TO: Mayor Collins and Town Council Members
FROM: Kevin Burke, Town Manager
Dawn Marie Buckland, Director of Administration & Govt Affairs
DATE: December 1, 2016
DEPARTMENT: Administration and Government Affairs Department
Staff Contact Dawn Marie Buckland, 480.348.3555
End
AGENDA TITLE:
Title
Public Hearing on Utility Impact Fees
Body
Council Goals or Statutory Requirements:
Long term balanced budget
RECOMMENDATION:
Recommendation
Hold a public hearing and schedule action to approve/disapprove fees on January 26, 2017
Background
SUMMARY STATEMENT:
Over the last year, the Town has held several public meetings to present information, land use assumptions (LUA), and infrastructure improvement plans (IIP) related to the impact of growth on the Town’s sewer infrastructure and available treatment capacity. These studies help us to determine the appropriate nexus between the overall cost of growth and an equitable distribution for each development in a manner consistent with state law.
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 ongoing growth-related costs.
The consultant assisted staff in first developing the Town’s LUA in order to determine what capacity, projects or debt service is required to support new development. This was then incorporated into the IIP for sewer impact fee to be developed. The potential sewer impact was presented with the LUA and IIP and will be presented again at the public hearing on December 1, 2016. However, the sewer impact fee will not be presented to Council for adoption until January 26, 2017.
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 an average 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 LUA and IIP. Generally, water and sewer impact fees are assessed based on meter size and the standard associated flow capacity (gallons per minute) for each meter. 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 (gpm) |
Capacity Ratio |
Proposed Fee |
|
1-inch and Smaller |
50 |
1.00 |
$7,847 |
|
1.5-inch |
100 |
2.00 |
15,694 |
|
2-inch |
160 |
3.20 |
25,110 |
|
3-inch |
350 |
7.00 |
54,929 |
|
4-inch |
600 |
12.00 |
94,164 |
|
6-inch |
1,000 |
20.00 |
156,940 |
|
8-inch |
1,600 |
32.00 |
251,104 |
Next Steps
With the approval of the LUA and IIP, there are several additional steps in the adoption process that the Town must undertake. The next steps are:
• October 13, 2016 - Approve or disapprove IIP and LUA at least 30 days after September 8, 2016 public hearing but no later than 60 days. Provide Notice of Public Hearing for sewer impact fees for November 17, 2016;
• December 1, 2016 - Public Hearing for proposed sewer impact fees. At least 30 days after notice of public hearing;
• January 26, 2017 - Approve or Disapprove sewer impact fees at least 30 days after December 1, 2016 but no later than 60 days;
• April 1, 2017 - Impact fees would become effective at least 75 days after the resolution to adopt fees.
BUDGETARY IMPACT:
The purpose for the study and corresponding process is to determine the appropriate fees to provide the necessary revenue to offset growth’s fair share of its associated costs.
ATTACHMENT(S):
Presentation