The city shall grant credit against impact fees imposed pursuant to this chapter under the following circumstances:
A. Credits shall be granted against public facilities impact fees imposed pursuant to this chapter for the value of any construction of improvements or contribution or dedications of land, easements or money for system improvements or system studies made by a developer or his/her predecessor in title or interest as a condition of development approval or pursuant to a development agreement with the city for public improvements which are, or upon completion will be, owned and operated by the city.
B. Credits shall be granted only for the value of any construction of improvements or contribution or dedication of land, easements or money for system improvements or system studies listed on the CIP made by a developer or his/her predecessor in title or interest as a condition of development approval or pursuant to a development agreement with the city, or for payments made or to be made pursuant to the terms of any special assessment district (SAD), public improvement district (PID), subdivision improvement agreement (SIA), business improvement district (BID), or other program by which off site system improvements are paid or constructed, as long as the projects are listed on the CIP.
C. Credits shall only be granted for system improvements listed on the CIP or system studies listed on the CIP for the same category of system improvements and within the same service areas for which impact fees are imposed pursuant to this chapter.
D. Credits shall only be granted for contributions, dedications or improvements accepted by the city. Cash contributions shall be deemed accepted when payment is received and accepted by the city. Land or easements shall be deemed accepted when conveyed or dedicated to and accepted by the city. All conveyances and dedications of land or easements shall be conveyed to the city free and clear of all liens, claims and encumbrances. Improvements shall be deemed accepted when:
1. The construction of the creditable improvements is complete and accepted by the city;
2. A suitable maintenance and warranty bond or letter of credits is received and approved by the city; and
3. All design, construction, testing, bonding and acceptance procedures are verified by the city to be in strict compliance with the current city standards as shown by a certificate of completion and acceptance issued by the city engineer.
E. Notwithstanding subsection D of this section, the city may, by agreement, grant credits for system improvements which have not been completed if the applicant for such credits provides the city with acceptable security to ensure completion of the system improvements in the form of a performance bond or irrevocable letter of credit payable to or for the benefit of the city in an amount determined by the impact fees administrator to be equal to one hundred twenty five percent (125%) of the estimated completion cost of the system improvements, including land acquisition costs and planning and design costs. The value of such system improvements for computing credits shall be their estimated completion cost, based on documentation acceptable to the city.
F. No credits shall be granted for:
1. System improvements that fail to meet applicable city standards;
2. Project improvements;
3. The construction of local on site facilities required by zoning, subdivision, or other city regulation intended to serve only a particular development;
4. System improvements made in excess of level of service established in this chapter unless such system improvements are listed on the CIP and are required as a condition of development approval; or
5. Any study, analysis or report, or portion thereof, required by the city to determine the project improvements for a development project.
G. Development agreements for system improvements may be negotiated and entered into between the city and a developer, subject to the following requirements:
1. A developer may offer to construct, contribute, dedicate or pay the cost of a capital improvement included as a project in the CIP;
2. The city may accept such offer on terms satisfactory to the city;
3. The terms of the agreement shall be memorialized in a written agreement between the city and the developer prior to the issuance of a building permit;
4. The agreement shall establish the estimated value of the system improvements, the schedule for initiation and completion of the system improvements, a requirement that the system improvements be completed to accepted city standards, and such other terms and conditions as deemed necessary by the city; and
5. The city must review the system improvements plan, verify costs and time schedules, determine if the system improvements are eligible system improvements, determine if the completed improvements meet applicable city standards, calculate the applicable impact fees otherwise due, determine the amount of the credits for such system improvements to be applied to the otherwise applicable impact fees, and determine if excess credits are created.
H. Credits for system improvements shall be applied for as follows:
1. Credits shall be applied for no later than the time of application for a building permit on forms provided by the city. Credits not applied for within such time period shall be deemed waived.
2. Credits created pursuant to a development agreement with the city entered into between the city and a developer from and after the effective date shall be applied for no later than the time the development agreement is approved by the city.
I. The value of credits and the calculation of excess credits shall be determined by the impact fees administrator, in writing, subject to appeal pursuant to section 3-6-17 of this chapter.
J. The value of credits for system improvements shall be computed as follows:
1. The value of cash contributions shall be based on the face value of the cash payment at the time of payment to the city;
2. The value of unimproved land or easements shall be:
a. The fair market value of the land or easement prior to any increase in value resulting from development approval demonstrated by an appraisal prepared by an appraiser acceptable to the city; or
b. The acquisition cost of the land or easement to the developer or his/her predecessor in title or interest demonstrated by documentation acceptable to the city.
