§ 157-03 Establishment of Development Fee Accounts; Appropriation of Development Fee Funds; And Refunds.
   (A)   Development fee accounts. The City must establish and maintain a separate development fee account for each category of public facility for which a development fee is imposed. Each such account must be clearly identified as to the category of public facility for which the development fee has been imposed. Subaccounts must be established for individual service areas, as applicable. The City must deposit all development fees collected into the appropriate development fee account or subaccount, which must be interest bearing. All interest earned on monies deposited to such account must be credited to and considered funds of the account. The funds of each such account must be capable of being accounted for separately from all other City funds. The City must 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.
   (B)   Appropriation of development fee funds.
      (1)   In general.  Development fee funds, including accrued interest, may be appropriated only for public facilities, public facility expenditures, and for the payment of principal, interest, and other financing costs on contracts, bonds, notes, or other obligations issued by the City to finance public facilities that provide a beneficial use to new development. Development fee funds may be appropriated only for project improvements on the City's Infrastructure Improvements Plan in accordance with §§ 157-06 through 157-13. All appropriations from development fee accounts must be detailed on a form provided for such purpose and filed with the Finance Department. Development Fees shall be deemed to be appropriated in the order in which they are received by the City.
      (2)   Development fees may be appropriated only:
         (a)   For the category of public facility for which they were imposed, calculated, and collected; and
         (b)   Within the service area where collected.
      (3)   Development fees collected for a purpose other than as authorized by SB 1525 (2011), shall be used for the purpose for which they were collected on or before January 1, 2020, after which, if not spent, shall be distributed equally among the categories of necessary public services authorized by SB 1525 (2011).
      (4)   Restrictions on appropriations. Development fees may not be appropriated for:
         (a)   Maintenance or repair of public facilities;
         (b)   Operational, administrative, or personnel expenses associated with the provision of public facilities;
         (c)   Upgrading, updating, expanding, correcting, or replacing existing public facilities in order solely to meet stricter safety, efficiency, environmental or regulatory standards; or
         (d)   Upgrading, updating, expanding, correcting, or replacing existing public facilities in order to provide a higher level of service to existing development.
   (C)   Procedure for appropriation of development fee funds.
      (1)   The City must maintain an Infrastructure Improvements Plan for each public facility for which development fees are collected, which program identifies public facility projects necessitated by new development. The Infrastructure Improvements Plan represents the City Council's plan for providing public facilities in a manner consistent with the General Plan and the Council's ability to provide public facilities in an efficient and fiscally-responsible manner. Based on the annual report prepared by the Coordinator, the Infrastructure Improvements Plan must identify the source of funding for each planned improvement and identify the portion of each planned public facility attributable to and that will provide a beneficial use to new development. The Infrastructure Improvements Plan must include improvements sufficient to provide public facilities to new development at the level of service set forth in the Infrastructure Improvements Plan.
      (2)   Each year the City must identify public facility projects anticipated to be funded in whole or in part with development fees in the coming fiscal year.
      (3)   The recommendations must be consistent with the provisions of this chapter, the Infrastructure Improvements Plan, the City's Capital Improvement Program, the particular public facility development fee ordinance, A.R.S. § 9-463.05, other applicable legal requirements, and any guidelines adopted by the City Council.
      (4)   The City Council may authorize public facilities funded by development fees at such other times as it deems necessary and appropriate by a majority vote of the City Council in order to comply with the requirements of law.
      (5)   The City Council must verify that adequate development fee funds are or will be available from the appropriate development fee accounts at the time of appropriation in order to assure a beneficial use to new development.
   (D)   Refunds.
      (1)   Eligibility.
         (a)   Expiration or revocation of construction permit.  An applicant who has paid a development fee for a new development for which the necessary construction permit has expired, or for which the construction permit has been revoked prior to construction, is eligible to apply for a refund of development fees, on a form provided by the City for such purpose.
         (b)   Failure of City to appropriate development fee funds within time limit. For fees paid after July 31, 2014, a current real property owner may apply 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 time limit identified in the Infrastructure Improvements Plan, but in no event longer than ten years from payment of the fees. The refund application is made in writing on a form provided by the City for such purpose.
         (c)   Failure to provide service. For fees paid after July 31, 2014, a current real property owner may apply for a refund of development fees paid by an applicant if the City has failed to provide immediate service from any existing facility with available capacity if the available capacity has not been reserved or pledged in connection with the construction or financing of the facility.
         (d)   Partial refund for actual cost savings. If the development fee was collected for the construction of all or a portion of a specific public facility expenditure, and on completion of the facility, the City determines that the actual cost of construction was less than the forecasted cost of construction on which the development fee was based and the difference between the actual and the forecasted cost is greater than 10%, the current owner may apply for and receive a refund of the portion of the development fee equal to the difference between the development fee paid and the development fee that would, have been due if the development fee had been calculated at the actual construction cost.
         (e)   Abandonment of development after initiation of construction. An applicant, who has paid a development fee for a new development for which a construction permit has been issued, but for which construction is not begun or is abandoned prior to completion, is eligible for a refund if no construction began or any uncompleted building is demolished.
      (2)   To whom. Notwithstanding any hypothecation, assignment or reservation of rights by the applicant to the contrary, except as provided in subsections (l)(a) and (e) above, the City shall make refunds only to the current owner of real property for which the development fee was paid.
      (3)   Processing of applications for a refund. Applications for a refund are made on a form provided by the City for such purposes. Upon receipt of a complete application for a refund, the City must review the application and documentary evidence submitted by the applicant, as well as such other information and evidence as may be deemed necessary, and make a determination as to whether a refund is due.
      (4)   Application requirements - due to expiration, revocation, or abandonment. Applications for refunds due to expiration, revocation, or abandonment of a new development prior to completion must be made within 180 days following expiration or revocation of the construction permit. The applicant must submit the following: 
         (a)   Evidence that the applicant paid the development fee for which a refund is sought, or is the duly designated agent of said person;
         (b)   The amount of the development fees paid by public facility category and receipts evidencing such payments; and
         (c)   Documentation evidencing the expiration or revocation of the construction permit or approval of demolition of the structure pursuant to a valid City-issued demolition permit.
            Failure to apply for a refund within 180 days following expiration or revocation of the construction permit or demolition of the structure constitutes a waiver of entitlement to a refund. The City will not pay interest on refunds made due to abandonment or construction permit expiration or revocation.
      (5)   Application requirements - due to timeliness. Applications for refunds due to the failure of the City to provide service or appropriate development fees within the time limits established herein are made on forms provided by the City. The current property owner must submit:
         (a)   Evidence of current ownership or designated agency for the current property owner; and
         (b)   The amount of the development fees paid, by public facility category, and receipts evidencing such payments.
(Ord. 02005-74, passed 9-7-05; Ord. 02010-14, passed 3-3-10; Ord. 2012-10, passed 5-2-12)