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Home My WebLink AboutREP PC 100 10/07/2008 2006-2008REPORT OF THE COMMITTEE ON PLANNING DATE: October 7, 2008 PLACE: Councilroom Ben Franklin Building, 2"" Floor 333 Kilauea Avenue Hilo, Hawaii TIME: 3:00 p.m. Council Chair and Members Hawaii County Council Hilo, Hawaii 96720 Re: Comm. 1329Bi11324 Your Committee on Planning, to which was referred Bill 324, reports as follows: Bill 324, transmitted via Communication 1329 from Council Chair Pete Hoffmann, dated July 10, 2008, presents an ordinance amending the Hawaii County Code 1983 (2005 Edition, as amended), by adding a new chapter relating to Impact Fees. The proposed ordinance implements the provisions and requirements for an impact fee. The proposed ordinance contains the following provisions: • New developments and construction that substantially impact quality of life, social welfare and environment in Hawaii County be assessed an impact fee to ensure that the persons responsible for impact-generating developments and construction bear a proportionate share of the cost of improvements to the County's major roadway, parks, fire/emergency medical service, police, solid waste and wastewater facilities. • Designates the Planning Director as the Impact Fee administrator. • Designates the Director of Finance as the Impact Fee Fund administrator to receive impact fees from the Department of Planning and Department of Public Works, maintain accurate records, manage funds in terms of fee renewal, reimbursement and use, and perform related duties required to implement the Impact Fee chapter. • Provides exemptions from payment of impact fees, pre-calculated fees based on service standards and unit costs per the needs assessment study, and provides formulae for impacts relating to roads, parks, fire/EMS, police and solid waste. • Provides a section relating to refunds, credits, off-sets, and recalculations of impact fees. At the July 22, 2008, Planning Committee meeting Council Chair Hoffmann explained that he initiated the bill through discussions and with the assistance of the Departments of Finance and Planning and that it was also determined that the usual 120-day processing by the Planning PC Report No. 100 Communication 1329 Bill 324 Page 2 of 4 Commission was not required. Mr. Hoffmann explained it was necessary to create an impact fee ordinance especially in light of the constitutionality regarding the fair share system currently being used, and that due to the complex nature of the proposed bill, further outreach from developer groups and the community was very critical. Finance Director Bill Takaba stated that the overall bill had some merit, however he felt that managing renewals, reimbursements and the use aspect of the fund should not fall under the jurisdiction of the Finance Department or Finance Director. Mr. Takaba expressed concern that having the Finance Department manage the funds and make decisions on behalf of the fund was heading in the wrong direction. Councilmember Jacobson stated he was glad a public hearing was being called because he believed the biggest impact will not fall upon developers but on those people seeking to build their homes on vacant lots that have already been rezoned. Mr. Jacobson stated although he is not opposed to the impact fee assessment, he would certainly like to hear from those people out there who will be impacted both positively and negatively. Councilmember Yagong stated that a public hearing was the right way to go but suggested that since this is an intense legislative change that will generate a lot of questions, he felt the public hearing should be more like a workshop where a presentation is made and dialog exchanged rather than simply listening to public testimony. Council Chair Hoffmann said his intent was that the public heazing would include a 15-minute or longer presentation to lay the groundwork for the legislation. A motion for two public hearings, one to be held in Hilo and one to be held in Kona was duly approved, and this matter was held over for public hearings. At the October 7, 2008 Committee on Planning meeting, public testimony was presented by the following persons: Tim Rees, Robert G. Williams, Raynard Torres, Paul Baillie, Donald Schenkeir, Mazia Schenkeir, Evelyn Thompson, Ruth Smith, Mary Begier and Randy Ruper. Council Chair Hoffmann presented a brief recap of the importance of approving the Impact Fee bill and explained that the contents of Communication No. 1329.15 contained amendments that were the result of the public hearing process and expressed his desire to request a postponement to allow members time to review these proposed amendments. A motion to amend Bi11324 with Communication No. 1329.15 was duly approved. Councilmember Yagong stated he was ready to vote on the bill now and would not support a postponement. A motion to postpone failed and discussion followed. Council Chair Hoffmann stated that the current fair shaze system is illegal and cannot continue because some other type of system that provides funding to address infrastructure must be put in place. Mr. Hoffmann disagreed with Mayor Kim that the impact fee is a regressive tax affecting middle income people, but rather, the impact fee represents an investment in infrastructure that can actually improve "quality of life," increase the value of property and provide a better system for the people of this island. PC Report No. 100 Communication 1329 Bill 324 Page 3 of 4 Councilmember Jacobson stated that this is a progressive measure that the people have been asking for and that it is a true cost for development. He stated that if we are going to expect our tourist industry to continue coming here, adequate infrastructure must be provided. Councilmember Higa expressed concern whether the current fair share system is truly illegal or not and was informed by Corporation Counsel Joseph Kamelamela that a response would have to be provided during executive session due to liability issues. Mr. Higa also noted another concern that although the impact fee would help with infrastructure, it will hurt the guy who wants to build his first home. Council Chair Hoffmann noted that this Council earlier approved atwo-lot subdivision in which the applicant, who intended to build a home on his newly created second lot was assessed a fair share amount of approximately $11,000 as opposed to an impact fee for a Single Family Residential dwelling which would amount to approximately $6,000. Director Yuen explained that the difference between the current fair share system and the proposed impact fee is that under the fair share system, a fair share amount is assessed as part of a rezoning application but would not be assessed to someone who already owns a lot and just wants to build a home. Mr. Yuen stated that under the impact fee system, anyone who obtains a building permit would be assessed an impact fee. After some discussions regarding in-lieu fair share contributions and impacts upon pending fair share assessments not yet collected in the event of a potential lawsuit, Director Yuen stated that all existing fair share conditions would have to be complied with regazdless. Councilmember Yagong stated he disagrees with the position that this is the best time for and Impact Fee ordinance and that although there is no dispute about the need for infrastructure, the country is in a financial crisis. He adamantly stressed that in the real world people are losing their jobs and businesses are going under in this time of economic crisis, and to add an additional financial burden of $6,000 to the people who aze struggling to make ends meet would be devastating. Mr. Yagong felt that when the economy improves then a measure such as this could be brought before the Council. Council Chair Hoffmann disagreed and stated that the best time to establish an impact fee system is when the economy is down and that there is a need right now to change the way business is done. Mr. Hoffmann also added that the bill also allows the Council flexibility to make adjustments and changes if it decided, and noted there is a one year effective date after adoption. Councilmember Yoshimoto stated he understands that Mr. Hoffmann is doing what he feels is the right thing, however, Mr. Yoshimoto expressed that proper timing was the critical issue for him. He said he understood the need for infrastructure but at the same time felt the need to make sure our people can purchase their homes was more important. Therefore, Mr. Yoshimoto stated he could not support the bill as written. PC Report No. 100 Communication 1329 Bill 324 Page 4 of 4 A motion to approve this measure received three aye votes. Pursuant to Council Rules, 5 aye votes are needed to pass a measure. Therefore, your Committee on Planning forwards Bill 324, as amended to Draft 2, to Council with a negative recommendation. and AYES NOES A&E EX FORD X HIGA X HOFFMANN X HCEDA X JACOBSON X NAEOLE X PII,AGO X YAGONG X YOSHIMOTO X Respectfully submitted, COMMITTEE ON ADOPTED: PC REPORT NO. 100