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HomeMy WebLinkAboutDevelopment Impact Fee Ordinance by Curt Lueck & Associates Town of Marana, Arizona Development Impact Fee Ordinance Resource Documents November 18, 1999 Compiled by: Curtis Lueck & Associate~ Gust Rosenfeld JE Fuller Hydrology & Geomorphology Contents Development Impact Fee Statutes ARS 9-463.05 (Cities) ARS 11-1101 et seq (Counties) A Practitioner's Guide to Development Impact Fee (Excerpt) Current Town of Marana Ordinances Construction Contracting Sales Tax Development Agreements (Fair Share) Transportation Sales Tax Revenue Information Newspaper Clippings J Municipal Development Impact Fee Statutes 9-463.05. Development fees; imposition bv 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. 5. 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 heating 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 ihe 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. County Development Impact Fee Statutes 11-1101. Definitions In this chapter, unless the context otherwise requires: 1. "Benefit area" means a geographic area in which public facilities are of direct benefit to development within the area. 2. "Benefit area plan" means a map identifying the benefit area of a public facility and a budget for the public facility's capital costs. 3. "Board" means the board of supervisors. 4. "Developer" means any person, corporation, organization or other legal entity undertaking development. 5. "Development" means any construction or expansion of a building or structure, any change in the use of a building or structure or any land use change that affects a county's need for public facilities. 6. "Development agreement" means an agreement bet~veen a county and either a community facilities district pursuant to section 48-709, subsection C, a landowner or any other person having an interest in real property that may specify or is otherwise related to any of the following: (a) The duration of the agreement. (b) The permitted uses of property subject to the development agreement. (c) The density and intensity of uses and the maximum height and size of proposed buildings within such property. (d) Provisions for reservation or dedication of land for public purposes and provisions to protect environmentally sensitive lands. (e) Provisions for preservation and restoration of historic structures. (f) The phasing or time of construction or development on property subject to the agreement. (g) Conditions, terms, restrictions and requirements for public infrastructure and the financing of public infrastructure and subsequent reimbursements over time. (h) Conditions, terms, restrictions and requirements relating to the governing body's intent to form a special taxing district pursuant to title 48. (i) Conditions of sewer service. (j) Any other matters relating to the development of the property.. 7. "Development fee" means a fee imposed on a benefit area by the board to pay for a proportionate share of the public facilities required to serve a development. 8. "Development fees projects plan" means a public document which identifies all benefit area plans including all proposed expenditures for projects funded with development fees in the current fiscal year and at least the four fiscal years thereafter. 9. "Discount rate" means the interest rate which is expressed in terms of a percentage per year and which is used to adjust, past or future financial or monetary payments to present value. 10. "Encumbered" means the award of a contract for a public facility for which a development fee has been imposed. 11. "Exaction" means a condition or requirement which is attached to a development approval and which compels the payment, dedication or contribution of goods, services, land or money to a public or quasi-public entity. 12. "Present value" means the current value of past, present or future payments which are adjusted to a base period by a discount rate. 13. "Proportionate share" means that share, or portion, of total public facility capital cost which is reasonably attributable to or caused by an individual development. 14. "Public facilities" means capital improvements for roadways, wastewater collection systems and treatment facilities, effluent delivery systems and treatment facilities, flood control, neighborhood parks intended to serve development within a one-half mile radius, and potable water distribution systems and treatment facilities which have a life expectancy of three or more years. 15. "Public facilities capital costs" means capital costs associated with the project planning, design and construction of new or expanded publicly owned facilities and equipment which have a life expectancy of three or more years and the related land acquisition, land improvement, design and engineering. These costs do not include routine and periodic maintenance expenditures, personnel training or other operating costs. 16. "Roadways" means right-of-way acquisition and construction of roads, road shoulders, curbs, gutters and sidewalks, and traffic signal installation. 11-1102. Development fees: limitations A. Counties may assess, impose, levy and collect development fees for new development within their jurisdictional limits only pursuant to the development fee requirements of this chapter. A county may not assess, impose, levy or collect a development fee for a public facility unless it has adopted a development fee ordinance for the public facility for which the development fee is collected. B. Development fees may be imposed only for one or more public facilities which are identified in a benefit area plan. 11-1103. Development fees: interzovemmental aareements: purposes A county may enter into an intergovernmental agreement to accept or disburse development fees for construction of a public facility pursuant to a benefit area plan, including an agreement with a city or special taxing district for the joint establishment of a needs assessment, the adoption of a benefit area plan and the imposition, collection and disbursement of development fees to implement a joint plan for development. 11-1104. Development fee vro~ram reouirement A county shall not require as a condition of development approval the construction of any public facility or other exaction for which a development fee ordinance has been adopted unless the county credits the reasonable value of facilities advanced, dedicated or improved by a developer against the development fees. A development fee ordinance shall not be adopted for that cost of a public facility which is funded by general obligation bond proceeds, highway user revenue fund proceeds, community facilities districts or improvement districts. 11-1105. Development fee standards: recoupment; exemptions A. A development fee shall meet the following standards: 1. The cost of public facilities for which a development fee may be assessed, imposed, levied or collected shall be reasonably attributable or reasonably related to the service demands of the benefit area. 2-. Development fees assessed, imposed, levied or collected from development shall not exceed a proportionate share of the costs incurred or to be incurred in providing a public facility. 3. Development fees shall be used and expended for the benefit of the benefit area that pays the development fee. In order to satisfy this requirement, the implementing ordinance must specifically contain the following: (a) On collection, development fees shall be accounted for in a fund that clearly identifies the type of public facility for which the fee was imposed, and development fees shall be invested with all interest accruing to the fund. (b) A benefit area plan shall be established and recorded on final adoption of the development fee ordinance. Any benefit areas which are established shall be appropriate to the nature of the particular public facility and the nature of the jurisdiction. (c) Except for recoupment as provided in subsection C, development fees shall not be collected from a development until public facilities which bear a reasonable relationship to the needs created by the development are included in a benefit area plan. (d) Development fees collected shall be encumbered for public facilities within five years after the date of collection unless a development agreement provides for a longer term. (e) If the development fees are not encumbered within five years after the date of collection, a county shall refund the amount of the development fee along with accrued interest on the amount of the fee at the average annual rate of interest earned by the trust fund during the five year period to the owner of the property on which the fee was paid, unless a development agreement provides otherwise. B. For purposes of refunds pursuant to subsection A, paragraph 3, subdivision (e), the owner of the property on which a development fee was paid is the owner of record at the time that the refund is paid. An action brought to obtain a refund may only be commenced within one year after the date the refund becomes due. C. A county may recoup through a development fee the costs of excess capacity in existing public facilities to the extent development is served by existing public facilities. D. Development fees may be used to repay a developer for public facilities constructed or paid for by the developer pursuant to a development agreement. E. A county may waive development fees for all development that constitutes affordable housing to moderate, low or very iow income households as defined by the United States department of housing and urban development, provided that the waiver does not result in an increase in the development fee for other properties in the benefit area. F. A county may waive from development fee programs particular types and locations of development that are determined to serve an overriding public interest, provided that the waiver does not result in an increase in the development fee for other properties in the benefit area. 11-1106. Development fee needs assessment; requirements A. A county which desires to adopt a development fee ordinance shall first conduct a needs assessment for the type of public facility or public facilities for which the development fee is to be assessed, imposed, levied or collected. The needs assessment must distinguish between existing deficiencies and new development needs and must contain components which inventory existing facilities and identify level of service standards for which the fee is to be assessed, imposed, levied or collected and the projected community needs. The needs assessment may be a separate document from an ordinance establishing a development fee. A county shall use or base the needs assessment on supporting data used to develop its development fee projects plan. The development fee projects plan shall be updated and adopted annually by the board. B. The data sources and methodology on which the assessment of the development fee is based shall be made available to the public on request. C. The amount of development fee imposed shall be based on actual public facilities capital costs or reasonable estimates of_capital costs for the expansion of public facilities incurred as a result of anticipated new development. D. In determining the total amount of monies a development fee ordinance is to raise, the county shall reasonably provide for credits that reflect the present value of contributions or exactions that new development may have made for the same public facility. The determination of credits shall be made at the time of the calculation of the amount of the development fee. The method for calculating credits and the calculation of the amount of the development fee shall be reviewed and updated at least every two years. The revised determination of credits and the amount of the development fee shall not be applied retroactively to amounts already paid. E. If a development fee ordinance has been adopted to provide for neighborhood parks, credit shall be given for any existing and planned on-site park or recreational facility provided by the developer. F. The development fee 'ordinance shall identify, for the type of facility covered by the fee, any existing deficiencies, based on adopted level of service standards, and must describe how the county intends to remedy the deficiency. Nothing in this section shall be construed to require a county to remedy existing public facilities deficiencies before adopting or imposing a development fee pursuant to this chapter. G. The amount of the development fee shall not include the cost of remedying existing public facilities deficiencies. H. The capital improvements element of land use plans shall list anticipated development fee revenues as a projected source of revenue together with the percentages of development fee dollars to be used for funding public facility capital improvements. 11-1107. Development fee: hearing: notice: procedures A. The needs assessment and a proposed benefit area plan shall be submitted to the board at a public heating. Notice of the hearing shall be published in a display advertisement covering not less than one-eighth of a full page in a newspaper of general circulation in the county. B. At or after the conclusion of the public heating prescribed in subsection A, if the board decides to go for~vard with the proposed development fee ordinance, the board shall set a time and date for the final adoption of the ordinance. Notice of the time and place of the hearing including a general explanation of the matter to be considered and including a general description of the benefit area shall be given at least fifteen days before the hearing by publication at least once in a newspaper of general circulation published or circulated in the county and by mail to each owner of record in the benefit area. A new or increased development fee assessed pursuant to this chapter is not effective until ninety days after its adoption by the board. 11-1108. Development fee: assessments A. All development fees imposed pursuant to this chapter shall be assessed at the time the building permit is issued and may be collected, at the option of the county, on issuance of the building permit or certificate of occupancy or as may be provided for in a development agreement. The county may provide for payment of a development fee on an installment basis. All development fee ordinances shall require that real estate closing documents involving a parcel of land or improvements for which a development fee has been assessed or paid within five years of the closing shall include a written notification of the fact that a development fee has been assessed or paid and the location of a public office where information in regard to the rights and obligations arising from the assessment or payment of the fee can be obtained. B. A development fee ordinance shall not assess, impose, levy or collect a development fee on development constructed with a valid building permit in effect on the effective date of the ordinance. 11-1109. Development fee: appeal Development fee ordinances shall provide for an appeal from a determination of the development fee to be paid by any individual development to the board. A Prac:l:loner's Guide :o Deve-opmen: Imp -' ac: ees By JAMES C. NICHOLAS ARTHUR C. NELSON JULIAN CONRAD JUERGENSMEYER PLANNERS PRESS AMERICAN PLANNING ASSOCIATION Chicago, Illinois Washington, D.C. p 4 . CHAPTER Development Impact Fees A New Local Government Regulatory and Finance Tool These newcomers arrive in our community seeking opportunity. They come seeking a new begin- ring, a new start with hope, or a final fulfillment of life's just reward. They come for the same reasons that we came. They stay for the same reasons that we stay in this community and state we all love. These newcomers bring with them all their fondest dreams of the future. They bring dreams that are the same as ours--dreams of a better life and a better future. What they don't bring with them are the roads, the bridges, the schools, the hospitals, the li- braries, the parks, the utilities, the sewers, the waterlines, and all the vast and varied human services that will be needed to realize our dreams (ADAPTED FROM FLORIDA STATE COMPREHEN- SIVE PLAN COMMITTEE 1987: 6). INTRODUCTION AND OVERVIEW Local jurisdictions throughout the United States have been learning that the cost of pro- viding a residential dwelling unit with new or expanded public facilities including water, sewer, drainage, police, fire, library, school, park, recreation, and others to new develop- ment now exceeds $20,000 (Florida ACIR, 1986; California Office of Planning, 1982). This cost has been rising at a pace that exceeds local government revenue-generating capabil- ity (Nicholas, 1987a). The increasing cost of maintaining the existing infrastructure, com- bined with the decline of public support for taxation alternatives, has forced local jurisdic- tions in the United States and other countries to seek alternatives (Amborski, 1987, 1988; Alterman, 1988; Netzer, 1988; Callies and Grant, 1991). Impact fees are one alternative. Increased taxation is another. A growing num- ber of communities across the nation are in- creasingly looking to the private sector for financial help. Local governments 'have dis- covered that development impact fees are one way to shift some of the burden of paying for new or expanded facilities to accommodate growth from existing development to new de- velopment (Nelson, 1986). Definition Development impact fees are scheduled charges applied to new development to gener- ate revenue for the construction or expansion of capital facilities located outside the bound- aries of the new development (off-site) that benefit the contributing development. As they are currently applied, development impact fees normally cannot legally be used for opera- tion, maintenance, repair, alteration, or re- placement of capital fadlities (Juergensmeyer, 1988a, 1988b; Nicholas, 1988a, 1988b). 