Council - Special Meeting

IN THE FIRST FEW FISCAL YEARS, WE CAN CHANGE THOSE SPEND RATES, BUT ULTIMATELY WE DECIDED THAT IF WE'RE GOING TO INCLUDE THE REVENUE OF THE IMPACT FEES, WE HAVE TO INCLUDE THE COSTS AS WELL. BUT THERE ARE TIMES WHERE IMPACT FEES ARE PAID FOR by the developer, they may not be spent for that specific subdivision. The way impact fees are utilized, it's on a whole city basis. But we do have to spend those impact fees within eight years. It can be stretched out to 10 years. So essentially the impact fees coming in and the impact fees going out are a wash at the end of the 10 years. Lastly, population, the increases in population are what drives our staffing needs per 1,000 ratio, so that police FTE and the GenGov FTEs are driven by the population increases. With that being said, do we have any further?

Chris, if I may. Yeah. I have a question on communication. Who and when? I think you've heard me say that many times that I would appreciate this analysis to be done very on the front end, before the developer starts spending money, et cetera, that he or she or whoever the applicant is is totally aware of what's going on. Is that the plan?

That is the plan. Yeah, the plan is to have this tool available.

So it'll be totally on the front end and before the developer, before P&Z Commission gets it, and then possibly the council. Correct. Okay, all the way through that. Okay. All right, any other questions, council? Yes. Yes.

Gotcha. I need clarification to help clarify the constituency. One of the lines in the budget book, though, it says to forecast general government revenues increasing about... All expenses increase about... Okay, 1.9 million...

That is a great question. Unfortunately, I don't have that information off the top of my head. Doug, I don't know if you're able to speak to that better than I am currently.

I couldn't hear a word, Mark. I could hear it was Mark, but I couldn't hear what he was saying.

That was actually Councillor Griffin. Councillor Griffin, this is your time. Go ahead. Still can't hear him. How about now?

Yep. Got it. The city forecast general government revenues increasing about 8.6% while expenses increase about 9.7% creating an estimated 1.9 million annual gap by 2030. How do we, what do we associate that shortfall? We can say three 89, but what is causing our expenses to outweigh our revenues?

So there are two realities we're working with here. One is we budget for one level of service. We budget to hire so many positions. We budget to spend so much on projects. That's one reality. The actual comes in never matching the budget. We always hire a little lower than we plan on. We always spend less on the projects that we plan on. So we have to keep in focus those two different realities. Hopefully, over time, we get those realities closer and closer together so we become more accurate. What the model you're referring to was referring to where our actuals were trending. This is what the actuals are doing. The costs over time are increasing faster than the revenues. Those are the actual costs, not the budgeted costs. The actual costs will change from year to year based on city circumstances. Do we buy new property? Do we invest in a brand new process? Do we add anything one time that's a cost? And that's part of that trend rate. So what my intent with that number was to try and help us understand that while the budgeted numbers are coming in, you know, we're budgeting and we're taking care of the revenues, we're taking care of the wages and the costs and so forth. When the actuals are coming in and we actually... have a growth rate where our actual is increasing a little faster than we'd like them to. The intent is to help us as finance give council and leadership the information to make information to help bring the actuals and the budget more closely into alignment so that our priorities can be met.

Mayor if I could for a follow up. Yes. What is causing the actuals to be higher What are the costs associated to? That's what I'm trying. It all makes sense. I'm just trying to associate what is... That's what I'm saying.

So let's say you take police. One year, they might hire two people. The next year, if we have more funds, we hire eight people. So those actuals will change. We have the perdom drain when we're spending a lot of money in planning and preparation and capital. That will increase the actuals. That may not stay. The actuals are dependent upon circumstances that aren't available when the budget is built.

Mayor Brunner.

Rates can go up higher. Inflation, when we have the COVID, inflation went rampant. So inflation will drive costs up, but inflation has come down. So the rate of growth comes down. So it's very, very dependent upon what's going on in the environment, the economy, and what's going on with our city decision-making process.

Thank you, Doug. Councilman Rodriguez.

Okay, Chris or Doug. So I'm just thinking out loud here that since we've had about 5,000 annexations over the last year, maybe a couple years, that I would assume that our property tax revenue would increase because of the growth. But it only increases by, what, 4 or 5 million maybe at that most. So I have a hard time grasping that growth is paying for growth, especially when, at the moment, the City of Nampa have decided to ask our developers to front the money to put in infrastructure for them, rather than us saying, we'll take care of it, we'll do it. By the way, you'll get that money back. from the developers, but the, but the resident has to pay for it first. Thus 3%, thus foregone and now a levy. So I wonder, is that the right attitude? Is that the right direction that we, the city of Napa wants is that we're strong enough to hold our own, but we're having crutches along the way. Thus, your statement of growth is paying for growth just threw me for a loop. Now, unless you can show what each and every development is going to bring us in 10 years, not today, I would question that. Now, let's talk about the impact of House Bill. Hold on, Doug. The impact of House Bill 389. You know what? I'm actually getting tired of hearing about 389. It's something we need to do is step forward and say, we have to take care of this. What's the alternative? What are we doing? Well, guess what? We're doing what we can right now for, because of make up the difference between the tax revenue and the, and the credits and all this would be that three 89 took from us. And so I don't know the answer to that at all, but I just wonder where, where we're going to end up a year from now. one thing that really bothers me is that we spend millions, well not millions, we spend a lot of money on the comp plan. And that comp plan is something that the community has really put together a forethought, a very equitable, affordable, or whatever, however you want to say it. And then the developers come along and say, Oh, we want to modify it because it doesn't fit our plans. That's where the kink is to me. Cause here I see we're going to go a good direction and then boom, it doesn't fit the developer. So where do we come up with mediating or yeah, mediating with the developer saying, well, wait a minute, this is what the best revenue, the best impact for the city will be. And so that's what I'm really concerned with Chris.

Doug, I think you wanted to respond, and we need to get back to the tool and Mark and so on.

