spent some time going through the Growth Management Act. We talked about the comprehensive plan and reviewed the transportation element. We talked about how your levels of service are developed and we reviewed the 1991 report of the Mayor's advisory committee on impact fees. That was a policy level document talking about that and was about the time GMA was evolving. And what about impact fees, and that committee actually recommended a serious look at implementing, before impact fees for education, fire, parks, and transportation. King County came in and shared how their MPS system works. I would describe that system as the • most detailed in terms of site-specific, sub-areas Data analysis in really cranking down impact fees to a specific project and a specific Zone. We looked at Renton's impact fees, which is Council Workshop, 10/5/99 2 . probably on the other end where they have taken their transportation plan and then something interesting around travel time and added that back into their transportation project list and developed an impact fees for single families, somewhere around $1,100 per year. It's updated periodically but it's not half as sophisticated as the county's. We also reviewed annual road reports so the committee had a good understanding of where money was going, relative to fees being collected for transportation, both dedicated, General fund, and the like. So that was framing the problem, developing the information, and then what we did was brainstorming, relative to what about the current EMA program were the strengths of the program. One strength that was identified was that the dollars being collected were actually being received and tied to a plan for spending as to the point of need. Several members of the community like the fact that there is predictability and a set of rules to play by. You know what the projects are, you know what the game plan is, and the money is being spent on that. Some indicated there was a potential to avoid higher housing prices, and have the impact deferred. You'll see this show up on the negative side. Some felt that because the dollars were collected upfront, that was a positive. On the other hand, some had felt that was a negative. Then we did a brainstorming session about what were the negatives. The number one negative was that the notification process was not adequate. And then there was a rock wide range of questions around the equity question. At least one member felt that the current program favors single occupancy vehicles that is not broad-based enough and impacts all users. Some indicated that there was a different burden on residential vs. commercial property owners and a comment that puts cost of transportation on the cost of housing where it might be better on the cost of transportation. • What are the transportation and infrastructure priorities of the Council? Are they a priority? That's where we talked about how money is being spent and then the dollars not being collected upfront. Particularly at issue was with residential property owners as it was tied to the notification process. And then there was a discussion about is a waiver program unfair. And that specifically comes back again to the residential impacts. We spent some time talking about other potential revenue sources. We went down through a list. GO bonds, councilmanic bonds, what about a citywide transportation impact fee? What about a subarea impact fee modeled after the stone water impact fee? What about the sales tax, specifically the new construction portion as building is booming and that increment is growing. Could that be dedicated or linked to transportation funding? The same with property tax revenue growth in new developments and new assessed valuation. We talked about the fiscal applications in your$68 million. (You do have councilmanic bonds funding scheduled.) The task force rated the options and on a scale of 1 to 5 with one being highly desirable and five not acceptable. You can see that the GO bond got generally higher ratings. The reason behind that is a broadness of the funding. The broader the funding, the more the task force felt that we were meeting their objectives. The citywide impact fee didn't do too terribly well. This is a guide to you in terms of your thinking in decision making elsewhere. A citywide impact fee would be levied on all new developments. For example, in the Renton model, a new single- family home would be required to pay$1,100 for a building permit. AGO bond is voted by the people, so they have a say in it. It is spread out over your entire assessed value. It's paid out over a longer period of time so the improvements are coincident with the payments. That affects Council Workshop, 10/5/99 3 • all existing properties. Brent McFall—That also authorizes the levying of an additional property tax against all properties for as long as the debt lasts—20 years. Paul Lanspery— The downside is that you have to get voter approval. The conclusions recommendations: There were three specific transportation policies that the task force talked a little bit about that they thought were worthy of pursuit by the Council. The establishment of a mechanism that provides multi-jurisdictional coordination of funding of transportation improvements. Traffic is definitely regional and it doesn't know city boundaries terribly well. This shows that the more you can get regional or