M I N U T E S KITSAP COUNTY BOARD OF COMMISSIONERS December 8, 2003 - PM The Board of Commissioners met on the above-stated date. Present were Chair Jan Angel, Commissioner Chris Endresen, Commissioner Patty Lent, County Administrator Malcolm Fleming and Clerk of the Board Pro Tem, Kathy Brown. (THE BOARD OF COMMISSIONERS' PUBLIC MEETINGS AND PUBLIC HEARINGS ARE AUDIO AND VIDEO TAPED). ITEMS SET FOR TIME CERTAIN: 6:30) Meeting Called to Order with Pledge of Allegiance. 6:30) PM Public hearing to consider adoption of the following Capital Facilities Plans: 1. Public Works/Roads Division Six Year Transportation Improvement Program for the period of January 1, 2004 to December 31, 2009. Total Fiscal Impact: $46,405,000 over a 6-year period for specified transportation projects. Source of Funds: State, Federal Impact Fees & Local. Staff Contact: Jon Brand, 337-4893. 2. Public Works/Roads Division Annual Road Construction Program for 2004. Total Fiscal Impact: $7,916,000 for specified road construction projects. Source of Funds: State, Federal Impact Fees & Local. Staff Contact: Jon Brand, 337-4893. 3. Public Works/Sewer Utility Division Capital Improvement Program for the period of January 1, 2004 to December 31, 2009. Total Fiscal Impact: $64,280,800 over a 6-year period for specified sewer utility projects. Source of Funds: Sewer Construction, PWTF & SRF Loans, and Revenue Bonds & Assessments. Staff Contact: Rick Gagnon, 337-3659. 4. Public Works/Stormwater Division Capital Improvement Program for the period of January 1, 2004 to December 31, 2009. Total Fiscal Impact: $5,596,000 over a 6- year period for specified SSWM projects. Source of Funds: Surface & Stormwater Utility Fees. Staff Contact: David Tucker, 337-7292. 5. Parks Capital Improvement Program for the period of January 1, 2004 to December 31, 2009. Total Fiscal Impact: $19,252,000 over a 6-year period for specified Parks & Recreation Improvement projects. Source of Funds: Park Impact Fees, Real Estate Excise Tax, Grants, Donations and Contributions. Staff Contact: Cris Gears, 337-5361. 6. Administrative Services Capital Improvement Program for the period of January 1, 2004 to December 31, 2009. Total Fiscal Impact: $49,800,000 over a 6-year period for financing public buildings projects. Source of Funds: LTGO Bonds, Real Estate Contract, Real Estate and Excise Tax. Staff Contact: Rich Hanna, 337- 4787. 7. Schools Capital Improvement Program for the period of January 1, 2004 to December 31, 2009. Total Fiscal Impact: $ Source of Funds: Staff Contact: Malcolm Fleming, 337-7146. 6:30) PM Public hearing to consider a proposed Ordinance amending Kitsap County Code Chapter 4.110 relating to Development Impact Fees which will delete phased implementation established by Ordinance 303-2003. Total Fiscal Impact: $429,256 in 2004; $1,487,650 in 2005; $2,116,737 in 2006; $2,830,049 in 2007; $2,940,551 in 2008 and $3,054,881 in 2009 reduction in annual revenues from impact fees. Source of Funds: Impact Fee revenues. Staff Contact: Randy Casteel, 337-5777. Malcolm Fleming, County Administrator, gave a PowerPoint presentation on the Capital Facilities Plan and the proposed ordinance relating to impact fees. He said the Capital Facility Plans are intended to help maintain the quality of life in Kitsap County and that the Growth Management Act (GMA) requires that all comprehensive plans include an inventory of existing capital facilities forecast for future needs that covers at least six years. Fleming said GMA also requires that if the projected funding for the facilities is inadequate, a balance must be achieved by either the level or service, adjusting the sources of revenue or restricting land uses. Jon Brand, Public Works Department, gave a brief overview of the Six Year Transportation Program and Annual Road Construction Program. He said the 6-year program has 46 projects totaling approximately $46 million with funding from Federal grants, State grants, Impact Fees and allocations from gas and excise taxes as well as other fund reserves. Brand said the Annual program is the first year of the 6-year program and is required by RCW to be updated annually. He said there is 25 projects on the annual program totaling $7.9 million. Rick Gagnon, Public Works Wastewater Division, gave a brief overview of the Six Year Wastewater Capital Facilities Plan stating there are 12 projects identified on this plan totaling $64, 280, 800 with funding from sewer improvement/ replacement/construction funds, Public Works Trust Fund Loans, State Revolving Fund Loans, Revenue Bond Sales and ULID Assessments. Gagnon said the primary projects for 2004-2005 would be the construction of the Kingston Treatment Plant and Outfall. David Tucker, Public Works Stormwater Division, gave a brief overview of the six-year plan stating there are 15 projects to be designed and constructed over the next six years totaling $5.596 million all which are paid through Surface and Stormwater management fees. Cris Gears, Facilities, Parks & Recreation, gave a brief overview of the plan stating the total projects funded range between $19,022 million and $23.5 million and the primary projects are the large-scale regional facilities for sports, recreation and trails. Malcolm Fleming, County Administrator, said the Administrative Services Capital Facilities Plan includes six different specific projects – the Bremerton Government Building, County Administration Building, Courthouse Park and Master Plan, Silverdale Library and Community Center, Law and Justice Center remodel and a county morgue facility totaling $45.5 million. Grace Yuan, Kitsap County School Districts, said the Schools Capital Improvement Plan is consistent with the requirements of the Growth Management Act and asked the Board to adopt the plan by reference. She said within the next six years both capacity and non-capacity projects for North Kitsap totals $85.6 million; Central Kitsap - $88 million; South Kitsap - $16.4 million and Bremerton - $6 million. Yuan said these projects represents the analysis and funding done based on estimated project costs in June of 2002 along with the impact fee analysis. She said the school districts are looking for a combination of multiple sources of funding in order to build the capital facilities. Discussion was held between the Board and Yuan regarding federal impact fees, districts being unable to build schools on anticipated enrollment and funding for school portable facilities. Six-Year Transportation Improvement Program: Dusty Meyer said Kitsap County did not have the resources to become a city and a determination needs to be made as to what needs to be done in the county in order for it not go broke and ruin the land. Tom Donnelly, Kitsap Citizens for Responsible Planning, said the elements of the proposed Capital Facilities Plan are monstrous and far beyond the ability to digest them within the short period of time that is available. He said there is no urgency and the Capital Facilities Plan can be amended at anytime. William Palmer addresses the Board with concerns about Section 4.11.200 in that it is a significant departure from the way trips are calculated and would impact fees under today's standards. Annual Road Construction Program: No testimony given. Sewer Utility Division Capital Improvement Program: Dusty Meyer questions who wouldn't need sewers if they had good septic systems. She said if the county had working septic system there would be no need for the sewerage treatment plant that is already obsolete. Tom Donnelly said he gave comments regarding this matter in his previous statements. Storm-water Division Capital Improvement Program: Tom Donnelly said he gave comments regarding this matter in his previous statements. Parks Capital Improvement Program: Tom Donnelly addresses the Board with concerns about the limited lack of meaningful public participation and no opportunity from organized groups to receive feedback from staff evaluating the proposed reductions. Helen Daly believes there is a need for the impact fees in order to help the Parks Department funding. Matt Ryan asks the Board to consider a metropolitan park district for the county and that impact fees would not take care of maintenance. Jim Sharp questions the proposed reduction in the Parks and Recreation funding and said he is against cutting the budget by 20% to subsidize people who have not moved to this area yet. Hank Mann Sykes reminds the audience that due to lack of funding, Kitsap County ranks # 39 out of the 39 counties in Washington state for public amenities. Administrative Services Capital Improvement Program: Dusty Meyer – pass Helen Daly - pass Schools Capital Improvement Program: Kevin Ferguson, Bremerton School District, recommends that their portion be included in the adopted Capital Facilities Plan. Tom Donnelly objects to the reducing the school capital facilities plan or the impact fees due to the limited opportunity for citizen participation. Gary Powell, Central Kitsap School District, recommends that their plan be included in the County's Capital Facilities Plan. Bev Cheney, South Kitsap School District, recommends that their plan be included in the County's Capital Facilities Plan. Bette Hyde, Bremerton School District, recommends that their plan be included in the County's Capital Facilities Plan. Nancy Moffatt, North Kitsap School District, recommends that their plan be included in the County's Capital Facilities Plan. Cahtherine Ahl, North Kitsap School District, recommends that their plan be included in the County's Capital Facilities Plan. Richard Brown did not support including the schools facility plans into the county's overall capital facilities plan. Development Impact Fees: Malcolm Fleming, County Administrator, gave a PowerPoint presentation on the proposed ordinance stating the current impact fee code imposes residential buildings for schools, roads and parks. He said the county also imposes fees for commercial buildings but only for road programs. Fleming said