Sec. 29-8. Infrastructure financing plan.
Prior to assessment of a new or modified impact fee, the City shall prepare and adopt an infrastructure financing plan (IFP). The infrastructure financing plan will include the following: land use assumptions (LUA), an infrastructure improvements plan (IIP) for each necessary public service, and an impact fee study.
A. Preparation of infrastructure financing plan (IFP). The Planning and Development Department, and/or other qualified professional(s), shall prepare the infrastructure financing plan in conjunction with each City department responsible for a necessary public service, in accordance with the scheduling procedures outlined herein.
B. Land use assumptions (LUA). The IFP shall include the land use assumptions for each impact fee area within which impact fees will be charged.
1. Validity. If the land use assumptions have not been updated within the last five years, the City shall evaluate the land use assumptions to determine whether changes are necessary. If, after general evaluation, the City determines that the land use assumptions are still valid, the City shall issue the report required in Section 29-10(B).
2. Required modifications to land use assumptions. If the City determines that changes to the land use assumptions are necessary in order to adopt or amend an infrastructure improvements plan, it shall make such changes as necessary to the land use assumptions in conjunction with the review and approval of the infrastructure improvements plan pursuant to Section 29-9.
C. Infrastructure improvements plan (IIP). The City shall prepare an infrastructure improvements plan for each category of necessary public service for which an impact fee will be charged that evaluates the need for capital facilities for new development.
1. Necessary public services. The infrastructure improvements plan shall specify the categories of necessary public services for which the City intends to impose an impact fee, which may include any or all of the following:
a. Fire protection.
b. Police.
c. Parks.
d. Libraries.
e. Major arterials.
f. Storm drainage.
g. Water.
h. Wastewater.
2. Impact fee areas. The IIP shall define and provide a map of all impact fee areas within which a substantial nexus exists for the City to charge impact fees to provide a necessary public service.
3. Direct benefit. In cases where Section 9-463.05, Arizona Revised Statutes, requires a direct benefit from a proposed capital facility to the new development it will be serving, the direct benefit shall be evaluated and explained in the infrastructure improvements plan.
4. Existing level of service. For each necessary public service to be provided, the IIP shall evaluate and quantify the level of service provided to existing development in each impact fee area.
5. Adopted level of service. For each necessary public service to be provided, the IIP shall identify and/or propose a level of service to be provided in each impact fee area, based upon City-wide standards or policies.
6. Existing capacity. For each necessary public service to be provided, the IIP shall analyze and identify the capacity of existing capital facilities serving each impact fee area, specifically:
a. The level of utilization by existing development;
b. Any excess capacity available to serve new development;
c. Any existing or planned commitments or agreement for the usage of excess, including reservations of capacity reserved through a development agreement;
d. Any changes or upgrades to existing capital facilities that will be needed to maintain the adopted level of service, or to meet safety, efficiency, environmental, or other regulatory requirements for existing development;
e. Those portions of existing capital facilities that will be necessary to serve any new development for which impact fees will not be assessed.
7. Future development. The IIP shall provide the existing number of equivalent demand units (EDUs), together with the projected number of new EDUs, for each impact fee area. The projected number of new EDUs shall be based upon the City’s land use assumptions and projected new development for a period not to exceed ten years (15 years for wastewater and water).
8. EDU factors. For each necessary public service provided, the IIP shall provide a table of the EDU factors used for each type of development and/or land use.
9. Future demand. In addition to existing excess capacities already identified for each necessary public service provided, the IIP shall analyze and identify new capital facilities (including expansion of existing facilities) required to provide the adopted level of service to the future development projected for each impact fee area in subsection (C)(7) of this section. The future demand shall take into account, and adjust for, any new development for which impact fees will not be assessed. Nothing in this subsection shall prohibit the City from additionally including projected demand for a longer period than described in subsection (C)(7) of this section.
10. Future costs for existing development. If the IIP identifies any changes or upgrades to existing capital facilities that will be needed to maintain the adopted level of service, the associated costs shall be identified in the IIP. Additionally, the IIP shall identify any portion of the costs of new capital facilities which are attributable to existing development.
