Title
Consideration of Final Infrastructure Financing Plan: 2020 Update (Development Impact Fees) (Resolution 21805)
Description
Request City Council approve the Infrastructure Financing Plan: 2020 Update (2020 IFP), including the recommended development impact fees detailed in the 2020 IFP report by adopting the resolution. (Resolution 21805 is recommended concurrently with Ordinance G-6666, to update the development impact fee schedules and adopt other text amendments in Phoenix City Code Chapter 29-Development Impact Fees, and Chapter 30-Water Resources Acquisition Fee)
Report
Summary
Development impact fees are collected by the City in designated "new development" areas to help pay for certain public facilities and equipment that are essential to providing city services for new development. Phoenix currently administers nine development impact fees including: Fire Protection, Police, Parks, Libraries, Major Arterials, Storm Drainage, Water, Wastewater, and Water Resources Acquisition (WRA). Arizona's development impact fee enabling statute, Arizona Revised Statue (A.R.S.) 9-463.05 requires cities to review and, if necessary, update development impact fees every five years. Updating the impact fee program helps ensure that the fees are based on current growth projections, infrastructure master plans, and facility costs. The previous impact fee update was approved by Council on Jan. 21, 2015 and the fees took effect on April 5, 2015.
If approved, the proposed impact fee update would take effect on April 13, 2020, unless an alternative effective date is specified at the time of adoption, but in no case less than 75 days after the formal adoption date.
2020 Infrastructure Improvements Plan
The 2020 IFP serves as a single document that consolidates the recommended impact fee schedules (Impact Fee Report), the Land Use Assumptions (LUAs) and Infrastructure Improvements Plans (IIPs). The Impact Fee Report summarizes the proposed changes and includes a comparison of existing and recommended net impact fee schedules for each fee category and impact fee area. The LUAs are the main subject of Chapters 1 and 2. Chapter 1 provides the growth projections for each impact fee area in terms of 'development units' (e.g. dwelling units, 000's square feet) for different categories of land use (e.g. residential and commercial). Chapter 2 details how the 'development units' are converted to 'equivalent demand units' for the purpose of determining infrastructure needs, and calculating impact fee assessments that are proportionate to the expected new demand for each land use category. The IIPs for each of the City's nine development fee categories are provided in Chapters 3 - 11. Each IIP includes a detailed explanation of the methodology, assumptions, values, and formulas used to calculate the recommended impact fee. The IIPs also include updates to facility inventories, levels of service, 10-year demand projections, facility costs, and offsets calculations where required.
No changes have been made to the 2020 IFP report that was posted to the City's website on Nov. 18, 2019 and the subject of the public hearing held at the City Council Formal meeting on Dec. 18, 2019. The final 2020 IFP report is attached as Attachment A and can be accessed online at: www.phoenix.gov/pdd/devfees/impactfees.
Formal Adoption Process
A.R.S. 9-463.05 prescribes a two-stage process that requires a minimum of two public hearing and two formal actions taken by Council. A summary of the process that has been completed to-date is provided below:
1st Report Posting: July 1, 2019 the draft 2020 IFP, that included a written report of LUAs and IIPs was posted to the City's website and made available to the public.
1st Public Hearing: Sep. 4, 2019 a public hearing on the proposed LUAs and IIPs was held at the City Council Formal meeting.
1st Council Action: Oct. 16, 2019 Council approved the draft 2020 IFP.
2nd Report Posting: Nov. 18, 2019 the final 2020 IFP report, that included recommended impact fee schedules in addition to the approved LUAs and IIPs was posted to the City's website and made available to the public.
2nd Public Hearing: Dec. 18, 2019 a public hearing on the recommended impact fee changes was held at the City Council Formal meeting.
Public Input and Comments
Public involvement in the update process was welcomed from many sources. One key contributor throughout the process was the Impact Fee Ad Hoc Committee, a 17-member committee comprised largely of representatives from the development sector, that was convened by the City Manager in the Fall of 2018 to provide feedback on staff recommendations. The Ad Hoc Committee submitted written comments dated Sept. 11, 2019 that are attached as Attachment B. Included among the Ad Hoc Committee comments is a recommendation to ensure that development, that does NOT benefit from the planned Rawhide Wash flood control improvements is NOT assessed the proposed drainage impact fee in the Paradise Ridge Impact Fee Area. Among the proposed amendments to City Code Chapter 29-Development Impact Fees is new language intended to address this recommendation of the Ad Hoc Committee.
Concurrence
A presentation of the development impact fee review process and preliminary recommendations was provided to the Water, Wastewater, Infrastructure and Sustainability Subcommittee on June 5, 2019 for information and discussion.
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Planning and Development Department.