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Home My WebLink About12-13-05 Agenda PacketDocument in Binder1 Page 1 of 1 NOTICE OF THE SPECIAL SESSION AND PUBLIC HEARING OF THE FOUNTAIN HILLS TOWN COUNCIL Mayor Wally Nichols Councilman Mike Archambault Councilman Keith McMahan Councilman John Kavanagh Councilman Ed Kehe Vice Mayor Jay Schlum TIME: 5:00 P.M. WHEN: TUESDAY, DECEMBER 13, 2005 WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS 16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ CALL TO THE PUBLIC Pursuant to A.R.S. §38-431-01(G), public comment is permitted (not required) on matters not listed on the agenda. Any such comment (i) must be within the jurisdiction of the Council and (ii) is subject to reasonable time, place, and manner restrictions. The Council will not discuss or take legal action on matters raised during “Call to the Public” unless the matters are property noticed for discussion and legal action. At the conclusion of the call to the public, individual Council members may (i) respond to criticism, (ii) ask staff to review a matter or (iii) ask that the matter be placed on a future Council agenda. REGULAR AGENDA 1.) CALL TO ORDER AND ROLL CALL – Mayor Nichols 2.) CONSIDERATION of approving LIFEWISE as the HEALTHCARE CARRIER for Town of Fountain Hills employees in 2006. 3.) PUBLIC HEARING to receive comment on the PROPOSED DEVELOPMENT FEE SCHEDULE with possible direction to staff. 4.) ADJOURNMENT. DATED this 9th day of December, 2005. Bevelyn J. Bender, Town Clerk The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 837-2003 (voice) or 1- 800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this meeting or to obtain agenda information in large print format. Supporting documentation and staff reports furnished the Council with this agenda are available for review in the Clerk’s office. Pathways to Lasting Solutions Town of Fountain Hills Development Fee Study FINAL REPORT ADDENDUM December 9, 2005 P A T H W A Y S T O L A S T I N G S O L U T I O N S • 3300 S. PARKER ROAD - SUITE 305 - AURORA, CO 80014 - T 303-369-3535 F 303-369-3540 - WWW.REDOAKCONSULTING.COM December 9, 2005 Mr. Tim Pickering Town Manager Town of Fountain Hills 16836 E. Palisades Boulevard Fountain Hills, AZ 85268 Dear Mr. Pickering: On behalf of Red Oak Consulting, I am pleased to submit this addendum to our September 2005 Final Report on the Development Fee Study prepared for the Town of Fountain Hills. This addendum was prepared at your request based on the results of the recently completed City Council strategic plan. This plan eliminated a number of future capital improvement projects previously reflected in the development fees calculated in the September 2005 Final Report. Questions regarding this report should be directed to me at (303) 369-3535. Very truly yours, RED OAK CONSULTING A Division of Malcolm Pirnie, Inc. Richard D. Giardina Vice President Town of Fountain Hills, AZ Page i Development Fee Study – Report Addendum December 9, 2005 Table of Contents BACKGROUND....................................................................................................................................................1 GENERAL GOVERNMENT.................................................................................................................................1 PARKS AND RECREATION...............................................................................................................................2 STREETS...............................................................................................................................................................4 DEVELOPMENT FEE SUMMARY.....................................................................................................................5 