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City of Chandler, Arizona Report on Applying Agreed-Upon Procedures Biennial Certification of Land Use Assumptions, Infrastructure Improvement Plan and Impact Fees For the Period July 1, 2022 through June 30, 2024 City of Chandler, Arizona Table of Contents Contents Page Independent Accountant’s Report on Applying Agreed‐Upon Procedures 1 Results of Procedures 3 Appendix A – Progress of Infrastructure Improvement Plan Projects 8 Independent Accountant’s Report on Applying Agreed‐Upon Procedures Honorable Mayor and Members of the City Council City of Chandler, Arizona We have performed this agreed‐upon procedures engagement to assist management of the City of Chandler, Arizona (City), with the requirement set forth in Arizona Revised Statutes (A.R.S.) 9‐463.05.G.2 “to provide for a biennial certified audit of the municipality’s land use assumptions, infrastructure improvements plan and development fees.” As such, we have performed the procedures identified below, solely to assist users in evaluating the City’s compliance with the progress reporting requirements of the infrastructure improvement plan for the period from July 1, 2022 through June 30, 2024, as specified in A.R.S. 9‐463.05.G.2. City of Chandler, Arizona’s management is responsible for its compliance with those requirements. City of Chandler, Arizona’s management has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting users in determining whether the City complied with the specified requirements. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. We have applied the following procedures: The progress of the infrastructure improvements plan. a. Compared growth projections for 2023 and 2024 related to dwelling units, population, and the various commercial square footage units as reported in the Infrastructure Improvement Plan (IIP) to actual results for the proportionate 10‐year projections. A list of all variances are reported in the Results of Procedures. b. Obtained City‐prepared report (see Appendix A) documenting the progress of each project identified in the Infrastructure Improvement Plan (IIP) and performed the following procedures: i. Agreed expenditures as of June 30, 2024 to the underlying accounting records. ii. Agreed amounts reported as estimated cost to complete to underlying accounting records. The collection and expenditures of impact fees for each project in the plan. c. Selected a sample of 80 building permits issued and determined fees were charged in accordance with authorized fee schedules and that each permit holder was charged the same rate as another equivalent permit holder. d. Selected a sample of 50 expenditures and determined that the expenditures were associated with an approved project in the City’s IIP. Page 1 Evaluating any inequities in implementing the plan or imposing the impact fee. e. Evaluated any inequities in implementing the plan or imposing the impact fee through recalculating impact fees at the transaction level for the sample mentioned in procedure c above. f. Determined that there were no instances in which the City waived impact fees, except as allowed for under A.R.S. 9‐499.10.B and A.R.S. 9‐500.18. The accompanying Results of Procedures describes the items we noted. We were engaged by City of Chandler, Arizona’s management to perform this agreed‐upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on compliance with the specified requirements. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. We are required to be independent of City of Chandler, Arizona and to meet our other ethical responsibilities, in accordance with relevant ethical requirements related to our agreed‐upon procedures engagement. This report is intended solely for the information and use of the management of City of Chandler, Arizona, and is not intended to be and should not be used by anyone other than these specified parties. Heinfeld, Meech & Co., P.C. Scottsdale, Arizona February 25, 2025 Page 2 City of Chandler, Arizona Results of Procedures Procedure A Compared growth projections for 2023 and 2024 related to dwelling units, population, and the various commercial square footage units as reported in the City’s Land Use Assumptions and Infrastructure Improvements