subregional funding, the better. Your policies even talked about a transportation benefit district that could be applied across boundaries. It would be difficult to enter into jurisdictional negotiations and to design a subregional transportation system in cooperation with neighboring jurisdictions. So again you do have existing policies that the task force encourages you to look at when you do your CIP and transportation update. Councilmember Tom Brotherton—Are we actually doing any of those things? I know we belong to SKATBd. Public Works Director Don Wickstrom— It would be something the county would have to think about. Back when we started to plan the 277th corridor, it ended up dying at the county level. The county changed the jurisdiction and then we would have had to get into a legal issue of whether that is really a transportation benefit district. Brent McFall—The 277th corridor is an excellent example. Any project that we can, we'll make multi jurisdictional because it helps funding. Tom Brotherton— It seems to be a broader policy to formalize the inter jurisdictional nature of it and work for long-term goals. Don Wickstrom—When Boeing was a big part of it, • we did a whole value transportation study and we'd identified about $300 million worth of improvements at that time. The transportation benefit district was the animal that they were looking at defending. That didn't go. They got shot down at the county level. Tom Brotherton— Did that process end then at that point? Paul Lanspery—The cities of Redmond and Bellevue just signed an interlocal agreement on the Overlake area and that's kind of one of the newer models that's evolving out there. Assistant City Attorney Tom Brubaker—There was a new program put together quite a few years ago now called the Green River Valley Transportation Action Program and we've used that as a basis for some of our environmental background mitighation for the whole corridor system. Out of that planning program have come projects like 196t and 277th The 277`h has Kent and Auburn working together. A portion of the 196th Street corridor is in King County, a portion is in Kent, and eventually into Renton as it goes up the hill. You do see that the outcome of some of those plan programs is subject inter jurisdictional cooperation, maybe not quite extensive as always would like, but part of that is partnering with all of those other jurisdictions. I think there has been some inter jurisdictional cooperation, maybe not to the degree we'd always like to see. There have been lots of joint programs. Paul Lanspery—Other long-term recommendations and policy thoughts from the task force included support for long-term actions. Payment of transportation needs to be linked more closely to the true user. One of the task force members presented a pamphlet called the Road Relief. It's interesting reading but obviously beyond your legislative authority. But at issue is talk about parking fees as a good example of connectivity to the user. I think, in general, the task Council Workshop, 10/5/99 4 . force would encourage you to think about possibly linking transportation capital improvements to true user fees. It a recommendation that your transportation plan is a little bit outdated and needs to be updated. They recommended that you take a look at a twenty-year based plan consistent with your land use element, and that's probably the opportunity where you're going to need to reassess the overall financing of your transportation element. Now, the specifics to the EMA program—these are forwarded as the unanimous recommendations of the committee. First off, to establish clear notice of future monetary payment obligations through documents recorded on titles. There are legal ways to improve that process. It's recommended that we eliminate our waiver program on future corridor projects— that is the 228"'project, specifically in reference to residential waivers; implement a public information mailing program to provide updates to effective EMA property owners—what's going on in the LID, what's the timing, if I'm paying for something can I know what's going on? And most recently and lastly was a discussion over offering extension agreements if the applicable LID is not formed and is requested by property owners. In other words, an agreement may be reached and a LID formed and instead of making them pay, they would be able to extend along with the LID. Not all of the committee members but the majority of them, recommended that we establish what is called the sinking fund to cover EMA obligations for all newly formed single-family residential homeowner associations. For example, if there's a plot of 20 homes, if there's a homeowners association, they are required to set up the sinking fund that the dues go into so when the LID is formed the money is there and the property owners aren't on the hook. If you • don't have an application that requires a homeowners association and it's one or two, the majority of the task force members recommended you collect that at the time of permit, and we would really avoid this downstream stuff like what you were challenged with several months ago. So kind of the balance of long-term recommendations and then specifics to really improve the current EMA program. I think it's safe to say that the majority, if not all, of the committee would not recommend eliminating the EMA program and