The city implemented a full schedule of System Development Fees on January 20, 1997, to provide a funding source for growth-related infrastructure needs. In order to continue to collect System Development Fees, the city must comply with Arizona Revised Statute §9-463.05, which includes conducting a Public Hearing on the recommended fees included in the attached System Development Fee Update (“the report”) prepared by the consulting firm Duncan and Associates. The Public Hearing process provides residents and other stakeholders with the opportunity to address Council about the modified system development fees shown in the report. The report includes the recommended system development fees, as well as the Land Use Assumptions and the Infrastructure Improvements Plan, which were adopted by Council on January 11, 2024. The modified system development fees included in the report are calculated by service area for arterial streets, parks, fire, police, public buildings, water, wastewater, and reclaimed water. In order to ensure compliance with statutory requirements, the consultant calculated three costs per service unit for each of the fee categories: existing level of service, 10-year cost per service unit, and build-out cost per service unit. Each fee category uses the lowest of the three calculated costs by service area as the basis for the fee. The Public Buildings grandfathered fee category remains the same as in the prior report and will only be collected until the outstanding pledged debt is paid off for each fee category. The report was provided to stakeholders representing single family and multi-family developers, commercial builders, and others. The report, including the recommended fees, was posted on the City’s website on October 11, 2023, to provide interested parties with a minimum of 30 days advance notice of the planned Public Hearing; a link to the report was also disseminated through social media. The Notice of Intent to modify fees was approved at the January 11, 2024, Council meeting and has been posted on the City’s website and the official posting board. Social media was again used to disseminate the date and time of the Public Hearing. Following this Public Hearing, an ordinance modifying City Code Chapter 38 with the fee updates will be introduced, with final adoption scheduled for April 4, 2024. If approved, the modified system development fees will then become effective Monday, July 1, 2024. Financial Implications System development fees are designed to provide funding to a community for the cost of expanding infrastructure required to support new development. If these fees are not maintained at the proper level, the City may have to provide additional General Fund support for growth-related capital projects or increase the secondary property tax rate to support additional bond proceeds to fund growth-related capital projects. System development fees are a significant funding source for growth-related capital projects in the City’s 10-year Capital Improvement Plan, providing an estimated $48,281,620 worth of projects over the next ten years in addition to paying off existing System Development Fee internal debt. |