(A) In general. The city shall calculate the development fees due and owing for any applicant at the time of the issuance of a building permit. The applicant shall pay the development fees prior to and as a condition of the issuance of a building permit. The city's actions established in this section are to be performed by the Director of the city's Community Development Department or equivalent, or his or her designee, unless specifically stated otherwise.
(B) Calculation.
(1) Upon receipt of an application for a building permit, the city shall determine:
(a) Whether the permit is for a residential or non-residential use;
(b) The specific category (type) of residential or non-residential development, if applicable;
(c) If residential, the number of new dwelling units, and;
(d) If non-residential, the number of new or additional square footage of gross floor area (rounded up to the nearest square foot) and the proposed use of the facility.
(2) Upon receipt of an application for a building permit relating to an existing facility, the city shall determine whether the permit will result in a change in use. in such cases, the development fee due shall be based only on the incremental increase in the development fee(s) for the additional public facilities needed to accommodate the change in use.
(3) After making the determinations in this paragraph, the city shall calculate the total demand for the public facility added by the new development for each public facility category for which a development fee is being imposed and calculate the applicable total development fee by multiplying the demand added by the new development by the amount of the applicable development fee per unit of development, incorporating any applicable offset if set forth in the particular development fee calculation methodology.
(4) If the type of land use proposed for new development is not expressly listed in the particular development fee schedule, the city shall, at its option and in its discretion, determine the basis used to calculate the development fee(s) by:
(a) Identifying the most similar land use type listed and calculate the development fee based on the development fee for that land use; or
(b) Identifying the broader land use category within which the specified land use would apply and calculate the development fee based on the development fee for that land use category; or
(c) Reference to an independent impact analysis for development fee calculation. If this option is chosen, the following shall apply:
1. The applicant shall be responsible, at its sole expense, for preparing the independent impact analysis, which shall be reviewed for approval by the Director of Community Development Department, the Finance Manager, the City Engineer, and the City Manager prior to the city's notification pursuant to division (B)(4)(c)3. below. The city may, at the request of the applicant, have the independent impact analysis prepared, provided that all costs for said analysis are paid in advance of completion of the study.
2. The independent impact analysis shall measure the impact that the proposed new development will have on the particular public facility at issue, and shall be based on the same methodologies used in the development fee calculation methodology report, and shall be supported by professionally acceptable data and assumptions.
3. After review of the independent impact analysis submitted by the applicant, the Director of Community Development shall accept or reject the analysis and provide written notice to the applicant of its decision within 30 days of the submission of the completed independent impact analysis. If the independent impact analysis is rejected, the written notice shall provide an explanation of the insufficiencies of the analysis.
4. The final decision of the Director of Community Development may be appealed pursuant this chapter.
(5) In the event that the Director of Community Development is required to determine the proper classification of a proposed new development pursuant to division (4)(a) or (b) above, the director's determination must be based on a generally-accepted land use classification system (e.g., the North American Industry Classification System, the Land-Based Classification Standards (APA), and/or ITE's Trip Generation Manual) and the methodology report.
(6) An applicant may request a non-binding estimate of development fees due for a particular new development at any time by filing a written request to the Director of the Community Development Department. The applicant must acknowledge that the estimate may be subject to change when a formal application for a building permit for new development is made. Such non-binding estimate is solely for the benefit and convenience of the prospective applicant and shall in no way bind the city nor preclude it from making amendments or revisions to any provisions of this chapter, the specific development fees or the development fee schedules.
(7) The calculation of development fees due from a multiple-use new development shall be based upon the aggregated demand for each public facility generated by each land use type in the new development.
(8) The calculation of development fees due from a phased new development shall be based upon the demand generated by each specific land use within the phase of development for which a separate building permit is requested.
(9) Development fees shall be calculated based on the development fee amount in effect at the time of application for a building permit.
(C) Offsets. The City Manager, or his or her designee, shall perform the actions of the city in accordance with this division unless specifically stated otherwise.
(1) Offsets against the amount of a development fee due from a new development shall be provided for, among other things, contributions made in cash, or by dedication of land (if accepted or required by the city) or by actual construction of all or part of a public facility by the affected property owner for public facilities meeting or exceeding the demand generated by the new development and the contribution is determined by the city to be a reasonable substitute for the city's cost of public facilities which are included in the particular development fee calculation methodology.
