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(A) The city may assess and collect a development fee for costs of necessary public services, including all professional services required for the preparation or revision of an Infrastructure Improvements Plan, Development Fee Report, development fee, and required reports or audits conducted pursuant to this Chapter. Development fees shall be subject to the following requirements:
(1) The city shall develop and adopt a Development Fee Report that analyzes and defines the development fees to be charged in each service area for each capital facility category, based on the Infrastructure Improvements Plan, pursuant to A.R.S. § 9-463.05.
(2) Development fees shall be assessed against all new residential, commercial, office, institutional, and industrial developments, provided that the city may assess different amounts of development fees against specific categories of development based on the actual burdens and costs that are associated with providing necessary public services to that category of development. No development fee shall exceed the cost per service unit for any category of development.
(3) No development fees shall be charged, or credits issued, for any capital facility that does not fall within 1 of the categories of necessary public services for which development fees may be assessed as identified in Vol. II, § 7-1-10 of this Chapter.
(4) Costs for necessary public services made necessary by new development shall be based on the same level of service provided to existing development in the same service area. Development fees may not be used to provide a higher level of service to existing development or to meet stricter safety, efficiency, environmental, or other regulatory standards to the extent that these are applied to existing capital facilities that are serving existing development.
(5) Development fees may not be used to pay the city's administrative, maintenance, or other operating costs.
(6) Projected interest charges and financing costs can only be included in development fees to the extent they represent principal and/or interest on the portion of any financing or debt used to finance the construction or expansion of a capital facility identified in the Infrastructure Improvements Plan.
(7) All development fees shall meet the requirements of A.R.S. § 9-463.05.
(B) The Development Fee Report shall summarize the costs of capital facilities necessary to serve new development on a per service unit basis as defined and calculated in the Infrastructure Improvements Plan, including all required offsets, and shall recommend a development fee structure for adoption by the city. The actual development fees to be assessed shall be disclosed and adopted in the form of development fee schedules described in this Chapter.
(C) Defined terms in any previously established fee schedule shall be interpreted according to the ordinance in effect at the time of their adoption.
(Ord. 1521, passed 8-16-2022)
(A) The City Finance Department shall establish a separate accounting fund in which the development fees collected for a particular type of capital facility within the service area shall be credited. Such fees shall be invested by the city and the yield on those fees, at the actual rate of return to the city, shall be credited to such accounting fund periodically in accordance with the accounting policies of the city. The funds need not be segregated from other city monies for banking purposes.
(B) (1) Any yield on such accounting fund into which the fees are deposited shall accrue to that fund and shall be used for the purposes specified for that fund.
(2) Development fees and any interest thereon collected pursuant to this Chapter shall be spent to provide capital facilities associated with the same category of necessary public services in the same service area for which they were collected, including costs of financing or debt used by the city to finance such capital facilities and other costs authorized by this Chapter that are included in the Infrastructure Improvements Plan.
(C) The City Finance Department shall maintain and keep financial records for the accounting fund showing the revenues to the fund and the disbursements from that fund, in accordance with normal city accounting practices. The records of the fund shall be open to public inspection in the same manner as other financial records of the city.
(D) The city shall issue as part of the report required in Vol. II, § 7-1-20 of this Chapter an unaudited accounting of all development fee funds.
(Ord. 1521, passed 8-16-2022)
(A) The Infrastructure Improvements Plan shall be consistent with the city's current land use assumptions for each service area and each category of necessary public services as adopted by the city pursuant to A.R.S. § 9-463.05.
(B) The land use assumptions shall be renewed, updated, developed, adopted, and modified subject to the procedures required by A.R.S. § 9-463.05.
(Ord. 1521, passed 8-16-2022)
(A) The Infrastructure Improvements Plan shall be developed by qualified professionals and may be based upon or incorporated within the city's Capital Improvements Plan, when/if available, and/or other capital facilities plans.
(B) (1) The Infrastructure Improvements Plan shall comply with the requirements of A.R.S. §9-463.05, and shall:
(2) Specify the categories of necessary public services for which the city will impose a development fee, which may include any or all of the following:
(a) Street facilities.
(b) Police.
(c) Parks and recreational facilities.
(d) Libraries.
(Ord. 1521, passed 8-16-2022)
All necessary renewals and updates of the Infrastructure Improvements Plan and land use assumptions shall comply with procedures required by A.R.S. § 9-463.05.
(Ord. 1521, passed 8-16-2022)
(A) Development fees, together with administrative charges assessed pursuant to division (A)(5) of this section, shall be calculated and collected prior to issuance of permission to commence development, specifically:
(1) Except as set forth in division (A)(2) below, the development fees for all new development shall be calculated and collected in conjunction with the application for the first building permit or electrical permit, certificate of compliance or occupancy, or other permit subsequent to development plan approval for such development, whichever occurs first in time. However, in no case shall the Development Fee Administrator allow prepayment of development fees in order to avoid higher fees which the council has passed but have yet to go into effect. At the time the development fees are paid in full, a permit shall be issued.