the current impact fee codes phases in a series of increases over a 4-year period and that they are imposed only in the unincorporated areas of the county. He said the total percentage for the proposed capital facilities plan is approximately 10% and if the impact fee increases stand, the percentage would be approximately 20%. Under the current code, he said the projected revenue is approximately $28 million over the 6-year period with the maximum amount of approximately $5.7 million annually. He further said under the current code, impact fee revenue must be used only to add capacity and not used for maintenance, it must be used on projects/developments that benefit from the infrastructure and the fees must be used within the 6-year of collection and if not must be refunded. Fleming said the proposed ordinance would make an automatic provision that provides for an annual adjustment based on the consumer price index but only if the capital improvement plan has not been adjusted during the previous 12-month period. He said the greatest change to the ordinance is proposing to repeal the phase-in of increases that are planned over the next four years. He said if the fee increases are repealed it would reduce the county revenue in the three categories by approximately $13 million over the 6-year period. Randy Casteel, Public Works Director, said relative to the comments made by William Palmer, for a 10,000-square foot building, the $1.23 per square foot is the unit cost and not the trip cost. Larry Johnson said approximately 60% of his taxes goes to the schools and he doesn't have any kids in school. He agrees with supporting schools but if the impact fees were increased it would raise the cost of housing in the county and violate the Growth Management Act as it relates to providing affordable housing. William Palmer states he is opposed to impact fees under any circumstance and did not believe impact fees are the source of funding needed for capital facilities improvements. Richard Brown said he did not want the county to give the various entities any more of the taxpayer's money because they would never be satisfied and would always need more. Peter Schrappen, West Sound Conservation Council, states it is time to stop subsidizing welfare for realtors and developers. Sherry Appleton, Poulsbo residents, asks the Board not to rescind the decision on the increase to impact fees. She said the people who live here have already paid and wants good schools, roads and a healthy park system. Vivian Henderson said the Kitsap Alliance of Property Owners do not support the increase of impact fees and definitely supports the repeal of the ordinance. She said provisions already exists that would require new growth in development to pay a proportionate share of the cost, called property and sales taxes. Yvonne Saddler urges the Board to leave intact the increase in impact fees enacted last June. She said those who profit by the growth should pay the increase in the fees. Kevin Ferguson said funding is not keeping pace with anticipated growth and believes the current law should be sustained as it absorbs and handles future inflation needs. Richard Anderson, Kitsap Audubon Society, urges the Board not to rescind the impact fee ordinance because it is needed and if it was not in place the people who have already paid their impact fees would absorb the taxes. Linda Gabriel did not believe the people who live here should have to subsidize the move of others who wanted to live in this area by reducing the impact fees. Sharon Peterson said no one likes impact fees and the plan is not perfect but will help solve our problem. She said new construction does impact roads, schools and parks. She urges the Board to retain the vote in June. Dale Armstrong questions why the schools wanted to add additional taxes to an already unfair tax for new home construction. He urges the Board to repeal the impact fee ordinance and abolish impact fees entirely. Rick Courson said past commissioners have committed much of the rate to pay for new governments, not roads or parks and to say that there is a huge deficit in capital facilities due from lack of impact fees is misleading. He urges the Board to repeal the impact fee increase. Art Castle said if the state and local governments actually spent some of the new revenue on capital improvements instead of growing the general fund, tonight's discussion would not be needed. He said if growth isn't paying for itself its because its paying for everything else. He urges the Board to repeal the impact fee increase. Samantha Torpey supports repeal of the impact fee increase and if the increase remains, it will artificially increase the assessed value of every home in Kitsap County. David Smith said the issue of whether a builder or developer would carry home more profits based on the size of the impact fees has nothing to do with it and it is simply competition with other developers and other builders. Tom Donnelly said he agrees with Smith