LONG-RANGE FINANCIAL PLANNING COMMITTEE MEETING  

OCTOBER 17, 2006

1.      Chairman Roy Thomas called the meeting to order at 4 p.m. with Committee members Gary Meredith, Eric Magill, Bill Wichmann, Marc Grimes, and Clifton Mitchell present.  Councilman Norman Amendt was also present. 

2.      The Pledge of Allegiance was recited.

3.      There were no changes to the agenda.  Mayor Gary Meredith made made a motion to adopt the agenda.  Bill Wichmann seconded the motion, and it was unanimously approved.

4.      Roy Thomas distributed the Financial Analysis of the Annexation of Integrity Property, Plan B (copy enclosed) to attendees and explained the major changes in it.  Eric Magill noted that this annexation should increase the tax base, which would decrease the Town’s reliance on the transfer tax.  Chairman Thomas explained that he used 7 rather than 5 years to estimate the home closings (page 3).  He explained that the Administrative Department will need to hire ½ persons and the Public Safety and DPW will each to hire an additional person for this annexation.  He then used his budget analysis (page 4) to explain why he does not think that the annexation makes sense when based solely on the property tax.  He estimates that each home will cost $150 in general expense and will have additional costs for employees.  He then went into some detail about the uses of the transfer tax (page 5) and said that the transfer tax uses are not as limited as once thought. Mr. Thomas said that his budget analysis (page 6) shows that 50% of the years from 2008 to 2017 will be beneficial for the Town, and 50% will not be beneficial for the Town.  In answer to a question from Marc Grimes, Mr. Thomas said that this is a complicated issue but the thinks that the trend will probably continue downward after 2017.  He said that he didn’t factor in tax increases.  He recommended that all three departments should only increase by ½ a person, and these additional should be delayed by 1 year (page 7).  He then raised the issue of impact fees and said that he has talked to Dennis Schrader and Chuck Hauser about this issue.  He also said that this Committee previously recommended that the Council look at imposing impact fees.  In answer to a question from Marc Grimes, Mr. Thomas said that he didn’t know how the imposition of impact fees would affect Fairway Village and vacant lots in Town and said that this issue must be examined.  He presented a list of suggested impact fees, which would amount to $7,250 per unit for a total of $2,871,000 (page 9).  Cliff Mitchell commented that the downward trend indicated in the chart on page 8 would probably continue but also that a surplus would continue as long as the elements inflate and noted that there will be transfer taxes from resales.  Mr. Mitchell also said that it is reasonable to expect the deficit indicated on page 6 would continue to grow.  In answer to a comment from Eric Magill, Mr. Thomas said that he did not factor in the real estate transfer taxes that would accrue from the sale of land.  Mayor Meredith said that he favors impact fees for annexation but thinks that the numbers look high.  Bill Wichmann said that there are various forecasts for the real estate market, and no one knows which ones are accurate.  He said that it is important to remember that someone will build on this property whether or not the Town annexes it, and cars will use the Town’s streets.  He suggested that they sit down with the developers and ask them to provide a service such as widening narrow streets like Woodland Avenue rather than imposing an impact fee.  He favors beginning dialogue and moving forward.  After some discussion about this issue, Eric Magill said that the key is to keep the number of new employees hired as a result of this annexation to 1½  employees.  Marc Grimes said that they must be sure of what the Town will needs as a result of this annexation and asked about the possible tax burden for all property owners.  Mayor Meredith said that the figure for the Town Hall improvements may be too high and reminded everyone that the fire department is not in Ocean View.  He went on to say that he is in favor of recommending this annexation to the Town Council.  Roy Thomas said that he was also in favor of recommending annexation with conditions.  He said that the transfer tax should be used to improve the quality of life for Ocean View property owners (page 10).  The issue of density was raised, and Mr. Thomas said that this Committee did not decide this matter.  Garland Saville, South Wind, said that the Planning and Zoning Commission should decide this issue.  Marc Grimes said that if the Town allows excess density, it should charge for that density, and said this annexation should not add to the Town’s financial burden.  Mr. Grimes agreed with Bill Wichmann’s suggestion for Woodland Avenue; however, Eric Magill said that the previous Town Manager looked at this and said that it will be very expensive to do.  Marc Grimes said that a bike path would improve the Town.  Roy Thomas said that they don’t have a true financial picture and said that they could have another meeting after it goes to the Planning and Zoning Commission, and they decide on the density of the project .  Mike Nally, Integrity Communities LLC, said that he didn’t understand why the Town would add a police officer before the project starts.  Mr. Nally questioned the figures on page 6.  Discussion followed.  Mr. Nally reminded attendees that they had been working with the Town on this annexation for a long time and just learned about impact fees.  He went on to say that they are willing to pay their fair share in impact fees and thinks that the rules must be clear and fair and does not think that they should be excessively charged for them.  Bill Wichmann said that he only recently learned of this annexation, and Mr. Nally explained that they have been meeting with the Town Manager and Town Administrative Official.  He said that they have many changes to their plans to accommodate the Town.  Marc Grimes said that this is the first annexation to be considered by the Long Range Financial Committee.  Roy Thomas agreed that the impact fees need work.  Ray Berzins, Berzins Enterprises, mentioned Fairway Village in relation to impact fees, and March Grimes said that they should be imposed on everyone.  Mayor Meredith said that impact fees should be imposed across the board and doesn’t agree with the numbers.  After some discussion, Mr. Nally said that he thinks that this annexation will be financially advantageous for the Town.  Bill Wichmann expressed concern that the issue of impact fees has come up so late in the process and said that he is opposed to percentages.  Eric Magill said that they should look at the impact fee and get the numbers worked out and decide what to do about Fairway Village and the vacant lots.  Mayor Meredith suggested that another meeting be scheduled, and the consensus was that they would meet at 4 p.m. on October 24.  They also agreed that someone should work with Mike Nally about the figures, and someone should contact Chuck Hauser about the impact fees.  The issues of whether the number of potential employees was accurate, the real estate transfer tax, and Woodland Avenue were discussed.  Roy Thomas said that they would meet on Tuesday, October 24^th and said that he would contact Mike Nally and Chuck Hauser. 

Mayor Meredith made a motion to adjourn the meeting.  Bill Wichmann seconded the motion, and it was approved unanimously.  The meeting adjourned at 5:25 p.m. espectfully submitted

                                                        Respectfully submitted,

                                                       Roy Thomas

                                                       Chairman

                                                       Long-Range Financial Planning Committee

Enclosure:

Transcribed from notes:  December 31, 2006

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