1 2 A Practitioner's Guide to Development Impact Fees Development impact fees should be distin- guished from linkage fees wherein nonresi- dential development--typically office build- ings in attractive locations such as Boston and San Francisco--are assessed special fees to help provide a variety of sodal services rather than physical infrastructure including low- income housing, day care, and public art (Andrews and Merriam, 1988; Juergensmeyer, 1988a, 1988b). Moreover, other forms of link- age fees, such as the Transit Impact Fee im- posed by the City of San Francisco, recoups a portion of anticipated operating deficits of the BART system. This is an exception rather than the norm. It also may be a harbinger of future applications of these fees. Impact fees as de- fined in this book mean a monetary charge im- posed by local government on new develop- ment to recoup or offset a proportionate share of public capital costs required to accommo- date such development with necessary public facilities (Nicholas and Nelson, 1988). There are other forms of developer contributionsm land dedications and other exactions, for ex- ample--but they are excluded in order to focus solely on the impact fee. The Use of Impact Fees Impact fees are assessed and dedicated for the provision of water and sewer systems, roads, parks, libraries, police and fire facili- ties, general government administrative build- ings, emergency medical facilities, hospitals, schools, solid-waste facilities, and even public cemeteries. This list is not inclusive. By far, the most common fees charged are water and sewer facilities (Bauman and Ethier, 1987; Downing and Frank, 1982). These fees are also known as hook-up or connection charges. Lev- 3ring all or a portion of the capital cost of a fa- cility is an impact fee. After utilities, highways are the next most common charge, and after highways, the frequency of use of other fees drops markedly. It is very difficult to estimate the number of communities across the nation that assess im- pact fees. One of the complications is the lack of standard terminology. In some communities these developer charges are called impact fees while in others they may be called benefit as- sessments or connection charges. Developers tend to call them exactions or extractions while jurisdictions call them donations. Earlier stud- ies indicated that impact fees were relatively common in California, Florida, Oregon, and growth spots of other states including Colo- rado and Texas (Bauman and Ethier, 1987; Downing and Frank, 1982; Frank, Lines, and Downing, 1985a, 1985b). But since those stud- ies, several states have explicitly enabled com- munities assess and collect impact fees includ- ing Arizona, California, Georgia, Maine, Maryland (for specific jurisdictions), Nevada, Oregon, Texas, Vermont, and Washington (as of this writing). The number of local govern- ments assessing impact fees has surely risen since the earlier studies. If Florida counties' experience can be con- sidered representative of the future of impact fee usage, the popularity of this new tool is seen in Table 1-1. In Florida, at least, impact fees other than for utilities, roads, and parks are the exception rather than the rule. The first Florida fee for an improvement other than utilities, roads, or parks was adopted in 1985. This was for public safety facilities (fire and police stations). While such 'other' fees are not in common use at this time, they will likely see increasing use unless there is a major legislative or judicial reversal. The Amount of Impact Fees Experience has shown that the dollar amount of an impact fee is critical in the consideration of an impact fee program. While it must be clearly understood that individual fees will re- spond to local conditions, a sampling of fees is set out below in Table 1-2. The fees shown are Development Impact Fees 3 Table 1-1. Impact fee use in Florida counties and cities 1986 and 1989 ACIR surveys Counties Number Using Impact Fees Number Surveyed/Number Responding Impact Fees Used: Road Impact Fees Water and/or Sewer Impact Fees Park/Rec. reation Impact Fees Fire and/or EMS Impact Fees Law Enforcement Impact Fees All Other Impact Fees Total County Impact Fees 1986 ACIR 1989 ACIR Survey Survey 15 32 67/67 67/67 12 27 15 27 5 13 3 12 1 10 5 [1] 29 [1] 41 117 Source: Florida Advisory Council on Ingovernmental Relations, Impact Fee Use in Florida: An Update, July 1989, 89-8, [1] In the 1986 ACIR survey, other impact fees used by counties included drainage, beach acquisition, emergency/rescue, and school impact fees. Other impact fees used by cities included solid waste, drainage, library, one-time general government, and flex-unit impact fees. not the result of a scientific survey. Rather, they are an attempt to depict what may be the typical situation. Nevertheless, this table should provide a general overview of the amount of fees. The fees in Table 1-2 are for a 2,000 square foot single-family detached home; 1,000 square feet of a general industrial building; 1,000 square feet of a general office building; and 1,000 square feet of a general re- tail building. In the event that industrial, com- mercial, and retail fees vary by size of the building, a 100,000-square-foot building was used. Many jurisdictions have fees that vary within the jurisdiction. In such cases, the high and low fees are shown. Local governments are constantly changing their fee programs. Thus, these fees could be changed in the near future. The amount of the fees assessed varies markedly among types of facilities financed with those fees, and among jurisdictions. Table 1-3 illustrates the range and average impact fees assessed for several types of facilities on different kinds of development. Table 1-3 shows that for single-family homes, impact fees for roads vary from a low of $130 to a high of $7,348. The national average, for all fees assessed (excluding water and sewer) on a per-single-family-home basis was $3,686. Philosophic Basis for Impact Fees Impact fees are generally imposed as a con- dition for approval in order to proceed with development (Bosselman and Stroud, 1985). Thus, they fall within the general system of land development regulation as contrasted with revenue-raising (taxation) programs. The objective of impact fees is not to raise money. Rather, the objective is to ensure adequate cap- ital facilities. The adequacy of capital facilities is critically important to the entire system of land development regulation. Where capital facilities are not adequate, permitting develop- ment is contrary to the responsibility of a local government to protect public health, safety, and welfare. In Florida this is known as con- currency. Therefore, a requirement that devel- opment proceed only when such adequacy is either attained or ensured is an act protecting the public from the harm that would occur in the absence of these facilities. Protecting the public from harm is an exercise of a local gov- 4 A Practitioner's Guide to Development Impact Fees Table 1-2. Jurisdiction Impact fee levels by type and jurisdiction Single-Family General Home Industry (Per Unit) Contra Costa Co., California Road (Low) $1,648 $1,150 Road (High) 5,276 2,320 Park (Low) 1,350 NF Park (High) 2,000 NF Fire 500 Variable School ' 2,000 250 Costa Mesa, California Road (Low) 1,566 2,010 Road (High) 7,348 NA Park 1,206 NF Fire NA 285 School ' 2,000 250 Oxnard, California Road 1,084 NA School * 2,000 250 Richmond, California Road (Low) 1,985 NA Road (High) 2,426 2,080 Park 1,011 NF Police (Low) 14 70 Police (High) 51 N^ Fire (Low) 30 150 Fire (High) 686 NA School * 2,000 250 Santa Ana, California Road Variable Variable Solid Waste 2,270 450 School * 2,000 250 Thousand Oaks, California School Variable 260 Police 84 50 Fire 121 66 School * 2,000 250 Ventura Co., California Road 5,245 2,210 School * 2,000 250 Loveland, Colorado Road 268 NA Park 736 NF Pub Fac 271 NA Fire 98 NA Police 24 NA Library 121 N F Broward Co., Florida Road Variable Variable Park 534 NF School 293 NF Water 699 Variable Sewer 1,465 Variable General General Office Retai{ (Per 1,000 Square Feet) $2,630 $4,120 5,360 8,370 NF NF NF NF Variable Variable 250 250 2,010 2,010 8,680 NA NF NF 285 285 250 250 1,368 NA 250 250 2,980 1,980 3,880 6,070 NF NF 20 140 210 20 440 300 1,370 2,400 250 250 Variable Variable 450 450 250 250 260 260 50 50 66 66 250 250 4,415 4,130 250 250 320 800 NF NF 190 190 70 70 20 20 NF NF Variable Variable NF NF NF NF Variable Variable Variable Variable Jurisdiction Charlotte Co., Florida Road Park Pub Fac Police Library Citrus Co., Florida Road Park Pub Fac Police Fire Library School EMS Clearwater, Florida Road Park Collier Co., Florida Water Road Park Hernando Co., Florida Road Park Pub Fac Police Fire (Low) Fire (High) Library School Hillsborough Co., Florida Road (Low) Road (High) Park (Low) Park (High) Fire School Water (Low) Water (High) Sewer (Low) Sewer (High) Indian River Co., Florida Road (Low) Road (High) Water Sewer Lake Co., Florida Road Table 1-2, Single-Family Home (Per Unit) (continued) General Industry Development Impact Fees 5 General General Office Retail (Per 1,000 Square Feet) $ 615 $ 383 $1,058 $1,614 165 NF NF NF 74 57 161 92 6 54 142 102 86 NF NF NF 696 246 932 1,947 248 NF NF NF 47 26 60 72 36 20 47 56 76 43 98 117 87 NF NF NF 135 NF NF NF 6 3 7 9 1,607 589 1,532 2,711 200 NF NF NF 900 Variable Variable Variable 318 183 387 1,981 413 NF NF NF 3,124 1,040 2,370 7,541 81 NF NF NF 96 51 107 207 83 44 93 179 52 27 58 112 105 72 152 294 79 NF NF NF 562 NF NF NF 605 519 1,022 1,909 1,610 1,014 2,587 4,832 224 NF NF NF 422 NF NF NF 49 16 41 22 196 NF NF NF 2,160 Variable Variable Variable 2,510 Variable Variable Variable 1,515 Variable Variable Variable 1,830 Variable Variable Variable 587 149 532 914 1,513 385 1,373 2,356 1,246 Variable Variable Variable 1,366 Variable Variable Variable 298 264 270 817 6 A Practitioner's Guide to Development Impact Fees Jurisdiction Lakeland, Florida Park Police Fire Water Sewer Lee Co., Florida Road Fire (Low) Fire (High) EMS Park Martin Co., Florida Road (Low) Road (High) Park Pub Fac Police Fire Library Miami, Florida Road (Low) Road (High) Park Police Fire (Low) Fire (High) Solid Waste Pub Fac Orange Co., Florida Road Fire Police Orlando, Florida Road Monroe Co., Florida Road Park Police Library Solid Waste Osceola Co., Florida Road Palm Beach Co., Florida Road Park (Low) Park (High) School Library Police Table 1-2. Single-Family Home (Per Unit) (continued) General Industry General General Office Retail (Per 1,000 Square Feet) $ 335 SNF SNF SNF 80 18 55 204 112 201 140 181 530 Variable Variable Variable 1,100 Variable Variable Variable 1,712 1,079 1,990 3,297 51 1 14 83 206 5 57 340 10 NF 3 17 882 NF NF NF 428 536 $1,020 2,109 826 580 1,211 2,537 104 NF NF NF 61 26 61 61 70 30 71 80 29 12 29 33 30 NF NF NF Variable 209 209 209 Variable 543 543 543 Variable 404 404 404 Variable 283 283 283 Variable 18 18 18 Variable 67 67 67 Variable 119 119 119 Variable 102 102 102 1,061 612 1,611 4,005 152 Vadable Variable Variable 46 8 141 141 1,249 919 $2,152 $5,420 1,610 594 1,822 1,874 128 NF NF NF 102 137 137 137 190 NF NF NF 65 NA 65 333 715 563 1,452 3,317 1,650 384 755 2,330 247 NF NF NF 767 NF NF NF 572 NF NF NF 79 NF NF NF 79 26 156 156 Jurisdiction Fire (Low) Fire (High) Pub Fac Pasco Co., Florida Road Water Sewer Sarasota Co., Florida Road Park Water Fire (High) Fire (Low) St. Johns Co., Florida Road Park Pub Fac Police Fire EMS School St. Lucie Co., Florida Road (Low) Road (High) School Volusia Co., Florida Road Fire Tampa, Florida Road (Low) Road (High) Titusville, Florida Road Park Police Fire Alpharetta, Georgia Road ("P") DuPage Co,, Illinois Road (Low) Road (High) Montgomery Co., Maryland Road (Low) Road (High) Anne Arundel Co., Maryland Road School Atlantic County, New Jersey Road (Low) Road (High) Table 1~2. Single-Family Home (Per Unit) (continued) General Industry Development Impact Fees 7 General General Office Retail (Per 1,000 Square Feet) $ 72 $ 179 $ 50 $ 71 86 205 61 85 89 7 67 131 1,734 Variable 2,130 1,840 539 Variable Variable Variable 1,525 Variable Variable Variable 2,231 1,752 1,923 3,553 310 NF NF NF 1,500 Variable Variable Variable 191 Variable Variable Variable 161 Variable Variable Variable 603 200 457 1,456 130 NF NF NF 64 30 63 122 19 9 19 37 74 34 72 139 76 35 74 144 381 NF NF NF 584 310 357 1,944 4,227 714 891 4,875 452 NF NF NF 779 480 1,110 3,950 120 7O 7O 7O 995 918 2,387 2,818 2,770 1,830 4,892 6,865 689 493 880 1,552 110 NF NF NF 18 9 11 27 11 5 7 16 1,497 822 1,921 4,943 492 290 1,732 382 1,075 556 3,072 936 1,498 1,459 3,355 3,035 1,855 1,819 4,812 3,783 533 248 1,109 1,113 2,096 NF NF NF 130 300 600 1,700 560 600 1,580 2,690 8 A Practitioner's Guide to Development Impact Fees Table 1-2. (continued) Jurisdiction Single-Family General General General Home Industry Office Retail (Per Unit) (Per 1,000 Square Feet) Reno, Nevada Road $1,591 $1,735 $2,934 $2,638 King Co., Washington Road (Low) 1,019 Variable Variable Variable Road (High) 1,073 Variable Variable Variable Source: Growth Management Studies, University of Florida, 1990. NF =, No fee charged for this type of development. P = Proposed. ° = In California, school impact fees are authorized at $1 per square foot of a residence and $.25 per foot of non-residential build- ings. The residence shown is assumed to have 2,000 square feet. ernment's police powers, granted by the states solely to authorize such protection (Hagman and Juergensmeyer, 1986). Though such grants of authority to local jurisdictions will vary in nature and extent from state to state, all local governments are legislatively author- ized to protect the public from harm. Building codes, subdivision regulations, speed limits, gun controls, and impact fees are generally permissible to the extent that they prevent public harm. Before it establishes regulations to protect against a harm, however, govern- ment must define the harm and its source. No one would assert an owner's right to harm others in the use of his land. It is the spe- cifics of what constitutes a harm that is a mat- ter of contention. While most would agree that inadequate (off-site) roads provide a reason- able basis for denying an owner a proposed land use, some find it unreasonable to impose a charge on that owner to provide those neces- sary roads. The issue, then, is who should be financially responsible for such necessities? Three possible candidates for fiscal respon- sibility are the local government, the property owner, or 'someone else.' The latter category would include entities such as the state and federal governments. In general, local govern- ments and property owners can readily agree that 'someone else' should bear the cost of roads or other capital facilities. Their agree- ment has not, however, resulted in funding. Moreover, it flies in the face of modem fiscal reality. The federal government is not going to provide increased funding for local infrastruc- ture. On the contrary, federal support has been declining (Choat and Walter, I98I; Netzer, 1988). The states have generally not filled the vacuum created by the federal withdrawal. The simple reality is that the community and the property owner are the only available can- didates to bear the financial burden. The issue then becomes which of these should bear this burden and how the burden should be borne. On the one hand, it may be argued that the community should be financially responsible for needed facilities because it is the commu- nity that benefits (National Association of Home Builders, 1988). Land development is part of the creation of socially and economi- cally beneficial products--new housing, facto- ties, and stores--which satisfy needs of the community in which it takes place. Land de- velopment creates jobs and enhances the tax base. Moreover, it may be argued that impact fees are fundamentaIIyunfair in that they shift to new development costs that were formerly borne by the community (Connerly, 1988). Development Impact Fees 9 Type of Impact Fee Table 1-3. Average impact fees by type Single-Family General General General Home Industry Office Retail (Per Unit) (Per 1,000 Square Feet) Road Low 130 149 209 209 High 7,348 2,320 8,680 8,370 Average 1,543 801 1,963 2,873 Parks Low 81 NF NF NF High 2,000 NF NF NF Average 534 N F N F N F Public Facilities Low 47 7 60 61 High 271 102 190 207 Average 98 43 101 122 Police Protection Low 6 8 11 20 High 102 283 283 283 Average 51 58 97 109 Fire Protection Low 11 1 7 16 High 686 285 1,370 2,400 Average 142 81 158 238 Libra~ Low 30 NF NF NF High 190 NF NF NF Average 93 NF NF NF Schools Low 135 NF * NF * NF * High 2,096 NF * NF * NF ' Average 1,231 NF ' NF * NF ° Water Low 530 Variable Variable Variable High 2,510 Variable Variable Variable Average 1,261 Variable Variable Variable Sewer Low 1,100 Variable Variable Variable High 1,830 Variable Variable Variable Average 1,467 Variable Variable Variable Total Low 2,069 High 17,033 Variable Variable Variable Average 6,413 Less Water & Sewer Low 439 165 287 306 High 12,693 2,990 10,523 11,260 Average 3,686 987 2,329 3,353 Source: Growth Management Studies, University of Florida, 1990. NF == NO fee charged for this type of development. * In California, school impact fees are authorized at $1 per square foot of a residence and $.25 per foot of non-residential build- ings. The residence shown is assumed to have 2,000 square feet. 10 A Practitioner's Guide to Development Impact Fees It may be argued that imposing such costs upon an unwilling community is harmful. It is harmful to the extent that higher taxes and/or user fees are charged to individuals who had no part in the decision to develop the property and who may receive no benefits from the de- velopment. This argument has been going on for a number of years and will undoubtedly continue. Clearly a community may pay for needed facilities. But must