CC - Agendas - City Council - REGULAR - 10/23/2012

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It. 44. COUNCIL AGENDA MEMO - October 23, 2012 DEPARTMENTS: Finance / Public Works AGENDA ITEM: Approval of a professional services agreement with Red Oak Consulting for Development of Impact Fees, Infrastructure Improvement Plan and Associated Documents, and Analysis and Development of Utility Rates, in an amount not to exceed $289,694.00 Approved By: Date: Public Works Director: Mark Nietupski 10/16/2012 Finance Director: Mark Woodfill City Manager: Craig McConnell Zra./ /0—/6 Item Summary Arizona Senate Bill 1525 became effective December 31, 2011. Pursuant to this legislation development impact fees must be replaced with a new fee schedule based on land use assumptions and an infrastructure improvements plan (IIP) in compliance with the pertinent statutes (§9-463.05). The law essentially requires every element of the IIP to be prepared by "qualified professionals" licensed in the State of Arizona, precluding in-house accomplishment. Impact fee zones will be delineated and validated identifying properties that benefit from specific project/system improvements. The zones must demonstrate a connection between the capital improvement project and the demands of new growth (residential and commercial) identified in the General Plan. The legislation requires new impact fees based on the new criteria and other requirements to be in effect prior to August 1, 2014. To meet this deadline Council must adopt an ordinance establishing fees by May 18, 2014. This agenda item is to award a contract to Red Oak Consulting for all analyses, calculations, development of supporting documents and ancillary materials necessary. The analyses and studies will be twofold, covering both impact fees (Police, Fire, Parks, Library, Streets, Water, and Wastewater), as described above, and utility rates (water and wastewater). Both components are necessary to clearly distinguish between impact fees as a funding mechanism for the infrastructure demand generated by new growth, and utility rates which are required for operations, maintenance, and to remedy existing deficiencies. Impact Fees City-wide Water System and Water Resource Development Impact Fees were adopted in 2006 following a rate and development fee study performed by Red Oak Consulting. In 2008 Economists.com performed a "Water and Wastewater Rate and Impact Fee Study" following which Council adopted the recommended impact fees and rates. However, the impact fees never went into effect due to the moratorium declared by the State in 2009. 1