3. The value of system improvements shall be:
a. The fair market value of the completed system improvement at the time of acceptance by the city demonstrated by an appraisal prepared by an appraiser acceptable to the city; or
b. The actual construction cost of the completed system improvement, including planning and design cost, demonstrated by documentation acceptable to the city.
4. The value of system studies shall be the cost of the study demonstrated by documentation acceptable to the city.
5. An applicant for credits shall be responsible for providing at his/her own expense the appraisals, construction and acquisition cost documentation and other documentation necessary for the valuation of credits by the impact fees administrator. The city shall not be obligated to grant credits to any applicant who cannot provide such documentation in such form as the impact fees administrator may require.
6. In lieu of the appraisals referred to in subsections J2a and J3a of this section, the impact fees administrator may accept an appraisal prepared by an appraiser acceptable to the city that demonstrates the combined fair market value of land, easements or completed improvements at the time of acceptance by the city, less the increase in land value resulting from development approval.
7. The impact fees administrator may accept an appraisal that was prepared contemporaneously with the original contribution, dedication or construction of a system improvement if he/she determines that such appraisal is reasonably applicable to the computation of the credit due.
8. The impact fees administrator retains the right to obtain, at the city's expense, additional engineering and construction cost estimates and/or property appraisals that may, at the impact fees administrator's option, be used to determine the value of credits.
K. Credits granted for system improvements and system studies shall be applied as follows:
1. Credits shall be given in the year the project appears in the CIP.
2. Credits shall be applied first to offset the impact fees otherwise due for the development project for which the credit was granted. If the value of the credit exceeds the impact fees otherwise due, the excess credits shall become the property of the applicant, subject to the requirements of this chapter.
3. Credits shall only be applied to offset impact fees for projects within the same service area for which the credit was granted. Credits shall not be used to offset impact fees for other categories of system improvements or for other service areas.
4. If an applicant is entitled to excess credits, the impact fees administrator shall issue a certificate of excess credit to the applicant which denotes the dollar amount of the excess credit, the category of system improvement and service area to which the excess credit may be applied, the name of the applicant as the original credit holder and a description of the development project for which the credit was granted, and the year in which the credit will become available. The certificate of excess credit shall be signed by both the impact fees administrator and the credit holder. The impact fees administrator shall retain a copy of the certificate of excess credit and the credit holder shall be given the original certificate.
5. Excess credits shall be freely transferable in accordance with the provisions of this chapter.
6. The credit holder of excess credits may do any of the following:
a. Apply all or part of the excess credits to offset impact fees due for new development for the same category of system improvements within the same service area for which the credit was granted;
b. Transfer all or part of the certificate of excess credits to another person who shall become the credit holder upon written notice to the impact fees administrator, subject to the same rights and restrictions as the original credit holder, in addition to additional restrictions that apply to transferred excess credits; and/or
c. Request reimbursement from the city for all or part of the amount of the excess credits from revenue generated by impact fees paid by new development for system improvements within the same service category and service area for which the credit was granted.
7. Excess credits shall be subject to the following restrictions:
a. Excess credits shall not accrue interest and shall not be considered public money, public funds or public credit within the meaning of any law or ordinance relating to public money, public funds or public credit.
b. Excess credits shall not be reimbursed from the city's general fund or from any other city funding source other than impact fees paid by new development for system improvements within the same service category and service area for which the credit was granted.
c. The city shall, upon request from the credit holder of excess credits, after acceptance by the city of the project creating credits, provide reimbursements for excess credits on a first in, first out basis and shall not be obligated to provide reimbursements in the event there is no unencumbered account balance in the city's impact fee account for the appropriate service category and service area.
d. Except as otherwise provided in this chapter, excess credits shall not constitute a liability of the city and the city shall not be obligated to reimburse excess credits.
e. Excess credits transferred from the original credit holder may be applied to offset up to one hundred percent (100%) of the impact fees otherwise due from new development for system improvements within the same service category and service area for which the credit was granted.
f. Excess credits must be applied for, used, sold, or redeemed, if at all, within five (5) years after their issuance. (Ord. 299-06-07, 4-24-2007, eff. 5-24-2007)