on the effects of impact fees and it is not time to sort out the semantics of this at tonight's meeting. He urges the Board to reject this proposal that will either tax current residents for more of the cost of growth or create severe overcrowding or congestion in our schools, roads and parks. Deborah McDaniel said she did not have children in the school system buts supports impact fees. Rick LaBow urges the Board to repeal the proposed impact fee increase and said impact fees are not fair. Cathy Davidson said school districts have real needs and our communities want quality schools. She said all of the district schools are affected by new development. Helen Hoover urges Commissioner Lent to stand by her decision made in June and agrees with the comments made by Davidson. Hal Hoover said the schools needed the Board vote for impact fees. Tom O'Brien said impact fees are necessary to the financial health and well being of the school districts. Tom Anderson said the county roads are congested, the schools are overcrowded and the parks are closed too often. He said these problems will not get any better as population increases and believes the phased impact fees are reasonable and a small price to pay for the future of the county. Art Schick said he supports schools and park levies with his vote but did not support his taxes being used to build infrastructures that were needed due to growth. He believes the new people coming into the county should expect to pay their own way. Dan Delaney urges the Board to retain its June vote regarding the impact fees. Amy VanFossen urges the Board to retain its June vote regarding impact fees. Jan Oleksiak said she is confused about the fairness of the impact fees in that the Board supports the EDC and other agencies that bring businesses into the county and yet impact fees to new businesses are so high that she could not imagine why businesses would want to come to Kitsap County. She also has concerns about affordable housing and urges the Board to repeal the impact fees. Frank Mahaffey said there are some misleading statements in that its been stated that the realtors /builders/developers oppose impact fees in order to benefit their own industry but that is not true, its just the opposite. He did not believe the county should send an "anti-business" message to the business community. Commissioner Endresen clarifies that relative to assessed valuation on property, under Initiative 747, the county and cities can only collect 1% more in revenue than it collected the year before. She said even if one's assessed valuation increases 100%, the property taxes would not be that much because the county can only collect the 1%. Jimmy James urges the Board to consider the existing population who do not want to subsidize new people coming into the area and using new facilities when the rest of citizens have to pay for it. Phil Best wonders why Kitsap County is the lowest among the counties in impact fees and yet there is an impact in this county. He said relative to parks, conservation futures fees allows acquiring property but does not allow for building anything on the property. He said the county needs funds for building and using impact fees could do it. Nancy Moffatt said she understands that imposing impact fees is not a perfect system but it is the system in place for protecting schools, parks and roads. She urges the Board to leave the adopted ordinance in place as the bridge between the old fee structure and the new system that is yet to be defined. Bob Burkholder submitted a petition to the Board and states the petitioners believes it is only fair to have new growth pay its way in funding for increased costs to schools, roads, parks and other infrastructure. Catherine Ahl said if impact fees had been increased each year with inflation since 1992, local school taxes might have been less because schools can use impact fees to help pay for growth for more classrooms. Jeff Moore said if impact fees were increased to the maximum, the public would still have to pay for or subsidize development. Ed Bass urges the Board not to repeal the phased increases in the growth impact fees and believes it is fair for new growth to pay its way. Nadean Ross objects to the long presentation by staff. She believes the impact fees have a detrimental affect on affordable housing and a dampening affect on additional businesses. She believes levies for schools were difficult to pass and that was for a good reason. Robert Ross agrees with comments made by previous speaker but also has concerns about taxes paid on undeveloped properties. Judy Morgan said Kitsap County is expensive but nowhere near the housing costs in King County. She said impact fees here are small but growth never pays for itself. She said increase in impact fees will change the burden of taxes and encourages the Board not to repeal the impact fee increases. Gayle Helseth-Kenison supports statements made by Delaney of North Kitsap and encourages the Board to retain the