HomeMy WebLinkAboutItem 03 Transportation System SDC Methodology Update - Creation of a CAC AGENDA ITEM SUMMARY Meeting Date: 9/9/2013
Meeting Type: Work Session
Staff Contact/Dept.: Len Goodwin/Anette
Spickard
Staff Phone No: 726-3685
Estimated Time: 15 minutes
S P R I N G F I E L D
C I T Y C O U N C I L
Council Goals: Provide Financially
Responsible and
Innovative Government
Services
ITEM TITLE: TRANSPORTATION SYSTEM SYSTEMS DEVELOPMENT CHARGE (SDC)
METHODOLOGY UPDATE – CREATION OF CITIZEN’S ADVISORY
COMMITTEE
ACTION
REQUESTED:
Provide direction to staff for creation of a Citizen’s Advisory Committee (CAC) for
the Transportation System SDC methodology update and on the issues to be
reviewed by the CAC.
ISSUE
STATEMENT:
Shall the city appoint a CAC to provide recommendations and input to the Council
regarding policy issues identified by Council for the Transportation System SDC
methodology update?
ATTACHMENTS: 1. Council Briefing Memo
2. CAC Charge, Guidelines, Membership Categories, Meeting Schedule
3. CAC issues for review
DISCUSSION/
FINANCIAL
IMPACT:
City staff are updating the System Development Charge methodology for the
Transportation System. Transportation System SDC’s were last reviewed and
updated by Council in 2000, although the project list was updated in 2008. The
Council will be reviewing the City’s new Transportation Systems Plan (TSP) in
2013. The TSP will form the new project list used in the SDC methodology as part
of the process to set SDC fee levels.
The CAC is an important part of the public process to review and evaluate the
proposed methodology for the SDC update. Recruitment for CAC members will be
conducted in September and applications will be brought back to Council in
October for appointment. Once appointed the CAC will meet between October,
2013 and March, 2014.
Staff have developed a list of issues where the Council might choose to seek
recommendations from the CAC. Issues that are statutory or technical in nature will
not be referred to the CAC for review.
Formal action by the Council is not required, although direction to staff will form
the basis for the recruitment process and future presentations to the Council and to
the CAC.
Attachment 1 – Page 1 of 3
M E M O R A N D U M City of Springfield
Date: 9/9/2013
To: Gino Grimaldi COUNCIL
From: Len Goodwin, DPW Director
Anette Spickard, DPW Deputy Director
BRIEFING
Subject: Transportation System Systems Development
Charge (SDC) methodology update – Creation
of Citizen’s Advisory Committee
MEMORANDUM
ISSUE: Shall the city appoint a CAC to provide recommendations and input to the
Council regarding policy issues identified by Council for the Transportation System
SDC methodology update?
COUNCIL GOALS/
MANDATE:
Provide Financially Responsible and Innovative Government Services
BACKGROUND:
City staff has undertaken a review of the existing methodology created to establish rates
for Transportation System Systems Development Charges (“SDC”). Council last
reviewed and updated the Transportation System SDC methodology in 2000. In 2008
Council reviewed the methodology and no changes were made other than to update the
project list and rates. With the City’s pending adoption of its own Transportation
System Plan (TSP) it is appropriate to review the methodology and update the basis for
the SDC rates.
An important component of this review is the use of a Citizen’s Advisory Committee
(“CAC”) to work with staff to evaluate the methodology and provide input and
recommendations to the Council prior to adoption of the new rates. Staff has identified
a list of potential issues the Council may wish to refer to the CAC for review. In
addition to the work of the CAC, staff will review statutory and technical components of
the methodology to present to Council.
DISCUSSION:
Staff recommends that Council ask the CAC to examine certain policy issues using the
following objective evaluation criteria:
• Equity – is the fee in proportion to the system impact
• Defensibility – is the methodology consistent with the law and other
communities
• Administrative Feasibility – is the data available to support the methodology
• Public Understanding/Acceptance – is the methodology simple to understand
and fair
If Council believes any of the following issues are not appropriate for reference to a
CAC, or should Council have additional issues which they believe should be considered
by a CAC, they may provide appropriate direction to staff at the work session.
Attachment 1 – Page 2 of 3
Citywide SDC rate or region-specific SDC rate?
Should there be one citywide SDC charged for all new development or should there be
separate SDC’s for regions of the city based on the projects to be built in that region,
such as a Glenwood specific SDC? Such a regional SDC could be adopted as either a
supplement to a baseline rate that is City wide or a standalone SDC for a region. There
are benefits and downsides to either approach and therefore it is an appropriate issue to
receive citizen input for the Council’s consideration. For example, if the SDC is based
on geography there will be disparate rates between areas due to the amount and size of
projects to increase capacity. The Glenwood area will have a lot of capacity projects to
be built and so a Glenwood specific SDC will be higher and may discourage
development. However if Glenwood Urban Renewal funds continue to pay the SDC’s
for development in this area this issue may be mitigated. Having different SDC rates in
different parts of the city may result in complaints of inequitable treatment between
developments but the counter argument is that the rate paid is directly tied to the
capacity needs of the area being developed. Some may argue this is a fair approach
because a development in Jasper is not paying for projects occurring in Glenwood.
