Civic Insights: Who Pays for that Pipe, Part V

(City council, school board, planning commission, county commissioners – these groups and several others represent us.  They do the day to day work of running our community. It is our responsibility to keep informed about their work so that we can help them represent us effectively.  “Civic Insights” by Jeffrey Vitarius is a regular feature of Act Locally Waco.  Its purpose is to help us understand decisions that shape our community so that we can participate effectively as informed, engaged residents of Waco. – ALW)   

By Jeffrey Vitarius

We are finally coming to the end of the long impact fee process. This policy has been a goal of the city since it adopted the comprehensive twenty-five year plan in 2016. There has been intense study and discussion of the potential policy since Freese and Nichols (consulting firm) was hired to produce the study back in December of 2018. We have been writing about it here since early September. Last week, the City Council took its first vote on the initial policy that has been generated by this process. Another vote is scheduled for next Tuesday (November 6th) and this should be the final step. 

Back in September, we started this discussion with a broad look at what an impact fee policy is. We moved from there to the legal process for establishing an impact fee, and finally to an examination of the pipe-related and road-related details of the Freese and Nichols report . That report will serve as the basis for any impact fee policy in Waco. Here in our final post, we will finally move from what impact fees could be to what they should be by examining the policy that was approved last week and the discussion that has occurred at the City Council level regarding how best to proceed.  

The Policy

As a brief reminder, the Freese and Nichols report established the maximum allowable impact fees for water, wastewater, and roadways (the end of the could process). The results of that study are below. 

All of these maximums are based upon single-family home equivalency. So, the numbers above are the maximum allowable impact fees for a single-family home. For example, a single-family home in service area seven (near China Spring) could not have an impact fee above $6,328 ($1,804 – water + $3,574 – wastewater + $950 – roadway). Developments that are not made up of single-family homes have a maximum that is scaled based on calculations of use. So if a development is anticipated to use twice as much of the infrastructure as a single-family home, the maximum impact fee for that development is twice that of the single-family home (there is a lot more detail on this front in the last two posts). 

The policy the city is in the process of adopting (found in more detailed form in the ordinance that was voted on last week) starts with base impact fees that are 100% of the allowable fees established above. However, to this base fee a number of exemptions, waivers, and limits are applied.

Below is a brief list of most but not all of these adjustments with some explanation of each:

  • Residential Infill Waiver – single family homes in the “residential infill area” (map below) would have all impact fees waived
  • Traditional Commercial Corridor Credit – non-single family home developments in the “traditional commercial corridor area” (map below) would have impact fees reduced by 50%
  • Credits for construction of system-wide facilities – from a really broad view, if the development involves the construction of system-wide facilities (those kinds of infrastructure that are not just for the development itself) a credit to account for this construction would be applied to impact fees
  • Affordable Housing Waiver – if a development has at least 25% affordable housing units (costing  less than 30% of a household’s income for households making less than 80% of Waco’s median income) and an additional 25% that are either affordable or “workforce” units (costing  less than 30% of a household’s income for households making between 80%-120% of Waco’s median income) impact fees would be waived. There are additional allowances for +sale units as well. Eagle eyed observers may spot that some of these percentages have appeared before in discussions of the CDBG program
  • Existing Business Waiver – if an existing business expands or relocates and the project fits with a collection of conditions (for example being open at least 2 years already, and documentations showing that the expansion or relocation will provide at least as many jobs as before) all impact fees would be waived.
  • Phase-in elements – the policy has an effective date of June 1st, 2021. The fees would also be phased in over the course of five years (hitting 100% in June of 2024). There is also a waiver that would apply to projects that are nearly complete. 

Each of these policy adjustments has some reasoning behind it and in most cases represents an effort to avoid disincentivizing certain kinds of development. It’s economics short-hand to say that if you make something more expensive you will get less of it (like most economics, I am sure there are disputes on this point, but the general rule remains). If affordable housing became more expensive to build due to impact fees, the theory goes that some number of units would not be built because of the increased cost. So, the above adjustments tend to exempt or reduce impact fees for the kinds of development that are high priorities for the city (infill residential, core commercial, affordable housing, etc). In addition to these adjustments, the policy gives the city the ability to grant waivers on a case by case basis as well. 

The phase-in elements provide developers with some time to incorporate the new impact fees into their calculations and decision making.

The downside to these adjustments is that they make a complicated policy more complicated. Much of the discussion at City Council hit upon this point.  

