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City Council Work Study Session Glendale, Arizona January 28, 2025 DRAFT Land Use Assumptions, Infrastructure Improvements Plan, and Development Fees 2 Overview • Development Fee Basics • Land Use Assumptions (LUA) • Infrastructure Improvements Plan (IIP) • Proposed Fee Summary • Proposed Fee Comparison 3 Development Fee Basics • One-time payment for growth-related infrastructure • Collected when building permit issued • Can’t fund operations, maintenance, or replacement • Not a tax, but a contractual arrangement to build infrastructure with three requirements: • Need for infrastructure (system-level improvements, not project-level improvements) • Benefit to fee payer (service areas, accounting and expenditure controls) • Proportionate to demand • Level of Service (LOS) • May not exceed what is provided to existing development • Higher LOS must be paired with non-development fee funding source to cover existing development’s share DRAFT 4 Fee Methodologies TischlerBise | www.tischlerbise.com • Cost Recovery Approach (Past) • Future development is “buying in” to the cost the community has already incurred to provide growth-related capacity • Common in communities approaching buildout • Incremental Expansion Approach (Present) • Formula-based approach based on existing levels of service • Fee is based on the current cost to replicate existing levels of service (i.e., replacement cost) • Plan-Based Approach (Future) • Usually reflects an adopted CIP or master plan • Growth-related costs are more refined DRAFT 5 Evaluate Need for Credits • Site Specific • Developer constructs a capital facility included in fee calculations • Debt Service • Avoid double payment due to existing or future bonds • Dedicated Revenues • Property tax, local option sales tax, gas tax, etc. DRAFT 6 Arizona Legislation • Three Integrated Documents • Land Use Assumptions (LUA): 10+ years • Infrastructure Improvements Plan (IIP): limited to 10 years • Development Fees: updated every 5 years • Limitations on Necessary Public Services • Library: Limited to 10,000 square feet • Parks: 30 acres unless direct benefit to development • Public Safety: No regional training facilities • Useful life of 3 or more years DRAFT 7 Necessary Public Services • Adopted 2022 • Street • Adopted 2024 • Water • Wastewater • 2025 Update • Fire • Library • Parks • Police DRAFT 8 Project Timeline • March 2024: Project Initiation Meeting • Dec 11: Advertise (60 days) • Jan 28, 2025: Work Session • Feb 11: Public Hearing (30 days) • March 25: Adoption • March 26: Advertise (30 days) • May 13: Public Hearing (30 days) • June 24: Adoption (75 days) • Sept 8: Fees Effective Land Use Assumptions (LUA) & Infrastructure Improvements Plan (IIP) Development Fees DRAFT 9 Land Use Assumptions DRAFT Multi-Family and Employment: Maricopa Association of Governments (MAG) 2023 Socioeconomic Projections Single Family: Glendale staff based on available land 10 Fire IIP • Service Area • Citywide • Fee Components • Fire Facilities: Incremental • Fire Apparatus: Incremental • 10-Year Demand • Fire Facilities: 12,000 square feet, $6.9 million • Fire Apparatus: $3.2 million DRAFT 11 Proposed Fire Fees DRAFT 12 Library IIP • Service Area • Citywide • Fee Components • Library Facilities: Incremental • 10-Year Demand • Library Facilities: 2,900 square feet, $2.5 million DRAFT 13 Proposed Library Fees DRAFT 14 Parks and Recreational IIP • Service Area • Citywide • Fee Components • Park Amenities: Incremental • 10-Year Demand • Park Amenities: $8.5 million DRAFT 15 Proposed Parks and Recreational Fees DRAFT 16 Police IIP • Service Area • Citywide • Fee Components • Police Facilities: Incremental • Police Vehicles: Incremental • Police Equipment: Incremental • 10-Year Demand • Police Facilities: 4,000 square feet, $4.2 million • Police Vehicles: $1.6 million • Police Equipment: $1.8 million DRAFT 17 Proposed Police Fees DRAFT 18 Fee Summary (Excludes Street & Utility Fees) Proposed Current DRAFT Increase / (Decrease) 19 Single-Family Fee Comparison DRAFT $14,567 $13,900 $7,747 $7,080 20 Single-Family Fee Comparison (Non-Utility Only) DRAFT $7,080 $6,775 $7,747 $7,442 Includes Required Credit for Excess Construction Sales Tax