However, if the SDC continues to be a uniform citywide rate then the proceeds can be
used on any project that is part of the SDC adopted project list. Priority transportation
projects won’t be delayed due to a lack of SDC’s collected in their region.
Should there be a credit and/or incentives policy?
We are required to provide credits for offsite development already but should there be
additional credits beyond the statutory requirements? Are there other ways to use
credits and incentives in the SDC structure to encourage development? If Council
allows for credits/incentives that are not built into the methodology, then the result is a
true net loss of future revenue to build the Transportation System projects. If the
credits/incentives are a component of the methodology the rate will adjust for that factor
and will ensure adequate revenues are available to build the projects. Having a
credit/incentive methodology may encourage more development but the question is at
what cost to either the planned projects or to the other ratepayers?
Should there be an automatic adjustment in SDC rates that addresses inflationary
changes?
Some jurisdictions do have this feature built into their methodology, and the City of
Springfield has had this feature since 1991, but it is still an appropriate issue to have the
CAC consider and give their recommendation to the Council.
Should City’s match for State and Federal projects be included in methodology?
This is in our current methodology. Should we continue to assume that some specific
level of match requirement will be met for both State and Federal projects? Given the
financial status of our Road Funds, if the match is not accounted for in the SDC, then it
is unknown where the City will find the funds to meet the match requirements. The
current methodology assumes a 25 percent match, but the actual amount is often the
subject of negotiation at the time a project is prepared for delivery.
Attachment 1 – Page 3 of 3
Should the costs associated with debt service be included in the project costs for
purposes of the SDC methodology?
It is difficult to predict so far in advance what the bonding environment will be or even
if we will sell bonds at all to finance any of the projects. Factoring in an estimate for
debt service is allowable under the law, however previous CAC’s that have reviewed
this issue for other SDC’s recommended that it should not be included in the initial
project cost but included at the time that debt is actually issued. The city can then
update the project costs and adjust the SDC accordingly. If the debt service cost is built
in up front then that eliminates the need for Council to revisit the project list and adjust
SDC rates multiple times.
Should there be a reconciliation of actual project costs to estimated costs after project
completion to address use of any savings for future projects?
It is difficult to rebate previously paid SDC’s after a project is completed because
SDC’s are deposited into a pooled fund. If any adjustments are made to the rates based
on lower project costs, then the rate adjustment would only impact future rate payers.
Currently savings from projects are used to pay for other projects on the adopted list.
Should the use of the ITE data manual for trip data be continued? The 2000 CAC
recommended that this issue should be reviewed. Fundamentally, there has to be data
available to support the SDC methodology and staff will evaluate whether there is
enough local trip data available to use instead of the ITE manual. The ITE manual is
currently used for the SDC methodology and developers can submit their own local data
for staff to review if they feel the ITE data is not representative.
Should Council policy allow commercial/industrial ratepayers to defer payment of
SDC’s over time similar to that allowed by residential ratepayers?
Deferral or phasing of SDC payments for commercial/industrial projects may provide an
additional incentive for new projects to commence, however there will be a
corresponding financial impact on the city’s ability to finance transportation system
projects and an added administrative cost to track and bill for such payments that should
be considered.
Should the appeal process be evaluated to determine if any improvements should be
made?
It is always good business practice to look at procedures from time to time to find
efficiencies and implement service improvements.
RECOMMENDED ACTION:
Direct staff to establish a Citizen’s Advisory Committee to evaluate the Transportation
System SDC methodology update; recruit applicants and bring back to Council for
appointment to the CAC in October 2013; and give staff direction on the policy issues
list for the CAC’s review.
Attachment 2 - Page 1 of 5
City of Springfield
SYSTEM DEVELOPMENT CHARGE UPDATE PROJECT
Transportation System
CITIZEN ADVISORY COMMITTEE (SDC-CAC)
October 2013
CAC Charge
This CAC is charged with the responsibility of evaluating the city’s proposed methodology for
assessing systems development charges to developers of property. Specifically, the CAC will provide
the City Council with informed citizen opinions and input from their review of the Transportation
System systems development charges (SDCs) methodology.
The CAC is a forum for facilitating an open exchange of information, ideas and opinions between the
SDC study team and interested members of the public.
Since the creation and modification of SDC methodologies is a highly technical area, the Council will
seek the input of the CAC on specific policy issues identified by Council and referred to the CAC. It will
not refer policy items to the CAC that are driven by technical or statutory requirements.
While the Council values the input of informed and interested citizens, and will certainly consider the
views of the CAC members, it does reserve the ability to fulfill its legal obligation to the citizens to
make the final decisions.
