CITY OF STEAMBOAT SPRINGS SPECIAL MEETING NO. SP-2008-03 MONDAY, MARCH 10, 2008 MINUTES Mr. Loui Antonucci, City Council President, called Special Meeting No. SP-2008-03 of the Steamboat Springs City Council to order at 5:05pm, Tuesday, March 10, 2008, in Centennial Hall, Steamboat Springs, Colorado. City Council Members present: Loui Antonucci, Cari Hermacinski, Meg Bentley, Steve Ivancie, Walter Magill, Scott Myller, and Jon Quinn. City Staff Members present: Alan D. Lanning, City Manager; Wendy DuBord, Deputy City Manager; Anthony B. Lettunich, City Attorney; Julie Jordan, City Clerk; Anja Tribble, Staff Assistant; John Eastman, Planning Services Manager; Jason Peasley, City Planner; Lisa Rolan, Director of Financial Services and Chris Wilson, Director of Parks, Recreation and Open Space. NOTE: All documents distributed at the City Council meeting are on file in the Office of the City Clerk. CITY COUNCIL DISCUSSION TOPIC 1. United States Postal Service: relocation update. Mr. Leigh Hettick, Unites States Postal Service (USPS), was present. He provided a PowerPoint presentation highlighting the following: Introduction of USPS representatives; meeting objectives; background; existing conditions; alternatives; facility requirements; and approximate process timeline. Mr. Hettick noted that the USPS wants to provide better service for the community, and that they will be informing with public notices as they go. Discussion took place relative, but not limited to: use of tax payer money for a possible relocation (clarification by Hettick that post office doesn’t run off taxes), the location of a future post office (preference of it staying within the downtown area for easier access), options/ analysis for leaving the post office in the current building, problems with the current building (designed as a bank), financing of a new location, repairs at and re-organization of the current location, options and problems of a new building in the same location, the possibility of more cluster boxes downtown, residential delivery, and the possibility of multiple facilities for West of Steamboat Springs. 2. Annexation Panel of Experts. Mr. Peasley, City Planner, was present. Panel members: Ted Wang, Mayor, Town of Granby; Jerry Dahl, Partner, Murray Dahl Kuechenmeister & Renaud, LLP; and Munsey Ayers, Shareholder, Otten Johnson Robinson Neff & Ragonetti, P.C. Mr. Wang stated that eight years ago, Granby faced a decision of growing or dieing. They aggressively went after annexing properties of different sizes; from 5,200 acres to 200 acres; for a total of 8000 acres. As far as Pre-Annexation and Annexation agreements, they often “learned the hard way”, and now the area is seeing lots of growth. Mr. Dahl noted that he is an attorney who mainly represents Cities and other governmental entities in Land Use matters. His specialty is annexation agreements. He focuses on the longer view rather than schedule. Mr. Dahl stated that a City needs an agreement that works for the future and doesn’t just solve today’s problems. Mr. Ayers stated that he is an attorney who represents primarily Real Estate developers, with focus on Land Use. Due to that, he typically works on the annexation of properties that are planned for development, and not developed already. While he agrees that it is important to create a structure that enables changes in future, he also insists that schedule is important to have projects succeed. Mr. Lettunich disclosed for the record that while Ayers is not personally involved in this project, Ayers’ firm represents Steamboat 700. Mr. Lettunich reminded everybody that the Community Development Code (CDC) requires a pre-annexation agreement to be presented at the time of the pre- application. He asked for input from the panel on said pre-annexation agreement. Mr. Dahl stated that the agreement is only as good as you make it. He said that it is helpful to surface early what will be deal cutters (such as affordable housing, density). City Council has two basic choices: 1. The agreement contains a schedule and includes “big ticket items”. This agreement will be used as a roadmap, and the process is only continued if both parties agree upon all conditions. 2. The agreement is a precondition that the parties are close enough and will agree at some point soon. In this case, discussions are continued during the process. Mr. Ayers used the analogy of a funnel; you get into the discussion at the big end and work towards and annexation agreement at the small end. Most pre- annexation agreements he has worked with have been the “roadmap” type, containing procedural steps, definitions on how the cooperation will work, timelines, and a game plan how to get from the beginning of the discussion to decisions and zoning etc. This is then followed by the annexation agreement. Council Member Myller asked Mr. Wang what types of pre-annexation agreements Granby had used for their aggressive annexations. Mr. Wang explained that at first, they didn’t use any at all, but then found that if you don’t have a document that defines the needs of the community and authorities, definitions of things like affordability, it’s easy to lose sight of the bigger picture. He also stated that it’s fairer to the developer to know whether it is even possible for them to meet the conditions, before they sink lots of time and effort into a project. Granby’s set-up process and philosophy were more on the inviting side of the scale; “we want to work with you, these are our interests…” Mr. Wang said despite that, they still held their ground on the important issues. City Council President Antonucci referred to a negotiating team Mr. Wang had mentioned earlier (this team negotiates the terms of the pre-annexation and of the annexation agreement), and wondered about the make-up of this team. Mr. Wang listed the following: Town manager, town attorney, contract planner, representation from planning staff, contract road engineering firm. He noted that Granby purposely kept appointed officials out of the loop because of the quasi- judicial nature of the team’s