Yeah. So the reality is here, every subdivision that we present this for is unique on its own merits. It will have a different – this is what Chris was alluding to. It will have a different mix of densities. That will affect the revenue, and that will determine whether it's growth paying for growth. What we're seeing is a near thing. We're not seeing this huge windfall of cash waiting for us at the end of the rainbow. We're seeing a very near process that requires constant attention and management. We're developing this tool to help you as councils understand better what that likely impact is to the city for any given subdivision that we develop it for. So we're trying to take the biases out and not tell you, hey, this is going to be a great thing. We're trying to tell you this is the likely outcome. You as council take it and you decide, is that within your acceptable parameters for growth, paying for growth, or does it not? And that's We don't want to step into your shoes and try and impact the decision. We want the information to help you make the best decision possible.

Thanks, Doug. I'm going to move it along here. We're going to have a lunch hour here in a few hours. We need to get on with the two, my understanding is, and I think that's maybe going to help answer some questions. I think the main thing, council, this is my own opinion. Here we have Chris and Doug that have been willing to step forward and save the city a lot of money where we would have been paying Clearwater or whoever else probably hundreds of thousands of dollars. So I just want to thank them for that. And the other thing is each and every council meeting with the criteria that they just stated, That's going to be part of the packet, is my understanding, Rodney, right? That's going to be included in the packet. Now, you don't have a long duration here.

Mayor, it's not every meeting because not every meeting we have a project that meets the criteria.

I understand it. That's why I said the criteria that has been set aside. Okay, so Mark, are you first or who's going to show the tool? Okay, Chris back.

Yeah, so sorry, Mayor and Council, I had to move over here so I could do the driving just a little bit better. Okay, so what you're currently seeing This is what we refer to as the assumption page. Right now, currently, we are using numbers based off of the Trestle Creek number one subdivision that will be coming before you for, I believe, a final plat approval. So it's already past this process. In an ideal situation, this would be involved from the beginning, but these are just some live numbers. So what we're seeing here is we have a total acreage of 23.4 acres. There are zero low density lots or units. We have 44 medium density lots, which you'll see this SFD over here on the left-hand side. That's single family detached. And then we have 114 single family attached lots with 15 common areas and giving us a total residential units of 158 and gross density of 6.75 units. So this next section is what we call our value schedules. This is for each of the densities listed in column A. We have a low value, we have a mid value, and we have a high value. I want to inform you that these are the improved lot values. So that's taking the land and the house. It's not two separate numbers. These are combining them into one. Now down here in this active valuation section, this is where we can change. If we believe that low density for this specific subdivision is gonna have a higher valuation, we can come here. It's a simple dropdown menu. We can click high. That's gonna change our overall valuations. In this one specifically, you didn't see any number shifts because there are zero low density lots. So I'll just go come to the mid. and we'll change this to high, and you'll see valuations over on this right-hand side shift because we changed the valuation of the medium density to the high. Right now, I'm going to shift these back to low just for our example here. So I shift them back to mid. These numbers right here, these are the midpoints for all of them for each zoning type. And this number right here is our total subdivision value. I should clarify there should be subtotal because this does not factor in 389, the 71% owner occupancy rate. So down here, we have more parameters that can be changed. As you can see, we have our homeowners. This 10% is referring to the House Bill 389 effect. We have our new construction and our 90% new resident rate. The populations for single-family dwellings, we use 2.67%. Residents per dwelling for multifamily. We use two residents per dwelling and then down here We have our impact fee schedule. We've worked closely with Daniel Badger and Mark Stauer about these and we know these numbers shift from time to time As and they can be updated. Sorry. I'm just trying to make that a little bit bigger so We can see this then we have our impact the collection years and spend outs. Again these numbers can be changed if we think development is going to be built. Quickly we can reduce the collection years and again if we have a a streets project or another impact fee-related project that needs to be done in the first couple years, we can adjust these numbers. Right now, our next section is our cost driver section. This lane miles impacted, that's referring to our streets maintenance. That's how many lane miles within the subdivision are being added So we need to account for a new chip seal. We're using $25,000 per lane mile. And just to clarify, a lane mile is one side of the road. So if you have a mile of road, that's two lane miles that we need to account for. These population drivers, these are the police FTEs that I was referring to. So right now we're using a .921, and that's the actual average that we've been hiring over the last six years. For the GENGOV population, we're using a .725. For the police... For that police FTE, we're using a rounded $130,000. And for the GenGov FTE, we're using $100,000. We did take out some outliers because we have some GenGov-funded positions that are on the very high side and the very low side. So that $100,000 is an average. The cost per vehicle, these are new public safety vehicles that can be paid for with impact fees. And the .5 refers to it's one vehicle per every two officers. Next, we get into our growth rates. So if we wanted to change our property tax growth rate, we can adjust that here. We can change our sales tax growth, which are on the revenue side. On the cost side, our police costs, we have at 6% right now. We've all seen the budget. We know that police costs are continuing to grow. So we've estimated roughly 6% growth each year. GenGov costs are not growing as fast, so we have that at 3%, and we have the capital cost escalator of the streets maintenance and the public safety vehicles at 3%. Again, anything you see highlighted here in yellow can be adjusted, and that will affect the overall net impact to the city. So... With that being said, the bottom information is all the numbers, but I'm going to switch over to our dashboard page because it's a nicer, cleaner version of what those bottom numbers are. So for each proposed subdivision, we want to give the council what we're calling a one-pager. It's all this information. It's in nice, pretty form. It has graphs. And so for this specific subdivision, Trestle Creek, with the 44 medium density single-family detached homes, 114 single-family attached homes, and 15 common lots, we show revenue, midpoint revenue of $2.9 million. If you look under in row seven right here, you'll see the range. So if we use the lower valuations for whether it was medium density or the high density single-family attached, that would affect where this total revenue number came in but it would be within this range of 2.6 to 3.1 million dollars the cost the total costs are static because and there's no range for the total cost because that range is manipulated by those drivers on the assumption tab so if we want to change a specific cost we can change it and then it'll it'll roll over to this dashboard side Now, the 10-year net fiscal impact. So what this number says is over 10 years, the revenue, your property taxes, your sales taxes, and your impact fees, minus your costs, which is your impact fee, spend out your public safety FTEs, your GenGov FTEs, your public safety vehicles, your street maintenance, or coming out in the green or in the black, $235,000. Again, if you look below that number, you'll see the range. If we changed any of those valuations for the different zoning types, we would get a different number. It would fall between a negative $14,000 or positive $486,000. So there's about a $500,000 swing right there based on the valuation of the zoning. lots itself over the next one over is we have our net per acre that takes your total fiscal impact divides it by the number of acres just to give you guys an idea and then right below that you'll see what we're calling the the revenue and cost convergence point also you could call it a break even there there are different names for it that's what that does is that's taking all the data and saying okay at what point our revenues that are, are revenues going to be surpassed by our ongoing costs. So that's not factoring in the vehicles and the streets maintenance. So it's your police FTEs, your GenGov FTEs. And at what point our expense is going to exceed our revenues. And since this is only a 10-year projection, we capped it at 10 years. So anything out past 10 years, you'll see this past 10 years. If that number happens in year seven where our costs exceed our revenue, you'd see a seven. That means in year seven, that's when our costs exceed our revenue.

