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HomeMy WebLinkAboutPackets - Council Packets (1476) AGENDA ORO VALLEY TOWN COUNCIL AND ORO VALLEY WATER UTILITY COMMISSION STUDY SESSION MARCH 6, 2000 ORO VALLEY TOWN COUNCIL CHAMBERS 11,000 N. LA CANADA DRIVE STUDY SESSION CALL TO ORDER — AT OR AFTER 7:00 P.M. ROLL CALL 1. HOME BUILDERS vs. APACHE JUNCTION (School Impact Fees) — DISCUSSION 2. MODIFICATION TO DEVELOPMENT IMPACT FEES RELATING TO POTABLE WATER SYSTEM - DISCUSSION 3. FINANCING OF WATER CAPITAL IMPROVEMENT PLAN AS RELATED TO WATER CONNECTION FEES - DISCUSSION 4. REVIEW AND RECOMMENDATIONS REGARDING INCREASING THE TOWN WIDE ROADWAY DEVELOPMENT IMPACT FEE -DISCUSSION 5. PRESENTATION OF THE DEPARTMENT OF PUBLIC WORKS STRATEGIC FINANCIAL PLAN FOR ROAD PROJECTS — DISCUSSION ADJOURNMENT The Town of Oro Valley complies with the Americans with Disabilities Act (ADA). If any person with a disability needs any type of accommodation, please notify the Oro Valley Town Clerk at 297-2591. POSTED: 03/01/00 4:30 p.m. Ih i TOWN OF ORO VALLEY STUDY SESSION PAGE 1 OF 1 COUNCIL COMMUNICATION MEETING DATE: 03/06/2000 TO: HONORABLE MAYOR AND COUNCIL FROM: Dan L. Dudley, Town Attorney SUBJECT: HOME BUILDERS vs. APACHE JUNCTION BACKGROUND: Lawsuit. In March, 1998, the City of Apache Junction imposed a school impact fee of approximately $1,360.00 on each new home/unit. Since that date, the City of Apache Junction has collected in excess of $2,000,000.00 in school impact fees. The Home Builders Association of Central Arizona, Beazer Home Building, Corp., Diamond Key Homes, Inc. and Cortland Homes sued the City of Apache Junction seeking to enjoin Apache Junction from imposing and collecting those fees. The Apache Junction Unified School District intervened on the side of City of Apache Junction. As a result of that lawsuit the court, on August 10, 1999 in a case heard in Pinal County by the Honorable James Don, ruled against the Home Builders Association determining that neither the Constitution nor the State statutory scheme prevented municipalities from imposing school impact fees. Although the Home Builders Association advanced multiple arguments, the focal argument appeared to be that Student First legislation intended to equalize the funding for school districts prevented towns from providing ancillary funding to schools. A Notice of Appeal was filed in this matter and the Opening Brief by the Home Builders Association was due and filed in late January. The Reply Brief is due March 10, 2000. Several public entities, including Flowing Wells School District, Marana School District, Casa Grande School District, Cave Creek, Dysart and Gilbert School Districts, as well as the League of Cities and Towns have been authorized, and presumably will file, amicus briefs on behalf of Apache Junction. Council for the town is optimistically confident that the town will survive the challenge. (It is expected that this matter will be argued and a decision entered by late fall, early winter.) Legislation. In an apparent attempt to limit exposure via the impact fees, the Arizona House of Representatives leadership is promoting legislation that would limit impact fees to $5,000 per home/unit and ostensibly permit towns to impose such fees only upon request by the school district. I have attached for your review and information a copy of the court ruling of August 10, 1999. ATTACHMENT: Court Ruling of 08/10/99 Signature of Town • t orney flO Signature of ow anager • (` • IN THE SUPERIOR • COURT OF THE STATE OF A��rzo?�'�.'- �� �..1:� ���� ,.• �l:�� T c'r _• JS 1 .3 4;i ('; IN AND FOR PINAL COUNTY � w HOME BUILDERS ASSOCIATION OF ) NO. CV 9 CENTRAL ARIZONA, a non-profit corporation; BEAZER HOMES HOLDING CORP.,A Delaware ) ,1 corporation; DIAMOND KEY HOMES,INC., an ) Arizona corporation; COURTLAND HOMES, ) INC., an Arizona Corporation, and as class ) representatives of all others similarly situated, ) ) Plaintiffs, ) ) VS. ) RUL NTGS OF TEE COURT: COURT'S FINDINGS OF C:i l Y OF APACE �TL Lti C.-�ION, a Municipal ) FACTS AND CONCLUSIONS corporation, ) OF LAW ) Defendant, ) ) vs. ) ) APACHE JUNCTION UNI.r IED SCHOOL DISTRICT,) ) Intervenor. ) ) This Court denies the Plaintiffs' request for injunctive relief. The Arizona Constitution does not contain wording that excludes the state legislature from conferring the ability to fund the construction of school facilities to cities. AF.S. §9-4O6 contains wording that allows cities to assess development fees for the construction of school facilities to offset the increased costs associated with new developments. The city ordinance does not violate the Home Builders Association rights to equal protection and duerocess because the p h ordinance is reasonably related ._ __ __ _ _ .-►., 1.-. ..n.. to the purposc of raising funds for the construction of new school facilities. STATEMENT OF THE FACTS "On or about December 10, 1997, the City of Apache Junction enacted Ordinance No. which assessed development fees against builders engaged in construction of new residential homes. . multi-family dwellings, and mobile homes. The city claims authority to assess feesP ursuant to A.R.S. §9-463.05" (Defendant's Memorandum of Points and Authorities in � Support of Request for _P Injunctive Relief p. 2, filed 4/8199). Al "began assessing dev elo ment fees on March 16 P , I998 to finarc, defray or reimburse the cost of additional necessary school capital facilitiesl enc ucung additional school buildings, educational or recreational facilities and necessaryrequired equipment by the Apache Junction Unified School Distr ct"id. ar 4. Home Builders Association and a zoup of developers came together. and as' Q a to be qualified as a class,brought suit on A_I. on 4/8/99. The Plaintiffs raised the issues of 1 whether A_7_ exceeded its legal authority and acted arbitrarily and capriciously in enacting and enforcing J J Ordinance No. 1014; 2) whether Defendant be preliminarily andermanentl enjoined P y nlomed from enforcing Ordinance NO. 1014; and 3) whether Defendant violated 42 U.S.C. §1983 andthe 14th Amendments of the U.S. Contituticn by depriving the members of the class of due process and equal protection rights by imposing the impact fees. Subsequently. the Apache Junction Unified School District("the School �requested uested q an intervention, which this Court1ed. The School then brought about a motion to sever because they lacked the proper standing. This Court decided against severing I-LBA after hearing oral arguments. _ 2 r cn ! "'�f`,r�nr;p n"?r` '(',L1 "T1! -, r c�_n r_nnU The issue before this Court at this time was whether or not to ' meant the Plaintiffs' request for injunctive relief and have Defendant refund impact feesreviousl P y collected and prohibit Defendant from continuing to assess these fees in the future. DISCUSSION There are a few issues that Plaines have presented and.must be addressed to resolve I this matter. Plaintiffs bring forth the issue of Apache Junction's authority in enacting regulation that provides funding for the development of school facilities. They argue that leiI slation which allows J .lowS city municipalities to create such ordinances to be non-existent. Another argument raisd eby the Plaintiffs is that Ordinance No. 1014 violates their Constitutional rights to Due Proc� Equal � ss and Protection. They state that the imposition of the school development fees are an unauthorized z..d I3x which violates their rights of Due Process aid Equal Protection_ The subsequent e q .t�ssuzs o_I3om.. Builders Association's standing and the propriety of intervention bytheApache p Junction School District has already been resolved and will not be addressed here. 1. Apache Junction's .4uthoriry in Assessing Fees Impact the Pu os- forPurpose of Funding the Construction of School Facilities Plaintiffs argue that Defendant did not have the authorityto enact Ordinance 1014 because there are not any Arizona s-- tutes norarticles in the Arizona Constitutionthat th�.t eYprE'SS,y confers such powers upon the city_ Plaintiff further contends that Ordinance 1014 violatesArizona the Constitution because it allows municipalities to perform acts that have been bestowed solely upon the _ Arizona lezisIature. This funding scheme allegedly restrictsthe funding for the constr. caon of school facilities toroce�s from the saleof Psale school property, money from capital outlayfunds, P 3 monies given by the school facilities board, monies donated specifically for the constrI ctt.o n of school facilities, and a capital outlay override or bond election. a_ Arizona's Constitutional School Fw ding Architecture The PlYainti±.s' pleadings clearly illustrate that there are many issues that must be answered before this Court can endorse Apache Junction Ordinance 1014. Logically, the first issue that must be addressed is whether or not the Arizona Constrtu ion confers the legislature e with the sole responsibility and ability to fund schools_ Analysis of the other issues will not be needed if the Arizona legislature is the only entity that can enact laws concerning the funding of schools. The Arizona Iegisla.ture does not have the sole ability to enact laws that concern the f.lndin of schools. a*t ele XI §§ 1 and 2, the portion of the Arizona Constitution which so ecif c ally addresses the.resp onsibii±ty ofthe legislature in _girds to school fundinz, does not contain any wording that suggests that no other entity can enact laws that concern school funding. Section one of the Arizona Constitution merely states that the legislature has the job of enacting"such laws as shall provide for the establishment and maintenance of a general and uniformP ublic school system. . ." An:zona Constitution Art.21 c7. This phrase cannot be interpreted as stating that the Arizona legislature is solely responsible for the enactment of all law involving school funding. The wording can and should be interpreted as stating that the Arizona le islature is responsible for setting up laws that will lay the foundation for an equal school system. It does not contain any words of exclusiveness that would give the impression that only the state legislature can address issues of school funding. This section allows the legislature to confer upon city municipalities the ability to address local school funding issues. This Court finds that the legislature has done so under A.R.S. §9-43 6.05 which will be discussed later. 4 70-70c0 n,^ 'nIT VU r nc inT 7nT -nT-nnU Article XI §2 also does not give the Arizona Iegislature the sole ability to handle the affairs of school funding. The section merely states that"the general conduct and supervision of the public school system shall be vested in a State Board of Education, a State Superintendent of Public Insiuction. county school superintendents, and such governing boards for the State institutions as may be provided by law." Arizona Consrrrrrion Art_ XZ 2. This section is not relevant to our discussion of Apache Junc on's ability to enact Ordinance 1014 because it only addresses the general supervision of schools. Thus further analysis will not be conducted because it is not necessary. b. Arizonas St t:aory School Furrdins Scheme In discovering that there is nothing in the Arizona Constitution that vests the legislature with the sole authority to deal in matters con c er r ing school funding we must now turn to the matter of whether or not the legislature has bestowed that power to any other entity. namely city municipalities. Plaintiffs point out that A.R.S. § l5-341(A)(2) and 15-342(25) clearly shows that the legislature has not delegated out the responsibility of constracting school facilities. It is asserted that these statutes restrict funding for school facilities to five methods: "1) from the proceeds of the sale of school property only on approval by a vote of the district electors; (2) prior to June 30, 1999, from monies in the capital outlay fund or in the plan for the use of the reserve of the capital outlay fund; (3) from monies.distributed from the school facilities board: (4) from monies specifically donated for the purpose of constructing school buildings; and(5) from an election to raise revenues by a capital outlay override or a bond election.' 11f��rtorandum of Points and tthorir es in Support of Request for Infurtclive Relief(P1cinrzff's Merno =41)pp. 7. lines 9-14. 5 r: r T 711 -rlfl §15-341(A)(2) and §15-342(25) does not specifically exclude city municipalities from issuing ordinances that deal with the funding of construction of school facilities. ARS §15- 342(25) l5-342(25) does not state that there arc only five ways in which a local school board may fund the construction of school buildings. It states that there are only 5 ways in which a local school board may fwd a construction project`without a vote of the school district electors.- 15-342(25). lectors."15-342(25). Thus, a construction site that is funded by impact fees imposed by a local city municipality would fit under §15-342(25) if voted upon by school district electors. However, a vote by school district electors is not needed if thendin2 from Ordinance 1014 is deemed to be a donation to the school district by the city. Taus. since the transfer of money from the city of Apache Junction to the Roache J mc: en School District under Ordinance 1014 is deemed to be a 'Iz,if , donation, or - a vote by school district electors is not needed. DefEndanr s Memorandum in Support Authorizy for Ordinance No. 1014, p. 19, Line 10. c. ,4ricona's Historical Stance on School Funding:Reconciling Roosevelt Elementary v. Bishop Hull v. _4lbrechr with Students FLR.Sl In oral arguments,Plaintiffs argued that the case law in Arizona clearly shows that the sole responsibility of school funding rests with the Arizona State Le .slature. The main cases that were presented to this Court were Roosevelt Elementary v_ Bishop, 179 Ariz. 233. and Hull v. Albrecht, 192 Ariz_ 34, 960 ?.2d 634. These cases are argued as making finii stances on the impropriety of funri Ing provided by sources other than those that are approved by the Legislature. These cases were also used to support Plaintiffs contentions that Students FAST, le isiation that has been enacted to streamline school funding, precludes cities such as Apache Junction 6 1 1 • • .-�1 ^^ ^ •�'' t ! r i n T ".7 f T C ti_! T_ I �J from helping to cons uct school facilities. The argument is that Students FIRST was passed with the idea that all schools would be funded equally and that no other public entity could contribute to the schools lest there would be disparities among the schools. However, closer examination of these cases show that the Arizona Supreme Court recognized and appreciated the fact that outside sources of school funding is both proper and essential to any school funding system. ,Rooseve i1 E!emcntay v. Bishop invo ly ed a suit initiated by Arizona school districts and parents against the Superintendent of Inssction and the state under allegations that the state funding mechanism for schools was unconstitutional. Plaintiffs argued that the state was responsible for providing a ifolnl public school system while the State argued that it was the school dist'ict's r espons:billity to fund the school_. In an opinion Breed by Justice M actor e the Court acknowledged that the "only sources mentioned are the state and the counties" and that "art. Xi, §I makes it quite clear that the legislature must enact laws that establish and maintain the public school system." Bishop at 240. Though this may sound consistent with Plaintiffs' argument that the Arizona Supreme Court has interpreted Article X §1 precluding any other entity from funding schools, further reading reveals the Court's true ideas on the issue of how to fund our state's schools. The Court stated that`units in `general and uri form' state systems need not be exactly the same,identical, or equal." Bishop at 241. In addressing the tension between"local control and statewide standard" the court declared that: As long as the statewide system provides an adequate education, and is not itself the cause of substantial disparities. local political subdivisions can go above and beyond the statewide 7 • ► f,r_ risT vu i I C m P T 7l 1 RF-n l-1,nu system. Disparities caused by local control do not run afoul of the state constitution because there is nothing in Art. XI that would prohibit a school district or a county from deciding for itself that it wants an educational system that is even better than the general and uniform system created by the state. Bishop at 242. The Court recognized the fact that different communities may attach greater importance to their schools than others and that local control in education is "an important part of our culture." Id. at 242. Therefore the Court fond that-political subdivisions of the state, such as district and counties, are therefore free to go above and beyond the system provided by the state." Id. at 242. Plaintifs also cited Hall v. Albrecht, 192 Ariz. 34, 960 P.2d 634, to bring about the idea that the Arizona Supreme Court has?`cognized that the only way in which"school districts can seek funding is based on local property taxation methods. such as capital override elections and general obligation bonding." Plaintiffs Memo #1, p. 7, line 21-23. However, this is a rather narrow reading of the Court's opinion. The Supreme Court of Arizona did not state that these were the only methods that were currently available to local school dis`LLcts. Rather.it states that these are historically important methods that school districts havo used in the past in securing adequate funding. This does not nullify the Court's subsequent statement that"nothi cz In the Constitution prohibits a school financing system that allows districts to go above and beyond the stare-mandated adequate facilities by individually accessing local financing source." _Albrecht at 637-638. These cases are clear on how Article X7§I of the Arizona Constiurion should be interpreted; The section does not preclude a city municipality like Apache Junction from providing funds that s �,�--o r '- ���r ,,,, . r ,n T �n r _n 1_nnu benefits schools because it is not a violarion of the Arizona Constitution. Such a violation only occurs when the financing scheme of the state causes the disparities, it is "not the existence of disparities between or among districts that results in a constirational violation." Bishop ax 242. Therefore,though Students FIRST may have been passed with the intent of rectifying the State's history of unequal school funding problems, it should not be interpreted as precluding city municipalities from attempting. to help local schools to go above and beyond a state-wide standard. This Court also realizes and dates the importance of local control of schools. Though Students FIRST may provide equal funding based on a per student basis, this Court should not ignore the fact that the legislation cannot address every single issue that different schools may experience. Larger schools. for example,have different dynamics than smaller schools. Thus, they have different needs that may require more funding. That is not to say that the smaller school may also have f nding needs that Students FIRST would not address because the legislation places schools,students,and local needs in a vacuum tube to equalize school funding. It should be noted, however, that this Court based its decision not only on the idea of local control but through Pralysis of Arizona Cons`ttution, Arizona States, and Arizona case law. d. Apache Junction 's,hilly to Impose Impact Fees for the Development of Schools Apache Junction has the ability under A.R.S. §9-463.05 to impose an impact fee that funds the construction of school facilities. The statute states that a "municipality may assess development fees to offset costs to the municipality associated with providing necessary public services to a development." A.R.S. §9-463.05(.4). Though Plaintiffs reads this to exclude a 9 Cr .rT 7nT cp-nT-nflu school mt icipality from imposing similar to those under Ordinance 1014, a plain and ordinary reading of the stage allows for such a fee. The statute states that development fees imposed by a city to offset costs that are associated with providing necessary public services are valid. Thus, the question is whether or nor an impact fee for the construction of school facilities is a necessary public service that must be provided by the city in the wake of the development It cannot be Questioned that construction of school facilities would benefit the development and the city as a whole. Even Plaintiffs concede this point. However,Plaines argue the issue of whether or not the city has to incur any costs related to a development that may increase the school population. The argument is that the school district and the sues are responsible for meeting the demands of the schools growth. Apache Junction does not have to incur any costs because they are not responsible for building and maintaining the schools. Close examination of the wording of A.R.S. §9-46105 shows some support for Plaintiffs' contentions. The statute restricts development fees to those that `sults in a beneficial use to the development.'' 9-463.05(3)(1). The legislative intent also states that the development fees should be scrutinized in light of its impact on the affordability of homes and that such development fees ar subject to reasonable limitations_ Id. This Court finds that Apache Junction Ordinance 1014 is in conformance with A.R.S. § 9- 436.05 and is aligned with the legislature's intentions. 1 Court would not be expanding the powers given to municipalities by the statute jilt deems that school impact fees are allowed. The statute clearly states that the municipality can. assess development fees for the provision of necessary public services. There is no wording that dictates that the public services be one that the municipality has to provide. The statute simply requires that the service be one that� ha is 10 required by the public_ It is obvious that the development will be benefited from the construction of school facilities. It is engrained in our national psyche that strong educational foundations build good citizens and communities. Hull v.Albrectu and.Roosevelr Elemerrtmy v.Bishop were cases which shows the importance our state places on a solid education. The ordinance also meets the legYslative intent of the stature because it a marginal fee that is assessed by the city. The idea of affordable housing is amorphous and variable and this Court does not have the authority to plainly state what it considers to be affordable. However,this Court does observe that though there are some extra costs to the initial homebuyrs, subsequent homebuyers will be alleviated from the burden because of the depreciation in land value due to the impact fees. Thus, the growing pains of the impact fees will lessen as time goes on, allowing homes to be as affordable as they were before the development fees were imposed. Though Plaintiffs argue that the impact fees are improper b ecaus e not ail of those who pay the development fee have children going to school, the fact is clear that the development creates a burden for the schools from new families that might move into the development afterwords. The issue of the fairness of the impact fee is tricky-because it can easily be argued. that not assessing the fees would be unfair to present homeowners who have paid proper�y taxes that o into the construction of the school for years. Thus,this Court considers that the effort in which Apache Junction lint tried to march costs with their origins to be the most fair method the city could have implemented. This Court does not deem the development fees under Ordinance 1014 to be a tax because it is a fee that cities are allowed to assess under ARS. §9-463.05. The fee is a requirement that must be paid before development can ben,thus, it is more similar to a license or fee than a tax. It CONCLUSIONS This Court should find that Ordinance 1014 is Constitut onaL is allowed under A.R.S. §9-463.05, and that the City of Apache Junction has the authority to assess the fees. Therefore. this Court , having taken this=tarter und:r advisement,hereby denies Plaintiffs'request for permanent injunction w and makes the following findings ings fo facts and conclusions: Findings Of Fact 1. Plaintiff Home Builders Association. of Central Arizona("Home Builders-) is a nonprofit corporation which represents itself as representing the interests of single-family residential home builders throughout cent Arizona.. 2. Beazer Homes Holding Corp., Diamond Key Homes. Inc.. Providence Homes, Inc_, Puke Home Core., Courtland Homes, The. are members of the Home Builders Association of Central Arizona. Beazer,Diamond,Providence,Pule. and Coed, either directly or throughsubsidiaries, construct homes in Arizona and in the City of Anach e Junction. 3. This City of Apache Junction("City")is a municipality organized and existing under Article XIII of the Arizona Constitution and Title 9 of the laws of the Stare of Arizona, and its boundaries are primarily within mai County. 4. Apache Junction Unified School District ("District") is a District organized and existing pursuant to the provisions of Article XI of the Arizona Constitution and Title 15 and is located within Pinal County, Arizona. 5, The District provides educational services for residents within tae City of Apache Junction in within areas of Final. County that-are not within the boundaries of City_ 6. The City and District in 1996 conducted development fee studies to determine the impacts 12 ,,-,� '--tt ',TLS PC•n T 711 ofnewgrowth, and in particular new residential growth on the cost of capital improvements needed forP ublic educational services to service said new growth. These studies culminated in a document entitled Impact FeelExactions Study Phase Ir, Task 5; final Impact Fee Study Apache Junction Arizona `Stud .). At pn. 30-35 of said study is the study for schools and the data used in making said study. The factual data contained in this study is not disputed by plaintiffs. Plaint us do not dispute the propriety of the methodology utilized in the conduct of this study. Plaintiffs do not sP dispute the conclusions reached by said study. Plaintiffs do not dispute the appropriateness of the City Council of City relying upon said study in the exercise of its legislative discretion. 7. The study concluded that approximately S3.7 percent of the students enrolled in the schools of District reside in the municipal limits of City. 8. The study used data showing the rour,ber of public school students per dwelling unit as it varied by type of housing. 9_ The study divided residential housing into three types,es,single--fay;mobile home,and multi- fes. The study determined the number of students per type of unit that could be expected by new development in the City. 10. The study then determined the school capital cost per student station_ The total net cost per student for necessary new capital improvements was then deter-rifled_ Next a school debt credit per student was gives By deducting the credit from the capital cost, a net capital cost per student was determined_ By dividing the net cost per student station for necessa,-y capital improvements by the average students per unit per housing type the fee per new unit of development, labeled "school net cost per dwelling unit-in said study, was determined 11. The method of calculation as stated in the foregoing paragraph was an appropriate 13 7�74Q99 .n ' 00: 11 3flJ. 66-01-JnV methodology to determine the amount of money necessary to fund the cost of capital improvements for schools generated by new dwelling unit development, related rationally to the burdens created by that new development, separate from burdens created by the existing dwelling units in the municipality. and the monies needed to provide capirai services to said existing residential dwelling units. 