00:00:06 [ CALL TO ORDER ]
00:01:07 >> We will call for action on
00:01:11 the minutes which are item
00:01:13 20-0638. This is the minutes of
00:01:17 July 14th, 2020, CIP committee.
00:01:23 >> A motion to approve.
00:01:24 >> Second.
00:01:25 >> Approve the minutes from
00:01:26 July 14th. . Seconded by
00:01:29 Mr. Taylor.
00:01:31 >> You'll those in favor raise
00:01:32 your hand. All those same sign
00:01:34 wish to carries. First item is
00:01:41 1090m3-2019 impact fee update.
00:01:49 --
00:01:50 >> I'll introduce the item and
00:01:52 Aaron will jump in to get into
00:01:53 the details.
00:02:09 >> July 28, 2020. July 28,
00:04:03 2020.
00:09:40 >> Prosper at 26 square miles to
00:09:45 28 square miles. We have a lot
00:09:47 greater need, um, or a lot
00:09:49 bigger area to fill than a lot
00:09:51 of those other cities. Our
00:09:59 infrastructure cost are higher.
00:10:00 The roadway improvement plan,
00:10:01 the total cost is 465 million.
00:10:05 So you can kind of see the
00:10:06 breakdown as everyone else looks
00:10:08 at that. But more importantly
00:10:10 is really this recover cost.
00:10:12 This is what we can recover as a
00:10:14 city per state law. You see
00:10:18 McKinney can collect $302
00:10:21 million as opposed to everyone
00:10:23 else which is 116. That's based
00:10:25 on all those anticipated
00:10:28 roadways that are, um, need to
00:10:30 be built in the future. So side
00:10:34 by side comparison of those two
00:10:36 numbers. You can see on the
00:10:37 left, McKinney on quite a bit
00:10:41 bigger. Even as you look at our
00:10:43 recoverable cost, our
00:10:45 recoverable cost is higher than
00:10:46 what people can actually capture
00:10:48 for their total infrastructure
00:10:50 here. So you see that. Let's
00:10:58 move into funding sources. This
00:11:00 is a breakdown of what we did in
00:11:02 fiscal year 2020 so far. They
00:11:17 are for new growth and they are
00:11:19 on our roadway improvement plan.
00:11:21 Those are the key ones, but
00:11:23 those are the ones we look at
00:11:24 the most. Anything that's not
00:11:30 -- anything related to
00:11:32 maintenance or expansion for an
00:11:34 existing development impact fees
00:11:35 are not go towards those
00:11:37 projects. Because impact fees
00:11:39 are for new growth and adding
00:11:40 capacity to our system. So keep
00:11:42 that in mind. Um, so as we talk
00:11:46 about that, and look at funding
00:11:47 sources for those impact fee
00:11:50 eligible projects, this is the
00:11:52 breakdown you see of how they're
00:11:53 funded in the city of McKinney.
00:11:55 You have bonds, grants,
00:11:57 developer contributions and
00:11:58 impact fees. I put the number
00:12:00 up here for impact fees to show
00:12:02 how small it is right now. We
00:12:05 collect 13% or use 13 percent of
00:12:09 impact fee dollars for eligible
00:12:11 projects. So we talk about that
00:12:30 impact or range. We're going to
00:12:37 get more into that next time,
00:12:38 but I want to show the graphic
00:12:41 -- we're going to be somewhere
00:12:43 within this fee range and that's
00:12:46 where the discussion is. As we
00:12:48 move away from that recoverable
00:12:50 cost, that means anything in
00:12:52 other funding sources would have
00:12:54 to go up for that. So keep that
00:12:56 in mind. It's used for new
00:13:05 infrastructure rather than
00:13:07 maintenance. That's another
00:13:08 thing to keep in mind as we move
00:13:09 forward. What does this mean?
00:13:12 Or at least the takeaways.
00:13:15 McKinney has a lot of
00:13:17 infrastructure and it's growing.
00:13:19 Probably nothing new to anybody
00:13:22 here. Impact fee collection,
00:13:27 like I mentioned before, we can
00:13:28 collect that during our period
00:13:30 of growth so it's the one
00:13:33 opportunity to get it right or
00:13:35 pay for it later. And then
00:13:37 also, just when you start to
00:13:40 look at McKinney as compared to
00:13:43 the city -- the sister cities,
00:13:46 McKinney has more needs and it's
00:13:48 bigger and that information
00:13:49 comes into play as we present
00:13:51 that. As we move forward, we're
00:13:52 going to focus on the concepts
00:13:53 and kind of this approach to
00:13:55 impact fee funding. But we'll
00:13:59 get into that a little bit
00:14:00 later. So on the information
00:14:02 that I've provided to you today,
00:14:06 do you have initial thoughts,
00:14:08 any questions? Um, any areas
00:14:10 that you want me to kind of go
00:14:12 back and cover, focus on?