instituting an in lieu fee program. But fix up your EMA program, update your transportation plan, with your new six-year CIP for that, and then evaluate these revenue choices that they're giving you some input on. That's really the bottom line of our recommendations. A sinking fund is an accounting term for a dedicated fund that is built around improvements and you're putting money aside. Councihnember Rico Yingling—And every homeowner because they have communication with homeowners association and the billing of the dues, every time they pay that bill they would be aware of the fees for the fund that they're paying. On the due statement it would break out. Gary Young, Polygon—The reason for this approach was that Road improvements may be five years out in the future. The choice is that if the road improvement is paid for in advance, it's the same idea as taking a loan, so the payments are made in anticipation of the improvement needed in the future. It's very important for the first time home-buyer as the difference in price of $2,000-5,000 can determine whether or not a person can actually buy a home or not. By providing the sinking fund, it's an earlier savings plan that ties into the improvement. It's a much better way to go than just arbitrarily having that impact fee cost applied right at the beginning. Council Workshop, 10/5/99 5 • People can schedule their earnings into it. Paul Lanspery—Then if it's one or two lots, get the money then because it's administratively much easier and you're going to avoid downstream issues. Councilmember Sandy Amodt - If we went to G.O. bonds, would we even need to have an EMA agreement? Brent McFall—Conceivably you could go to the voters to fund the entire action with general obligation bonds. That would do away with mitigations, too. Part of the philosophy behind EMAs has been that why should 1, as a long-standing homeowner, pay for the new road for you in your new home to drive on because the old road was just fine for me. In other words, the cost of growth is borne by those who are causing it. In actuality, you have to find a balance point somewhere in-between. We do have councilmanic bond schedules as a funding mechanism for some of these future projects, so we are spreading it across the entire City without going for an excess property tax levy or a voted bond issue, although we could. It really becomes a policy of the City Council. Sandy Amodt—Of all of these recommendations, which is the most user-friendly, which is the most customer service oriented, which is going to take the least amount of staff time to deal with, what is going to work in a comeback on this later bond like the current system that cost all of us in this room a tremendous amount of time? Brent McFall—The things the task force came up with to modify the EMA goes a long way to eliminate that later impact that the jury brings to the person in eight years down the road who bought the house last year who gets a LID notice in the mail overnight. Paul Lanspery— One of the revenue sources the committee talked a lot about was the local option gas tax, and that would be a pretty good example to your question where it Swould be tied more to the user and easily collected. The challenge there is King County is the authorizing agency; the City of Kent can't just go out and institute it. Philosophically, I think the committee would view that as a positive form. Councilmember Judy Woods—In respect to how many issues were put on the ballot, we've been very careful in recent years to not compete with a school district in winter going to float a major issue and we have a major public safety issue coming down the road. One has to take great care because we never want to be like the Federal Way School District of getting a reputation of not being able to pass an issue. It reverberates from one issue to another. That was just schools, but what did they do? Took 10 years and 20 tries before they passed on it. Councilmember Rico Yingling—So no one wanted to do toll roads? Paul Lanspery—Toll roads did come up, but we're not sure they are even legal in Washington. Tom Brubaker—From my perspective, EMAs work very well for commercial, retail, and industrial properties. The 196`h Corridor, $21 million LID (a huge LID) was predominately from commercial industrial properties. These were sophisticated buyers and sellers, they were aware of the encumbrance on their property, they wanted the improvement added. There was only wide protest to $70,000 out of the whole thing. So it really worked beautifully. Where it doesn't work well is with residential properties because people don't see and check their title report fully. And the notice, as provided with your title report, includes the suggestion already and gives credence to trying to achieve better notice of the EMA. The idea of requiring payment up-front on residential development or, in lieu of that establishing a sinking fund, will go a long way to Council Workshop, 10/5/99 6 solving the residential property owners' problems. That may be a pretty good solution from this point forward, but the main problems we faced on the EMAs are with the residential homeowners. This really came as a surprise. Brent McFall—You might just also tell them that you have drafted an extension agreement. Tom Brubaker—Yes,we have drafted the extension agreement and notices have been sent. Leona Orr—If we went to G. O. bonds, we're