Plan (IIP) to actual current amounts for the proportionate 10‐year projections. A list of all variances will be reported. Exception: Variances were noted for growth projections for dwelling units, population, and the various commercial square footage as reported in the Land Use Assumptions and Infrastructure Improvements Plan when compared to actual results. Management Response: Assumptions of equal growth of land development and the resulting fees averaged over a set period of time do not reflect the reality of how development occurs. Variances exist due to market conditions, demand for various types of land use and structures, the condition of the economy, and the availability of capital. The City of Chandler continues to take into account annual planning projections, entitled projects, and variations in construction permits to augment the equal growth assumptions when forecasting. Total Square Footage Note: The cumulative projected amounts for square footage assume equal growth for each year of the 10‐year period with the incremental cumulative total presented for each year. Cumulative Total as of 2023 Projected Actual Variance Variance % Industrial Citywide 39,591,692 45,598,934 6,007,242 15% Arterial Streets 19,448,074 24,854,028 5,405,954 28% Institutional Citywide 12,830,405 12,427,817 (402,588) ‐3% Arterial Streets 6,870,343 7,423,899 553,556 8% Office Citywide 10,811,074 7,958,008 (2,853,066) ‐26% Arterial Streets 4,632,474 3,934,941 (697,533) ‐15% Retail Citywide 19,244,358 19,390,990 146,633 1% Arterial Streets 8,104,330 8,335,605 231,275 3% Page 3 City of Chandler, Arizona Results of Procedures Procedure A (Continued) Total Square Footage Cumulative Total as of 2024 Projected Actual Variance Variance % Industrial Citywide 40,489,531 46,146,069 5,656,538 14% Arterial Streets 20,165,130 25,358,764 5,193,634 26% Institutional Citywide 12,904,892 12,453,049 (451,843) ‐4% Arterial Streets 6,946,634 7,449,131 502,497 7% Office Citywide 11,337,615 8,260,002 (3,077,613) ‐27% Arterial Streets 4,866,077 4,236,935 (629,142) ‐13% Retail Citywide 19,407,272 19,554,465 147,193 1% Arterial Streets 8,231,243 8,495,899 264,656 3% Total Housing Units and Population by Service Area Note: The cumulative projected amounts for housing units and population assume equal growth for each year of the 10‐year period with the incremental cumulative total presented for each year. Cumulative Total as of 2023 Projected Actual Variance Variance % Single Family Parks Northwest 11,733 11,850 118 1% Parks Northeast 34,995 36,091 1,096 3% Park Southeast 33,171 34,771 1,601 5% Citywide 79,898 82,712 2,814 4% Arterial Streets 43,932 52,930 8,999 20% Multi‐Family Parks Northwest 4,990 5,269 279 6% Parks Northeast 18,023 15,934 (2,089) ‐12% Park Southeast 7,164 9,097 1,933 27% Citywide 30,177 30,300 123 0% Arterial Streets 11,430 15,934 4,505 39% Resident Population Parks Northwest 42,332 43,653 1,321 3% Parks Northeast 132,230 137,664 5,434 4% Park Southeast 104,771 111,863 7,092 7% Citywide 279,332 293,180 13,848 5% Arterial Streets 144,724 175,603 30,879 21% Page 4 City of Chandler, Arizona Results of Procedures Procedure A (Continued) Cumulative Total as of 2024 Projected Actual Variance Variance % Single Family Parks Northwest 11,738 11,853 115 1% Parks Northeast 35,047 36,176 1,129 3% Park Southeast 33,324 34,912 1,588 5% Citywide 80,110 82,941 2,831 4% Arterial Streets 44,078 53,153 9,075 21% Multi‐Family Parks Northwest 4,998 5,334 336 7% Parks Northeast 18,465 19,019 554 3% Park Southeast 7,164 9,227 2,063 29% Citywide 30,627 33,580 2,953 10% Arterial Streets 11,487 17,238 5,751 50% Resident Population Parks Northwest 42,363 43,827 43,827 3% Parks Northeast 133,216 140,747 140,747 6% Park Southeast 104,771 112,554 112,554 7% Citywide 280,350 297,128 297,128 6% Arterial Streets 145,244 179,497 179,497 24% Procedure B Obtained City‐prepared report (see Appendix A) documenting the progress of each project identified in the Infrastructure Improvement Plan (IIP) and performed the following procedures: a. Agreed expenditures as of June 30, 2024 to the underlying accounting records. b. Agreed amounts reported as estimated cost to complete to underlying accounting records. No exceptions noted. Procedure C Selected a sample of 80 