The Discussion

Over the course of the last two City Council meetings (10/06 and 10/20) there has been substantial discussion of the policy outlined above. In general, there has been support for impact fees in theory. Most points of concern have been focused on the specifics of the policy and its timeline for implementation.

The committee formed to analyze and make recommendations on the impact fee policy (the Capital Improvements Advisory Committee – CIAC) recommended the above policy with a single exception: that the implementation of commercial impact fees be delayed for six months (essentially pushing the effective date of commercial impact fees from June 1st, 2021 to December 1st, 2021). 

This recommendation exception highlights one of the key elements of the discussion around this policy. The commercial impact fee calculation is substantially more complicated than the residential impact fee calculation. This makes sense, given the variety of developments that fit under the “commercial” umbrella. For commercial developments, the variety of kinds, sizes, locations, and exemptions all factor into the impact fee calculation. The city is working on a calculator to assist developers in navigating the detailed points of this part of the policy. 

Additionally, concerns were focused on whether this policy strikes the right balance between funding the needed infrastructure projects and making sure not to disincentivize development. Since this policy is new, there were also questions about when and how it could be changed. 

Input that was received from the public raised similar concerns and questions regarding balance and alternatives.

Arguments were made that the substantial phase-in elements of the policy and semi-annual review by the CIAC allowed for adjustment before the full impact of the fees would be felt by developers. Additionally, the importance of associating the costs of development with development rather than existing tax and ratepayers was emphasized. Ultimately the City Council voted 5-1 to approve the policy in its first vote. The Council will vote for a second and final time next Tuesday.

Thank you for walking through this review of impact fees with me. I hope to bring you something new or at least different in November. If there are any particular civic policy or issues you would like me to take more of a look at, please feel free to comment here. Thanks again.

Jeffrey Vitarius has been actively local since early 2017. He lives in Sanger Heights with partner (JD) and his son (Callahan). He helped found Waco Pride Network and now serves as that organization’s treasurer and Pride Planning Chair. Jeffrey works at City Center Waco where he helps keep Downtown Waco clean, safe, and vibrant. He is a member of St. Alban’s Episcopal Church and graduated from Baylor in 2011.

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email ashleyt@actlocallywaco.orgfor more information.

Civic Insights: Who Pays for that Pipe, Part IV

(City council, school board, planning commission, county commissioners – these groups and several others represent us.  They do the day to day work of running our community. It is our responsibility to keep informed about their work so that we can help them represent us effectively.  “Civic Insights” by Jeffrey Vitarius is a regular feature of Act Locally Waco.  Its purpose is to help us understand decisions that shape our community so that we can participate effectively as informed, engaged residents of Waco. – ALW)   

By Jeffrey Vitarius

Back in September, we began this series with a broad look at what an impact fee policy is. A month ago, we focused on the legal process for establishing an impact fee. Two weeks ago, we took a look at pipe-related details of the report that serves as the basis for any impact fee policy in Waco. This week, we’ll take a look at the road side of things. Then we will wrap up next week, by looking at the policy the City considered on October 20th. 

As a bit of reminder, we are working our way through the following steps that were used to calculate maximum impact fees:

  1. Determine a service area
  2. Identify a way to connect demand for service to supply for service
  3. Calculate increased demand for services
  4. Review existing supply for services
  5. Determine and cost projects needed to meet increased demand
  6. Identify service unit to divide costs amongst projects
  7. Calculate maximum impact fees

1. Service Area 

As you may recall from two weeks ago, service areas are the geographic boundaries of the impact fee policy. Chapter 395 provides guidance on what these areas can be or must be. For roads, there is a unique limitation that is not applied to pipes. Service areas for roads are limited to about twelve miles across (technically a six-mile radius). The reasoning here is that one part of town should not have to pay for the roads of a different part of town. For pipes the network is considered as a united system, whereas with roads smaller service areas are required. Additionally, a service area for roads cannot extend beyond the city limits (excluding the Extra-Terratorial Jurisdiction).

How these twelve mile “areas” are drawn is left up to the city or county looking to begin impact fees. For Waco the service areas ended up as this map:

2. Connecting Demand and Supply 

We will once again need to find some measurement to connect a new house or business park (demand) to the existing system of roads and any potential expansions (supply). The measurement needs to be scalable to the variety of demands that will come from new development and be measurable for distinct projects and supply systems. For roads, that measure is vehicle-mile at the PM peak hour. That probably needs some unpacking.

