Roadway Impact Fees Roadway Impact Fees Council Workshop #5Council Workshop #5January 12, 2017January 12, 2017

Council ActionCouncil ActionDirection provided on October 27Direction provided on October 27thth

Approved on November 10Approved on November 10thth Effective

DatesSingle Family

Fees

Year 1Eff. 12/1/2016

$0 / SF

Year 2Eff. 12/1/2017

$750 / SF

Year 3+Eff. 12/1/2018

$1,500 / SF

* Table shows Single Family Fees Only* Other Fees would Vary by Land Use / Business Type

Res: $375/VMNon-Res: $80/VM

Res: $187.50/VMNon-Res: $40/VM

Roadway Costs and Roadway Costs and FeesFees

Construction Costs:Construction Costs:Full Impact Fee List (City)Full Impact Fee List (City) = $289M= $289M10-yr Needs10-yr Needs = $207M= $207MAttributable 10-yr Growth Attributable 10-yr Growth = $134M= $134MEligible (Max) Recovery 10-yr Eligible (Max) Recovery 10-yr = $134M= $134M

10-yr “Collection” Amount:10-yr “Collection” Amount:““Adopted” Fees Adopted” Fees = $12M (Fee is 9% of = $12M (Fee is 9% of the Attributable/Max)the Attributable/Max)

Unfunded Projects Unfunded Projects

– Lincoln Ave - ReconstructionLincoln Ave - Reconstruction– Luther St - ExtensionLuther St - Extension– Royder Rd - RealignmentRoyder Rd - Realignment– S. Dowling - RR CrossingS. Dowling - RR Crossing– WS Phillips Pkwy – ExpansionWS Phillips Pkwy – Expansion– Birkdale Dr – ExtensionBirkdale Dr – Extension– TxDot Thoroughfares - ParticipationTxDot Thoroughfares - Participation

Fee ScheduleFee Schedule

Fee Land Use TableFee Land Use Table

2015 CAC Funded 2015 CAC Funded ProjectsProjects $50M Total$50M Total

– Greens Prairie RdGreens Prairie Rd $4.7M$4.7M– Greens Prairie TrGreens Prairie Tr $8.2M$8.2M– Royder IRoyder I $4.9M$4.9M– Rock Prairie W & ERock Prairie W & E $9.3M$9.3M– Cain / Deacon RRCain / Deacon RR $3.8M$3.8M– Holleman SHolleman S $10.3M$10.3M– Capstone / BarronCapstone / Barron $5.6M$5.6M– Holick, Park Pl, Anna, GladeHolick, Park Pl, Anna, Glade $2.1M$2.1M

Projected Roadway Projected Roadway Needs Needs (2016)(2016) Exist + 10 Yr Growth Needs Exist + 10 Yr Growth Needs ~$ 207M~$ 207M Average annual capital outlay Average annual capital outlay ~$ 6M~$ 6M

– Includes all capital projects and not just growth Includes all capital projects and not just growth related projectsrelated projects

Options:Options:– Additional fundingAdditional funding– Do not fund all projects needed in the next 10-yrsDo not fund all projects needed in the next 10-yrs

Limit GrowthLimit Growth Degraded Transportation Level of ServiceDegraded Transportation Level of Service

– CombinationCombination

Recommended FeesRecommended Fees Residential FeesResidential Fees::

– $375 / Vehicle-Mile $375 / Vehicle-Mile (Reduced 65% to 91% off the Maxes)(Reduced 65% to 91% off the Maxes)– Equals $1500 per Single Family HouseEquals $1500 per Single Family House

Non-Residential FeesNon-Residential Fees::– $80 / Vehicle-Mile $80 / Vehicle-Mile (Further reduced to 93% to 98% off the Maxes)(Further reduced to 93% to 98% off the Maxes)– Actual Fees Vary by Land Use/Business TypeActual Fees Vary by Land Use/Business Type

Reminder W/WW Impact Fees were Reminder W/WW Impact Fees were reduced to leave Reasonable Roadway reduced to leave Reasonable Roadway FeesFees