it? Increasingly, the answer is that a community need not absorb all costs but may impose a proportionate, or fair, share of such costs upon new develop- ment. This is a permissive rule, and certainly individual communities may elect not to fol- low it. The impact fee presupposes that new devel- opment should pay a proportionate share of facility costs. Proportionate share, in the im- pact fee context, would generally be less than total cost but more than nothing. This book es- tablishes bases on which to determine propor- tionate share. Its method is twofold: it draws upon the experience of various communities that have defined and measured proportionate share, and it draws also upon case law and ju- dicial rationale. A word of caution is in order. This book addresses a dynamic issue, one in the very process of evolving. Relying upon actual ex- perience as it does, it necessarily draws ex- amples only from states where impact fees are in use and have been found to be an ac- ceptable form of land development regula- tion. Both case law and local authority with respect to development regulation vary tre- mendously among states. This book will not discuss the jurisdictional variation in regula- tory or home rule powers, but they are criti- cal to the outcome of an impact fee program. In attempting to develop and implement im- pact fees, one must note the nature of local regulatory powers. THE HISTORICAL CONTEXT Development impact fees are a product of evo- lution in public policy toward land use and provision of public facilities. Before the U.S. Commerce Department's model planning and zoning enabli.ng acts of the 1920s, most grow- ing communities had no effective land use controls. It was not uncommon to find specu- lators, for example, subdividing vast tracts of land at considerable distances from cities in anticipation that purchasers and home build- ers would eventually receive city services (Nelson, 1988a). There were no land use regu- lations controlling the location, timing, or di- mensions of those developments, nor were public facility extension policies linked to land use regulation. The model acts are the genesis of modern land use regulation. They were adopted by most states, many verbatim. Today a person can travel to virtually any state and find commonalities in land use-regulation process and substance that are rooted in the model acts. An immediate outcome of the model acts were regulations requiring developers to pro- vide necessary facilities on-site. Prior to the model acts, developers often demanded and received street, water, sewer, and drainage fa- cilities to each part of their development. The model acts gave public officials legal rationale for requiring developers to internalize those costs (Nelson, 1988b). Of course, if the devel- oper found such improvements to be economi- cally infeasible, they would not be made and the development would not proceed. It must always be remembered that develop- ment impact fees are land development regu- lations and they have evolved just as the regulation of land development has evolved. The object of development regulations is to protect the public. In certain circumstances protecting the public has required the prohibi- tion of certain types of developments in certain Development Impact Fees 11 locations. Impact fees can be expected to have such effects albeit due to economic rather than physical reasons. Requiring developers to provide adequate facilities is common. In fact, subdivision regu- lations typically mandate that the subdivider must provide a number of public facilities as a condition of development approval (see Freilich and Levi, 1975, and Ayres v. Los Ange- les). Initially, required dedications were con- fined to improvements on-site--that is, within the bounds of the property to be subdivided. Concern about the adequacy of public facili- ties ~xtended beyond the limits of the subdi- vided property. As zoning and other land use regulatory forms evolved, so also did required improvements, or exactions. Developers began being required to provide property or im- provements that were external--outside the bounds of the subdivision. Such requirements were found to be within the authority of a local jurisdiction if there was a valid public purpose and the result was reasonable (see Wald v. Dade County, Associated Builders v. Wal- nut Creek, and J.W. Jones Companies v. San Diego). First Steps: Mandatory Land Dedication and In-Lieu Fees The four decades following, the 1920s saw public officials wrestle with providing facilities outside the boundaries of the development. For example, local officials discovered that fis- cal resources could not satisfy the voracious appetite generated by new development for new parks and schools. The initial resolution of this problem required developers of resi- dential subdivisions to dedicate land for park and school use (Hagman and Juergensmeyer, 1986), which is commonly fadlitated by state enabling legislation. But sometimes land dedicated by a develop- ment was in the wrong place, was too small, or for other reasons could not be reasonably used to satisfy community demand for parks and schools. As an adjunct to subdivision dedica- tions, therefore, a system of payment in lieu of dedication came into use. Payment. in lieu is employed when actual dedication or provision of land or improvements is not practical or fea- si~ble. For example, under a requirement to set aside 5 percent of a development's land area as open space, a five-acre subdivision would re- serve one-quarter of an acre. Such a site might prove to be totally impractical for both the subdivision and the community. The alterna- tives were either to exempt smaller subdivi- sions from such requirements or to allow a payment to be made in lieu of dedication. This resulted in local governments requiring money in lieu of land dedication. The money exacted was to equal the value of the land that would have been dedicated (Hagman and Juergens- meyer, 1986). By the 1940s local government's power to demand land or money for facilities located off-site was firmly established. But mandatory dedication and in-lieu laws did not necessarily enable modern impact fees. This is because in- lieu fees are related to mandatory land dedi- cation. There is usually no mandatory land dedication for water, sewer, drainage, roads, and many other facilities (Juergensmeyer, 1988a). The need for these facilities and serv- ices would have to be satisfied on a different, but related, basis. Reconsideration of the Growth Ethic Until the 1960s and 1970s most communities believed that growth and new development were fundamentally good, because those events brought an improved tax base that could be used to build better facilities that all community residents enjoyed. Growth meant improved services at declining average cost to taxpayers. Challenges to the growth ethic 12 A Practitioner's Guide to Development Impact Fees emerged in the 1960s, however, as residents of desirable, rapidly growing communities dis- covered that unbridled growth caused poilu- tion, congestion of streets, overuse of other facilities, and a general lowering of the quality of life (Reiley, 1975). Furthermore, cost- revenue studies showed that in many cases new development placed incremental de- mands for community facilities that actually increased average tax burdens for existing tax- payers (Burchell and Listokin, 1978). Citizens concluded that growth was inimical to their reasons for choosing to live in their communi- ties (Scott, Brower, and Miner, 1975). A new land use regulation ethic emerged calling for new development to internalize all the costs it imposed on existing residents (Bosselman and Callies, 1972). Regulations based on such logic have been found to be within the power of local jurisdic- tions provided that there is a clear public pur- pose and that the regulations are reasonable (see, e.g., Callies and Freilich, 1986). Protect- ing the public also commonly requires that cer- tain types of developments be denied because the necessary supporting fadlities are lacking (see Golden v. Ramapo). The development would become acceptable once the needed fa- cilities were provided. Local Government Fiscal Stress A number of changes in the attitude toward fi- nandng public facilities emerged in the 1970s and 1980s. At the forefront of these changes was the fiscal revolt of the 1970s. Other factors included inflation, rising facility standards, and rising expectations of existing residents on the preferred range of public services. The fiscal revolt manifested itself in rejec- tion of new general obligation and revenue bonds for capital improvements needed to ac- commodate new development. It also mani- fested itself in electorates imposing on local government severe restrictions in the taxation of real property, the most regressive of the major taxes. Proposition 13 in California and Proposition 2-1/2 in Massachusetts are only two examples of the more visible outcomes of this revolt (Chapman, 1981). The fiscal revolt extended to state and fed- eral levels as well. When combined with infla- tion, the result was a dramatic decline of public fiscal support for public facilities. As a result, government capital financing has not kept pace with either inflation or population growth since about 1965 (Choat and Walter, 1981; Duncan, Morgan, and Standerfer, 1986; and Netzer, 1988). Government capital financ- ing was 3.4 percent of gross national product in 1965, for example, but fell to 1.3 percent in 1984 (Nelson, 1988a). While capital spending at all levels of gov- ernment rose from $20.6 billion in I965 to $50.7 billion in 1984, inflation-adjusted out- lays in 1972 dollars actually fell from $31.3 bil- lion in 1965 to $20.5 billion in 1984. The decline in inflation-adjusted per capita capital outlays for public infrastructure from $161 in 1965 to less than $87 in 1984 is even more dra- matic (Nelson, 1988b). Coupled with inflation and the fiscal revolt are rising facility standards and rising expecta- tions for facilities by existing residents. Im- proved water and wastewater treatment, and larger, better-designed highways are not so much demanded by the public as they are re- quired by state and federal regulatory agen- cies. But new arts centers, public day-care centers, and expanded parks facilities are ex- amples of the rising public appetite for new or expanded facilities (Choat and Walter, 1981; Netzer, 1988). The net result of all these factors is that local government has been forced to consider all possible revenue-enhancing sources. These in- clude new or higher user fees, privatization of some services, negotiated exactions of new de- velopment requiring planning approval, and development impact fees. Judicial Support Legal challenges to development impact fees have focused first on whether local govern- ments assessing them have the authority to do so under state enabling statutes. Impact fees have been explicitly authorized by only a few states since the 1980s including as of this writing, Arizona, California, Georgia, Illinois (for only some local governments), Maine, Maryland (for only some local governments), North Carolina (for only some local govern- ments), Tennessee (for only some local govern- ments), Texas, Vermont, West Virginia, and Washington. In some states without enabling legislation, the courts have found impact fees to be unauthorized taxes. Challenges have also focused on whether impact fees are unfair since existing developments do not have to pay them (Nicholas, 1988a and b). However, under one theory or another impact fees, by a variety of names, exist in all 50 states (Bauman and Ethier, 1987). The first major court case in which the fun- damental principles of development impact fees were tested was Jordan v. Village of Me- nomonee Falls. The Wisconsin Supreme Court reviewed the authority of local governments to require dedications of land for schools and parks. The court held that dedications were consistent with exercise of the police power. The court reasoned that the city established a rational nexus between the need for new or ex- panded public facilities necessitated by new development and the dedications that would reasonably (but not exclusively) benefit con- tributing development. The connection between need and require- ment was unclear in the 1960s, however On the one hand, the court in Jordan required only Development Impact Fees 13 that local government demonstrate a reason- able relationship between the fees paid and the benefits received. The Jordan court set out the basic principle that has been followed re- garding impact fees as it relates to this connec~ tion, or nexus: In most instances it would be impossible for the munidpality to prove that the land required to be dedicated for a park or school site is to meet a need solely attributable to the anticipated in- flux of people in the community to occupy this particular subdivision. On the other hand, the munidpality might well be able to establish that a group of subdivisions approved over a period of several years had been responsible for bringing into the community a considerable number of people making it necessary that the land dedications required of the subdividers be utilized for school, park and recreation pur- poses for the benefit of such influx. In the ab- sence of contravening evidence this would establish a reasonable basis for finding that the need for the acquisition was occasioned by the ac- tivity of the subdivider [emphasis by the Court]. The clear establishment of need that the court is demanding would be done through compe- tent land use and facility planning. At the other end of the spectrum is Pioneer Trust & Savings Bank v. Village of Mount Pros- pect, in which the Illinois Supreme Court held that the need for new or expanded facilities must be specifically and uniquely attributable to development. In this case the court ex- pressed a totally different sentiment than that of the Jordan court when it wrote: There can be no controversy about the obvious fact that the orderly development of a munici- pality must necessarily include a consideration of the present and future need for school and recreation facilities. That the addition by this subdivision of some 250 residential units to the municipality would of course aggravate the existing need for ad- 14 A Practitioner's Guide to Development Impact Fees ditional school and recreational fadlities is admitted by the parties to this cause. No com- plaint is made by the plaintiff in this cause that the land required to be dedicated for such pur- poses by subdivision control ordinance is un- necessary. The sole question thus presented here is whether the state of law is such that a mandatory dedication of the land without cost to the public may be sustained in the regulation of proposed subdivision when it is admitted that such land may well be needed. However ... the need for recreational and educational fadlities in the event that said sub- division plat is permitted to be filed, is [not] one that is specifically and uniquely attributable to the addition of the subdivision .... If this whole community had not developed to such an extent or if the existing school facilities were greater, the purported need supposedly would not be present. [at 381] Thus, because school and recreational sites were needed generally, and not just by the oc- cupants of the p.articular subdivision, general approaches to their provision would be more appropriate than developer dedication. The Pioneer Trust standard of 'specifically and uniquely attributable', if it is to be strictly applied, virtually precludes impact fees, be- cause the facilities typically provided with im- pact fees are used by the entire community and not just the occupants of contributing developments. By and large, however, courts have gravi- tated toward the rational nexus test as a deter- mination of reasonableness as defined by the Florida and Utah courts. In Contractors & Builders Association of Pinellas County v. City of Dunedin, the Florida Supreme Court found that development impact fees were permissi- ble provided that: 1. There must be a reasonable connec- tion between the need for additional fa- cilities and the growth resulting from new development. 