12- The City conducted public hearings pursuant to the provisions of ARS§ 9-463.05 prior to the adoption of Ordinance No. 1014. As part of said hearings the aforementioned study was made a part of the record before the City Council of City. 13. After the public hearings conducted on Nov. 24, 1997 and December 10, 1997, the City adopted Ordinance No. 1014. 14, The City met the procedural requirements of Notice of Hearing and adoption of the ordinance pursuant to ARS § 9-463.05(C)when it adopted Ordinance No. 1014. 15. Pursuant to the terms of Ordinzace No. 1014-the City bcgan assessing dcvclopm e 1t fees on March 16, 1998. 16. Ordinance No. 1014 imposes a fee to be charged upon the business activity of constructicn of new dwelling units and is coiiertcd as a condition of the issuance of a building permit at the time of issuance. The amount charged is$1,368.00 for all new single family detached dwellings, 3366.00 for the placement and location of new mobile homes, and$276_00 for each individual dwelling unit in any multi-family dwelling unit project. 17. Ordinance No. 1014 provides that it is the purpose and the intent of the City to implement a comprehensive plan by requiring new development pay for its share of public facilities through the imposition of development fees that will be used to finance, defray, or reimburse all or portion of 14 the costs incurred to provide additional necessary public services to its citizens resulting from new residential development within the City. 18. Ordinance No. 1014 defines "Benefits Area- to mean the geographic area within the City limits of the City of Apache Junction as they exist now or as they may be amended by annexation wherein the fees are collected and expended for particiiinr capital improvements serving the development within the b ene fit area- 19. The City entered into an Intergovernmental Agreement with the District on December 11, 1997 whereby the City and the District ad that school development fees collected would be used by the District to finance school capital. construction and improvements within the geographical boundaries of the City. /0. Ordinance No. 1014 defines Improvement" to mean land or facilities owned, operated or used by the Apache Junction Unified School District for educational and recreational purposes as well as the equipment and fu u ere necessary to own.,operate or use the facility. Capital improvement also includes costs associated with desi ., engineering, land acquisition and all other costs normally associated with construction of a capital improvement_ 21. Ordinance No. 1014 requite the District to submit a written document to the City settinz forth a capital irrprove:rent plan_ It requires the District to submit to the City a capital improvement project list as defined within the ordinance. 22. Monies collected pursuant to Ordinance No. 1014 are required to be kept in a se negated impact fee account as required by section 7-2-8 of the City Code as established by said ordinance. 23. Use of the fees collected pursuant to Ordinance No. 1014 are restricted by section 7-2-9 of the City Code as established by Ordinance No. 1014. By this section the City Council of City 15 �C7QCGQ n7q 'CM uu 1 00: T l 7n1 66-ol-J(lu controls the transfer of f :ds to the District. The City Council of City,in its sole discretion, controls the amount of funds that may be used toward capital improvements and controls the decision of what projects may be funded. 24. By the 1irtitrng the use of the funds to school capital improve cent projects within the municipal limits of the City; the limitation that funds are to be used for capital improvements on a capital improvement project list; and the further it limitation that the City Council makes the determination of what projects from that list may be .funded as well as the extent of that funding, Ordinance No. 1014 and the related Intergoveimental Agreement makes provision that the funds collected will be expended to provide necessary new capital educational services to serve new reside t al development in the municipal limits and not serve persons living outside municipal boundf . 21. Ordinance No. 1014 establishes section 7-2-10 of the City Code which allows a property owner to seek offsets for contributions made presently or in the future towards the public services covered by the development fee. Said section further provides that a person who pays the development fee may appeal the fee to the City Council of the City. By this provision any affected person who believes that the residential development being established by said person does not create either a need for new capital services to service that particular development, or believes that the development will not be benefitted by use of the fee may seek administrative review. This review process helps ensure that fees paid will result in a special benefit to the new development, and that the payer is paying only his fair share. 26. Ordinance No. 1014 establishes section 7-2-11 which provides that any school development fee collected pursuant to Ordinance No. 1014 "...that is not either actually expended or committed 16 'a 7-:579994 O erN 0: 1 t 31U 66-01-J11 _I ,a • for expenditure within seven years of the dare upon which the fee is paid may be subject to a refund-" This provision ensures that either the fees will be used to fund needed new capita] improvements to provide educational services benefiting said development within a reasonable time, or the monies will be returned, 27. In the record of the hearing before the City Council on November 24, 1997 the City Council of the City received testimony that a city had a public interest in ensuring that public educational services were available to service new residential growth_ The City Council received testimony that the City was trying to build a rapidly developing community, and economic base, and was trying to change its demographics so that it was not deoendent or. -Inter, visitors_ The City Council received . testimony that the City needs schools for the families that live in the city limits ye--4--round. The City received testimony that this service is as fundamental as wester to having a healthy community. The City received expert opinion testimony that in hard dollar terms,a fralIncially sped school district will have cost impacts upon a city. These impacts can include borrowing space from the City such as classes in the libr •, City council, or community center. These impacts cin include a school to look at cheap land sites which enforces a City to pave wide roads, extend the water lines out into the undeveloped areas of the city, extend the sewer lines, and other added costs. The City Council received testimony to that it is the city government that ends up paying these casts_ The City Council received testimony that schools were a necessary public service that involves a real cost to a municipality. 28. The fee adopted by Ordinance No. 1014 bears a reasonable relationship to the public and/or community burden created by new residential development within the municipal limits of the City of Apache Junction_ 17 Cr 'a =c;700QQ n7 c 'Pk1 vu.I I n: I f 301! 29. The fee adopted in Ordin.ance No. 1014 ensures that the developer paying the fee will receive a special benefit in new public services separate from services ordinarily provided to the general public and ensures that the developer will pay only his fair share of that capital cost Stated another way, Ordinance No. 1014 provides for the existence of special benefits and true local improvements benefitting the activity being charged which are in proportion to the charges imposed. These charges are distinct from charges whose prim2.ry purpose is to benefit the public at large. 30. The City's will reflect the receipt of income from school development fees collected pursuant to Ordinance No. 1014 as: "Gies, Grants and Donations." 31. If the City were tosfer school development fee funds collected pursuant to Ordinance No.1014 to the District.the transfer would be categorized in the City's budget as "Gifts_ Grants and Donators to the D i stric t. Conclusions of Law 1. "The general rule is that municipal corporations possess and can exercise only such powers as are granted in express words, or those necessarily or airly implied in or incident to the powers expressly conferred, or those essential to the declared objects and the purposes of the corporation..." City of Glendale v. White, 67 Ariz. 23 i, 194?.2d 435 (1948). 2. "...[T]he term"public purpose" is incapable of exact definition ___ In considering what is properly a public purpose we should not be controlled to too mar an extent by decisions of courts and climates far distant from ours. Further, we should not be to too great an extent controlled by decisions which come from our remote time, and therefore may be out of tune with modern conditions. The question of what is a public purpose is a changing question, changing to suit industrial inventions and developments and to meet new social conditions. Law is not a fixed and 13 T -Tri r CC ^1_rrU rigid system,but develops, a living thing, as the industrial and social developments which form it make their impelling growth.. " jv of(lendale v. White, 67 Ariz. 231, 194 P.2d 435 (1943). 3_ The adoption of Ordinance No. 1014 is a legislative act that came to the court cloaked with a presumption of validity. City of Phoenix v. FehIrer, 90 Ariz. 13, 17, 363 P.2d 607, 609 (1961); Home Builders Ass'n vs. City ofcoLT4(iale, 187 Ariz. 479, 930 P.2d 993 (1997). 4. It is important to recognize just what the presumption means. It means, first, that the factual underpinning for the city councils decision must stand unless shown to be without factual support. Second, the presumption also means that the wisdom of the City's choice of methods of meeting its needs is a legislative,not a Judicial, question. Whether the ordinance may be a wise one, is not a question for this or any other court. "Courts must ac ord mur_icipal.ities considerable deie ce and upset their legislative decisions only if they are shown to be arbitrary and without factual justification." Home Builders Ass'n vs_ City of$cottsdale, 187 Ariz. 479, 930 P.2d 993 (1997). 5. To prevail, Plaintiffs had the burden to show that the ordinance is clearly arbiz;-ary and unreasonable,and that it does not have any substantial relation to the public health, safety,morals or general Welfare . The ordinance is presumed valid,and where the reasorzbleness of the ordinance is fdiriy debatable_ a it al court must uphold its validity. ICIensiu v. Ci .y of Tucson, 10 Ariz. App. 399, 459 P.2d 316 (1969):T-�'�-r_e R �. Citti•of Scctt,dsle. 187 Ariz. 479, 930 P.2d 993 1 rollers A. �'nyS. (1997). 6. The City of Apache Junction is a general law city organized pursuant to Title 9 of the Arizona Revised Statutes. The sources of statutory authority for municipalities organized as general law cities or towns to exercise legislative power exist throughout Title 9. Other authorizations of exercise of power can be found in other titles as well. For example Title 43. Among the powers 19 provisions enjoys are those conferred bythe of ARS § 9-276, and by virtue of ARS § 9-499.01. the powers of Towns as provided by ARS § 9-240. Power to regulate land use and development is generally found in Article 6 of Title 9,ARS §§9-461 through 9-467. However,the sources of power in this area are not confined to this chapter alone_ For examples see ARS §§9-?76.A.1, A.12,A_13, and A.15. 7. In the case of Arizona ona Pub. Serv. v. Town o f Paradise Valley. 125 Ariz. 447. 610 P.2 d 449 in co ' g`e owers of cities and towns under ARS § 9 'f6,the Arizona Sureme Co`�rt (1980), F recognized that each want of authority stands equal and alone. As a result, if the power to impose the school development fee of Ordinance No. 1014 can be found in any one of or combing-ion of sections in Title 9 of the Arizona Revised Statutes, then the ordinance must be upheld as a legal exercise of power. S_ A municipality is not restricted to particular grants of power,but all statutes applicable may be invoked- Thus authority for Ordinance No. 1014 may be derived from a single rpt or from a combination of enumerated powers. Accordingly,the power to enact this particular ordinance may be derivative from several different grants, rather than from a single°rant, of power_ McQuillin Mun Corp §10.20 (3'Ed); McQuillin Mur,Corp §16.05 (3'Ed). 9. The City of Apache Junction has been tented authority pursuant to ARS §9-499.01 to impose a license tax on the carrying on of any business, ga rie or amusement, calling, profession. or occupation pursuant to ARS §9-240.A.lS. 10. The City of Apache Junction has broad power to impose regulations for the public health, safety, or welfare pursuant to the authorities and powers granted by ARS § 9-240.A.2l.a and 9- 276_A.16. 20 UG-l0-99 TUE 11 : 13 FtX NO. 520 80802. 2 P. 02 Apache Junction has thepower pursuant to ARS §9-276.A.23 to make local 11. The City of special improvements byassessments, by special taxation, or otherwise, as it shall by ordinance prescribe. Apache Junction has the power to assess development fees p t to ARS §9- .4 1_. The City of_ ,63.05. 13. Both the Cityof Apache Junction and the Apache Junction School District have the power intergovernmental a en t.c forjoint and cooperative action pursuant to the authority to enter into agreements of Article 3 of Chapter 7 of Title 11 of the Arizona Revised Statutes. 14. A fee charmed for _ oservices or improvements ents which benefit a user, wherein the user is not mp hisvolition,takes an act which requires payment, such as compelled led topayunless the user, of own volition, q _ y � • totheproperty,is le<.1a11v a fee and not a tax. See Kvrene School District ;��.� build upon user's � _ 240, 722 P.2d 967 (App. 1986); Horn z-uilders Ass'n v. Cit, of N o. ?8 �-. Ch3nalzr, 150 ��. r , 930 ?d 993 (1997); Home�3ui_idrs Ass'n v. City of Scottsdale, 183 Scottsdale. 18� ��lz. -�79, P • ,�4,,902 P.�d 1347 (App. 199� . and Hore Builders Ass'n v. City of Scottsdale, 179 P.2d 5, � �, 875 P.2d 1310 (App_ 1993). 15. _Arizona has held that the le • lature in adopting the provisions of ARS §9463.05 intended is P � to ant broad authority to impose fees in accordance with the predominant state law standards regarding the propriety of regulation egulation as existed ax the time of adoption.. See Home Builders Ass'n • of a P.2d5, 875 P.2d 1310 (App. 1993) at p.9 and Home Builders A.ss'n v. �;. City 5cat..d.�.�z. 1�9 City of Scottsdale. 187 Ariz 479, 930 P.2d 993 (1997) at p. 484. call held that development fees are akin to the regulatory requirements l o. Aiizona hay specifically �P`nz 21 AUG-10-99 TUE FX N0. 5CO So86c ? P. 03 I 1� 13 of requirement of dedications of rights of way, construction of road improvements,water and sewer improvements, and the lie as a condition of development. Home Builders Ass'n v. City of Scottsdale, 187 Ariz_ 479, 930 P2d 993 (1997); Home Builders Assn v. Ci tv of Scottsdale, 183 243, 902 P.2d 1"1 -47 (App. 1995); and,Home Builders Ass'n v. City of Scottsdale, 179 P.2d 5, Ariz. 875 P.2d 1310 (App. 1993). 17. The purposc of development fees is"...to transfer the cost of new infrastructure required by P e:v developments themselves, as opposed to funding them through those new developments to the n general revenue." c�m • Horne Builders .kss'n v. City of Scottsdale, 179 P.2d 5, 875 P.2d 1310 (App. � 1993) at p. 8; Home Builde A c' V. .i off. ottsdale. 137 Ariz. 479, 930 P.2d 993 (1997) at p. 434. 18. The imposition development fee is a form of regulation, and not a tax. Kvt-eue School osition ofa devetoPI • . 240, 722 P.2d 967(App. 1986);Home Builders Ass'n v. City Dis�ct I\To. _S�. C"�n,andler, 150 r'�n2 of Scottsdale. 187 Ariz.479, 930 P.2d 993 (1997);Home Builders Ass'n v. City of Scor`t dale, 183 i 243,902?.fid 1347(App. 199 ; and Home Bui tiers Assn v. CityScottsd .ie, 179 Ptd 5, r�I'Iz. ) 875 P.2 d 1310 (App. 1993). 19. Authority to impose of development fees has been recognized to be a proper under a city's usp P _..n..,al police power ower to enact reasonable reg l tions to promote the health, safety, and general welfare of its people. � illin Mun Corp §25.113.50 (3rd Ed) at p. 452_ The City of Apache Mc Junction possesses such power p uTs-uant to ARS § 9-240.A.21.a and 9-276.A.16. 20_To jusfy a development fee a municipality need only show that there is a rational nexus or •i__.a reasonable connection `between the need for additional facilities and the growth generated by 22 FAX NO, r.:-.)2J � � `� AUG:-10-99 TUE 1113 � - ale 179P.'_d5, 875P.2d1310tApp- . • Builders ass n v. ity Cof Scottsdale the subdivision'". B 1993 Ariz. 479, 930 P.2d 993 (1997) at p. • Homz •� -n v_ .ztV o SBul.ders cottsdale 187 �ai P.9, 485. 21. For a fee to be" t be the fair share to be imposed on a payer, 'roughly proportional" or for i - to burden created by the proposed relationship the community o� needs to be a rational r P there y �. - 7 Ariz.479, 930 P.2d 993 (1997) at p. �' Ass'n V. City of Scottsdale i8 development.Home Builders P 4.85. . �� - showing•�� of some the ail that is required is a sho .- be a"benefit"to the payer of fee, 22. r or there to - = � �a1e. 187 Ariz.479,,930 P.2d cme Builders Assn City of S co:� beneficial a1 use to the developer. H 993 (1997) at p. 483. inbenefit to the developer"the term 1 s not 23. While 19-463.05 requires that the fee result a s . Ariz479 930 P.2d 993 (199i} at p- Elf defining. Home Builders� Ss'n v. City of Scottsdale 187 A iz. 483. . "...first that the exaction imposed on for-benefit"to result to the developer is 24. The standard . .• -,;'ces created by the proposed the developer be factually related to the need. for public sea development. �' -die exaton must bear a relationship to the need for econ-� �the nature zn d extent o2 Builders Ass'11 v. City of. cottsd3le development." Horde public services created by the proposed ��to developer to exist,a city does not Ariz_ /�J (1997) at P 18 479,9•�0p•rd99� P. 483. For a"benefit e cted development alone. Home Builders Ass n - itv of have to show a bcnefit to the a� 7 P.2(3.993 (1991) at pp. 454-436. cottsuale 18 7 Ariz. 4 79, 930 'tti►of ARS §9240.A.18 thz elzments - •to m1 ose a business fzelt3.�under on , 2�. For authority impose anon or calling. for the carrying whether the feel tax imposes a ch�.rge on a person., fes, coi poi 23 AUG-10-89 ,, FX NO, E20 6686252 P. 05 TUE 111�� on of any business, � cal l it g,profession, ,or occupation. The charges imposed by Ordinance No. 1014 Is a charge upon a person, firm, corporation or calling for the carrying on of the business, calling, profession, or occupation of developing iresidential dwelling units. As such the City of Apache Junction has the power to impose it. City of Mesa vs. Home Builders Association of entry m P Arizona,Inc., 111 Ariz. 29, 523 P.2d 57 (1974). 26_ For authorityauthorityto imposeac a feeitax under authority of ARS §9276.A.23 the fee/tax must be L for the prose of�-makin�local improvements fo r whi ch th e ce are`the actual e_�ist enc e of sp e;ci al � benefits in proportion to the taxes imposed." Builders Home B idzrs of Cent. .�:��.�Inc. et al. v. Riddel et ..-... 7' (1973) atp p. 407. The power to impose charges pursuant to ARS 1. 109 Ariz. 404, >10 P._d�1b §9-276.A.23 are indep�dent of, wid In addition to,the powers of assess ' ent created in Title 48 of the Arizona Revised Statutes. The charges imposedby Ordinance No. 1014 are c�es which are for local improvements 27. . for which.the deve!oper er is paring his fair share which confer a special al benefit upon the developer P p or proportional burden. Rome Builders ,Ass'n v. City of Scottsdale, 187 Ariz. 479, 930?2d 993 impose pursuant to ARS §9- 276.A.23. 9 A,s such the City of Apache Junction has the power to impose 1(19 �. • c. zt a1. �. Reel et 3I., 109 _�riz• 404, 5I0 P.2d 376 Home Builders o f Cent. ,���L� (1973). infrastructure, and capital improvements as that term is 28. Proper public school facilities, �' defined in.Ordinance No. 1014 are a proper public purpose. Public schools are fundamental to a that any sh �-ortage of space for schools til... .:.±ely a problem to the whole community. Jordan �-. Village_o f Menomonee Falls, 28 Wis.2d bOS, 137 iV7r'?d 442 (1965); _ t .v. Bisl 0 179 Ariz. 233, 877 P.2d 806 (1994). Roosevelt Elem. School Dist �, F, UG-10-99 TUE 11; 14 FX NO. LU <, Ut..) ' ' e s is a proper public purpose of a city. Citiof 29. Havingproper public schools for its cit�z n P P „/'� Ariz. � 245 (1926); Jordan v, Vi11a� fMenomonee F3IIs,28 bstoreV.Ma 33V218, P• 677 Wis.2d 608 137 i��w2d.�•2 (1965); ROQs� ,v ezm. School Dist. V. $ishop,, 179 Ariz. 233, 877 it E _ - ' v. City of Scottsdale~ 137 Ariz. 479, 930 P.2d 993 P.2d806 (1994); and �o�� Bu�ld�rs ���s n (1997). 30. Arizona has Zoo miiled that cities may spend monies,including by donation or ganr, for . • • derive a rouvhly proportional benefit. Cjof any public purpose for which its citizens will . P P . �_ .... � City�f G1z�d.a.�z v_ White, 67_� 231, 194 z v-Ziac' 30_�.z- 218,2�� P. 6�f (19_6); Tc,�h,-to _ �� P.2d.435 (1943). 21 riz,App.. 53, 515 P.2d 355 (1973); C'itti- of Terre v-- • -, 22 ��.An . 356, 527 P.2d 515 (1974). Pilot Prop=. -P • � or grants Sad expend those monies for capital 31. School distrzcrs may receive donations, in §§15-341 and 15-34'; Op Atte. Ger-. I87- ts as def n.ed Ordinance No. 1014. ARS improvements 122; Op Atty Gen. .188- 056. 31 Concrete P 1 an s for the expenditure of funds do not have to be established in order for a development ' have to show that the fees will confer a benefit to an pnent fee to be legal,or nor does a city ' v. City of Scottsdale. 187 Ariz. 479, 930 P.2d 993 ' developer alone. Home Builders Ass'n specific d p (1997) at . 4S�-=�30. All a municipality need d���vn ,sfrate is that the fees will be used to provide PP Idzrs Ass'n v. City of Scottsdale. 137 Ariz. a reasonable period of time. ome Bus services within 479, 930 P.2d 993 (1997) at p. 484. . � ,�.a inlegislative detetnZinatYorl of all matters of fact � in Arizona -will acqules•... the Ie�zsl 33. Cour` �,•• kj .uuilderSo �z r'iss'n v. �itv of s it is clearlyerroneous, arbitrary, and wholly unw arrau unles - - _ Qimposed byOrdinance No. Scottsdale, 179 9 P._d 5, 875 P.2d 1310 (App. 1993) at p. 7. The charges 25 5 r�X NO. 520 6666c.(:-.)2. �. U AUG-10-99 TUE 11 � 1 1014 are charges which are for extra development capital expenditures necessitated by the impact of new residential development The charges imposed by the ordinance are factually related to the need for public services created bythe new development. The studies conducted by the City show that extent of the exaction bears a reasonable relationship to the public burden created by the proposed. development. The restrictions on use of the funds within Ordinance No. 1014 and the IntemoYernrnental A� ent assure that the monies will be used for new capital improvements which will directly bE.ncnt school children'ldreresiding in the Ilew developments in the City and provide public education Serviees need to service new residential development w-ithii the City. The ordinance has the necessary controls to assure that the monies will be appropriately used in a reasonable period of time, or will be refunded.. Plaintiffs have conceded that there has been compliance with the procedures of §9-4-63.05 ARS by the City of Apache Junction. As such the City of Apache Junction has the power to enact Ordinance No. 1014 and impose the school development fee pur3ilnnt to ARS §9-463.05. Home Builders Ass'n v. City of Scottsdale, 1S7 Ariz.479,930 P.2d 993 (1997);T-T4rne Builders_ City of Scottsdale, 183 Ariz-243, 902 P?d 1347 (App. 1995); A�s n v. and Tio_m zu 1 zrs Ass'n z'. City of Scottsdale, 179 P.2d 5, 875 13.2c11310 (App. 1993). 34. Ordinance No. 1014 is a proper exercise of the power of the City of Apache Junction .-anted ,, _.,- -�10_�.I 9-276.A...23; and 9-463.05. For to it byARS § 9-499.01; 9-?=�0��._l.a.; 9 ..�6.A.16, 9 8; Defendant City of Apache Junction to prevail it need only establish it has authority to adopt said thoseprovisions of state law. Accordingly,Plaintiffs are not entitled to relief ordinance under any of pursuant to either Count 1 or Count 2 of the Complaint on tile herein. 26 .AUG-10-99 TUE 11 � 15 FAX NO, 520 8686252 r, u� T t� .. . _ . . ..._ .. ._. cl uS 99. T this da , 19 Dom m oP�COURT day on• .b e J mes Don .... udge of the Final County Superior Court Pzest •• � 27 TOWN OF ORO VALLEY SUPPLEMENTAL REPORT STUDY SESSION COUNCIL COMMUNICATION MEETING DATE: 03/06/2000 TO: HONORABLE MAYOR AND COUNCIL FROM: Dan L. Dudley, Town Attorney SUBJECT: HOME BUILDERS vs. APACHE JUNCTION (School Impact Fees) BACKGROUND: We have supplemented the previous Council Communication with the following attachments: 1) Study Bill #1121 re the assessment of growth management fees concerning the methods and manner of imposing school impact fees; 2) House Bill #2511, which failed, referencing school development fees for municipalities; and 3) Apache Junction Ordinance No. 1014 establishing the assessment of development fees to offset costs to the municipality associated with providing necessary public services to development. Please note that both the Town of Oro Valley and the City of Apache Junction do not share the exact boundaries with their respective school districts. ATTACHMENT: 1) SB 1121 2) HB 2511 3) Apache Junction Ordinance No. 1014 C . \,10141/ (7:11?7.. A(I Sign re f Town • or ey AA Signature of Tow Manager vqx.. Forty-fourth Legislature S.B. 1121 Second Regular Session COMMITTEE ON FINANCE SENATE E AMENDMENTS TO S.B. 1121 (Reference to printed bill ) 1 Strike everything after the enacting clause and insert: "Section 1. Title 15, chapter9, Arizona Revised Statutes , is 2 3 amended by adding article 8, to read: ARTICLE 8. GROWTH MANAGEMENT FEES 4 5 I5-1051. Definition$ IN THIS ARTICLE, UNLESS THE CpNTEXT OTHERWISE REQIS I RES 6 7 1. "BUILDING PERMIT- MEANS ANY DOCUMENT OR OTHER DEVICE GRANTING AN a INDIVIDUAL OR THE INQI1tIDUAL•S AGENT ENT TKE RIGHT TO CONSTRUCT IMPROVEMENTS. 9 INCLUDING RESIDENTIAL STRUCTURES, ON REAL PROPERTY, WHETHER ISSUED BY A MUNICIPALITY PURSUANT TO SECTION 9-467 OR BY A COUNTY PURSUANT TO SECTION 10 1 11-321 . 12 2. "DEVELOPER" MEANS ANY P,.C RSOK, FIRM, CORPORATION, PARTNERSHIP, 13 ASSOCIATION, SYNDICATE, TRUST OR OTHER LEGAL ENTITY THAT UNDERTAKES TO ' 14 c T EXCEPT THAT AN INDIVIDUAL SERVING AS AN PLAN OR CONSTRUCT A DEVELOPMENTc ��L�JPER. 1S AGENT FOR A LEGAL ENTITY IS NOT A DEV 16REAL ESTATE DEVELOPMENT RESULTING IN THE 3. "DEVELOPMENT.. MEANS AMULTIFAMILY RESIDENTIAL 17 CREATION OF A RESIDENTIAL SUBDIVISION OR A IN THE CONSTRUCTION OF RESIDENTIAL 18 SUBDIVISIONOR BOTH, OR RESULTING !� UNITS OR RESIDENTIAL STRUCTURES. 