CC - Agendas - City Council - STUDY SESSION - 3/16/2010

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11~ COUNCIL AGENDA MEMO— 3/16/10 & 3/23/10 DEPARTMENT: City Manager AGENDA ITEM: Approval of Ordinance No. 4721-1018 superseding Ordinance No. 4665-0908 during the legislative moratorium or further legislative actions regarding the imposition of water and sewer development fees, and declaring an emergency Approved By: Date: Regional Programs Director: Craig McConnell "": 3 r0 Finance Director: Mark Woodfill City Manager: Steve Norwood Background On October 28, 2008, the City Council approved Ordinance No. 4665-0908 which implemented a new wastewater impact fee, and adjusted the amounts of existing water system impact and resource development fees. The ordinance was approved with a delayed effective date of July 11, 2009. However, on August 12, 2009, the Arizona State Legislature approved House Bill 2008 which placed a retroactive, two-year moratorium on municipalities implementing new or increasing existing impact fees after June 29, 2009. This bill was signed into law and became effective November 24, 2009. } The City implemented its new impact fee structure on July 11, 2009, as set forth by Ordinance No. 4665-0908. In late 2009 the League of Arizona Cities and Towns challenged the moratorium in an initial court action, but was not successful. Rather than returning to court, the League has been a party to discussions of a possible legislative amendment to HB 2008 in the current session which would resolve the issue for Prescott arising from the retroactive effective date. Given the fact that the legislatively- imposed moratorium is in effect as law, the City Attorney has advised that it must be observed until either expiration or the amendment being discussed is approved. Ordinance No. 4721-1018 (see attached), drafted by the City Attorney, will not repeal No. 4665-0908 or its effective date, but instead make certain adjustments to the amounts and types of fees being assessed by the City to effect compliance with the requirements of HB 2008. Key provisions of the new ordinance are as follows: • Rollback of impact fees to the amounts on June 29, 2009, the last day prior to HB 2008 becoming effective (increases in impact fees are prohibited during the moratorium except for annual CPI adjustments) • Reinstatement of previous "sewer buy-in fees" which were replaced in Ordinance No. 4665-0908 by new sewer "impact fees" (the imposition of new fees is prohibited during the moratorium) due to suspension of the Ordinance • Refund of any amounts paid on and after July 11, 2009, exceeding the fee levels which were in effect on June 29, 2009 • The emergency clause is included to expedite compliance with HB 2008