(2) The amount of the excess contribution shall be determined by the city upon its receipt of a written application requesting an offset; provided, however, that:
(a) The city will make no reimbursement for excess contributions unless and until the particular public facility fund has sufficient revenue to make the reimbursement without jeopardizing the continuity of the city's capital improvements program, and;
(b) The excess contribution may not be transferred or credited to any other type of development fees calculated to be due from that development for other type of public facilities. The determination of the eligibility for and the amount of the credit shall be made by the city. If the applicant contends that any aspect of the city's decision constitutes an abuse of discretion, the applicant shall be entitled to appeal pursuant to this chapter.
(3) No offset shall be allowed unless the city has approved the contribution or expenditure before it is or was made.
(4) Offsets for dedication of land or provision of public facilities shall be applicable only as to development fees imposed for the same types of public facilities that are proposed to be dedicated or provided. Even if the value of the dedication of land or provision of a public facility exceeds the development fee due for the type of public facility, the excess value may not be transferred to development fees calculated to be due from the applicant for other types of public facilities for which development fees may be imposed. Offsets may, however, be transferred to the same applicant or to other applicants for new development that are proposed within the final approved platted area of the same development and for the same type of public facility.
(D) Collection. The city shall collect all applicable development fees at the time of issuance of a building permit and shall issue a receipt to the applicant for such payment unless:
(1) The applicant is determined to be entitled to a full offset; or
(2) The applicant has been determined to be not subject to the payment of a development fee; or
(3) The applicant has filed an appeal protesting the imposition or calculation of the development fee and a bond or other surety in the amount of the development fee, as calculated by the city and approved by the Director of Community Development and City Attorney, has been posted with the city. The city shall collect a development fee at the time of issuance of a building permit even if development fees were paid by the applicant at an earlier time in the development permit or approval process, if the amount of the development fees have increased since such prior approval. In such case, the applicant shall only be liable for the difference between the development fees paid earlier and those in effect at the time of issuance of the subsequent building permit.
(E) Establishment of development fee accounts; appropriation of development fee funds; and refunds.
(1) Development fee accounts. A development fee account shall be established by the city for each category of public facilities for which development fees are imposed. Such account shall clearly identify the category, account, or fund for which the development fee has been imposed. All development fees collected by the city shall be deposited into the appropriate development fee account or sub-account, which shall be interest bearing. All interest earned on monies deposited to such account shall be credited to and shall be considered funds of the account. The funds of each such account shall be capable of being accounted for separately from all other city funds, over time. The city shall establish and implement necessary accounting controls to ensure that the development fee funds are properly deposited, accounted for and appropriated in accordance with this chapter, A.R.S. § 9-463.05 and any other applicable legal requirements.
(2) Appropriation of development fee funds.
(a) In general. Development fee funds may be appropriated for public facilities, for public facility expenditures as defined herein and for the payment of principal, interest and other financing costs on contracts, bonds, notes or other obligations issued by or on behalf of the city or other applicable local governmental entities to finance such public facilities and public facility expenditures. All appropriations from development fee accounts shall be detailed as required by and filed within the Finance Division.
(b) Restrictions on appropriations. Development fees shall be appropriated only for:
1. The particular public facility for which they were imposed, calculated and collected; and
2. Within ten years of the beginning of the fiscal year immediately succeeding the date of collection, unless such time period is extended as provided herein. Development fees shall not be appropriated for funding maintenance or repair of public facilities nor for operational or personnel expenses associated with the provision of the public facility. Every effort will be made to expend development fees within seven years of collection.
3. Notwithstanding the preceding division (E)(2)(b)2., development fee funds will be appropriated within ten years from the date of collection for all fees collected after July 1, 2012.
(3) Procedure for appropriation of development fee funds.
(a) The city shall each year identify public facility projects anticipated to be funded in whole or in part with development fees. The public facility recommendations shall be based upon the development fee annual review as set forth herein and such other information as may be relevant, and may be part of the city's annual budget and capital improvements programming process.
(b) The recommendations shall be consistent with the provisions of this chapter, the particular public facility development fee ordinances, A.R.S. § 9-463.05, or other applicable legal requirements and any guidelines adopted by the Mayor and Council.
(c) The Mayor and Council may include development fee-funded public facilities in the city's annual budget and capital improvements plan.
(d) The Mayor and Council may authorize development fee-funded public facilities at such other times as may be deemed necessary and appropriate by a majority vote of the Council.
(e) The Mayor and Council shall verify that adequate development fee funds are or will be available from the appropriate development fee account for the particular public facility.
(4) Refunds.
(a) Eligibility for refund.
1. Expiration or revocation of building permit. An applicant who has paid a development fee for a new development for which the necessary building permit has expired or for which the building permit has been revoked prior to construction shall be eligible to apply for a refund of development fees paid.
