CC - Agendas - City Council - REGULAR - 8/29/2006

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Additional demographic information is contained in the appendix. Additional considerations and fees imposed by surrounding communities: 1. Impact fees are based on maintaining current capital facility Service Levels. The City Council may choose not to do so. The Council may determine that the City can't afford to continue this level. A decline in service level would reduce the impact fee. 2. Impact fees can't fund maintenance and operational expenses. Consequently, these costs must be absorbed by other revenue sources. The expansion of capital facilities has a correlating increase on maintenance and operational expenses. These expenses vary depending on the facility added. For example, a fire station may cost $2,000,000 to acquire the land, construct and equip, while the operational and maintenance costs could be as high as $500,000 per year. 3. The City needs to demonstrate specific planned uses for impact fees and the fees should generally be expended within six to ten years. Major capital projects may take closer to ten years to generate the required funding; in these cases, preliminary planning should begin within the six- year period. 4. Housing affordability may decline since impact fees generally increase the cost of construction; residential rental rates may also increase. At the same time, impact fees help maintain a community's quality of life, and enhance the value of property. 5. Impact fees on non-residential development may have a real or perceived adverse effect on new business development. Since development costs would rise, a business could argue that it would operate at a competitive disadvantage. At least 21 cities and towns impose impact fees on non- residential development. Chino Valley, Sedona, Wickenburg, Casa Grande, Gilbert, Glendale and Peoria are just a few of the cities that impose impact fees on non-residential development.The fees imposed by other cities and towns are included in the appendix. 6. Prescott Valley currently imposes residential impact fees totaling $2,711. Nonresidential impact fees were to become effective August 6, 2006 but have been delayed two years until August 2008. Chino Valley currently imposes impact fees totaling $3,835 for residential and $1,180 for nonresidential. Yavapai County imposes a roadway impact fee for two "benefit areas". The western benefit area is the area covering Prescott, Cordes Lakes, and Chino Valley ($1,200); the eastern area is near the Verde Valley ($1,100). The impact fees for both jurisdictions are imposed on residential dwelling units. The appendix contains surveys of several cities regarding impact fees; although the survey is not exhaustive it does provide a good basis for comparison. 26 jurisdictions were included in the survey. The average fee charged on residential units amounted to $3,886 while non residential fees averaged $3,513 for Arizona cities and towns.