17 20 4. "FINAL PLAT" MEANS A MAP OF ALL OR PART OF A SUBDIVISION THAT ESSENYIALLY CONFORMS TO AN APPROVED PRELIMINARY PLAT AND THAT IS PREPARED 21 22ISICNS OF ANY APPLICABLE ORDINANCE OR STATUTE. IN ACCORDANCE WITH THE PROVISIONS 5. "GROWTH MANAGEMENT FEES" OR "FEES" MEANS MONIES ASSESSED AN 23 D 24 COLLECTED BY SCHOOL DISTRICTS FOR THE PURPOSES OF AND PURSUANT TO THIS 25 ARTICLE. Ed wd62:2O 000E TO ',Anew S Z 99oc9OES : 'ON ::Id 21dN9S/9SOOH : WOdd Senate Amendments to S.6. 1121 V SIGH" MEANS LAND THAT IS SUBJECT 1 6. "MULTIFAMILY RESIDENTIAL SUBDI I _ THAT IS USED FOR THE CONSTRUCTION OF 2 TO SECTION 9-463.02 OR ll 8a6.o1 AND 3 RESIDENTIAL UNITS, INCLUDING APARTMENTS. 4 7 . "PLAT" MEANS A MAP OF A SUBDIVISION. 8. "RESIDENTIAL STRUCTURE" MEANS A STRUCTURE OR BUILDING FOR WHICH 5 BUILDING PERMIT IS REQUIRED BY LAW AND THAT IS INTENDED OR IS COMMONLY 6 A BU USED AS A RESIDENCE OR DWELLING PLACE, AND MOBILE HOMES, EVEN IF A 7 PERMIT IS NOT REQUIRED FOR THE MOBILE HOME. 8 BUILDING 9. RESIflENTIAL SUBDIVISION" MEANS LAND THAT IS SUBJECT TO SECTION 9 -463.02 OR 11-806.01 AND THAT IS TO BE USED FOR THE CONSTRUCTION OF 10 9 11 RESIDENTIAL STRUCTURES, INCLUDING MOBILE HOME PARKS. 10. „RESIDENTIAL UNIT" MEANS THAT PORTION OF A MULTIFAMILY 12 13 RESIDENTIAL STRUCTURE THAT IS SET UP AS A SEPARATE HOUSEKEEPING UNIT AND 14 THAT IS COMMONLY USED BY A FAMILY OR INDIVIDUAL AS A RESIDENCE OR DWELLING 15 PLACE. 16 15-1052. sse sment of Qr_tth an vent ties. 17 A. A SCHOOL DISTRICT RGOVERNING BOARD MAY ASSESS GROWTH MANAGEMENT 18 FEES TO OFFSET COSTS TO THE SCHOOL DISTRICT ASSOCIATED WITH PROVIDING 19 NECESSARY EDUCATIONAL FACILITIES AND SERVICES TO RESIDENTIAL DEVELOPMENTS. 8. BEFORE ASSESSING ANY GROWTH MANAGEMENT FEES PURSUANT TO 20 21 SUBSECTION A. A GOVERNING BOARD SHALL CONDUCT A COMPREHENSIVE STU4Y TO 22 DETERMINE WHETHER THE ASSESSMENT OF GROWTH MANAGEMENT FEES IS NECESSARY AND WHETHER THE AMOUNT OF THE PROPOSED FEES IS DIRECTLY ATTRIBUTABLE TO 23 THE RESIDENTIAL DEVELOPMENT. ON THE COMPLETION OF THIS STUDY , THE 24 GOVERNING BOARD SHALL CONDUCT A PUBLIC MEETING TO DISCUSS THE RESULTS dF 25 26 THE FINDINGS. 27 C. AFTER THE PUBLIC MEETING TING PRESCRIBED IN SUBSECTION B OF THIS 28 SECTION, THE GOVERNING BOARD SHALL APPOINT AN OVERSIOKT COMMITTEE TO 29 REVIEW THE RESULTS OF THE STUDY AND TO RECOMMEND THE ASSESSMENT OR 30 NONASSESSMENT OF GROWTH MANAGEMENT FEES. THE OVERSIGHT COMMITTEE SHALL 31 r INCLUDE AT LEAST ONE REPRESENTATIVE OF A COMPANY INVOLVED IN THE v 32 CONSTRUCTION OF THE RESIDENTIAL DEVELOPMENT. IF THE OVERSIGHT COMMITTEE -2- 2d wdor:20 000c TO '-4EW ST998E.90ES 'ON ;;H� �I HN3S/ SfOH : WO'd --- * `:o S.B. 1121 Senate Amendments _--._, 1 RECOMMENDS THE ASSESSMENT OF GROWTH MANAGEMENT EES, THE OVERSIGHT 2 COMMITTEE SHALL RECOMMEND THE AMOUNT OF FEES TO BE ASSESSED. BEFORE SUBMITTING ITS RECOMMENDATIONS TO THE GOVERNING BOARD, THE OVERSIGHT S COMMITTEE SHALL CONDUCT A PUBLIC HEARING ON THE PROPOSED RECOMMENDATIONS. 4 5 E GIVEN AS PRESCRIBED IN SECTION 15-3�7. NOTICE OF THE MEETING SHALL 6 _ D. BEFORE -TAKING ANY FINAL ACTION ON THE ASSESSMENT OF GROWTH 6 7 MANAGEMENT FEES, THE GOVERNING BOARD SHALL CONDUCT A PUBLIC MEETING ON THE 8 MATTER. NOTICE OF THE MEETING SHALL BE GIVEN AS PRESCRIBED IN SECTION 9 15-327 ,10 E. GROWTH MANAGEMENT FEES THAT ARE COLLECTED PURSUANT TO THIS ARTICLE SHALL BE USED FOR THE SAME PURPOSES AND IN THE SAME MANNER AS 11 12 CLASS B BOND PROCEEDS. 13 15-1053. Time of a s e ,sment 14 NO MORE THAN TWENTY-FIVE E PER CENT OF THE TOTAL GROWTH MANAGEMENT FEES ASSESSED MAY BE MADE DUE AND PAYABLE ON OR BEFORE THE APPROVAL OF THE 115 THE REMAINING FEES ASSESSED ARE FINAL PLAT FOR A RESIDENTIAL SUBDIVISION.IN 17 DUE AND PAYABLE ON OR BEFORE THE ISSUANCE OF ANY BUILDING PERMITS FOR 18 RESIDENTIAL STRUCTURES RESIDENTIAL UNITS. A RESIDENTIAL SUBDIVISION OR OR 19 MULTIFAMILY RESIDENTIAL SUBDIVISION THAT DOES NOT REQUIRE OR USE A PLAT TIAS. 2SHALL BE ASSESSED AND SHALL PAY THE GROWTH MANAGEMENT FEES BEFORE THE O 21 ISSUaNCE OF Tht BUILDING PERMITS FOR ANY RESIDENTIAL STRUCTURES CR UNI TS 22 BUILT IN THE SUBDIVISION. THE MAXIMUM GROWTH MANAGEMENT F E E TNAT MAY BE 23 OHARGcD pURSUaN7 TO TNIS ARTICLE IS FIVE THOUSAND DOLLARS A RESIDENYIAL 24 STRUCTURE OR RESIDENTIAL UNIT. 25 16-1054. Exempts on fc r 1 and or facilities in 1 �eu of growth 26 management feu_ 27 A SCHOOL DISTRICT MAY ACCEPT A DONATION OF LAND OR FACILITIES FROM A 28 SUBDIVIDER OR DEVELOPER IN LIEU c�L 0 F PART OR ALL OF THE FEES. IF THE GROWTH MANAGEMENT FEES EXCEED THE ACTUAL VALUE OF THE DONATED LAND OR FACILITIES. 29 30 THE DIFFERENCE IN THE FORM OF A REDUCEDED TNS. GOVERNING BOARD MAY COLLECTT .^� GROWTH MANAGEMENT FEE. THE DESIGN OF ANY CONTRIBUTED FACILITIES IS AT THE DISCRETION OF THE GOVERNING BOARD OF THE APPLICABLE SCHOOL DISTRICT•'' 32 -3- td d wdot:2© 000c TO '-LpW t 990 9©ES 'ON ::Cd aLU 9S=9SnOH : WOdd Senate Amendments to S.8. 1121 1 Amend title to conform 2/3100 8:47 AM S: JJK/jas -4- Sd wd Z :20 0003 TO 'uPw S T 999 9©cS : 'ON Xtid 31WN3S/3SnOH : walJ FROM HOUSE/SENATE FA; N0. 52 6286615 Mar. 02 2000 11:37AM P2 REFERENCE TITLE: school development fees; municipalities State of Arizona House of Representatives ' Forty-fourth Legislature Second Regular Session 2000 HB 2511 Introduced By . Representative5 Horne, Marsh,rsh Laredo, Rios: Avel a r, Hatch-Miller, Val adez. Senator Bundgaard AN ACT AMENDING TITLE 15, CHAPTER 9, ARIZONA REVISED STATUTES, BY ADDING ARTICLE 8; RELATING TO SCHOOL DEVELOPMENT FEES. --r (TEXT OF BILL BEGINS ON NEXT PAGE) - 1 - t FROM HOUSE/SENATE FA;' NO. 520E28E515 Mar. 02 2000 11:38AM P3 HB 2511 1 Be it enacted by the Legislature of the State of Arizona: ha ter 9, Arizona Revised Statutes is amended 2 Section 1 . Title 15, c p 3 by adding article 8, to read: 4 ARTICLE 8. SCHOOL DEVELOPMENT FEES 5 15-1051. deli ni ti oris 6 A. IN THIS ARTICLE, UNLESS THE CONTEXT OTHERWISE REQUIRES: 7 1 . "AREA OF JURISDICTION" MEANS THAT PART OF THE COUNTY OUTSIDE THE 8 CORPORATE LIMITS OF A MUNICIPALITY. 9 2. $UILDING RANTING AN PERMIT" MEANS ANY DOCUMENT OR OTHER DEVICE GRANTING INDIVIDUAL'S AGENT THE RIGHT TO CONSTRUCT IMQROVEMENT5. 10 INDIVIDUAL OR THE INDIVIDUAL S ISSUED 8Y A RESIDENTIAL STRUCTURES, ON REAL PROPERTY, WHETHER 11 INCLUDING R BY A COUNTY PURSUANT TO SECTION 12 MUNICIPALITY PURSUANT TO SECTION 9-467 0 13 11-321 . 14 3. "DEVELOPER" MEANS ANY PERSON, FIRM. CORPORATION, PARTNERSHIP. TRUST OR- OTHER LEGAL ENTITY THAT UNDERTAKES TO PLAN 15 ASSOCIATION, SYNDICATE, SERVING AS AN AGENT FOR 16 OR CONSTRUCT A DEVELOPMENT, EXCEPT THAT AN INDIVIDUAL 17 A LEGAL ENTITY IS NOT A DEVELOPER. IN THE 18 4. "DEVELOPMENT" MEANS A REAL ESTATE DEVELOPMENT RESULTING SUBDIVISION 19 CREATION OF A RESIDENTIALOR -A MULTIFAMILY RESIDENTIAL 20 SUBDIVISION, OR BOTH, OR RESULTING IN THE CONSTRUCTION OF RESIDENTIAL UNITS 21 OR RESIDENTIAL STRUCTURES. 22 5. SUBDIVISION THAT .,FINAL PLAT" MEANS A MAP OF ALL OR PART OF A 23 ESSENTIALLY CONFORMS TO AN APPROVED PRELIMINARY FLAT AND THAT IS PREPARED IN 24 ACCORDANCE WITH ANY APPLICABLE ORDINANCE OR STATUTE. 25 6. "HABITABLE SQUARE FEET" OR "HABITABLE SQUARE FOOTAGE" MEANS THE UNDER THE ROOF OF A RESIDENTIAL STRUCTURE 26 AREA MEASURED IN SQUARE FEET 27 EXCLUDING ANY AREA FOR PARKING MOTOR VEHICLES AND ANY SPACE NOT SURROUNDED 28 BY FOUR WALLS, SUCH AS AN ATTACHED PATIO. "MULTIFAMILYRESIDENTIAL SUBDIVISION MEANS LAND THAT IS SUBJECT 29 7. RcSID r TH CONSTRUCTION OF 30 TO SECTION 9-463.02 OR 11-806.01 AND THAT IS USED FOR E 31 RESIDENTIAL UNITS. INCLUDING APARTMENTS. 32 8. "MUNICIPALITY" MEANS AN INCORPORATED CITY OR TOWN. 33 9. "PLAT" MEANS A MAP OF A SUBDIVISION. 34 10. "PRELIMINARY PLAT" MEANS A PRELIMINARY MAP, INCLUDING SUPPORTING � THAT IS PREPARED IN THAT INDICATES A PROPOSED SUBDIVISION DESIGN AND 35 DATA, 36 ACCORDANCE WITH ANY APPLICABLE ORDINANCE OR STATUTE. 37 11 . "RECORDED PLAT'' MEANS A FINAL PLAT BEARING ALL OF THE CERTIFICATES ..RESIDENTIAL STRUCTURE" MEANS A REQUIRED BY ANY APPLICABLE ORDINANCE OR STATUTE. 39 12.38 OF APPROVAL � STRUCTURE OR BUILDING FOR WHICH A THAT IS INTENDED O R IS COMMONLY USED REQUIRED BY LAW AND 40 BUILDING PERMIT IS NOME EVEN IF A BUILDING PERMIT 41 AS A RESIDENCE OR DWELLING PLACEAND A MOBILE . 42 IS NOT REQUIRED FOR THE MOBILE HOME. TO SECTION 43 13. "RESIDENTIAL SUBDIVISION" MEANS LAND THAT IS SUBJECT 44 9-463.02 OR 11-806.01 AND THAT IS USED FOR THE CONSTRUCTION OF RESIDENTIAL 45 STRUCTURES, INCLUDING MOBILE HOME PARKS. - 1 - FROM HOUSE/SENATE FA:-•; NO. : 5206286615 Mar. 02 2000 11:39AM P4 H8 2511 1 14. "RESIDENTIAL UNIT" MEANS THAT PORTION OF A MULTIFAMILY RESIDENTIAL 2 SEPARATE HOUSEKEEPING UNIT AND THAT IS SUBDIVISION THAT IS SET UP AS A SE PLACE. 3 AN INDIVIDUAL AS A RESIDENCE OR DWELLING 3 COMMONLY USED BY A FAMILY OR OF A SCHOOL DIS 4 15. "SCHOOL DEVELOPMENT FEE FUND,, TRICT MEANS A FUND 5 ESTABLISHED BY THE COUNTY TREASURER FOR THE COLLECTION OF SCHOOL DEVELOPMENT AND EXPENDED PURSUANT FEES DEPOSITED TO SECTION 15-1062. OR "FEES" MEANS MONIES ASSESSED AND 7 16. "SCHOOL DEVELOPMENT FEES" 8 COLLECTED BY SCHOOL DISTRICTS FOR THE PURPOSES OF AND PURSUANT TO THIS 9 ARTICLE. MEANS ANY PERSON, FIRM, CORPORATION, PARTNERSHIP, 10 1J, "SUBDIVIDER" ION SYNDICATE, TRUST OR OTHER LEGAL ENTITY THAT FILES LES AN APPLICATION 11 ASS4CIAT , THE SUBDIVISION 12 AND INITIATES PROCEEDINGS FOR 4F LAND FOR A RESIDENTIAL 13 SUBDIVISION OR A MULTIFAMILY RESIDENTIAL SUBDIVISION IN ACCORDANCE WITH ANY 14 APPLICABLE ORDINANCE OR STATUTE, EXCEPT THAT AN INDIVIDUAL SERVING AS AN 15 AGENT FOR A LEGAL ENTITY IS NOTA SUBDIVIDER. 5-1052. Assessmgnt of school deveI o m nt f A s 16 1 DEVELOPMENT FEES PURSUANT TO SECTION 17 A MUNICIPALITY MAY ASSESS SCHOOL ASSOCIATED WITH 18 9-463.05 TO OFFSET COSTSPROVIDING NECESSARY EDUCATIONAL 19 FACILITIES TIES AND SERVICES TO RESIDENTIAL DEVELOPMENTS. A MUNICIPALITY SHALL 20 DETERMINE THE AMOUNT OF THE FEES AS PRESCRIBED IN THIS ARTICLE. �t 21 15-1053. Maximum fees- time of ass_ gg.ssm_ q SHALL 22 A. BEFORE ASSESSING SCHOOL DEVELOPMENT FEES THE MUNICIPALITY 23 DETERMINE AND DOCUMENT THE COSTS FOR ITEMS DESCRIBED IN SECTION 15•1062, THE MUNICIPALITY SHALL INCLUDE ONLY THOSE COSTS FOR WHICH24 SUBSECTION B. BURDENS IMPOSED BY THE DEVELOPMENT. 25 THERE IS A RATIONAL CONNECTION WITH THE .- NOT EXCEED 26 THE TOTAL FEES ASSESSED AGAINST A RESIDENTIAL DEVELOPMENT SHALL 27 TWENTY-FIVE PER CENT OF THESE COSTS.IN ADDITION 28 B. .. FEES TO THE TOTAL FEE LIMITATION, SCHOOL DEVELOPMENT 29 SHALL NOT EXCEED: THAT IS LESS THAN SIX HUNDRED FIFTY 1. FOR A RESIDENTiAt STRUCTURE 3G FEET INc TWENTY-FIVE IVE CENTS A SQUARE FOOT. 31 SQUARE SIZE, STRUCTURETHAT IS SIX HUNDRED FIFTY OR MORE 32 2, FOR A RESIDENTIAL CENTS A SQUARE FOOT UP TO A MAXIMUM OF THREE SIXTY-FIVE 33 SQUARE FEET IN SIZE, 34 THOUSAND FIVE HUNDRED SQUARE FEET . 35 C. THE DEPARTMENT OF EDUCATION SHALL ADJUST THE AMOUNTS THAT MAY BE ` DOMESTIC PRODUCT PRICE DEFLATOR. ASSESSED BY THE ANNUALCROSS MAY 36 GROWTH IN THE 37 D. NO MORE THAN TWENTY-FIVE PER CENT OF THE TOTAL FEES ASSESSED THE APPROVAL 38 BE MADE DUE AND PAYABLE ON OR BEFOREOF THE FINAL PLAT FOR AARE DUE AND PAYABLE ON SUBDIVISION. THE REMAINING FEES ASSESSED R 39 RESIDENTIAL 40 OR BEFORE THE ISSUANCE OF ANY BUILDINGPERMITS FOR RESIDENTIAL STRUCTURES a 41 RESIDENTIAL UNITS. A RESIDENTIAL SUBDIVISION OR MULTIFAMILY RESIDENTIALA PLAT SHALL BE ASSESSED ANDSHALL REQUIRE OR USE 42 SUBDIVISIaN THAT DOES NOT ANCE OF BUILDING PERMITS FOR 43 PAY THE SCHOOL DEVELOPMENT FEES BEFORE THE ISSU 44 ANY RESIDENTIAL STRUCTURES OR UNITS BUILT IN THE SUBDIVISION. FROM HOUSE/SENATE SATE FA NO. 52 625661 Mar. 02 2000 11:39AM P5 HB 2511 1 15-1054 . Land or facilities i ti es i n l teu of School development fees - MAY ACCEPT A DONATION 2 A MUNICIPALITY OF LAND OR FACILITIES FROM A 3 SUBDIVIDER THE DEVELOPER IN LIEU OF PART OR ALL OF FEES. THE DESIGN OF 4 ANY CONTRIBUTED FACILITIES SHALL BE AT THE DISCRETION OF THE MUNICIPALITY . 5 15-1055. Exempt develonrnents S OR OTHER PERMANENT 6 A DEVELOPMENT THAT BY ZONING, DEED RESTRICTION R HIP OR RESIDENCE WITHIN 7 RESTRICTIONS ON OWNS THE DEVELOPMENT RESTRICTS THE OWNERSHIP 8 PERSONS RESIDING IN THE DEVELOPMENT TO PERSONS TWENTY-TWO YEARS OF AGE OR 9 OLDER IS EXEMPT FROM THE ASSESSMENT AND PAYMENT OF SCHOOL DEVELOPMENT FEES. STRUCTURE OR UNIT WITHIN 10 EACH RESIDENTIAL A DEVELOPMENT THAT CHANGES ITS 11 ZONING OR REMOVES ITS DEED RESTRICTIONS OR OTHER PERMANENT RESTRICTIONS OF 12 OWNERSHIP OR RESIDENCE WITHIN THE DEVELOPMENT TO ALLOW PERSONS RESIDING IN 13 THE DEVELOPMENT TO BE UNDER TWENTY-TWO YEARS OF AGE SHALL BE ASSESSED THE 14 SCHOOL DEVELOPMENT FEES IF THE RESIDENTIAL STRUCTURE OR UNIT HAS NOT 15 PREVIOUSLY BEEN ASSESSED AND PAID THE FEES. IF AN EXEMPT DEVELOPMENT FAILS 16 TO ENFORCE ITS ZONING, DEED RESTRICTIONS OR OTHER PERMANENT RESTRICTIONS ON 17 OWNERSHIP OR RESIDENCE WITHIN THE DEVELOPMENT IN ALL CASES, THE EXEMPT 18 DEVELOPMENT LOSES ITS EXEMPTION AND THE ENTIRE DEVELOPMENT IS SUBJECT TO THE 19 FEES. 20 15-1056. Limitation on___a,p roval of rgsidentJal s bdivisions or 21 granting building _o r,_hood permits. 22 A. A MUNICIPALITY OR COUNTY SHALL NOT APPROVE A FINAL PLAT OF A 23 RESIDENTIAL SUBDIVISION, MOBILE HOME PARK OR MULTIFAMILY RESIDENTIAL 24 SUBDIVISION UNLESS THE FEES REQUIRED BY THIS ARTICLE HAVE BEEN PAID. 25 B. AMU MUNICIPALITY OR COUNTY SHALL NOT ISSUE A BUILDING PERMIT FOR A 26 RESIDENTIAL STRUCTURE OR RESIDENTIAL UNIT OR APPROVE ANY HOOKUP PERMIT FOR 27 A MOSILE HOME UNLESS THE FEES REQUIRED BY THIS ARTICLE HAVE BEEN PAID TO THE 28 EXTENT THE RESIDENTIAL SUBDIVISION OR MULTIFAMILY RESIDENTIAL SUBDIVISION HAS 29 NOT PREVIOUSLY BEEN ASSESSED OR PAID THE FEES. 30 15-1057 , Notice of_21eH i mi nary _plat 31 AFTER A PRELIMINARY PLAT IS FILED, THE MUNICIPALITY OR COUNTY IN WHICH 32 IT IS FILED SHALL H L NOTI FY AND FORWARD A COPY OF THE PLAT TO THE MUNICIPALITY BOUNDARIES THE PROPERTY DESCRIBED WITHIN WHOSE ON THE PRELIMINARY PLAT IS 34 LOCATED. THE DEVELOPER OR SUBDIVIDER SHALL CONTACT THE MUNICIPALITY 35 REGARDING PAYMENT OF THE SCHOOL DEVELOPMENT FEES. 36 15-1058. Nati ce„- p, of al i ca Ion f2r b. j 1 di permit or hookup 37 permit 38 THE DEVELOPER OF A RESIDENTIAL STRUCTURE OR RESIDENTIAL UNIT OR A 39 PERSON DESIRING TO HOOK UP A MOBILE HOME TO RECEIVE UTILITY SERVICES SHALL 40 PRESENT ITS FINAL PLANS TO THE MUNICIPALITY WITHIN WHOSE BOUNDARIES THE 41 STRUCTURE OR UNIT IS LOCATED FOR ASSESSMENT OF THE SCHOOL DEVELOPMENT FEES. 42 THE FINAL PLANS SHALL CLEARLY SET FORTH THE CORRECT HABITABLE SQUARE FOOTAGE 43 OF THE STRUCTURE OR UNIT. - 3 - FROM HOUSE 'SENATE FA:-; NO. : 5?06 %661 Mar. 02 2000 11:40AM P6 HB 2511 `--- q ubdi vi si ons• l i en •-- 1 15-1059. Nonconforming s_ � MULTIFAMILY RESIDENTIAL SUBDIVISION THAT A RESIDENTIAL SUBDIVISION OR MUL WITHOUT 2 UT A RECORDED 3 IS ESTABLISHED WITHOUT PLAT OR THAT IS ESTABLISHEDTUYES REGARDING THE SUBDIVISION TING WITH APPLICABLEASSESSMENT OF 4 COMPLYING ORDINANCES AND STA THAT IS 5 OF REAL PROPERTY OR ANY DEVELOPMENTEXEMPTED FROM THE_ THAT SUBSEQUENTLY FEES PURSUANT TO SECTION 15-1055 AND 6 SCHOOL DEVELOPMENTFEESUNTIL PAID IN FULL, THE FEES 7 . LOSES ITS EXEMPTION IS SUBJECT TO THE MUNICIPALITY WITHIN THE PROPERTY 8 CONSTITUTE A LIEN AGAINST IN FAVOR OF THE MUN CIS LOCATED. BOUNDARIES THE NONCONFORMING 9 WHOSE SUBDIVISION ^1�erl 10 16-1060.060. N ncon.formi nq strUcturg s and uts. RESIDENTIAL UNIT THAT IS CONSTRUCTED WITHOUT 1� A RESIDENTIAL STRUCTURE OR WITH APPLICABLE M T OR THAT 12 A BUILDING PER IS CONSTRUCTED WITHOUT COMPLYING I OR UNITS OR ANY DEVELOPMENT 13 ORDINANCES OR STATUTES REGARDING THE STRUCTURES FEES PURSUANT TO FROM THE 14 THAT IS EXEMPTEDASSESSMENT OF SCHOOL DEVELOPMENT ITS EXEMPTION IS SUBJECT TO THE 15 SECTION 15-1055 AND THAT SUBSEQUENTLY LOSES ANY STRUCTURE FULL, THE FEES 16 FEES UNTIL PAID INCONSTITUTE A LIEN AGAINSTTY WITHIN WHOSE BOUNDARIES THE NS 17 OR UNIT C0TRUCTED IN FAVOR OF THE MUNICIPALIOCATED. 18 NONCONFORMING STRUCTURE OR UNIT IS L 19 15-1061. Foreci re of)i end MAY BE FORECLOSED 20 A LIEN IMPOSED PURSUANT TO SECTION 15-1059 OR 15-1060THE 21 BY THE MUNICIPALITY IN THE MANNERSET FORTH IN TITLE 42, CHAPTER 18 FOR� ND FORECLOSURE OF LIENS ARISING FROM NONPAYMENT OF REAL PROPERTY TAXES. 22 SALE A e osi t of fees: nd•fuuse• return=xemPti� �., 23 1� 102. D p• - BE o A. SCHOOL DEVELOPMENT FEES SHALLEPflSITED WITH THE COUNTY FEE FUND. 24 THE MONIES TO THE SCHOOL DEVELOPMENT 25 TREASURER WHO SHALL CREDITr DEPOSITED IN AND EXPENDED FROM THE FUND SHALL BE IDENTIFIED BY THE 26 MONIES 27 DEVELOPMENT THAT IS THE SOURCE OF THE MONIES. 28 B. SJBJ INSUBSECTION E OF THIS ECT TO THE LIMITAi IONS PRESCRIBED �; THE 29 SECTION. THE GOVERNING BOARD MAY SPEND THE FEES AND INTEREST EARNED 0 30 FEES FOR: EASE-PURCHASE. LEASE OR LONG-TERM LEASE 1. ACQUISITIONS BY PURCHASE, � 'LDINGS , INCLUDING LABOR 31 AND IMPROVEMENTS TO LAND AND BUS 32 OF LAND. BUILDINGS�D 1 NGS MATERIAL COSTS I F WORK I S PERFORMED AND RELATED EMPLOYEE BENEFITS COSTS AND33 34 BY SCHOOL DISTRICT EMPLOYEES.TRANSPORTATION VEHICLES AND EQUIPMENT, INCLUDING 35 2. PUPIL AND NONPUPIL � ,.T CONTRACTS FOR 36 ALL CAPITAL EXPENDITURES IN A CONTRACT IF THE SCHOOL DIS 37 PUPIL TRANSPORTATION.EXPENSES INCURRED BY A SCHOOL DISTRICT IN ASSESSING AND COLLECTING 3. LEGAL, ENGINEERING. 38 39 SCHOOL DEVELOPMENT FEES, INCLUDING ALL PROFESSIONAL, 40 ACCOUNTING AND AUDIT FEES OR EXPENSES THAT ARE INCURRED. ARE BE SPENT WITHIN FIVE YEARS AFTER THEY 41 C. DEVELOPMENT FEES SHALLSHALL BE RETURNED TO THE 42 PAID. FEES THAT ARE NOT SPENT WITHIN THIS PERIOD 43 DEVELOPER THAT PAID THE FEES. 44 D. SCHOOL DEVELOPMENT FEES AND ANY INTERESTE 45 EXEMPT FROM THE LIMITATIONS D IEARNED ON THE FEES ARE --ATIOt1S ON EXPENDITURE OF LOCAL REVENUES AS DEFINED - 4 - FPOM : HOUSE:="SENATE FANO. : 520E28E615 Mar. 02 2000 11:41AM P? HB 2511 NOTWITHSTANDING SECTION CONSTITUTION OF ARIZONA. 1 ARTICLE IX, SECTION 21, M 2 15-905, SUBSECTION F, AT LEAST SEVENTY-FIVE PER CENT OF THE AMOUNT WITHIN THE 3 CAPITAL OUTLAY REVENUE LIMIT, AS PROVIDED IN SECTION 15-951 , SUBSECTION C OR THE CAPITAL OUTLAY SECTION FOR BUDGETED ENTIRELY IN 4 SECTION 15-961, SHALL BE L DEVELOPMENT FEES OR IF 5 ANY FISCAL YEAR IF A GOVERNING BOARD ASSESSES SCHOO 6 THERE ARE MONIES IN THE SCHOOL DEVELOPMENT FEE FUND. 7 E. A GOVERNING BOARD MAY ONLY USE THE FEES AND INTEREST EARNED ON THE 8 FEES FOR PROJECTS AND EQUIPMENT THAT EXCEED THE STANDARDS PRESCRIBED IN 9 SECTION 15-2011. 10 15-1063. ApDe, 1 of jssessunts 11 A. A SUBDIVIDER OR DEVELOPER WHO BELIEVES THE ASSESSMENT OF SCHOOL MAY APPEAL 12 DEVELOPMENT FEES IS IMPROPERTHE ASSESSMENT TO THE MUNICIPALITYMORE THAN TEN DAYS AFTER 13 BY FILING THE APPEAL WITH THE GOVERNING BOARD NOT NOTICE OF THE ASSESSMENT. THE DEVELOPER SHALL BE 14 THE RECEIPT OF THE ASSESSMENT IN WRITING WITH FURNISHED WITH THE METHOD 15 OF COMPUTATION OF THE ASSES 16 THE NOTICE OF THE ASSESSMENT. THE APPEAL SHALL BE IN WRITING AND SHALL STATE TO THE ALLEGED WRONGFUL SPECIFIC FACTS RELATING DIRECTLY ASSESSMENT, AND THE 18 MUNICIPALITY CIPALITY SHALL HEAR THE APPEAL WITHIN THIRTY DAYS AFTER THE APPEAL IS 19 FILED. 20 B. HEARINGS ON THE APPEALS ARE OPEN TO THE PUBLIC, UNLESS THE HEARING. HEARINGS ARE REQUESTS A CONFIDENTIAL 21 SUBDIVIDER OR DEVELOPER 22 INFORMAL.RMAL. AND TECHNICAL RULES OF EVIDENCE DO NOT APPLY EXCEPT THE RULES OF 23 PRIVILEGE RECOGNIZED BY LAW. BOTH THE SUBDIVIDER OR DEVELOPER AND THE AT LEAST TWENTY 24 MUNICIPALITY SHALL BE NOTIFIEDDAYS BEFORE THE HEARING. THE 25 PARTIES MAY SELECT REPRESENTATIVES OF THEIR CHOOSING PRESENT AND N GIVE EVIDENCE BEFORE THE MUNICIPALITY. THE 26 CROSS-EXAMINE WITNESSES AND THEHEARING AND TAKE MAY APPOINT A HEARING 27 MUNICIPALITY OFFICER TO CONDUCT MUNICIPALITY SHALL PREPARE AN 28 EVIDENCE ON BEHALF OF THE MUNICIPALITY. THEY 29 OFFICIAL RECORD OF THE HEARING THAT INCLUDES ALL TESTIMONY RECORDED MANUAL 30 OR BY MECHANICAL DEVICE AND THE EXHIBITS. THE 31 C. WITHIN THIRTY DAYS AFTER THE CONCLUSION OF THE HEARING SEND A COPY OF THE DECISION BY ITS DECISION AND 32 MUNICIPALITY SHALL ENTERTHE ADDRESS AS GIVEN AT THE 33 CERTIFIED MAIL TO THE SUBDIVIDER OR DEVELOPER AT r 34 HEARING OR TO A REPRESENTATIVE DESIGNATED BY THE SUBDiVIDER OR DEVELOPER TO 35 RECEIVE A COPY OF THE DECISION. T 'Y TO THE SUPERIOR 36 D. A PARTY MAY APPEAL THE DECISION OF THE MUNICIPALITY THE SCHOOL 37 COURT IN THE COUNTY IN WHICHDISTRICT IS LOCATED IF THE ORDER WAS: g 1. FOUNDED ON OR CONTAINED AN ERROR OF LAW INCLUDING AN ERROR IN THE 3 3g CONSTRUCTION RU,,TION T r OR APPLICATION OF ANY PERTINENT RULES. LOSED BY THE ENTIRE RECORD. 40 2. UNSUPPORTED SY THE EVIDENCE AS DISC 41 3. MATERIALLY AFFECTED BY AN UNLAWFUL PROCEDURE. 42 4. BASED ON A VIOLATION OF ANY CONSTITUTIONAL PROVISION. 43 5. ARBITRARY OR CAPRICIOUS . - 5 U4/V4, VV 10.11 �1i1 4OV 27O.'. t 010 ORDINANCE NO. 1014 AN ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION, ARIZONA. AMENDING THE APACHE JUNCTION CITY CODE VOLUME 2, DEVELOPMENT C.QtE. CHAPTER 7, BY ADDING ARTICLE 7-2 i*. 1' E . it •o f ESTABLISHING THE FEE AND EFFECTIVE DATE FOR COLLECTION THEREOF; REPEALING ANY CONFLICTING PROVISIONS; AND PROVIDING FOR SEVERAB I LITY. WHEREAS. A.R.S. § 9-463.05 authorizes cities and towns to assess development fees to offset costs to the municipality associated with providing necessary public services to a development; and. the Cityof Apache Junction and the Apache Junction Unified School WHEREAS p District have entered into a contract with James Duncan and Associates to • assist the City in evaluating the cost to the City of providing necessary public services to developments: and. WHEREAS. the Mayor and CityCouncil of the City of Apache Junction have found y that a development fee for additional necessary school capital facilities is notnecessary onlybut will result in beneficial use to new development, and. WHEREAS. the Mayor and City Council of the City of Apache Junction have determined that new development within the City impacts the Apache Junction A School District by requiring additional necessary school capital facilities, new schoolbuildingsrequired with re ui red educational and recreational facilities and equipment; NOW. THEREFORE, BE IT ORDAINED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION. ARIZONA, AS FOLLOWS: SECTIOLIAL _IN That the Apache Junction City Code Volume 2, Land Development Code, Chapter 7. is hereby amended by adding a new Article 7-2 1'V- ••i�• choo} . to read as follows: ORDINANCE NO. 1014 PAGE 1 OF 6 0-4T VL!W LV•11 FA-1 -tou 00� 1V14k.1..E.An-n.1,2110 Section 7-2-1 Authorization This Section is authorized by Ordinance No. 1014 and is enacted pursuant to the general police power of the City and the authority granted to the City by the State of Arizona as found in A.R.S. § 9-463.05. Section 7-2-2 Purpose and Intent It is the purpose and intent of the City of Apache Junction to implement a comprehensive plan by requiring that new development pay for its share ofp ublic facilities through the imposition of development fees that will be used to finance, defray, or reimburse all or a portion of the costs incurred by the municipality to provide additional necessary public services to its citizens resulting from new residential development within the City. Section 7-2-3 Effective Date TheP rovi si ons of this Article shall become effective. at the rate of 100%. at 12:01 a.m. on the 16 day of March, 1998. Section 7.2.4 Applicability Unless expressly accepted or exempted, this Article applies to all fees imposed by the City to finance, defray or reimburse the cost of additional necessary school capital facilities including additional school buildings, educational or recreational facilities and necessary equipment required by the Apache Junction Unified School District. • Section 7-2-5 Exemptions A. This Article does not apply to taxes and special assessments: fees forP rocessi ng development applications: fees for enforcement of, or inspection pursuant to. regulatory ordinances: fees collected under development agreements: fees imposed pursuant to a reimbursement agreement between the City and a property owner for thatp orti on of the. costs of a public facility paid for by the property owner which exceeds the need for the public facility attributable to. reasonably related to, or roughly proportional to. the development; fees to mitigate impacts on environment: or ORDINANCE NO. 1014 PAGE 2 OF 6 03/02/00 16:11 FAX 480 982 7 018 CITY CLERK-ADMIN 404 fees imposed. levied or collected by other governmental agencies including subdivisions of the State and the County. 8. This Article does not apply to any permit issued for land that is not zoned residential at the time of permit issuance. Section 7-2-6 Definitions When used in this Article, the following words. terms and phrases, and their derivations, shall have the meaning ascribed to them in this Section. except where the context clearly indicates a different meaning: A. Benefits Area means that geographic area within the City limits of the City of Apache Junction as they exist now or as they may be amended by annexation wherein the fees are collected and expended for a particular capital improvement serving the development within the benefited area. B. Capital Improvement means land or facilities owned, operated or used by the Apache Junction Unified School District for educational and recreational purposes as well as the equipment and furniture necessary to own. operate or use the facility. Capital improvement also includes costs associated with design, engineering, land acquisition and all other costs normally associated with construction of a capital improvement. C. Capital Improvement Plan means a written document submitted to the City by the Apache Junction Unified School District setting forth its board-approved capital improvement plan. D. Capital Improvement Project List means a list submitted annually to the City by the School District describing the location. size time of availability and estimated cost of each capital improvement authorized by the District and to be considered by the City for funding from this particular development fee account. E. New Development or Development Project means any project undertaken for the purpose of development, including without limitation, a project involving the issuance of a permit for construction, reconstruction or addition to any land located within any zoning district designated as a residential district. ORDINANCE NO. 1014 PAGE 3 OF 6 03/02/00 16:11 FAX 480 982 7018 CITY CLERK-ADMIN 1005 Section 7-2-7 Devel opment Fee FROM AND AFTER the effective date of this Article, the following fees shall be charged and collected at the time of issuance of any building permit as follows: All single-family.1y. detached residential dwelling units, including site- built. ite- buylt, manufactured,ured and modular--51,368.00: all permits for the placement and location of mobile and manufactured homes in a designated park--$366.00, • each individual dwelling unit in any multi-family dwelling unit project--$276.00 per dwelling unit. Section 7-2.8 Development Fee Account All fees collected pursuant to this Article shall be maintained in a l separate account with specific notations showing the date upon which the fee was paid. the person paying the fee. the legal description of the property for whichthe fee i s applicable and the owner or owners of record of tho property realon the date the fee was paid. The funds shall be invested ted in the same manner as all other City funds and interest earned on the h fund shall be credited to the fund and maintained in the fund. Section 7-2-9 Use of Development Fees The City may Councilauthorize the transfer of funds to the Apache Junction Unified School District in an amount certain which is Ju desl gnated by resolution for usage of the District in connection with any project on the capital tal i m P rovements project list previously '� A yCity submitted to the City. The Council shall schedule a public hearing and take public comment and testimony regarding the proposed use of the funds prior to the actual authorization of transfer. The City Council may also, in its sole discretion. authorize the use of the fund by the direct payment of invoices submitted to the School District by third parties if said invoices have been approved for payment in advance by the School District and are entirely associated with a capital improvement project that has been approved by both the School District and the City. ORDINANCE NO. 1014 PAGE 4 OF 6 s is I ' • : .0 982 7018 CITY CLERK ADMIN 14106 Section 7-1-10 Offsets and Appeals A. In determining and assessing this development fee, the City shall consider. among other things, the contribution made or to be made in the future, in cash or taxes. fees or assessments, by the property owner towards the necessary public services covered by this development fee. The City shall also assess and determine whether or not the property is located in a community facilities district which will provide for, in whole or part. the necessary public services covered by this fee. B. Any person who pays the development fee may appeal the fee in writing within thirty (30) days after payment. The appeal shall set forth the reason or reasons for the appeal and shall be filed with the City Clerk. Upon receipt of an appeal , the City Clerk shall place the matter on the next available City Council agenda but in no event later than forty-five (45) days from the receipt of the appeal . The City Council shall conduct a hearing on the appeal and shall render a written decision accepting. modifying or rejecting the appeal .