2. The fees charged must not exceed a pro- portionate share of the cost incurred or to be incurred in accommodating the develop- ment paying the fee. 3. There must be a reasonable connection between the expenditure of the fees col- lected and the benefits received by the de- velopment paying the fees. In Banberry Development Corporation v. South ]ordan City the Utah Supreme Court elabo- rated on how a rational nexus can be estab- lished between the costs of facilities required to serve new development and the amount of fees assessed (Nicholas, 1988b). Critical ele- ments of defensible impact fee systems estab- lished by this court and now embraced by many other courts are reviewed later The central issue of any development im- pact fee effort has become the'determination of proportionate share. Before that determina- tion is made, however, it is important that the impact fee system respect these three major tenets of the rational nexus test. The source of the need for the fadlities and the benefit from those facilities to the development being charged the fees must be considered. It is criti- cal that these matters not be subordinated to share calculation procedures. Here it is possi- ble to observe the relationship between impact fees and subdivision dedication requirements. SubdivisiOn dedications are permissible, first, because the improvements dedicated are needed by that development, and second, be- cause such improvements benefit that devel- opment. Impact fees must pass the same test of reasonableness. As with dedications, it is vital for communities using impact fees to be able to show that the fadlities for which impact fees are to be paid are needed because of develop- ment. It must also be shown that fadlities pro- vided by these fees will reasonably benefit or serve the developments paying the fees. r Development Impact Fees 15 Courts have commonly embraced the ra- tional nexus test and it has become the main- stream approach to the design of impact fee systems (Stroud, 1988). Recently, the U.S. Su- preme Court in Nollan v. California Coastal Commission found an unconstitutional taking that would require just compensation when that agency failed to demonstrate a rational (that the Court referred to as essential) nexus between a requirement to dedicate a beach ac- cess easement and the benefit received by the contributing property owner. CHAPTER 2 Which Communities Use Development Impact Fees and Why? Communities are most likely to adopt impact fees for reasons reviewed in three parts of this section. The first part reviews the political ra- tionale. The second reviews the kinds of com- munity administrative structures and capaci- ties most likely to influence the decision to adopt impact fees. The third part reviews the kinds of communities most likely to adopt for- mal impact fee programs. In general, commu- nities in which these preconditions do not exist are unlikely to adopt impact fees. POLITICAL RATIONALE Two underlying currents of political change have been observed since the 1960s. First, the growth ethic gave way to a growth manage- ment ethic that demanded new development to account for its costs. Second, the taxpayer revolt forced local governments to abandon many traditional means of financing infra- structure in favor of expanded user fees and innovative financing, including impact fees. Between 1970 and 1987 there was a move- ment away from property taxes--caused in large part by voter resistance to the size and re- gressive nature of the tax. Real state and local property tax revenue rose by 11.3 percent, but fell by 7.2 percent on a per capita basis, during 16 this period. Additionally there was a 56.8 per- cent increase in real debt and increases of 64.3 ' percent in general revenue, 69.8 percent in taxes excluding property, and 135,3 percent in other charges (Statistical Abstract of the United States, 1990). The level of state and local taxa- tion has increased faster than incomes have risen. Total state and local government reve- nue as a percent of personal income rose from 18.7 percent in 1970 to 22.4 percent in 1987. The figures thus portray the effect of fiscal revolt--costs are being shifted away from the community at large to users of services, and new development has become defined as users of new capital facilities (see 1800 Atlantic v. City of Key West). For their part, local govern- ments may politically rationalize development impact fees for the following five reasons (Frank and Downing, 1988a): 1. To shift fiscal burdens from existing tax- payers to new development; 2. To synchronize the construction of new or expanded facility capacity with the ar- rival of new development (sometimes called concurrency); 3. To subject new development decisions to pfidng disdpline; Which Communities Use Development Impact Fees and Why? 17 4. To enhance the community's quality of life by attempting to exclude certain types of development and socioeconomic groups; and 5. To symbolically respond to locally vocal antigrowth sentiments. The significance of these motivations are dis- cussed in detail below. Shift Fiscal Burdens Occupants of existing developments enjoy fa- cilities that were commonly subsidized by .fed- eral, state, and community resources. For new development those subsidies have been re- duced or canceled. Additionally, existing facili- ties were provided when costs, especially interest rates, were lower Federal aid for water and sewer systems, and federal and state aid for transportation once paid for up to 75 to 90 percent of the costs of those facilities. The community needed only raise the other 10 to 25 percent. When general obligation or reve- nue bonds were used to finance the commu- nity share, the tax burden on residents was relatively small. But when federal support for these systems was reduced or eliminated in the 1970s and 1980s in order to reduce the federal deficit, communities had to find other means to finance facilities. The trouble was that vot- ers in many of those communities refused to. raise their taxes [n order to pay for new facili- ties serving other people. The nation as a whole is experiencing negative investment in infrastructure (Netzer, 1988). Table 2-1 sum- marizes the decline in the public stock of capi- tal, commonly called infrastr~Icture. The obvi- ous alternative was to require new users to pay for what the federal government had formerly paid. But some communities have also under- priced the use of existing facilities over years or even decades. Prudent facility pricing policies could raise more revenue to pay for necessary rehabilitation and replacement of existing cap- ital stock. Largely to provide politically popu- lar low user prices (in the form of direct user fees or indirect taxes), local public officials kept the price of services artificially Iow. The result is that today many communities face a mounting unfunded capital improvement maintenance and replacement debt that is quite large, by some estimates running over $1 trillion across the nation (Stein, 1988). Faced with this prospect, occupants of existing devel- opments do not wish to have to pay for reha- bilitation or replacement of existing facilities together with new facilities that over time will also require rehabilitation or replacement. Al- though existing facilities were paid for by ex- Table 2-1. Federal and state and local government capital stock in relation to housing stock, 1970-82 in 1982 dollars Net Capital Stock (Billions) Federal State and Local Total Occupied Housing Units (000) Net Capital Stock Per Occupied Housing Unit Net Capital Investment Per Additional Housing Unit 1970 1975 1980 1982 479 492 574 594 1,018 1,293 1,501 1,358 1,497 1,785 2,074 1,951 63.445 72,523 80,390 83,907 7,550 6,784 7,140 7,079 -1,846 -2,426 -2,905 Source: Statistical Abstract of the United States; 1979, page 288; 1984, pages 277 and 753. 18 A Practitioner's Guide to Development Impact Fees isting development, communities are strapped with maintaining or replacing those facilities. New development will have to install, main- tain, and replace their own facilities. The polit- ical reality is that no one, either existing or new development, wants to pay the bill for either new facilities pr rehabilitation of existing facilities. Synchronize Facility Expansion and New Development Leapfrog urban sprawl is caused in part by the extension of facilities into undeveloped areas, allowing development to skip over land closer to the urban center. Extension of those facili- ties in advance of development is also costly if development does not immediately use and pay for them. Thus, to keep facility costs down, communities now use facility extension policy to control the rate, timing, and location of growth. Force Pricing Discipline on New Development Local public offidals now generally agree that underpricing of facilities leads to their ineffi- cient use. Development is less intense, more spread out, and more wasteful of facilities when it does not have to pay the full cost of the fadlities it connects to and uses. It is now read- ily accepted that some development is simply more expensive to serve than other develop- ment. With typical user charges and flat con- nection fees, development in areas that are less costly to serve actually subsidizes develop- ment in areas that are more expensive to serve. The result is that development in less costly areas is penalized while development in more costly areas is rewarded. Maldistribution of de- velopment occurs and the cost of providing fa- cilities rises. By requiring new development to pay for its full share of the cost of providing new fadli- ties, local officials use the private market to aid in determining when new development is fea- sible. That is, when facility prices reflect true costs, only development that can afford to pay those costs will happen. Exclusionary Desires, or "Snob Pricing" There is the possibility that some communities may see impact fees as a way to keep out un- desirable development and certain sodoeco- nomic groups. In the guise of making new development pay its full share for new facili- ties, such communities try to exclude classes of households that cannot afford those costs. Of course, it is entirely rational for communities to avoid developments that cost it more to serve than it generates in revenue. In fact, any community that accepted development that did not pay its own way would be seen as irre- sponsible. The fundamental problem is a cur- rent system of local government finance that does not compensate communities for accom- modating necessary but revenue-losing de- velopments and the lack of any federal or state assistance or direction in dealing with this problem. Symbolism Local public officials may see impact fees as a way to mollify local antigrowth or slow- growth interest groups. The strength of these groups is evident in some California commu- nities where local public officials are elected and reelected by demonstrating how high impact fees are. Sometimes officials will adopt arbitrarily Iow impact fees, amounting to a small fraction of the true cost, in order to demonstrate symbolic support of interest- group positions. For example, in at least one Florida community, local interest groups were strong in their assertion that all new de- velopment be held fully accountable for fa- cility costs, but local public officials adopted some impact fees that reflected only a quar- ter of those costs. Which Communities Use Development Impact Fees and Why? 19 ADMINISTRATIVE DETERMINANTS Not all communities have the proper circum- stances under which to consider, adopt, and administer impact fee systems. Kaiser, Burby, and Moreau (1988) find that there are three groups of administrative factors that dictate whether a community is more or less likely to adopt impact fees. First, there must be need for innovation imposed on local administrations. Second, there must be administrative capacity to innovate. Third, there must be land use and facility planning and coordination capacity. Need to Innovate In the case of public fadlity expansion, the need to finance expansion is closely assodated with population and employment growth. In- creased demand stresses existing system ca- pacity and pressures local administrations to respond. Kaiser, Burby, and Moreau observe that the need for innovative fadlity finandng tools such as impact fees results from growth in population and employment~ increasing de- mand for public fadlities, stress on the existing system to cope that can only be met by system expansion, and policy rationale favoring the sheltering of existing development from de- mands of new development. Administrative Capacity Innovative financing can only be implemented by administrations that have the capacity to do so. Capable administrations are those charac- terized as being large enough to afford special- ization of functions so that policies such as impact fees can be adequately reviewed, delib- erated, and implemented; being under cen- tralized control so that chief political and administrative officers can issue directives that will be carried out; and having fairly capable and secure managers who have the vigor and the technical foundation needed to face the challenges of innovation. Planning and Coordination Capacity Legally defensible impact fee systems' depend on a comprehensive land use and capital im- provements program. The development of those documents is very demanding of person- nel and resources. Furthermore, coordination of planning and programming is necessary both among local government agencies and with outside government units. If the local government administration is unwilling or in- capable of preparing comprehensive land use plans and capital improvement programs, or is unwilling or incapable of adequately coordi- nating its departments and other government units, then impact fees cannot be defensibly adopted or implemented. WHICH COMMUNITIES ADOPT IMPACT FEES? Considering all the factors that determine whether communities adopt impact fees, what does the.evidence show to date? A recent study by Frank and Downing (1988b) is espe7 cially illuminating. Based on their earlier studies of the adoption of impact fees (Frank and Rhodes, 1987), Frank and Downing analyzed factors underly- ing adoption of fees in communities across the United States. Their analysis consisted of 304 communities that were 'in the sewer business,' and who responded to a questionnaire. They devised seven community types to illustrate characteristics of communities prone to adopt- ing or not adopting impact fees. Of their seven community types, the least likely community (with a probability of virtually zero) is small (population 5,000), located in a state with a prodevelopment judicial tradition (such as many southern, midwestern, and mountain states), had little growth during the last dec- ade, has a small property tax effort dedicated to capital fadlity financing (I mill), and has a relatively small investment in sewage treat- 20 A Practitioner's Guide to Development Impact Fees ment to maintain (only $200,000). At the other extreme is the community type most likely to adopt (probability of 92 out of 100). Such a community is large (population 500,000 or more), growing (25 percent growth in the past decade), in a state with a preservation-ori- ented judicial tradition (some New England and West Coast states), relatively large prop- erty tax effort dedicated to capital facility fi- nancing (10 mills), and a relatively large sewer facility investment to maintain ($20,000,000). The community types are statistical con- structs and no community precisely fits all characteristics of any type. But the work of Frank and Downing clearly conveys the point that only certain kinds of communities are likely to adopt impact fees. This evidence shows that communities having to devote sig- nificant tax resources to the support of growth are those that adopt impact fees. Likewise, those with low costs of accommodating growth have little likelihood of fee'adoption. SUMMARY By taking all these factors together, one may deduce that communities with many if not all of the following characteristics are likely to adopt development impact fees: · Large population base; · Moderate to rapid growth rate; · Relatively high property taxes; · Relatively large capital investment to maintain; · Administrative capacity to innovate (im- plying large, centralized administrative appa- ratus with professional administrators); · Planning and coordination capacity (im- plying ability to prepare comprehensive land use plans and capital improvement programs, and coordinate the planning and implementa- tion process am.ong local government and extrajurisdictional agencies); · Popular support to shift new facility fi- nancing burdens; · Growth management ethic that forces new development to account for a high share of the costs if may impose on existing develop- ment, and that favors the use of facility exten- sion timing, sizing, and location to guide growth; · Predisposition of existing residents to en- hance community welfare by excluding certain development and, implicitly, socioeconomic groups; · Local slow- or antigrowth interest groups that would force new development to pay off or at least more of its fiscal, social, economic, and environmental impacts on the community. While these are many of the preconditions dictating a community's movement toward impact fee adoption, in reality the impact fee systems that emerge are greatly tempered by the development community and public offi- cials' desire to exclude neither certain socio- economic classes nor certain kinds of eco- nomic development. These influences on impact fee design will be discussed in Chap- ter 6. 