2015-008 - Morrisville

Version: 2015-008
Subject: Credit for HSNC Payment-in-Lieu
Briefing Sheet
Lead Department:
Town Manager
Subject:
Consideration of Providing a Credit to HSNC for a Payment-In-Lieu Fee Plus
Accrued Interest for Improvements on Aviation Parkway
Briefing:
01/13/15
Action Officer:
Public Hearing:
None
Item Schedule
Schedule 1: Brief twice – vote once (six weeks)
Schedule 2: Brief once – vote once (two weeks)
Schedule 3: No briefing required (one week)
Martha Wheelock, Town Manager
Action:
01/27/15
Select One
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Updates/History of Briefing:
The name of this briefing item and action request has been changed to reflect the substance of the
item being considered by Town Council and the recommendation of staff to provide HSNC a credit for
accrued interest on a PIL payment made in 1987 rather than as the waiver which was originally
requested.
The original briefing sheet indicated the legal statutory rate for interest when not specifically
designated was 6%. The actual NC statutory rate is 8%. Calculation of interest due on the original
payment in 1987 would result in a larger credit than was discussed at the January 13, 2015 briefing
meeting and larger than what prevailing interest rates yields have been over the last thirty years.
Town Council generally expressed support for applying a full credit for the original PIL fee.
The briefing sheet and attached resolution have been revised to reflect correct information on the
implicit NC statutory tax rate and to make minor edits for the chronology of interactions with HSNC to
ensure accurate information is provided in this report. The edits do not change the staff
recommendation.
Executive Summary and Background Information:
The Town has received a request that the Town Manager waive a payment-in-lieu fee (PIL) for
Aviation Parkway improvements related to a pending expansion request for the HSNC Temple
Learning Center Addition. In accordance with the Unified Development Ordinance (UDO) Section
8.1.3, authority for decisions related to PIL rest with Town Council.
Background:
(NOTE: The background for this item spans almost thirty years. Documentation of actions taken is
limited. The following information has been pieced together through records of minutes, files and
past correspondence and recollections of staff members.)
Updated: January 22, 2015
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In January 1987, HSNC received approval by the Town Board of Commissioners for the original
Temple; as a condition of that approval, the applicant, Hindu Society of North Carolina (HSNC), was
to provide a bond for Aviation Parkway improvements in lieu of work being completed for
construction of the original temple (front building). The amount of the bond was correlated to the
amount of a contract that the HSNC had with a contractor at that time. The value of the bond was
to escalate over a period of five years at a rate of 5% each year. A decision to extend the bond or
call the bond was to be made at the end of the five years. The type of improvements are not
referenced in the minutes, but are believed to be turn lanes into the HSNC site. While the reason is
not documented in our records, records indicate HSNC made a payment to the Town of $14,654 at
the time of construction rather than provide a bond.
No information on activity from January 1987 to March 1995 has been located. In March 1995, the
Town Board of Commissioners considered a site plan for a second extension of the HSNC building.
In addition to some site conditions approved at that time, the developer was required to submit
additional funding necessary for the road improvements beyond the original $14,654 payment,
plus accrued interest. The rate of accrued interest is not referenced in the minutes. It also appears
that this obligation was left “open-ended” in that no cost estimate, funding amount, or time limit
for completion of improvements were determined at that time.
HSNC is now seeking approval for a site plan for the Learning Center addition to the second
building. HSNC will add the original required turn lanes, a sidewalk, and add a 24-inch pipe across
the road for improved drainage, as well as dedicating 10 additional feet of right-of-way along the
road frontage. The estimated cost of these improvements is approximately $300,000. These
improvements are the minimum improvements necessary to make the site functional and safe.
Since 1987, the Town has moved away from bonds to assure completion of road improvements to
the current provisions of the UDO which allow for a PIL in the amount of 150% of estimated costs
for these improvements. A primary reason for the PIL is to alleviate timing obstacles with
improvements to roads while allowing timely processing of site plan approval requests and
construction design review. The challenges along Aviation Parkway – a road in need of
improvement but that will not be funded for a number of years – is a clear example of how and
when PIL may be employed as an efficient way to plan for the impacts of current development in
the future.
The Hindu Temple expansion project was submitted under the old Zoning Ordinance and has been
sporadically pursued by HSNC since early 2012. There was no specific language regarding use of PIL
as a replacement for completing required transportation improvements in the old zoning
ordinance, but was negotiated with the HSNC (i.e., the improvements would have been required
to be completed with the project). Further impacting the project was the adoption of the
Transportation Plan in 2009, which increased the type and amount of road improvements,
significantly more than what was required when the original improvements associated with the
payment-in-lieu was made in 1987. These requirements were communicated in a letter to Mr.