- Section ppeal .Section 7-2-11 Refunds Any fee collected pursuant to this Article that is not either actually expended or committed for expenditure within seven (7) years of the date upon which the fee is paid may be subject to a refund. Persons seeking a refund of unused or uncommitted development fees must do so in writing, stating that they either actually paid the fee or are legal successors in interest to the person who paid the fee and, as such, are entitled to request a refund. All requests for refund shall be placed on an agenda for consideration by the City Council no later than forty- five (45) days after the request is filed with the City Clerk. Council shall determine whether or not a refund. together with all accrued interest to date, should be made. The decision of the City Council shall be in writing and shall be final . Section 7-2-12 Conflicts and Severability In the event of a conflict between the provisions of this Article and any other Ordinance or Resolution establishing or amending development fees. the provisions of this Article shall govern. If any Section. ORDINANCE NO. 1014 PAGE 5 OF 6 subsection-, sentence, clause, phrase or portion of this Article is for anyreason held to be invalid or unconstitutional by the final decision of any court of competent jurisdiction, such decision shall not effect the validity of the remaining portions of this Article. PASSED AND ADOPTED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF APACHE JUNCTION. ARIZONA. THIS 10TH DAY OF DECEMBER . 1997. SIGNED AND ATTESTED TO THIS 11TH DAY OF DECEMBER 1997. a #j4 4 ._.1 .11 .._ DOUGLAS /L EMAN Mayor ATTEST: - 1,/f KATHLEEN CONNELLY l City Clerk APPROVED AS TO FORM: J,•,i_- iZ-/i-97- R. JOEL STERN City Attorney ORDINANCE NO. 1014 PAGE 6 OF 6 Item #1 - Supplemental as submitted by Nancy Young Wright The Impact of Impact Fees on Economic Development Conventional wisdom holds that new development will abandon communities that charge impact fees and locate elsewhere. The reality is that most development must locate in the community anyway to maximize profits. Evidence shows that impact fees are a necessary ingredient to sustaining economic development among that state's counties. Will Be Passed On To ♦ MYTH: Impact Fees Homebuyers. Developers usually argue that impact fees will simply be passed assed on to the homebuyer. This implies that impact fees will p P raise the price of housing. If this were true, developers would not oppose impact fee Py olic since the fees would cost them nothing. Also, if this were true, developers are not now charging as much as the market will bear and are therefore leaving money on the table. In fact, developers have it partly right. Depending on market dynamics,the impact fee P will actually be paid by the landowner, land developer, builder, or homebuyer. There are two kinds of markets: competitive and noncompetitive. In competitive markets, housing prices are set at the maximum the market will bear across all housing segments. In these markets, it is very difficult to pass impact fees forward to the buyers of new homes. Except for a transitional period, impact fees will be mostly, if not entirely,paid by the P seller of land--whether that is the seller of raw land or the seller of finished lots. This is because, accordingto classic economic theory, the urban land market will force landowners to absorb the fees in the form of lower sales prices. Indeed,by viewing impact fees as a form of tax, classic economic theory requires that the fees be internalized in land prices. From a public policy perspective,this is a desirable outcome because it leads to more efficient use of land and its resources, thereby maximizing social benefits while minimizing social costs. MYTH: Impact Fees Are DCostly cult And To Administer. At one to five percent of - - ♦ f fi total receipts, impact fees are a most efficient method of exaction. For example, researchers at the Georgia institute of Technulogy recently found that government costs negotiated with case-by-case, exactions are four times higher than impact fee administration costs. Moreover, considering that developers incur far greater costs associated with case-by-case negotiations than local government--but there are no such costs where impact fees are involved—the developer savings can be considerable. ♦ 1tlYTH: Impact Fees Are Just One More Bureaucracy Developers Have To Contend With. Since developers pay fees based on a published fee schedule, gone is much of the time- consuming, ime-consumin , unpredictable, usually unfair horse trading between developers and local government for improvements. The result is several important efficiencies that accrue to developers. These include predictability of decision-making processes, certainty of P /// infrastructure provision, streamlined decision processes, and more precise information for financial analysis purposes. Ironically, impact fee policy can reduce bureaucracy by making less necessary the bureaucrats involved in case-by-case negotiations with developers. ♦ Impact fees tend to be flat rate charges on new development. Park facility impact fees are routinely based on the average household size of new residential units. If the average household size is four persons per home and the average cost to provide park facilities is • $500 per person, the impact fee assessed against all new residential units is $2,000, regardless of house size or income of the buyers. On a $50,000 home, the fee is four percent of value; on a$100,000 home the fee is two percent of value; and on a $1,000,000 home the fee is two-tenths of one percent of value. f Impact fee cities grew faster and had higher incomes, slightly higher house values and rents (with respect to income levels), lower unemployment rates, and higher local government expenditures per capita than non-impact fee cities. Impact fee cities had lower property taxes and similar total local taxes compared to non- impact fee cities. + Compared to impact fee cities, many of which are its principal regional competitors, Albuquerque grew more slowly and had higher household income, lower vacancy rates, higher house values and rents, similar unemployment rates, considerably higher local government expenditures per capita, higher local taxes per capita and higher property taxes per capita. + Summary Observations: First, impact fees are a form of conservative pay-as-you-grow policy in which revenues generated by new development are earmarked for new facilities benefiting new development. Second,they shift cost burdens from taxpayers at-large to those who create new impacts, but this shifting is done in a way that is consistent with. principles les of economic efficiency. Third, in theory and based on growing empirical evidence, impact fees are absorbed mostly by the land market, while finished product prices remain competitively priced. Fourth, where markets have artificial buildable land supply constraints leading to low vacancy rates and higher land prices relative to competitors, impact fees can have the effect of increasing buildable land supply more commensurate with demand than the status quo,which will have the added benefit of stimulating higher growth rates. Last, where impact fees may occasionally run counter to other local policies, the impact fees assessed may be paid from other traditional sources that would have paid the price of facility expansion in the absence of impact fees anyway; only under this option, public officials can pick and choose those developments that warrant public subsidies, leaving the rest to pay their own way. In sum, impact fee policy may be viewed as not only one of the newest ways local governments have found to accommodate new development but a more economically efficient way than the past and probably on balance better for sustained economic development than the status quo. Why Support Developmental Fees? While Apache Junction may be a community with a historical tie to the rich legends surrounding the development of the "Wild, Wild West," no one has put a gun to the head of any landowner, developer, or contractor and said, "You have to build houses here." In fact there are those who believe our pristine desert should have uses other than residential development When an individual or corporation begins the process of developing property as residential units, they create a need for capital facilities which include schools. it is our premise that it is proper for them to pay the proportionately fair costs associated with P P providing those services. After all, the need for those services was generated by the demand that they, the developers, voluntarily created. It is therefore fitting for existing taxpayers to expect developers to pay their fair share. You might call this a " pay as you P P grow plan". Many ask why, developmental fees? Why not? We certainly don't want to create or supportsystem a s stem in which the existing property taxpayers must subsidize real-estate P developers. Developmental fees actually place the burden of capital improvements P supporting the development where they belong, on the landowner, land developer, PP g builder, or homebuyer. In a competitive marketplace, the homeowner should not the one the fee; rather the landowner should absorb the fee in the form of lower sales paying . prices. From a public policy perspective this is a desirable outcome because it leads to more efficient use of land and its resources, therefore, maximizing social benefits while minimizing social costs. Why support developmental fees? The Arizona Constitution specifically addresses the responsibility of the Legislature in regards to school funding. it does not contain wording suggests ests that no other entity can enact laws that concern school funding. It further states that "Legislature must provide for the establishment and maintain a general and uniform public school system. In two most recent court cases, Roosevelt v. Bishop and Hall v. Albrecht, the recognizes Supreme Courtandappreciatesthe fact that outside sources of school funding P �zes is both proper and essential to any school funding system. These cases framed the fact P p that the state system must provide an adequate education for its children. It is not itself the cause of substantial disparities and that local political subdivisions can go above and beyond the statewide system. Students First may have been passed with the intent to y• schoolitshould not be interpreted as rectify the state's history of unequal funding but, rp precluding ludin local schools from going above and beyond statewide standards to provide for the areas not included in the guidelines established by Student's First legislation. Why support developmental fees? So communities can provide for what Students First does not. Such things as administrative support facilities, athletic facilities or larger libraries. While Students First may provide equal funding based on a per student basis, it can not be ignored that this legislation does not address every issue school districts experience. Under Students First, districts are allowed to use local bond P issues, override elections, federal grants, and gifts from private persons and businesses to exceed state standards and guidelines. Developmental fees are just another way of supporting Students First legislation by helping all districts throughout the state to decrease the financial burden that has been ignored for so long. While our governor shows her support of public education, many of our state's conservative politicians are not so generous. The capital facilities program continues to be under-funded and local districts continue to receive only a portion of what they actually need. Why should you support Developmental fees?Because this fee: • Provides a way to"pay as we grow." • Shifts the costs of growth from the existing taxpayer to those who create the growth. • Provides a funding mechanism that is consistent with the principles of economic efficiency. • Is absorbed by the land market keeping finished product competitively priced. • is a"fee", not a"tax" • Acts to enhance"Students First" • Allows local control • Benefits the children of Arizona Have your school district join the consortium to defend the Superior Court decision that supported developmental fees. For more information contact Dr. Barry L. Sutter, Superintendent of Schools Apache Junction Unified School District 1575 W Southern Avenue Suite 3 Apache Junction, Arizona 85220 Thank you. Impact Fees, Developer Agreements And Other Capital Finance Alternatives Panel: Don Peters MILLER LASOTA& PETERS, PLC 5225 North Central Avenue, Suite 235 Phoenix, Arizona 85012 602 248 2900 Paul Cragan CITY OF SURPRISE 12425 West Bell Road Surprise, AZ 85374 623 583 3135 Much of Arizona continues to experience population growth. New residents expect to have schools. Where will school districts get the money which will be required to build and operate those schools? In theory, the Students First legislation will provide an answer to this problem. Many people are concerned that the answer which it provides may not be entirely timely or entirely sufficient. A number of school board members and school administrators are therefore asking what alternatives are available for trying to ensure that their district's financial needs do not exceed the available revenues. The possible alternatives include developer donation agreements, impact fees, business license taxes, community facilities districts and sales of advertising rights. Developer Donation Agreements A common method of generating revenues with which to respond to the needs generated by growth is to request voluntary donations from developers. • What's a developer donation agreement? It's usually a contract between a school district and a developer which provides that the developer will donate either land or money to the school district. •• Land is typically donated for use as a school site. Developers commonly want a provision which says that if the land is not used for a school site within a specified period of time, ownership of the land will revert to the developer. •• Money is usually donated on the basis of the number of homes to be constructed in the development. •• One developer has commented that such agreements constitute "semi-voluntary impact fees." Some developers perceive that declining to make such donations may make it difficult to obtain the approval of municipal'officials for their development plans. • How does a school district obtain such an agreement? Usually by asking for one. •• Whenever possible, school districts should be involved in the municipality's planning and zoning process. A school district may not know whom to ask for a donation, or when, unless the district 2 participates in an ongoing basis in the municipal planning process. Involvement by the school district in the process also facilitates the planning of new school construction. •• In making their decisions about proposed development, municipalities are entitled to consider whether a developer's plans have adequately taken into account the need for schools. Municipalities are therefore in a position to encourage developers to make donations to school districts. •• The City of Glendale is considering the enactment of an ordinance which would require that developers confer with local school districts as a prerequisite to development. The ordinance would also require a certification from the developer that adequate provision has been made for the necessary school facilities. Where it is politically feasible, school districts might want to consider encouraging local municipalities to consider enacting similar ordinances. • Are donation agreements legal? Within limits, yes. •• School districts are allowed by law to accept donations of money or land. They are permitted to agree to some conditions on such a donation. •• A number of legal issues can arise in connection with donation agreements. ••• The agreement may not bind future governing boards or make contractual commitments which constrain the board's ability to fulfill its legal duties) In practice, a school district can make very few binding promises to a developer in return for the donation. Developers often ask for promises that, e.g., a school district will build a school on the site, or that the school district will not oppose the developer's request for approval of the developer's plans by municipal authorities. There are serious questions as to whether school boards can • legally make such promises,although to some extent the same result can be reached via contractual "conditions" rather than "promises." ••• Because a school district cannot legally promise much in return for a donation, whether such agreements can be 3 enforced is not entirely clear. A one-sided promise to make a donation. in return for nothing, could be viewed by the courts as lacking "consideration." A properly drafted agreement would probably be enforced by the courts. ••• Although developers may view donations as the price of obtaining the school district's political neutrality, some potentially serious legal issues would be raised if a school district's request for a donation was accompanied by an "or else." Such a request might constitute extortion.' A request for a donation which is explicitly characterized as the price of a school district's political neutrality might be viewed as illegal and unenforceable by the courts, for reasons discussed above. ••• If land which is to be donated is subject to liens or encumbrances, there may be legal questions as to whether a transaction is really a gift or a disguised purchase. • Practical considerations. •• Consistency is important. To the extent possible, a school district should ask for donations of comparable value from different developers so as to avoid giving any one developer a competitive edge. Donations will be much more palatable to developers if all developers are treated alike. •• How much should a school district ask for? There's no right answer. If a school district is asking some developers for cash and some for land, however, the amount of cash being requested from some developers should arguably have a value comparable to the value of the land which is being requested from others. •• Developers are highly resistant to making up-front donations. and usually want to make donations only when homes are built or sold. The need for capital dollars in a new subdivision is therefore likely to precede the flow of dollars from any donation agreement. Impact Fees Whether impact fees can be imposed to pay for school construction is a question P P which is currently being litigated in Home Builders Association of Central Arizona v. City of Apache Junction. The trial judge has now ruled that impact fees may be 4 imposed for the benefit of schools. That decision is expected to be appealed. rca25 • What are impact fees? Arizona law permits acity to assess "development" pe-r �> fees "to offset costs to the municipality associated with providing necessary public services to a development.s' School districts themselves have no power to assess impact fees. • Can impact fees be used to pay for schools? That is the central question in the pending litigation. The City of Apache Junction enacted an_ordinance which imposed development fees to be used for the benefit of the Apache p p Junction School District. The city and the school district entered into an intergovernmental agreement which governs the transfer of the money. g g • Until the courts give a definitive answer...Most school districts and cities have not followed Apache Junction's lead. If impact fees are ultimately held to be illegal, any which are collected may have to be repaid. Business License Taxes A possible alternative to impact fees would be for a city to impose a business license tax for the benefit of a school district. The school districts which participated in the Apache Junction litigation argued this as an alternative basis for upholding what Apache Junction had done, and the trial court accepted that argument. • What's a business license tax? A.R.S. § 9-240(18) provides that a common council of a municipality shall have the power"to fix the amount of license taxes to be paid by any person, firm, corporation or association for carrying on any business.... " This power is available to general-law cities. 'The right of municipalities to impose a tax on business activities has been recognized in Arizona since before statehood.' • So what? There appears to be no reason why a municipality could not impose a business license tax on the business of constructing new homes. Such a tax might serve as the functional equivalent of an impact fee. But... •• There are legal''questions as to whether a municipality can impose such a tax for the benefit of a different governmental entity, i.e., a school district, and whether the revenues generated by such a tax could be legally transferred to the school district. Some of these issues be resolved in the appeal of the decision in the Apache y Junction case. •• This approach could only be attempted where the local municipality is willing to cooperate. This approach would appear to raise fewer legal questions than would the use of impact fees. Community Facilities Districts Creation of a community facilities district would appear to be a legal means of funding schools on a local basis. • What's a community facilities district? It's a special taxing district which is authorized by Arizona law.' A community facilities district is expressly authorized to pay for school sites and facilities with the consent of the governing board of the school district for which the facility is being provided. If 25 percent of the landowners in a proposed community facilities district petition to have a district created, the city or county in which the proposed district is located may vote to create one. The creation of the district must be approved both by a vote of the affected land owners and by a vote of the people who will live within the proposed district. • Example: A community facilities district might be created with the same boundaries as a new subdivision. That would permit the residents of the subdivision to be taxed for a school to be placed in the subdivision. • Example: All undeveloped areas within a given city could be placed within a single community facilities district. That would enable the costs of all new schools to be spread out over all new residents. • Problems: •• There could be problems in getting the necessary approval of the landowners and residents to subject themselves to an additional tax, particularly where the object of the tax is to provide something which, in theory, the State is obligated to provide. •• Such an approach to school construction would sacrifice a certain amount of autonomy on the part of the school district. Sales of Advertising Rights Some school districts have entered into agreements whereby the district receives a pecuniary benefit from allowing advertising on school premises. A number of school districts have obtained a scoreboard for athletic events at a discounted price in return for allowing advertising on the scoreboard. 6 With the exception of one provision which authorizes the sale of advertising rights on school buses, there is no legal authority for a school district to sell access to its students to advertisers.' The Attorney General recently declined to review an opinion letter from a school district's counsel which came to the conclusion that school districts cannot legally enter into such agreements. Other Considerations A school district which resorts to self-help may wonder whether the money or land which it obtains will reduce the money it is likely to receive from the State via Students First. • The legal answer: Probably not. While there is still uncertainty about many aspects ects of the Students First legislation, nothing in it provides that moneys to be provided by the State will be reduced if a school district succeeds in raising money itself. • The practical answer: Who gets what under Students First, and with what degree of priority, is likely to be affected by how extreme the needs of different districts are perceived to be. There is some risk that those districts which help themselves will receive less help or less prompt help from the State. Conclusion There are a number of possible alternatives to State capital funding. Some are illegal or legally questionable. Others may prove politically impractical. Virtually none could be employed without the active cooperation of other governmental entities. These difficulties may explain why developer donation agreements are so far the only capital-funding alternative which has enjoyed widespread use. 1. See School Dist. No. 69 of Maricopa County v. Altherr, 10 Ariz.App. 333, 45 8 P.2d 537 (App. 1969). 2. A.R.S. § 13-1804 defines theft by extortion to include "knowingly obtaining...property...by means of a threat to...take or withhold action as a public servant or cause a public servant to take or withhold action." 3. A.R.S. § 9-463.05. 7 4. See A.R.S. § 9-499.01. 5. See Centric-Jones Co. v. Town of Marana, 188 Ariz. 464, 470, 937 P.2d 654, 660 (App. 1996). 6. See A.R.S. § 48-701 et seq. 7. A.R.S. § 15-342 authorizes governing boards to "sell advertising space on the exterior of school buses" in a specified manner, but there is no statutory authorization for any other kinds of advertising. 