Loading...
HomeMy WebLinkAboutreconnaissance analysisTISCHLER & ASSOCIATES, INC. PROVIDING COST OF GROWTH SERVICES IMPACT FEE RECONNAISSANCE ANALYSIS PREPARED FOR THE CITY OF MIAMI, FLORIDA JANUARY 16, 2003 IN ASSOCIATION WITH FREILICH, LEITNER & CARLISLE A LAND USE LAW PLANNING. FIRM TABLE OF CONTENTS EXECUTIVE SUMMARY 1 • DEMAND CATEGORIES 1 COLLECTION AND EXPENDITURE ZONES 1 IMPACT FEES 1 NATURE OF ASSIGNMENT 2 DEMAND CATEGORIES 2 COLLECTION AND EXPENDITURE ZONES 3 POLICE 3 FIRE/RESCUE 3 PARKS 4 SOLID WASTE 4 STREETS 4 STORM SEWER 5 MUNICIPAL FACILITIES 5 NEXT STEPS 6 WoRx SCOPE 6 TIMING 6 EXECUTIVE SUMMARY Tischler & Associates, Inc. (TA) was retained to review the existing City impact fee structure and recommend appropriate changes to comply with recent case law findings pertaining to impact fees. A brief summary of the recommendations is noted below. A more comprehensive explanation is discussed in the body of the report. The City implemented one of the first impact fees in the country. Since that time, impact fee case law as well as City levels of service, costs and other factors have changed significantly. This includes a further definition of the two main impact fee requirements of proportionate share and rational nexus. In brief, the impact fees should be paid to enhance capital facilities from which new growth benefits (no operating expenses are included) and also show a direct benefit. Demand Categories In order to meet the proportionate share requirements of impact fees as indicated in recent court findings, TA recommends that the nonresidential categories be expanded to include a minimum of retail, office, industrial flex and hotel. This will enable the impact fees to more accurately reflect the different intensities of land use by these nonresidential categories in terms of employment, trips, etc. For residential, it may be more appropriate to base the impact fees on the square footage calculations reflected in the Zoning Ordinance, by type of housing unit or by persons per household by type of housing unit. The specifics would be evaluated in a Phase IT analysis. Collection and Expenditure Zones TA recommends that most of the recommended impact fees be applied on a citywide basis or with a minimum of geographic subareas. For example, fire/rescue could be collected and expended citywide for capacity expansion purposes for reasons discussed in the report. Impact Fees TA has the following recommendations regarding the impact fee categories. Palace - TA recommends that the police impact fee be recalibrated to reflect the existing levels of service and demands by different types of land uses. Fire/Rescue -TA recommends that the existing fire/rescue impact fee be recalibrated to reflect the existing levels of service and demands. Parks - TA recommends that the parks impact fee be recalibrated to reflect different types of parks and their current level of service. A regional park impact fee component would be collected and utilized for regional parks in the City while a community parks impact fee would be utilized for those projects, etc. Solid Waste - TA recommends against recalibrating the solid waste impact fee. This impact fee should be allowed to expire since it is now relevant to only new single-family housing units and other residential units having four or fewer units. The street sweeping equipment could be reflected in the municipal facilities (general services administration) category. • 1 rik Streets - TA reconunends against the recalibration of the street impact fee: One major reason for this is the utilization of the impact fee amount for only local and some collector streets (the County has responsibility for higher classification streets) The, lord and relevant collector streets would necessitate a multitude of small collection expenditure zones in order to meet the proportional share requirements under recent case • law. Further reasons are discussed in the text. It should be noted that the original estimates of the street impact fee revenues approximated about $1 million annually. This amount would be more than made up through the gas tax monies of about $3.5 million freed up from the gas tax fund for streetlights. Also street equipment, currently not included in the street impact fee, could be reflected in the municipal facilities (general services administration) category. Storm Sewer - TA recommends against the recalibration of the storm sewer impact fee. In the overwhelming majority of cases, the storm sewer improvements relate to the local street improvements. Therefore, this fee category has the same issues as the street category. The City has wisely implemented a stormwater utility. TA recommends that. any storm sewer activities be carefully reviewed to ascertain whether they can be paid by the stormwater utility. Municipal Facilities (General Services Administration) - TA recommends that the; current category of general services administration be expanded (and renamed) to include all municipal facilities that are not included in the categories discussed above. Another recommendation is that all other capital assets, particularly vehicles, which are not reflected elsewhere, be included in this category. The suggested next steps are discussed in the body of the text. NATURE OF ASSIGNMENT Tischler & Associates, Inc. (TA) is a fiscal, economic and planning consulting firm that specializes in impact fees and fiscal impact evaluations. TA has prepared over 500 impact fees, including a number in Florida. Paul Tischler met with City staff and reviewed relevant information as part of preparing