Chris, just a little comment right here for council. So, and correct me if I'm wrong on this, Chris, but on this one, we're showing that 10-year financial impact, the mid-range at possibly $235,000. Now, I believe in this model, we didn't have any intersection impact, no dollars required by us to improve intersections. Is that correct?

That is correct, but what is factored in here is an impact fee spend out over the 10 years because we have to use the impact fees. And again, I can show you a version here. Let me, we'll go back and change. So if we have an impact fee need and say we need to address the intersections within the first two years, Well, it may not change the overall because we're still spending the impact fees that are brought in by this. What it does is it changes how and when we spend them. So this red line right here, this reflects our costs. And you can see that our cost is going to be greater in the first two years. So what this area right here represents is a use of fund balance of our impact fees. because we would have to front the money if we haven't brought in the all the impact fees because the entire subdivision has not been developed yet if we're saying. The collection is going to mirror the spend rate. Again it shifts that our total revenue line to essentially match the spend out of the impact fees.

So let's say that it's an investment in an intersection that is not impact fee eligible. So some growth, you know, we know where impact fees are eligible. But if we have a cost that we have to pay for as a city, it's not impact fee eligible. then we have to reflect that. I think you've got a method to do that. What I was trying to point out to council is if that happens, that's possible that this pushes this whole analysis into a more negative realm. That's where we come up with this cost factor exceeding the growth of the revenues is if a particular development requires the city to invest our general government or street balances to fix an intersection of fixed roads, we need to factor in that cost and we would, that might make this a whole different analysis. But that's why I'm saying each individual annexation needs to be looked at on its own merits, not just a broad statement of this would be profitable here and not profitable there based on past assumptions.

And Just to clarify that a little bit, so Doug is referring to, and Daniel, you can correct me if I'm wrong, but Doug is referring to an already failing intersection that would be surrounded by or attached to this specific subdivision. If an intersection is not failing, and the subdivision comes in in the capacity from the subdivision comes in and pushes it into quote unquote unfailing phase then we have mechanisms in order to cover those costs if the intersection is already failing meaning we can't handle the current capacity. Prior to that subdivision coming in then it is on the city to pay for that growth but that that project would be impact fee eligible a portion of that project would be impact fee eligible because it is related to growth so let's go back go ahead go ahead doug no i'll add another comment about the 10-year convergence but finish this train of thought first

No, I was just going to ask if this sample is going to be on our P&Z website or where can actually the public and developers find this?

Once it is finalized, we have not really decided on where it's going to live, but we will make a decision.

Let's make it as transparent as possible to as many as possible once you have it.

We talked with Rodney about getting a developer or two to pilot this with somebody that we trust for their integrity and their capacity to work with us. So we'll pilot it first before we put it online, but we will make it transparent.

I'm going to try not to interrupt you again, but I just want to say we're moving along. It's over an hour. There's two other subject matters. Council, I know there's, I'm sure there's a lot of questions. I know there's a lot, probably a lot of questions out here. But if those can be sent to us, now I realize, Council, you cannot communicate as a group, and so it may have to be sent to Clay or myself and have a blind copy then sent as far as if you have questions or suggestions. And same with the public. Very quickly, what's the best way for the public if they have questions and suggestions? Rodney, I'm gonna direct to you. What's the best way for them to send directly to you, PNZ?

Yes, Mayor, and I'll get it to the right person.

Okay. All right, Doug, yes. I'll try not to interrupt you.

Very quickly. The convergence comment, a break-even. So here's the scenario. We have revenues increasing at 3%, maybe 4%. We've got sales tax increasing at maybe 3%, 4%, depending upon the year. But sometimes we have costs that increase at a faster rate. If we look at the increase in General Gov costs outside of police, it's probably less than the 3% rate. But if you look at the police, they're about 6%. They could be higher depending upon the given year we look at. So what happens is we have a point in time out somewhere between year 5, maybe year 20, where those costs and the revenues begin to to even out to the point where we're no longer bringing in more revenues than costs. This is generally way past 10 years. And so it's very difficult to say how accurate that would be because, you know, you've got inflationary impacts on the valuations at home that will change property taxes. You've got sales tax that will change growth dynamics. The point is, is that what we're trying to say is that the most likely in almost every circumstance where we're predicting this growth exceeding the growth paying for growth the point in time when they might tie up it's way down the road 10 to 20 years down the road and very difficult to to estimate so we're saying this is a near-term belief uh assumption we're putting together that the revenues continue to exceed the growth the costs mayor yes about just before are you it's going to be short

As short as I can make it. Anyway, I'm just going to say Doug will shoot me later. He didn't like empathy or sympathy, but he is actually on vacation. So he's doing that. That's why he's not here. And as you can imagine, just getting through with the budget, the hours that Chris and the team has had.

Okay, short. I had seven things to talk about, but I'll only focus on one.

Okay, thank you.

Late Mayor Hagerbom had mentioned 389 often, but also talked about House Bill 673 that was passed in 2021, which is the change in land designation. And he attributed it as a double discount. And he Frequently stated that 389 has an impact. Sure, it's 10%. But the land designation issue was closer to 15% to 22%. Is that factored into this model? Currently, no. I would appreciate it if it were.