8 Wednesday, August 11, 1999 Tucson Citizen 3C • • Judge says city can ImPose • school impact fees on homes The Associated Press The fees include S1,368 for a charge impact fees does not spe- PHOENIX-Arizona cities may single-family home, S366 for the cif cally mention ones for schools. impose school impact fees on new placement of a new mobile home The builders also say the school homes, a judge ruled in a case and $276 for each apartment or impact fee would put new homes widely watched for its potential im- other unit in a multifamily project. out of the reach of many potential pact in growth communities. "The kids are our citizens and buyers. However, the case is far from need the services," said William Together with other impact fees over. The Home Builders Associa- Farrell, a lawyer who represented assessed by the city for sewer, wa tion of Central Arizona promised to Apache Junction. ter, parks and other facilities, the appeal yesterday's ruling by Judge Don's ruling came two weeks added cost to a new home in Apa ( James Don_of Pinal County Superi after a hearing that included testi- the Junction is $5,217, McKay mony from state Superintendent of said. or Court in Florence. Public Instruction Lisa Graham Though home builders argued "Ultimately the (Arizona) Su- Keegan. She said the impact fee is that the impact fee is unfair to buy- preme Court will have the final unconstitutional because the state, ers without children, Don said it is say," said Gibson McKay, deputy through the Students FIRST pro- a reasonable way for the city to director of the builders group. gram enacted last year,is responsi- "match costs with origins"because Don rejected a request by the builders association and four mem- ble for financing school construe- even those homes could later be re- tion forcement of a school impact fe D.on to families with children. ber companies that he block en- Don disagreed, saying that nei- Charles Herf, a.lawyer for the ther the Arizona Constitution nor builders, said the ruling will be ap- ordinance enacted in Decembe the Students FIRST law bars dis- pealed either initially to the Arizo- 1997 by Apache Junction. tricts from receiving money from na Court of Appeals or directly to In doing so, Don rejected all of other sources. What is prohibited, the Supreme Court. the plaintiffs arguments and said it he said, is a state system that While the builders decried the was obvious that development ben- causes disparities among rich and ruling,it was hailed by the Arizona k efits from the construction of poor districts. School Boards Association. school facilities. Students FIRST, as upheld by The ruling, executive director "It is ingrained in our national the Supreme Court,allows districts Panfillo Contreras said, will help , psyche that strong education foun- to issue bonds and use other means districts with rapidly growing en- dations build good citizens and to raise money for schools to ex- rollment build adequate schools d communities,"he said. ceed the state's minimum stan- and reduce class sizes. "We know After studying development dards,Don added. that the Students FIRST legislation costs and school facility needs, the The judge also rejected the ar- is not enough,"he said. city began assessing the fees in gument by the builders and their So far,Apache Junction has col- March 1998, requiring them to be association that cities cannot assess lected $1.1 million in fees. The paid in order to get a building per- school impact fees because state money is being held in trust pend- mit. law authorizing municipalities to ing resolution of the challenge. ' 1 r S Thursday, August 12, 1999 Tucson Citizen 7C M _9 ..s F. i } A may act on impact fee .in .... The Associated Press likely to ask town officials next About • 13,000 Queenling Creek month to study the possibility of home sites are in the planning 4 QUEEN CREEK-Local leaders impact fees. stages. School administrators have are wasting no time trying to cape- "If the school board asks the 3 talize on a judge's decision that al- town to do that, then we would be Schnepf said a stepping stone lows Arizona cities to imposewilling," said Queen Creek Mayor toward imposing the fees "would i school impact fees on residentialMark Schnepf. be for the school district to pay for z development. Judge James Don of Pinal a study so they can determine at The school board is consideredCounty Superior Court recently what level the impact fees would , ruled that Apache Junction may be necessary. , assess costs for school construc- Commemorate the milestones of life... tion. And though Home Builders A study could cost as much as 1 Association of Central Arizona, $30,000, Town Manager Cynthia Place a special announcement in which had claimed in suingApa- Seelhammer said. p - said each new home will add one the Junction that the fees are un- j T :',Nhconstitutional, plans to appeal, student. { Tram. e n Queen Creek leaders plan to move Earlier this year, Queen Creek ahead. tabled the impact-fee issue for fear i P i My personal feeling is that if of a lawsuit by homeowners. At announcements'of celebration we wait and see too long,we're go- $7,311 per home, the town already ., a monthly supplement in ing to miss out on the growth that's has the highest municipal impact The Arizona Daily Star and Tucson Citizen coming in," said Sally Berger, fees in the eastern metro area. 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PEORIA,.irmr 1'crge AI among growth-weary Valley resi- What it costs dent. growth," Peoria Mayor John Kee- New homes bring not only new Officials say they're looking for gas said. residents and new tax revenue to a other solutions. Some school dis- Peoria. with its ever-spreading community,hut also new demands tricts have begun working more sea of subdivisions and far-flung for roads,schools,parks,utilities, closely with builders and city undeveloped edges,offers a nearly fire protection and other infra- planners, so no one is surprised perfi`ct study in the struggle to structure.I Icre's what one ty ftical when a new subdivision opens or cope with both sides of growth• three-bedroom home in a a school fills up. the side that produces new revenue developing neighb orhoc►d can cost and the side that soaks it up again. a county,city,school district and Better planning needed But nearly every city, school other service providers: Glendale Mayor Scruggs said district and service provider in the ITEM AMOUNT cities also need better long-range Valley faces the sante hard reality Schools $11,809 /planning, including stronger cf.', about growth: Left alone, it won't Sewers 1,660 forts to attract jobs and commer- pav for itself. New homes may Transportation 4,430 cial development to balance out bring new taxpaying residents,but Water treatment the new homes. • and distribution 2,729 "The most im ortant.thitt is to until the residents bring their own P b streets,schools and water systems, Parks and recreation 2,915 hold hack those houses,"she said. the cities will have to scramble for Fire stations flood control 298 "There's always going to be home Fire 298 more stoney. Library services 441 builders ready to build houses. "Cities have to look to provide Electric generation `there's tons of them.But there are everything that everybody who and distribution 8,494 not so many opportunities to land lives in those new houses wants TOTAL $33,259' quality employers." . and needs," Glendale Mayor 'Subtract any impact fees from Tom Traw, a West Valley i-l;one Scruggs said. "You don't the total.Does not include on-site developer and rear estate broker, do that with rooftops. !Ionises cost improvements paid for by the saicT builders are simply building cities money. It costs about twice developer or homeowner.Also too much too fast, leaving cities as much to provide services as we does not include maintenance and school districts to catch up. ever get front the tax base. You and operation of any of the "We need open spaces, large have to have revenue coming in facilities or public safety services. lots, parks, schools,' he said. other ways„ Numbers are average,based on `•Transportation should be, Num- . 'llrban planners have long ar- costs in Oregon. her 1—put the roads in first.You geed that single-family homes need to look at the whole picture, Source:Eben Fodor,Fodor and .------ don't generate enough money to Associates not ust yourself. T pay fur the services needed to ASU's Rex said the Valley can t keep their residents happy, espe- depend on growth to support itself cially not in the first year or two. the local government spent $1.12 forever. Sooner or later,the boom Sprawling subdivisions also make on public services. For every will level off and so will the a wobbly tax base for bonds to dollar collected from commercial steady increase in revenue. Re- build bigger-ticket items like development, officials spent just cause Arizona cities rely so schools or water systems. 27 cents on services. heavily on sales tax, he said, a in theory,planners say, the two slowdown in growth is like a A `balancing act sides should balance each other punch to the gut of local coffers. On the flip side,home builders out. The problem is, fast-growing Fewer homes built means not only say commercial developers, who neighborhoods are often swallowed fewer new people but fewer could infuse a bigger shot.of by subdivisions long before any construction supplies bought. revenue to help support the homes, commercial development arrives. ends.the are reluctant to stake an outpost in Most cities are turning to Whencycle the suburbs until the people are impact fees to make up the For now, Rex said, when the there. difference and keep up with latest wave of homes needs "It's kind of a balancing act of needed infrastructure. Phoenix services,the last wave is generat- what copses first and at what charges about$9,000 per house in ing enough money to get by, but rate," said Connie Wilhelm,presi- .some neighborhoods, Peoria will that cycle will end. dent of the Home Builders Associ- collect more than $12,000 in its ""That's why when we've had anion of Central Arizona. "New still undeveloped northern edges, recessions, they've bad snch a growth can support new growth.it and even tiny Queen Creek re- terrible impact." he said. "Every- is a timing issue of when the cently approved a $7,300-per- one's overextended themsek es. As res ernes are generated.That's why house impact fee. long as things keep going the way you have to look at the whole arca Peoria council members ap- they're going, we're fine; but lir a longer period of time if proved fee increases,repeating the sooner or later,there's going to he you're going to evaluate homes." mantra that growth should pay for another recession.' She cites a 1987 study of two growth, a popular sentiment f' Ultimately, most planners and developing Phoenix neighborhoods among homeowners. /housing analysts say,everyone in a that looked at how much the city , community winds up paying at would spend on services for new Line in the sand least part of the cost of growth, homes in the area and how much But Wilhelm said communities whether it's through taxes,housing those homes would produce in used to accept the idea that a costs or a decline in services as revenue, from taxes to money neighborhood generated money the municipal budget is stretched spent by homeowners. needed to help support a new`to its limit. Over a nearly 50-year span,.the neighborhood and that, down the New-home buyers may be hit study predicted the city would road, that neighborhood would first. As impact fees climb higher, break even, spending and collect- help build'up the next. Wilhelm said,home builders have ing about $1 billion, a testafnent, "It's like somewhere,we drew a no choice butt to pass along the Wilhelm argues, to working with line in the sand and said new costs to home buyers. With profit, the big picture. homes have to pay for them- margins of 3 to 5 percent, she. But with thousands of new selves,"she said. said, "there's no way they can people moving to the Valley each That approach helps many cities absorb fees that high." month, most budget-conscious build roads and water systems they "'There's just no way they can cities and school districts must otherwise couldn't afford, but it do anything but pass it along,"she work first with the snapshot in drives up the cost of housing and said. front of them. 'T'rying to find fails to address the needs for Although impact fees can help a enough money to pay for new upkeep services in older neigh- city avoid raising taxes or fees on growth means trying to figure out horhoods,she said. \ the general population. housing how much growth costs,and most � Cities argue that as developers experts say that if those fees drive planners agree that number is a move farther and farther from up the price of a new home, the rapidly moving target. What's true established neighborhoods, the price of,existing homes in the in Peoria isn't necessarily true in cost of building roads and utility same area will probably also rise, ('handler. infrastructure is just too high affecting people who may just "It's not an easy thing to do," without substantial contributions want to move across town. said Tom Rex, research manager from the home builders. / And when.growth doesn't pay for Arizona State university's Phoenix recently wrote into law its own way, Eugene, Ore., corn- ('enter for Business Research. service boundary on the city's munity pllining consultant Eben "There's no one right answer.The northern end, outlying for dc- Fodor wrote last year, taxpayers general consensus is, no, simply velopers where infrastructure will have to make up the difference, a building a house and collecting be provided and where the build- subsidy he-suggests actually stirn- buildintg permit fees and taxes ers will be on their own. ulates even more growth by doesn't cover what it costs for The Sierra Club wants even lowering the private cost of services.But not every situation is more restrictions, growth bound- developing land. going to be the same." aries that would limit where a Either way, "the high costs of Studies of costs developer could build anything. urban growth are unavoidable." That proposal could end up on the Planning experts refer regularly ballot next year, and home build- Shaun McKinnon can be reached at(602) to a handful of studies on how ers concede it would be popular 444-7116 or at ahaun.mckinnonwpni.com. much a new single-family home will cost local governments and - service providers,such as utilities. The benefits of growth One study conducted by Florida researchers more than a decade A typical single-family home can produce various forms of ago set the cost at about$10,000 per house. A more recent and Local income to Local wages Inca detailed study by Oregon planning income businesses and salaries at consultant Eben Fodor produced a First year* $147,830 $39,350 $108,470 $11 price tag of about$33,000. Ongoing $31,180 $ 5,320 $25,870 $ Broken down further, New Jer- sey researchers found that, in one *Includes construction county, for every dollar a single- Source:Richard H.Carson,Paying for our Growth in Oregon.1998 family home produced in taxes. __ 2 TOWN OF ORO VALLEY COUNCIL COMMUNICATION STUDY SESSION: March 6, 2000 TO: HONORABLE MAYOR & COUNCIL FROM: Shirley Seng, Interim Water Utility Director SUBJECT: Modifications to Development Impact Fees SUMMARY: On 2/2/00, Mayor and Council adopted Resolution No. (R) 00-06 providing notice of intent to increase potable water system development impact fees for the Oro `Talley Water Utility. The potable water plan stem master adopted by Council in January 2000 identified improvements needed to continue serving the existing customers as well as infrastructure requirements to meet the needs of future water customers. The plant identified as existing system improvements will be funded from water rate revenue generatedbyexisting customers while the plant to be constructed for future customers is to be funded with development impact fees collected as new customers connect to the water system. The impactf fees as they exist today do not generate enough revenue to allow the utility to build the infrastructure necessarytoprovide water service to future customers; therefore, staff has proposed an increase impactallocations to these fees. The proposed development fees were designed so that cost allocations could be distributed proportionately to the required facilities attributed to the development. Proportionality of p p Y ll enera the costs is generally based uponstandardwater usage assessing for single-family residential units, multi- family famil residential units, commercial/industrial, irrigation and turf users. The design of the potable water system is based upon the anticipated water usage for different categories of development. Thus in keeping P impacttypical usage for these with this methodology, the fees will be assessed based upon t�,pical water categories and the anticipated demand they place on the water system. TheP pro osed impact fees for single-family residential, commercial/industrial and irrigation customers are based on, and increasep pro ortionately to, their meter size. The fees for multi-family units are based on a perusage unit cost and turf is based on a per acre cost. In addition, fire flow fees will be assessed to commercial/industrial, multi-family and other users requiring more than 1,000 gpm fire flow. The fees are projected se r comPid of infrastructure costs plus financing costs. The detailed analysis of these costs are summarized in Exhibit A attached hereto. This item wasp laced on the agenda for the study session to be held on 3/6/00 with the intent of reviewing the analysis and design of the proposed impact fee modifications and to respond to any questions Council may have prior the public hearing scheduled for 3/15/00. FISCAL IMPACT: Thep pro osed increase in development impact fees will provide the revenue necessary for the utility to build infrastructure to meet the needs of future customers. TOWN OF ORO VALLEY COUNCIL COMMUNICATION PAGE 2 OF 2 ATTACHMENTS: 1. Exhibit A: Report in support of Potable Water System Development Impact Fees e ' 1 Inte - Water Lin tv lector Ar, /AY Town Manager EXHIBIT A REPORT IN SUPPORT OF POTABLE WATER SYSEM DEVELOPMENT IMPACT FEES POTABLE WATER SYSTEM DEVELOPMENT IMPACT FEES Prepared for: TOWN OF ORO VALLEY WA'T'ER UTILITY DEPARTMENT Prepared hl': TOWN OF ORO VALLEY STAFF David Hook, P.E., Water Utility Director David Andrews, Finance Director Dan Dudley, Town Attorney Jeff Weir, C.E.D., Economic Development Administrator WESTLAND RESOURCES, INC. Mark Taylor, P.E., Principal Thom Martinez, P.E., Senior Project Engineer GUST ROSENFELD, P.L.C. Frank Cassidy, Attorney at Law Thomas Burke. Attorney at Law PEACOCK, HISLOP,STALEY&GIVEN, INC. Jim Stricklin, Managing Director Mark Reader, Managing Director Bryan Lunberg, Assistant Vice President FEBRUARY 2,2000 • TABLE OF CONTENTS I. INTRODUCTION 1 I I. METHODOLOGY 3 lll. POTABLE WATER SYSTEM DEVELOPMENT IMPACT FEE SCHEDULE 5 IV. WATER SYSTEM DEVELOPMENT IMPACT FEE CALCULATIONS 6 Step 1 - Total Infrastructure Requirement Cost 6 Step 2 - Develop Standard Water Usage Based Upon Categories 6 Step 3 - Develop and Tabulate EDUs 7 Step 4 - Develop Standard Cost per EDU 7 Step 5 —Cost of Financing 7 Step 6— Determine Method for Allocating Development Fees 8 Step 7 — Water System Development Impact Fee Calculations 8 Step 8— Multi-family System Development Impact Fees 9 Step 9 - Turf System Development Impact Fee 9 Step 10— Fire-flow System Development Impact Fee 9 Appendix A— Financial Analysis and Requirements I. INTRODUCTION The Town of Oro Valley has recently adopted a Potable Water System Master Plan (PWMP). The PWMP projects existing land uses, future populations, water system demands, and infrastructure requirements for the potable water system. The infrastructure requirements were separated into two distinct categories: existing and future infrastructure requirements based upon population and land use projections. The existing system requirements were developed based upon the existing units currently being served and the existing platted lots not yet connected to the system. The existing connections and platted units were considered existing demand, and the analysis of the infrastructure requirements for these facilities were determined based upon a higher level of water service to customers. The cost burden of these facilities will be recovered from existing rate payers, with two exceptions. The first exception is the infrastructure facilities required to serve the existing golf courses. To meet the new water system design criteria proposed in the PWMP, these additional facilities will be funded as existing system upgrades. It is anticipated that the existing golf courses will be transferred to alternative water resources within the next five years. The facilities previously used to supply the golf courses will be available to serve future growth. The cost of these facilities, minus depreciation, will be for the benefit of future customers and are included in the system development impact fees. The second exception is a portion of the existing platted lots which will eventually be developed after the new system development impact fees are adopted. It is anticipated that potable water system development impact fees will be in effect beginning June 2000. It is anticipated that approximately 1,000 platted, undeveloped lots will be connected to the system after this date. The 1,000 lots and corresponding infrastructure cost will be transferred to future development and are included in the water system impact fee calculations. In accordance with Table 17 of the Water Master Plan, Future System Buildout Summary, it is anticipated that there will be approximately 15,135 additional single-family units, 5,064 additional multi-family units, and 1,546 additional acres of commercial/industrial facilities. As developed within the PWMP, infrastructure requirements for these facilities are estimated to cost approximately $27.25 million and be built within the next 20 years to accommodate projected growth. The Oro Valley Water Utility (OVWU) has maintained a policy that growth pays for itself. In order to maintain this policy, the potable water system development impact fee has been developed in accordance with the philosophy that growth pays for itself and the cost burden for infrastructure required by future development be placed upon future development. The development impact fees have been developed so the cost allocations are distributed proportionally to the required facilities attributed to the development. Proportionality of the costs are generally based upon assessing standard water usages for single-family C\WINDOWS\TEMP\impact fee repon.doc residential units, multi-family residential units, commercial/industrial, irrigation, and turf users. The impacts fees will be collected based upon typical water usages for these categories. The design of the potable water system is based upon the anticipated water usages for different categories of development. The higher the water usage of a facility, the higher the cost will be to serve such facilities, hence a higher impact fee for larger users. C\W I NDOW S\TEMP\impact fee report.doc 2 II. METHODOLOGY The method selected for allocating water system costs between different types of users is to develop equivalent dwelling units (EDUs). EDUs standardize water usage types based upon the average consumption of equivalent residential units. This method of standardization is based upon average daily demand for single-family units, multi-family units, commercial/industrial facilities, irrigation, and turf users. This allocation method includes the following steps: 1. Determine the total infrastructure requirement costs due to future growth to be repaid by water system development impact fees. ?. Develop separate categories of usage and estimate the average daily usage per unit based upon historic usage and/or general planning numbers. 3. Develop and tabulate EDUs for each water usage type and sum the total EDUs required for the system at buildout. 4. Develop a standard cost per EDU based upon the total cost divided by the total EDUs served. 5. Add debt service, cost of issuance, and underwriting fees to base infrastructure fees to develop total water system costs for development of an impact fee schedule. 6. Determine a method for allocating costs to future customers (i.e., charge impact fees based upon user types - the fees can be based upon meter size, acreage of development, per unit, or per fixture unit). The method for assessing standard development fees should be based upon factors such as: closely related to use and demand, easily understood by customers, and ease of implementation. 7. For fees based upon meter size (i.e., single-family residential, commercial/industrial, and irrigation [non-turf] fees) determine the typical water usage differences between user types for each meter size. The usages are based on historic water usage for different type users using the same meter size. Develop meter ratios based upon typical water usage within the same class of customer for different meter sizes. 