(2) For other uses not ultimately requiring a building permit, electrical permit, certificate of compliance or occupancy, or other permit, the fee shall be calculated and collected at such time as determined by the Development Fee Administrator. However, in no case shall the Development Fee Administrator allow prepayment of development fees in order to avoid higher fees which the council has passed but have yet to go into effect. At the time the development fees are paid in full, a permit shall be issued.
(3) If the building permit is for a change in the type of building use, an increase in square footage, or a change to land use, the development fee shall be assessed on the additional service units resulting from the expansion or change, and following the development fee schedule applicable to any new use type.
(4) No building permit or certificate of occupancy shall be issued if a development fee is not paid as directed in the previous division.
(5) For issued permits that expire or are voided, development fees and administrative charges shall be as follows:
(a) If the original permittee is seeking to renew an expired or voided permit, and the development fees paid for such development have not been refunded, then the permittee shall pay the difference between any development fees paid at the time the permit was issued and those in the fee schedule at the time the permit is reissued or renewed.
(b) If a new or renewed permit for the same development is being sought by someone other than the original permittee, the new permit applicant shall pay the full development fees specified in the fee schedule in effect at the time that the permits are reissued or renewed. If the original permittee has assigned its rights under the permits to the new permit applicant, the new permit applicant shall pay development fees as if it were the original permittee.
(B) Development fees for mobile/manufactured home and recreational vehicle parks including campgrounds shall be assessed for the entire development, based on the number of manufactured home and recreational vehicle spaces and camping spaces created at the time of application for the first building, electrical or other permit for the development. No additional development fees shall be assessed on subsequent building or electrical permits in the manufactured home or recreational vehicle park unless additional spaces are created. Development fees for mobile/manufactured homes and campgrounds placed on single parcels shall be assessed in the same manner as site-built or conventional homes.
(C) Development fees shall not be owed under any of the following conditions:
(1) Development fees have been paid for the development and the permit(s) which triggered the collection of the development fees have not expired or been voided.
(2) Modifications requiring approval are made to existing development, or vacant property that previously accommodated any legally established development and do not: (a) add new service units; (b) increase the impact of previous or existing service units on existing or future capital facilities; or (c) change the land-use type of the previous or existing development to a different category of development for which a higher development fee would have been due. To the extent that any modification does not meet the requirements of this division, the development fee due shall be the difference between the development fee that was or would have been due on the previous or existing development and the development fee that is due on the development as modified.
(3) Placing on a lot or parcel in the city a temporary construction trailer or office, but only for the life of the building permit issued for the construction served by the trailer or office.
(4) Expansion, upgrade or repair of a legally established existing residential dwelling unit or structure.
(5) Construction or installation of a development on vacant property that previously accommodated any legally established development, subject to the terms of division (C)(2) above.
(6) Any development, including but not limited to the mere subdivision of land, installation of utilities, or the use of land for limited recreational, filling or dredging purposes which, in the opinion of the Development Fee Administrator, will not result in a net increase of more than 1 one-way average daily trip.
(D) New developments in the city shall be temporarily exempt from increases in development fees that result from the adoption of new or modified development fee schedules as follows:
(1) Residential uses. On or after the day that the first building permit is issued for a single unit residential development, the city shall, at the permittee's request, provide the permittee with an applicable development fee schedule that shall be in force for a period of 24 months beginning on the day that the first building permit is issued, and which shall expire at the end of the first business day of the 25th month thereafter. During the effective period of the applicable development fee schedule, any building permit issued for the same single unit residential development shall not be subject to any new or modified development fee schedule.
(2) Commercial, office, industrial, institutional, and 2+ unit dwelling unit structures. On or after the day that the final approval, as defined in A.R.S. § 9-463.05(T)(4), is issued for a commercial, office, industrial, institutional or 2+ unit development, the city shall provide an applicable development fee schedule that shall be in force for a period of 24 months beginning on the day that final development approval of a site plan or final subdivision plat is given, and which shall expire at the end of the first business day of the 25th month thereafter. During the effective period of the applicable development fee schedule, any building permit issued for the same development shall not be subject to any new or modified development fee schedule.
(3) Other development. Any category of development not covered under divisions (D)(1) and (2) of this section shall pay development fees according to the fee schedule that is current at the time of collection as specified in division (A) of this section.
