CC - Agendas - City Council - REGULAR - 8/14/2018

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9.H.a City of Prescott, Arizona Water, Wastewater and Water Resources Utility Development Impact Fees and Associated Documents Water, Wastewater and Water Resources Utility Development Impact Fee Study Statement of Understanding The City has requested a review and update of the City's utility development impact fees (DIFs) to comply with the requirements of the Arizona Revised Statutes (ARS) §9-463.05 which is required to be completed every five years. The study is to affirm and update fees to meet the base rational nexus requirement that DIFs are in response to the impact of new or increased development recovering costs for facilities benefiting new development in proportion to the service level demands recovered through non-discriminatory fees. The City's engineering consultant is completing the Land Use Assumptions (LUA) and capital improvement project cost and timing update tied to the Infrastructure Improvements Plan (IIP) which maintains the current service area boundaries developed as part of the 2014 IIP. The administrative requirements placed on the City through collecting and assessing DIFs will also be factored into the analysis and whether or not the current water and wastewater service areas will be remaining and/or areas may be consolidated will be reviewed within the initial phases of the project. As part of this study, Raftelis will serve as the City's analyst providing advice which is in the best interest of the City and providing a thorough review of costs of facilities required to serve new growth to the City Council and overall community. DIFs are one-time payments for specific public infrastructure that benefits new development. In contrast to project - level improvements, DIFs fund growth -related infrastructure that will benefit multiple development projects, or the entire jurisdiction (referred to as system improvements). Fees must proportionately allocate infrastructure costs to all types of new development. There are three general methods for calculating development fees. The choice of the best method depends primarily on the timing of infrastructure construction (past, concurrent, or future) and service characteristics of the facility type being addressed. Each method can be used simultaneously for different cost components. Regardless of the methodology, a consideration of "credits" is integral to the development of a legally defensible development fee study. In addition, DIF revenues must be used to fund the type of infrastructure for which the fee was collected, while providing a timely and substantial benefit to new development. Furthermore, the City implemented services area -based water and wastewater utility DIFs and a review of the service areas as well as a validation of the make-up of the service areas is a key area of this study. Water resource DIFs are assessed using a single assessment schedule City wide. The City has successfully used water, wastewater and water resource DIFs for many years. The scope of services included in this phase proposal is focused around updating water, wastewater, and water resource DIFs maintained and updated as part of the 2014 study. Raftelis has developed separate phases to address the review of one or more of the six non -utility DIFs eliminated as part of the 2014 study to be completed in a parallel to this update and addressed through a separate scope of services. The core Raftelis project team from the 2014 study is also proposed to complete this update and is uniquely qualified to efficiently complete the project. To meet infrastructure demands from growth, Raftelis will work with the City to update the IIP, and DIFs for water, wastewater, and water resource DIF categories reflecting the updated LUA and utility master plan completed by the City. The proposed scope of services conforms to the requirements of ARS §9-463.05 and legal principles related to DIFs. Attachment: Raftelis Scope of Work -Prescott DIF and Rate Study (2124 : Rate & Fee Study Contract with Raftelis) RAFTELIS Water, Wastewater and Water Resource Utility DIF Study and Associated Documents - Attachment Pad Packet Pg. 237