current impact fee ordinance passed in June of 2003. Cami Hattrick encourages the Board to stay with the decision made in June of 2003. David Grellier said all county residents benefits from development and is unfair for new people to pay for these things. Gene Medina believes the action taken by the Board on last June responded to the challenges of providing appropriate education facilities for students, families and communities. He urges the Board to retain its decision made in June. Bill Matchett said he agrees with a great deal of the comments made regarding retaining if not increasing impact fees. Debra Reedy encourages the Board to retain its decision made in June of 2003. Janice Yee urges the Board to not to repeal its decision made in June of 2003 and to continue with the impact fees. Matt Ryan said impact fees are the most inefficient way of collecting taxes. He is against impact fees. Kathryn Quade believes impact fees goes for the quality of life issues and that Growth Management requires that development pay for itself and that is only fair. She urges the Board to reject the repeal and to continue with the impact fee increases voted on in June of 2003. Dave Jones said the Association of Realtors is against the increase to the impact fees because it will have a negative effect on affordable housing. Jack Hamilton said Kitsap County is a government-dependent economy and will remain so unless something is done to change it. He said impact fees are based on the assumption of growth that does not properly consider the cost of government within the county. Hamilton said empty lots do not pay impact fees and urges the Board to reverse its decision made in June. Hank Mann-Sykes said he loves this county and did not mind paying the additional taxes. He said this a county thing and not a partisan or political issue. Dane Spencer said Kitsap County is the second most populated county in WA State and it is not a rural county. He supports impact fees. Jim Sharpe urges the Board to retain the impact fee increases voted on in June of 2003. Michael Svardh said there is not enough buildable land in North Kitsap and that is what is increasing the cost of housing. He urges the Board to retain the impact fee increases voted on in June of 2003 until the impact of the housing market can be assessed. Linda More' said it is 10:30 PM and questions how long this meeting would continue. She believes impact fees are to the community just as a foundation is to a structure. She said impact fees paid for the schools, parks and roads, the foundation of our community. John Taylor – not present to speak. Mary Lou Jensen – opposes impact fees. Kenneth Jensen said he is against the impact fees and believes the burden should be placed equally on all the citizens. Ken Holmgren questions the Board on when was the last time they saw a new home crowding a highway, a school or park. He said children crowds schools, people crowd parks and cars crowd highways therefore an excise tax should be levied on cars, school children and parks users. He believes this would be more fair and equitable. Helen Daly believes the impact fees are fair and justified because the people who are causing the increase to the infrastructure should help pay for it. Richard Romane said he is opposed to the impact fees because they would have an adverse impact on Kitsap County. Lary Copolla states he is opposed to the impact fee increase and believes it will discourage job creation. He said this is not about builders and developers versus teachers and children this is about paying for the impacts that are generated on equal basis by the people that create and contribute to the impacts. Jean Bulette – yields time to Frank Mahaffey Beth Wilson – not present to speak. David Wideman said after repealing the impact fees and reducing the school board by one third then - teach the school board members about budgeting and then perhaps builders would pay more for impacts to our communities. Charles Bickel concurs with most of the speakers who supports the impact fees and thanked the Board for its vote in June in that it showed good judgment and character. Grace Yuan thanks the Board for its vote in June and urges them to retain the ordinance that is in place. Ron Ross said as a developer he has given the county a lot of property over the years and did not believe the largest city in the county pays impact fees yet the majority of the schools in Bremerton are within the city limits. He suggests taking the money from the Parks Department and giving it to the schools. Jim Sommerhauser believes Kitsap County would continue to grow, it is already not keeping up with the level of service and it would get worse if we don't keep the increased impact fees. Mike Brown fears with the higher cost, the potential is created for a generation of renters. He also has concerns about impacts to commercial development and how that might effect new job creations. Scott Henden said according to the state constitution, it is the