Okay. Well, difficult. We can try and find a way. It means we'll have to work with Rodney to see how that could factor. But 673 is a huge impact. It absolutely is. All right.

Thank you. You want to hear him repeat it? Yeah, I need to repeat that one more time, please.

Okay. So 673 is a definite impact. As big, if not bigger than 389. We'll have to work with Rodney to see how we can identify which land is impacted by this or which annexations. We'll build in a mechanism to add it in where it's applicable.

Okay. here yes i just want to say thank you doug and team all of you this is really helpful i appreciate this tool it's going to be nice to use it's incredible incredible yes i think everyone agrees up here okay are we ready to uh move on uh marker where are we chris rodney i hear hands being raised i see hands being raised i should say I think I see people fighting for the podium here. Who's gonna? Okay.

Thank you, Mayor and Council. I've worked closely with Preston on these slides, and so he's coming down to help us if we have questions about them. So first of all, I just wanted to talk about growth. We know growth is a challenging topic. You know, I get told all the time that Hey, city of Nampa, you don't plan for growth. And then I look at our number of plans that we've done that we're trying constantly to try to plan for that growth. And it just kind of hurts my feelings a little bit. Like, come on, we are really, really trying to do some really good planning in Nampa. And I would say that I think we have. So growth is, if you don't agree with the growth, that's different than not trying to plan for it. And so we're trying to figure out ways to address your concerns over growth. One of the questions was, is a moratorium an option? So we have a couple of moratorium options in state code. The first one is an emergency ordinance, and you have to find that, excuse me, an emergency moratorium. If a governing board finds that an imminent peril to the public health, safety, or welfare is in place, is something happening, you have to actually adopt that, saying that there is an imminent peril, then you can potentially have a moratorium. It can't be longer than 182 days, and you can't do another one for at least one more year for that topic. Then at the end, you need to have a new ordinance in place to address those concerns. The intention here is, the moratorium is there to help you make decisions so that when the moratorium is over, you've fixed the problem. So then we came across this section of state code as well, and it's a little bit different. This is for interim, or temporary ordinances and moratoriums. If a governing board finds that you're working on your plan, and in state code when it says plan, it's referring to your comprehensive plan, a plan component or an amendment to the plan is being prepared for its jurisdiction, you can actually, in those times where we're working on a major update to our comprehensive plan, you may adopt an interim ordinance or an interim moratorium. But there's a couple of ifs again. You have to find, again, that there's imminent peril to the public health, safety, and welfare. And you have to state that in writing. And then the other is it can't exceed one calendar year. So there's limitations on moratoriums. And again, my conversations with Preston, our attorney here, we believe that imminent is a critical word as well as peril. So you have to individually find that that peril is coming right away and you have to document that.

Ronnie, quick question on that. And we had a neighboring municipality that did do a moratorium. What was their imminent peril? Do we know?

So I think you're speaking about Caldwell?

No, I think it's about Middleton.

Oh, okay. Do you know the situation there?

That's right, that's fine. I'm just curious how a municipality came up with an imminent peril and put that into place.

Yeah, good question. So again, it's an option. It's something you have to think about, but you have to find imminent peril. The next thing that we want to talk just quickly.

I'm sorry, another interruption.

So Rodney, based on that code and based on all the code that governs planning, zoning, land use, et cetera, it seems the overall of the state of Idaho's code is that some type of growth, some type of action, plan, for what the city, what the counties are to look like is a prerequisite, but it's an assumed issue. What I'm trying to get at is if we say, well, we just don't wanna do this anymore, it doesn't seem the code affords a city to just say, stop, no, we don't do this, go somewhere else. Because even in an emergency deal, it's saying you got six months, you got one year to solve the issue, and the door's open again.

Yeah. Mayor and Council, I think you've summarized that well. The code that we have looked at, and frankly, LUPA, Local Land Use Planning Act, which is Title 6765, is... The language in it is telling us we must plan for the growth that will happen. That's the language in that state code. So much of this is just saying, okay, since we're planning, since we're planning for this growth, since we're looking forward, anticipating some growth at some point in the future, you have to do these things. And so, yeah, for a moratorium, it's interim. It's an interim moratorium. or an emergency moratorium, but it's not intended. This is not a tool to be used to just stop growth indefinitely forever.

Okay. I think it's helpful from the standpoint that of late, a lot of comments have been made. Why don't you just stop growth? Why don't you just quit approving a project? just put it on hold. And it seems our code, at least in the state of Idaho, assumes a regular ongoing process in the land use and the conversion of land use. And that's what you're bringing out to us today.

That's correct. And I do have another reference to state code in just a little bit that I think that solidifies that comment that you just made. So, Legal, state law, concerns about a moratorium, well, the legal situation, you'd have to find that it's imminent peril. Next is just financial. This is a statistic I just looked up just recently. In Canyon County, the construction industry provides 11,968 jobs. And from what I can tell, that's not supportive industry. It's only construction. So 13.3% of our Canyon County jobs are in construction. If everybody puts a stop on growth, That's a significant portion of our economy that has repercussions of rippling effect to other industries as well. The next one is just fairness. I know you hear this all the time, but hey, we shouldn't have any more subdivisions in this area. From people who are living in subdivisions that went in, not too many years ago, right? So what is fair? You have to consider that. Is that right, that now that these people are here, do we shut the door behind them and say no more? No more can come. Authority, frankly, you put a moratorium on growth in Nampa, you still have, Canyon County can still make decisions to approve growth. In our impact area, in our planning area, it can still happen. And other cities can grow into our area as well if it hasn't been annexed by the city. So if everyone in the valley said, hey, we're not going to approve so much growth, that might have a scenario where you stop growth or slow it down at least. But if it's just us doing this, I think that there's still concerns there. And then finally, private property rights. And this is the section of code I'd like to point you to because THROUGHOUT LUPA, WE REFERENCE PRIVATE PROPERTY RIGHTS. AND WE HEAR FROM THE GENERAL PUBLIC IN THIS ROOM, WELL, HEY, THEY'RE INFRINGING ON MY PRIVATE PROPERTY RIGHTS. AND THAT'S TRUE, THAT COULD BE TRUE, BUT WE HAVE TO BALANCE OUT BOTH SIDES BECAUSE BOTH SIDES HAVE PRIVATE PROPERTY RIGHTS. AND THE LANGUAGE IN LUPA, This is under property rights. An analysis of provisions which may be necessary to ensure that land use policies, restrictions, conditions, and fees do not violate private property rights, adversely impact property values, or create unnecessary technical limitations on the use of the property. An analysis as prescribed under the declarations of purpose in Chapter 80, Title 67, Idle Code. So what the purpose behind this is, is they're saying that everyone has private property rights, but specifically there's something critical on here. We can't create unnecessary technical limitations on the use of property. So we have to balance those things out every time a project comes before you. You do, I should say, that's a challenging, dynamic and so it's just a reminder that private property rights are shared by, everyone has different property rights. But where do those begin and where do those end? It's not necessarily right at the edge of your property and now no one has the private property, no one has rights for what happens on your property. We have junkyards, we have people who have smells, right? There are private property rights that others can assume for your property, but there's a limitation to that, and we have to consider both of those sides. And that is really all I have for the discussion about moratoriums, unless you have questions for me.