Area AArea A

Area BArea B

Area A

Area CArea C

Area DArea D

Comparison Cities’ Comparison Cities’ Example Example DevelopmentsDevelopments

Other Fee OptionsOther Fee Options

OPTIONS BY YEAR

Option 1 Recommended Option 2 Option 3

Year 1 $1,500 / SF $0 / SF $500 / SF

Year 2 $1,500 / SF $750 / SF $1,000 / SF

Year 3+ $1,500 / SF $1,500 / SF $1,000 / SF

* Table shows Single Family Fees Only* Other Fees would Vary by Land Use / Business Type

Res: $375/VMNon-Res: $80/VM

Res: $375/VMNon-Res: $80/VM

Res: $247/VMNon-Res: $80/VM

Discussion and DirectionDiscussion and Directionto Staff for Ord Preparationto Staff for Ord Preparation

1.1. Adopt FeesAdopt Fees??– Option 1 - Staff Recommended FeesOption 1 - Staff Recommended Fees– Option 2 – Staff Recommended Phased ApproachOption 2 – Staff Recommended Phased Approach– Option 3 – Reduced Residential FeeOption 3 – Reduced Residential Fee– Consideration for Ongoing Implementation CostsConsideration for Ongoing Implementation Costs

2.2. Absolute Fee CapsAbsolute Fee Caps??– All or Specific Land UsesAll or Specific Land Uses

3.3. ExemptionsExemptions??– Specific Land UsesSpecific Land Uses

4.4. Council DirectionCouncil Direction– ConsensusConsensus

Presentation OverviewPresentation Overview1.1. Roadway BackgroundRoadway Background

Land Use AssumptionsLand Use AssumptionsCapital Improvements Plan Capital Improvements Plan – Maximum Calculated Fees w/ Detailed FinancialsMaximum Calculated Fees w/ Detailed Financials

2.2. Roadway Fees by Land UseRoadway Fees by Land Use– Comparison Cities’ FeesComparison Cities’ Fees– Staff Recommended Fees Staff Recommended Fees

3.3. Fee & Credit ExamplesFee & Credit Examples4.4. IFAC Written CommentsIFAC Written Comments5.5. Discussion & DirectionDiscussion & Direction

Roadway Needs (CIP)Roadway Needs (CIP) Full Build-Out T-Plan (City)Full Build-Out T-Plan (City) = $290M= $290M 10-yr Needs10-yr Needs = $217M= $217M Attributable 10-yr Growth Attributable 10-yr Growth = $143M= $143M

(66%)(66%) Eligible Recovery 10-yr Eligible Recovery 10-yr = $134M= $134M (94%)(94%)

City will continue to look to new and City will continue to look to new and increased funding sources: increased funding sources: – Council Directed Roadway Impact Fees be studied Council Directed Roadway Impact Fees be studied

and initiated this formal process as one sourceand initiated this formal process as one source– Otherwise, Roads will not be built, LOS decreasesOtherwise, Roads will not be built, LOS decreases

Roadway Impact Fee – CIP

Maximum Calculated Maximum Calculated FeesFees

Roads ARoads A $4,244/SF House$4,244/SF House ($1,061/Veh-Mile) ($1,061/Veh-Mile)

Roads BRoads B $4,288/SF House$4,288/SF House ($1,072/Veh-Mile) ($1,072/Veh-Mile)

Roads CRoads C $10,224/SF House$10,224/SF House ($2,556/Veh-Mile) ($2,556/Veh-Mile)

Roads DRoads D $16,148/SF House$16,148/SF House ($4,004/Veh-Mile) ($4,004/Veh-Mile)

Recommended Recommended Roadway Impact Roadway Impact FeesFees

““Flat” across all four areas for equityFlat” across all four areas for equity Residential Fees 15% of Max Residential Fees 15% of Max (Area C)(Area C)

– $1500 Single Family House$1500 Single Family House Non-Residential Fees 3% of Max Non-Residential Fees 3% of Max (Area C)(Area C)

– Actual Fees Vary by Land Use/Business TypeActual Fees Vary by Land Use/Business Type Staff believes the Market can bear the Staff believes the Market can bear the

Recommended FeesRecommended Fees– Council could adjust the % in future if neededCouncil could adjust the % in future if needed