11/16/1999 i1:35 6822654 TOWN OF M~ANA PAGE MARAN'A ORDINANCE NO. 98.02 AN ORDINANCE OF THE TOWN OF MARANA, ARIZONA, RELATING TO THE PRIVII ]::GE LICENSE TAX; AMENDING THE TOWN TAX CODE BY ~'qCREASING THE TAX RATE ON CONTRACTING ACTIVrI~S; PROVIDING PENALTIES FOB. THE VIOLATION PROVIDING FOR SEVERABIZITY AND DESIGNATING AN EFFECTIVE DATE. BE IT ORDAINED BY ~ MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA: Section 1. The tax rate in each of the following sections of the town tax code is increased fi.om two percent (2%) to three percent (3%): Section 8415 Construction contracting: construction contractors. Section 8416 Construction contracting: speculative builders. Section 8-417 Construction contracting: owner-builders who are not speculative builders. Section 2. Any person found guilty of violating any provision of these amendments to the tax code shall be guilty of a class one misdemeanor. Each day that a violation continues shall be a separate offense punishable as herein above described. Section 3. Irony section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions thereof. Section 4. The additional tax imposed pursuant to Section 1 ofth/s ordinance shall not apply to contracts entered into prior to the effective date ofth/s ordinance. Section 5. The provisions of this ordinance shall become effective on May 1, 1998. M~. ~o~ o~d;,~,~ 9~.0: Page 1 of 2 11/16/1999 11:35 6822654 TOWN OF MARAHA PAGE 24 MARANA RESOLUTION NO. 98-06 A KESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, DESIGNATING CERTAIN TAX RECEIFI~ TO BE USED SOLELY FOR TRANSPORTATION CAPITAL IMPRO~S, AND PROVIDING FOR A SEPARATE ACCOUNT FOR SUCH FUNDS. W}i~P,]SAS, the Town of Mm'ana has detmn~nined that it h~ significant n~.A for transportation capital improvements, and that such tmn~rmtion nc-..ds have increa_~l, and will continue to rise, due to the dramatic escalation of development activities in the Town; and ~AS, Ordinance No. 98.02, as adopted by the Town of Mazana Mayor and Council, has increased thc tax rate for construction contracting activities to thre~ percent (3%); and WHEREAS, the Town Council of the Town of Marana has determined that two-rJKrds (273) of the sales tax generated from construction contracting activities should be aegregatext from other tax revenue, placed in a sepm~te account, and used for the purposes of transportation capital improvements. NOW, THEREFORE, BE IT KESOLVED by thc Mayor and Council of the Town of Manna, Arizona, that two- .QSx'ds (2/3) of the tax revenue generated from construction contracting activity within the Town of Marana, pursuant to sections 8-415, 8-416, and 8-417 of the Marana Town Code shall be: placed in a separate account, and said funds and interest from maid funds shall thereafter be uaed solely for transportation capital improvements. BE 1T FuR'rltER RESOLVED that the effective date of this Resolution shall be May I, 1998, and it shall apply to the designated tax revenue which is collected for construction activity conducted after such date. M~rao~. Arizon~ Resolution 98-06 Page 1 of 2 11/16/1999 11:35 $822654 TOWN OF ~g~RANA PAGE PA.RSIED AND ADOPTED by the Mayor and Council of the Town of Marana, Ar/zona, this 3~ day of February, 1998. ATTEST: APP~ AS TO FORM: ~el J. I-Ioch~ Town Attorney' Mayor RN / M,,.,... ^,-~.o,,. ;z=,o~,~t;o. No. 9s-o6 Page 2 of 2 ll/l~/19BB 11:35 6822654 TOWN OF MARANA PAGE 82 TRANSPORTATION FUND Construction Tax Mon~ Year Receipts July 1998 179,685.08 August 1998 163,547.94. September 1998 226,996.61 October 1998 161,741.27 November 1998 186,265.28 Oecember 1998 183,684.38 January 1999 259,544.68 Feb~ary 1999 126,441.69 March 1999 267,562.95 April 1999 240,825.11 May 1999 234,186.92 June 1999 247,400.21 July 1999 316,231.83 August 1999 253,923.82 September 1999 272,892.83 Amount to Cumulative ContdbutJon Transportation Interest No. of Interest Fund Factor Fund Rate Days Earned Disbursements Balance 66.86% 119,778.07 66.66% 109,021.06 5.7003% 66.66% 151,315.94 5.8756% 66.66% 107,816.73 5.4757% 66.66% 124,164.44 5.4957% 66.66% 122,444.01 5.4611% 66.66% 173,012.48 5.2837% 68.88% 84,286.03 5.1050% 66.66% 178,357.46 5.1010% 66.66% 160,534.02 5.0202% 66.66% 156,109.00 5.0194% 66.66% 164,916.98 5.0740% 66.88% 210,800.14 5.1529% 66.66% 169,265.49 5,2906% 68.66% 181,910.38 5.4759% 31 573,71 30 1,051.28 31 1,736,17 30 2,04.4,.86 31 2,631.13 31 3,025.29 28 3,307.78 31 4,C02.89 30 4,155.20 31 4,68820 30 5,O57.38 31 5,783,58 31 8,904.7O 30 7,704.55 1,275.00 118,503.07 2,736.50 225,381.34 4,406.00 373,322.56 30,17~t.00 452,701.48 11,638.37 567,274.39 18,193.57 674,155.96 5,546.25 844,647.48 8,335.75 923,g05.54 99,234.82 1,007,030.87 72,480.15 1,099,259.94 47,374.83 1,212,880.31 61,128.21 1,321,528.48 1,47S.00 1,536,837.18 967.00 1,711,840.36 6,139.20 1,895,315.07 11/16/1999 11:31 AM TOWN OF MARANA PAGE 83 ORDINANCE NO. 95.02 AN ORDIN.-MN'CE OF ~ TOWN OF Ng~:Uk,'qA. ARIZONA. .a. DOPTI'NG SECTION 0~.05, ENTITL£D "DEVELOPMENT AGREEME'NTS". .~N'O .-LDOPTiNG SECTION 04.06, I~-N'ITi'r_!=i~ '-'R.E~i:BL~:2,~--,v. i:E'NTS FOP, PUBL.rC r),~ROv~N~NTS". AS .-L,M:EN-DN.~NTS TO T'i-~ ~.t-kk~NA L.-hN'O DEVELOPM:E?,rT CODE. WI-FEI:LEAS. the Town Council of the Town of .Marana did on May 14. 19S4 adopt Ordiran¢= No, 84.04 whici~ Ordinan¢... adopted a Land l:)eve!opm~.-.t Cede for the Town of Marana. said Ordinance having been amended a number of times; and Wr"I:E~AS, the Tov,'n Council hat deten'n, ined that it would be in the bert interests of the To,.'m elNa. tuna m ~ke sub~antid modi~cadon~ ~o Title 4 of ~he Land Development Code adding a new se~ion to ~ Deveiopment Code pro~ding for a procedure for the orderly and unifo~ ~opdon of Deve{opment Agreements a~ecdng l~d ~thin :he boundade~ of ~e Town of M~na: WH:E~-KE.-LS, the Tov,'n Council has de:;."mined that it ~,,'euic~ be in the best in~eres=s or,he Town arM. arum. to makc substantial modifications m Tk!e 4 of the Land Dev=topmen~ Code adding a new section ~o the Oevelopmen~ Code providing for a procedure whereby deve!operx may obtain reimbursement from other developer, for c-=~ain in~i-as~ructure con$cruc:e~ within the boundaries oftt~e Town of Marana, and Vv"i-IEI:LIT_-LS, the Mm'a.na Planning Commisxion he!d a public hearing on the propose~ modifications to the Land Development Code on October 26. I994, amd following this public hearing recommended that the Town Council adopt the proposed, modii~cations; and WI-i:ERF_a,S, the Town Cound of the Town ofMarana hetd a public hearing on the proposed modiicafions :o the Land Development Code on D~smber 6. 199a, in order to obtain public input on the proposed modi~cations, and has considered the modifications and betieves them to be in the best in~eres:s of the Town of Mm'aha. NOW, THEREI:ORE BE iT ORDAD/ED by the Mayor and Council of' the Town of Marana Arizona, ~ follows: Section I: The Marana Land Development Code shall be amended by adding Sec:ion 04.05. titled "Development Ago'cements", and Section 0-'..06. titled "Reimbursements for Public Improvements". ,Section 1'~: Those c-_,'tain documents tmown as Land Development Code, Tide 0~..05. titled DEV.F_LOPMF..NT AG:RE--__---Nf~NT$ and Section 0~.06 d~led REIMBURSEMENT FOR PUBLIC IlW..PRO~NTS, ~"~-- copies of which are on ill: in t~e offic: of the town ct~rk of the Town of ~ Arizona, which decummts were m~e public r=ords by Re~olution No. Ordinauce No. 95.02. Page [ of 2 11/16/1S99 11:35 6822654 TOWN OF MARANA PAGE 04 Planning Commission Recommendation. Ar the conclusion of the public hearing, the Planning Commission shall make a report: and recommendation to the Town Council, by affirmative vote of not less than z majari .t7 of its voting members, as follows: i. T'nac the development agreement be ~dopce~ as proposed: 2. That ~he development agreement be adoot~ with proposed by the Pt~ning Commission: or modiEcations, as 3. That the development agreement be denied. Any action taken by the Ptanning Commission shall be by resotu~:on and shall include written findings sp.~ifying the acrs and information relied upon by the Planning Commission in rendering its decision and re,-.:~mmendation. A copy of the resotu~on shall be filed with the Town Clerk ~ct with the Planning Administrator. H. Totem ~ouncil Acdon- FoLlowing the Plm-m/ng Commission Public He. ar/nd ;md issuance or' the ru'commenda~on of th~ Planning Commission, the irern sh-,~U be placed on the agenda for the next r~*ularly scheduled Town Council M~ting, z[Io,,ving suffi¢ie~qt time for publication ~ noti~, if needed. The Town Council may adopt the recommendar/on of r. he Planning Commission without holding a second public hearing if there is no ot~j~rion, request for public h~..a'ing, or other protest. The Town Council si'roll hold a tmbEc hearing if requested by the pa..-W, aggrieved, or any member of the public or of the Towrt Council. Notice or' the t/mc and place or' ~hc pubiic hearing shall be given in the same manner and under the same te:Tns as provided in Para=~raph F shove. The Town Council may: 1. Approve the development agreement; A.mprove the development agr~',.ment with modifications; or 3. Reject the developmen~ agreement, in whole or in. pan, and take such further ac=ion as it d~-rns to be in the public interest. The Town Council, in approving a d~veiopment agreement, must find th:u the agreement is cortsis~ent with the adopmd general plan for the Town. applicable speciHc plans ~md relevant Town poli¢ie$. L Ordinanem. The Town Council sbM1 ~pprove such %,,zc~men£ bv ordinance. 'i-ne Town Co~ncii's action shall be tin~ and conclusive. ll/16/1BB9 ii: 35 6822654 TOWN OF MA~A~A 85 J. F._,~ecution of Development A~'eement. If approv:d by the Town Council, the deve!opmenr :gr~-eme.~r ~h~l b~ome effective upon execution by the Town, acdn§ by amd through the Mayor, by t,~¢ :ppIican: ~d by rmv other parries to the developmen: zgr~men~. K. Notice of Decision of Towu Council Within ten (10) days ~ ' ~ . ,ollowm= rtj~?2on oi: ;~ deve!ooment agra--mont, the Town Clerk sh'.:.ll give node: of iuch action to [he applicant ,~t ~he ~dress ihown on ;he :~p[icatioa and to the Planning Commiixion through the ?lanning Adminiirmror. L. Recordation of Agreement. Within ten (I0) days foilowing compi~,.~ ex,'m/on of a development :.gr~menr, the Town Clerk shail re. cord w/th thc Recorder of ?ima County, a fully execut~ c~py of the development agreement and ordinance, which shall describe thc land subj,: .;hoe-eeo. The agt'e~ment shall be binding upon, and the benefits of the Mos'~men~ ihall inure to ,.he parties and ali in interest ro ~e parties ~o th~ devdopme.~ U'pon submission of the completed ~pEmdon, the applicant shn. iI tender a five thousand ($5,000.00) dollar application fee, said f~ to cove.", among other things, the costs of public:~tiort, l%mi noti~$, legal fe.~s, engine,-ring fe'..s, and other costs associated with the ping of the a.~. lic:xion. This application f~ shall be non-refundable. In the event ~/crual admirfisrradve costs excel[ this f~, the owner/devdoper shall tender additional ~nds as requested by the Town. 04.05.05 COORDINATION OF DEVELOPMF~NT AGREE3,.IZ~iT APPLICATION WITI-t OTHER DISCRETIONARY APPROVAJ..S It is the intone of thes~ r~ulaions th~ thc ap. pticadon rbr a development Morexment wiil be made and mnside.-'~i simultaneously with the my/ow of other n~essary applications, including but not limited to, reining, planned commit'icl, residential or industrial d~velopment, and conditional u.~ permits. If combined with an application for rezoning, planned development or conditional use permit, the application for ~. d~,eiopm~t ~.,'eement shall be submitted with mid application and shall be processed, to the maximum e.x~t possible, jointly, to avoid duplication of hearings and repetition of information. A devetopmen: agreement is no[ a substitute for, nor m alternative to. any other r~uir~ pemit or approve, and the appik".mt must comply with all other required procedures for deve!opment approval. ll/1G/1BB9 11:35 G822G54 TOWN OF MAR~qA PAGE 06 04.0S.04 EXISTh-NG A~N'D STJB~EQUF_NTLY ADOPTF_D TOWN ORD~N~NC~ES, POLICIES, RULES A~ND REGULATIONS Urdess o~e.-wi~a provided by the deve{opment ~_r~ment, rules, regulations ~d official policies or' the Town governing permitted uses of' ',.he land, governing density and intensity of use; governing public facitiry requirements ~nd financing, and governing design, improvement and construe'don standards and .specifications applicable to the subjec: pmper'cy, shall be those rules. regulations :mci o~cial policies in force at the rime of execu:ion or' ',he development ag.,'~ment. T'ne adopdon of a development agr~ment, however, shall not prevent the Town. in subsequent ac:ions applicable to the property, or to the Town in gene:?2, from appiying new rules, r=§ulations and policies which do not conflict with those appiicabIe to the propeay at the time of e.'c=ution of the development agr~ment, or wi'rich are required to prot~ the health or safety of Town r~sidents. The existence of the development agreement shall not prevent the Town from denying or conciitiorm.Lly approving any subsequent development pr~ect appticafion on the b~is of such exiszing or new role.s, ~guiations and policies. 04.05.07 ST~q3SEQLFN-NTLY ADOPTED STATE AaN'D FEDEIL~L LAWS f.n r. he ev~t chac s~m or t~e_,-'~ laws or ~uta~ons, enac:~ gtera d~eiopm~qt ag~menc h~ be:n entered into, p~vent or p~Nde compline= wi=~ one or more provisions o~ ~e dev~opm~t ~mm~ ~e pro~ons of ~e agreement sh~l be mcdi~ or sus~d ~ my be n~s~ m ~mply ~ mc~ stat= or f~e~ laws or regulations, ~d ev~ suc~ deve!opment ~m~t sh~l ~ pm~de. 04.05.08 PEi~IODIC REVIEW, TY3aXfh~ATION OR NfODIFICATION An adopted devMopment a=,~re~me, nt shaiI be reviewed at least every ~etve (12) monks, ~ wN~ ~me ~ o~(s) of ~e pro~ subj~t to ~e deve!opm~t ag~ment sh~ be to demons~e good ~ comp~ ~ ~e te~s of ~e development ~ment. ~, ~ a result of such m~ew, ~e Town Council finds ~d dete~es, on ~e b~s of sub~d~ e~d~, ~ ~e o~ h~ not compli~ in good f~ with ~e condi~ons of ~e development ~m~ ~e T~ Co~ea my u~am~ly terminate or modiO ~e a~mmmt. Such action s~ ~ ~ by ~e To~ Co~ ~ a ~uI~ or .s~i~ re=drift, pmvid~ ~at ~e dcv~oper is ~fi~ at I~ ~ (10) ~ys ~ adv~c= of such m~g. 0~.05.09 AM~.ND~,'FJgaNT OR C.-kNCtCLLATION OF AG~'I~-NT A d...-'ve2opment ~m-~,.ment rrmv be amended or c~celed, in whole or in p~ax, by mumm consemt of ,.he l:mrcies to the deve!opment ag.,'ee, ment or their successors in inter, sc The proc~ure for amendment or c'ancellarion sh~ be the same ax that for adoption ~ provided by Subs, er:lion ~.0~.03 hm"~in. Notice of intemt to amend or cancel any portion of the development ~r=mmt shail be given in the manner provided by Subs~tion ~.05.03. 11/15/1999 11:35 6822654 TOWN OF MARANA PAGE 87 Section 04.05.I0 EN'FO R CE~fEN'T A development agr~ment shall be enforceable by any parry there:o notwithst:.nding any change in any appli~ble general or .~.fic pla.n, zoning, subdivision or building regulation adopted by the To~vn which aJ. ters or amends the rules, ~gutadon~ or polio';es sp~ificd in the Development Code or in ~e development agreement itself. Adc, l,~l. ?d'//95. Ordi~o No. 9~ ll/16/1BBB 11:35 6822654 TOWN OF MARANA PAGE Section 04.0g. ]R.E~EBb'RS~'IE2qTS FOR pLrBLIC ~ROVEMENTS 04.06,01 Policy and P~roose. S~rlon ~,06 intends co provide for thc ex:ension of public infrasu'ucmm improvements in[o or for ~e be~fi~ of und~ve~ope~ ~ of ~e To~ by encouraging ~ ~x~sion of. or i~c~ in ~e ~P~dV of, such improv~enu ~d pmvidlng for ~e reimbursement of th~ cos;s of ~uch improvements other ~ those cosu which ~: for gene~ pub[ic ben~fi~ bv the owners or pac:!s which s~ific~Iy be:e~: from s~ch impmvem~na mad which ~ no: subj~:: :o ~v o~er speci~ ~sessmenu or so~i~ ch~ge/for ~e benefit which :hey recxive from the public infrzstrucmre improvement. Public infF~cmre [morovemenu which ~ extended into undevdo~ ~ons of ~e Tom, or who~ ~ b ~cr~ for the benefit of undeve!oped po~ons of ~e Town, ~ he,in,er rcfe~ to ~ Addidon~ Capaci~ Pubic Infns~cmre Improvemen~ ("Pubtic Improvemena'). 04.06.02 Definitions The following words, tc.,wns ad phrases, when used in this Section 04.06, shall have thc meanings set for'nh below, untess the context clearly [ndi~t~ a differen[ me:ming: 'Beaefittmt P:a'ty"' means ',he per, on or entity crmting i demand for or otherwise utilizing Additional Capacity Pubtic Infrarrucmm [mprovemenra r~ult'ing in an additional bene.fi~ for which the benefitted par~ ha: eot/9~i~ca!Iy contributed to thc cosm in providing such Additional Capacity Public Infr,. qu',acmre Improvements. B. 'Town' me:ms the Town or' Marana,. Arizona. C. ~'Costm' means thc actual cost 1. Rights or' way or ~ns~ment acquisition: 2. Consmicdon of the Additional Capacity Public Mf~cmre Improvements as de~ermined by the consamc~on conn"ac: price or by the acm,al costs, such construction to include, but shall not be limit~ to, construction and installation of sanitary .sewer cotI~:ion ~clYor trmr. rn~t systems; r~.iaimed water systems; drainage and fl~od control systems: water sysa:ms: highways, srrmu, roadways and parking f:~citities: areas rot' pedcs;~an. ~uesr. rian, bicycle, or other non-motor vehicle u~e oi tra','e[, ingress, eg.mss, md parking: t:~desr, rian m~ts. parks md recrmrional h~iid~; landscaping: public buiidings: public safety facilities: fire protection fa~.iidea; lighting systems: traffic co,wzol systems a.nd devices, including signals, controls, markings and signage: 3. [nspec:ion. ~esting and pe,,'mk fe~_s: t ll/16/199B 11: 35 6822654 TOWN OF MP-~ANA PAGE 89 4. Fm§in~:ing and design f'~s required for pruparation of plans and m. ccificadons; 5. Administrative charges pa~d to the Town by the developer or Owner; 6. Incident. cd f~s, expenses and charges, including but not limited to capimHz~ inlet'est required to complete the improvements. Town puget to Arizona Revised Statutes Sec:ion 9-5~.5 and as that statute may be ~mended from dine to dine. "Gene.,'al PuNic Benefit" means ~at pordon or' r. he expense or' the Addition~ Capacity Public In~ara'ucmrc Improvem~t that is for general public benefit and does not specially beaerk the prope.'W subject to re,.'mbur~ement for Additional Capacity Pubiic Infra.mmcmre Improvcme.nu. ~Reimbursement' amount means the charge which must be paid to ~e Town and iml~qed upon the owner or developer of property which ba~ or wiiI receive ~e sp~ial · bene~[ of Additional Capacity. Public Infrastructure [mprovemenu benefitting their property. "S.~,.,al Be~efiff means a. b~efi~ to a ~fic parc*,2 of rind. prope:'cy from an Additional '.C. apacity Public l. nfr-'~amcmre Improvement based on (~ appropriam): a calculation of traffic genm'ated from the ~ecific parc-.l of real esmm; the volume of demur or flows genemr~ as a result of the cennection to or use of an improvement from the benefitting aa'e.a fi'om the specific parc~ of real estate; cost per frontage foot of the improvement; or cost apportioned per acm of ~e ~ilSc parcel of rea/estate benefitd, ng from the improvement. 'Additional Cap~. Public l. nt:rasrrucmr~ Improvement" mm.ns all improvements listed in this paragraph, including a~essary or incidenm/, work, whether newly consu-ucted, ~novar. ed, or'existing, and ail n~ or debs-able appurtenance. Additional Capacity Public Infi-'~rucmr~ Improvements are and can inetude: I. sanitary s~wcr gysmms, including collection, transport, storage, treatment, disposal, effluent us~ a~d discharge; S. rcct~med water systems, including transport, dis;fibudon systems, and ail other appursenances.necessary; rtorage, treatment, 5. drainage ~d flood control systems including collation, transport, diversion, storage, de:endon, rttmdon, dispersal, protect/on, use and discharge: 2.,. water svs;ems for domestic, industrial, irrigation, municipal, or fize protec~on purposes, inc~udin§ production, collation, storage, treatment, transport. ll/16/1ggg 11:35 6822854 TOWN OF MARANA PAGE 10 04.06.03 delivery, connection, and all other appurtenanc:s, but not includin§ £acilitiex for agricultural irrigation purpoi~ unless for the repair or replac-.ment of existing f.