Title
Public Hearing - Draft Land Use Assumptions and Infrastructure Improvements Plans
Description
Request to hold a public hearing on the Land Use Assumptions and Infrastructure Improvement Plans draft, as required by Arizona Revised Statutes (ARS).
Report
Summary
Arizona’s development impact fee enabling statute (ARS 9-463.05) requires cities to review and, if necessary, update development impact fees every five years. Impact fees are assessed on building permits within designated "new development" areas to help pay for certain capital facilities that are required to serve new development. Phoenix currently administers nine development impact fee programs including: Fire Protection, Police, Parks, Libraries, Major Arterials, Storm Drainage, Water, Wastewater, and Water Resources Acquisition. The City's last impact fee update was approved by Council on Jan. 21, 2015 and the fees took effect on April 5, 2015. In addition to maintaining compliance with impact fee rules, updating the impact fee program helps to ensure fees are in-line with current growth projections, infrastructure plans, and facility costs. In accordance with Arizona impact fee rules, draft land use assumptions (LUAs) and infrastructure improvements plans (IIPs) for each impact fee category have been prepared, and made available to the public. The draft LUAs and IIPs have consolidated in a single document titled Draft Infrastructure Financing Plan: 2020 Update (Draft IFP) that, along with several supplemental reports, was posted to the City's website on July 1, 2019. The Draft IFP may be viewed online at: https://www.phoenix.gov/pdd/devfees/impactfees/draftifp. This public hearing is being conducted in accordance with ARS 9-463.05; that requires the City to conduct a public hearing on the draft LUAs and IIPs no less than 60 days after making the documents available to the public. ARS 9-463.05 requires Council to approve or disapprove the draft LUAs and IIPs between 30 and 60 days after the public hearing.
The Draft IFP is comprised of eleven chapters. Chapter 1 provides the draft LUAs utilized in this update for each designated impact fee area. Chapter 2 presents updated Equivalent Demand Unit Factors for each impact fee program that are used to convert the projected development units discussed in Chapter 1 into equivalent demand units for planning and assessment purposes. Chapters 3 - 11 contain the IIPs for each of the City's impact fee categories; including explanations of the methodology, assumptions, values and formulas used to calculate potential impact fees. The IIP for each impact fee category includes standard required updates to facility inventories, levels of service, anticipated new demands, planned facilities and costs, and offset calculations. In addition, the following impact fee program changes are included in the Draft IFP:
Chapters 3 - 6 (Fire Protection, Police, Parks and Libraries): Base the levels of service on the citywide service area, as opposed to the service levels currently achieved in each impact fee area. This change is recommended to help ensure long-term equity in the provision of services, and to provide more consistency in fees across impact fee areas.
Chapter 7 (Major Arterials): Combine the existing Northwest / Deer Valley and Northeast impact fee areas to create one "Northern - Major Arterials" impact fee area. This change will help control cost fluctuations, provide greater flexibility in appropriating funds to eligible projects, and simplifies proportionality calculations for roadways that intersect multiple impact fee areas (e.g. Sonoran Desert Drive and Happy Valley Road). Also, employ a 'buy-in', plus '10-year plan' fee calculation methodology that has been successful for the water and wastewater fees. This method helps to ensure that changes in the 10-year infrastructure plan do not disproportionately impact development in terms of providing infrastructure capacity and the associated costs.
Chapter 8.A. (Northern Drainage): Implement a drainage impact fee to help recoup design and construction costs associated with projects that reduce the Rawhide Wash flood plain that impacts the area generally bounded by 64th Street on the west, Scottsdale Road on the east, Pinnacle Peak Road on the north, and the Central Arizona Project Canal on the south.
Chapter 8.B. (Estrella and Laveen Drainage): Employ the 'buy-in', plus '10-year plan' fee calculation methodology that is consistent with the existing water and wastewater impact fees, and proposed for the Major Arterial fee as part of this Draft IFP. Information related to project costs, project cost-shares, and EDUs have been updated.
Chapter 11 (Water Resources Acquisition): Recommend incorporating the Water Resources Acquisition (WRA) impact fee study into the Infrastructure Financing Plan (IFP). The WRA impact fee is authorized under Phoenix City Code, Chapter 30, while the other impact fee categories are authorized pursuant to Phoenix City Code (PCC), chapter 29. As a result, a separate report has traditionally been prepared even though the WRA is an impact fee, subject to Arizona impact fee rules, and is expected to be updated at the same time as the City's other impact fees. Incorporating the WRA into the IFP helps consolidate impact fee program studies, however approval of an update to the WRA would still require amending the WRA section of City Code at the same time the regular impact fee section is amended.
The tables outlined in Attachment A compare the current Net Impact Fees per Equivalent Demand Unit (EDU) with the combined (sum of all applicable fee categories) net fees per EDU for each impact fee area. The WRA impact fee is currently assessed citywide in two unique fee areas (Off-Project and On-Project) that overlap with other impact fee areas. In these instances the draft WRA charges which are displayed in the second table are in-addition to fees in the first table. It should be noted that the On-Project fee was reduced to $0 per EDU in 2015 and is recommended to remain at $0 per EDU with this update.
Concurrence
A presentation of the development impact fee review process and preliminary recommendations for the draft IFP 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.