Suvas Shah via e-mail in March 2013. There is no record of response or follow-up on the conditions
outlined in this letter. On April 30, 2013, Mr. Shah responded to the e-mail to inquire about the
possibility of having the requirement for preparing a Transportation Impact Analysis (TIA) waived.
Town staff reviewed the request and agreed to waive the requirement because the potential safety
issues presented by traffic turning into and out of the site would be addressed to the extent
feasible by the roadway improvements offered by HSNC.
Updated: January 22, 2015
2 of 6
A review of required transportation improvements associated with the submission of a minor
modification of the site plan by HSNC was conducted in fall 2013/early 2014. In addition to the
original turn lanes, additional transportation improvements included dedication of right-of-way,
curb and gutter, sidewalk, storm water improvements, and one-half of a required median were
required to meet the thoroughfare widening requirements of the 2009 Transportation Plan. Town
staff and HSNC representatives have worked throughout the year to review, evaluate and agree on
the cost of some of those improvements (curb and gutter, additional laneage) for which a PIL
would be accepted. The cost estimate for those improvements is $50,608; the 150% PIL would be
$75,913.
Both the amount and cost of Aviation Parkway improvements have increased due to the passage of
time and the unique challenges of the roadway in this particular section of the thoroughfare. The
review by the Engineering Department notes any widening of Aviation Parkway is better suited as a
larger, corridor type project rather than a partial improvement. There are no near-term plans to
improve Aviation Parkway, although the roadway is now part of the State Transportation
Improvement Plan.
The original PIL payment of $14,654 was paid to the Town in lieu of constructing turn lanes. Since
HSNC is now constructing those turn lanes, they wish for the $14,654 to be applied to the current
PIL cost of $75,913. Although not formally documented, it appears the former Town Manager had
indicated that no accrued interest on the original payment would be calculated. Neither the Town
nor HSNC is able to prove payment of this amount. However, the minutes reference both a
payment and accrued interest. In the absence of a stated rate, accrued interest using the North
Carolina statutory rate of 8% 6% would result in a credit equal to or greater than the PIL payment,
of approximately $73,000 towards the $75,913 PIL request, but that is not reflective of the interest
rate yields on investments over the past thirty years.
The UDO requires that developers be responsible for road improvements for the future impact of
traffic. For this request, no TIA analysis was required or prepared. HSNC traffic typically occurs
during non-peak traffic hours. HSNC is completing substantial improvements and is dedicating
future right-of-way to the town that will provide future value.
Potential Options:
· Apply full credit for the original payment plus accrued interest to the PIL fee
· Adjust PIL to $3,000 after credit for accrued interest on the original payment
· Adjust PIL to some portion of the $75,913 after credit for the original payment and some
acceptable rate of interest accrual
· Require payment in full for the PIL
Attachments:
· ATTH 01 UDO Section 8.1.3
· ATTH 02 HSNC Request to Waive PIL dated November 17, 2014
· ATTH 03 Excepts of Town Board of Commissioners minutes from January 12, 1987 & March 13,
1995
· ATTH 04 Cost Estimate for Proposed Improvements on Aviation Parkway
· ATTH 05 Letter to Mr. Suvas Shah from Ben Hitchings dated March 27, 2013
· ATTH 06 HSNC Major Site Feature Development Timeline and Map
Updated: January 22, 2015
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Staff Recommendation:
Apply full credit to PIL fee
Advisory Board/Committee Review:
None
Board/Committee Recommendation:
NOT APPLICABLE
Advisory Board/Committee Meeting Date and Minutes:
NOT APPLICABLE
Meeting Perspectives and Goals Adopted by the Council:
Perspectives
Serve the Community
Run the Operations
Manage the Resources
Develop Personnel
Goals
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Promote an Environmentally Sensitive & Livable Community
Provide a Safe Community
Deliver Quality Services
Foster a Healthy Community
Enhance Community Preparedness & Responsiveness
Maximize Partnership Opportunities
Provide Courteous & Responsive Customer Service
Model a Positive Town Image
Deliver Efficient Services
Cultivate Community Involvement & Access
Maintain Fiscal Strength
Maximize Utilization & Resources
Invest in Infrastructure & Transportation
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Develop a Skilled & Diverse Workforce
Create a Positive & Rewarding Work Culture
Perspectives and Goals Additional Comments:
NONE
Resource Impact:
Staff time required if item is approved:
No Additional
Other Potential Impacts:
NONE APPLICABLE
Staff Coordination:
Updated: January 22, 2015
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Check the box for those required to comment on left. To comment-click in the box and select.