In thinking about the kind of measure we need here, the first impulse might be to simply count the cars. How many vehicles use the road system at any given point in time? That would get us part of the way there, but would miss a critical question: how far are those cars going? A car going a couple miles to a local restaurant “uses” substantially less roadway than a car going ten miles to work. 

So we need to know not only how many cars are out there, but how far all of them are going. That is how we get to vehicle-miles. Ten cars going one mile has the same “vehicle miles” as one care going ten miles (10 cars x 1 mile = 10 vehicle-miles vs 1 car x 10 miles = 10 vehicle-miles).

On top of this, roadway use changes throughout the day, much like pipes (diurnal patterns). Road use peaks in the AM and the PM rush hours with less use in between. So, for the sake of impact fees the PM peak hour is used to measure vehicle-miles. 

3. Increased Demand

Projecting how much Waco will grow overall, and where that growth will occur follows the exact same pattern that was used for pipes. For roads, however, a simple breakdown between growth in residents and employees will not be enough to fully capture the impact on roadways. For roads, the kind of employment becomes important.

We can see this if we think about the differences between a small industrial center and a retail park. Both may hire the same number of employees, but they generate substantially different vehicle-miles. At the industrial center, employees arrive and leave plus the occasional shipment of goods. However, at the retail center not only do you have employees and shipments coming and going, you also have customers. 

To account for this our consultants, Freese and Nichols, broke employment growth down into basic, retail, and service categories. Each of these have a different impact on vehicle-miles. They then translated the number of new employees into anticipated square feet of use and bridged from that measure into vehicle-miles. For new residents, they looked at growth on a residences (rather than residents) basis.

Combining all this together they were able to project increased vehicle-mile demand for each of the service areas over the next ten years.  

4. Existing Supply and 5. New Projects

A factor of particular importance in looking at how the current roadways will be able to accommodate the increased pressures of growth is how much are they currently being used. Pipes are metered. Water users are billed based on how much demand they put on the current systems. So it is fairly simple to gather information about current use. Roads are different. Their use is not tracked nearly as closely. For the sake of this study, Freese and Nichols relied on traffic counts that were collected on thirty separate locations across the city in May of 2019. 

They then compared these counts to the traffic capacity of various road segments (think of these as the bits of road where the road stays the same, so the part of x drive that has four lanes is separated from the part that has two lanes). Capacity can normally be determined by looking at the design of the road. On a really rough level, you can see that I-35 has more capacity than Waco Drive which has more capacity than 10th Street. So looking at the current use and the design capacity of each roadway you can figure how many additional vehicle miles you can add in without needing to change the road (incidentally there are some roads that are already used more than their capacity, these “deficits” are ultimately taken out of the calculation of improvement cost since they are not a result of new demand). 

Much like with pipes, Freese and Nichols along with City Staff then identified a number of improvements that might be eligible for impact fee funding. Unlike pipes, these projects were assigned to specific service areas. Where a project crossed the boundary between two service areas, its costs were split between the two. These projects were then examined for the amount of vehicle-mile capacity they added to the service area. So long as this added capacity was less than the increased demand in that service area (see step 3) the entire cost of the projects for that area could be included in the impact fee calculation. Where the added capacity was more than the increased demand, only that portion of the projects that covered the increased demand could be considered. 

Combining all the allowable costs together, the report then applies the same 50% credit to the costs that we discussed with pipes. At the end of this process we have the total eligible impact fee cost – the total cost of increased capacity due to new demand after consideration of a credit for future taxes for each service area. 

6. Service Unit

Chapter 395 calls for the establishment of a service unit specifically. It defines this (in broad terms) as a standardized measure of use. Although vehicle-miles remain a good connector between supply and demand, it is difficult to determine the exact number of vehicle-miles any given development would generate. So, the study scales vehicle-miles on the basis of a single-family residence. Basically, we look at each development in terms of how it relates to the demand generated by a single-family residence. 

As was mentioned above, in general you can calculate the vehicle-miles produced by any given development based on its characteristics. We look at this in terms ultimately of trip total trip length. That is the number of vehicle-miles generated by the development. There are a number of interesting factors that go into this calculation (like trip generation, individual trip length, adjustments for diverted trips and local conditions), but we don’t have the space to get into all of these here. Instead we can go with a nice round number example. Let’s assume a single-family residence produces 4 miles of adjusted trip length and a retail store produces 12. The retail store will be scaled so that it can be measured as a multiple of a single family residence. With this example that multiple is 3 (12 divided by 4). 