2. Failure of city to appropriate development fee funds within time limit. The current property owner may apply, in writing, for a refund of development fees paid by an applicant if the city has failed to appropriate the development fees collected from the applicant within the ten-year time limit or any extension thereof established above.
3. Abandonment of development after initiation of construction. An applicant who has paid a development fee for a new development for which a building permit has been issued and pursuant to which construction has been initiated, but which construction is abandoned prior to completion and issuance of a certificate of occupancy, shall be eligible for a refund if, and only if, the uncompleted building is completely demolished pursuant to a proper demolition permit.
4. Change of use within five years. An applicant may request a refund of a portion of the development fees collected at the time of building permit issuance, if the development has changed its use to one in a category in which fees are less, or the development can be documented as less intense. In such instance, the applicant must present the appropriate study documenting the change in trip reduction that corresponds to calculations used in the methodology report.
5. A 5% administrative fee, but not to exceed $200, shall be deducted from the amount of any refund granted and shall be retained by the city in the appropriate development fee account(s) to help defray the administrative expenses associated with the processing of a refund application.
6. Refunds shall be made only to the current owner of property on which the new development was proposed or occurred. If more than one owner owns property which paid the development fees the request for refunds shall contain a copy of the conveyance documents wherein the proportionate ownership shares are set forth and the refunds shall be issues in accordance with the ownership shares of the conveyance documents. Any party obtaining a refund from the city shall confirm current ownership and entitlement to this refund under oath and shall defend and indemnify the city from any claims by any other party claiming a right to the refund for the same new development.
(b) Processing of applications for a refund. Upon receipt of a complete application for a refund, the city shall review the application and documentary evidence submitted by the applicant as well as such other information and evidence as may be deemed relevant, and make a determination as to whether a refund is due. Refunds by direct payment shall be made following an affirmative determination by the city.
(c) Applications for refunds due to abandonment of a new development prior to completion shall be made in or on forms provided by the city and shall be made no later than 60 days following expiration or revocation of the building permit. The applicant shall submit:
1. Evidence that the applicant is the property owner or the duly designated agent of the property owner;
2. The amount of the development fees paid by public facilities category and receipts evidencing such payments, and;
3. Documentation evidencing the expiration or revocation of the building permit or approval of demolition of the structure pursuant to a valid city-issued demolition permit. Failure to apply for a refund within 60 days following expiration or revocation of the building permit or demolition of the structure shall constitute a waiver of entitlement to a refund. No interest shall be paid by the city in calculating the amount of any refunds.
(d) Applications for refunds due to the failure of the city to appropriate development fees collected from the applicant within the time limits established herein shall be made in or on forms provided by the city and shall be made no later than one year following the expiration of such time limit. The applicant shall submit:
1. Evidence that the applicant is the property owner or the duly designated agent of the property owner;
2. The amount of the development fees paid by public facility category and receipts evidencing such payments, and;
3. A description and documentation of the city's failure to appropriate development fee funds for relevant public facilities.
(e) The city may, at its option, make refunds of development fees by direct payment, by offsetting such refunds against other development fees due for the same category of public facilities for new development on the same property, or by other means subject to agreement with the property owner.
(F) Appeals.
(1) An appeal from any decision of the Director of Community Development pursuant to this chapter shall be made to the City Manager by filing a written appeal pursuant to the appropriate city form, if any, with the City Clerk within 30 days following the decision which is being appealed; provided, however, that the notice of appeal is accompanied by a cash bond or letter of credit in a form satisfactory to the Finance Manager and the City Attorney in an amount equal to the development fee calculated to be due, a building permit may be issued to the new development. The filing of an appeal shall not stay the imposition or the collection of the development fee as calculated by the city unless a cash bond or other sufficient surety has been provided.
(2) The burden of proof shall be on the appellant to demonstrate that the decision of the city is erroneous pursuant to the applicable legal standard.
(3) All appeals shall detail the specific grounds therefore and all other relevant information and shall be filed in such form as requested by the city for such purposes.
(G) Appeal decision.
(1) The City Manager must:
(a) Determine whether there is an error in an order, chapter requirement, or decision made by the Director of Community Development in the enforcement of this chapter, and/or
(b) Determine whether a provision of this chapter or a decision by the Director of Community Development made pursuant to this chapter results in a taking of private property or otherwise violates the constitutional or statutory rights of the applicant pursuant to Arizona or federal law.