DEVELOPMENT FEE SURVEY..........................................................................................................................7 List of Tables TABLE 1 – GENERAL GOVERNMENT, CALCULATION OF REVISED DEVELOPMENT FEES......................................................2 TABLE 2 – PARKS AND RECREATION, CALCULATION OF REVISED DEVELOPMENT FEES......................4 TABLE 3 – STREETS, CALCULATION OF REVISED DEVELOPMENT FEES........................................................5 TABLE 4 – COMPARISON OF CURRENT AND RECOMMENDED DEVELOPMENT FEES...............................6 TABLE 5 – RESIDENTIAL DEVELOPMENT FEE SURVEY – SINGLE FAMILY DETACHED............................7 TABLE 6 – COMMERCIAL DEVELOPMENT FEE SURVEY – 3,000 SF RESTAURANT WITH 1” METER......9 TABLE 7 – COMMERCIAL DEVELOPMENT FEE SURVEY – RESTAURANT (PER SF)...................................11 List of Figures FIGURE 1 – RESIDENTIAL DEVELOPMENT FEE SURVEY – SINGLE FAMILY DETACHED...........................................................8 FIGURE 2 – COMMERCIAL DEVELOPMENT FEE SURVEY – 3,000 SF RESTAURANT WITH 1" METER...10 FIGURE 3 – COMMERCIAL DEVELOPMENT FEE SURVEY – RESTAURANT (PER SF)..................................12 Town of Fountain Hills, AZ Page 1 Development Fee Study – Report Addendum December 9, 2005 Background Following the completion and delivery of the 2005 Development Fee Study Report, the Town of Fountain Hills (the Town) approved a new strategic plan which resulted in a revision to the 20-year Capital Improvement Plan (CIP). Per the November 15, 2005 letter from Julie Ghetti, Finance Director, the following projects were removed from the CIP. Project 20-Year Total No. Project Name Cost* Fee Area F4004 Senior Center $ 1,500,000 Gen Govt F4008 Performing Arts Building 5,000,000 Gen Govt F4010 Public Aquatic and Fitness Facility 2,500,000 Parks & Rec P3013 Acquisition/Development of Park 9,000,000 Parks & Rec P3014 Purchase Community Park in State Trust 12,000,000 Parks & Rec P3016 Acquisition/Development of Park 9,000,000 Parks & Rec S6015 Fountain Hills Blvd. Road Widening 4,375,000 Streets Total $ 43,375,000 * 2005 dollars As a result of these changes, the Town requested that Red Oak revise the proposed development fees as contained in the September 2005 Development Fee Study Report. The revised fee calculations are described in the balance of this report. A complete listing of capital improvement programs is contained in Appendix A of this Addendum Report. General Government As noted above, the Town has removed the Senior Center and the Performing Arts Building, totaling $6,500,000, from the General Government Fund CIP. However, at the request of the Town, the Performing Arts Building project had been removed from the CIP for the calculation of the general government development fee in the September 2005 Report. Therefore, only the removal of the Senior Center factored into the fee revision in this report addendum, reducing the growth-related CIP from $2,181,891 to $1,805,000 (25.1% of the Senior Center is considered to be growth-related). Red Oak used the hybrid approach, the same fee approach used in the September 2005 Report, to calculate the revised general government development fee. Table 1 presents a calculation of general government development fees based on the infrastructure costs and revised CIP provided by the Town. This resulted in recommended fees of $1,000 per unit of residential development and $0.639 per square foot of commercial development. Town of Fountain Hills, AZ Page 2 Development Fee Study – Report Addendum December 9, 2005 Table 1 General Government Calculation of Revised Development Fees Amount General Government Infrastructure