Here are some of the real ratios to give you an idea of how they work in the study. A hospital is anticipated to generate 1.72 times the demand of a single-family residence for every 1,000 square feet it contains. A clinic, in contrast, generates 5.81 times the demand of a single-family residence for every 1,000 square feet.  These ratios allow for the generation of a comprehensible unit of measure to distribute the costs of the improvements. 

7. Maximum Impact Fee

Knowing our service unit and our total eligible costs, the final step can be taken. A projection is made of the total new service units anticipated by development (for roads this projection relies heavily on land use assumptions since different kinds of development vary greatly in terms of trip generation). This projection is made on the basis of the service areas we noted above. For example, service area five as zero anticipated growth in service units. Whereas, service area one anticipates 15,947 new single-family resident equivalents. The chart below completes the process. 

Here we see that after all these steps the maximum impact fee allowable by law for roads in service area one is $6 and for service area eleven is $1,169. These numbers are the final product of that could process we discussed at the very beginning of all of this. That is the process to determine what impact fees could be (as opposed to should be).  Whatever the outcome of the should process is, the impact fees cannot exceed these amounts for a single-family residence equivalent.

Jeffrey Vitarius has been actively local since early 2017. He lives in Sanger Heights with partner (JD) and his son (Callahan). He helped found Waco Pride Network and now serves as that organization’s treasurer and Pride Planning Chair. Jeffrey works at City Center Waco where he helps keep Downtown Waco clean, safe, and vibrant. He is a member of St. Alban’s Episcopal Church and graduated from Baylor in 2011.

The Act Locally Waco blog publishes posts with a connection to these aspirations for Waco. If you are interested in writing for the Act Locally Waco Blog, please email ashleyt@actlocallywaco.orgfor more information.

Candidate for City Council, District 4: Kelly Palmer

By Kelly Palmer

Affordable housing, economic development, and COVID-19 are three of the most pressing issues our District IV City Councilmember must prioritize. More than ever, we need trustworthy leaders who listen to their constituents’ needs and are well equipped to address the complex issues our city faces. 

Issue 1: Affordable Housing

The rising cost of housing in our community is one of the concerns I have heard repeatedly voiced by District IV residents. Since 2015, the cost of property taxes and housing in Waco has skyrocketed while wages have mostly stayed stagnate. Nearly half of our city’s residents are “housing burdened” and spend more than 30% of their monthly income on housing. As housing costs continue to surge, folks have to move further and further from the city’s core, where many of Waco’s highest paying jobs are located. Housing is an issue where we see poverty and race significantly intersect, in everything from disproportionate homeownership rates to redlining in communities of color. 

While there are several ways to address housing-related issues, I believe we will not see meaningful change enacted until housing is a priority in our city’s budget — which ultimately reflects the city’s values. In reviewing the city of Waco’s budget from the past three fiscal years, I was surprised to learn that housing and community development are consistently the least funded budget category. Year after year, housing has made up only 1% of the city’s annual budget. By allocating greater resources to housing, we can invest in solutions that will help alleviate this significant area of need in our community. If elected to the council, I would advocate for both for the development of mixed-income housing, which the data suggests can significantly benefit both communities and residents, in addition to pursuing policies that prevent gentrification and displacement of families from generational homes. 

Issue 2: Equitable Development

Waco has experienced a significant economic boom over the past several years, and yet, 44% of District IV residents make under $25,000 a year. While Waco’s growth has undoubtedly benefited some segments of our community, many of our neighbors have not shared in the prosperity or growth. As the city continues to expand in the coming years, the development we pursue must be sustainable and rooted in equity. 

Equitable Development is a framework that encompasses economic and community development goals, in which community members are actively engaged in the decision-making process. If elected, I would pursue economic development initiatives that seek to improve the quality of life for all Wacoans, focusing particularly on our residents experiencing financial insecurity. One way I will do this is by championing jobs that provide our residents with a living wage and supporting our local workforce development programs. Through my work with Communities In Schools, I have seen firsthand the impact that workforce development programming can have on someone’s life by equipping them with an employable skill set that opens the door to financial security.    

