§ 157-02 Procedures for Imposition, Calculation, Credits, and Collection of Development Fees; Waivers.
   (A)   In general. The City will notify an applicant of applicable development fee requirements at the time of application for a construction permit. The City calculates development fees at the time of application for a construction permit and the applicant must pay the fees due at the time of and prior to the issuance of a construction permit.
   (B)   Calculation.
      (1)   Upon receipt of an application for a construction permit, the City determines:
         (a)   Whether the proposed use is a residential or non-residential use;
         (b)   The specific category of residential or non-residential development, if applicable;
         (c)   The number of new service units, if for a residential use, in dwelling units, and, if for a non-residential use, in new or additional square feet of gross floor area; and
         (d)   The service area in which the new development is located.
      (2)   Upon receipt of an application for a construction permit, the City determines whether the development proposed involves a change in use. In such cases, the development fee due is based on only the incremental increase in the fee for the additional public facilities needed for the change in use.
      (3)   After making these determinations, the City calculates the demand for the public facility created by the proposed new development for each public facility category for which a development fee is being imposed, and calculates the applicable development fee by multiplying the service units proposed by the amount of the applicable development fee per service unit, incorporating any applicable credit.
      (4)   If the type of land use proposed for new development is not expressly listed in the particular development fee ordinance, the Coordinator:
         (a)   Identifies the most similar land use type listed and calculates the development fee based on the development fee for the land use identified;
         (b)   Identifies the broader land use category within which the proposed land use would apply and calculates the development fee based on the development fee for that land use category; or
         (c)   Determines the basis used to calculate the fee pursuant to an independent impact analysis as provided for below.
            In the event that the Coordinator is required to determine the proper classification of a proposed new development pursuant to subsections (a) or (b) above, the Coordinator'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 consistent with the land use assumptions, Infrastructure Improvements Plan, and fee study.
      (5)   In the event an applicant believes that the impact to public facilities necessitated by new development is less than the development fee imposed in §§ 157-06 through 157-13, the applicant may, prior to issuance of a construction permit, request that the City have prepared an independent impact analysis based on the proposed development to arrive at an alternative development fee calculation.
         (a)   All costs incurred by the City in the preparation of an independent impact analysis shall be borne by the applicant and no construction permit shall be issued until the independent impact analysis is complete and a determination as to the appropriate fee is made by the Coordinator.
         (b)   Upon the request of an applicant, the Coordinator shall have prepared an independent impact analysis consistent with the requirements of this section.
         (c)   The independent impact analysis must be calculated for that land use type analyzed for the applicable service area and based on data, information, or assumptions contained in this chapter, the land use assumptions, Infrastructure Improvements Plan, and fee study, or an independent source, provided that:
            1.   The independent source is a generally-accepted standard source of demographic and planning data; or
            2.   The independent source is a local study supported by a database adequate for the conclusion contained in the independent impact analysis and performed pursuant to a generally-accepted methodology.
         (d)   If a previous applicant has submitted a local study consistent with the criteria for an independent impact analysis, and if such study is determined by the Coordinator to be current, the impact upon the public facilities as described in such prior local study shall be presumed to exist for a similar land use proposed by a subsequent applicant. There shall be a rebuttable presumption that an independent impact analysis conducted more than three years earlier is invalid.
         (e)   If the Coordinator determines that the independent impact analysis complies with the requirements of this section and the alternative development fee is less than the fees set forth in §§ 157-06 through 157-13, then the alternative fee shall be paid by the applicant. If the alternative development fee is greater than the fees set forth in §§ 157-06 through 157-13, the fees set forth in §§ 157-06 through 157-13 shall be due.
      (6)   An applicant may request a non-binding estimate of development fees due for a particular new development at any time by filing a request on a form provided for such purpose by the Coordinator; provided, however, that such estimate may be subject to change when a formal application for a construction permit for new development is made. Such non-binding estimate is solely for the benefit of the prospective applicant and in no way binds the City nor precludes it from making amendments or revisions to any provisions of this chapter or the specific development fee implementing ordinances.
      (7)   The calculation of development fees due from a multiple-use new development is 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 is based upon the demand generated by each specific land use within each phase of development for which a separate construction permit is requested.
      (9)   Development fees are calculated based on the development fee amount in effect at the time of application for a construction permit.
      (10)   No new or modified development fee shall be assessed against a development for 24 months after the date that the City issues the final approval for a commercial, industrial or multifamily development, or the date that the first building permit issued for a residential development pursuant to an approved site plan or subdivision plat, provided that no subsequent changes are made to the approved site plan or subdivision plat that would increase the number of service units. If the number of service units increases, the new or increased portion of a modified development fee shall be limited to the amount attributable only to the additional service units. The 24 month period shall not be extended by a renewal or amendment of the site plan or the final subdivision plat that was the subject of the final approval. If, after the date of the municipality's final approval of a development, the municipality reduces the development fee assessed on development, the reduced fee shall apply to the development.