Yes, councilman. A funding mechanism that wasn't agreed upon between the city and the county regarding impact fee shares. Both the county's failure to adopt the MidStar impact fee threatens the efficiency. plan capital improvements as a whole, jeopardizing the city of Middleton, adequate facilities, et cetera. Development is generating transportation demand, while a regional financial mechanism necessary to construct adequate roads does not necessarily do that, not funding mechanisms.

That was an imminent peril, and who approved that then from an accountability standpoint?

The city of Star approved it, and

Okay.

So it's kind of some leverage, it sounds like.

Okay, I think we're ready for our legal. Preston?

I'm going to hand out to you and share on the screen what I'm going to hand out.

Thank you, sir.

Mayor, I'll defer to you. I may have a little follow-up to Council President Bill's questions on moratoriums, a little extra finer point. You want to do that right at the front end? Maybe do that, then we'll transfer into this if that's okay. Just to reiterate, for the record, Preston Rutter, city attorney, and nowhere else I'd rather be in the morning than talk about land use law. I get excited about this, and I'm grateful for the opportunity.

He's a little weird, by the way.

I know. You have to be to go to law school and all that, so it's an occupational hazard, so. On the moratoriums, as you know, there's two types. There's an interim and there's an emergency. So that standard imminent peril of health, safety, and public welfare. Just know that under case law, courts actually look at that with a lot of scrutiny, meaning they look very closely. It cannot be a shoot from the hip, quick grab tool. This is one that's an emergency break the glass in case of emergency type of situation. And it can't be used just to slow growth. So, Council President, your question was, is there a presumption of growth? I would argue probably yes. It's inherent in communities to grow and develop. But you have stop whales, right? You have certain applications that do allow you to say no if you don't meet the criteria. CUPs, subdivisions, preliminary plats, those are quasi-judicial. When you get to the annexations, and you know this, we preach it often, that's when the playbook opens up. That's where you're given a little more latitude on, hey, is this the right time for something? What could the impact be? So you're not obligated to say yes to applications unless they're quasi-judicial and they have substantial evidence to meet those factors. But on those type of applications that Ronnie hit on, your annexations, subdivisions, and others, right, there's a little more latitude where you can exercise some discretion.

Mayor. Yes. So a follow-up question, Preston is not obligated to annex. However, is there an implied assumption to a certain degree of, annexation and approvals if the applicant and the application meets the ordinance of the jurisdiction.

the Mayor, Council President implied, it may be in the eye of the policymaker, which is each of you elected officials. If you believe that it is in the best interest of the city, you have that discretion on those type of applications to say, yes, it does. Maybe in your policy opinion, it does not. So not an obligation by no means, but implied possibly. And remember, you can't make a decision just because it's annexation. You think, okay, it's all, the playbook's wide open. You cannot make a decision that's arbitrary or capricious or an abuse of that discretion. And in the room here, we have some wonderful developers that we see here in other jurisdictions. I used to be in that world for a few years. And I've been in that spot where we had the city by the short hairs and they denied us and it was arbitrary. And we could have scorched the earth and sued them, absolutely. But there is a practical element to it. And any developer gets that there's a relationship and you wanna be buying into that community and both be enthusiastic coming into it. And so, yeah, the law can say one thing, but then reality says another, so.

Is that answer what you needed? Yeah. Okay.