work; there is a need for free-flow communications, and they can’t be corrupted by politics. Mr. Dahl mentioned that towns like Silverthorne have taken different approaches. There, a formalized Team, consistent of Planning Director, Public Works Director, Town Attorney, Town Manager, and sometimes the Finance Director, participates in discussions and generates a charter. Then this team goes into executive session with City Council. City Council doesn’t look at the whole agreement but at charts or bullet point lists that outline the problem areas. Discussion and input from City Council follows. This way the team is well prepared for their negotiations, and City Council already knows about the issues once they see an annexation agreement, even if that doesn’t happen until late in the process. Mr. Ayers mentioned the possibility to hold regular work sessions for decisions that wouldn’t be considered quasi-judicial. He suggested specific City Council members to be assigned to specific issues. He said that it is important for the developer to know that communication isn’t being manipulated by staff, and to enhance the feeling of trust and partnership. (To avoid the “Car Dealership- Feeling”, where everyone tries to sell you something but nobody has your interest at heart.) Mr. Dahl agrees with the general idea but reminds Council that the “Car Dealership Experience” can happen on both sides. He stated that when inking the final agreement is when you’ve reached a partnership. That is not the case in the beginning, you aren’t obliged. Both parties need to earn their way into the partnership. He stated that the Government doesn’t HAVE to make it work, and therefore doesn’t have to give in to demands such as “I have to have so many units to make it financially work”. You need to determine if you can be partners first. Only if you choose to make it your problem does it become yours. Mr. Ayers replied that while that statement is true, it is also true the other way. He suggests taking a different approach to the situation. Instead of one party having a problem and expecting the other one to solve it, work together to fix the issue. He reminded Council that sometimes we confuse the tools available to us with the results we’re trying to achieve. He warned them not to get hung up on the tool but to focus on the result. He stated that the pre-annexation agreement is an early and conceptual tool, not a result or goal. City Council President Pro-Tem Hermacinski asked why City Council’s feedback to the negotiating team’s charts has to happen in Executive Session, and at what point the public gets to weigh in. Mr. Dahl explained that the chart process allows the team to negotiate the annexation agreement (5-6 issues per chart, which will get turned into agreement) which then is made public and open to public comment. City Council President Pro-Tem Hermacinski asked Mr. Dahl whether he knows of anyone who has done everything in public. Mr. Dahl stated that he doesn’t know of anyone that has done it all in public, but there are certainly towns that have done more open discussion than Silverthorne. City Council President Pro-Tem Hermacinski asked whether this open process could be a problem, especially with a sales tax based economy. Mr. Dahl said yes. He mentioned a possible transfer tax to make up for it. Council Member Ivancie reminded Council that the City isn’t always the one requesting an executive session; the confidentiality is to benefit for both parties. He compared it to a courtship vs. an arranged marriage and stated that what we want is Courtship. He said that what we need to look at is: Who benefits? Who pays? Short term/ long term? Council Member Bentley re-phrased City Council President Pro-Tem Hermacinski’s earlier question, wondering at what point there would be space for public input during the negotiating team’s work. Mr. Wang explained that the negotiators get direction in executive session (identifying 5-6 big priorities), then a public hearing is scheduled. He also noted that contrary to their expectations, there was very little public participation. Mr. Dahl stated that this process is a matter of local procedure. Once the annexation petition has been filed, zoning subdivisions can be considered. The land use application is done in public hearing; the annexation agreement is usually put together more quietly/ privately. Public input from the land use discussion can be used for the agreement discussion. Mr. Ayers explained that the required annexation agreement is “folded into” the normal process of zoning, etc. A yes or no decision on annexation is usually preferred to be at the same time as zoning, subdivisions, etc. The Executive Session isn’t to keep information away from the public; it is more used for negotiating strategies and for sharing proprietary information from the developer (financing etc), which is important for the Government’s decision, but can’t be made public. City Council President Pro-Tem Hermacinski asked whether since the pre- annexation agreement gets turned into the annexation agreement simultaneously to zoning and land use, and zoning and land use go through the Planning Commission, should the other go that route, too? Mr. Dahl stated that most towns don’t run it through their Planning Commission since it’s not in that commission’s jurisdiction. Council Member Myller reminded Council that the land in question for annexation has been Master Planned for years and lays within Steamboat’s urban growth boundaries. He wondered whether this would or should affect their annexation process. Mr. Wang replied that it shouldn’t. He told Council that they have to know why they want to do this. An annexation has to make sense for both sides for it to work. He listed a few values Granby had, for Council to use as examples, such as: Control their own destiny (growth will come, want to control and shape it), Need strong commercial component (none of the annexations were purely residential), and Water (need to bring more water than what they needed for own development at max development). Granby didn’t