|
Title:
|
Development Impact Fee Review Update
|
Title
Development Impact Fee Review Update
Description
This report provides the Water, Wastewater, Infrastructure and Sustainability Subcommittee an update on the Development Impact Fee review process, and an overview of preliminary recommendations for the Draft Infrastructure Financing Plan Update (IFP) that will be posted for public input later this summer.
THIS ITEM IS FOR INFORMATION AND DISCUSSION.
Report
Summary
Arizona laws require cities to review and, if necessary, update development impact fees every five years. The last comprehensive impact fee update took effect April 6, 2015. Staff has been working closely with the Impact Fee Ad Hoc Committee, an advisory committee comprised of development stakeholders, on preparing the draft IFP and establishing an adoption schedule to ensure compliance with impact fee rules.
Draft Infrastructure Financing Plan Recommendations
The Planning and Development Department administers nine development impact fee programs on behalf of seven City departments. Impact fees are charged when building permits are issued within designated impact fee areas. The Draft IFP recommends updating and continuing all nine impact fee programs. The recommended changes for the Draft IFP are summarized below:
An analysis of the library program demonstrates fees can be justified in the Northwest and Ahwatukee impact fee areas; where library fees are not currently being charged.
The storm drainage fee; which is currently only charged in Estrella and Laveen, is recommended for the portion of the Northeast impact fee area that will benefit from the Rawhide Wash project. This proposed “new” fee would affect lands north of the Central Arizona Project canal, generally bounded by 64th Street and Scottsdale Road.
There are several components of the draft IFP that have been reviewed by staff and the Ad Hoc Committee, and are recommended to be updated for all impact fees. These include: growth projections, land use assumptions, service demands (EDU factors), levels of service, unit construction costs, offset calculations, and infrastructure plans. An Equivalent Demand Unit (EDU) is a measure of service provided across different types of land uses.
Changes to the impact fee calculation methodology are recommended for several impact fee programs. Proposed methodology changes include the following:
Fire Protection, Police, Parks and Library: base the level of service on the citywide service area, compared to the service level currently being achieved in each impact fee area. This change is recommended to help control long-term service inequities across impact fee areas.
Major Arterials, Storm Drainage: employ the hybrid “buy-in, plus 10-year” method that has been successfully used for the water and wastewater fees. This method helps to ensure the ten-year infrastructure plan does not disproportionately impact development in terms of infrastructure capacity and/or costs.
Storm Drainage (Rawhide Wash): consultants have been retained to recommend a preferred method for assessing storm drainage fees in the Northeast impact fee area. Storm drainage fees in Laveen and Estrella are assessed based on land area (acreage), however the land benefitting from Rawhide Wash is expected to have greater densities than the southwest area; which may require a different assessment method to ensure fairness.
Impact Fee Update Schedule
The process to update impact fees is complex and resource intensive, generally requiring well over one year to complete; including a minimum 225-day public review / City Council approval process. Staff is working with the various city departments and the Ad Hoc Committee to complete draft Land Use Assumptions and draft Infrastructure Improvement Plans (IIPs) that provide the basis for any fee changes. It is anticipated that draft LUAs and IIPs will be posted for public review in the summer of 2019, officially starting the state-prescribed minimum 225-day public review / City Council approval process. After draft plans are posted, a minimum of two public hearings and two Council actions, all occurring on different dates, are required. The updated impact fees would go into effect 75 days following Council approval.
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Planning and Development Department.