Costs Replacement Cost of Existing Assets $ 17,586,463 Less Outstanding Principal (3,560,000) Beginning Fund Balance 69,121 FY 2005-06 CIP 135,000 Growth-Related CIP 1,805,000 Development Fee Study Cost 6,924 Financing Costs 2,484,313 Net Costs $ 18,526,821 Allocation for Development Fees Residential 90.9% Non-residential 9.1% Allocated Costs by Category Residential $ 16,840,880 Non-residential $ 1,685,941 Build-out Development Residential 16,855 Non-residential 2,624,599 Cost by Unit of Development (rounded) Residential (per dwelling) $ 1,000 Non-residential (per square foot) $ 0.639 Parks and Recreation The following projects were removed from the Parks and Recreation Fund CIP: Public Aquatic and Fitness Center - $2.5 million (25.1% growth-related); Acquisition and Development of two Community Parks - $18.0 million (0% growth- related); Purchase of a Community Park in the State Trust Land - $12.0 million (100% growth- related). Town of Fountain Hills, AZ Page 3 Development Fee Study – Report Addendum December 9, 2005 The removal of these projects reduces the growth-related CIP from $19,431,010 to $6,802,859. The land for the Community Park in the State Trust Land is anticipated to be donated to the Town. Therefore, the $12.0 million that was allocated in the CIP to purchase the land was removed. However, the $6.0 million that is planned in Fiscal Years 2010-11 and 2013-14 remains in the CIP. The Town will use the $6.0 million to develop the park. Even though this property is located outside the current boundaries of the Town, it is an asset of the Town and when developed (the $6.0 million of planned improvements) will serve the residents of Fountain Hills. As such, it is appropriate to include the $6.0 million of improvements in the fee calculation. Red Oak used the cash flow approach for the September 2005 Report because the hybrid approach resulted in a development fee that was not sufficient to meet future cash needs. However, with the reduced CIP, the hybrid approach will produce a revised fee that is sufficient to meet future cash requirements. Therefore, the hybrid approach was used to determine the revised parks and recreation development fee. Table 2 presents the calculation of the revised parks and recreation development fee based on the infrastructure costs and revised CIP provided by the Town. This method would result in a fee of $1,477 per residential dwelling unit. Town of Fountain Hills, AZ Page 4 Development Fee Study – Report Addendum December 9, 2005 Table 2 Parks and Recreation Calculation of Revised Development Fees Amount Parks and Recreation Infrastructure Costs Replacement Cost of Existing Assets $ 16,254,426 Beginning Fund Balance 708,246 Growth-Related CIP 6,802,859 Development Fee Study Cost 6,924 Financing Costs 1,129,258 Net Costs $ 24,901,712 Allocation for Development Fees Residential 100.0% Non-residential 0.0% Allocated Costs by Category Residential $ 24,901,712 Non-residential $ 0 Build-out Development Residential 16,855 Cost by Unit of Development (rounded): Residential (per dwelling) $ 1,477 Streets The removal of the Fountain Hills Boulevard Road Widening project reduced the growth- related Streets Fund CIP from $12,197,416 to $7,822,416 (100% of the project is considered to be growth-related). In the September 2005 Report, Red Oak used the cash flow approach to calculate the revised streets development fee. Table 3 presents a calculation of streets development fees based on the revenue requirements projected for the 20-year study period and the PM trip generation figures from the study. This resulted in recommended fees of $988 per unit of single family residential development, $586 per unit of multi-family residential development, $3.437 per Town of