Town Council Regular Session


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  Item # 5.       
Meeting Date: 01/15/2014  
Requested by: Stacey Lemos Submitted By: Stacey Lemos, Finance
Department: Finance  

Information
SUBJECT:
RESOLUTION NO. (R)14-07, ADOPTING THE 2013-2023 LAND USE ASSUMPTIONS AND INFRASTRUCTURE IMPROVEMENT PLANS DATED OCTOBER 4, 2013, FOR THE TOWN OF ORO VALLEY
RECOMMENDATION:
Staff recommends approval.
EXECUTIVE SUMMARY:
At the December 4, 2013, Town Council Regular Session meeting, the Council held a public hearing to receive public comment on the infrastructure improvement plans (IIPs) and land use assumption (LUA) sections of the development impact fee studies prepared for parks, police, transportation, potable water system and alternative water resources development impact fees. 

The purpose of this agenda item is to seek Council approval of the IIPs and LUAs in compliance with the new impact fee statute, A.R.S. Section 9-463.05.
BACKGROUND OR DETAILED INFORMATION:
Development impact fees are fees assessed by the Town to fund infrastructure improvements required due to new growth.  These fees are accumulated to construct specific improvements or portions of improvements within the Town based on development fee studies.

In the 2011 legislative session, the Arizona Legislature passed Senate Bill (SB) 1525 which updated Arizona Revised Statutes (ARS) Section 9-463.05.  This new law restricts the types of facilities for which impact fees may be charged and requires jurisdictions to prepare new impact fee studies to include land use assumptions and infrastructure improvement plans (IIPs) that must be approved prior to the updated fees being effective on August 1, 2014. Land use assumptions and IIPs are defined as follows:

1.  Land Use Assumptions - Projections of changes in land uses, densities, intensities and population for a specified service area over a period of at least ten (10) years and pursuant to the general plan of the municipality.

2.  Infrastructure Improvement Plan (IIP) - A written plan that identifies each necessary public service or facility expansion that is proposed to be the subject of a development fee that complies with the requirements of ARS.  This is based on the Town's capital improvements plan.

The last comprehensive update of the Town's impact fees was completed in 2008.  At that time, the Town adopted fees for parks, police, general government, and library.  The transportation and water utility impact fees were already in place at that time.  On January 1, 2012, the Town eliminated its general government impact fees and significantly reduced its park and police fees to comply with the January 1, 2012, requirements of SB 1525.  On July 1, 2012, the Town discontinued collecting library impact fees due to the transfer of library operations to the Pima County Library District.

In March 2013, the Town hired Duncan Associates to prepare the update of its remaining non-utility development impact fees for parks, police and transportation.  In addition, the Water Utility hired CH2M HILL to prepare the update of its alternative water resources system and potable water system development impact fees. 

The draft public review reports from each consultant are provided as attachments 2 and 3.  These reports have been on file with the Town Clerk's Office and made available on the Town's website for public review.  Copies of the draft reports have also been provided to the Southern Arizona Home Builders Association (SAHBA) and Metropolitan Pima Alliance (MPA). 

Land Use Assumptions

Both draft impact fee reports are consistent in their 10-year land use assumptions and growth projections.  The consultants utilized population and employment projection data from the U.S. Census Bureau and Pima Association of Governments.  Based on these sources, it is projected that the Town's population will grow from an estimation of 43,070 in 2013 to 47,735 in 2023.  Total anticipated housing units (single-family and multi-family) are expected to grow from 21,361 in 2013 to 22,749 in 2023.  More details relating to the land use assumptions for the non-utility impact fees can be found on pages 13 - 14 of the Duncan Associates report. 

For the water utility service area, total service units are expected to grow from 23,200 in 2013 to 27,758 in 2023.  This includes residential and commercial development with an annual growth rate ranging from 1.3% to 1.9% over the 10-year period.  To determine service units, a GIS database with land use assumptions consistent with the Town's General Plan was used.  Details on the land use assumptions for the Water Utility impact fees can be found on pages 2-4 and 2-5 of the CH2M HILL report.

The Water Utility service area does not include the entire Town since parts of the Town are served by other water providers.  The water service area also includes Countryside, which is located outside of Town boundaries (Appendix A of CH2M HILL report).

Infrastructure Improvement Plans (IIPs)

The new impact fee law requires that an IIP be prepared for each category of fee in each service area.  Both reports assume a single service area for the collection of fees.  For the non-utility impact fees, the service area is defined as the incorporated boundaries of the Town.  The Water Utility service area is defined in the section above. 

Impact fees may only be collected for improvements identified in the IIP.  Therefore, the IIPs must identify planned projects over a period of not more than 10 years and are limited to include those improvements that add capacity to accommodate future growth.  The impact fee law requires that the IIPs be updated at a minimum of once every 5 years.

For reference, the Duncan Associates report (Attachment 2) contains tables listing the planned projects in each non-utility fee category on the following pages:

Transportation - Table 24, page 24
Parks - Table 32, page 28
Police - Table 40, page 34

The CH2M HILL report (Attachment 3) contains a list and description of the planned projects in each Water Utility impact fee category on the following pages:

Alternative Water Resources - Table 3-6, page 3-7 and Appendix C
Potable Water System - Table 3-7, page 3-7 and Appendix D

Next Steps

The following schedule of public hearings and Town Council meeting dates has been established in order to comply with the timeframes mandated in the impact fee law and to accommodate implementation of the new development impact fees prior to August 1, 2014:
  • January 15, 2014 - Town Council meeting to consider adoption of land use assumptions and IIPs
  • February 19, 2014 - Public hearing on updated impact fees
  • April 2, 2014 - Town Council meeting to consider adoption of updated impact fees
  • July 1, 2014 - Effective date of new impact fees
  • August 1, 2014 - Legal deadline to have new impact fees effective
FISCAL IMPACT:
The analysis included in the land use assumptions and infrastructure improvement plans serve as the basis for the calculation of the development impact fees. In April, Council will consider adoption of the fees which would change as described below.

Based on the Duncan Associates draft report, the combined total of the three non-utility fees would be approximately 12% higher for residential uses, approximately 19% lower for most retail/commercial uses and range from 47% to 95% higher for most office and industrial/warehouse uses, depending on the specific use.  Table 2 on page 2 of the Duncan Associates report compares the Town's current impact fees to the proposed updated fees for parks, police and transportation.

Based on the CH2M HILL draft report, the combined Water Utility development impact fees for alternative water resources and the potable water system would be 20% lower for residential customer classes, 13% lower for the commercial customer class and 17% higher for irrigation uses.

In conclusion, when the proposed utility and non-utility impact fees are combined, the results are overall decreases in most land use categories.
SUGGESTED MOTION:
I MOVE to approve Resolution No. (R)14-07, adopting the 2013-2023 land use assumptions and infrastructure improvement plans for the Town of Oro Valley dated October 4, 2013.

or

I MOVE...
Attachments
(R)14-07 Land Use Assumptions & IIP
Duncan Associates Report
CH2M HILL Report


    

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