Consideration and Adoption:  Public safety development fee Land Use Assumptions and Infrastructure Improvement Plan.

Arizona Revised Statutes require cities to adopt Land Use Assumptions (LUA) and an Infrastructure Improvement Plan (IIP) prior to considering the adoption of development fees.  The LU and IIP provide the basis for establishing development fees.  The City is considering continuing public safety fees for police and fire infrastructure only.

The adoption of the revised LUA and IIP does not have a direct financial impact on the budget, however, it is a necessary step prior to considering the adoption of public safety development fees, which will fund capital improvements and equipment needed to provide police and fire services to new residential and non-residential projects.

Without the adoption of the new LUA and IIP, the public safety development fee program will come to an end. 

Council Goals
Transportation and Other Public Infrastructure - Deliver quality community assets and continue to advocate and implement a highly performing multi-modal transportation system.

Flagstaff Regional Plan
Goal CD.1. Improve the City and County financial systems to provide for needed infrastructure development and rehabilitation, including maintenance and enhancement of existing infrastructure.
Policy CD.1.3. Analyze the feasibility of expanding development fees within the City of Flagstaff, which may enable future development to provide for adequate off-site improvements and facilities.
Policy CD.1.5.  Require that new development pay for a fair and rough proportional share of public facilities, services, and infrastructure.

Team Flagstaff Strategic Plan
Foster a Resilient and Economically Prosperous City

• Enhance the organization's fiscal stability and resourcefulness

The City of Flagstaff adopted police and fire development fees in 2008.  Since then the public safety development fees have been readopted twice: in 2011 and in 2014. 

The City Council held a work session on the draft Land Use Assumptions (LUA) and Infrastructure Improvement Plan (IIP) on January 7, 2020.  The City Council then held a public hearing on the draft LU and IIP on February 28, 2020. The Council agreed with the direction to schedule the adoption of the LU and IIP for April 7, 2020.

1. Adopt the LUA and IIP and direct staff to finalize the proposed development fees, provide notice of May 19, 2020, public hearing on the proposed fees, publish the proposed fees on the City website, and distribute to interested parties.
2. Reject the LUA and IIP and provide direction to modify the LU and IIP for reconsideration.
3. Direct staff to stop the renewal process and allow the current public safety development fee program to end.

At the January 7, 2020 work session, City consultant TischlerBise provided an overview of the draft Land Use Assumptions (LUA) and Infrastructure Improvement Plan (IIP).  After receiving public input at the February 18, 2020, public hearing, Council did not direct staff to make changes to the LU and IIP, which is moving forward as presented.  Staff is now presenting the LUA and IIP for adoption separately.

The Land Use Assumptions (LUA) are found in Appendix C (page 33) of the April 7, 2020, TischlerBise report.  The LUA provides demographic estimates and development projections that are used to prepare the IIP and calculate development fees.  Key land use assumptions for the City of Flagstaff development fee study are population, housing units, and employment projections.  During the next 10 years, citywide development projections indicate an average increase of approximately 560 housing units per year and approximately 130,000 square feet of nonresidential floor area per year.  The LUAs provide an analysis of single-family and multi-family residential units by bedroom size.  The average person per household increases as the number of bedrooms increase, thus increasing the demand for services.  This methodology provides a more accurate estimate of the demand generated by residential units.

The report also includes the methodology to develop the IIP for both fire and police services.  Development fees for the necessary public services made necessary by new development must be based on the same level of service (LOS) provided to existing development in the service area.  There are three basic methodologies used to calculate development fees.  They examine the past, present, and future status of infrastructure.  Reduced to its simplest terms, the process of calculating development fees involves two main steps: 1) determining the cost of development-related capital improvements and (2) allocating those costs equitable to various types of development.

Fire fees will be used to fund facilities, apparatus, and communications equipment as well as the cost of preparing the Fire Facilities IIP and related Development Fee Report.  Police fees will provide for facilities, vehicles, and communications equipment.  The demand for specific services is summarized through the IIP and a schedule of Fire Facilities Development Fees (Figure F11, page 17) and for Police Facilities Development Fees (Figure P11, page 28) are found in the report.

Development fees provide a base standard that all developers are aware of and can plan for as they look to propose development in our community.  Should development fees not be assessed, this same type of financial consideration will still need to be attained; however, negotiations with each developer will occur separately which may result in an unequal burden due to the timing of a development.

The study that is provided to calculate the Public Safety development fees covers a 10-year growth horizon.  The development fees themselves, however, are updated every five years to assure the planning and needed services are either confirmed or are updated to match current community needs.

Impact fees assess new development their fair share of cost for the expanded network of service that will need to be provided.

Inform -  The draft Land Use Assumptions (LUA) and Infrastructure Improvements Plan (IIP) were published on the City website on December 2, 2020.  Staff has prepared the attached memo which was provided to the Northern Arizona Building Association, Northern Arizona Association of Realtors, and the Chamber of Commerce.  Staff has offered to make individual presentations to any interested group. 

Consult - A public hearing on the LUA and IIP was held on February 18, 2020.  The next public hearing will be held on May 19, 2020, to discuss the proposed fees.  The public will also have a chance to comment on July 7, 2020.