Fountain Hills, AZ Page 5 Development Fee Study – Report Addendum December 9, 2005 square foot of commercial development, and $0.714 per square foot of industrial development. Table 3 Streets Calculation of Revised Development Fees Assessment Category Unit Cost per Trip End /Unit PM Peak Trip Ends (1) Cost per Unit Single-family Residential dwelling $968 1.02 $988 Multi-family Residential dwelling $968 0.60 $586 General Commercial s.f. $0.968 3.55 $3.437 Industrial s.f. $0.968 0.74 $0.714 (1) Trip Generation, Institute of Transportation Engineers, 1997. Development Fee Summary The recommended development fees are shown in Table 4 compared to the Town’s current fees. As indicated at the bottom of Table 4, the total fees for a single family residence would increase 49% compared to the Town’s current fees. Town of Fountain Hills, AZ Page 6 Development Fee Study – Report Addendum December 9, 2005 Table 4 Comparison of Current and Recommended Development Fees Fee Area Unit Current Recommended Difference General Government Residential (1) dwelling $ 466 $ 1,000 $ 534 Non-Residential (2) s.f. $ 0.300 $ 0.639 $ 0.339 Law Enforcement Residential (1) dwelling $ 32 $ 594 $ 562 Non-Residential (2) s.f. $ 0.020 $ 0.380 $ 0.360 Open Space Residential (1) dwelling $ 1,258 $ 856 ($ 402) Parks and Recreation Residential (1) dwelling $ 1,130 $ 1,477 $ 347 Streets SF-Residential dwelling $ 609 $ 988 $ 374 MF-Residential dwelling $ 326 $ 586 $ 260 Commercial s.f. $ 0.190 $ 3.437 $ 3.247 Industrial s.f. $ 0.190 $ 0.714 $ 0.524 Fire & Emergency Residential (1) dwelling na $ 139 Non-Residential (2) s.f. na $ 0.089 Library and Museum Residential (1) dwelling na $163 Total SF-Residential dwelling $ 3,495 $ 5,217 $ 1,722 MF-Residential dwelling $ 3,212 $ 4,815 $ 1,603 Commercial s.f. $ 0.510 $ 4.545 $ 4.035 Industrial s.f. $ 0.510 $ 1.822 $ 1.312 (1) Residential includes single and multi-family dwelling units. na = not applicable. (2) Non-residential includes commercial and industrial square footage. na = not applicable. Town of Fountain Hills, AZ Page 7 Development Fee Study – Report Addendum December 9, 2005 Development Fee Survey Red Oak compiled information and prepared a comparison of development fees for Fountain Hills and other Arizona communities – see Table 5 and Figure 1. Survey communities were selected generally based on geographic proximity to the Town and represent communities the Town often uses in comparisons. The Fountain Hills fees include the fee assessed by the Fountain Hills Sanitation District. The District’s fee varies and an average of the minimum and maximum fee was used for the comparison - $5,700 per single family equivalent. The average of the survey group (excluding FH) is $8,976. Table 5 Residential Development Fee Survey Single Family Detached City/Town Gen. Govt. Law Enforcement Streets Open Space Parks/ Rec. Fire Library Utility (1) Total Apache Junction (2) $83 $133 $1,485 $564 $262 $2,921 $5,448 Avondale $585 $187 $873 $791 $489 $264 $6,810 $9,999 Carefree $963 $237 $1,255 $2,455 Cave Creek $736 $911 $3,230 $798 $3,570 $9,245 Fountain Hills (3) Current $466 $32 $609 $1,258 $1,130 $5,700 $9,195 Proposed $1,000 $594 $988 $856 $1,477 $139 $163 $5,700 $10,917 Gilbert $595 $586 $280 $2,449 $663 $9,003 $13,576 Mesa (4) $446 $226 $1,199 $145 $424 $2,458 $4,898 Paradise Valley $18,532 $18,532 Queen Creek (2) $600 $279 $166 $3,814 $656 $4,366 $9,881 Scottsdale (5) $6,754 $6,754 w/o FH Average Median $573 $595 $282 $226 $659 $577 $2,216 $2,243 $1,309 $999 $432 $489 $402 $344 $6,802 $5,560 $8,976 $9,245 (1) Wastewater, water, sanitation, and storm water. (2) Open Space includes Parks & Recreation. (3) Bolded fees charged not charged by the Town of Fountain Hills. (4) Parks & Recreation includes