Let me switch my screen then, Mayor. I'll share this for everybody. JUST FOR CONTEXT, I WAS ASKED TO TALK ABOUT MITIGATION FEES. YOU WEREN'T HERE LAST YEAR WHEN WE HAD OUR DISCUSSION ABOUT THIS, AND IT NEVER HURTS TO HAVE A REFRESHER. IT'S ANOTHER COAT OF PAINT, AS I LIKE TO SAY ON A MATTER. THESE ARE NOT EASY LEGAL CONCEPTS TO GRASP. I'LL MAKE THAT CLEAR. I WAS ASKED TO TALK ABOUT PARTICULARLY MITIGATION FEES THAT ARE BEING USED IN NEIGHBORING JURISDICTION OF STAR AND OTHER DISCUSSIONS ABOUT THEM IN GENERAL. JUST TO KIND OF CUT TO THE POINT HERE FROM THE GET-GO, THIS IS AFTER LEGAL ANALYSIS OF MY OWN. I'VE CONSULTED WITH PRIVATE SECTOR ATTORNEYS IN THIS REALM AND OTHER CITY ATTORNEYS, INCLUDING TALKING WITH STAR'S OWN ATTORNEY. and taking that body of analysis and law and really calling balls and strikes as I see it. Growth mitigation fees, they cannot be imposed to fund general operational costs. I wanna make sure that's really clear, operational costs and ongoing maintenance or employee head counts. And you gotta know, you gotta go in the beginning. We are a Dillon's rule state. And I'll spare you the boring legislative and legal history of it. It is a doctrine that every state has to make a decision. It's just permeated through the court since 1868. Are you a Dillon's rule state where you, the cities, are only allowed to do exactly what the legislature tells you, whatever is expressly authorized to you? Or a home rule state where there's a lot more difference. You can exercise that home rule authority. Wild guess, what is Idaho? We are a Dillons rule state. So we are mandated because of that Supreme Court direction. We have to look at our laws very strictly. And I get we're in a time where things are constrained. We want to be creative. We want to be... forward thinking, but we have to do it within the framework of our jurisdiction, the state of Idaho. So we have to look at all these laws very carefully. We have here, the legislature has authorized you as a governing board of a city to impose impact fees. And I'll refer to this often, you'll see it on the slide. IDIFA, Idaho Development Impact Fee Act, IDIFA. I apologize, it'll be a little bit of an alphabet soup today, so bear with me. So big distinction here, capital, operations, okay? You have a lot more to play with when it comes to capital impacts and what you can impose or exact out of a development coming before you. Operational, you are far limited and we'll get more into that. The rationale that was provided for this novel idea of mitigation fees was Idaho Code 63-1311. And in that, it states that you can charge a fee that otherwise a tax would pay for. So at face value, you think, well, all right, let's charge a fee. If taxes were gonna pay for our growth, let's just charge a fee. That's a basis in the rationale that I've been provided from the City of Star. However, that's like looking at one sentence in a book and judging it by that sentence. There is a lot more context to it. So what is a fee? And you see here in slide one, a fee is a charge for a direct public service rendered to a particular consumer. So it would be like me going to the rec center. I'm paying for a service. The city's providing that payment. They're exacting from me to go play basketball. is because I am directly benefiting. It is one-to-one direct consumer use. That is a fee. A tax is different. A tax has a legal distinction to it just as a fee has a legal distinction to it. So when we're talking about fees and taxes, those are two very, very different things, even though they both pertain to money. And so a tax is a forced contribution by the public. And this is a key word, indiscriminate. A tax is the universal currency. If you have a tax dollar, it can be used for anything in your city. When you get an impact fee dollar, it is limited. It can only be exchanged for certain things. So tax, universal, indiscriminate. That's why police officers are funded by tax money. Think about it. When they go to the door, they don't come and do a welfare check and say, here you go. Here's your invoice for my coming here today. And expect payment in 30 days. That's not the case. It's not a direct service. Police services are provided to anybody in the city. That's why tax money has to fund them. When it comes to, so when you're saying, hey, we want you to help offset our police officers operationally, you can't get a fee for it. The tax mechanism is how you do it. There's a few other ones, right? We have before us this fall, a levy override. That is another tool to get a universal currency of the tax money to pay for police officers. So to also be a fee, there has to be an actual cost nexus. We have cases, a few. I cite here Brewster v. Pocatello. That city, trying to address their concerns, got creative. The Supreme Court batted them down pretty good in that case. You can't use a fee to do something a tax is required to do by law. Again, point number three, North Idaho Builders Contractors Association versus City of Hayden. Even though they got a fee and said, hey, this is related to a cost, they were charging too much for it. It has to be actually related to the service. And so for everybody's awareness, let me see if I can pop over to this real fast. This was provided to us by STAR. We appreciate them providing it to us. There's no hard feelings at all towards them. I just have to call balls and strikes like I see them here. What you see is they've collected fees for police and fire. And as noted in the very statute they used to justify it, that statute says you have to charge something that is the actual cost for the service and does not exceed it. Interestingly though, they've collected and fired 6.1 million, but have only used 3.4.

Are those actual costs?