      (11)   For applications for a construction permit for a building shell where the actual use of the building is unknown, the development fee shall be calculated based on the lowest intensity land use allowed within the applicable zoning district. At the time the certificate of occupancy is issued and the permanent use is established, the applicant shall be assessed additional fees if the actual use of the property results in a higher fee.
   (C)   Credits.
      (1)   Eligibility.  Credits against the amount of development fees due for a proposed new development may be given, pursuant to the terms outlined below, either:
         (a)   By the City Council, pursuant to a development agreement, for dedications of land or actual construction, by a developer of all or part of a public facility necessary to offset the impacts of a new development; or
         (b)   By the Coordinator, where an applicant demonstrates that excess public facility capacity was provided previously pursuant to subsection (a) above.
         (c)   Credits against development fees must be given for dedications of public facilities the Infrastructure Improvements Plan that are required by the City, However, any improvement that must be built or dedicated by a developer or applicant that is not on the City's Infrastructure Improvements Plan, but substitutes for or otherwise reduces the need for public facilities in the IIP, shall be eligible for a credit against development fees. In the event the City grants a credit for such an improvement, the City will amend the Infrastructure Improvements Plan to include the subject replacement facility and will make any other amendments to the IIP to ensure consistency with Arizona law.
      (2)   Credits for dedication or construction. Applications for a credit for the dedication or construction of public facilities must be made on a form provided by the Coordinator for such purposes. The application must be accompanied by a proposed development agreement as provided herein.
         (a)   Requirements.  In order to be eligible for development fee credits, the public facility proposed for dedication or construction must be:
            1.   Credited only against the same public facility category of development fee as the public facility being proposed for dedication or construction; and
            2.   Subject to an executed development agreement, as provided herein, prior to the issuance of a construction permit for which a credit is sought.
         (b)   Procedure.
            1.   Upon receipt of a complete application and proposed development agreement, the Coordinator, City Attorney, and other appropriate staff must review the application and proposed agreement, as well as such other information and evidence as may be deemed relevant, and the Coordinator must forward to the City Council a report as to whether a credit is proper based on the provisions of this chapter.
            2.   Based on the report of the Coordinator, the provisions of this chapter, the Infrastructure Improvements Plan, the General Plan, adopted City budget, and the CIP, the City Council must make a final decision to accept, reject, or accept with conditions the proposed dedication or construction and development agreement in exchange for a credit against development fees owed.
         (c)   Calculation of the value of dedication or construction.
            1.   The amount of the credit to be given as a result of the dedication or construction of a public facility is to be calculated as the lower of the following:
               a.   The amount of the development fee due pursuant to this chapter;
               b.   The costs assumed in the City's Infrastructure Improvements Plan; or
               c.   The actual verified costs of dedication or construction.
            2.   If the actual verified costs are used, the credit shall be calculated as follows:
               a.   Construction of facilities and provision of equipment. The credit must be equal to the actual cost of construction or equipment, as evidenced by receipts and other sufficient documentation provided by the developer of the public facility and verified by the Coordinator.
               b.   Dedication of land. The credit is to be based on the fair market value of the land as determined by a certified property appraiser hired and paid for by the applicant. If the City rejects the applicant's appraisal, the City may hire and pay for a second appraiser to appraise the property. If either party rejects the second appraisal, a third appraisal may be performed by an appraiser chosen by the first and second appraisers, the costs of which are to be shared equally by the City and the applicant. The third appraisal is binding on both parties. All appraisals must be consistent with generally-accepted appraisal techniques and the date of valuation must be the date of transfer to the City.
         (d)   Development agreement requirements. No dedication or construction project may be accepted in exchange for a credit except pursuant to an executed development agreement between the City and the provider of the dedication or construction, which must include the following:
            1.   A schedule for the initiation and completion of the construction of the proposed public facility;
            2.   The amount of the development fees, by type, proposed to be credited by the City;
            3.   Where excess capacity is provided:
               a.   The amount, nature, and location of excess capacity being provided;
               b.    The eligibility for such excess capacity to be used for credits against development fees owed by subsequent applicants;
               c.   The amount of such credits and their duration;
               d.   The geographic area within which such credits would be awarded based on the excess capacity benefit created by the dedication or construction; and
               e.   The mechanism for transferring the excess credits to properties within the geographic benefit area of the dedication or construction.
            4.   A provision that all construction will be in accordance with City specifications and all regulations set forth in the City Code; and
            5.   Such other terms and conditions as deemed necessary by the City.
         (e)   Transferability. Credits granted pursuant to this section may be transferred from the applicant to property owners within the original development. However, in order to transfer credits from the original development to another development, but within the same service area, an application must be made pursuant to subsection (3) below.