paramount duty of the state to make ample provision for the education of children residing within its borders. He said the responsibility of the state should not be shifted to the county. He urges the Board to repeal the impact fee ordinance and ask the state to do its job. Chair Angel closed the public comment portion of the public meeting. Commissioner Lent said when she initially made the motion to increase the impact fees and the motion was very clear stating she would like to increase the current impact fee and begin July of 2004 to allow the Board to look at additional funding to supplement impact fees. She said she has always been under the assumption that impact fees alone and added new growth will not do the trick. She said there needed to be something in place that is equitable for all residents of Kitsap County. She said real estate excise taxes are already collected and is being spent it on various county government items. Commissioner Lent said the task force committee was able to review the current impact fee revenue and divide it – 40% for roads, 40% for parks and 20% for capital facilities. She said it is actually not as grim a picture as it seems because with the impact fee, there will be money received in the parks department that is actually more than what would have been received with increase of impact fees. Commissioner Lent said she is content with using the real estate excise tax as a supplement to the impact fees but it is a temporary bridge. She said the Board can re- address this next year but the opportunity would not be given to force the state to do what is right. Chair Angel said she agrees with a statement in the Bremerton Sun Editorial relative to the impact of these fees and the quality of life. She said the health care and health insurance cost are already astronomical and is one the county's largest budget expenses. She said high school construction costs would more than double by the square foot, local churches cost would increase approximately 150% per square foot and we would be discouraging employers from expanding and encouraging them to leave Kitsap County. Chair Angel said this is not about builders, its about eliminating jobs, its about slowing or stopping economic development and it is drastically affecting affordable housing and health care cost. She said it is about increasing the quality of life in Kitsap County. Commissioner Endresen read a list of road projects that would not be completed whether the impact fee increase was kept or not unless the state or federal governments helps with the funding. She questions why Pierce and Snohomish Counties had an increase in housing when their impact fees are higher and said that logic did not set well with her. She said the question is who should pay for new roads, new parks, new trails and new schools that are required as the result of growth. She said currently existing taxpayers pay 75% of the cost while new construction pays 25% of the bill. Commissioner Endresen did not believe it was fair to ask current residents to pay 100% of the cost. She said the current impact fee ordinance is fair, it allows for impact fees to be increased over a period of years and it splits the cost of new roads, parks and schools between existing taxpayers and new homeowners, 60% to the homeowner and 40% to existing taxpayers. She said these services are essential to a quality community and a quality community is essential for economic development. She said repealing the impact fees would degrade the quality of life and challenges the audience that in eight years when they are sitting at a stop light complaining about the long wait, to think back on tonight's meeting and how they asked for this level of service because this is level of service that this vote is going to provide. A motion was made by Commissioner Lent and seconded by Chair Angel that the Board enacts Ordinance No. 313-2003** thereby amending Chapter 4.110 Kitsap County Code; repealing the existing impact fee ordinance (Ordinance No. 303-2003) for roads, parks and schools; accepting the Consumer Price Index (CPI) that automatically goes into effect and continuing to work with the state. Commissioner Endresen votes No. Motion carries. Meeting adjourned at 11:00 PM. BOARD OF COUNTY COMMISSIONERS KITSAP COUNTY WASHINGTON __________________________________ PATTY LENT, CHAIR __________________________________ CHRIS ENDRESEN, COMMISSIONER __________________________________ JAN ANGEL, COMMISSIONER ATTEST: OPAL ROBERTSON DATE APPROVED CLERK OF THE BOARD * See Resolution Journal Volume No. 58 ** See Ordinance Journal Volume No. 12 Visit the County's website at www.kitsapgov.com NOTE: KITSAP COUNTY DOES NOT DISCRIMINATE ON THE BASIS OF DISABILITY. INDIVIDUALS WHO REQUIRE ACCOMMODATIONS SHOULD CONTACT THE COMMISSIONER'S OFFICE AT (360) 337-4428 OR TDD (360) 337-7275 OR 1-800-816- 2782. (PLEASE PROVIDE TWO WEEKS NOTICE FOR INTERPRETER SERVICES). KITSAP COUNTY COMMISSIONERS MINUTES, DECEMBER 8, 2003 - PM Page 368 Page 356