Recommended FeesRecommended Fees% of Max Fees by Area% of Max Fees by Area

Service Areas

Recommended Residential

$375/VM

RecommendedNon-Residential

$80/VM

A 35% 7.5%

B 35% 7.5%

C 15% 3%

D 9% 2%

Roadway Fees by Land Roadway Fees by Land UseUse

Comparison Cities Comparison Cities for Roadway Impact for Roadway Impact FeesFees

DentonDenton Mansfield Mansfield FriscoFrisco Fort WorthFort Worth New BraunfelsNew Braunfels

Comparison Cities Comparison Cities Roadway Impact FeesRoadway Impact Fees

City Max Fee Unit*($/Vehicle

Mile)

Adopted Residential($/Vehicle

Mile)

Adopted Non-Residential($/Vehicle

Mile)College Station

(Recommended)$2,182 / VM $375 / VM

($1,500 SF Home)

$80 / VM

New Braunfels $1,056 / VM $375 / VM($1,875 SF

Home)

$102 / VM

Denton $2,002 / VM $408.16 / VM($2,000 SF

Home)

$306.12 / VM

Mansfield $904 / VM $550 / VM($2,200 SF

Home)

$300 / VM

Frisco $1,060 / VM $636 / VM($3,816 SF

Home)

$636 / VM

Fort Worth $1,866 / VM $500 / VM($3,000 SF

Home)

$375 / VM

* Average Max Fee Unit

Fees & CreditsFees & Credits Developments receive credit toward Developments receive credit toward

Roadway Impact Fees for construction of Roadway Impact Fees for construction of Major Collectors and aboveMajor Collectors and above

System Improvements receive credit System Improvements receive credit (Public – i.e. Major Collector, Signal, etc.)(Public – i.e. Major Collector, Signal, etc.)

Site Improvements do Site Improvements do notnot receive credit receive credit (Private – i.e. Driveways, DW Decel Lanes, (Private – i.e. Driveways, DW Decel Lanes, etc.)etc.)

May not owe any feeMay not owe any fee Lowe’s / Lakeway Dr ExampleLowe’s / Lakeway Dr Example

IFAC Written IFAC Written CommentsComments

Provided in Council PacketProvided in Council Packet IFAC Representative IFAC Representative

– Commissioner Jerome RektorikCommissioner Jerome Rektorik

Impact Fee Calculations

LUE = Living Unit Equivalent (connection for a single family home)

Eligible CIP Cost = 10-year capital cost (2016 – 2026)

Rate Credit = Chapter 395 requirements: reduce the eligible CIP cost by 50% [or] perform a credit analysis to determine the percent of utility bill used for growth CIP

Service Unit Growth = Derived from land use assumptions for 10-year growth in LUEs

Eligible CIP Cost – Rate Credit Impact Fee Per LUE = Service Unit Growth

Impact Fee Equation:

Maximum Maximum Calculated Calculated

FeesFeesWater Water $2,917/SF House$2,917/SF House $500/SF House $500/SF HouseSewerSewer $5,519/SF House$5,519/SF House $3,000/SF House $3,000/SF HouseRoads ARoads A $4,244/SF House$4,244/SF House $1,500/SF House $1,500/SF HouseRoads BRoads B $4,288/SF House$4,288/SF House $1,500/SF House $1,500/SF HouseRoads CRoads C $10,224/SF House$10,224/SF House $1,500/SF House $1,500/SF HouseRoads DRoads D $16,148/SF House$16,148/SF House $1,500/SF House $1,500/SF House

TotalsTotals $12K-$24K/SF House $5K/SF House $12K-$24K/SF House $5K/SF House

Staff Staff RecommendeRecommende

ddFeesFees

Maximum Roadway Maximum Roadway Example Impact FeesExample Impact Fees

Real World Example 1Real World Example 1

Land Use Intensity/Units Impact FeeFree Standing Discount Superstore 114,768 ft2 $433,823.04

Shopping Center 29,760 ft2 $88,052.40High-Turnover Sit-Down Restaurant 19,600 ft2 $98,931.00

Gasoline/Service Station

18 Fueling Positions $32,535.00

Total $653,341.44

Constructed 2-lanes and made intersection improvements

100% Credit

Real World Example 2Real World Example 2Developer constructed 2 lane divided facility. Paid no Impact Fee.