~cilitie-~ when r~!uired by other improvement~; 5. highways, stre,:ts, roadways and par!ring facilities including ail areas for vehicular use for u"avet, ingreas, egress, ad paring; 6. a. reas for p~es~an, equesu"i~, bic':'cle, or other non-motor vehic!e use for travel, ingress, egress, a~d pm-king; 7. pedestrian m.:.dIs, parks, r~readona faciiid..s other than stadiums, and o~n space a.reas for the use of membe.'-a of the punic for ea~er, ainment, assembly ~d recreation; 8. landscaping including ear~wor~, struc.-ar~, Iak=s and other water features, plats, tr~,.s and mD, ted water delivery, systems; 9. public buildingx, public m.r'e.w, faciiid~x an, c[ Ere protection faciiide:; 10. lighting systems; l 1. tra2'ic con~o[ ~stems and devices including ~ignals, controls, makings and ~ignage. Additional Capa~ P,abLie .[nfrmstructur~ Improvement~ also means any publicly dedicamd rights-of-way or any other improvemen~ fnanc~ by bonds, g~.ne:"al fund~, water udiit'y funds, ~ewer utility, funds that are completed al:er the effusive ~te of tl~ S~tion 04.06. The de'.erminarion of which improvements will be d~m~ to be Additional Catmci .ry Public Infraswacmre Improvement:, and thus becoming eti~ble for a repayment ~r~rnenr., ~ be at ~e sole discretion .of ',.he Mayor and Council of the Town. Additional Cap. Sty Public Infrastructure Improvemen~ shall mean ~he same Public Improvements as hereinaft~ referr~ to. Au[hod:at'ion of Public Tmorovement Construe:ion and R~.vme, t ,-%.~r~=m~n~s; Aoolicadon: F~s. Upon development of any prope."ry within or oumide the Town limits for which an Additional Capacit7 Public Infra.m-ucture Improvement (hereinafter "public Improvement") project will. be con~truct~, the owner or developer (heminafter 'ownerldeve!oper") paying ~e cost of the PubLic Improvements may request thc Town to enter into a PubLic [mprm'ement Construction and Repaym~ Agreement (he.~inafter 'Repayment Agreement') to authorize construction of the Public Improvements and to 11/16/19SS 11: 35 G822G54 TOWN OF M~.RANA PAGE 11 collect reimbursement amounts from thc developers a~d owners of parcels specifically benefitted by the project locsted within or, as permitted, outside the Town. A~y owner or deve!o~r who wishes to enter into such an ~g.,'~ment, sh~l complete an Application for Public improvement Construct. ion and Repayment Agreement on a form tO be ~proved by the Town Eh§inert. Upon submission or' the comple:~ application. the a~l.ic~t shall tender a five thous~d (S5.000.00) doll~ application fa:, said fee- to cover, among other things, the costs of publication, legal aotic:s, legal f~s. engine:rin_~ f~---.s, and other cost~ associated with the processing of the application. This application r'~ shall b~ non-~ndable, rn m= even~ actual adminisz=riv~ costs exc~ci this re:, the ownertdeve!oper etalI tender additional funds a.s requested by the Town. Ail Repayment Agm~mmts shall be submitted to the To,,vr~ Council ~'or approval by Re~ol. udon. No BcDymem: ,.xgr~ment shall be binding or =fleer. ire unless approved by the Town Council by Re.solution. Re$oludon~ approving Repayment Agr~menr. s shall author:,.7.~ the Town Mane=ocr to rater into Repayment A=~.~e=ment$ on behalf of the Town pursuan~ to S~tion ~.06. Such ap. proved and author:,z~ repayment Agreemenr. s shall be recorded in the OPic= of ~e Pima County. R~corder, ~nct a copy of' each and eve,q, Resolution and approved R~ayment Ag.,-~ement ~halI be kept in the office of the Town Clerk. Those portions of Public Imorovement$ consu'-uc:ed und.:r Section 04.06 which ar= for genre-al p~lic bene~ shall not be subject to r~paymen~ under the provisions of Sec:ion 04.06. 04.06.04 Con,ruction of Additional Citpacitw Public l'nfra$_~ructure fmorovements. Public Improvements may be construcmd by cite owner or developer of property (hereinafter %wrier/developer'), or by th: Town by a=OTe..emen~ with the owner/developer of properc'y whereby the owrm:ld~ve!oper contributes the estimated cosu of me construction of such Pubdc Improvements to the Town. .~dI Repayment Agree,mm= sh~ provide for and r~quire that prior to a permit being issued for construction of Public Improvements, the following requirement~ shall be met: A di~ram and leg-al description of all prope,'w which will be benefitted by any Public Improvements to be installed shall be provided tO the Town Engin~r. The submittal shall be in accordanc= with the Town's Supplemenr~i Req. uimments For Legal Descriptions. Bo The engin~ring plans and specifications (including any studie~, ~alysis, and capacity. requirements) required for th= PubLic Improvements may b~ prepared by the ownerldeve!oper or the Town. If pret:m.r~ by the Town. the owner/developer shall advance thc eaximated cosu of thc p~paration of thee pt~s to the Town Engin~r. [f p .repa.red by the owner/dcve!oper, th~ plans and speciF, c=.dons must be approved by the r 11/16/1999 11:35 6822854 TOWN OF MARANA PAGE 12 Town Engin~.r prior to consu-ucdon. Thc cn~dng costs for preparation of plans and staldng of the Public Improvement~ only, whic,~ are incurred by the owner/developer, or' funded by the owner/deve!oper, may be included ax de'.e.'-mined by the Town F-~gin~r in the a_5~:sd construction costs ~ provided in this Section. For any DebUt lmt~rovements which are cons~,~c:ed, the owner/deve!oper shall furnish znd insr. ali, to Town sp~ificadons, ail faciiides within .?,e bounda, r-v of the designated area or' Ge development. Detailed plans and spec!fic:w'.'ons for Public Improvements which are e.xter, sions :o ex.isdng public fzciiides must be approved by the Town Engineer prior to cons;motion. i-ne costs for the pre,mqa-adon of plans and .specifications, diag,~ms and other information required by the Town to comply with this ordinaries, ~ prep~e~ in accordance with Paragraph B above, shatl be ge responsibility of the ov.'ner/devetoper, but shall be eligible for inclugion ~ ~e ~re~ construc~on costa ~ prov(ded ~n this Set,on. and the Town Engin~r. informaliti~ or to rej~'~ any to the oommenc~ment The project shall be bid in accordancs with the provisions per~ining to public works projects contzined in Ti~e S~, Arizonz Revi~:t Sc~u~s. The bids shall be opened in the office or' the Town F_q~.n~r on a pre-<ie~:Tnined da~e zg.,:e~tbie to uPc owner/developer T'ne Town and the owner reserve the right to waive all or ali bids. The consu'uc6on costs shall be de~.ermined prior consn'uction and shall be approved by thc Town Engin~r. In the event that the a=.--~:ed upon construction costs i.ncr~e, r. he repayment agr~ment may be mended upon approval or' the additional construed, on cor,.x by the Town Engineer, providing that good and sufficient cause, in the sole opinion of the Town Engin~r, ha~ be~ shown. The Town may, at its option, pen'om.~e in .spection during c:nstruction and shall charge the owner/developer for the insertion 06 the Public Improvements. The costa of such inxpectiona may be included in any repayment a=m-esme.q:, rn the event the Town elam to utilize the owner/developer's engineer to perform the inspections viz a "Private Improvement Agr~ment" with the owner/developer, these costa will be included in the repayment agreement subject to prior agreement with the Town Engin~r as to the ' .m..,'p~on fee costa. The ownership of ail Public Improvements. upon insp~fion and acceptance as m~ting Town standards, shall be vested in the Town. 04,06.05 Reoavment ATre~,ments: Terms: CoHo:ions: and Costs. Ao The Repayment Agresme.qt shall designase the parcels =nd persons who are entitled to reimbursement amounts and shall include a diagram or' tt',~ properties and respective lmounm from which reimbursement amounts may be cotlec.:~. In the ~ent bonds of the Town, including improvement district or -assessment '~ondx. have b~n issued to finance the conr~cdon of PubUc Improvements and re!at~ facilities, the Town shall 11/16/1999 11:35 G822GS4 TOWN OF MARANA PAGE Co mc.~v¢ =,Il re.~mbu-rs~ment m'nounu and apply such a.moun~ to the d~c ~:rvic-, funds or the applicable bond i~ue aa provided for in Sub~ection 0-~.06.06. The Repayment Agrc'ement shall set forth thc torn/of the reimbursement m'nount to be pnld to the Town, which agr~s to pay such reimbumemcnt amounts to the owner/deve2ope~. The tod of such reimbursement amounts shall not exc~d that pordon of the agr~d consu'uction cosr. s of the Public Improvement allotted to the prope.y ou~de the ~ of thc owne_-/devefoper. Thc Repayment Agr=ment shall be for a term not to exc:~l ten (I0) years commencing with the date of approval by Resolution, and may te:-mina~e em'lief if the total amount provided ~'or by Subs~tion 04.06.0.~ [s repa/d. The approved construction costs as described in Sub~ec:ion 0'-t.06.0~ will be used for calculation of all reimbursement amounts. Upon retry into a Repayment Ag~ment with the Town, the owner/developer shall have the right to conn~,'t to the Public Improvement in conside~tion for their entry into the Repayment Agre:ment. The ensnaring, plans ~d specifications required for a Pubiic Improvement shall be prepared by the developer and approved by the Town Engineer prior to consu-uction. The engine_ring coxm for preparation of plans and sca?king of the ~ecial public infra'~umomre improvemenra on the property which are incurre<i by the owner may be included as determin~ by the Town Engineer in the agra%ed construction cosu ~ provided in Subsec6on 04.,06.04. The Town ,hall have sole and exclusive control of ¢onnection~ to the Public Improvements. Connection~ to the Public Improvements may on£y be made upon i~suan~ of a written permit ~5'om the Town Engin,?.r. It ~hall be unlawful to make a connmt/on to a Public Impmvemer[= without a permit. Such connecrion~ may be removed by the Town and the costs of removal asses~e~ to th~ parry ma_king the cormcction. Prior to the Town's final inxp~rion and acceptance, of construction of the Public Improvement, ali reimbursement amounts due by an owner/developer for repayment of the benefit which their property received from the Public Improvement shall be paid to the Town. An annual charge will be a..~.~ by the Town to the owner/developer who construc:~ the Public Improvement to administer each Repayment Agreement. This annual charge ~ no~ be less than one hundred dollars ($I00.00) per ye?.r. The annual charge shall be calcular~ based on the actual cost incurred by ~e Town for the administration or' em:h agr~-.ment. The Repayment Ag-r~ment shall provide for annual payment to the ownm-lcleve!oper of the amount of reimbursement due to that owneffdev~:oper for the prior year. For p~ of all R~:~yment Agreement~. the amount of reim~ur~ment due will be based ll/16/19BB 11:35 TOWN OF MARANA PAGE 14 on the previous f'm:ml yem' ending Iune 30th, a. nd ~he reimbursement amount shall be rern~mgd to the owner/developer by October 315t following the end of each fiscal year. In the event that at the time of distribution the owner/developer is responsible for payment to the Town ~ set for& in P~ph H atmve, tach Administrative Cosu sh~l be automadczdly deduct~ fram the payment to be made to the awner/developer. Any o~,.~ne~/developer may a~sign the benefits a.dsing out of ~y Repaymen~ Ag~ment ~ ~e To~. Such ~signmen~ ~h~{ not m!ieve ~e owner/~eve~o~r from iu duties ~d obEgafions under me :gr~ment. ~e ~signment sh~l require written approv~ or' the To~. i--ne Town shall not be liable to pay ~my interest to iny parry on any unpaid amount of a Repayment A~ment. Any po~on of the amount of ~ Repayment Agr~m~t ~at ~ n~ ~n ~d ~ ~e ~nd of~e ~n (10) y~ te~ s~I b~ome non-~nd~le ~d sh~ no long~ be subj~ to r~mbumemenc. In the evem of a ge.n~ll, a.~i~ment by the owner/developer [or ~ benefit of traitors, or ~e ~g by or g~ ~e o~/dev~op~ of ~y preenings und~ ~y ~solv~cy or b~ptcy law, or ~e appoin~ent of a ~st~ or ~.ver to ~e pass,ion of ri or subsidy ~ of me ~eu of ~e o~er/develooer or ~ ~u~on or o~ judici~ly au~o~ g~ of ~ or subs~fially ~ Of ~e o~effdeve!ope~s ah~ aummad~y ~ ~y ~aym~t Ag:~men: ~ of ~e ~m o~ such a~on. M. The owner/developer shall commence construction of the improvements set forth ~n the Repayment Ag-reemen~ wi~n twelve (12) months of the da~: the Town Council pa.~ed Se R~.~olurion Approving Entering Into A Repayment A=.~z~e~m~t, and shall diligently purzae completion memafter. In the event consn'uc:~on i~ not commenc~ md/or diligently purraed aa ~et forth hcrc~, the Repayment Agreement shMl automatically terminam and xhaiI be of no force and effect. The Town h~ no authority to ext~md a Repayment A=~reement, md in the event of termination aa set forth herein, the ownerfdevetoper mu~: beg~=~n the process Rain. 04.06.06 Reimbursement Amounts Payable to Town. When a Public Impwvem~nt is constructed, by the Town or im contractor~ to provide .~rvi~ or benefit to a par~ of nml es:am, which own~ or r.h~r pr~dec~om in inw, r~t did acs pay for any of the cos~ of the Public Improvement, the Town may impose and collect ~ reimbursement waount. The reimbumement amount shall be b~aed on the benefiozd pm'ce{'s s~arc of the benefit r~cdved aa compar--d to the to~ cost of me Public Improvement. The ;rdmbursement m-nount shall be paid to the Town prior to the issuanc~ of a buitd[ng pe_,vnk or any pe.:'mk or right of acce~ to Town righz-of-way or connex:fion to any Public Improvement. The reimbursement aimount may be smt~i ~ a f~. based on a calculation of ~'zffic generated by the bene:icted parcel; ~ cormection fe~ b~exi on the volume of demand or flowa g~.ner'~d ~ a r~ult of the connection to or u~ of a Public Improvement by the benefitted parcel: cost per frontage foot of the Public 11/16/1S99 I1:35 6822654 TOWN OF MARANA PAGE I5 Improvement; or cost apportioned per acre of the arm. benefitting, from the PuNic Improvcmcm. It shall be unlawful for any person to ~xtend service from ~. ?ubtic Improvemen[ to their property for which a reimbursement amount has b~n imposed without fir~ paying the reimbumement amount and obtaining a pe:'mit or conn,:ion fight from the Town. of zppmv~ of ~e Repayment Agr=ment by ~oludon or when the t0mI amount provid~ for by ~e Repayment Agreement is mp~d, whichever is sooner. Tee Town sh~d. collect reimbursement amounts for any ?ubiic improvement, financed by improvement dis~ct or ~sessmen~ disco: bonds, ~r=r utility funds, sewer ~, dcvel~m~t f~ ~ ~d gme~ obligation bond ~nds which were designz~ ~ subj~t m reimbu~ement from ~b~c Improvement repayme~. Any own~ who h~ p~d ~1 or p~ of ~c debt se~ic~ upon ~y bon~, ~e pr~ of whio we~ us~ to ~c= Public improvem~u sh~ have no c!~m m ~mbu~em~t moun~ mp~d to the Town under S~fion ~.06. The portions of Public Improve.menu constructed under Section 0~.06 wi,ach arc for general public benefit shall, not be subj~t to repayment under the provisions of S~tion 04.06. 04.06.07 Notice of intention to Aoorove Additional Ca~>acirv Public I'nt'r~trucmm rmprovements ~nd Remvment A~reements. Upon the de'marion of the Town En.~inem' that the public, health, safe~, welfare and convmiencc requir~ the constmcdon..of ltalic Improvemenm prior to the deve£opment of thc ad.iac~tt pro[re'fy but for which the adjac~t prope:'cy will be ~p~ially benefitted, a Resolution of htention to Approve the Public improvement(s) and A Resolution to Approve Entering Into A R~ayment Agr~mmt ~I/be mbmirted to the Town Council. Prior to acting on the R~oludon of intention to A~mve Pubtic Improvemen~ and the Rcso{ution to Approve Ent~ng Into A Repayment Agreement, the Town .Council shall hold ~t public hearing. Thc public hearing slmtl t~ for the pu .rpose of m:eiving eommcm on whe:he.r the pmpo~t Publ/c Mprovemcnt~ ~ required for the public heal~, mfetzy, welfare and convenient=. Those owner~ of real pmpe.'W within thc area subject to reimbursement repayment for Public Improvements shall r~eive notice in writing, by firs~ c!ass mail postage prepaid, mailed not less than fift=n (I5) days pr/or to ~e date of the pubtic hearing. The last lmown name and address of each owner as shown on the records of the Pima County. Assessor may be used for this no,ce. In addition, the notice of the public hearing shall be published at least onc= in x newspaper having gene,-al circulation with~ the Town of Marana, at least FZ't~---~ (I~ days prior to the d_at~ of the Public I-Iearing. Ali required node.~s shall be headed "Notic-.. of Public l-!em'in§" and shall ru~.ite in l~le c.haracm.,'s: r ll/I~/19BB 11:35 6822G54 TOWN OF ~RANA PAGE 1G (I) The boundaries of the area that are proposed to be subject to a reimbursement amount ~yment requirement: (2) A general explanation or' the prOposed Pubiic rmprovements, ~e ~z~ to be bene.'itted by such improvements, and the me'hod of allocation of the bene.%s: (]) The proposed reimbursement amount payment requirements; (4) A statement that the Town Council reserves the right to m~e any or' the l'btlowing decisions: (a) That the proposed Pubiic Improvements be approved to construct: That the proposed Public Improvements not be approved; (c) That the pmpos~ Public improvements be modified in such manner in the opinion or' the Town Council which will best serve the public interest. (d) The date, time and place or' the punic heed'lng before the Town Council. (e) A rmtement that any person may appear and be' heard before the Town Council. After ~e public hem-lng is eonc!uded, the Town Council shall determine whether the public health, safety, welf-ar~ and convenience require the Public Improvement& ' If the Town Council so determines, then .the Town Council shall adopt the Resolurlon of Intention to A~rove the Public Improvement and Repayment Agreement. The determina~on shall include that the owners of spec/ally benefitted property from the improvement shall be required to reimbune the Town for the bene&: ree-.ived from the special p~lie in~r-astrucrare improvement. . The Resolution of Intention to Approve tho Public Improvement and the Resolution Approvin~ Entering into A ReFayment Agreement shall contain: (I) A description of the Public Improvement. ~) A general d~cfipdon or' the estimated tor. zd cost and cost per front foot, or cost based on (~ appropriate}: a calculation of u-ai"tlc generated from the ~fic pardi of rml es=m: the volume of demand or flows generated as a r.suit of the connection to or u. se of an improvement from the benefitting area :'rom the ~;~cifie parcel or' real estate; cost per frontage foo~ of the improvemmng or cost apportioned per acre or' the sp. eeiffc pate. el of real estate benefkdng from rite improvemmt. 