And I don't know the answer to it, but there is a big gap there that even if a fee is to be assessed, it has to be kind of one for one, not two for one. And I just use that as an illustration here, partly because I was asked to address what ISTAR doing and how do we address that? So as noted before, indiscriminate. You have to have taxes that pay for your general operational expenses. Fees are for one-to-one users. So there's some good case law here that helps clarify this tax idea, right? First, Hillview Mobile Park for City of Pocatello. Pocatello's been in some fun over the last little bit. They've helped contribute to this body of law. I know their current city attorney, a good guy, and I don't think he was a part of this, but yeah, they've had some bumpy times, and we're the beneficiary of what they've gone through. There, the court says, if you're going to charge a fee, you have to first see, is there even authority to do so? And that's my job here is to let you know, can you do it or can't you do it? And as things come up and proposals, that's my job. Tell me what you're thinking and I'll give you a legal opinion, whether it's vulnerable or if it's defensible. I think that's all I want to hit here. I will say this. Looking here at the financial exposure, there's a risk of being creative or pushing the envelope. If we were to impose a fee, and let's say it was a close call, And there was an argument later by the developer who paid it or whomever that that was unlawful. If there's a successful challenge, there would be a mandatory disgorgement. That's a legal term for having to cough it back up. You would refund all the money, not just that, but you would do prejudgment interest on that. And do you know the rate of that right now? It's about 8%. So if you collected millions of dollars and then were later challenged on it, let's say it's $5 million, you're looking at somewhere, I have to do my math right, $400,000 of just interest potentially liable to, not to mention the principle of what you exacted from them. And then you have to backfill that because you're disgorging it. So paying for ongoing operations, the tried and true and legal path really is that general currency of tax revenue. So can a voluntary agreement or one-time fees fund operations. As we're hitting on here, no, they can't. Like a one-time per rooftop fee, just labeling it as that doesn't make it lawful. So the nature of the expenditure controls. The Idaho Impact Fee Act says that the validity depends on the nature of the expenditure, not when you collect it. Paying for operational salaries is an operational expense. You can't use fees to pay for that. There's a seminal case called the Buckskin case. I think it was issued in 2013 in Valley County. That year, 2013, is important because about four years prior, 2007, things were hot in the market, as we know, then 2008 hit. And when things were hot, the development was going rampant up there. And developers saying, I want to play here. I want to build here. And so there was an offset with fees. The developer went back to challenge it. After, way after, during the... hearings, they volunteered the fee. They didn't pay under protest. They didn't file judicial review. They weren't challenging what the city was asking them. And then years later, they came back to try to get it back. The court in that case said, you can't, that was truly voluntary. But in that case, it was to offset capital expenditures. They weren't paying for operational And so that's crucial there. So it's a risk we need to be aware of. And my job is to try to guide you as best I can to stay within the fairway and stay out of the rough and the sand traps as we process applications. So as Rodney alluded here, what can the council consider on service impacts when you can deny it? This goes to your earlier question by council president. When it's an annexation, rezones, comp plan amendments, these are your legislative decisions. This is where you wear your elected hat or pin. This is where you have broad discretion, but you cannot be arbitrary or capricious or abuse that discretion. Flip it. When you are wearing those robes, the quasi-judicial decisions, subdivisions, CUPs, this is where you can say, let's look at traffic congestion. Look at a TIS that's gonna be provided. You can look at school capacity. 65-12 and 65-13 are under LUPA. Those are for your CUPs and subdivisions. They do expressly allow you to look at it. Remember Dylan's rule, it says, hey, you are authorized to consider that, one of the applications before you. And what about police? That's a big one. They're a big, a needed expense of the city. If it's tied to a capital level service, Chris Boas here oversees a lot of our capital work. This is where you call Chris, tell us, okay, what about this application? What's the capital impact on police officers? You can take that into consideration even on a subdivision or a CUP. And I think that's good to know what your tools are in your tool belt. When it comes to salaries, operations, no. The path the city has elected with the levy, that is the defensible proper mechanism. Get that universal currency of tax dollars increased to pay for operational expenses. So here's kind of a chart to give you an idea of what's lawful and what's unlawful. Again, these are very likely to be lawful, very likely to be unlawful. If we were to mandate a school impact fee That would be unlawful. Idaho's impact fee, it would be unlawful to do so. Schools are not listed in that impact fee act, unfortunately. So previously on this slide, you can look at capacity. You can say that's a factor for schools. But if you're saying, okay, there's a factor for schools capacity, now you have to pay something. That's where you've crossed the line. into vulnerable legal territory. And that's because like Dillon's rule, the state we're in, the Impact-B Act says only certain things you can charge for. Schools did not make the cut for capital facilities. What about denying a plat based on school overcrowding? Sure, like we talked about, that would be lawful. What about phasing? This is another tool you might consider. If they're gonna be developing quickly, that could put a quick burst on the city. You could require that they lay out or string out the development further down the road. That way you're able to absorb and prepare for that impact as they come in. And most developments, at least from my time in private practice, it takes almost six, seven years sometimes to get to your final phase. And you could even extend that out further if there was data to support that. What about a cash in lieu? So this bottom one here. Yes, however, it has to be truly voluntary. We can't be looking at them and say, sure, it would be really nice, I'm on the fence here, if you could just kinda sweeten the pot a little bit. That's part of the record that would be challenged, just so you know. When you see an early stage of developer come to you offering it, the courts have said that is more likely to be a voluntary agreement. And it has to be, instead of giving you a capital benefit, like, hey, we're gonna give you land for a school, we're gonna give you the cash equivalent of that land. So it's not a dollar for rooftop fee, it's instead of dirt, we're giving you cash. So that's why the law would support a scenario like that. So what's in your toolkit, right? In a world of no, I can't do this, no, I can't do that, what can you do? I wanna make sure you know there are tools here. Direct site infrastructure. You can mandate that there be physical improvements required in that development. Think turn lanes, signals, utility main extensions. Moving along, what about voluntary conditions? Yes, but it has to be for capital facilities. We're not here to pay for operational. Operational is, you know, my alarms are gonna go off if we hear operational, we're trying to have them offset that. Again, with development agreements, we do those very often, but as the buckskin case reminds us, they have to be towards capital funds and be truly voluntary. And on phasing controls, we mentioned this previously. you can require the phasing to be stretched out so that you can better absorb the impact of that development. Now, the EIDL Impact Fee Act actually has some interesting language in there. And if you have insomnia or anything, read that act. It will put you right to sleep. It is like, as I say, stirring concrete through eyelashes. It is thick. Deep in there, though, it has language that says you're not obligated to approve a development that has extraordinary impact. or that by its development, it would reduce your level of service below minimum standards of service. And so if that's something that you believe a application could put us in that territory, let's talk about it. Give me a call before as you're going through the packet. And same thing with planning and zoning on a development team. Let us know. There's tools here that are often not touched just because they're kind of buried in state law. And we want to bring those to the surface and start using them. So here's just another final slide, kind of a summary matrix of what controlling authority and what would be permissible. Yes, direct site improvements, do it. Capital facilities on annex land, you bet. Capital land contributions, development phasing, level of service, denying based off a TIS traffic report. where you get into hot water and it'd be illegal under case law is mandatory cash fees for operational expenses. With that, I'll stand for other questions you might have, but that's just a run-through of the framework of Idaho's impact fee and tax law.

So, Mayor, quick question. So, STARS mitigation fees seems like it's, quote, voluntary. However, I don't know that a project would be approved if the applicant didn't participate in that voluntary. And I'm just hearing the scuttle, haven't applied, haven't done anything in STAR, so I don't know. Trying to get an idea because it keeps being used as the example that STAR's doing it. Why aren't we doing it? Everybody should be doing it. Trying to get just a quick summary wrap up.

It's my understanding, again, not their attorney, I'm not in all the details of what that money's being applied to. To the extent that money's being used for operational, even though it's voluntary, There's nothing in Idaho law that authorizes a city. And there's plenty of cases that support this that would say you cannot use these fees even if voluntary to fund operational expenses. If there's a capital expense component to it, there's a lot of case law that would support that. But if you string all these cases together, they all have a common theme. When you exact money, you have to do it because a statute authorizes you to do so. And everything that we've read is capital, capital, capital. And to the extent there's operational in some of those monies, I'm not aware of any case law or statute that would support that.

So then is there any possible repercussions similar to McCall getting into and people coming back after the fact? Dial that's being used in Star, is that possible? possible as well, or?