Cultural Facility fee. (5) Assumed ¼ acre lot, Zones B-E fees. Zone A fees are lower. Town of Fountain Hills, AZ Page 8 Development Fee Study – Report Addendum December 9, 2005 Figure 1 - Residential Development Fee Survey Single Family Detached $18,532 $13,576 $10,917 $9,999 $9,881 $9,245 $9,245 $9,195 $8,976 $6,754 $5,448 $4,898 $2,455 $0 $5,000 $10,000 $15,000 $20,000 Paradise Valley Gilbert Fountain Hills PROPOSED Avondale Queen Creek Cave Creek Median (Excluding FH) Fountain Hills CURRENT Average (Excluding FH) Scottsdale Apache Junction Mesa Carefree Note: All amounts include applicable water, wastewater development and storm water fees; average fees were used when more than one fee could apply to a fee category. For Fountain Hills, an average wastewater fee of $5,700 was used assuming the average of two fee levels: a $5,100 fee would apply as a base capacity fee, and an additional Capacity Fee Surcharge of $1,200 (for a total fee lf $6,300) would apply for homes located in the Shea Corridor utilizing the Shea Outfall Sewer. Table 6 and Figure 2 show the total proposed commercial development fees for Fountain Hills and the other Arizona communities. In order to make the comparison valid or useful, all fees were calculated for a 3,000 square foot restaurant with a 1-inch water service line/meter. Table 7 and Figure 3 show the proposed commercial non-utility development fees per square foot for a restaurant. Town of Fountain Hills, AZ Page 9 Development Fee Study – Report Addendum December 9, 2005 Table 6 Commercial Development Fee Survey 3,000 SF Restaurant w/1" Meter City/Town Gen. Govt. Law Enforcement Streets Fire Utility (1) Total Apache Junction $609 $975 $11,577 $13,161 Avondale $1,641 $1,647 $10,860 $1,371 $16,195 $31,714 Carefree $4,314 $3,372 $7,686 Cave Creek $11,361 $3,741 $6,067 $21,169 Fountain Hills (3) Current $900 $60 $570 $5,700 $7,230 Proposed $1,917 $1,140 $10,311 $267 $5,700 $19,335 Gilbert $945 $936 $3,162 $993 $15,431 $21,467 Mesa (2) $750 $4,412 $2,829 $6,051 $14,042 Paradise Valley $18,532 $18,532 Queen Creek $1,767 $333 $4,923 $7,417 $14,440 Scottsdale (4) $48,272 $48,272 w/o FH Average Median $3,055 $1,641 $1,661 $975 $6,273 $4,332 $1,731 $1,371 $10,360 $15,431 $21,165 $18,532 (1) Wastewater, water, sanitation, and storm water. (2) Law enforcement and fire fees are based on an average of fast food and sit-down restaurant fees. (3) Bolded fees charged not charged by the Town of Fountain Hills. (4) Assumed Zones B-E fee of $38.19 per gallon of estimated average daily usage (assumed to be 24,500 gpd for 1-inch meter). Zone A fees are lower. The significant increase in the Town's commercial fees is largely the result of the change in the streets fee. This increase is compounded by the fact that the Town did not adopt the calculated streets fee based on the last study. The streets fee as recommended in the last comprehensive study was not adopted by the Town; the Town adopted a streets fee for commercial development that was only 10% of the recommended fee ($0.19 was adopted and the recommended fee was $1.90). Furthermore, the use of the cash flow method (instead of a historic investment approach) also contributed to the increase in the streets fee. Increases in the other fee areas, general government and law enforcement, and the new fire fee are also responsible for the increase in the total commercial fee (industrial fees as well). Town of Fountain Hills, AZ Page 10 Development Fee Study – Report Addendum December 9, 2005 Figure 2 - Commercial Development Fee Survey 3,000 SF Restaurant with 1" Meter $48,272 $31,714 $21,467 $21,169 $21,165 $19,335 $18,532 $18,532 $14,440 $14,042 $13,161 $7,686 $7,230 $1,000 $10,000 $100,000 Scottsdale Avondale Gilbert Cave Creek Average (Excluding FH) Fountain Hills PROPOSED Paradise Valley Median (Excluding FH) Queen Creek Mesa Apache Junction Carefree Fountain Hills CURRENT Note: All amounts include applicable water, wastewater and storm water development fees; average fees were used when more than one fee could apply to a fee category. For Fountain Hills, an average wastewater fee of $5,700 was used assuming the average of two fee levels: a $5,100 fee would apply as a base capacity fee, and an additional Capacity Fee Surcharge of $1,200 (for a total fee lf $6,300) would apply for businesses located in the Shea Corridor utilizing the Shea Outfall Sewer. Town of Fountain Hills, AZ Page 11 Development Fee Study – Report Addendum December 9, 2005 Table 7 Commercial Development Fee Survey Restaurant (per SF) City/Town Gen. Govt. Law Enforcement Streets Fire Total Apache Junction $0.203 $0.325 $3.859 $4.387 Avondale $0.547 $0.549 $3.620 $0.457 $5.173 Carefree $1.438 $1.124 $2.562 Cave Creek $3.787 $1.247 $5.034 Fountain Hills Current $0.300 $0.020 $0.190 $0.510 Proposed $0.639 $0.380 $3.437 $0.089 $4.545 Gilbert $0.315 $0.312 $1.054 $0.331 $2.012 Mesa (1) $0.250 $1.471 $0.943 $2.664 Paradise Valley Queen Creek $0.589 $0.111 $1.641 $2.341 Scottsdale w/o FH Average $1.018 $0.554 $2.091 $0.577 $3.453 Median $0.547 $0.325 $1.444 $0.457 $2.664 (1) Law enforcement and fire fees are based on an average of fast food and sit-down restaurant fees. Town of Fountain Hills, AZ Page 12 Development Fee Study – Report Addendum December 9, 2005 Figure 3 - Commercial Development Fees Restaurant (per SF) $5.173 $5.034 $4.545 $4.387 $3.453 $2.664 $2.664 $2.562 $2.341 $2.012 $0.510 $0.000 $1.000 $2.000 $3.000 $4.000 $5.000 $6.000 Avondale Cave Creek Fountain Hills Proposed Apache Junction Average (Excluding FH) Median (Excluding FH) Mesa Carefree Queen Creek Gilbert Fountain Hills Current NOTICE OF THE SPECIAL SESSION AND PUBLIC HEARING OF THE FOUNTAIN HILLS TOWN COUNCIL Mayor Wally Nichols Councilman Mike Archambault Councilman Keith McMahan Councilman John Kavanagh Councilman Ed Kehe Vice Mayor Jay Schlum TIME: 5:00 P.M. WHEN: TUESDAY, DECEMBER 13, 2005 WHERE: FOUNTAIN HILLS COUNCIL CHAMBERS 16705 E. AVENUE OF THE FOUNTAINS, FOUNTAIN HILLS, AZ CALL TO THE PUBLIC Pursuant to A.R.S. §38-431-01(G), public comment is permitted (not required) on matters not listed on the agenda. Any such comment (i) must be within the jurisdiction of the Council and (ii) is subject to reasonable time, place, and manner restrictions. The Council will not discuss or take legal action on matters raised during “Call to the Public” unless the matters are property noticed for discussion and legal action. At the conclusion of the call to the public, individual Council members may (i) respond to criticism, (ii) ask staff to review a matter or (iii) ask that the matter be placed on a future Council agenda. REGULAR AGENDA 1.) CALL TO ORDER AND ROLL CALL – Mayor Nichols 2.) CONSIDERATION of approving LIFEWISE as the HEALTHCARE CARRIER for Town of Fountain Hills employees in 2006. 3.) PUBLIC HEARING to receive comment on the PROPOSED DEVELOPMENT FEE SCHEDULE with possible direction to staff. 4.) ADJOURNMENT. DATED this 9th day of December, 2005. Bevelyn J. Bender, Town Clerk The Town of Fountain Hills endeavors to make all public meetings accessible to persons with disabilities. Please call 837-2003 (voice) or 1- 800-367-8939 (TDD) 48 hours prior to the meeting to request a reasonable accommodation to participate in this meeting or to obtain agenda information in large print format. Supporting documentation and staff reports furnished the Council with this agenda are available for review in the Clerk’s office. Z:\Council Packets\2005\WS12-13-05\Agenda 12-13-05.doc Page 1 of 1