11/16/1999 11:35 6822654 TOWN OF MARIA PAGE 17 (3) A description of thc Public Improvement pro, ecl arm and a m~.p :md list o'f ~1 owners of real property who will be ,.-,:e:.ving a special benefit from the construction of the Public Improvement. (4) A de:e."rninarion of that po[don of the Public Improvement which is for gene-al publ/c behest and that per'don which is for sp~ial benefit of [l~e owner. (5) A preliminary est/mate of the pot'don o[' the Public Improvement which will be financed with gene.,'"~l obii=*adon bonds, speciM assessments or improvement district assessments and the po[doit which will be ~in~.nced with repayments for Public Improvements. T'n¢ Town Council's dec/sion on necessity for Public Improvements and con/truce/on shall be 'fm~.I and conclusive. 04.06.08 Resolution Authofizin~ Repayment Agra.men[. In the even[ uhc Town Council :[pproves the Public Improvement,. ~e Town Council may then .~tso adopt :he Resolution Approving Ea~"/ng Into A Repayment A==re=ment. The obligation of the Town to re/tabu[se the o~-neffdevelo~r for the agre"~d-upon cos',s of ~e PubLic Improvemen~ shall be subjest to completion of ,..he Public Improvement project, compLiance by the owner/developer with all ~,'rns and condit/ons of the Repayment A=%-r~em~tt, and compliant-. by the owner/developer wi~h the laws, ruies and regulations of the United States, th~ State of Ar/zon:~, Pima County, and the Town of Marmon :~pplicabie to ~e construction of the Public Improvement project. The R~ayment Agree. merit shaJ1 be on :~ form approved by the Town Attorney and [.he Town Nfanager. 04.06.09 Establishment and AuthorizerS.on of Re{mburse.m. en~ Amount~. At ~e same time as a Repayment Ag.,-eemen[ is authoriz.~ and approved by the Town Council. the Town Counc;.i r2'~.lI :.[so establish by Resoludoa the reimbursement amount to be charged rn prope.-des benefitting from the PubLic Improvement. Thc reimbursem.cm amount shall be sm[ed as a fee based on · colculadon of re.fflc generated by the benefitted parc~; a. connection f~ based on the volume of demand or flows ge. notated as ~ result of the conn,:ion to or use of a Public Improvement by the benetitt~ pame[; a cost per frontage foot of the Public Improvemcnq or cost a.s~. ortioned per acre of the ar~ benefitting from thc Public Improvement. The Resolution establishing the reimbursement amount shall designate by ma= and legal desc:i.'p6on the area in which propeaies shn. ll be subj,: to ~ reimbursement ~rnount, to be identified ~ ~e 'B~efit A~'. In no even~ s~t pa~t of a ~imbu~em~n~ ~ount be due ~d o~ng to ~e Town undI ~e own~ or ~mqt of pmpe~ lom~ in · c '~efit A~" s~ a building or conmcdon p~it or ~ro~ to conn~t m or utilize ~e Public [mprovem~m for whi~ ¢c ~mbu~m~: mourn is berg c~. 11/16/1999 ll: 35 GB22G54 TOWN OF MARANA PAGE The effective dam of the reimbur~_ment amount shall be the mrna date as the Resolution adopting ~e reimbursement amount for each "Benefit Area". Each reimbursement amotmt Resolution shall be effective for ten (I0) years after date of iu adoption. In the event the actual cost of the PubLic Improvement is ~ter than the amount initially er, ablished in t~e Repayment Agreement, the reimbursement amount shall be incrms~ aceordingly. In the event the aeraal cost of the Public Improvement is less than the amount inifia/ly established in d~e repay~£ Agr~ment, the reimbursement amount shall be de=re.seal accordingly. ~.qd ~y parry who h~ p~d ~ reimbursement amount thai has been mbsequendy r=duc~ shall have the exc:ss paymen~ r:fu=ded by the Town. 04.06.10 A~sessmCnt Dism/ct~. Improvement Districts, Oe~e.'n] Oblig,qrfon Bond Proiecrz Cost Apportionment. Upon collation ~f rdmbtmse.ment arnounu pursuant to any PubLic Improvement ordered under Se='don 04.06, wl'dch is located in a municipal improvement district and financed by ~m:airaen~, such funds shall be deposited with the Town Clerk. The funds sl~all be applied ~=-ainst the outstanding indebtedne.~ for which improvement dis~ct bonds we."= issued. Reimbursements for PubLic [mprovemenm pursuant to $~:ion ~.06 may be used in combination with a general obligation bond issue, provided that the gene.mi obligation bond/ssue question subm/rr,~ to the q,m~;~ed e!ec:ors indicams that such'reimbursements may be required of beneHtted property, owne=. Ail ~aounts coll,:ed from such reirubursemenU shall be deposited in the gener-,d obH?_r~on bond fund from which ~e ?ubiie Improvement proj~t is fmanc..~. ll/16/1BB9 11:35 G822G54 TOWN OF MARANA PAGE 19 95-09 of th~ Town of ~ if fully set out in this ordin~nc=. S¢~ion [Iii A.[! ordin.~nces or pm'ts of ordinanc'.s in con~]~c; with ~hc provisions oF ~his a~nc~ ar ~v. p~ ofth~ documen: zdop~cd he:~in by r~fer~nc: irc hereby r~pe~ied ~..,e..~ve~,' · ~ of ~h~ da~c of ~his ard~nanc:. Section IV: If ~my sm::ion, subs~:ian, sen~cnc:, c!zuse, phrase o~ ponJon of this a~din~c~ or ~y p~ of ~ d~um~n~ ~dop~ by r~famnc~ is for ~v ~on hetd ~o be inv~id or unconsdmdon~ by ~ d~sion of ~y ~um of com~n[ judsdic:ion, such d~:~sion sh~i[ not ~ffect ~e ~idky of the mm~ning po~ons ~cr~o6. P)~SSED AND ADOPTMD by :he Mayor and Counc{i or,he Tou,T~ ofMaranz A. dzona, :his 7th day of Fcbruai'y, 1995. M'ayo r 0 rs ~arn Or~i=~c~ No. 11/16/1999 11:35 6822654 TOWN OF MARANA P~GE 28 Section 04.05 DEVELOP;%'[~fT A GREF-~, PL-NT5 04.05.0I PL,~POSE .-kND ~'T~'T It is the intent of d",e regulations irt aSs Secdon 04.05 to promote and facilitate orderly and planned growth and development ;brough the provision of certainty in the developme.,at a.=proval proc.~ss bv th--. Town and through corresponding assurances by the deve!opers, B. The purposes or' these regubdons? therefore, m'e as follows: I. To eliminate uncertainty, in r.i'te deveiopme:'tt approval proc=ss, which results in a waste of resourc.:s that concribut~ to e~cxladng costs of development and which, in mm, discourages investment :mci produces higher pric~ for consumers. 2. To assure ap. plicanu for development projects u'~at, upon approval of their proj~t, the'! may pre=ct in ac:ordan¢--, with existing policies, xtles and. regulations. .3. To encourage thc achievement or' D'owth management gc~ls and obj~dves, including assurances of ad.~uate pubtie facilities at the time of ct~'ve!opment, proper timing ~nd sequendng of deve!opme':,t, eff'ecdv¢ capital im=rovemenr, x programming and appropfiam deveiopmen~ inc=rives in accordance with e..~isting policies, rules and regulations. 4. To str~ng,..hen the public planning proc=s, encourage private participation in comprehensive planning md redum ~e economic costs of government. 5. To provide a m~hanism for allowing exemptions from ordinance or regula, tions in order to promote rlexibility and to respond more sel~d, ve!y to spa:lie deve~opme..ut proposals. 6. To encourage plan implementation through a more irtexible development procedure. 04.05.02 AU'I~ORIZATIO N These regulations are %dop[ed pursuant to the authority gr-,,nced bv Arizona S~tums, $~don 9400.05. Ail development ag.,,:~,ments shall be approve~ by ordinance of thc Town Council punuant to tl~ese ~guiations. 11/16/1999 11:35 6822654 TOWN OF HARANA PAGE 21 04.05.03 PROCEDURE FOR DEVELOPM'EaNT AGRE~rES'r A. Initiation by Application. An appiicadon for a deve!opmenr agreement may be made to the Planning Adminis:mmr in accordance with the procedures set for'~h herein. I. Application may be made by a community facilities district established pursuomt to Arizona Revised Sm. tutes, Section 48-709. Subsecsion C, or by any person having a legal or ~uitable interest in the subjest re. al propeay. If made by the holder of an ~uimbie in,.rest, the appiicadon shall be aczompar, ied by a verified title re. pan and by a nora.al.zed statement or' con.se, ut to proofs'z-ed ~,.5xh the proposed development agreement executed by the holder of the legal interest. 2. Applic~-tion may be made by the Planning Commission or the Town Council. if made by the Planning Commission or the Town Council, the Town shall ok:rain and attach a notarized statemen~ of consent to proceed with the propos~ development agreement ex,uteri by the owner of the subject proper~y. B. Content~ of the Application. '~e ~ppiicatiort ~ be on a form pm~cribed by ~he Town P~ning Administrator and shall be accompanied by a proposed ordinance and development agr~-~men~. C. Contents of Development Agreement. The dev~oprnent ag'remment shall include, at minimum, provisions pea'flirting to the following: !. The permkt~t land use(s) and density/intensity for the proposed development project and any conditions attached the.,-em; 2. The phasing of ~ proposed deveiopment project in coordination with th= provision of rpeciai public infrastructure improvements, including, but not limited to, roads, water, sewer, drainage, parks, municipal and other facilities, r~.uired to accommodate the impacu of the propos~ development project on ~uch far. iiities at the Towu'~ adopted level of sm'vi~ standards; 3. The identification of public infrzstrucmre improvements, including any puk:lic improvemenr.s with additional capacity, for th= benefit of other property ownem. ~o be dedicate, consu'uct.~d or financed by the deveioper pursuant to the development agr=menu 4. The da.,~n'nina~ion of the development project's proportionate shar~ of the costs of public infr'a.s:rac:ure improvements to be d~ie.~ted, constructed, or fin~c=d by the developer of the development proj~t; 11/15/1999 11:35 6822~54 TOWN OF MARANA 22 :5. The Town's share af thc costs of pubtic infrastruc:ure improvements to bt dedic:~ted, constracted or financed pursuant to thc deve!oprnent agr~ment; 6. The :u~nount of crC[ts, if ~y, ~gsinst the developer's of public infro, strucmre improvements due to the deve{operl 7. Reimbursements, ~ a.o.oik~bie, to the owner of the subject prope.~y of the tmounc of any contributions for public infmsumc:ure improvements in excess of the propar6.onate share of the behest dedv~ from such facility by the subject property: :md 8. The vesting of de';e:opmeat apgroval. D. Repa.vrnen£ Agreements. Reimbursements to the owner of the subj~t propexy of the tmounc of any contribu~ons for public infrastructure improvements in exce~s of thc proporDon~te share of the behest derived from tach facility Shall be ~ubj~[ to the provision~ of 5~on 09.09. E. Review by Planning Administrator. Upon submission of an appLication for a development agreement, the Plan/ag Adminisumgor shall rev/ew the appllmdon and ac2.ompanying documentation for legal sufficiency, complianc-' with t~hnical requirements, consistmcy with the adopted gene.,"al ~lzm rbr the Town, ~d appl/cabie .specific plans and relevant Iowa policies. Upon the satisfactory completion of suc~ review, the Planning Adminismtor shall piacv, the matter on the agenda of the Planning Commission for public hearing at the next regularly scheduled Planning Commission m~ting, subj~t to .a!~licabIe Town procedure. Provided, however, that if the application for development agr~ment is incomplete or le[ally insufficient, the Planning Adminisu-ator shall notify the applic:mt by ~rfified U.S. ma/I, remm rec,.apt ,'-~.u~md, within fourm,,..n ([4) days :ffte. r the date of submission of such ~plimtion. Said noti~lcations shall de,giI the sp~ific grounds for rejection of the applicmtion. The applicant may resubmit at any time. F. Notice of Planning Commission Public Hearing. Noric. v. of' the Plarm/ng Commission public hearing shall sp~ify the dine, place and purpose of such he~ng in Ce foLIow~n§ manner:. 1. The notice of the Public Hearing shall be published ~: least one-- in ~ newspa.~ of g~e.,-al circ,.,{~tlon published or circulator in the Town. a~ least fift~n (153 days prior to the Public Hearing; md 2. By de.oosidng ~ the United States ma/t, postage prepa/d, at l~st fifte=a (15) days prior to the d:ue of such hearing, ~ notice addressed to the owner or owners each parcel of land within thre~ hundred (S00) f~t of ~e exterior baundar/es of the prope,-'t? subj~': tn the development ~,n'e~ment. The l~at l~own name ~d address of ll/1G/1999 11:35 G822B54 TOWN OF MARANA PAGE each owne: a~ shown on the r~ords of the Pimp. County. Asse.~or may be used for this node=; and 3. By de~$irin§ in the Uni£ed States m~iI, postage prepaid, at Iens~ fifteen (15) ~ys prior m ~c ~ of~e h~ng, ~ nodes ~o ~y p~rson who h~s filed ~ written r~u~ ~ercfor ~ ~e P~g Commission. Such t reques~ may be submit~e~ lc ~v dm~ during the c~end~? y~ ~d sh~[ =pp[y for ~e b~ca of such c=lczd~- ye~. ~. In the event that the number of owness to whom notice would be sent pursuant to pm-a§mph 2 zbove is grater tho. n two hundred (200). the Planning Commimsion may, ~ an ~r~rnarive to the notice required by par'~graph 2 above, provide nodce pursuant to his paragraph. Such nodce shall be given at least fiAeen (l J) days prior to the date of the heating by eithe:' or' the foIIowing proc~-dure~: a. By plating a d/splay ~.dve~seme."tc in ~ newspaper having general c~rculncion within the ~ a~T~:ed by the proposed deve!opmen~ agr~ment; or b. By placing an insem with any g:ne.'-~ized mailing, such as filing for Town se.,'vic~a, se.n~ by the Town to propen7 owners ia the are..x affec:~ by ~he proposed development 5. All required notices shall be headed 'Norics of Pubtic Hearing" amd sh:)il recite in legible characters: a. The boundmdes of the arm proposec[ ro be subj.: to the development ~.gre. ement, either by diagram, plat or brief description. b. A general axplanadon of the proposed development zgreemenu c. A statement that the Planning Commission reserves the fight to make any of the following recommendations to the Town Council: (1) Thix thc development %~re~_mcnt be adopted; or That the development agr~ment not be adopted; or (.3) That the development agreement be adopted with such c2mnges which in the opinion of the Planning Commission best serve the public interest. d. The dam, dme and p[ac: of the pubtic hearing before the Planning Commission. e. A statement that any person may appexr and be he~rd before the Ptanning Commission. THE ARIZONA REPUBLIC CORRECTION Published on Friday, July 9, 1999 Section: Front Page: A2 © 1999 The Arizona Republic A headline on Page B3 Thursday was incorrect and information was incomplete in a news item about development impact fees in Queen Creek. Town officials contend that the fee is intended only to make new growth pay for itself. Type of story: CORRECTION Search again: I All articles © The Arizona Republic and may not be republished without permission. If you have questions or comments about the archives, please send us feedback. Search I Questions I Start An Account I Search Help I Search Fees [ Co©vd(Iht HO_me I News I Sports I Entertainment I Business, I Travel I Classified ~C~oovri[ht, The Arizona Republic THE ARIZONA REPUBLIC ARCHWE$ PRICEY FEE DESIGNED TO CURB GROWTH Published on Thursday, July 8, ! 