TO: Mayor Collins and Town Council Members
FROM: Kevin Burke, Town Manager
Dawn Marie Buckland, Director of Administration & Govt Affairs
DATE: January 26, 2017
DEPARTMENT: Administration and Government Affairs Department
Staff Contact Dawn Marie Buckland, 480.348.3555
End
AGENDA TITLE:
Title
Consideration of Resolution 2017-02 Updating the Wastewater Development Impact Fees
Body
Council Goals or Statutory Requirements:
Long Term Balanced Budget
RECOMMENDATION:
Recommendation
Adopt Resolution 2017-02 approving the updates to the wastewater development impact fees
Background
SUMMARY STATEMENT:
The purpose of the Sewer Impact Fee agenda item on the January 26, 2017 Town Council Meeting is to approve or disapprove the recommended sewer impact fees previously presented to the Town Council. This memorandum summarizes the information that was presented and outlines the next steps in the process.
Purpose of the Impact Fee Study
Pat Walker Consulting in conjunction with Willdan Financial Services (Consulting Team) were retained by the Town of Paradise Valley (Town), to update the Town’s sewer impact fees. The purpose of updating the sewer impact fee was to:
• Recognize the impact new development places on the system;
• Ensure that growth is paying its proportionate share of costs; and
• Provide funding for current and future growth-related costs.
The first step in the process of updating the Town’s sewer impact fee is to first develop the Town’s LUA in order to determine what capacity, projects or debt service is required to support new development. This is then incorporated into the Infrastructure Improvement Plan (IIP) and then sewer impact fee can be developed.
Assumptions
In developing the new LUA and IIP, the Consulting Team worked with Town staff to
identify the anticipated growth projections over the next ten years (as required by the
State Statute). The anticipated system growth is as follows:
• Average annual customer growth of 4.45% per year.
Factors that were used in the development of annual system growth include:
• Annual addition of 18 vacant lots within 300 feet of an existing pipe;
• Annual addition of 10 septic lots within 300 feet of an existing pipe;
• Annual addition of 20 septic lots further than 300 feet from an existing pipe; and
• Ritz Carlton development which assumes:
o 85,500 average day gallons;
o 164 new residential units (32 per year beginning in 2019); and
o 94 villas and 10 commercial accounts.
Proposed Sewer Impact Fees
The Town is not anticipated to need to purchase additional treatment capacity from Scottsdale during the 10-year study period, therefore, the fees were calculated using a buy-in approach. Under this method new development funds “buy into” facilities at the same standard currently serving existing development.
The fee was calculated on a fee per equivalent dwelling unit (EDU) basis and was calculated at $7,847 based on the proposed LUA and IIP. Generally, water and sewer impact fees are assessed based on meter size and the associated flow capacity (gallons per minute) by meter size. The fee per EDU represents the fee for a development with a 1-inch or smaller meter. The fees for larger meters are illustrated in Table 1 below.
Table 1
Impact Fee by Meter Size
|
Meter Size |
Flow (1) (gpm) |
Capacity Ratio |
Current Fee |
Proposed Fee |
Difference |
|
1-inch and Smaller |
50 |
1.00 |
$6,541 |
$7,847 |
$1,306 |
|
1.5-inch |
100 |
2.00 |
13,083 |
15,693 |
2,610 |
|
2-inch |
160 |
3.20 |
20,932 |
25,109 |
4,177 |
|
3-inch |
350 |
7.00 |
41,865 |
50,218 |
8,353 |
|
4-inch |
500 |
10.00 |
65,415 |
78,466 |
13,051 |
|
6-inch |
1,000 |
20.00 |
130,831 |
156,932 |
26,101 |
|
8-inch |
1,600 |
32.00 |
209,329 |
251,091 |
41,762 |
|
(1) As published in AWWA Manual M6 - Water Meters: Selection, Installation, Testing & Maintenance pages 28 and 29 |
The recommended fees listed in Table 1, represent an approximately 20% increase from the current fees.
Next Steps
With the approval of the impact fees, there is a 75-day waiting period before the new fees can be assessed. The new fees are proposed to be assessed beginning May 1, 2017.
BUDGETARY IMPACT:
The recommended fees reflect the incremental share of the impact of growth on the Town’s wastewater capacity and infrastructure. Appropriate and equitable funding for the Town’s impact fees is an essential component of a balanced budget and long range financial plan.
ATTACHMENT(S):
Resolution
Fees
PowerPoint