talking about the $8 million out of the $68 million. Don Wickstrom— Can I clarify that? When we look at the six-year capital improvement program, we do not have all of the corridor LIDS in there. We'll have a small portion of them. $9 million for the to 277`h corridor, $24 million out .... Leona Orr—But my point is, Don, if we were to go that route and everybody said that's a great idea, it's $8 million dollars spread out, it's only going to cost the homeowner$12 to $20 a year, everybody would go for that. But, then that also impacts the business community who's already paying 75%. So, now they're going to be paying an additional amount due to the voted bond issue. Am I correct? If we separate out just the small portion? Don Wickstrom—And, also, when you think about those that have already paid through LID 340, they'd be hit twice. They're paying through their LID, and now they'd be paying a higher property assessment to pay for this other. Leona Orr—And that's my point,we can't take out one small section and say, oh we're going to do this through a voted bond issue because, then, everybody else who's already paying through whatever other mechanism is going to be hit again through the voter bond issue. Liz Warman, Boeing Company—I think most of the discussion about looking at other funding options—bonding, G O Bonds being one of those—at least in my mind was supplemental. It . wasn't throw out one and go exclusively,but it was supplemental. Rico Yingling— Is there a mechanism to establish a sinking fund for homeowner's associations or is there a way to do it? Tom Brubaker— I think the way to propose it to a developer is if you are going to develop a residential subdivision or short plat,then you must pay (however many dollars per property) or in the alternative, if you can develop a binding agreement, and maybe we could work with Gary and see what they did with Polygon, that creates a sinking fund that will guarantee payment at a future day. That would be acceptable. You give them the alternative or option to exercise that right and some may want to and some may say, hey, I'll just build it into the cost of my house. It would fall on the developer to either pay it up front or provide additional clear notice to the new homeowner because it would be part of the sinking fund. Sandy Amodt—Can you give me an example of the GO Bonds adding additional cost to a business —take one business and give me an example. Don Wickstrom—Boeing did pay$4.7 million for their share of the 1961h Street corridor. Liz Warman—It wasn't all cash. Some of it was the right of way. Don Wickstrom—But it's equivalent and so they're done. They're platted, they've done their off site mitigation, now if there's a G O issue with their high assessed value, they're going to pay a big chunk of the other projects too. Sandy Amodt— So they get hit again? Don Wickstrom—They get hit twice and they don't have any vote to say no. Sandy Amodt—The residents don't pay very much at all. It's the businesses that get hit for the 196th Street corridor—they paid a lot of money. Liz Warman—I think where we come down on • taxing issues, if there's a need and we benefit from the need and everyone pays proportionately, Council Workshop, 10/5/99 7 • we'll look at it fairly favorably. Nobody likes to wish new taxes on themselves, but if there is a reason for something and it benefits us and the rest of the community, I think it's worth looking at. Don Wickstrom —The other issue with a GO problem is interim financing—for the 272nd Corridor—getting the new money before this Spring. It would be difficult to get on the levy and get the voters' support, which would be a very difficult issue and get the money in. We'd have to take the money from other projects to temporarily finance that corridor. Leona Orr- I would think perhaps these recommendations need to go with staff through the Public Works and Planning Committee to bring a final recommendation as to what that committee feels would be the best course of action for us to take and schedule that for a meeting. Staff would have an opportunity to make some recommendations as to what would work best based on these recommendations. I think there are some real sound recommendations in here that we can live with. Brent McFall—One of the things that is very beneficial is there was a lot of really good thought put into how our current environmental mitigation agreement could be applied more appropriately so that you don't get the surprise. So, the sinking fund idea—that is a great one, I think. Those go a long ways towards making an interesting program much more customer friendly and avoiding the acrimony that we've experienced recently when letters began to go out. Liz Warman —There were some exceptions,but many of us didn't feel the system was broken, it needed improvement. Regional Issues Government Affairs Manager Dena Laurent—The Job Training Partnership Act from The Seattle King County Work Force Development Council is the federal training dollars that came down to the state and to the counties to do training for people who are displaced, the disabled, and youth. That program has been abolished by Congress and replaced with the Work Force Investment Act. The shift with the new act is to make the training efforts much more business and customer focused and so the County Executive and the Mayor of Seattle have come together and appointed