8. Develop multi-family hook-up fees based upon a multiplier of multi-family usage to the standard usage of a single-family EDU to develop a cost per unit. 9. Develop a turf system development impact fee based upon standard usage of turf as a factor of EDUs. Convert the cost to a fee per acre of turf. C\WINDOWS\TEMP\impact fee report doc 3 10. Develop a fire-flow system development impact fee for commercial/industrial and multi-family units to allocate larger reservoir capacity for fire flows greater than the standard 1,000 gallons per minute (gpm) for residential development. Fire-flow system development fees should be allocated based upon the fire-flow requirements of the facility. Fire-flow requirements above those generally provided for residential unit facilities range from 1,500 to 2,500 gpm within the Oro Valley system. C\WINDOWS\TEMP\impact fee reportdoc 4 III. POTABLE WATER SYSTEM DEVELOPMENT IMPACT FEE SCHEDULE Potable Water System v Development Impact Fee Schedule Single-Family *Commercial/ Irrigation (non-turf) Meter Size Residential Fees Industrial Fees Meter Fees 5/8" $2,022 $4,650 $3,639 1" $5,055 $11,625 $9,097 1 1/2" $10,110 $23,250 $18,195 2" $16,176 $37,200 $29,112 3" ---- $74,400 $58,224 4" ---- $116,250 $90,975 6" ---- $232,500 $181,950 8" ---- $465,000 $363,900 * The total impact fee for commercial/industrial and multi-family/condo consist of the total of the meter fee, plus the fire flow fees. * Multi-family/ Condo = $950/unit (master metered) Turf Usage = $20,916/acre of turf Fire-flow Fees = Commercial/Industrial, Multi-family and other users requiring more than 1,000 gpm fire-flow. (based upon the total area of development and fire-flow requirement by the Fire Department) Fire-Flow Requirement SDIFs 1,001 - 1,500 gpm $3,230/meter 1,501 -2,000 gpm $14,847/meter 2,001 -2,500 gpm $26,151 /meter C\WINDOWS\TEMP\impact fee report doc 5 IV. WATER SYSTEM DEVELOPMENT IMPACT FEE CALCULATIONS STEP 1 - TOTAL INFRASTRUCTURE REQUIREMENT COST The future development requirements listed in the Town of Oro Valley Potable Water System Master Plan must be adjusted to allocate responsibility of individual development types to pay their fair share of required infrastructure cost components. The existing facilities initially to serve existing golf courses, but which will ultimately be used by future development at buildout, have been allocated to future development based upon depreciated infrastructure values. The 1,000 platted units included within the existing facility projections (committed demand) will be required to pay the new hook-up fees after June '000. An additional adjustment was made which excluded the units in the Tucson Water system, which may be acquired by the OVWU. It is assumed that these improvements will be paid for by separate funding. An exclusion was also made for facilities requiring fire flows above 1,000 upm. The fire-flow infrastructure requirements of$1.18 million will be assessed through the fire-flow system development fee based upon per-meter costs, not EDUs. Future Development Requirement $27.25 M Existing Golf Course Infrastructure 2.26 M 1,000 platted units to be built after June 2000 ($1,120/unit) 1.12 M COST TO BE RECOVERED SUBTOTAL $30.63 M Units within Tucson Water Service Area (623 units x $1,120/unit) $ 0.70 M Fire Flow Infrastructure (Comm/Apts) 1.18 M $28.75 M STEP 2 - DEVELOP STANDARD WATER USAGE BASED UPON CATEGORIES The following average usage for single-family, multi-family, and commercial/industrial users is based upon historic and projected Arizona Department of Water Resources (ADWR) usage for future units. The master plan water usages include approximately five percent for irrigation. Irrigation usage has been subtracted from the master plan numbers and inserted separately as irrigation meters usage. System Usage Including Five Percent for Irrigation: Single-family=286 gallons per unit per day(gpud) Multi-family= 136 gpud Commercial/Industrial = 1,200 gallons per acre per day (gpad) C\WINDOWS\TEMP\impact fee report.doe 6 • • System Usage Excluding Five Percent for Irrigation: Single-family = 272 gpud Multi-family = 129 gpud Commercial/Industrial = 1,140 gpad STEP 3 - DEVELOP AND TABULATE EDUs The single-family number of units is based upon the master plan projection of 15,135 additional single- family units, adding the (1,000) platted but non-connected units after June 2000, and subtracting the Tucson Water service area (623 units); providing a total of 15,512 projected units. The EDU for multi- family and commercial/industrial is based upon water usage divided by the single-family usage. Growth i Water Total Usage Type (to buildout) Usage EDU EDUs Single-Family 15,512 units 272 gpud 1.0 15,512 Multi-Family 5,064 units 129 gpud 0.47 2,380 Commercial 1,546 acres 1,140 gpad 4.20 6,493 Irrigation Meter(non-turt) 5%of usage NA NA 1,283 TOTAL ---- ---- ---- 25,668 STEP 4 - DEVELOP STANDARD COST PER EDU The cost per EDU is calculated by dividing the total cost of the future infrastructure requirements (as developed in Step 1) divided by the total EDUs developed in Step 3. Cost per EDU = $28.75 M /25,668 = $1,120 / EDU (without financing costs) The average cost per EDU will be used for the system development fee base rate factors. This system development fee will be consistent over the buildout period with the exception for future cost escalations and growth adjustments. STEP 5 — COST OF FINANCING In order to provide the funds necessary to build the future infrastructure requirements, tax-exempt revenue bonds are projected to be issued in four installments with principal and interest to be repaid over 30 years. It is expected that each bond issue will be amortized over a 10- to 15-year period. ('\WINDOWS\TEMP\impact fee report doc 7 The bonds will be repaid primarily from revenues collected from system development fees. The cost per EDU must be adjusted to include financing costs (i.e., legal fees, underwriting fees, and interest). The cost per EDU. increased from $1,120 per EDU to $2,022 per EDU due to financing costs. The cost of fire flow infrastructure, increased from $1.18 million to $2.51 million due to financing costs (see Appendix A). STEP 6 — DETERMINE METHOD FOR ALLOCATING DEVELOPMENT FEES Based upon historic water usage within the OVWU, a system development hook-up fee based upon meter size for single-family residential, commercial/industrial, and irrigation (non-turf) fees is considered appropriate and proportional to actual usage. The fees will be charged based upon meter size and usage type for these categories. Multi-family hook-up fees will be based upon a per-unit cost for multi-family, condos, and master-metered facilities. This is due to multi-family facilities generally served by a master- metered system and a per-meter hook-up fee would not be applicable to usage. Turf system development fees will be based upon standard water usage in accordance with ADWR requirements for acreage and turf areas. Fire-flow system development fees are estimated based upon a per-meter hook-up and varying with the fire-flow requirement as dictated by the appropriate fire protection agency. STEP 7 —WATER SYSTEM DEVELOPMENT IMPACT FEE CALCULATIONS The single-family residential fee is based upon the EDU costs previously calculated. Based upon historic water usage for different type of users using the same meter size, commercial/industrial water usages are typically 2.3 times higher than the water usage for the same size, single-family residential meter. In addition, irrigation (non-turf) users typical consumption is approximately 1.8 times higher than the consumption of standard single-family residential users for the same meter size. These factors were developed to properly proportion tihe cost for commercial/industrial and irrigation fees. The increase in all categories, based upon meter size, is developed from the American Water Works Association (AWWA) Manual No. 6 for meter ratios. The ratios are standard increases based upon standard meter capacities and typical usage for the meter sizes. Irrigation AWWA M6 S.F. Residential Comm/Ind Fees (non-turf) Fees Meter Size Meter Ratio Fees(1.0 factor) (2.3 factor) (1.8 factor) 5/8" 1.0 $2,022 $4,650 $3,639 1" 2.5 $5,055 $1 1,625 $9,097 • 1 1/2" - 5.0 $10,110 $23,250 $18,195 2" 8.0 $16,176 $37,200 $29,112 3" 16.0 ---- $74,400 $58,224 4" 25.0 ---- $116,250 $90,975 6" 50.0 ---- $232,500 $181,950 8" 100.00 ---- $465,000 $363,900 C\WINDOWS\TEMP\impact fee report doc 8 STEP 8 — MULTI-FAMILY SYSTEM DEVELOPMENT IMPACT FEES Multi-family hook-up fees are based upon a multiplier of multi-family usage to the standard usage of a single-family EDU. Multi-family = 0.47 x $2,022 = $950 / unit STEP 9 - TURF SYSTEM DEVELOPMENT IMPACT FEE The turf system development fee is based upon the typical turf usage for an 18-hole golf course in accordance with ADWR requirements of 430 acre-feet per year. Using 90 acres of turf within a standard golf course, a typical water usage of 1,411 EDUs was developed per golf course. Golf course storage requirements are 1/5 of the storage requirement of a single-family home. The EDUs for golf courses were, therefore, reduced by this portion of the storage requirements. Reservoirs account for approximately 42.5 percent of the total cost. Reducing this amount by 4/5 of the storage requirement for golf courses, a 34 percent reduction in EDUs is required for turf usage. The final system development fee will be based upon a cost per acre of turf. Turf usage(ADWR requirements) =430 acre feet/yr for 18 holes(90 acre-turf) 383,819 gallons per day(gpd)/272 gpud = 1,411 EDUs/90 acre turf Golf Course Based upon Golf Course Storage Requirement = 0.25 Average Daily Demand(ADD) (1.25 ADD for other users) Reservoir Cost account for 42.5% of total x 4/5 reduction = 34% reduction 1411 EDUs x 0.66 (reduction in storage requirement) =931 EDU 90-AC Golf Course = 931 EDU x $2,022 /EDU = $1,882,482/Golf Course $1,882,482/90-AC turf = $20,916/acre turf STEP 10 — FIRE-FLOW SYSTEM DEVELOPMENT IMPACT FEE A fire-flow system development impact fee for commercial/industrial and multi-family users is based upon fire-flow requirements for each project. The system development impact fee is based on the affected number of meters for a project with fire-flows greater than 1,000 gpm. Historic data for the Town of Oro Valley reflect approximately one metered hook-up for every three acres of commercial/industrial or multi-family facilities. Based upon approximately 1,546 acres of commercial/industrial and 400 acres of multi-family residential development, a total of 1,946 acres of additional facilities are expected. This equates to approximately 452 hook-ups with fire flows greater than 1,000 gpm at buildout. Based upon the estimated distribution of fire-flow requirements on a percentage of new meter hook-ups, the following table provides system development impact fees that were established. C\WINDOWS\TEMP\impact fee report doc 9 Fire-flow % of Hook-ups System Development Requirement Cost of Facilities above 1,000 gpm Impact Fee 1,001 - 1,500 gpm $1.46 M 85% $3,230/ meter hook-up 1,501 —2,000 gpm $0.79 M 10% $14,847/meter hook-up 2,001 —2,500 gpm $0.26 M 50/o 526,151 /meter hook-up TOTAL $2.51 M 100% C.\WINDOWS\TEMP\impact fee report.doc 10 APPENDIX A FINANCIAL ANALYSIS AND REQUIREMENTS TOWN OF ORO VALLEY, ARIZONA Summary of Financing Assumptions in Connection with the Issuance of Water System Development Fee Revenue Bonds — Based on projected system demands, tax-exempt revenue bonds are assumed to be issued in four installments that are approximately five years apart. The first two sales are expected on or around July 1, 2000. Future sales are expected as follows; Debt Bond Total Engineer's Service Underwriting Project Bond Project Cost Reserve and Issuance Amortization Interest Phase Size Estimate Fund* Costs Period Rate Series 2000 Sale $9,025,000 $7,240,000 $902,500 $882,500 10 Years 7.0% Series 2005 Sale 6,850,000 6,300,000 - 550,000 15 Years 8.5% Series 2010 Sale 7,625,000 7,000,000 - 625,000 15 Years 8.5% Series 2015 Sale 6,525,000 6,000,000 - 525,000 15 Years 8.5% Total $30,025,000 $26,540,000 $902,500 $2,582,500 * The debt service reserve fund is equal to 10%of the principal amount of the Series 2000 Bonds and will be transferred to subsequent sales. Interest earnings on the debt service reserve fund are used to reduce gross annual debt service requirements. -- The bonds will be secured and repaid primarily through the collection of Water System Development Fees. Additionally,the bonds will have a subordinate pledge of net water system revenues; -- The bonds are structured such that those who benefit from the infrastructure will assume all related costs; - The Water System Development Fee methodology is based on the projected total costs of the infrastructure, including financing costs, divided by the number of projected EDU's. (See Westland Resources, Inc. engineering report and the schedule herein titled "Calculation of System Development Fee".); Historical residential building permits issued by the Town are as follows: 1999/00 projected 1,061 1998/99 1,020 1997/98 851 5-year average 756 10-year average 756 --- Bond debt service is structured based on the projected Water System Development Fee revenues which is driven by the historical building permit activity; Bond debt service is structured for maximum flexibility based on building permit demand and related Water System Developme Fee revenues, however: * The Town must make, at a minimum, scheduled principal and interest payments, and * The Town can accelerate principal payments based on system development fee revenue without penalty. 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O 'Y u •- >, CCCCCCCCC (lNNC`1NNNNNU ,i) V - 000000000000CCC000000000000000 U L E 0 • >" C C C`1 (tel N N N N C`i N N N N N N N N N N N N ' N N N N N N N N V '� cn LS. • 4RS.r 4) 4) C 0 >, 4) C1. .D C •v c N c as o. o L a TOWN OF ORO VALLEY COUNCIL COMMUNICATION MEETING DATE: March 6, 2000 TO: HONORABLE MAYOR & COUNCIL FROM: David L. Andrews, Finance Director SUBJECT: Financing of Water Capital Improvement Plan As Related to Water Connection Fees SUMMARY: The report in support of the proposed rate increase in water impact fees includes a recommendation of financing the cost of the future water system infrastructure requirements that were identified in the Town's water system master plan. This recommendation is for the Town issuance of tax-exempt water system development fee revenue bonds. Details to the financing structure and financing assumptions may be found in Appendix A to the rate report. The rate of growth and demand on the system has created the need for financing in lieu of a cash pay-as-you-go funding mechanism. The financing approach will provide the upfront funding for infrastructure and provide for better planning, improved cost effectiveness, and a more reliable system. Although the cost of financing does significantly increase the amount of the connection fee, staff believes that financing is necessary to meet the timing of demands on the system and will benefit the system over the long run. ANALYSIS: The basic connection fee as indicated in the report is $2,022 per equivalent dwelling unit. The following is a breakdown of the fee's components: Capital Infrastructure $1,120 55% Financing Costs 902 45% Totals $2,022 100% Financing costs include interest expense, costs of issuance and underwriting fees. The interest rates are estimated to be 7.0% on the first sale and 8.5% thereafter. These rates are higher than a typical bond issue for the following reasons: • The bond issue is riskier for investors because the pledged source of payment is assumed primarily to be water impact fees which are growth dependent. • The Town's sales and excise taxes would not be pledged as a source of repayment. • The bonds would be unrated and uninsured. • The bonds would be callable at any time so that bond payments could be accelerated if the rate of Town growth happens quicker than assumed. TOWN OF ORO VALLEY COUNCIL COMMUNICATION PAGE 2 OF 2 A final important point of the financing assumption relates to fireflow. The analysis assumes that the Town's General Fund would upfront approximately $575,000 in Series 2000 B Bonds. These bonds would be repaid to the General Fund with interest via connection fees when the water system revenue bonds are paid off. Mr. Jim Stricklin and Mr. Mark Reader, Managing Directors representing the underwriting firm of Peacock, Hislop, Staley & Given, will be present at the study session to review the financing portion of the report. ATTACHMENTS: 1. Appendix A, Financial Analysis and Requirements to Potable Water System Development Impact Fees Report 2D . David L. Andrews Finance Director Chuck Sweet Town Manager APPENDIX A FINANCIAL ANALYSIS AND REQUIREMENTS TOWN OF ORO VALLEY, ARIZONA Summary of Financing Assumptions in Connection with the Issuance of Water System Development Fee Revenue Bonds Based on projected system demands,tax-exempt revenue bonds are assumed to be issued in four installments that are approximately five years apart.The first two sales are expected on or around July 1, 2000. Future sales are expected as follows; Debt Bond Total Engineer's Service Underwriting Project Bond Project Cost Reserve and Issuance Amortization Interest Phase Size Estimate Fund* Costs Period Rate Series 2000 Sale $9,025,000 $7,240,000 $902,500 $882,500 10 Years 7.0% Series 2005 Sale 6,850,000 6,300,000 - 550,000 15 Years 8.5% Series 2010 Sale 7,625,000 7,000,000 - 625,000 15 Years 8.5% Series 2015 Sale 6,525,000 6,000,000 - 525,000 15 Years 8.5% Total $30,025,000 $26,540,000 $902,500 $2,582,500 * The debt service reserve fund is equal to 10%of the principal amount of the Series 2000 Bonds and will be transferred to subsequent sales.Interest earnings on the debt service reserve fund are used to reduce gross annual debt service requirements. - The bonds will be secured and repaid primarily through the collection of Water System Development Fees. Additionally,the bonds will have a subordinate pledge of net water system revenues; - The bonds are structured such that those who benefit from the infrastructure will assume all related costs; --- The Water System Development Fee methodology is based on the projected total costs of the infrastructure, including financing costs,divided by the number of projected EDU's. (See Westland Resources,Inc.engineering report and the schedule herein titled"Calculation of System Development Fee".); - Historical residential building permits issued by the Town are as follows: 1999/00 projected 1,061 1998/99 1,020 1997/98 851 5-year average 756 10-year average 756 - Bond debt service is structured based on the projected Water System Development Fee revenues which is driven by the historical building permit activity; - Bond debt service is structured for maximum flexibility based on building permit demand and related Water System Developme Fee revenues,however: * The Town must make,at a minimum,scheduled principal and interest payments,and * The Town can accelerate principal payments based on system development fee revenue without penalty, Prepared by:Peacock Hislop 1/27/2000 0 0 0 0 0 0 0 0 o O 6 0 740 0 0 0 0 0 O O N N H o o o n o O O vD N O M M N M EA EA f;A EA1 O O O 0 0 O O O O O O O O O O O O O O O O cv trc to o tn in En 0 CA vo EA EA EA ,0 z C , 0 0 0 0 it 0 W o 0 0 0 0 4 0 O 0 0 0 0 0 Z N Lel O tfc VI C Wcn eV CV0 CV CN VO � O S 'CI. 6. cA cA EA EA EA $ .4 W r?:4 g 4°t W v o 0 D o o 0 e. 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Summary: At the Town Council's regular meeting on August 4, 1999, the Department of Public Works was authorized to contract with Curtis Lueck& Associates to study the development impact fee ordinance and re-evaluate the fee structure. The existing fee of$1,494.00 per equivalent dwelling unit was set in 1997. The attachment contains the consultant's recommendation to revise the fee by an adjustment in the base used to calculate the fee due to increased road construction costs since the ordinance was originally drafted. The recommended Townwide Development Roadway Development Fee is $ 2,008.00 per equivalent dwelling unit. Attachment: Memorandum from Curtis Lueck & Associates De.. �; ent Head ice. Town Manager C2/28/2000 08:13 E20743421 e CLA TUCSON AZ PAGE 02 Oro Valley Roadway Development Impact Fee Update Mayor and Council Study Session Memorandum Overview of Current Ordinance: In 1994, the Town of Oro Valley adopted its original development impact fee ordinance for the reconstructing La Canada Drive from Naranjo Drive to Lambert Lane1. A fee of $1,035 was imposed on an area of the Town that would directly benefit from the improvement. The ordinance was amended in 1997 to include the entire Town, with a fee of $1,494 per single-family residence.2 Representatives of the development community were concerned that the fee would result in a downturn in home building in the Town, but the pace of construction has actually increased over time. In 1998, the PAG Regional Council unanimously adopted the Metropolitan Transportation Plan that includes roadway impact fees of $2,500 as a key element for funding transportation improvements region wide. The Town has been accumulating badly needed funds for major roadway projects. From Fiscal Year 1996-97 through 1998-99, the Town collected $3.1 million in development impact fees, as detailed by below: • FY 1996-97: $0.34 million • FY 1997-98: $1.23 million • FY 1998-99: $1.56 million To date, the Town has spent a total of $1.27 million in development impact fees, mostly for reconstructing La Canada Drive between Lambert Lane and Naranja. Most of the current fund balance is earmarked for the widening of La Canada Drive south of Lambert Lane in a cooperative project with Pima County. Impact fees have also been used for the purchase of right-of-way for the La Canada Drive Extension, Moore Road to Tangerine Road, and for traffic signalization improvements on lSt Avenue. Need for an Update: The roadway development impact fee should be updated P periodically to account for changes in travel demand and the increasing cost of building new roads and widening existing roadways to serve new development. Since the last update was more than three years ago, staff requested that Curtis Lueck & Associates (CLA) with legal support from Gust Rosenfeld's Frank Cassidy review and update the roadway development impact fee. The work Prior to adopting the fee, the Town Council adopted a roadway performance standard of Level of Service D, engineering design standards, and arterial roadway cross sections. 2 The full development impact fee per"equivalent demand unit" (EDU) Is $1,614 (Ordinance No (0)97-02, Section 13-4-4). Adjustments per Section 13-3-2 resulted in a reduced fee of $1,494 per EDU. Tucson,AZ Page 1 of 6 Curti,Lueck et Associates e2/28/2C00 D8:13 E2E17434218 CLA TUCSON AZ F ,GE 8'3 Town of Ole:Valley Development;rnpact Fes Ordinan a Update Mayor and Coancll Mer orandum February 28,2000 began during the Holiday season, and is now being presented to you in draft form for your consideration. Ordinance Update Process: The statutory process for updating the Ordinance and revising the fee is identical to creating a new ordinance, and is summarized below. The entire statute (ARS 9--463.05, attached) is very short.`' ✓ Provide at least thirty days' advance notice of intention to assess a new or increased development fee " Release to the public a written report including all documentation that supports the assessment of a new or increased development fee. I Conduct a public hearing on the proposed new or increased development fee at any time atter the expiration of the thirty day notice of intent and at least fourteen days prior to the scheduled date of adoption of the new or increased fee by the governing body. ✓ The development fee shall not be effective until ninety days after its formal adoption by the governing body of the municipality. Technical Analysis: The prior analysis utilized the "consumption" method. which takes into account the travel patterns of Oro Valley residents within the Town and the cost to provide additional roadway capacity for newcomers. The development impact fee for roadways was calculated by multiplying the roadway capacity consumed by a typical single-family residence, which represents the "equivalent demand unit", or EDU, by the unit cost to build that capacity. Some adjustments and credits were also included in the calculation to take into account related transportation fees and taxes. The bottom line was a development impact fee of $1,484 per EDU. Note that this fee is dedicated to construction of new capacity's only and cannot be used for maintenance of roadways or resolving existing deficiencies. Our review of the methodology shows that the original analysis remains valid and need not be revised. Travel patterns have not changed substantially over the past three years_ However, the cost of building roadway capacity has increased due to higher labor and materials costs, an abundance of work available to road builders, inflation, environmental mitigation costs, and other factors. Accordingly, the fee could be adjusted based on the higher construction costs without changing the roadway capacity consumption analysis.5 3 The Growing Smarter Plus legislation (signed by Governor Hull on February 21, 2000 and effective 90 days thereafter) repeals the onerous county development impact fee legislation at ARS 11-1101. and replaces it with the simpler requirements imposed on municipalities. 4 Widening existing roads, making operational improvements such as traffic signals, and building new roads are examples of ways to provide additional capacity 6 In the future, the entire technical analysis may need to be re-done if the Town limits change sr nifican or if there are other charges in trafficpatterns or avel demand. RI ^^ Tucson,AZ Page 2 of 6 6. Curt's Check Asood4 02/28/2000 08:13 5207434210 CLA TUCSON AZ PAGE 04 Town of Oro Valley Development Impact Fee Ordinance Update Mayor and Coanoil Memorandum February 28.2000 Roadway Construction Costs Evaluation Methodology: CLA assessed the current cost of construction by contacting other agencies in the metropolitan area to determine their actual costs to design and build contemporary four-lane arterial roadways. The attached table summarizes some roadway improvement costs in Oro Valley and Pima County. Roadways constructed in Pima County have actually averaged over $6.3 millions per mile. Based on this analysis, the revised roadway construction cost for the Oro Valley area is expected to be $6,306,640 per mile to construct a contemporary 4-lane divided roadway versus $4,736,000 in the current ordinance. This results in an increase of the gross fee to $2,128, per EDU and a net fee of $2,008 after an approximate credit of$120 is applied.' o This represents an increase of 34% over the fee resulting from the 1996 analysis. _ If the Council approves this increase, minor changes to the text of the current ordinance would be needed. The amount of the credit would need to be reevaluated; however it is expected to remain.at about the same $120 level. Those changes will be provided prior to any public notification and hearing held on the matter. Related Analysis: Town staff also requested that CLA consider including the cost of elements that support the Town's recently adopted Pedestrian and Bicycle Plan and the Focus 2020 General Plan's Transit Services Element. We are currently finalizing our assessment of the desirability to utilize development impact fees for pedestrian, bicycle, and transit improvements. Based on our research, the fees can be used to construct pedestrian, bicycle, and transit facilities that are included within the roadway cross section in cases where new development necessitates expansion of the roadway capacity. Indeed, these design elements are already included in the representative projects used to establish the cost of roadway capacity. The enabling legislation does not preclude the use of impact fees for transit capital costs such as buying buses and building transit centers and maintenance facilities. Although the fees can apparently be used for transit capital that is necessitated due to increased demand that exceeds the current transit fleet capacity, it is not recommended at this time to use the fees for that purpose. This is due to the lack of adopted transit service and performance standards that identify when transit fleet improvements will be required and what such improvements would be. For that reason we propose that this ordinance revision not include a transit fee, but that the topic be reconsidered when the Town Council establishes appropriate standards. a The projects were built between 1994 and 2000. Accordingly, the project costs have been adjusted to year 2000 dollars. The calculation is thus. 06,306.640/32,000) x 10.8) - $120) $2,008.49; where $6.306,640 Is the cost to construct a typical mile of four lane arterial, 32,000 is the daily capacity at Level of Service ID, and 10,8 is the average Oro Valley arterial vehicle miles traveled r EDUg! ,�per day. Tucson,AZ Page 3 of 6 Curtin Lueck a Assucieci 02/28/2000 08:13 5207434210 CLA TUCSON AZ FAGE 05 Town of Oro Valley Develooment Impact Fee Ordinance Update Mayor and Council Memore ndum February 28.2000 Finally, the contract with CLA includes an evaluation of using development fees for major drainage and flood control projects. Initial discussions with Town staff concluded that a storm water utility fee would be more appropriate. The analysis 1s continuing on a separate track from the impact fee analysis and will be presented to the Council at a later date. Recommendations: Depending on the results of the study session, Town Council may authorize staff to release the public report based on this memorandum and schedule a public hearing on the revisions to the Development Impact Fee Ordinance. L!! Tucson,AZ Page 4 of 6 Curtis Lusa a:Assuaatba 02/2312000 08: 13 5207434210 CLA TUCSON AZ PAGE 06 Town of Oro valley Development impact Fee Ordinance Update Mayor and Council Memorandum February 28,2000 ARS 9463,05. Development fees; Imposition by cities and towns A. A municipality may assess development fees to offset costs to the municipality associated with providing necessary public services to a development. B. Development fees assessed by a municipality under this section are subject to the following requirements: 1. Development fees shall result in a beneficial use to the development. 