building permits issued and determine fees were charged in accordance with authorized fee schedules and that each permit holder is charged the same rate as another equivalent permit holder. No exceptions noted. Procedure D Selected a sample of 50 expenditures and determine that the expenditure was associated with an approved project in the City’s IIP. No exceptions noted. Page 5 City of Chandler, Arizona Results of Procedures Procedure E Evaluated any inequities in implementing the plan or imposing the impact fee through recalculating impact fees at the transaction level for the sample mentioned in procedure c above. No exceptions noted. Procedure F Determined that there were no instances in which the City waived impact fees, except as allowed for under A.R.S. 9‐499.10.B and A.R.S. 9‐500.18 No exceptions noted. Page 6 Appendix A Page 7 Note: Any negative amount presented are expense recoveries from prior years. Fund Description 415 Arterial Street Impact Fees 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23 2023‐24 2024‐25 though 2033‐34* Total 6ST311‐Price Rd and Queen Creek Intersection ‐ ‐ (190,862) ‐ ‐ ‐ ‐ ‐ ‐ (190,862) 6ST478‐McQueen Rd (Queen Creek Rd to Riggs Rd) 401,157 720,556 542 ‐ ‐ ‐ ‐ ‐ ‐ 1,122,255 6ST482‐Gilbert Rd (Germann Rd to Queen Creek Rd) ‐ ‐ (127,921) ‐ ‐ ‐ ‐ ‐ ‐ (127,921) 6ST548‐Queen Creek Rd (McQueen Rd to Gilbert Rd) ‐ 262,288 246,143 601,762 2,100,347 153,606 ‐ ‐ ‐ 3,364,147 6ST596‐Gilbert Rd (Queen Creek Rd to Riggs Rd) 484,152 20,705 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 504,857 6ST607‐Ocotillo Rd (Arizona Ave to McQueen Rd) 659,940 490 ‐ (1,011) ‐ ‐ ‐ ‐ ‐ 659,419 6ST608‐Chandler Heights (Arizona Ave to McQueen Rd) 32,904 114,167 604,636 ‐ 1,182,277 2,983 ‐ ‐ ‐ 1,936,967 6ST641‐Ocotillo Rd (Cooper Rd to 148th St) 147,647 513,530 1,670,914 ‐ 334,675 48,918 35,048 3,244,472 1,286,816 42,929 7,324,949 6ST675‐Cooper Rd (Queen Creek Rd to Riggs Rd) 13,741 27,498 160,137 ‐ 45,614 2,294,623 2,644,544 556,933 39,632 5,782,722 6ST692‐Chandler Heights Rd (McQueen Rd to Val Vista Dr) ‐ ‐ 181,765 469,687 119,741 122,793 858,848 5,575,618 5,263,101 10,813,252 23,404,806 6ST693‐Lindsay Rd (Ocotillo Rd to Hunt Hwy) ‐ ‐ ‐ ‐ 17,915 110,764 84,842 125,002 128,139 28,331,604 28,798,266 6ST738‐Gilbert Rd (Ocotillo Rd to Chandler Heights Rd) ‐ ‐ ‐ ‐ 213,989 (213,989) ‐ ‐ ‐ ‐ 6ST745‐Alma School Rd (Chandler Blvd to Pecos Rd) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6ST746‐Alma School Rd (Pecos Rd to Germann Rd) ‐ ‐ ‐ ‐ 176,985 2,405,803 1,214,127 75,306 22,602 25,613 3,920,436 6ST747‐Alma School Rd (Germann Rd to Queen Creek Rd) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 174,310 1,069,369 1,243,679 *As programmed in 2022‐2033 CIP 421 Community Park Impact Fees 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23 2023‐24 2024‐25 though 2033‐34* Total 6PR396‐Mesquite Groves Park ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Note: This fund was expended and closed as of 6/30/17. 422 Neighborhood Parks Impact Fees 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23 2023‐24 2024‐25 though 2033‐34* Total 6PR039‐Neighborhood Park Land Acquisition 3,087 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 3,087 6PR044‐Tumbleweed Regional Park 41,759 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 41,759 6PR389‐Homestead North Park Site ‐ ‐ ‐ 22,445 72,723 ‐ ‐ ‐ ‐ ‐ 95,168 6PR400‐Roadrunner Park ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6PR631‐Centennial Park Site ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Note: This fund was expended and closed as of 6/30/20. 424 Park Impact Fees 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23 2023‐24 2024‐25 though 2033‐34* Total 6PR389‐Homestead North Park Site ‐ ‐ ‐ 27,588 25,564 55,091 684,404 2,071,891 ‐ ‐ 2,864,538 6PR390‐Homestead South Park Site ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6PR396‐Mesquite Groves Park Site Phase I ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6PR400‐Roadrunner Park Site ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6PR420‐Veteran's Oasis Park Site ‐ ‐ (59,740) ‐ ‐ ‐ ‐ ‐ ‐ ‐ (59,740) 6PR629‐Lantana Ranch Park 347,469 242,454 ‐ ‐ ‐ 589,923 6PR631‐Centennial Park Site 12,843 4,672 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 