999 Section: Valley And State Page: B3 © 1999 The Arizona Republic The East Valley's youngest and smallest municipality now has the East Valley's highest development i'mpact fees: $7,309 for each new house. After the Town Council's unanimous vote approval Wednesday, Queen Creek is bracing for legal challenges from home builders, who complained during public hearings that the $3,800 portion of the fee to buy public open space is unrealistic. Builders also said the fees are a back-door way of slowing growth. But officials in this town of about 4,500 say the fees are designed to make growth pay its way without straining amenities enjoyed by current residents. Type of story: Brief Published correction ran 7/9/99: A headline on Page B3 Thursday was incorrect and information was incomplete in a news item about development impact fees in Queen Creek. Town officials contend that the fee is intended only to make new growth pay for itself. Search again: All articles © The Arizona Republic and may not be republished without permission. IV, ' - ,: ..... n - ~nt¢ ~}' 'lift th~' ~rrhJveq nlease send us THE ARIZONA REPUiBLIC PEORIA WEIGHS BIG INCREASE IN IMPACT FEES COULD GO AS HIGH AS $6,339 Published on Wednesday, June 2, 1999 Section: Glendale/Peoria Community Page: 1 © 1999 The Arizona Republic Byline: By Jeffry Nelson, The Arizona Republic Adhering to the popular catch phrase "growth should pay for growth," the city will consider pumping up the cost of building a new house in this city by several thousand dollars. Under consideration is a plan to significantly increase the development impact fees charged to builders for each new home they want to construct. In addition to raising current impact fees, the city might even add a couple of new ones. Impact fees are designed to pass all the costs of growth to new residents and none to existing homeowners. For example, with new neighborhoods comes the need for more parks, so one of the development impact fees Peoria collects from builders goes to construct parks. Besides parks, Peoria collects impact fees to pay for new libraries, police equipment and buildings, and Fire Department equipment and buildings. Peoria began charging impact fees for these expenses in 1991. Problem is, the fees have remained unchanged since then. Deputy City Manager Meredith Flinn said the impact fees collected are not keeping up. Peoria's fees are now among the lowest in the Valley. Peoria currently charges impact fees (excluding water and sewer expansion fees) totaling $521 per new single-family t Glendale, on the other hand, charges $816 per home; Goodyear, $807 per home; Mesa, $1,093 per home; Gilbert, $1,143 per home; Chandler, $2,059 per home; and Phoenix, $4,319 per home. Although Flinn believes impact fees have little relation to the rate of new residential construction, many residents believe Peoria's Iow impact fees have contributed to the explosion in new-home construction in the city. It is currently one of the fastest-growing communities in the country. At just 12,500 residents in 1980, Peoria is expected to see its population surpass 100,000 next year. Notice to builders: The blue-light special in Peoria might not last much longer. Under a proposal being studied by the City Council, the impact fees in Peoria could climb to as high as $4,455 per single-family home in south Peoria and to $6,339 per home in the north part of town, with the dividing line being Bell Road. The city is considering two different fees because it's more expensive to extend services north of Bell Road, where it's less developed. Although the city could conceivably increase fees to $4,455 and $6,339, it's likely the fees that are approved will be lower. These are merely the "maximum supportable" fees, as recommended by the city's consultants, Tischler & Associates. The consultants recommended increasing impact fees in all four existing categories - library, park, police and fire - and adding two new fees: a general government impact fee and a transportation impact fee. They recommended charging a general government impact fee of up to $546 in both north and south Peoria to help pay for new government buildings and vehicles. They recommended a transportation impact fee of up to $3,500 in north Peoria and up to $1,616 in south Peoria to help pay for new roads, bridges and traffic signals. The council might not stop there. In addition to the impact fees mentioned above, the council might consider increasing its water and sewer expansion fees. These fees are collected by cities and towns to help cover the cost of extending water and sewer lines to new developments. city is not expected to change its solid waste expansion fee - currently $380 per home - which helps pay for new garbage trucks. All told, builders currently pay fees totaling $2,582 per single-family home in Peoria. Consultants hired to review the expansion fees were scheduled to present their recommendation to council this week. Flinn said a council subcommittee composed of Mayor John Keegan and council members Ella Makula and Joe La Rue will study the recommended increases and expansion fees over the summer. The subcommittee will then make a recommendation to the full council as to how much to increase each fee. The council is expected to make a decision before year's end. Chart FYI Current impact fees charged in Peoria: (All fees for typical single-family home) --> Library Impact Fee, $109 --> Park Impact Fee, $325 --> Police Impact Fee, $73 --> Fire Impact Fee, $14 --> Water Expansion Fee, $790 --> Sewer Expansion Fee, $890 --> Solid Waste Expansion Fee, $381 Total = $2,582 Source: City of Peoria Search again: All articles © The Arizona Republic and may not be republished without permission. If you have questions or comments about the archives, plea.se send us feedback. Sears I Clue. s. ti_on__~ ] Start An,.A_.cd:.~u_n.t I S_~a__rch H01E ] Sears Fees I C_~y_dgbl Home I ..N_e._w.._S [ Sp.g~_s I ._E_n. terta_i~...m, ent I Btcsi.n._ess I Travel I Classified (~_oplf_.ri~h_t, The Arizona Republic THE ARIZONA REPUBLIC ARCHIVES PHOENIX HOUSING IMPACT FEE PROPOSED WOULD INCREASE N. DEER VALLEY COST BY $9,161 Published on Saturday, April 3, 1999 Section: Sun Cities/Surprise Community Page: 4 © 1999 The Arizona Republic Byline: By Brent Whiting, The Arizona Republic Future development south of the Central Arizona Project Canal won't come cheaply. City officials have proposed a "development impact fee" of $9,161 per dwelling unit. The development fee, if adopted by the Phoenix City Council, will become the most expensive in Arizona, said Gibson McKay, deputy director of Home Builders Association of Central Arizona. "This obviously will increase the price of a home," McKay said. "It may reduce the ability of some people to qualify for a home." The proposed fee was announced by the city last week during a 45-minute meeting at the Deer Valley Community Center, 2001 W. Wahalla Lane. None of the fewer than 20 people in attendance voiced opposition to the idea. Some people said they showed up at the session out of curiosity. McKay said the lack of opposition really isn't surprising, because the home buyers who end up footing the bill usually don't find out about the impact fees until long after they have been adopted. "A lot of city councils feel it's a pretty easy sell," McKay said. Improvements assoclateCl Wl~ clevelopment. The $9,161 fee is for what the city calls "northern Deer Valley," a large planning area that straddles Interstate 17. West of the freeway, the area is bounded by Jomax Road, 67th Avenue and the CAP Canal. On the east, it is roughly bounded by Happy Valley Road, 16th Street and the canal. A portion of the fee area dips south of Happy Valley Road. No figures have been set, but city officials also are studying impact fees for North Gateway and Desert View, two vast planning areas north of the CAP Canal, said William Mee, the city's infrastructure financing coordinator. Mee said the proposed fees for northern Deer Valley are expected to go before the Phoenix City Council on June 16. The fees, if approved, are scheduled to take effect Sept. 16. In.1993, the Arizona Court of Appeals issued a ruling that uPheld the right of municipalities to pass along the infrastructure costs of development to the developers. The court's opinion came in a lawsuit filed by the Home Builders Association, a trade group, that sought to overturn a $1,000-per-home water development fee adopted by Scottsdale in 1987. To Phoenix Mayor Skip R/msza, such fees make sense. He believ.es the city needs to discourage sprawl in the desert and encourage the construction of new homes closer to the city center. The fees help for development to pay for itself and create an economic advantage for people to live in older neighborhoods, Rimsza said. By adopting such fees, cities, in effect, are passing a tax on to the buyers of new homes, said R.L. Brown, publisher of the Phoenix Housing Market Letter, which tracks residential real estate. In the far north Valley, Phoenix is studying the possibility of impact fees in an area northeast of 67th Avenue and the Carefree Highway that has yet to be annexed. The fee is expected to be charged if the desert area becomes part of the city. In south and southwest Phoenix, impact fees also are being studied for the Estrella, Laveen and Ahwatukee planning areas. such things as streets, parks, libraries, sewers and water- treatment facilities. Large-scale developers are expected to end up paying less than $9,161 per dwelling unit. Those developers likely will receive financial credit from the city for the infrastructure costs associated with master-planned communities. Map by Arizona Republic (See microfilm) Search again: All articles © The Arizona Republic and may not be republished without permission. If you have questions or comments about the archives, please send us feedback. Search I Question~ I Start An Account I Search Helg [ Search Fees I Coovd(~ht .H. 9.m__e [ .News I Sports [ Entertainment I Business [ Travel [ Classified Coovrieht, The Arizona Republic l Return.to S. earch..~.~r~.e..n. [ Oro Valley's impact fees simply unfair Tuesday, 14 March 1995 COMMENT 7A Bill Wiese, president Southern Arizona Home Builders Association THE ARIZONA DAILY STAR NOTE: GUEST COMMENT The Southern Arizona Home Builders Association (SAHBA) has always attempted to work with local governments to establish fair and equitable fees for our communities. A few weeks ago, some members of our association started writing checks to the town of Oro Valley - one check for every new home started in the area. Each one of these checks was for $1,03 5 and was paid to the town "under protest." Each check was to pay a tax established by local government. These checks pay a development-impact tee imposed by the town to fund 3.2 miles of La Cafiada Drive, which the town says will need improvement because of the new homes located near it. The improved road will be used by current residents of Oro Valley, too, but because the town has no property taxes, these current residents will pay a disproportionately small amount for the road they will be driving on. Therefore, development-impact fees as used by Oro Valley are simply a method to pass the cost for improvements to the newcomer rather than having current residents pay their fair share. We all want a community that we can be proud of- what has been developed in Oro Valley is a tax on new home owners. The implications are frightening: Avoid the political impact and controversy of raising taxes (or in the case of Oro Valley, creating taxes) to pay for infrastructure. All prior publicly funded roads in Pima County have been built by all taxpayers through property taxes, state funds, gas taxes, etc. appears to be capricious. Because the town of Oro Valley has no capital improvement plan, and because there isn't a plan to build the road, it is impossible for the builders paying this fee to determine if it is based on actual costs or is simply a speculation as to final cost of the roadway. SAHBA members have consistently opposed cost increases such as transfer taxes and rising materials prices that make homes less affordable. This fee, imposed arbitrarily by a local government, drives up the cost of housing, increases the cost of living in Southern Arizona, and sets a dangerous precedent for more and higher politically expedient impact fees. This is what happened in California, where housing prices spiraled out of reach because of government-imposed costs. Home prices here are already inflated by multi- thousands of dollars for government fees, taxes and surcharges. Additional fees, set arbitrarily, are likely to drive many Tucson families to seek affordable housing farther away fi.om major urban centers, impacting transportation systems still further. SAHBA members believe that needed improvements to the cities and towns of Southern Arizona are the responsibility of everyone who lives here and uses the infrastructure. Our members already pay millions of dollars each year for such improvements. For example, portions of Sunrise and Naranja drives were paid for by builders in the area. This track record shows that we are willing to pay our fair share for new roads and other needed improvements, and we also support the Legislature's enabling acts that established the concept of development impact fees. SAHBA supports working with local governments to develop fair and equitable impact fees that are responsible and share the cost of improvements among those who will utilize the infrastructure. The new home buyer should not be imposed upon to pay the lion's share of the bill. The Tucson metropolitan area continues to grow. That means more roads, more sewers, and many other improvements are needed to ensure the quality of life we now enjoy. SAHBA and its members understand that we all share the responsibility of providing for our future. irr~sponiible government mandates. What we do support are u~ell-planned and viable communities, ones that provide more jobs and more opportunities for their citizens. The precedent of impact fees imposed without substantiation or recourse is a dangerous one for the economic well-being of Southern Arizona, and may be interpreted as adverse social policy. The residential construction industry provided more than 13,800 jobs and $360 million in wages in 1994. Do we want that interrupted? SAHBA members will continue to pay the 0ro Valley development impact fees "under protest," concemed as we are that this fee may later be judged unfair or inequitable. We will also continue to encourage citizens to question this wasteful approach to infrastructure funding. Bill Wiese is president of the Southern Arizona Home Builders Association. ½ [' Return to Search. Screen [ Marana Waives development impact fees, enacts 'fair share' plan Thursday, 9 Feb=uary 1995 METRO/REGION lB Edward L. Cook THE ARIZONA DAILY STAR Marana is offering builders an alternative to development impact fees - that method of charging up- front money to help build roads, sewers and other necessities. The Town Council, in lieu of such fees, Tuesday night approved a" fair share" ordinance that will guarantee developers a rebate from other home-building companies. As developers, for example, connect to an existing sewer line, they will be charged their "fair share" for using the sewer, based on capacity needed to serve a project. Marana Attorney Dan Hochuli said the ordinance, approved 4-0 by the council, takes effect in 30 days. Mayor Ora Ham said the measure will be an incentive for developers to do business with the town. "They will know that when they put in the infrastructure they will get a benefit from doing it," she said. "It's an alternative to development impact tees. We think it is more fair to the builders, to the homeowners, to everybody." Under the ordinance, for example, new Marana developments that tap into a sewer line that Westinghouse Communities built along North Thomydale Road between Tangerine and Ina Roads will be charged their fair share. The town will collect the fee and reimburse Westinghouse, Ham said. As it is now, she said, developers "get a free ride" l'iobkUP'"fee, but are not required to reimburse the company that built the line. Marana Planning Administrator Jerry Flannery said the ordinance is a way for development to pay for itself and to also avoid "upsizing" in projects - such as going from a 10-inch sewer line to a 14-inch line because of unanticipated residential construction. Impact fees have been under discussion for years in Arizona communities hit by rapid growth, including Oro Valley, where builders have been assessed $1,035 per home since Jan. 20 to help finance road improvements along a 3-mile section of La Cafiada Drive. But impact fees are risky, Ham said. "You have to be real careful with those fees because you have to guarantee the fee is going to be beneficial. That's hard to do when you charge people up front," she said. C)alIy News I SL,YTecfl I AP Ne,~ I Dispatches I Ollmer at 81 Press P~-, I Tl~e Wire I Return to Search..S~.r~n I Marana manager urges higher construction tax Wednesday, 28 Januar~ 1998 STAR NORTHWEST 1E By Edward L. Cook THE ARIZONA DAILY STAR The Marana Town Council is expected to vote next month on a 1 percent tax increase on construction activities to raise funds for road improvements. Town Manager Hurvie Davis said hiking what is now a 2 percent construction tax would provide money to deal with transportation infrastructure problems before they arise. "We need to get ahead of the curve," he told council members last week. "We need to use foresight, instead of hindsight." The 3 percent construction-activities tax would raise $6.3 million a year under current construction spending in Marana. Davis said the council would couple two- thirds of that money with bond proceeds to meet critical transportation needs of the community. Alan Lurie, vice president of the 681-member Southern Arizona Home Builders Association, said he doesn't oppose the tax hike per se, but said the town should have safeguards to make sure it is applied equitably. "If there is a great deal of money collected that serves only a small part of the community, it would be unfair in its application," Lurie said. For example, he said, if Marana uses the money to help build an Interstate 10 interchange at Linda Vista Road and residents on the far side of town don't use the interchange, the money would not benefit them. The interchange, which would cost about $30 million, topped a list of projects Marana wanted included in a $350 million transportation bond issue that was approved by Pima County voters in November. The Board of Supervisors slashed the request. want io see Marana slap a future impact fee on top of the 1 percent tax. He said they can't eat such increased costs, which ultimately are passed on to home buyers. Davis, in his argument supporting the tax increase, said it is justified because of the burden the home-building industry places on the transportation system - due to the number of home-based trips generated by the increased population. The tax applieS to' new home sales and other general construction activities, such as the construction, alteration and repair of any building, highway, road or other structure, project development or improvement to real property. It does not apply to homes that are being resold. The additional tax is needed, Davis said, because the money Marana now receives from the state Highway User Revenue Fund and Local Transportation Association Funds is insufficient to meet the town's transportation needs. Davis said Marana has spent more than $900,000 over the last three fiscal years for routine street and road maintenance, as well as $ 1.6 million for capital transportation improvements. During that period, he said, the town has received $873,000 from the revenue funds. Councilman Mike Reuwsaat emphasized that passage of the 1 percent tax increase would not preclude the imposition of Marana's "fair share ordinance" fees, which have been in effect since March 1995. Under that ordinance, the town can require a developer to pay upfront money to help build roads, install sewers and other infrastructure work. The town collects the fee and reimburses the developer later. Mayor Ora Ham has called the ordinance an alternative to development impact tees, but critics have likened it to an impact fee under a different name. MARANA ROAD CONSTRUCTION TAX