00:14:16 >> Questions, Chris.
00:14:17 >> Um, the impact fees -- I
00:14:21 apologize. You said that's good
00:14:22 for ten years? When you look at
00:14:24 the I am fact fees and they're
00:14:26 set, you said it's every ten
00:14:28 years?
00:14:29 >> It's done every five years,
00:14:30 but you look at the ten-year
00:14:32 window. So you look at the --
00:14:34 what happens over the next ten
00:14:35 years.
00:14:36 >> I know I ask this a lot, but
00:14:37 I like to think ahead. So when
00:14:39 you're considering, and I know
00:14:42 nothing is set -- the 3D
00:14:46 project, when we're looking at
00:14:48 that and growth may occur, how
00:14:50 does that -- is that
00:14:52 (Indiscernible) that that's not
00:14:53 impacting your dynamics of where
00:14:55 growth may occur over the next
00:14:57 ten years or are you considering
00:15:00 that?
00:15:01 >> It affects it a little bit
00:15:02 because that is a text stop
00:15:05 roadway and although McKinney
00:15:07 participates in part of that
00:15:08 project, a lot of the funds come
00:15:10 from text stop for those
00:15:14 projects. It's being considered
00:15:15 and we can continue to look at
00:15:17 it and monitor it. But we'll
00:15:18 see more as it actually -- an
00:15:21 alignment gets determined and we
00:15:22 have more information.
00:15:24 >> I was thinking about once
00:15:26 that's constructed -- but that
00:15:31 could be a focus, I guess, as
00:15:33 you move forward. If things
00:15:35 shifts, you can look at those
00:15:37 impact fees and those are -- and
00:15:39 assess those.
00:15:40 >> That's right. State
00:15:42 (Indiscernible) requires we look
00:15:44 at -- if there's a significant
00:15:45 change in dynamic, for example,
00:15:47 if our ATJ signs change, we can
00:15:54 do an update in between those
00:15:56 times. Minimum we have to look
00:16:00 at every five years.
00:16:01 >> How will the change in the
00:16:02 ability of the city to annex and
00:16:09 having a longer time period
00:16:11 within these impact fee studies.
00:16:15 >> Everything we show as far as
00:16:16 the roadway impact fees, they're
00:16:18 all within city limits so we
00:16:20 calculate information within
00:16:21 city limits right now. So as we
00:16:23 look to the future, it
00:16:25 definitely will have an impact
00:16:28 and a lot of our policies, um,
00:16:30 that we set is to try out of
00:16:32 those ETJ areas so we stay out
00:16:37 of those as much as possible
00:16:39 currently. But it will. Anyone
00:16:44 else.
00:16:45 >> I have a question. If you
00:16:46 can two to 16 of 19. If you can
00:16:48 run over that slide again.
00:16:51 >> Okay. So what we have here
00:16:55 is just for the fiscal year 20,
00:16:59 that's this year right now.
00:17:00 Fiscal year 20 that we're in, of
00:17:03 all the projects we have, only
00:17:05 60% of these projects are
00:17:08 eligible for impact fees and the
00:17:09 breakdown in funding from that
00:17:11 is that little pie chart you see
00:17:14 coming out of that. So bonds,
00:17:16 grants, developer contributions
00:17:18 and then impact fees. So impact
00:17:21 fees right now only cover about
00:17:23 13% of our projects in 2020
00:17:27 right now.
00:17:28 >> So the total impact fees are
00:17:29 13% verses 13% of the impact
00:17:32 fees?
00:17:34 >> I'm not --
00:17:35 >> You said earlier, my notes
00:17:37 say only 13% of the impact fees
00:17:41 goes towards infrastructure.
00:17:43 What you just said was 13% of
00:17:47 the total for impact fees cover.
00:17:51 >> Sorry. I misspoke earlier.
00:17:53 >> The developer contribution
00:17:55 would be -- what is an example
00:17:56 of that little shiver you --
00:17:59 shiver you have there?
00:18:01 >> Those are escrow funds where
00:18:03 a developer will maybe not build
00:18:04 the road right now, but
00:18:07 contribute into a fund and that
00:18:08 goes into building a roadway.