2. Monies received from development fees assessed pursuant to this section shall be placed in a separate fund and accounted for separately and may only be used for the purposes authorized by this section. Interest earned on monies in the separate fund shall be credited to the fund. 3. The schedule for payment of fees shall be provided by the municipality. The municipality shall provide a credit toward the payment of a development fee for the required dedication of public sites and improvements provided by the developer for which that development fee is assessed. The developer of residential dwelling units shall be required to pay development fees when construction permits for the dwelling units are issued. 4. The amount of any development fees assessed pursuant to this section must bear a reasonable relationship to the burden imposed upon the municipality to provide additional necessary public services to the development. The municipality, in determining the extent of the burden imposed by the development, shall consider, among other things, the contribution made or to be made in the future in cash by taxes, fees or assessments by the property owner towards the capital costs of the necessary public service covered by the development fee. S. If development fees are assessed by a municipality, such fees shall be assessed in a non-discriminatory manner. 6. In determining and assessing a development fee applying to land in a community facilities district established under title 48, chapter 4, article 6, the municipality shall take into account all public infrastructure provided by the district and capital costs paid by the district for necessary public services and shall not assess a portion of the development fee based on the infrastructure or costs. C. A municipality shall give at least thirty days' advance notice of intention to assess a new or increased development fee and shall release to the public a written report including all documentation that supports the assessment of a new or increased development fee. The municipality shall conduct a public hearing on the proposed new or increased development fee at any time after the expiration of the thirty day notice of intention to assess a new or increased development fee and at least fourteen days prior to the scheduled date of adoption of the new or increased fee by the governing body. A development fee assessed pursuant to this section shall not be effective until ninety days after its formal adoption by the governing body of the municipality. Nothing In this subsection shall affect any development fee adopted prior to July 24, 1982. C!! Tucson,AZ Page 5 of 6 Curtis twock ec Ass i d.tci 02/23/2U10 08:13 5207434210 CLA TUCSON AZ FADE 07 Town of Oro Va Deyeloptrtent impact Fee Ordinance Update Mayor and Council Memorandum February 28,2000 Oro Valley Development Impact Fav Update Area Roadway Project Costs 28-Feb-00 Design/ Planning Total Cost Year Conetruct;on Right-of- Const. Cosi;TAP, (Currant Total Cost Pro act esGrigtion Completed 4.en > r Cost Way Alantin. ENMR,ftc) Y ar$) (Year 2300_ Cost per Mlle Ina/Sloping,Oracle to C.I. 1904 2.2 $ 711)0,000 $ 531.000 $3,533,000 $ 237.000 $12,321,000 $ 15,589,996 $ 7,088,382 From 2 to 4!dries rlvlded River Road,La Cholla 2000 1.1 $ d 500.000 $ 15 000 $ 800,000 $ 135,000 $ C 561,300 5 5,551,000 $ 5,048,364 to La Canada (1ncl.xies$1.0 minion for La Cholla Intersecton reconstru^130n and aignalizatian) From 2 to 4 lanes divided 1st Avenue.River Road 2901 2.0 $11,000,000 $ 756,500 $2,200,4CO $ 330,000 $14.28&1.500 $ 13,715,040 $ 8,647,620 to Orange Grove Road (Includes significant oo�ts for vaster.drainage and noise wall) From 2 to 4 lanes divided La Canada Drive Reconstruct, 1098 1.0 $ 2,C00,000 $ $ 440,000 $ 50,000 $ 2,320,000 $ 2,020,$00 $ 2,620,800 Lembert to Naranf s From 2 to 4 lane`0ivldsd La Canada Dri`re Extension. 2010 approx. 1.1 $ 1,490,000 $ 500,000 (1) $1,200,000 5 144,700 3 5,294700 1 5,604,438 $ 5,005,898 Tangerine to Moore Rd From 0 10 4 lanes divided Ali Projects Total Cost 7.4 $ 42,983,324 9 6,808,667 Adjusted Project Costs(2) 8.d _ $ 40.332,524 i 6.306,644 Ree ended Unit Cost [1 6,300,6441 Sourr : Pirna Canty Department of Transportation.Town of Oro Valle y Note: Prolect costa have been grown(or deflated)by 4 pervert per year frorr completion year to adjust to(=start year 2000 dollars. (1) Revised estimate based on recent right-of-way eoquisitun acttvtlee Original eat,matd of$1.1 million contained mthin'he La Canada()Frye Extension.July 1609 report. (2) Excludes la Canada Drive reconstruction due to it9 atypical nature • Tucson,AZ Page 6 of El Cnzri�I,� 8r Aasvciates ' S TOWN OF ORO VALLEY COUNCIL COMMUNICATION STUDY SESSION DATE: March 6, 2000 TO: HONORABLE MAYOR& COUNCIL FROM: William A. Jansen, P.E., Town Engineer SUBJECT: Presentation of the Department of Public Works Strategic Financial Plan for Road Projects SUMMARY: The rapid growth of Oro Valley and the surrounding area has placed a severe strain on the ability of the existing road system to handle the resulting traffic. The attached Strategic Plan was developed to provide guidance to the Department in meeting the existing and future traffic demands and transportation needs of the Town. The attached plan details the various financial resources available to fund these projects, the project schedules, and the personnel resources needed to effectively manage the design and construction of the Town's roadway projects. The Department of Public Works requests the advice and consent of the Town Council in the implementation of the proposed strategic plan. Attachment: Strategic Financial Plan for Road Projects D--zo ent HeaMilly Town Manager Town of Oro Valley Dep;. rtment of Public Works u-_--.r /4 ,, ,\%, „\t---,,--„,,,- ,„ ,I..,kf7,,,,,› o,4,:;:$19.4, ,:',,_ .,-.,-,,,0, 0,A,,o,-,,,I,wat---,,, et< . ..,,,f 'JS -4,',moi ' ,,,•W• , i`�3 ow_v tea. f . i a ,,,L,1 , 't , :' —+ way.- i;d,Akfu4{i;#,-,4:7,%, ,,T.:1,,.-- C1t.-,. n :> 4,,, i.tJiR,, ; ;i;4 1'" A,-7,,,,,,,,,,T„ :, may..... Mk 007,.:,_ ,,\9 v Li tz o - Strategic Financial Plan for Road Projects March 2000 MAJOR PROJECTS LISTED BY PRIORITY Project Activity Funding "12.6%" Safe CDO Wash to Tangerine (2 to 2 lanes) OW° `� First Ave.e Safety, g Lambert Safety,First Ave.to La Canada (2 to 2 lanes) STP d P&S1 P'2') Tangerine,First to Monterra (2 to 2 lanes) "12.6%" Tangerine,Monterra to La Canada (2 to 2 lanes) "12.6%" Oracle Road Improvement District (4 to 6 lanes) Improve District Pusch View Extension (0 to 4 lanes) To be determined First Avenue,Naranja to Tangerine (2 to 4 lanes) STP First Avenue,Oracle to Naranja (2 to 4 lanes) STP La Canada Extension,Tangerine to Moore (0 to 2 lanes) STP Lambert Lane Widening (2 to 4 lanes) STP Rancho Vistoso,Oracle to Big Wash (4 to 4 lanes) STP Naranja,La Cholla to First Avenue (2 to 2 lanes) STP La Canada Widening,Naranj a to Tangerine (2 to 4 lanes) STP Hardy,Oracle to Northern (2 to 4 lanes) STP Tangerine Road Improvements (2 to 4 lanes) STP Tangerine,La Canada to Town limits (2 to 4 lanes) STP Tangerine/La Cholla Realignment N/A STP La Cholla Safety Improvements (2 to 4 lanes) STP 1 Start ACTION PLANDesign.84 Const. CTI--'1 A Develop Pe 02 Permitting 12//99 complete 09 DCR coin /02 06/01 1-06 . _ complete .04/00-4)3/01 0-6/01 Road Project First Ave.sSafety,First h Tangerine to 03/01 Canada to 06/00 to 04/00 Lambert Safety, CD°AvWe.atso-Ltoa Canada to 06/00 Tangerine'monterra to ent District /01 07/0 „3/0l „.,in 1 07/00-k) /00 v"v 05/00-09 01/03 08/0 1 1 11 00//00 22 0111/0043 06/00-07'- 08/01 ,,,, 0 _ Tangerine'd Improvement . 1 -/02-10/u3 01/04 Oracle Road Extension Tangerine 10/03 7/04 m1-07/0 08/02- ,„4 0 Pusch Viewe, First Ave.toLMa onterra Nara__-a toN-Larani a 06/00-07/02 06 __ 06,- ,..,„-,2 02/03-04/v 01/05 Moo' 6/01-°/iv First Avenue, rij torrang_rine to 0 ,-) 01/03 n2/03-08/04 01/05 12/0-- ,in, ‘-'' n8/04 ,/05 First Avenue, e La Canada b Widening Bi_wash 06/02-0/Iv"' 08/03-'A/05 0/ -- Lambe . 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Aitirmssat,,,,,,,,,,,,.... :„,..„. . ... . Town of Oro Valley Department of Public Works Strategic Financial Plan for Road Projects March 2000 \jc v i. LE 1 4 i 11.;17 mor Niw „ s it.„..v 4 s - ,::iii , 0,— ,/ . . , , ,,,,, • 4 ' '''\ \ ; ' '1, e fr ...,. • t. . Alk i' ii 4#147, ,i;momplainonve".... -r44 , /Cs, OLts - /Nris EP J By: William A. Jansen,P.E. Town Engineer Martin L. Roush, P.E. Transportation Planner TOWN OF ORO VALLEY'S TRANSPORTATION GOALS Oro Valley's transportation system must provide residents and visitors with safe, convenient and efficient mobility. With scarce financial resources, the transportation system must also be cost-effective in order to successfully compete for limited local, state and federal funds. Reduction in traffic volumes and vehicle miles traveled is a desirable goal both to reduce traffic congestion and maintain air quality standards. Development of a transportation network which promotes alternative modes of transportation (e.g., transit) and trip reduction programs (e.g., telecommuting and rideshare), and the adoption of a land-use policy that links trip origins to nearby destinations are proven methodologies which can achieve this goal. The current and future demand for movement of goods and services must be accommodated in a matter that meets the needs of business while preserving Oro Valley's neighborhoods and the Sonoran Desert environment. LIST OF ACRONYMS AND ABBREVIATIONS ADOT Arizona Department of Transportation CIP Capital Improvements Program HELP Highway Expansion and Extension Fund HCJRF Highway User Revenue Fund Impact Fees Oro Valley Town-Wide Road Development Fee MPO Metropolitan Planning Organization ORID Oracle Road Improvement District PA Project Administrator PAG Pima Association of Government PDAF Project Development Activities Fund STP Surface Transportation Program TEA 21 Federal Transportation Act for the 21st Century TIP Transportation Improvement Program PM Project Manager TABLE OF CONTENTS I. INTRODUCTION 1 Purpose of this Task 1 Report Organization 1 II. TRANSPORTATION PLAN 2 III. FINANCIAL ENVIRONMENT 3 Regional Involvement 3 STP Surface Transportation Program 3 HURF Highway User Revenue Money 4 HURF Exchange 4 HELP Highway Expansion and Extension Fund 5 Oro Valley Town-Wide Road Development Fees 5 Improvement Districts 6 Summary 6 IV. GENERAL STATEGIC PLAN 7 Current Funding Levels 7 Acceleration Options 8 The HURF Exchange 8 Impact Fee 9 Action Plan 9 V. PROJECT BY PROJECT STATEGIC PLAN 11 First Avenue Corridor 11 Tangerine Road Corridor 11 La Canada Drive Corridor 12 Lambert Lane Corridor 13 Oracle Road Corridor 13 VI. HUMAN RESOURCE IMPLICATION 14 Projects Under way 14 Project Manager 15 Construction Manager 15 Field Inspector 16 Project Administration 16 VII. CONCLUSION 17 I. INTRODUCTION The Town of Oro Valley is one of the fastest growing communities in Arizona with a population over 26,000 in 1999. The Town's rapid growth has created localized traffic congestion and increased pressure on the roadway system as a whole. The community's awareness of traffic congestion drives the need for roadway improvement. Easing traffic congestion reduces air pollution and decreases travel time. The Town is further committed to a multi-model approach to transportation which promotes alternative forms of transportation by ensuring that all new roadways are pedestrian, bicycle, and transit friendly. Purpose of this Task The Town's Public Works Staff is committed to an aggressive approach to project funding and project implementation. Further, with staffs proactive participation in regional transportation planning,the elements are in place for the design and construction of road projects. The drive for staff to be innovative led to the development of a strategic approach in planning. The Strategic Financial Plan for Road Projects has two primary purposes. First, it will inform and educate Town's council, management, and staff of the opportunities and resources available. Second, this document will act as a tool for the building of a transportation system by providing a realistic financial plan and establishing the human resource requirements for effectively managing the design and construction of the Town's roadway projects. In summary this document demonstrates the Town of Oro Valley's commitment to improve our community by developing a planned transportation network. Report Organization This report is a guideline for the implementation of the construction of road projects. This report is organized into six sections: Introduction, Transportation Plan, Financial Environment, General Strategic Plan, Project by Project Strategic Plan, Human Resource Implications and Conclusion. Following this introduction, Section 2 reviews and updates the Transportation Plan specifically by identifying road projects to be constructed. Section 3, the Financial Environment, details funding opportunities such as regional resources, funding sources, and financing options. Section 4, the General Strategic Plan, defines current funding levels and details acceleration options. Section 5, Project by Project Strategic Plan details the specific road projects for the improvement of the Town's roadway corridors. Section 6, Human Resource Implications, stresses the staff requirements to take advantage of the opportunities to build road projects. Section 7, the Conclusion, stresses the commitment required by the Town of Oro Valley to accelerate road projects. 2 II. TRANSPORTATION PLAN Before one can propose a financial plan for road projects, one must have a transportation plan in place. The "1996 Town of Oro Valley General Plan", Circulation /Transportation section serves as the transportation-planning document. But, like all planning documents, the transportation plan must be updated periodically. This document will provide the basic planning components to complete the implementation of the Financial Plan for road projects by identifying road projects, defining their funding sources, and prioritizing these road projects. The "1996 Town of Oro Valley General Plan", Circulation/Transportation section was updated for the completion of the Financial Plan for Road Projects. The planning element essential for the development of a financial plan is the updated Roadway Network Map. The updated Roadway Network Map is used to project future roadway design capacities (see Appendix A). Staff recognizes the need to adopt a revised transportation element of the General Plan; however, this ongoing effort is out of the scope of this document. A major road project as a project defined by having a cost of over $500,000 for both design and construction. Table "A" Major Road Projects is listed by Public Work's priority. The major funding source for the project is also given. The funding sources are defined in the next section. TABLE "A" MAJOR PROJECTS LISTED BY PRIORITY PROJECT ACTIVITY FUNDING First Ave. Safety, CDO Wash to Tangerine (2 to 2 lanes) "12.6%" Lambert Safety, First Ave.to La Canada (2 to 2 lanes) STP Tangerine, First to Monterra (2 to 2 lanes) "12.6%" Tangerine, Monterra to La Canada (2 to 2 lanes) "12.6%" Oracle Road Improvement District (4 to 6 lanes) Improve District Pusch View Extension (0 to 4 lanes) To be determined First Avenue,Naranja to Tangerine 2 to 4 lanes) STP First Avenue, Oracle to Naranja (2 to 4 lanes) STP La Canada Extension, Tangerine to Moore (0 to 2 lanes) STP Lambert Lane Widening (2 to 4 lanes) STP Rancho Vistoso, Oracle to Big Wash (4 to 4 lanes) STP Naranja, La Cholla to First Avenue (2 to 2 lanes) STP La Canada Widening,Naranja to Tangerine (2 to 4 lanes) STP Hardy, Oracle to Northern (2 to 4 lanes) STP Tangerine Road Improvements (2 to 4 lanes) STP y Tangerine, La Canada to Town limits (2 to 4 lanes) STP Tangerine/La Cholla Realignment N/A STP La Cholla Safety Im rovements 2 to 4 lanes STP 3 III.FINANCIAL ENVIRONMENT This section presents the overall financial environment by reviewing the financial resources and the detailing of specific funding program strengths and weaknesses. The constantly changing financial environment for roadway funding can bring opportunities for those parties willing to invest the staff resources. With the increased levels of funding brought by the Federal Transportation Act for the 21st Century (TEA-21), the opportunities have never been greater for building road projects. These funds are available from ADOT via the Surface Transportation Program (STP). The STP funds are administered by the Metropolitan Planning Organization (MPO) for the region. For Pima County, the MPO is the Pima Association of Government (PAG). The STP designated by funds for the Town of Oro Valley are 18.3 million dollars programmed over the next five years. Regional Involvement PAG is the MPO for which ADOT administers the STP funds from TEA-21 legislation. PAG's Transportation Improvement Program (TIP) is the means by which projects are prioritized and funds are programmed. The TIP is much like the Town's Capital Improvements Program (CIP), only the TIP serves as the regional distributor for transportation funds. Thus, through the Town's participation in PAG, projects are programmed in the TIP. The TIP serves in the distribution of both State and Federal funds. Although PAG acts as the facilitator for communication and cooperation of regional government, PAG also serves as a resource for additional funding opportunities and general information. Additional funding is available from PAG's many grant programs. These range from transit grants to engineering design grants. One example of a PAG grant is the PDAF grant. The PDAF grant is designated for engineering design fees for projects programmed in the TIP. PAG also provides some general information which includes population data,vehicle counts, and travel models. Participation in PAG informs and educates staff on new opportunities and changing funding requirements available to the Town. Surface Transportation Program (STP) The funding for STP is available via the passage of the TEA-21. The STP is a Federal Highway Administration Program administered by ADOT and is limited to the construction, reconstruction, restoration and operational improvements on collector or arterial roadways. The problem of federal project implementation is twofold: ADOT administration and the federal procedures. To construct a federally funded project one must follow a complex and time-consuming process with extensive rules and regulations. The adherence to strict federal guidelines increases the cost of design, increases the cost of construction, 4 increases the cost of project administration, and finally increases the time to complete the design and construction of a project. Although STP project funds are programmed in the TIP and recognized by ADOT, there is a long delay in STP project implementation. For example, the time to complete the Town's STP Project "La Canada Drive from Lambert to Naranja"was about seven years. ADOT's services for administering STP projects have a substantial cost. ADOT's construction management fee is 18% of the construction cost, and ADOT's engineering design review fee ranges from $10,000 to $15,000. In summary, STP projects under ADOT administration have higher costs and substantially longer time to construct than comparable locally managed road projects. The long delays in the completion of the STP process stem from many sources, with any one problem causing a delay in the entire project. Problems that can cause delay range from environmental clearance issues, right of way problems,and utility clearance delays y to design firm staff turnover, general contractor issues, and ADOT's design review process. In conclusion, understanding federal procedures, ADOT process, engineering design process, and the construction process greatly decrease time to complete a road project. Highway User Revenue Money(HURF) The Arizona State Constitution restricts all HURF funds to highway and street purposes, which include right of way acquisition, construction, reconstruction, repair, and road development. There are two types of HURF monies: local HURF and PAG HURF. PAG's HURF monies consist of two basic classifications: "2.6% " funds and "12.6%" funds. The "2.6%" HURF monies are restricted to state roadways, where as "12.6%" HURF funds are available for local projects through participation in PAG's TIP. The local HURF is the Town's entitlement of the state's allocation of a variety of fees and taxes such as gas taxes and vehicle license fees. The problem with all HURF monies is the fees and taxes are driven by both the economic and political climate. Therefore, the funding levels of the HURF revenue stream are not guaranteed in the long term. The current level of the local HURF revenue stream is not guaranteed and thus must be managed wisely. From a Public Works perspective, this local HURF fund runs the day by day roadway operations that are critical to ensure public safety. Although this local HURF fund can be used for road construction projects, the Department of Pubic Works (DPW) staff recommends conservation of local HURF funds for operations and maintenance. HURF Exchange The HURF Exchange is an ADOT program whereby STP funds are exchanged for HURF type funds. The benefit of the HURF Exchange is that road projects can be administered and managed locally much like "12.6%" HURF funds, as opposed to STP funds where ADOT manages and administers the projects. The STP funds are exchanged for HURF funds at a rate of 90% of the MPO programmed amount. ADOT staff determines the 5 maximum project amount of the exchange. ADOT's staff asserts projects that are under $1,000,000 are the most suitable for the HURF exchange. Due to current state legislation,the HURF Exchange is not available to Oro Valley, nor is it available to any other towns in Pima County. The Town of Oro Valley is currently pursuing the sponsoring of a House Bill that will allow Pima County Towns to participate in the HURF Exchange. Currently all PAG members are in support of the HURF Exchange. The passage of the HURF Exchange would be a beneficial element for the acceleration of road projects in Oro Valley. The HURF Exchange gives the Town the opportunity to pp tY manage the funds outside the federal and ADOT system. Secondly, the funds could be available to start road design and construction projects now. To summarize, even with the 90% exchange rate, the Town saves money on road projects for two reasons: first, exchange yields the present value of money verses five-year monies, and second, the Town's administration costs are much less expensive than ADOT's administration costs. Highway Expansion and Extension Fund (HELP) The HELP program is a financing option where Arizona's State Infrastructure Bank Loan bridges the gap between roadway improvement needs and available funds. The intent of the HELP Program is to accelerate the construction of road projects. ADOT's Financial Management Services is encouraging local jurisdictions to participate in the HELP loan process. A HELP loan has finance charges with a current interest rate of 4%. Some limitations of the loan include: the amount must be over $250,000 and the State Infrastructure Bank requires a pay back period of five years or less. All projects listed on the PAG's TIP are eligible for the HELP loan. The HURF "12.6%" funds should be targeted for acceleration with the assistance of a HELP loan. Because PAG's TIP is a five-year program, the feasibility for HELP loans is questionable for STP projects. As long as a STP project takes over five years to design there is no benefit from the HELP loan system. The HELP program is useful for moving projects forward but does nothing to decrease the long delays associated with STP projects. One solution to moving forward STP projects is to use town funds to design projects by ADOT's STP standard and have them on the shelf. Then projects programmed in the PAG's TIP in the fifth year could be targets for acceleration with the assistance of a HELP loan because the design would already be complete. Oro Valley Town-wide Road Development Fees The Oro Valley Town-Wide Road Development Fee or Impact Fee is assessed on new residential development and is limited to use on Capital Projects that are for construction attributable to roadway capacity increases. This fund has accumulated the revenues 6 required to design and build a major roadway project. An important issue that should be considered is the relationship between Impact Fees and HURF funded projects. Improvement Districts The local business community can address traffic issues that impact the ingress and egress to their facilities by formation of an Improvement District. Improvement Districts are mechanisms for developers and business communities to fund projects that are "of more then local or ordinary public benefit." The process for the implementation of an Improvement District is governed by Title 48 Chapter 4 of the "Arizona Revised Statutes." The Improvement District process includes the sale of Town bonds. The property owners in the Improvement District through assessments pay for the bonds. The Town is in initial stages of formulating the Oracle Road Improvement District to widen Oracle Road to 6 lanes from Pusch View to La Reserve. The pending Improvement District is a direct benefit to local businesses and is the financing mechanism for providing improved ingress and egress to the shops in the surrounding area. Summary Regionally, PAG is the MPO for which ADOT administers the STP funds from TEA-21. Thus through participation in PAG, the Town can access the TEA-21 funds. Further participation in PAG informs and educates staff on new opportunities and changing funding requirements available to the Town. For STP projects, the problem is not funding but is that of project implementation. Although all of these programs are important to the successful development of road construction, the passage of the HURF Exchange is a beneficial element for the acceleration of road projects in Oro Valley. In conclusion, no one funding option will satisfy the demands of the community to build road projects in a timely manner. The Town must keep all its funding options open and search for new opportunities. 