Public Hearing:  On Land Use Assumptions and Infrastructure Improvement Plan in support of updated Public Safety Development (Impact Fees).

1. Hold Public Hearing
2. Provide notice to the public that April 7, 2020, is scheduled for Council's potential adoption of Land Use Assumptions and Infrastructure Improvement Plan

Arizona Revised Statute 9-463.05, allows a municipality to assess development fees to offset costs to the municipality associated with providing necessary public services to a development, including the costs of infrastructure, improvements, real property, engineering and architectural services, as well as, financing and professional services required for the preparation or revision of a development fee, including the required land use assumptions and infrastructure improvements plan.  Municipalities are required to update their land use assumptions and infrastructure improvements plan at least every five years.

Development fees assessed by the City are required to result in a beneficial use to the development and may not exceed a proportionate share of the cost of necessary public services to the development.  Development fees can only be used for public services identified in the adopted infrastructure improvements plan including construction, acquisition or expansion of public facilities.  Development fees may not be used for repair, operation, or maintenance of existing or new public services or facility expansions.

Development Fees collected will be used to help fund capital improvements and equipment needed to provide police and fire services to new residential and non-residential projects.

The State of Arizona requires the City hold a public hearing on the Land Use Assumptions (LUA) and Infrastructure Improvement Plan (IIP), followed by a 30-day period to build consensus and incorporate changes prior to considering the adoption of the LUA and IIP.

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 Flagstaff City Council first adopted Development Fees for Police and Fire in October 2008 and amended the program in 2011 and 2014 to be consistent with State law.

1.  Hold the public hearing and direct staff to proceed with the Land Use Assumptions (LUA) and Infrastructure Improvement Plan (IIP) as presented.
2.  Hold the public hearing and direct staff to make changes to the LU and IIP prior to the April 7, 2020 meeting
3.  Hold the public hearing and discontinue the adoption of Public Safety Development Fees.

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 may direct staff to make changes to the LUA and IIP or move forward as presented.  After incorporating Council direction, staff will present the LU and IIP for adoption on April 7, 2020.  Each should be considered as a separate item.

The Land Use Assumptions (LUA) are found in Appendix C (page 33) of the August 29, 2019, TischlerBise report.  The LUA provides demographic estimates and development projections that are used to prepare the Infrastructure Improvement Plan 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 Infrastructure Improvement Plans (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 equitably 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 throughout the IIP and a schedule of Fire Facilities Development Fees (Figure F11, page 17)  and for Police (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 developments in our community.  Should development fees not be assessed, this same type of financial consideration will still need to be obtained; however, negotiations with each developer will occur separately which may result in an unequal burden depending on the timing of 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.

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

Inform:  The attached report was published on the City's website on December 2, 2019, and provide the public the information required by the State of Arizona.  A public hearing notice was published in the Arizona Daily Sun on December 17, 2019.

Consult:  The purpose of the public hearing is to receive public input on the land use report and infrastructure improvement plan.  Staff has made presentations or provided additional information to the Chamber of Commerce, City of Flagstaff Housing Commission, the Northern Arizona Building Association, Northern Arizona Association of Realtors, and the City of Flagstaff Planning & Zoning Commission.