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(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)
Development Agreements containing provisions regarding development fees, development fee credits, and/or disbursement of revenues from development fee accounts shall comply with the following:
(A) Development agreement required. A development agreement is required to authorize any of the following:
(1) To issue credits prior to the city's acceptance of an eligible capital facility.
(2) To allocate credits to a parcel that is not contiguous with the subject development and that does not meet the requirements of Vol. II, § 7-1-15(E)(7)of this Chapter.
(3) To reimburse the developer of an eligible capital facility using funds from development fee accounts.
(4) To allocate different credit amounts per service unit to different parcels within a subject development.
(5) For a single unit residential dwelling unit, to allow development fees to be paid at a later time than the issuance of a building permit as provided in this section.
(B) General requirements. All Development Agreements shall be prepared and executed in accordance with A.R.S. § 9-500.05 and any applicable requirements of the City Code. Except where specifically modified by this section, all provisions of Vol. II, § 7-1-15 of this Chapter shall apply to any Credit Agreement that is authorized as part of a Development Agreement.
(C) Early credit issuance. A Development Agreement may authorize the issuance of credits prior to acceptance of an eligible capital facility by the city when the Development Agreement specifically states the form and value of the security (i.e. bond, letter of credit, and the like) to be provided to the city prior to issuance of any credits. The city shall determine the acceptable form and value of the security to be provided.
(D) Non-contiguous credit allocation. A Development Agreement may authorize the allocation of credits to a non-contiguous parcel only if all of the following conditions are met:
(1) The non-contiguous parcel is in the same service area as that served by the eligible capital facility.
(2) The non-contiguous parcel receives a necessary public service from the eligible capital facility.
(3) The Development Agreement specifically states the value of the credits to be allocated to each parcel and/or service unit, or establishes a mechanism for future determination of the credit values.
(E) Uneven credit allocation. The Development Agreement must specify how credits will be allocated amongst different parcels on a per-service unit basis, if the credits are not to be allocated evenly. If the Development Agreement is silent on this topic, all credits will be allocated evenly amongst all parcels on a per-service unit basis.
(F) Use of reimbursements. Funds reimbursed to developers from development fee accounts for construction of an eligible capital facility must be utilized in accordance with applicable law for the use of city funds in construction or acquisition of capital facilities, including A.R.S. §§ 34-201 et seq.
(G) Deferral of fees. A Development Agreement may provide for the deferral of payment of development fees for a residential development beyond the issuance of a building permit; provided that a development fee may not be paid later than the 15 calendar days after the issuance of the certificate of occupancy for that dwelling unit. The Development Agreement shall provide for the value of any deferred development fees to be supported by appropriate security, including a surety bond, letter of credit, or cash bond.
(H) Waiver of fees. If the city agrees to waive any development fees assessed on development in a Development Agreement, the city shall reimburse the appropriate development fee account(s) for the amount that was waived pursuant to A.R.S. § 9-463.05.
(I) No obligation. Nothing in this section obligates the city to enter into any Development Agreement or to authorize any type of Credit Agreement permitted by this section.
(Ord. 1521, passed 8-16-2022)
The developer who owes, has paid a development fee, or disagrees with the offset amount determined by the Development Fee Administrator, may appeal to the City Manager in accordance with the following procedures:
(A) Form of appeal. Such appeal must be filed with the Development Fee Administrator in writing: either within 30 calendar days after the date the city notified the developer of an assessment or offset determination; or within 30 calendar days after the developer paid the development fee.
(B) Fees during pendency. Any building permit issued before the appeal is filed shall be considered stayed until after the appeal process has concluded. Any work in progress completed during the appeal process shall be performed at the developer's own risk. Failure to pay the development fees as determined on appeal shall result in the withholding by the city of the certificate of occupancy for the subject development.
(C) The City Manager must render a decision within 30 calendar days after the appeal is received by the Development Fee Administrator. The City Manager's failure to render a decision within the 30 calendar days, absent a continuance request by the developer, shall result in the developer's position prevailing over the city's. The developer shall be notified of the City Manager's decision in writing within 30 calendar days after the appeal is received by the Development Fee Administrator.
(D) Final decision. The decision of the City Manager shall be considered the final administrative decision of the city. Any further appeals shall be pursuant to A.R.S. §§ 12-901 et seq.
(Ord. 1521, passed 8-16-2022)
(A) Except as herein otherwise provided, development fees are in addition to any other requirements, taxes, fees or assessments imposed by the city on development or the issuance of building permits or certificates of occupancy which are imposed on and due against property within the jurisdiction of the city. Development fees are intended to be consistent with the city's General Plan, Capital Improvements Program, Land Development Code, and other city policies, ordinances and resolutions by which the city seeks to ensure the provision of capital facilities in conjunction with development.
(B) In addition to the use of development fees, the city may finance qualifying capital facilities through the issuance of bonds, the formation of assessment districts or any other authorized mechanism, in a manner and subject to such limitations as provided by law.
(Ord. 1521, passed 8-16-2022)
(A) Refunds. A refund (or partial refund) will be paid to any current owner of property within the city who submits a written request to the city and demonstrates that:
(1) The permit(s) that triggered the collection of the development fee have expired or been voided prior to the commencement of the development for which the permits were issued and the development fees collected have not been expended, encumbered, or pledged for the repayment of financing or debt; or
(2) The owner of the subject development or its predecessor in interest paid a development fee for the applicable capital facility on or after October 31, 2022, and one of the following conditions exists:
(a) The capital facility designed to serve the subject development has been constructed, has the capacity to serve the subject development and any development for which there is reserved capacity, and the service which was to be provided by that capital facility has not been provided to the subject development from that capital facility or from any other infrastructure.
(b) After collecting the fee to construct a capital facility, the city fails to complete construction of the capital facility within the time period identified in the Infrastructure Improvements Plan, as it may be amended, and the corresponding service is otherwise unavailable to the subject development from that capital facility or any other infrastructure.
(c) For a category of necessary public services, any part of a development fee is not spent within 10 years of the city's receipt of the development fee.
(d) The development fee was calculated and collected for the construction cost to provide all or a portion of a specific capital facility serving the subject development and the actual construction costs for the capital facility are less than the construction costs projected in the Infrastructure Improvements Plan by a factor of 10% or more. In such event, the current owner of the subject development shall, upon request as set forth in this division (A), be entitled to a refund for the difference between the amounts of the development fee charged for and attributable to such construction cost and the amount the development fee would have been calculated to be if the actual construction cost had been included in the Development Fee Report. The refund contemplated by this section shall relate only to the costs specific to the construction of the applicable capital facility and shall not include any related design, administrative, or other costs not directly incurred for construction of the capital facility that are included in the development fee as limited by A.R.S. § 9-463.05.
(B) Earned interest. A refund of a development fee shall include any interest actually earned on the refunded portion of the development fee by the city from the date of collection to the date of refund. There is no duty however for the city to invest the funds in an interest bearing account. All refunds shall be made to the record owner of the property at the time the refund is paid.
(C) Refund to government. If a development fee was paid by a governmental entity, any refund shall be paid to that governmental entity.
(Ord. 1521, passed 8-16-2022)
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