(4) Changes to Site Plans and Subdivision Plats. Notwithstanding the other requirements of this division, if changes are made to a development's final Site Plan or subdivision plat that will increase the number of service units after the issuance of a previously adopted and then-in effect development fee schedule, the city may assess any new or modified development fees against the additional service units. If the city reduces the amount of an applicable development fee during the period that a previously adopted and then-in effect development fee schedule is in force, the city shall assess the lower development fee.
(E) Option to pursue special fee determination. Where a subject development is of a type that does not closely fit within a particular category of development appearing on an adopted development fee schedule, or where a subject development has unique characteristics such that the actual burdens and costs associated with providing necessary public services to that development will differ substantially from that associated with other developments in a specified category of development, the city may require the applicant to provide the Development Fee Administrator or authorized designee with an alternative development fee analysis. Based on a projection of the actual burdens and costs that will be associated with the subject development, the alternative development fee analysis may propose a unique fee for the development based on the application of an appropriate service unit factor to the applicable cost per service unit, or may propose that the development be covered under the development fee schedule governing a different and more analogous category of development. The Development Fee Administrator or authorized designee shall review the alternative impact fee analysis and shall make a determination as to the development fee to be charged. Such decision shall be appealable pursuant to Vol. II, § 7-1-17 of this Chapter. The Development Fee Administrator or authorized designee may require the applicant to pay an administrative fee to cover the actual costs of reviewing the special fee determination application.
(F) Individual assessment of development fees. If any applicant believes that the impact of the proposed development will be substantially less than would be indicated by using the fee schedule, the person may request to perform an individual assessment of the impact of the proposed development at his or her own cost. A request for an individual assessment must be made before submitting an application for a building permit.
(1) The individual assessment shall be subject to the following special standards and procedures:
(a) Street facilities development fees (as set forth in Vol. II, Article 7-2);
(b) Police facilities development fees (as set forth in Vol. II, Article 7-3);
(c) Parks and recreational facilities development fees (as set forth in Vol. II, Article 7-4);
(d) Library facilities development fees (as set forth in Vol. II, Article 7-5); and
(2) If the Development Fee Administrator accepts the computations of the individual assessment under this Chapter, the applicable fee shall be determined from the individual assessment.
(Ord. 1521, passed 8-16-2022)
(A) Development fees may only be spent on qualifying improvements, as follows:
(1) Street facilities development fees shall be spent as set forth in Vol. II, § 7-2-3;
(2) Police facilities development fees shall be spent as set forth in Vol. II, § 7-3-3;
(3) Parks and recreational facilities development fees shall be spent as set forth in Vol. II, § 7-4-3;
(4) Library facilities development fees shall be spent as set forth in Vol. II, § 7-5-3;
(B) Time limit. Development fees collected after October 31, 2022 shall be used within 10 years of the date upon which they were collected for all categories of necessary public services.
(Ord. 1521, passed 8-16-2022)
(A) Eligibility of capital facility. All development fee credits must meet the following requirements:
(1) One of the following is true:
(a) The capital facility, or the financial contribution toward a capital facility that will be provided by the developer and for which a credit will be issued, must be identified in an adopted Infrastructure Improvements Plan and Development Fee Report as a capital facility for which a development fee was assessed; or
(b) The applicant must demonstrate to the satisfaction of the city that, given the class and type of improvement, the subject capital facility should have been included in the Infrastructure Improvements Plan in lieu of a different capital facility that was included in the Infrastructure Improvements Plan and for which a development fee was assessed. If the subject capital facility is determined to be eligible for a credit in this manner, the city shall amend the Infrastructure Improvements Plan to: (i) include the subject replacement facility; and (ii) delete the capital facility that will be replaced.
(2) Credits shall not be available for any infrastructure provided by a developer if the cost of such infrastructure will be repaid to the developer by the city through another agreement or mechanism. To the extent that the developer will be paid or reimbursed by the city for any contribution, payment, construction, or dedication from any city funding source including an agreement to reimburse the developer with future collected development fees pursuant to Vol. II, § 7-1-16 of this Chapter, any credits claimed by the developer shall be: (a) deducted from any amounts to be paid or reimbursed by the city; or (b) reduced by the amount of such payment or reimbursement.
(B) Eligibility of subject development. To be eligible for a credit, the subject development must be located within the service area of the eligible capital facility.
(C) Calculation of credits.
(1) Credits will be based on that portion of the costs for an eligible capital facility identified in the adopted Infrastructure Improvements Plan for which a development fee was assessed pursuant to the Development Fee Report. If the gross development fee for a particular category of necessary public service is adopted at an amount lower than the cost per service unit, the amount of any credit shall be reduced in proportion to the difference between the cost per service unit and the gross development fee adopted. A credit shall not exceed the actual costs the applicant incurred in providing the eligible capital facility.
(2) Credits will be based on the included costs in the calculation of the cost per service unit for each category of necessary public service, including costs of land acquisition, improvements, engineering and architectural services, studies leading to design, design, construction, financing, and administrative costs, as well as projected costs of inflation.
