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ITEM NO. 11a |
TOWN OF PRESCOTT VALLEY
STAFF REPORT
STAFF REPORT
DATE: 10/08/2026
TO: Mayor & Town Council
THROUGH: Gilbert Davidson, Town Manager
FROM:
DEPARTMENT: Town Manager's Office
AGENDA TYPE: New Business
SUBJECT: Development Impact Fee (DIF) Report - Public Hearing Only [Ryan Judy, Deputy Town Manager]
TO: Mayor & Town Council
THROUGH: Gilbert Davidson, Town Manager
FROM:
DEPARTMENT: Town Manager's Office
AGENDA TYPE: New Business
SUBJECT: Development Impact Fee (DIF) Report - Public Hearing Only [Ryan Judy, Deputy Town Manager]
| VISION 2024 FOCUS AREA: Quality of Life - Enhancing the health of neighborhoods by promoting well-being for all through safety, infrastructure, housing, connectivity, recreational space, and community engagement. |
SUMMARY/BACKGROUND:
The Town of Prescott Valley has undertaken a comprehensive update to its Development Impact Fees (DIFs) for streets, police, and parks/recreation facilities, as detailed in the attached Prescott Valley Non-Utility Draft DIFs Report dated Sept 15, 2026. This Report, prepared by Town consultant Raftelis, supplements the Land Use Assumptions (LUA) and Infrastructure Improvements Plan (IIP) which the Town Council approved at its Sept 24, 2026 meeting (and aligns with the requirements of Arizona Revised Statutes §9-463.05). The Report covers the ten-year period from FY 2027 to FY 2037 and is designed to ensure that new development pays its proportionate share of infrastructure costs necessary to accommodate growth, without subsidizing existing deficiencies or ongoing operations and maintenance.
Arizona’s enabling legislation mandates that DIFs be based on LUA for at least ten years, and an IIP. DIFs must reflect the same level of service provided to existing development, and may only be used for capital improvements or debt service related to growth. The Town’s 2026 DIFs Report includes DIFs for streets, public safety facilities (police), and parks/recreation (with the Library DIF continuing only for debt service and intra-fund loans on the Town facility financed before June 1, 2011). The methodologies used in the Report—recoupment, incremental expansion, and plan-based—are industry-standard and ensure that DIFs are proportionate and reasonably related to the capital improvement demands of new development.
The proposed DIFs are structured by development type. For residential units, DIFs are charged per dwelling, with single-family and multifamily classes. For nonresidential development, DIFs are assessed per square foot of floor area, with categories for industrial, office/other services, and retail/restaurants. The proposed maximum supportable DIFs for single-family dwellings are $3,616 for streets, $676 for police, $1,654 for parks/recreation, and $1,589 for library, totaling $7,535. Multifamily dwellings are assessed $2,457 for streets, $596 for police, $1,458 for parks/recreation, and $998 for library, totaling $5,509. Nonresidential DIFs per square foot are $0.98 for industrial, $2.13 for office/other services, and $4.87 for retail/restaurants for streets; $0.24, $0.52, and $1.74 for police; and $0.27, $0.69, and $0.63 for parks/recreation (respectively).
Revenue projections based on these DIFs (and the LUA) indicate that over the next ten years, the streets DIF will generate approximately $11.77 million, the police DIF $2.51 million, and the parks/recreation DIF $5.21 million (assuming development proceeds as projected). the Library DIF is expected to yield approximately $403,000 in the next year. The Report confirms that Prescott Valley complies with all statutory requirements (including evaluation of credits to avoid double payment by new development), and that no offset is required for construction excise tax (inasmuch as the Town does not charge a rate higher than other business activities).
In summary, the proposed DIFs are designed to ensure that new development contributes its fair share to the Town’s infrastructure needs, supports sustainable growth, and maintains the quality of public services. The methodologies and statutory compliance documented in the Report provide a transparent and equitable framework for DIFs assessment.
THIS ACTION
In accordance with ARS 9-463.05, this is a public hearing only. The item will be brought back to the Town Council on November 12, 2026 for further consideration.
Arizona’s enabling legislation mandates that DIFs be based on LUA for at least ten years, and an IIP. DIFs must reflect the same level of service provided to existing development, and may only be used for capital improvements or debt service related to growth. The Town’s 2026 DIFs Report includes DIFs for streets, public safety facilities (police), and parks/recreation (with the Library DIF continuing only for debt service and intra-fund loans on the Town facility financed before June 1, 2011). The methodologies used in the Report—recoupment, incremental expansion, and plan-based—are industry-standard and ensure that DIFs are proportionate and reasonably related to the capital improvement demands of new development.
The proposed DIFs are structured by development type. For residential units, DIFs are charged per dwelling, with single-family and multifamily classes. For nonresidential development, DIFs are assessed per square foot of floor area, with categories for industrial, office/other services, and retail/restaurants. The proposed maximum supportable DIFs for single-family dwellings are $3,616 for streets, $676 for police, $1,654 for parks/recreation, and $1,589 for library, totaling $7,535. Multifamily dwellings are assessed $2,457 for streets, $596 for police, $1,458 for parks/recreation, and $998 for library, totaling $5,509. Nonresidential DIFs per square foot are $0.98 for industrial, $2.13 for office/other services, and $4.87 for retail/restaurants for streets; $0.24, $0.52, and $1.74 for police; and $0.27, $0.69, and $0.63 for parks/recreation (respectively).
Revenue projections based on these DIFs (and the LUA) indicate that over the next ten years, the streets DIF will generate approximately $11.77 million, the police DIF $2.51 million, and the parks/recreation DIF $5.21 million (assuming development proceeds as projected). the Library DIF is expected to yield approximately $403,000 in the next year. The Report confirms that Prescott Valley complies with all statutory requirements (including evaluation of credits to avoid double payment by new development), and that no offset is required for construction excise tax (inasmuch as the Town does not charge a rate higher than other business activities).
In summary, the proposed DIFs are designed to ensure that new development contributes its fair share to the Town’s infrastructure needs, supports sustainable growth, and maintains the quality of public services. The methodologies and statutory compliance documented in the Report provide a transparent and equitable framework for DIFs assessment.
THIS ACTION
In accordance with ARS 9-463.05, this is a public hearing only. The item will be brought back to the Town Council on November 12, 2026 for further consideration.
RECOMMENDED MOTION:
N/A Public Hearing Only
STAFF RECOMMENDATION:
N/A Public Hearing Only
FISCAL ANALYSIS:
Revenue projections based on these proposed maximum supportable DIFs indicate that over the next ten years, the streets DIF will generate approximately $11.77 million, the police DIF $2.51 million, and the parks/recreation DIF $5.21 million (assuming development proceeds in the community as projected). The Library DIF is expected to yield approximately $403,000 in the next year.