Key Outcomes
• Methodology is fair, equitable, objective, defensible, and understandable
• Provides adequate revenue for transportation system projects
Attachment 2 - Page 2 of 5
City of Springfield
SYSTEM DEVELOPMENT CHARGE UPDATE PROJECT
Transportation System
CITIZEN ADVISORY COMMITTEE (SDC-CAC)
October 2013
CAC Guidelines:
The CAC will operate under the following general guidelines and conditions:
• CAC members who have been appointed on the basis of a recommendation by a specific
constituency will be asked to solicit the opinions of their constituency and articulate the
positions of their memberships. The Council will strive to appoint a diverse and balanced
group.
• CAC meetings will be open to the public and include a period for general public comment.
• Members of the CAC will not hold “voting” positions nor adopt recommendations under the
majority rule requirements. The City Council Liaison and Planning Commission Liaison will
serve in an “Ex Officio” capacity. Members will participate in discussions of the SDC principles
with the staff team with the objective of developing consensus recommendations that will be
presented to the City Council. In the event that consensus on specific policy issues is not
achieved, both majority and minority opinions will be considered by the staff team and
reported to the City Council.
• CAC discussion will review options for SDC Methodologies for the Transportation System to
reflect, to the extent practicable, community values and concerns. The City staff SDC team
will provide objective information on SDC Methodology options to the CAC and solicit CAC
recommendations.
• CAC’s recommendations are non-binding to both the City staff SDC team and the City Council.
However, all CAC recommendations will be documented and forwarded to the City Council.
• The staff SDC team will consider all CAC recommendations in formulating its
recommendations to the City Council. However, because of the staff study team’s fiduciary
and management responsibilities, their recommendations may, at times, be different from
those of the CAC. Staff study team recommendations will be reported to the CAC once they
are made.
• The study scope of review will be defined by the staff team as approved by the City Council.
Due to the time constraints, it may not be feasible to accommodate revisiting of issues already
examined and feedback on staff study team recommendations. The CAC should not review
and/or recommend reconsideration of past City Council decisions.
Attachment 2 - Page 3 of 5
• Staff study team support of CAC activities will be limited to provision of information necessary
for consideration of SDC policy issues and decisions. The staff team will provide information
that is available from city records which may be collected and distributed without extensive
expenditures of staff time or budget resources.
• The CAC will continue until the completion and adoption of the City of Springfield SDC
Methodology for the Transportation System. The proposed meeting schedule includes six
meetings between October 2013 and March, 2014.
• CAC membership is voluntary and will not be compensated by the City of Springfield.
Attachment 2 - Page 4 of 5
City of Springfield
SYSTEM DEVELOPMENT CHARGE UPDATE PROJECT
Transportation System
CITIZEN ADVISORY COMMITTEE (SDC-CAC)
October 2013
Proposed Membership Categories:
Please note one person may fill more than one category.
• City Council Liaison – Ex Officio
• Springfield Planning Commission Liaison – Ex Officio
• Development Community
o Residential Builder
o Commercial Builder
o Engineering/Design
• Springfield Chamber of Commerce
• Business Community
o Large Employer
o Medium Employer
o Small Employer
• Bike/Pedestrian/Multi Use /Alternative Forms of Transportation Community
• Freight Community
• Fuel Community
• Citizen(s) at Large
Attachment 2 - Page 5 of 5
City of Springfield
SYSTEM DEVELOPMENT CHARGE UPDATE PROJECT
Transportation System
CITIZEN ADVISORY COMMITTEE (SDC-CAC)
Proposed Meeting Schedule
Six Wednesday evening meetings between October and March
September 9, 2013 Council worksession to adopt committee charge and membership categories
September 10 Recruit members between September 10 and September 23, 2013
October 7 Council appoints CAC members
October 30 Kickoff Meeting
November 20 Meeting #2
December 18 Meeting #3
January 15, 2014 Meeting #4
February 19 Meeting #5
March 19 Meeting #6
Attachment 3 – Page 1 of 1
City of Springfield
SYSTEM DEVELOPMENT CHARGE UPDATE PROJECT
Transportation System
CITIZEN ADVISORY COMMITTEE (SDC-CAC)
October 2013
Potential Policy Issues for CAC examination:
Should there be one citywide SDC to support all projects or break out by region, e.g. Glenwood projects
paid by Glenwood development?
Should there be a Credit/Incentive policy?
Should there be a factor for inflationary/deflationary adjustments?
Should City’s match for State and Federal projects be included in methodology?
Should debt service costs be included in the methodology?
Should there be a reconciliation of actual project costs to estimated costs after project completion to
address use of any savings for future projects?
Should the use of the ITE data manual for trip data be continued?
Should Council policy allow commercial/industrial ratepayers to defer payment of SDC’s over time
similar to that allowed by residential ratepayers?
Should the appeal process be evaluated to determine if any improvements should be made?
Evaluation criteria to be used when examining policy issues:
Equity – is the fee in proportion to the system impact
Defensibility – is the methodology consistent with the law and other communities
Administrative Feasibility – is the data available to support the methodology
Public Understanding/Acceptance – is the methodology simple to understand and fair