(D) Allocation of credits. Before any credit can be issued to a subject development (or portion thereof), the credit must be allocated to that development by executing a credit agreement between the developer and the city stating the total amount of the credits resulting from provision of an eligible capital facility.
(1) It is the responsibility of the developer to request allocation of development fee credits through an application for a may be part of a Development Agreement entered into pursuant to Vol. II, § 7-1-16 of this Chapter).
(2) If a building permit is issued, and a development fee is paid prior to execution of a Credit Agreement for the subject development, no credits may be allocated retroactively to that permit. Credits may be allocated to any remaining permits for the subject development in accordance with this Chapter.
(3) If the entity that provides an eligible capital facility sells or relinquishes a development (or portion thereof) that it owns or controls prior to execution of a Credit Agreement or Development Agreement, credits resulting from the eligible capital facility will only be allocated to the development if the entity legally assigns such rights and responsibilities to its successor(s) in interest for the subject development.
(4) If multiple entities jointly provide an eligible capital facility, all entities must enter into a single Credit Agreement with the city, and any request for the allocation of credit within the subject development(s) must be made jointly by the entities that provided the eligible capital facility.
(E) Credit Agreement. Credits shall only be issued pursuant to a Credit Agreement executed in accordance with division (D) of this section. The City Manager or authorized designee is authorized by this Chapter to enter into a Credit Agreement with the controlling entity of a subject development, subject to the following:
(1) The developer requesting the Credit Agreement shall provide all information requested by the city to allow it to determine the value of the credit to be applied.
(2) An application for a Credit Agreement shall be submitted to the city by the developer within one year of the date on which ownership or control of the capital facility passes to the city.
(3) The developer shall submit a draft Credit Agreement to the City Manager or authorized designee(s) for review. The draft Credit Agreement shall include, at a minimum, all of the following information and supporting documentation:
(a) A legal description and map depicting the location of the subject development for which credit is being applied. The map shall depict the location of the capital facilities that have been or will be provided.
(b) An estimate of the total service units that will be developed within the subject development depicted on the map and described in the legal description.
(c) A list of the capital facilities, associated physical attributes, and the related costs as stated in the Infrastructure Improvements Plan.
(d) Documentation showing the date(s) of acceptance by the city, if the capital facilities have already been provided.
(e) The total amount of credit to be applied within the subject development and the calculations leading to the total amount of credit.
(f) The credit amount to be applied to each service unit within the subject development for each category of necessary public services.
(4) Calculation and payment of credits not involving transfer of land, non-contiguous parcels, or delayed fee payments shall be approved by the City Manager or authorized designee(s). Credit Agreements for all other subject development shall be approved by the City Manager prior to its execution. The City Manager's determination of the credit to be allocated is final.
(5) Upon execution of the Credit Agreement by the city and the applicant, credits shall be deemed allocated to the subject development.
(6) Any amendment to a previously approved credit agreement must be initiated within 2 years of the city's final acceptance of the eligible capital facility for which the amendment is requested.
(7) Any Credit Agreement approved as part of a Development Agreement shall be amended in accordance with the terms of the Development Agreement and Vol. II, § 7-1-16 of this Chapter.
(F) Issuance of credits. Credits allocated pursuant to division (D) of this section may be issued and applied toward the gross development fees due from a development, subject to the following conditions:
(1) Credits issued for an eligible capital facility may only be applied to the development fee due for the applicable category of necessary public services, and may not be applied to any fee due for another category of necessary public services.
(2) Credits shall only be issued when the eligible capital facility from which the credits were derived has been accepted by the city or when adequate security for the completion of the eligible capital facility has been provided in accordance with all terms of an executed Development Agreement.
(3) Where credits have been issued pursuant to division (F)(2) of this section, a development fee due at the time a building permit is issued shall be reduced by the credit amount stated in or calculated from the executed Credit Agreement. Where credits have not yet been issued, the gross development fee shall be paid in full, and a refund of the credit amount shall be due when the developer demonstrates compliance with division (F)(2) of this section in a written request to the city.
(4) Credits, once issued, may not be rescinded or reallocated to another permit or parcel, except that credits may be released for reuse on the same subject development if a building permit for which the credits were issued has expired or been voided and is otherwise eligible for a refund under Vol. II, § 7-1-19(A)(2)(a) of this Chapter.
(5) Notwithstanding the other provisions of this Vol. II, § 7-1-15, credits issued prior to January 1, 2019 may only be used for the subject development for which they were issued. Such credits may be transferred to a new owner of all or part of the subject development in proportion to the percentage of ownership in the subject development to be held by the new owner.
(Ord. 1521, passed 8-16-2022)
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