Developer constructed 4 lane divided facility. Paid no Impact Fee.

1Developer constructed roundabouts. Paid no Impact Fee.

City participation

Maximum Calculated Maximum Calculated FeesFees

Land Use Assumptions Land Use Assumptions (adopted)(adopted) Capital Improvement Plan Capital Improvement Plan (adopted)(adopted) Detailed Financial AnalysisDetailed Financial Analysis

– Financing CostsFinancing Costs– Interest EarningsInterest Earnings– CreditsCredits

W/WW – Utility RatesW/WW – Utility Rates Roadway – Ad Valorem TaxesRoadway – Ad Valorem Taxes

50% W/WW50% W/WWExample Impact FeesExample Impact Fees

IFACs Discussion & Q/AIFACs Discussion & Q/A

Dr. James Gaines, TAMU Real Estate Dr. James Gaines, TAMU Real Estate OfficeOffice

Richard Weatherly, Freese and NicholsRichard Weatherly, Freese and Nichols Jeff Whitaker, Kimley HornJeff Whitaker, Kimley Horn City StaffCity Staff

IFACs’ Comments IFACs’ Comments RecordedRecorded on Staff Recommended Fees on Staff Recommended Fees

Water/Wastewater IFACWater/Wastewater IFAC– WaterWater $500/SF House $500/SF House– WastewaterWastewater$3,000/SF House$3,000/SF House

Roadway IFACRoadway IFAC– Roads Roads $1,500/SF House$1,500/SF House

Other CitiesOther Cities 2012 Duncan National I.F. Study2012 Duncan National I.F. Study

– 28 States with Impact Fees, 271 jurisdictions28 States with Impact Fees, 271 jurisdictions– 2012 National Averages per Single Family2012 National Averages per Single Family

Roads $3,228 Roads $3,228 Water $3,863Water $3,863 Sanitary $3,725Sanitary $3,725

– 8 Texas Cities averages lower than National8 Texas Cities averages lower than National 2014 KHA Metroplex Survey2014 KHA Metroplex Survey

– 35 Metroplex Cities with Roadway Impact Fees35 Metroplex Cities with Roadway Impact Fees– Average Roadway IF per Single Family ~$2,200Average Roadway IF per Single Family ~$2,200

Prior CS Impact Fee Prior CS Impact Fee StudiesStudies 2010 Roadway Impact Fees2010 Roadway Impact Fees

– Based on Average $3,000 per SF HouseBased on Average $3,000 per SF House– If adopted in 2012, fees ~ $7.0 MIf adopted in 2012, fees ~ $7.0 M

2011 Citywide Utility Impact 2011 Citywide Utility Impact FeesFees– Based on Water $1,480 per SF HouseBased on Water $1,480 per SF House– Based on Sanitary $1,578 per SF HouseBased on Sanitary $1,578 per SF House– If adopted in 2012, fees ~ $7.7 MIf adopted in 2012, fees ~ $7.7 M

Projected Wastewater Needs Projected Wastewater Needs (2016)(2016) Exist + 10 Yr Growth CIP Needs ~$ 154MExist + 10 Yr Growth CIP Needs ~$ 154M Average annual capital outlayAverage annual capital outlay ~$ 4M~$ 4M

– Includes all capital projects and not just growth Includes all capital projects and not just growth related projectsrelated projects

Options:Options:– Rate increasesRate increases– Impact feesImpact fees– Do not fund all projects needed in the next 10-yrsDo not fund all projects needed in the next 10-yrs

This option would Limit GrowthThis option would Limit Growth– CombinationCombination

Projected Water Needs Projected Water Needs (2016)(2016)

Exist + 10 Yr Growth CIP Needs ~$ 49MExist + 10 Yr Growth CIP Needs ~$ 49M Average annual capital outlay Average annual capital outlay ~$ 6M~$ 6M

– Includes all capital projects and not just growth Includes all capital projects and not just growth related projectsrelated projects

Options:Options:– Rate IncreasesRate Increases– Impact FeesImpact Fees– Do not fund all projects needed in the next 10-Do not fund all projects needed in the next 10-

yrsyrs This option would Limit GrowthThis option would Limit Growth

– Some CombinationSome Combination