(c) Based on the information provided, reverse or affirm, wholly or partly, or modify the order, requirement, or decision of the Director of Community Development appealed, and make such order, requirement, decision, or determination as necessary, including amendments to the provisions of this chapter.
(2) The City Manager must render a decision on the appeal within 90 days after the filing of the appeal.
(H) Exemptions.
(1) Generally. An applicant proposing a development for which development fees are due may be eligible for a partial or full exemption from the requirements of this chapter, only as specifically provided for in this section. In no case shall sewer development fees (sewer connect fees) as approved by separate Council action, be waived, either in whole or in part.
(2) Application for exemption. Applications for exemptions shall be filed with the Director of Community Development on forms provided by or in a format specified by the city for such purpose.
(3) Eligibility for exemption. Partial or full exemptions from the payment of development fees as required by this chapter may be made only for the follow types of uses:
(a) Affordable housing.
1. No development fees shall be assessed against projects that meet United States Department of Housing and Urban Development housing affordability guidelines for low and moderate income households. If only a portion of units meet the guidelines, the exemption shall only be granted proportionately, provided that affordability restrictions are in place for a minimum of ten years. The city shall record, in a format to be determined by the City Attorney, the requirements for exemptions granted under this section with the Cochise County Recorder.
2. No development fees shall be assessed against any individual residence where the home buyer meets federal Housing and Urban Development guidelines on low to moderate income levels as adjusted annually, as evaluated and determined by the South East Arizona Government Organization, provided the home remains owned and occupied by residents who meet the requirements of this section for a period of five years. The city shall record, in a format to be determined by the City Attorney, the requirements for exemptions granted under this section with the Cochise County Recorder.
(b) Economic development. Development fees may be waived, in whole or in part, by Council resolution or approved development agreement, for projects that meet the objectives and criteria of a city economic development policy as adopted by the City Council.
(c) Redevelopment and blight. Development fees may be waived, in whole or in part, by Council resolution or approved development agreement, on residential or non-residential development located within those areas described as blighted pursuant to A.R.S. §§ 36-1471 through 36-1491or for projects located within City Council adopted redevelopment plans.
(d) In support of specific Council policy. Development fees may be waived, in whole or in part, by Council resolution or approved development agreement, for projects that meet specific criteria as documented in written policies, plans or other actions as approved by the Mayor and City Council.
(e) Infill Incentive Districts. Development fees may be waived, in whole or in part, by Council resolution or approved development agreement, on residential or non-residential development within the boundaries of approved Infill Incentive Districts.
(f) Schools. No police or fire/EMS development fees will be assessed on any new school development that offers enrollment to the general public, including public, private, or charter school, where such school receives state funding.
(g) City government. No development fees shall be assessed against any new development owned or leased for public use by the City of Sierra Vista.
(4) Review of an application for exemption. Upon receipt of a complete application for exemption, the City Manager shall review the proposed new development and where applicable, shall make a recommendation to the City Council as to whether the new development qualifies for an exemption pursuant only to the provisions in division (3) above. Based on the recommendation of the City Manager and the criteria set forth in division (3) above, the City Council shall either grant, grant with conditions, or deny a proposed exemption request.
(5) Notification to appropriate departments. If the City Council determines that the proposed development qualifies for an exemption, the City Manager shall notify the Finance Manager that the exemption has been approved and that a funding source other than development fees shall be used to fund public facilities in accordance with the adopted capital improvements program.
(6) Effect of grant of exemption.
(a) If the City Council grants an exemption of development fees otherwise due, the City Manager shall either:
1. Transmit funds equal in amount to those exempted, from a source other than development fees, into the appropriate development fee account within two years of the grant of the exemption. or
2. Keep a record, by category, of all exemptions and the amount of each exemption by project, which shall be reported annually in accordance with § 154.04(B); and at the time of construction of development fee projects, further document in the required annual report that the exemptions granted have been covered in the final project cost by a source other than development fees.
(b) The city shall not increase the amount of development fees payable under this chapter to replace any revenue lost on account of the exemptions granted.
(7) Development agreements. Nothing herein shall be deemed to limit in any manner the city's authority or ability to enter into development agreements pursuant to A.R.S. § 9-500.05 with applicants for new development who may provide for dedication of land, payments in lieu of development fees, or actual infrastructure improvements. Such development agreements may allow offsets against development fees for contributions made or to be made in the future in cash, or dedication of land or by actual construction of all or part of a public facility by the affected property owner.
(Ord. 2006-006, passed 3-9-06; Am. Ord. 2009-012, passed 10-22-09; Am. Ord. 2012- 003, passed 5-10-12)