| ITEM #: 11. DATE: 03/24/2025 AI #:2469 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | DEVELOPMENT IMPACT FEE AUDIT |
| STAFF PRESENTER(S): | Jared Askelson, Finance Director |
SUMMARY
The City Council will hold a public hearing to receive the biennial certified audit of the city’s land use assumptions, infrastructure improvements plan, and development fees for the period July 1, 2022 through June 30, 2024.
STRATEGIC PLAN ALIGNMENT
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RECOMMENDATION
Accept the Biennial Certification of Land Use Assumptions, Infrastructure Improvement Plan and Development Impact Fees Audit. (Jared Askelson, Finance Director)
FISCAL IMPACT
There is no fiscal impact to the city for receiving the report.
BACKGROUND AND PREVIOUS ACTIONS
In accordance with Arizona Revised Statute 9-463.05, a biennial certified audit of the city’s land use assumptions, infrastructure improvements plan, and development fees (Attachment A) was conducted by Heinfled, Meech & Co., P.C. for the period July 1, 2022–June 30, 2024.
The engagement included performing procedures regarding the proper receipt and use of development fees relating to the City’s Land Use Assumptions and Infrastructure Improvement Plan (IIP), as adopted in 2024, for the City’s biennial period ending June 30, 2024. The procedures included reviewing 1) the progress of the infrastructure improvements plan, 2) the collection and expenditure of development impact fees for each project in the plan, 3) evaluating any inequities in implementing the plan or imposing the development impact, 4) confirming that the one percent (1%) excess construction sales tax collected was transferred to the appropriate Impact Fee Fund in accordance with ARS 9-463-05(B)(12), and 5) that the Annual Report included the information as required by ARS 9-463-05(N).
The engagement included performing procedures regarding the proper receipt and use of development fees relating to the City’s Land Use Assumptions and Infrastructure Improvement Plan (IIP), as adopted in 2024, for the City’s biennial period ending June 30, 2024. The procedures included reviewing 1) the progress of the infrastructure improvements plan, 2) the collection and expenditure of development impact fees for each project in the plan, 3) evaluating any inequities in implementing the plan or imposing the development impact, 4) confirming that the one percent (1%) excess construction sales tax collected was transferred to the appropriate Impact Fee Fund in accordance with ARS 9-463-05(B)(12), and 5) that the Annual Report included the information as required by ARS 9-463-05(N).
STAFF ANALYSIS
There were two findings noted in the Biennial Development Impact Fee Audit related to the five categories included in the engagement. The first finding noted variances between the growth projections and actual results for population, housing units, nonresidential square footage, and employment. This finding is offset by adjusting the timing of impact fee-related projects. The second finding identified two instances where the application of fees was not calculated correctly. Staff have followed up on both instances to correct fee collections.
Attachments
- Attachment A - Biennial Certification of Land Use Assumptions, Infrastructure Improvement Plan, and Development Impact Fee for the Period July 1, 2022 through June 30, 2024
- Staff Presentation