(Update is used when information has significantly changed from the first briefing.)
Required Staff Member
Briefing
Update
Town Manager
No Comment
Originator
☒
No Comment
Town Clerk
Reviewed
☒
No Comment
No Comment
Senior Director Business Management
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Budget and Analysis Manager
No Comment
No Comment
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Controller
No
Comment
No Comment
☐
No Comment
No Comment
Information Technology Director
☒
No Comment
No Comment
Contracting and Purchasing Manager
☐
No Comment
Senior Director Development Services
Comment
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No Comment
Planning
Director
Reviewed
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No Comment
Town Engineer
Reviewed
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No Comment
No Comment
Building Codes Administrator
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No
Comment
No Comment
Economic Development
☐
No Comment
No Comment
Senior Director Community Services
☐
No Comment
No Comment
Risk Manager/Safety Officer
☐
No
Comment
No Comment
Police Chief
☐
No Comment
No Comment
Fire Chief
☐
No Comment
No Comment
Parks & Recreation Director
☐
No Comment
No Comment
Public Works Director
☐
No
Comment
No Comment
Public
Information
Officer
☐
No Comment
Town Attorney
Reviewed
☒
No Comment
No Comment
Human Resources Manager
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Disagree or comment, explain:
Tim Gauss: I have the following comments: 1) There have been numerous and lengthy meetings
involving Town staff, HSNC officials and its designer, and NCDOT officials over the last couple of years
regarding this situation; my understanding is that an agreement had been reached that balances the
desires of HSNC and the public interest; 2) I do think that if some further accommodation of HSNC is to
be made, I agree with the general approach to consider the current value of the original PIL (as opposed
to simply “waiving” the requirement). However, the 6% annual increase seems high (not taking into
consideration at least two recessionary cycles), and a more modest (realistic?) percentage increase
might yield both some financial relief to the applicant while not throwing the entire burden of road
improvements onto the Town/public sector; 3) Any action taken by Council should be carefully worded
so as to avoid the perception of a broad precedent.
Public Information Plan:
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Public Hearing (Required by GS)
Newspaper Notice (Required by GS)
Public Forum/Input Session
Morrisville Connection
Social Media (Twitter, Facebook, etc.)
Updated: January 22, 2015
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Public Hearing (Not Required by GS)
Newspaper Notice (Not Required by GS)
Press Release
E-News Distribution
Website Notice
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☐ Special Mailing
☐ Flyers Posted
☐ Automated Phone Call
Other:
Updated: January 22, 2015
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Banners Posted
Survey
None Required
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TOWN OF MORRISVILLE
*
PO BOX 166
*
MORRISVILLE, NC 27560
RESOLUTION 2015-008 OF THE MORRISVILLE TOWN COUNCIL AUTHORIZING A
CREDIT TO THE PAYMENT-IN-LIEU FEE BY HINDU SOCIETY OF NORTH
CAROLINA (HSNC) FOR IMPROVEMENTS ON AVIATION PARKWAY
WHEREAS, the Town has received a request that the Town Manager waive a payment-in-lieu fee
(PIL) for Aviation Parkway improvements related to a pending expansion request for the HSNC
Temple Learning Center Addition; and
WHEREAS, In accordance with the Unified Development Ordinance (UDO) Section 8.1.3, authority
for decisions related to PIL rest with Town Council; and
WHEREAS, in January 1987, HSNC received approval by the Town Board of Commissioners for the
original Temple; as a condition of that approval, the applicant, Hindu Society of North Carolina
(HSNC), was to provide a bond for Aviation Parkway improvements in lieu of work being completed
for construction of the original temple (front building). The amount of the bond was correlated to
the amount of a contract that the HSNC had with a contractor at that time. The value of the bond
was to escalate over a period of five years at a rate of 5% each year. A decision to extend the bond
or call the bond was to be made at the end of the five years. The type of improvements are not
referenced in the minutes, but are believed to be turn lanes into the HSNC site. While the reason is
not documented in our records, records indicate HSNC made a payment to the Town of $14,654 at
the time of construction rather than provide a bond; and
WHEREAS, in March 1995, the Town Board of Commissioners considered a site plan for a second
building. In addition to some site conditions approved at that time, the developer was required to
submit additional funding necessary for the road improvements beyond the original $14,654
payment, plus accrued interest. The rate of accrued interest is not referenced in the minutes. It
also appears that this obligation was left “open-ended” in that no cost estimate, funding amount,
or time limit for completion of improvements were determined at that time; and
WHEREAS, HSNC is now seeking approval for a site plan for the Learning Center addition to the
second building. HSNC will add the original required turn lanes, a sidewalk, and add a 24-inch pipe
across the road for improved drainage, as well as dedicating 10 additional feet of right-of-way
along the road frontage. The estimated cost of these improvements is approximately $300,000.