a 51 member board which is more than 50% members of the business community to design a plan to deliver this training. The plan has to be designed by February by this 51 member board and there is one seat for Suburban Cities, and Mayor White has accepted that appointment, which is exciting for South King County, given the move of people who could benefit from this kind of training to South County where affordable housing is. We see tremendous demands not only from our employers but also from the people who live here. Some of the other members on the Council are from Kent Chamber, Flow, Pacific Aerotech, Tim's Cascade, Weyerhaeuser, and Boeing. There are a lot of Seattle businesses and groups whose offices are in Seattle. That's not to be overlooked. I think 8 is a big number compared to what it could have been and the fact that there are lots of people there talking. Bellevue has two. The second issue is like the next generation of the housing legislation, the buildable lands legislation from last session, and what I've copied for you here is the letter that we wrote about last year's legislation and the draft of new legislation that the realtor, community, and builders and master builders are supporting. I think everyone has the same goal and that is the issue of affordable housing and the desperate need for it. I would give you a city-focused perspective and, not as broad as I usually think, is that they are trying to make affordable housing the city's fault through this legislation. They are saying that we need to be held accountable because we're • failing. In the six GMA planning counties there are three King County cities,Federal Way, r . Council Workshop, 10/5/99 8 . SeaTac, and Burien, who are not making good progress toward their goal and in order to fix that, they want state legislation that somehow if we do that then that will provide affordable housing. All happen to be in the flight path, you might note that. There are two or three things they are looking for in this bill. One is annual numbers, what's the annual progress? And that is already required of cities under the Buildable Lands Legislation passed a couple of years ago. They want a five year check up in these 10 year planning horizons. We're already required to do that. The deadline for the first five year report is 2002. So, we're collecting the date and then they want enforcement for those cities not making good progress and if you don't have adequate land zoned to accommodate your housing target, you can be pulled before the Growth Hearing Board. The real question is, how do you get the market to build affordable housing when land prices are starting to go up, you're having to build in critical areas, the availability of land is shrinking, you increase your densities. You have taken a step in that direction by approving the condo ordinance. The problem is the market still wants to buy the mom and apple pie house. The little white picket fence, the yard, and the dog and until people are willing, or more willing, to buy more dense housing, we're going to see this rub where the realtor's community and builders want to provide what the market wants to buy. The lack of land is just going to be a rub. I just don't know that banging cities on the head and making it our fault is the answer to that squish. You either provide subsidies to subsidize the cost of purchasing housing, to give capital grants so that the purchase cost to construct is lower, or you move the growth line so there's more land. So my point in giving you this today is to let you know that the legislation is out there. I would expect that those organizations, if they haven't contacted you already to provide you with lots of data or position statements, they will, and I just wanted to review that issue with you and let you • know it is going to be on our legislative agenda. Tom Brotherton—This legislation as proposed is aimed at only three cities. If it was put into place it's going to cause us more work to get the information out but it still is going to be hammering at those three cities because they're the ones not meeting the target. Everyone else is meeting their targets. Would that really impact us beyond a little more data collection work? Is it just that we don't want the hammer hanging over us in case something happens in the future. Dena Laurent—There is a little bit more work involved in the current draft. The good thing about the current draft is there are not penalties. Now, they're trying to do incentives and they're trying to give incentives to cities who are doing a good job by giving us more infrastructure dollars. But I would almost argue in the communities that aren't reaching densities, they need to build the roads to accommodate the growth. I guess I'm more on the big city family and why are we taking this heavy handed action for the purpose of three cities. I don't know that it would be a lot more work. I also know it' going to not achieve the long-range goal that we have,which is affordable housing. Let's get together and really work on affordable housing issues instead of spending a lot of time pounding out numbers. I'm scheduled to bring a draft to your next workshop meeting on the 19`h and so if you have things you think we need to address, things you love or hate about what we did last year, if you could let me know in the next week. The workshop adjourned at 5:59 PM.