      (3)   Credits to subsequent applicants. An applicant may be given a credit against a development fee upon demonstration that, after the date of this chapter, a public facility was dedicated or constructed, pursuant to subsection (2) above, which will mitigate the impacts of the proposed new development on the particular public facility for which the dedication or construction was made.
         (a)   Requirements.  In order for a credit to be given pursuant to this section, the applicant must demonstrate that:
            1.   The public facility provided pursuant to subsection (2) above had sufficient excess capacity to offset the impacts of the applicant's proposed new development;
            2.   The public facility provided pursuant to subsection (2) above reduced the overall need for public facilities otherwise created by the proposed new development;
            3.   The proposed new development complies with all conditions of acceptance of the public facility provided pursuant to subsection (2) above, including time and geographic limitations for eligibility;
            4.   The public facility provided pursuant to subsection (2) above was for the same type of development fee as is being proposed for a credit; and
            5.   The applicant has secured a right to an allocation of capacity equal to the development fee owed by the applicant.
         (b)   Procedure.
            1.   Applications for a credit, based on a previously dedicated or constructed public facility, must be made on a form provided by the Coordinator for such purposes. The application must be accompanied by evidence of a transfer of credit granted pursuant to subsection (2) above.
            2.   Upon receipt of a complete application, the Coordinator must review the application, as well as such other information and evidence as may be deemed relevant, and determine whether a credit is proper based on the provisions of this chapter, the Infrastructure Improvements Plan, the General Plan, the CIP, and/or other relevant evidence.
            3.   If the Coordinator determines that a credit is appropriate, the Coordinator shall so indicate on the appropriate form and the credit shall be given upon the calculation and collection of the required development fee at the time of issuance of a construction permit.
   (D)   Collection.  The City collects all applicable development fees at the time of issuance of a construction permit and issues a receipt to the applicant for such payment unless:
      (1)   The applicant is entitled to a full or partial credit;
      (2)   The applicant and the City have entered into a development agreement that provides for payment at a later time, but no later than 15 days after issuance of a certificate of occupancy;
      (3)   The applicant is not otherwise subject to the payment of a development fee; or
      (4)   The applicant has filed an appeal and a bond or other surety in the amount of the development fee, as calculated by the City and approved by the City Attorney and Finance Director.
   (E)   Waivers.
      (1)   Generally. An applicant proposing a development for which development fees are due may be eligible for a partial or full waiver from the requirements of this chapter, only as specifically provided for in this section.
      (2)   Application for waiver. Applications for waiver shall be filed with the Coordinator on forms provided by the City for such purpose.
      (3)   Eligibility for waiver. Partial or full waiver from the payment of development fees as required by this chapter may be made only for the following types of uses:
         (a)   Affordable housing. Defined as projects that meet United States Department of Housing and Urban Development housing affordability guidelines for low and moderate income households.
         (b)   Redevelopment and infill. Defined as projects that meet redevelopment efforts to combat blight and unsafe conditions and are located within City Council adopted redevelopment plans, in accordance with A.R.S. §§ 36-1471 through 36-1491 or projects that meet infill efforts to encourage development in older, historic, and established areas of the city and are located within the Infill Overlay District.
      (4)   Review of an application for waiver. Upon receipt of a complete application for waiver, the Coordinator shall review the proposed new development and shall make a recommendation to the City Council as to whether the new development qualifies for a waiver pursuant only to the provisions in subsection (3) above. Based on the recommendation of the Coordinator and the criteria set forth in subsection (3), the City Council shall either grant, grant with conditions, or deny a proposed waiver request.
      (5)   Notification to appropriate departments and Infrastructure Improvements Advisory Committee. If the City Council determines that the proposed development qualifies for a waiver, the Coordinator shall notify the Finance Director that the waiver has been approved and that a funding source other than development fees shall be used to fund public facilities in accordance with the Infrastructure Improvements Plan. Within 30 days of the waiver approval, the Coordinator shall provide notice to the Infrastructure Improvements Advisory Committee established pursuant to § 157-05(B).
      (6)   Effect of grant of waiver.  If the City Council grants a waiver of development fees otherwise due, the Finance Director shall transmit funds equal in amount to those waived, from a source other than development fees, into the appropriate development fee account within one year of the grant of the waiver. The City shall not increase the amount of development fees payable under this chapter to replace any revenue lost on account of the waivers granted.
(Ord. 02005-74, passed 9-7-05; Ord. 02010-14, passed 3-3-10; Ord. 2012- 10, passed 5-2-12; Ord. O2017-029, passed 9-6-17)