11. Future costs for new development. For each necessary public service provided, the IIP shall estimate the total costs to provide the capital facilities required to meet the demand generated by future development. The cost estimates may include: land acquisition, improvements, engineering and architectural services, studies leading to design, design, construction, and financing, as well as projected costs of inflation. The cost estimates may not include costs for administration or ongoing operation and maintenance of capital facilities, nor costs attributable to attaining or maintaining the existing level of service for existing development. Replacement capital facilities may only be included to the extent that additional capacity is provided to serve new development.
12. Gross impact fee per EDU. For each necessary public service provided, the IIP shall calculate a recommended gross impact fee per EDU for each impact fee area by dividing the total future costs by the number of new EDUs projected.
13. Alternative revenues. The IIP shall forecast revenues from taxes, fees, assessments, or other sources that will be available to fund any new or expanded capital facilities identified in the IIP, as follows:
a. State-shared revenues, Federal revenues, ad valorem property taxes, construction contracting or similar excise taxes and the capital recovery portion of utility fees attributable to development based upon the approved land use assumptions shall be included in the estimations, if applicable.
b. The IIP shall additionally estimate the time required for financing, construction, and implementation of the new or expanded capital facilities, as appropriate.
c. Beginning August 1, 2014, if the City imposes a construction contracting or similar excise tax rate in excess of the percentage amount of the transaction privilege tax rate that is imposed on the majority of other transaction privilege tax classifications in the City, the entire excess portion of the construction contracting or similar excise tax shall be treated as a contribution to the capital costs of capital facilities provided to new development unless the excess portion is already utilized for such purpose.
14. Community facilities district. In determining and assessing an impact fee applying to land in a community facilities district established under Title 48, Chapter 4, Article 6, Arizona Revised Statutes, the City shall take into account any capital facilities in the infrastructure improvements plan provided by the CFD and capital costs paid by the district for such capital facilities, and shall proportionally reduce the assessed impact fees within the CFD either through the provision of credit for eligible facilities identified in Section 29-12 or through the calculation and application of an offset in accordance with subsection (C)(13) of this section.
15. Offsets. Based on the amounts determined in subsections (C)(13) and (C)(14) of this section, the IIP shall calculate an offset per EDU for each impact fee area, and identify how they shall be applied.
16. Net impact fee per EDU. For each necessary public service provided, the IIP shall calculate a recommended net impact fee per EDU for each impact fee area by subtracting the offset per EDU from the recommended gross impact fee per EDU.
17. Limitations. The adopted gross impact fee per EDU for each necessary public service shall not exceed the amount calculated pursuant to subsection (C)(12) of this section, though nothing in this section prohibits adoption of a lesser figure. If a lesser figure is adopted as the gross impact fee per EDU for a particular necessary public service, the same percentage reduction must be equally applied to:
a. Each and all impact fee areas;
b. Each and all categories of development or land use for which impact fees are assessed; and
c. Each offset per EDU.
D. Impact fee study. The impact fee study shall summarize the contents of the infrastructure improvements plan, and provide the following information, at a minimum:
1. Maps of the proposed impact fee area(s) within which an impact fee is to be assessed.
2. The number of existing and projected EDUs for each impact fee area, based upon the land use assumptions.
3. Information regarding all necessary public services for which impact fees are to be assessed.
4. Schedules of the proposed impact fees for each necessary public service, for each impact fee area, on a per-EDU basis, including details of all offsets to be applied. However, the actual impact fees to be assessed shall be disclosed and adopted in the form of impact fee schedules described in Appendix A of this chapter.
E. Multiple documents. More than one infrastructure improvements plan and associated impact fee study may be included within the infrastructure financing plan, so long as no more than one of each is effective for each category of necessary public service at any one time. Similarly, multiple categories of necessary public services may be included in a single infrastructure improvements plan and its associated impact fee study. (Ord. No. G-5984, 2015; Ord. No. G-6666, § 1, 2020)