17,515 6PR638‐Valencia Park Site ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6PR639‐Citrus Vista Park Site 1,412,990 4,995 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 1,417,985 6PR640‐Layton Lakes Park Site ‐ 141,285 1,191,476 139,376 ‐ ‐ ‐ ‐ ‐ 1,472,137 *As programmed in 2022‐2033 CIP Note: This fund was expended and closed as of 6/30/23. Fiscal Year Page 8 425 Parks NW Impact Fees 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23 2023‐24 2024‐25 though 2033‐34* Total None ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ **No growth‐related capital to construct; collecting fees to repay pledged debt 426 Parks NE Impact Fees 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23 2023‐24 2024‐25 though 2033‐34* Total None ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ **No growth‐related capital to construct; collecting fees to repay pledged debt 427 Parks SE Impact Fees 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23 2023‐24 2024‐25 though 2033‐34* Total 6PR396‐Mesquite Groves Park Site Phase I ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 17,073 32,729,926 32,746,999 6PR629‐Lantana Ranch Park Site ‐ ‐ ‐ ‐ 88,854 990,630 2,013,331 ‐ ‐ 7,729,908 10,822,722 *As programmed in 2022‐2033 CIP 465 Police Impact Fees 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23 2023‐24 2024‐25 though 2033‐34* Total 6PD243‐Chandler Heights Subtation ‐ ‐ (59,740) ‐ ‐ ‐ ‐ ‐ ‐ ‐ (59,740) **No growth‐related capital to construct; collecting fees to repay pledged debt 475 Fire Impact Fees 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23 2023‐24 2024‐25 though 2033‐34* Total 6FI611‐Southeast Fire Station 797 361,261 3,579,131 295,842 ‐ ‐ ‐ ‐ ‐ ‐ 4,237,031 6FI638‐Fire Station No. 1 Relocation 147,100 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 147,100 **No growth‐related capital to construct; collecting fees to repay pledged debt 603 Water System Development Fees 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23 2023‐24 2024‐25 though 2033‐34* Total 6WA029‐Water Master Plan Update 68,498 133,055 56,495 1,553 ‐ ‐ ‐ ‐ ‐ ‐ 259,600 6WA034‐Well Construction/Rehabilitation 2,260,447 1,807,500 894,025 718,077 1,637,212 16,503 18,132 80 29,007 3,052,547 10,433,529 6WA076‐Transmission Mains ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6WA334‐Joint Water Treatment Plant ‐ 6,418,629 19,857,848 1,639,976 1,020,748 ‐ ‐ ‐ ‐ ‐ 28,937,201 6WA672‐Water Purchases ‐ 9,999,788 4,999,940 4,999,940 14,731,755 ‐ ‐ ‐ ‐ ‐ 34,731,423 **No growth‐related capital to construct; collecting fees to repay pledged debt 604 Water Resource System Development Fees 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23 2023‐24 2024‐25 though 2033‐34* Total 6WW661‐Ocotillo Water Reclamation Facility Expansion 748,052 2,763,414 488,533 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 4,000,000 6WA672‐Water Purchases ‐ ‐ ‐ ‐ 128,827 ‐ ‐ ‐ ‐ ‐ 128,827 Note: This fund was expended and closed as of 6/30/20. 610 Reclaimed Water System Development Fees 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23 2023‐24 2024‐25 though 2033‐34* Total 6WW189‐Effluent Reuse‐Storage 97,991 876,519 15,513 151,138 294,279 210,698 2,171,057 690,757 142,912 178 4,651,043 Page 9 6WW192‐Effluent Reuse‐Transmission Mains 1,422,386 158,361 868,974 3,198,432 212,433 1,738 ‐ ‐ 14,560 227,270 6,104,155 *As programmed in 2022‐2033 CIP 614 Wastewater System Development Fees 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 2020‐21 2021‐22 2022‐23 2023‐24 2024‐25 though 2033‐34* Total 6WW021‐Wastewater Master Plan Update 157,935 266,114 112,989 3,107 ‐ ‐ ‐ ‐ ‐ 540,145 6WW022‐Water Reclamation Facility Expansion 20,126 540 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 20,666 6WW196‐Collection System Facility Improvements ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6WW651‐Wastewater Land Acquistion ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6WW642‐South Chandler Sewer Line Expansion ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 6WW661‐Ocotillo Water Reclamation Facility Expansion 19,505,029 79,677,431 14,085,867 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 113,268,328 **No growth‐related capital to construct; collecting fees to repay pledged debt Page 10