7 IV. GENERAL STRATEGIC PLAN The Goal of this section is to provide a realistic Financial Plan for Road Projects based on the current financial environment and a sound transportation plan. The first step to developing a Strategic Plan is to present the Town's current funding levels. The Strategic Plan will be presented by defining the concept of acceleration and showing the combined strength of the HIJRF Exchange &Impact Fees. Current Funding Levels Currently, there are four major fund sources for roadway improvements: STP, local HURF, "12.6%" HURF, and Impact Fees. Chart "A" shows the history of Impact Fees and local HURF funds collected by the Town over the past five years. The amount of Impact Fees and HURF funds is about equal in 99/00 fiscal year. Chart "A" History of Town Funds 4004Yearly 3000 30005 dr' Funds in 2000-/ $1,00. �� a� 1000� o HURF In$1,000 11$ i0 0 Impact Fee In$1,000 0) 0) 0) CO 0) 0 L (O CO a) 0) 0) 0) 0) 0) 0) Year The potential for STP funding for the Town is $18 million over the next five years. In order to secure STP funds programmed in the PAG's TIP, Oro Valley has committed $1.4 million dollars in the Capital Improvement Program(CIP). For road projects, a comparison between "12.6%" HURF funded projects and STP funded projects is made for the next five years. With the current programming, 85% of the projects are STP funds as compared to 15% of HURF funds. Oro Valley's approved street projects programmed in PAG's TIP including a location map are listed in Appendix GG�79 8 Acceleration Options The goal of the town is to build road projects as soon as possible. The method to moving construction projects ahead in time is defined as acceleration. Improvement Districts, the HELP Loan, and the HURF Exchange all aid in the acceleration of projects but all use distinctly different methods. Improvement Districts accelerate road projects but must be commercial development driven to be successful. Therefore, the Town should commit the staff resources to potential Roadway Improvement Districts to help accelerate increase of roadway capacity. The HELP Loan is a financing option that accelerates projects. Projects that are eligible for the HELP loan must be programmed in the TIP; however, ADOT's staff is working on changing this limitation. The HELP program was created to move projects forward but does nothing to decrease the long delay in the design construction period of ADOT's STP program. The passage of the HURF Exchange would be an effective element for the acceleration of road projects and is the topic of the next subsection. In order to reduce bureaucracy, the current trend in public works is to move towards the project management philosophy. The position of Project Manager (PM) exemplifies this philosophy by creating the position whereby personnel are motivated to complete a project and go on to the next project. The long delays in the completion of the STP process can be curtailed by a strong PM who is an integral part of the whole process. The philosophy of using a PM is an acceleration option whereby staff can safeguard the Town's interest throughout the ADOT's STP process. The HURF Exchange The passage of the HURF Exchange provides the town with the means to start road design and construction projects now. The passage of the HURF Exchange would be a beneficial element for the acceleration of road projects in Oro Valley. The HURF Exchange gives the Town the opportunity to manage the funds outside the federal and ADOT system. With HURF Exchange, the funds can be administered and managed by Town staff thus greatly accelerating the construction of road projects. If the HURF Exchange is passed into law, ADOT staff estimated $4,300,000 would have been available for HURF Exchange in Pima County for year 2000. The HURF Exchange would be divided between Marana, Sahurarita, Oro Valley, and any future incorporated towns in Pima County. South Tucson has the philosophy of only programming "12.6%" funds, so South Tucson does not have any STP monies in PAG's TIP to exchange. It is assumed that if the HURF Exchange is passed into law for Pima County, a minimum of $1,400,000 per year will be available in the short term (one to five years). With the passage of the HURF Exchange, up to $1,400,000 per year of STP funds would be available to the Town NOW for the construction of road projects. 9 Table "B" lists the Potential HURF Exchange projects or projects that are under $1,000,000 programmed in PAG TIP. Table "B" Potential I-IURF Exchange Projects t t. STP Project Amount Year Programmed Lambert Safety, First Ave. to La Canada $605,000 2000 Rancho Vistoso, Oracle to Big Wash $574,000 2002 Tangerine/La Cholla Realignment $750,000 2002-4 La Cholla Safety Improvements $750,000 2004 Hardy/Northern Realignment $300,000 2001 Lambert&Pecan Place Drainage $375,000 2000 ADOT staff has imposed a limit on the maximum project amount of the HURF exchange. ADOT's staff asserts projects that are under $1,000,000 are the most suitable for the HURF exchange. ADOT policies on the HURF maximum project amount should be investigated to see if the limit can be increased. Impact Fee An increase in Impact Fees provides the town with the means to start road design and construction projects now. Impact Fees are not an acceleration option, but this funding mechanism has an impact to road construction by creating the revenue to build road projects that the Town can directly administer. An increase in the Impact Fee is currently being studied by CLA. At the early stages of this study, it is projected that the fee may increase from about $1,500 per family unit to $2,000 per family unit. If the Impact Fee is increased $500 per family unit, a projected increase in revenues of$500,000 per year can be expected. Over 10 years, $500,000 a year can accumulate to $5,000,000. Action Plan Table "C" is an action plan detailing the schedule for the design and construction of the projects presented in Table "A". The Project by Project Strategic Plan will be presented in the next section listed by corridor. 10 TABLE "C" Action Plan Road Project Develop Design& Start Comments DCRPermitting Construction First Ave. Safety,CDO complete complete 12/99 "12.6"project Wash to Tangerine Lambert Safety,First Underway to 04/01-06/02 09/02 PDAF for$20,000 approved,STP Ave.to La Canada 03/01 _ project,possible HURF exchange Tangerine,First Ave.to Underway to 07/00-03/01 06/01 "12.6"project,PDAF grant for Monterra 06/00 $30,000 approved Tangerine,Monterra to Underway to 07/00-03/01 06/01 "12.6"project La Canada 06/00 Oracle Road Improvement Underway to 05/00-09/00 01/01 Improve District under formation District 04/00 Pusch View Program in PAG TIP Extension First Avenue,Naranja to 06/00-07/01 08/01-10/02 01/03 Obtain PDAF&HELP loan, Tangerine STP project { First Avenue,Oracle to 06/00-07/01 08/01-10/02 01/03 Obtain PDAF&HELP loan, Naranja STP project La Canada Extension, 06/01-07/02 08/02-10/03 01/04 PDAF grant for$20,000 approved, Tangerine to Moore STP project Lambert Lane 06/01-07/02 08/02-10/03 01/04 Received$70,000 PDAF, Widening STP project Rancho Vistoso,Oracle to 12/02-01/03 02/03-04/04 07/04 PDAF for$20,000 approved,STP Big Wash _ project,possible HURF exchange Naranja,La Cholla to First 06/02-07/03 08/03-08/04 01/05 STP project Avenue La Canada Widening, 06/02-07/03 08/03-08/04 01/05 STP project Naranja to Tangerine Hardy,Oracle to 12/03-01/04 02/04-04/05 07/05 STP project Northern Tangerine Road 06/03-07/04 08/03-08/05 01/06 STP project Improvements Tangerine,La Canada to 06/03-07/04 08/03-08/05 01/06 STP project Town limits Tangerine/La Cholla 06/03-07/04 08/03-08/05 01/06 STP project,possible HURF Realignment exchange La Cholla Safety 12/04-01/04 02/04-04/06 07/06 STP project,possible HURF Improvements exchange 11 V. PROJECT BY PROJECT STRATEGIC PLAN The Project by Project Strategic Plan is organized by corridor to show how specific projects fit into the larger picture. It is the goal of this section to show the funding strategies and process of acceleration for each project. First Avenue Corridor First Avenue is the most heavily traveled Town road. The congestion problem at the First/Oracle Intersection is mainly due to the bottleneck on First Avenue. The morning traffic from Rancho Vistoso, Lambert,Naranjo, and Tangerine all pour onto First Avenue to get to Oracle. In the afternoon, traffic from Oracle pours into First Avenue to get to Rancho Vistoso, Lambert,Naranjo, and Tangerine. The Town's long-range plan is to widen First Avenue to four lanes from Oracle to Tangerine. This will be accomplished in 3 phases: 1) First Avenue Safety Improvement - CDO Wash to Tangerine (2 to 2 lanes); 2) First Avenue - Naranjo to Tangerine (2 to 4 lanes); 3) First Avenue - Oracle to Naranjo (2 to 4 lanes). Although the Pusch View Extension is not a First Avenue project, the completion of this extension will have a significant effect on improving the operation of First Avenue. Smaller projects include the installation of traffic signals at Lambert, Tangerine, and Naranjo. The First Avenue Safety Project was of such pressing need that"12.6%"I-TURF funds were utilized and the construction started in December of 1999. The First Avenue improvements are of the highest priority, therefore the funding strategies need to be aggressive. The First Avenue projects will be combined with First Avenue — Oracle to Tangerine which will aid in the acceleration of the project. The design funds are programmed in the FAG TIP for FY 2001 and the construction funds are programmed in FY 2003. The Town CIP has $64,000 programmed for design FY 2000. It is the intent of the Town to apply for a PAG PDAF to aid in the design cost to supplement the monies programmed in the CIP. The Town will further apply for a HELP loan to move the construction funds for use as soon as the design is compete. The HELP loan will be repaid from the funds programmed in the PAG TIP. Town's staff working closely with ADOT's staff in all phases of design and construction will help aid project completion in a timely manner. Tangerine Corridor Tangerine Road is the most northern connection from 1-10 to Oracle Road and thus is of great regional significance. The next closest connection is 6 miles to the south at Ina, so all traffic from Oro Valley and Pinal County to the north use Tangerine for access to I-10. ADOT's long range plan for Tangerine is to construct a controlled access highway from I-10 to Oracle. ADOT has determined the project completion is contingent upon the "turn-back" of Oracle Road, but if Oracle Road was turned back the responsibility for 12 maintenance would fall on the Town. As the term implies the "turn-back" is an ADOT policy of giving up jurisdiction of roadways and giving jurisdiction back to local communities. The "turn-back" of Oracle puts a substantial strain on the Town's maintenance budget, so the benefit to the Town is unclear. Currently, the Tangerine Road project is not listed in ADOT's "5 Year Program" so the project cannot be completed for a minimum of six years. The existing Tangerine Road is in need of safety improvement to increase sight distance, enhance drainage, and replace pavement. In summary, the Town must proceed with plans to improve the Tangerine Corridor with or without assistance from ADOT. The Town medium-range plan is to reconstruct Tangerine to four lanes from Oracle to La Cholla (see Tangerine Road Corridor Plan, 1997). The process will begin with the first three phases: Tangerine - First Avenue to La Canada (2 to 2 lanes), Tangerine -- La Canada to west Town limits (2 to 2 lanes), and Tangerine Road Improvements (2 to 4 lanes). Smaller projects include the Tangerine/La Cholla Intersection Realignment and the installation of traffic signals at First Avenue and La Canada. The need for safety improvement is so pressing that"12.6%"HURF funds will be used to construct Tangerine - First Avenue to La Canada. The engineering design is currently underway. La Canada Corridor The La Canada Corridor provides the opportunity to solve two major traffic problems. First, the Town is in need of an alternative north-south route. Second, there are only two roads for ingress and egress to the Rancho Vistoso neighborhood: Rancho Vistoso at Tangerine and Rancho Vistoso at Oracle. The Rancho Vistoso at Tangerine directs traffic to the First Avenue Corridor which is operating near capacity. The long-range plan is to reconstruct La Canada to 4-lanes from the south Town limits to Moore Road. This will be accomplished in four phases: La Canada Extension- Tangerine to Moore Road (0 to 2 lanes), La Canada Widening -Naranja to Tangerine (2 to 4 lanes), ) La Canada---Ina Road to Lambert (2 to 4 lanes), and La Canada - Ina to Lambert(2 to 4 lanes). La Canada - Ina to Lambert project is a Pima County Bond project with $3.0 million in contribution from the Town of Oro Valley. The completion of the Final Location Report, La Canada Drive Extension (1999) yields a cost estimate of$3.1 million to construct to 2 lanes. For the design cost and right of way acquisition, $1.6 million in STP funds is programmed in the TIP from FY 2000 to FY 2003. The short fall for this project can be accommodated by shifting the Hardy Road — Oracle to Northern Funds ($1.9 million programmed in the TIP FY 2003) to the La Canada Extension. 13 Lambert Lane Corridor Lambert Lane is one of the few east-west corridors in the Town limits and is located two miles to the south of Tangerine. The long-range plan is to reconstruct Lambert to 4-lanes from First Avenue to La Cholla. This process will be accomplished by beginning two phases: Lambert Lane Safety - First Avenue to La Canada (2 to 2 lanes) and the Lambert Lane widening (2 to 4 lanes). Other projects are Lambert Lane Multi-Use Path (under design) and the traffic signal at First Avenue. The Lambert Lane Safety - First Avenue to La Canada is currently under design. STP funds will be utilized to complete the project. If the HURF Exchange passes, this project would be a prime candidate. Oracle Road Corridor ADOT plans to expand Oracle -- Calle Concordia to Tangerine from 4 lanes to 6 lanes. This project is currently programmed in FY 2005 in ADOT's "5 Year Program." The project is expected to be complete by the year 2007. The town is in initial stages of formulating the Oracle Road Improvement District to widen Oracle Road to 6 lanes from Pusch View to La Reserve. These improvements were mandated by ADOT as a condition for the permitting of the Pusch View Traffic Signal. The Town will have little if any financial participation in this project. The Town has engaged a consulting engineer firm to begin the initial formation of the ORID. 14 VI. HUMAN RESOURCE IMPLICATION The intent of this section is to answer the question "Is the Town readyto seize the opportunities available from the STP program now and in the future?" There is no doubt; we can be if the staffing level commitments are made. The implications of acceleration have negative staff impacts with a combination of increased new development and increased Public Works projects taking their toll on the current staff level. Projects Currently Underway Building a road project has two distinct phases: design and construction. The design phase has two distinct parts that require staff time: the engineering consultant selection and the engineering design. The construction has two distinct phases which require staff time: bid process and the construction management. The staff positions required to insure success in the entire process are Project Manager, Field Engineer, and Project Administration. J Solutions will be presented in this section to the factors that contribute to negative staff implication. Table "D" lists the current projects under way but does not include minor project. Minor projects are projects under $10,000. Table "D" Projects Underway Project Action Status First Ave. Safety, CDO Wash to to 2 l n .i tY Tangerine gine (2 lanes) Construction Lambert Safe , First Ave. to La Canada (2 to 2 lanes Desi• Tangerine, First to Monterra (2 to 2 lanes) Design Tangerine, Monterra to La Canada (2 to 2 lanes) Design Oracle Road Improvement District (4 to 6 lanes) Formation Calle Bonita/Calle Loma Linda Resurfacing Construction Lambert Multi-Use Path Liner Park Design First Ave. &Lambert Signal Construction La Canada&Naranja Signal Construction First& Tangerine Signal Design La Canada Landscaping Landscaping Design 1� g g Town Wide Drainage Study Study Design Project Manager The position of Project Manager (PM) is essential for the success of any major engineering project. The PM should act as a town liaison to insure problems are solved at the lowest level before they delay the project. The PM cannot be a figurehead, but the PM should strive to attend every meeting the consultant has with state and federal officials. The PM duties must include detailed documentation along with trackingthe of 'ect project 15 costs and schedule. A working relationship with key players is best establish bythe Y PM, rather than the project being left in the hands of the design engineer. g The PM must make a strong commitment to learn the ADOT and federalprocess. in There are many players in the ADOT and federal systems and all are important to the overall project success. ADOT's Local Government group is charged with the administration of the engineering design review for STP projects. The plan review process in Local Government is organized into three basic sections: design review, right of way,g g and utilities. Other ADOT divisions that require an interface with the PM are ADOT's Administration Service Division, Contracts and Specifications, and Environmental Planning. Hence, a PM proactive approach to the ADOT and federal process will greatly accelerate a project. In conclusion, having a committed staff PM to helptraverse e obstacles will secure a more timely completion of STP roadJrojects. p Currently, the Public Work's Transportation Planner is tasked with the Project Management of the Oracle Road Improvement District and the Lambert Safety Improvement STP project. STP projects require substantially more staff time commitment than that of Town administered projects. The volume of projmajorects 'ects p programmed in the next five years (see Table "C") will require a new PMp osition to insure the project maintains cost and schedule, as well as, insuresp rotection of the Town's interest. Construction Manager Once a project makes it to the design phase the Town must safeguard its interest in the construction phase by a field presence. There are two basic types of constructionJro'ects p classified by funding source: STP projects administered by projects ADOT and 'ects administered by the town. Projects administered by the town include, "12.6%" HURF HURF Exchange, Improvement Districts, and Impact fees. For STPJro'ects the PM can p also serve as the Town's Construction Manager (CM), thus the PM tracts the STP projects from design to the completion of construction. The CM should act as a town representative to insure problems are solved at the lowest level before they delay the project. In order to expedite the construction process, the CM . must have the authority to make field decisions. The Field Engineer for STP projects must make a strong commitment to learn the ADOT and federalrocess. An important � p duty of the CM on STP projects is to track the project cost, especially thechange orders p Y and credits. This is of the utmost importance because if the STPJ ro'ect goes over the p programmed amount, the responsibility for the cost overruns are the Town's. Thus, a CM Position with understanding of the construction process benefits the Towneatl . � Y 16 Field Inspector Projects administered by the Town require field inspection to insureuali control and q �Y to guarantee the contractor complies with the standards and specifications. So, for "12.6%"HURF,HURF Exchange, Improvement Districts, and Impact fees, Town staff is tasked with field inspection and construction management services. The volume of major projects programmed in the next five years (see Table "C") will require a new Field Inspector position to insure the project maintains schedule and protects the Town's interest. Project Administrator From the Project Administrator(PA)point of view, a road project has four phases: design consultant selection, engineering design, bid process, and the construction. The consultant selections for STP projects must be accomplished under federalg uidelines to insure reimbursement to the town for engineering services. The engineering consultant selection is a cumbersome process that requires the following major administrative tasks: Invitation for Statement of Qualifications, Town Council Resolution for Award of Contract, Notice of Award, Purchase Order, and Notice to Proceed. During the engineering design phase and construction phase of STP projects the PM/CM requires extensive clerical support. For projects administered by the Town, the engineering consultant selection is much the same as for STP projects. The PM for Town administered projects will still require clericalq support during the design phase. PA duties greatly increase during the construction phase of projects administered by Town. For example, during the construction bid process the following tasks are required: Advertise Notice, Pre-Bid Conference with minutes, Purchase Requisition, Pre-construction meeting, and Notice to Proceed. Financial responsibilities include the PA keeping track of payment schedules, requesting purchase orders for payment, and notifying purchasing to close the account once the project is complete. The number of major projects programmed in the next five years (see Table "C") will require a new PA Position to insure the projects maintain schedule and protect the Town's interest. Conclusion There is no question the implications of acceleration of road projects have negative staff impacts. With the rapid pace of development combined with the increased implementation of Public Works projects, current staff quality of work is impacted. The Town must make the commitment to increase staff level in order to take full advantage of the available funding. The staff positions required to insure success of the entirerocess are PM, p Field Engineer, and PA. 17 VII. CONCLUSION The problem with STP projects is that of implementation statewide. The STP funds are available; but because of the complexity of federal projects, ADOT administration, and a variety of other stumbling blocks, road projects can take an average of seven years to complete for smaller jurisdictions. Although it is easy to place blame on the system, jurisdiction yADOT staff stresses local should take more responsibility for the long delays s in the STP process. The town can best approach this by committing a strong PM to STP projects. The PM position should also be tasked to lead improvement districts. PAG participation is the single most important step to insure the town takes advantage of the federal and state transportation monies. SIP funds, 12.6%"H1JRF funds are available for local projects through participation in PAG's TIP. Further participation in PAG informs and educates staff on new opportunities and changing funding requirements available to the Town. Thus, the Town's staff is committed to an ongoing Evaluation of Financial Options. The Town must make the commitment to increasing staff level in order to take full advantage of the available funding. The staff positions required to insure success in the entire process are PM, Field Engineer, and PA. The Town's Public Works Staff is committed to an aggressive approach to project funding and project implementation. Further, with staffs proactive participation in regional transportation planning, the elements are in place for the design and construction of road projects. The drive for staff to be innovative leads to the development of this Strategic Financial Plan for Road Projects. This document acts as a tool for the building of a transportation system by providing a realistic fmancial plan and establishing g the human resource requirements for effectively managing construction of the Town's roadway projects. In conclusion this document demonstrates the Town of Oro Valley's commitment to improve its community by developing a planned transportation network. LIST OF APPENDICES Appendix "A" 2010 Roadway Network Map Appendix"B" Projects in TIP &Location Map ROADWAY DESIGN CAPACITY 2110 2 Lane 4 Lane 6 Lane mmemmen U Moore w Tangerine • (Li o 4t c.f) Naranja �, p Lambert Pusch View 0 Lane Extension Calle Concordia ctHardy U Town of Oro Valley `t Public Works — 0 -0°- 0I 0O00 0 O O UOO �" OPat 0 0 CO •� c OF 0000 O 0 Cl0OO1` 0000 CO000rr. p 0 L_ = O O M © c (II1` N o W W O M N N O r F-- Ll. LL. 4o N r r r r N N CI N N W ^ V = .-� CZ i (� re .♦•/fir. 'u) ') u) to n CL (1-: i r) 'Vp ,,- I— '� 0 O O O >- Ou) = oU) N- 00000000 Co r0 01%. 00 COv. O 0 Oet' `�'— L N © z ii U o LO 0 0_J 000000 o r 0 0000 `r0 0 N c°� C� r WI V _ rr, a re _ co n L� 0- O ICAC M O ou- s u) . zr,. u) C5' co 0ci) 0 u. © co _ o0 NMOr- r- r o o in ti ti o O d' 't!' o o O © r 04 C.? 0 CI W M 75 u. 0 LOU) NN0 00 L ® .J rN0rrr� 0 0 0 0MMO 00 O 0 © IC) a. Q W = < 00 r4 La. ( V U) u) tc V) 0 0 N ` I.•_ OM Cr T- O !t1%+ CO00 © Co O IZ >�, 0 p = oU) ON O OP. O O 0 0 O NONt 00 r v- O CD LL C ZTrio V O 0. LI. ...j e-r0., r0,. Co 0 000 N IC) 0 h >a00 'V0 0 0 0 003 3N 00 r int 0M r W . < t]' a- ON r 45 co e r = o t Co 'Cf' v- 00 00 p >- 0 � O`ti:: N 0U) o 0 0 O COoti Or N 0 M to £ uL Oo 0 — 0 o ti n ooF..: I - so 0 U. ° �, Co O o " OMO 0 0 0 000ROr t.*: to 0 N d .n rQ a 5 >. 0) -Q co u.o � Lc. co i tJ = = co >. 0 p D L_ �, 0 .4. Co ti '�' CO ® c � Q) t/) = OU) OOoo o O 0 M 10000 ON 0 O oN CU (13c z — ca -JOOC� ® MO O O N MO © C3 Or 0CO •-,.-• 0 e4' it-- o V a) pc C N o I--- " .`"0 a) t6 U E o 0) — Q Ln 4 tom? V C3) Z3 •- N to N V c o c p N o = C t6 z...cn _ !-- 4- 9-. 2 -'. = E o oz '� . o � �, `E c �CD c o �" ill ,� � a� � � = a a 1- ,-- i 0) ." E .-6 Z =r. „ V 4-',„�' o.O o c O c (13 >. =.`� m h. 'a 5 Z3 r� .c •.- C C .� .� a. > C - 0 E 5_ p as ° .,°c ° � � � �` CO V = x 1 tU a) 0 .0 4) (-) E °0.,..c cn u) c as Z W '� 4- c c 0,Cl) o 'o > '� 'C3 C Ci3 i-- O Q c6 RS co as C •�-� v� Q L� _..i N . LL. cob -� V -c a) N z3 --j ...� D .J ] s�. o a) c 0 ,°CLS C' co t .E. __2 t -t a&-t as as- 0 E .E „G. 12 .5_ E .5. .g. 03 0 :Z:7 ._,..._, Lr L.. C c 0 t� V Q - Q 172 Q -a-0 al C co.c 0) X) a .CD �c c 0 .c 0) 0) CU N c a) o o 0 - - U a. LL_ Li i,i 2 Z I-- .� -I .� zs -I Z Z LX S', !ca I= CtS-I ca 0 c� c� >- . .. dp a is • • • • •6 a • A 11 . 111- a FYsaaa % • a • N 99/00 •••••••.. a • • ■ • 00/0 1 m•••••••••• • 11 • III III ti ci) -I.• • III 01/02 ��• ° . ....4 • • 02/03 • • a 0 a 03/04 • ,4 a • Pima Co. 1997 Bond � � Moore 13 r a it a of- •,. 5 • • 17 :r. . . .f • ■ Tanerine 18 • 16 15 cd � � � = < 1 CD • 6 i) . 7.) 1 czt . 0 ;.. 0 = Naran'a � iw 0 iii■ % ct ..c.f) � • 11, 12 s'. 0 2 7 a 10 1.First Ave,Naranja to Tangerine 2.First Ave-Oracle to Naranja Lambert 93.g Hardy Rd/Northern Intersection 4.Hardy to Northern Improvement 5.LaCanada Extension 6.LaCanada Widen,Naranja to a Tangerine ct ■ 7.LaCholla Safety Improvements 0 ■ 8.Lambert Lane Widening ,� i■ 1 a 9.Lambert Lane/Pecan Place c..) a �� � Drainage Improvements � � ♦• Calle Concordia ■ 10.Lambert Lane Safety Imp. T� 11.Naranja Drive Improvements � •' Hard ■ 12.Naranja,LaCholla to First Imp. c�3 ■ y ■ 13.Rancho Vistoso,Oracle to Big Town of Oro Valley V *• • di � Wash Improvements Public Works � 371 4 ■ 14.Tangerine Rd Improvements 10/21/99 a 15.Tangerine Rd-Monterra to �• • � � � • r LaCanada 16. Tangerine,LaCanada to West ORO VALLEY / PAG ROAD PROJECT17. Town Limits Tangerine/LaCholla Intersection 18.Tangerine-First to Monterra