I look forward to reinforcing partnerships like this within our city, bringing together schools, non-profit organizations, and businesses to train our residents with the specialized skill sets needed to access high paying jobs available within the Greater Waco area.

Issue 3: COVID-19 Management & Recovery

COVID-19 continues to pose a real threat to the security and wellbeing of our community. While the virus has had broad sweeping adverse effects on all of our residents, it has significantly hit our communities of color. Our Black and Latinx populations have been disproportionately affected by COVID-19, as evidenced by the positivity and morbidity rates among these demographic groups. Addressing racial disparity as it relates to the novel-coronavirus is an issue of critical importance. 

While there are no quick fixes or easy answers, our city council members must continue to provide thoughtful leadership throughout the duration of this crisis. Getting up-to-date, accurate information to our residents will continue to be an important area of focus. Finding ways to access hard-to-reach populations and populations at heightened risk of contracting the virus is also vital. We need city leaders who can strategically mitigate and respond to the wide range of effects COVID-19 has on our community. Even after a vaccine has been created and widely distributed, we will likely face the virus’s ramifications for months, if not years to come. As a city, we must be thoughtful as we develop plans for the long-term multi-tiered recovery we will need.

I commend Mayor Deaver, Judge Felton, and our extensive network of local healthcare providers for the decisive actions taken since March to flatten the curve and minimize the transmission of COVID-19 in our community. The road ahead of us is long, but we can weather the storms of this virus together. My experience working on the frontlines of a humanitarian aid crisis in 2015 and 2016 has equipped me with the skills needed to effectively prioritize competing values and lead during times of collective crisis.

2020 has been a challenging year, but there is hope for a brighter tomorrow. Our community is resilient and resourceful; we will get through this together. Collectively we can build a healthy future for all Wacoans – one where our neighbors have access to needed resources, our local economy is strong, and our community thrives. As a social worker and educator, I have the tools and expertise necessary to get us there. I have been on the frontlines, showing up for our community for years, and I’m ready to serve District IV residents as their next city councilwoman.

Biographical information for Kelly Palmer

Kelly Palmer is a licensed social worker and educator running for Waco City Council, District IV. She has called Waco home since 2013, when she moved to here to pursue her Masters in Social Work for Baylor University. Kelly is running for public office to further serve the community she loves by promoting greater equity and justice through public policy and city funding. Kelly’s campaign priorities are housing, COVID-19 leadership, and economic development with a focus on impacting our most financially insecure neighbors. When she’s not working, you can usually find Kelly volunteering with a local non-profit, on a walk with her husband, or nose deep in a book from the library.

City manager announces organizational & department changes

NEWS RELEASE from the City of Waco

City Manager Bradley Ford announced Tuesday during the City Council work session several upcoming changes to his administration and city department changes. These changes are being made to align the organization to achieve the City Council’s newly identified strategic goals, which are:
·       Build a High Performing City Government
·        Create a Culture of Equity
·        Enhance Quality of Life
·        Facilitate Economic Development
·        Improve Infrastructure
·        Provide a Safe and Vibrant City
·        Support Sustainability and Resiliency

A summary of the organizational changes includes:

— Deidra Emerson, who currently serves as an assistant city manager, will be promoted to deputy city manager. Deidra brings more than 25 years of experience in city government, including the last five years in Waco. She is a trusted adviser to City Manager Ford and will lead several key areas, including the city’s work on equitable practices, process improvement, and economic development.  

— Melett Harrison, who currently leads economic development efforts for the city, will assume the newly created role of director of neighborhood engagement. Ford made re-energizing of the neighborhood program a key element of the upcoming budget, and Melett’s knowledge of various city departments will allow the city to move ahead quickly and strategically on this priority. Melett has served the City of Waco for more than 20 years in a variety of roles including housing, economic development, and neighborhoods.

— Ashley Nystrom, who is currently executive coordinator, will assume the newly created role of chief of staff to the city manager. Ashley has served the city for seven years. The chief of staff role will support the city manager by leading governmental relations functions, as well as serving as a key communicator to link the City Manager’s Office to
the broader city organization.  

— Galen Price, who is currently director of housing and code enforcement, will temporarily assume the role of interim assistant city manager to support the re-alignment of various city departments until the city completes the recruitment for a third assistant city manager later in 2020.

Ford is quoted as saying, “The updated organizational structure at
City Hall will better align staff to meet the needs of our citizens and to achieve the strategic goals of the City Council.”