These improvements are the minimum improvements necessary to make the site functional and
safe; and
WHEREAS, since 1987, the Town has moved away from bonds to assure completion of road
improvements to the current provisions of the UDO which allow for a PIL in the amount of 150% of
estimated costs for these improvements. A primary reason for the PIL is to alleviate timing
obstacles with improvements to roads while allowing timely processing of site plan approval
requests and construction design review. The challenges along Aviation Parkway – a road in need
Page 1 of 3
of improvement but that will not be funded for a number of years – is a clear example of how and
when PIL may be employed as an efficient way to plan for the impacts of current development in
the future; and
WHEREAS, the Hindu Temple expansion project was submitted under the old Zoning Ordinance
and has been sporadically pursued by HSNC since early 2012. There was no specific language
regarding use of PIL as a replacement for completing required transportation improvements in the
old zoning ordinance, but was negotiated with the HSNC (i.e., the improvements would have been
required to be completed with the project). Further impacting the project was the adoption of the
Transportation Plan in 2009, which increased the type and amount of road improvements,
significantly more than what was required when the original improvements associated with the
payment-in-lieu was made in 1987. These requirements were communicated in a letter via e-mail
to Mr. Suvas Shah in March 2013. On April 30, 2013, Mr. Shah responded to the e-mail to inquire
about the possibility of having the requirement for preparing a Transportation Impact Analysis
(TIA) waived. Town staff reviewed the request and agreed to waive the requirement because the
potential safety issues presented by traffic turning into and out of the site would be addressed to
the extent feasible by the roadway improvements offered by HSNC; and
WHEREAS, a review of required transportation improvements associated with the submission of a
minor modification of the site plan by HSNC was conducted in fall 2013/early 2014. In addition to
the original turn lanes, additional transportation improvements included dedication of right-ofway, curb and gutter, sidewalk, storm water improvements, and one-half of a required median
were required to meet the thoroughfare widening requirements of the 2009 Transportation Plan.
Town staff and HSNC representatives have worked throughout the year to review, evaluate and
agree on the cost of some of those improvements (curb and gutter, additional laneage) for which a
PIL would be accepted. The cost estimate for those improvements is $50,608; the 150% PIL would
be $75,913; and
WHEREAS, both the amount and cost of Aviation Parkway improvements have increased due to
the passage of time and the unique challenges of the roadway in this particular section of the
thoroughfare. The review by the Engineering Department notes any widening of Aviation Parkway
is better suited as a larger, corridor type project rather than a partial improvement. There are no
near-term plans to improve Aviation Parkway, although the roadway is now part of the State
Transportation Improvement Plan; and
WHEREAS, the original PIL payment of $14,654 was paid to the Town in lieu of constructing turn
lanes. Since HSNC is now constructing those turn lanes, they wish for the $14,654 to be applied to
the current PIL cost of $75,913. Although not formally documented, it appears the former Town
Manager had indicated that no accrued interest on the original payment would be calculated.
Neither the Town nor HSNC is able to prove payment of this amount. However, the minutes
reference both a payment and accrued interest. In the absence of a stated rate, accrued interest
using the North Carolina statutory rate of 8% would result in a credit equal to or greater than the
PIL payment but that is not reflective of the interest rate yields on investments over the past thirty
years; and
WHEREAS, the UDO requires that developers be responsible for road improvements for the future
impact of traffic. For this request, no TIA analysis was required or prepared. HSNC traffic typically
occurs during non-peak traffic hours. HSNC is completing substantial improvements and is
dedicating future right-of-way to the town that will provide future value.
Page 2 of 3
NOW, THEREFORE BE IT RESOLVED THAT THE MORRISVILLE TOWN COUNCIL, provide HSNC credit
for interest on the original PIL payment and apply a full credit to the payment-in-lieu for
improvements on Aviation Parkway in recognition of the challenges of reconciling the
complications associated with Aviation Parkway improvements with the needs to accommodate
future demand on the thoroughfare.
Adopted this the 27th day of January 2015.
______________________________
Mark Stohlman, Mayor
ATTEST:
_____________________________
Diana Williamson, Town Clerk
Page 3 of 3