Yeah, I think the key word is possible. The buckskin case gives you a fact pattern there. Voluntary agreements, they were for capital expenditures. The court did uphold them because they viewed it truly as voluntary. There was no protest or any kicking and screaming to pay it, but it was for capital. use change the fact pattern to operational sure there hasn't been a case on it yet so they can say there's no case law directly on point but look at all the body of case law surrounding it it is it is totally flanked this issue in my my legal opinion and i think the outcome would be pretty clear operational is not supported currently under statute you cannot do it that way thank you

Yeah, just to inside. So what I'm hearing, just to summarize, you're saying that from your legal standpoint, it's a high risk.

I would say that, yes. I think it's a fair statement. Yes, Councilman.

I want to touch on that after. CUNA does a school mitigation fee.

I'm aware of that from private practice days, yes.

How are they doing that? And why aren't they getting sued?

Yeah, that's a question there's not a good answer to. I don't know why a developer, and all the facts there, so I can't answer that question. What I've shared with you today is what I would advise you to follow, those principles. Is it operational that they're trying to offset? Yes or no? Are they mandating it? Are they gonna deny an application because they didn't pay it? Those are things you gotta consider case by case, and each one is maybe different. So I understand the question, and not trying to dodge it, but it's a tough one to answer, yeah.

It is tough, and as the mayor, it is high risk. When it bleeds into operational, is it as high risk when it's focused on capital?

Well, it depends on what they are. If the capital is there, Idaho Impact Fee Act does not allow, it doesn't have school districts in there. So you can't collect an impact fee for a school facility because it's not spelled out. We are locked to what they write in a statute. Schools didn't make it into it. Maybe that's legislation that gets changed eventually and then it's bare game. Right now, they're not in it. And if there is an exaction saying you have to fund capital expenditures for a school district, I'm not sure where they're finding legal authority for that. You can deny it because of capacity issues and say it's not the right time, but to then exact a fee out of it based off what I presented to you today, finding idols law, I'm not sure there's really much to support that. And again, that's a matter for their own jurisdiction, yeah.

because I personally would find it very difficult unless the words were others, give us this fee or you're being denied. I'd be amazed to hear that spoken. How is another neighboring city getting away with it as voluntary? to the city. We had a couple in the first three rows that I personally sat in their offices and said, would you help us here or there or somewhere else? And they have. So I look at this, as you previously discussed, oh, if you deny a project and they sue you, scorched earth, it burns up relationships. That analysis is pretty accurate. I think it is a mutual benefit to support Is that what's happening in other cities that they're wanting to find mutual support for each other outside the narrow scope of you're getting denied because of this fee or not? Is it because of the relationship built from your perspective or how is this possibly happening without repercussion?

Mayor, do you want me to answer that?

Are you allowed to answer that?

That's my point. That's a matter I can't answer.

I wouldn't answer if you don't have it. I understand the question, but I can't answer that. Yes.

I just have a comment.

I didn't know who went first, so go ahead.

President, I just want to thank you for doing this, and I feel like you did it just so that I would be educated. But I also think that it's important for all of us to hear again, and I know there's new planning and zoning commissioners, too. And so I do appreciate, and I have learned from you. Thank you. You're welcome.

President, just to confirm, there's been no legislative changes to mitigation fees since we last discussed this, correct?

Well, there's not any legislation for mitigation fees right now, so.

There's been no changes though, like legally, there's nothing new.

Yeah, and if I'm being totally candid with you, there may have been some touch-ups on the Impact Fee Act. It is a large body, and so I don't have what last legislative session may have cleaned up on that. But no changes that really change the whole landscape of what we're talking about, if that answers your question.

Just kind of an off-the-wall question. Valley View, I don't know if they're continuing to do it, but you know, of course, the growth in Valley View School District, and I know our main topic is not schools, but my understanding is when a development comes in, they're going out and asking the developer for a certain dollar amount for every rooftop. So there's no problem with that that you see? There again, as long as it's voluntary?

What I have up here... and it depends on what the nature is what they're asking. If they're asking for a mandated school impact fee, school facilities are not in the Idaho Impact Fee Act and they can't.

I understand it's just a verbal request. You coming in here, would you like to help us here because our schools are overcrowded and would you be willing to go ahead and provide us a cost per rooftop?

Yeah, and I'm aware of those situations, having been in that prior to my tenure here at the city. And I get the pinch they're in and their reason for asking that. And it's a really tough situation, I'll put it that way, for the jurisdiction to be put in of the city, the developer. Look at the top row here. School facilities, they're not eligible for impact fee capital facilities. And so you're making that decision, whoever the restriction is doing that, they're making that knowing that this is the framework of the law.

And that's a state decision. And just for the public aware, we will be, in fact, the public that are out here will be, I think we're having most of our local legislatures joining us here next week on Tuesday. So we're gonna have a lot of questions, we'll be talking a lot of issues, but if there's anything out there that you think we should be talking to them about from a Nampa city municipality standpoint, let us know. Mayor? Yes.

So on the school issue or those type of volunteer deals, in a good market, those volunteers usually come forward. If a market begins to recede or gets excessive and somebody says, gosh, we're just not in position to volunteer any fee. And then they get denied. Now you got a situation of setting, to me, more of a case precedent of was it really volunteer? And my concern is that we get something going in that fashion and it's not well defined.

That is possible. Council, any other questions?

Since we've been able to gather developers in a room all together with us, you heard a lot of state legislature this, base law that. A lot of this stems because our hands have been tied as council members. Denials or requests or development agreements or anything of the sorts come up. I think most of us I Think all of us want to be good partners with you all Same way goes for Future elections if something's frustrating you I hope you'll stand with us to see some of these legislative changes happen and so we can combat issues like 389 and 673. Because when we end up doing our impact analysis, it's not off the bias of Councilman Griffin, it's going to be based off the numbers and data that's going to be presented. And if it skews in the negative, it's going to be something that I consider, but not necessarily weigh my whole decision on. And that's from legislative impacts. Navicode, if there's an issue with Navicode, we're all real quick to change it. So, I say that, some of you developers have heard that speech before, I just am saying it once