want to end up with big subdivisions where the town would have to take care of the roads. He reminded Council that they can insist on the developer taking care of certain things like road maintenance with Homeowners Associations and Special Districts (Metro District). Mr. Dahl stated that Council has already taken a few steps towards a partnership, but they’re still not obligated to go through with an annexation. The financial aspect also needs to work. City Council President Pro-Tem Hermacinski inquired whether the Granby board ever formally answered the question “Do we want this to work?” Mr. Wang responded that they did, and that that was a very important discussion to have. The Town of Granby acted very calculating and hired a new town manager whose strength was large scale development and negotiation. They put together the team according to a specific set of skills. Mr. Ayers reminded Council that any project has a capacity for carrying a cost and if it doesn’t succeed, the City won’t get the benefit they were hoping for. All of that needs to be discussed. He stated that special districts, “Title 32”, for example, are a valid option. He said that they are a good tool to isolate costs under the right circumstances. City Council President Antonucci questioned whether establishing Levels of Service or establishing Adequacy of Public facilities is more appropriate. Mr. Dahl responded that it depends on the situation. Something will have to be done to account for the difference between the “as is now” compared to “what will be in ten years”. In a phase project, the annexation agreement will have to anticipate possible changes. He noted that whichever of the two earlier mentioned options they go with needs to be tiered to provide ways of dealing with what actually happens during the process of building, and as time goes by. Mr. Wang cautioned Council that the Colorado Department of Transportation (CDOT) will have a say in traffic. He also mentioned other issues Council should keep on the look-out for, such as Law Enforcement (suggested a levy stipulation when population reaches a certain amount or the development reaches a certain percentage of build-out, extra costs for extra officers); water, sewer (tap fees need to be pegged to growth, to handle maximum growth during times like President’s Weekend), land reserves for bus stops (didn’t require them to be built, but platted and agreement from developer to build when necessary), requirement for stub-outs on underground utilities to adjacent pieces of property to make it possible to tie in later. Mr. Ayers stated that it is important to the developer that the measurement is objective, not subjective. There needs to be a rational connection between the impact of the specific project on the infrastructure, and a predictability of all facets. Developers don’t want to be the insurer of an absolute level of service that may not have anything to do with their development. If a developer steps up to cure an existing issue, they want to be compensated for it. Mr. Dahl countered that the Government has the right to impose or require that a developer take care of an existing problem as part of the annexation agreement; there is more bargaining room on the legal side when the proposed development is located outside of town limits. Mr. Wang said that a developer doesn’t always have the same thing in mind as an elected official. He mentioned the possibility of a Real Estate Transfer Tax during an annexation process, or bond proceeds fees, which should be used for specific things. He stressed the need for a good healthy relationship since their future and the current City’s future are tied together. City Council President Pro-Tem Hermacinski asked whether Granby ever annexed several properties at the same time. Mr. Wang answered that they had done it all three ways. Some properties had to be annexed little slices at a time, some of them were annexed as one, and some smaller ones were annexed together in one step. However, he noted that they didn’t sit down and plan it that way originally. It was more of a domino-effect. Mr. Dahl mentioned the right of reimbursement for whoever puts in initial infrastructure. He reminded Council that if they required a developer to build oversized, they should promise reimbursement when the rest of the land gets developed. Mr. Ayers cautioned Council that Bond fees will only be accepted if there is predictability for the market. Council Member Quinn inquired about what the Town of Granby learned from mistakes besides the need to have a pre-annexation agreement. Mr. Wang recommended that Council bargain hard, and not leave things on the table. He told them to be bold and aggressive (while still making it work for both parties). Don’t be afraid to ask and to “dig in your heels”. He reminded Council that once they sign this agreement, it will stay in place. He reminded them to protect the financial stability of their community, and to talk to other communities to get input and hear about their experience. Mr. Ayers added that the private side will bargain hard. All issues need to be explored and flushed out. He stated that if one party feels like they got abused, the agreement in question won’t “wear well” over time. He re-iterated that the agreement has to be a good and reasonable deal for both parties. Mr. Dahl mentioned that a City has an “event horizon” that is always longer than that of the developer. There are always differences in the nature of interests and government’s partner will most likely change. He also cautioned Council to be careful about service plans. ADJOURNMENT MOTION: Council Member Ivancie moved and Council Member Myller seconded to adjourn Special Meeting SP-2008-03 at approximately 7:15pm. The motion carried 7/0. MINUTES PREPARED AND RESPECTFULLY SUBMITTED BY: Anja Tribble-Husi Anja Tribble-Husi City Clerk Staff Assistant REVIEWED AND RESPECTFULLY SUBMITTED BY: Julie Jordan Julie Jordan, MMC City Clerk APPROVED THIS 1st DAY OF April , 2008. STEAMBOAT SPRINGS CITY COUNCIL MINUTES SPECIAL MEETING SP-2008-03 March 10, 2008 9