00:18:09 >> You receive the impact fees
00:18:11 from --
00:18:13 >> Builders, developers, whoever
00:18:15 is going to be building the --
00:18:18 >> A developer should not be
00:18:20 able to -- an sliver should be
00:18:25 more than that. The developer
00:18:27 has a small portion of
00:18:28 contribution towards
00:18:30 infrastructure.
00:18:31 >> Yeah. So in the city, the
00:18:35 developer is responsible for
00:18:37 building their portion. What
00:18:38 you're seeing right here is city
00:18:41 projects. This is only city
00:18:42 projects.
00:18:43 >> On the city side?
00:18:46 >> Yeah.
00:18:47 >> Good clarification.
00:18:48 >> If a developer develops a
00:18:49 neighborhood, they're doing the
00:18:51 roadways inside the
00:18:52 neighborhood. This ties it back
00:18:53 to more of the (Indiscernible)
00:18:55 to get to that developer.
00:18:56 >> Yes. That is true. But also
00:18:59 the developer is, uh,
00:19:02 responsible for the portion of
00:19:05 the arterials that's adjacent to
00:19:06 their site to provide service.
00:19:07 And so any of those arterials,
00:19:10 they typically build for their
00:19:12 site themselves.
00:19:13 >> So to Bill's 1 point, that's
00:19:16 not shown in the small sliver we
00:19:21 see on the chart.
00:19:24 >> Right. Like I said, these
00:19:25 are for capital improvement.
00:19:27 This is what the city goes out
00:19:28 and builds. That's not the
00:19:29 developer ones they build on
00:19:30 their own. Good point.
00:19:35 >> Anyone else? All right.
00:19:39 Ms. Arnold, are we receiving
00:19:42 this or taking action?
00:19:44 >> On the receiving -- only
00:19:45 receiving the report. Aaron, do
00:19:47 you want to walk-through the --
00:19:49 >> Yeah. I was going to
00:19:52 walk-through that. We're
00:19:53 meeting with you tonight. Next
00:19:54 week we meet with the Council 1.
00:19:58 In August, we have developer
00:20:00 focus to talk about their
00:20:02 feedback on options so we're
00:20:05 working on getting those
00:20:06 meetings setup right now. Over
00:20:07 the next three, I guess, every
00:20:09 other week, every time you have
00:20:10 a PNZ meeting, I'll discuss the
00:20:17 next part of the presentation
00:20:19 and we'll move on. There's no
00:20:21 action. This is a discussion
00:20:22 item. Just getting your
00:20:23 feedback and thoughts, so....
00:20:25 >> Aaron, at any time that you
00:20:27 present in the future, it's
00:20:28 possible fee structure related
00:20:31 to these impact fees and changes
00:20:32 to that fee structure, will you
00:20:35 place that back to what the
00:20:36 existing structure is so we can
00:20:37 have a comparison?
00:20:39 >> Yeah. As we move forward,
00:20:40 we'll show some of that more
00:20:42 detailed information. We're
00:20:45 taking a broad step right now,
00:20:46 and we'll move in closer and
00:20:48 show some of that, and then
00:20:49 we'll get down to actual
00:20:51 individual recommendations and
00:20:54 Latin uses of fees.
00:20:56 >> You have basically,
00:20:57 potentially case studies of what
00:20:59 our department is, and what a
00:21:01 department is, what atypical
00:21:03 shopping center is, those types
00:21:05 of studies?
00:21:06 >> We'll give examples of what
00:21:08 that is in McKinney right now.
00:21:09 We'll show some of those
00:21:11 comparisons on an individual
00:21:13 land use base. Single family,
00:21:17 multifamily. Office buildings,
00:21:18 light industrial, um, retail.
00:21:20 Some of those different shopping
00:21:22 centers type things so you'll
00:21:24 see that coming forward.
00:21:29 >> Good questions. Anyone else?
00:21:34 Aaron, thank you very much.
00:21:35 Ms. Arnold, thank you. With
00:21:37 that, rainy, we need a motion to
00:21:40 adjourn.
00:21:46 >> That's a yes.
00:21:47 >> What did you say --
00:21:50 >> Many comments, do you have --
00:21:52 any comments?
00:21:53 >> Does anyone have comments?
00:21:55 Ms. Arnold, do you have
00:21:56 anything?
00:21:57 >> Nope!
00:21:59 >> I'll make a motion to
00:22:00 adjourn.
00:22:01 >> Second
00:22:02 >> Motion and Hamilton seconds
00:22:05 by Mr. Duke. (Indiscernible).
00:22:06 [Laugher]
00:22:10 >> All those in favor, raise
00:22:12 your hand. Those opposed, same
00:22:14 sign. 7:20 and we're adjourned.