this report. In addition, Tyson Smith of Freilich, Leitner and Carlisle, the land use law firm subcontractor on this assignment, reviewed relevant information pertaining to impact fee legal requirements. DEMAND CATEGORIES With the exception of parks, all of the impact fee categories benefit nonresidential development. In order to more appropriately reflect the proportionate share requirements of impact fees based on recent case law, TA recommends expanding the number of nonresidential categories to include retail, office, industrial flex and hotel. The final number of categories would be agreed upon in a Phase II analysis. A major reason for expanding the number of categories is to more accurately reflect proportionate share since different types of nonresidential development have different impacts on various City services. For example, a hundred thousand square foot shopping center will have a greater demand on police services than a hundred thousand square foot industrial flex building. A similar situation is likely to exist for fire/rescue. This approach is usually reflected in new impact fee 2 PA. studies to better meet the proportionate share requirement. As a consequence, retail activities are likely to have a higher impact fee per square foot than industrial flex adtivities: At the present time, the City collects an impact fee on a square foot basis for residential units. This has created some disincentives for certain types of residential such as lofts. TA recommends that a variation of this approach be further analyzed. One example could be a similar approach to that reflected in the Zoning Ordinance in which the number of bedrooms or rooms of a somewhat similar size to a bedroom are counted as a bedroom. Another approach could be by persons per household. In this case, the higher the density the lower the household size per unit. The most appropriate methodology would be suggested as part of a Phase II assessment. COLLECTION AND EXPENDITURE ZONES One of the requirements of impact fees is to show a direct benefit. One of these attributes is geographic proximity as appropriate. For some City services, there may not be a need to maintain the current geographic collection and expenditure zones because the service is truly citywide. For example, with the fire/rescue, the closest apparatus responds to a call for service regardless of the geographic subarea. In addition, backup support is provided as appropriate, again from various subareas. A similar situation would also exist for regional parks in the City. Because of the nature of these parks, geographic subareas would be unnecessary. However, for community parks there is likely to be a need for several collection and expenditure zones because of the attributes of the particular community parks. For the other impact fee categories recommended for recalibration and for municipal facilities, the number of collection and expenditure zones will be reevaluated. As discussed further under respective categories, the rational nexus requirement is one of the reasons why streets and storm sewer are not recommended for recalibration as impact fees. POLICE The police impact fees should be recalibrated to reflect changes in levels of service, costs and other related factors. There would be a number of components for the police impact fee. These would include police stations/storefronts, vehicles and other equipment, police portion of communications system as well as other relevant capital assets. FIRE/RESCUE It is estimated that about 80% of the calls for fire/rescue pertain to emergency medical facilities. As the City continues to grow and increase in population and employment, there will be an increase in calls for service. TA recommends that the fire/rescue fee be recalibrated to reflect the latest levels of service cost and other relevant factors. Based on the provisions of the Fire Assessment, no fire assessment monies are spent for capacity expansion. Therefore, there is no duplication of payment. There are likely to be several components to the fire/rescue fee. These include stations, apparatus and other equipment as well as communications. 3 PARKS TA recommends that the park impact fee be recalibrated to reflect the current level of service and higher costs as well as other appropriate factors. There would be several components to the park impact fee. At a minimum these would include regional parks, community parks as well as park vehicles. The impact fees would be collected to enable the City to maintain its current level of parks serving new development. It is likely that the park impact fee would be applied solely, against residential. As indicated above, it is likely that there would be several collection and expenditure for some categories of the parks in order to meet the rational nexus requirements of impact fees. SOLID WASTE Since the implementation of the original impact fees, the type of service provided by the solid waste department has changed. At the present time, the solid waste services provided by the City are provided to single-family units and multifamily buildings having four or less multifamily units. The reality is that in the future there will be very few of these types of residential units being built (although there might be some teardowns and replacements of the same units for which there would be no impact fees collected). Therefore, the likelihood of the City collecting more than minimal revenues for the solid waste vehicles is very low. Another component of the solid waste capital assets is the street sweepers. It is probable that the total asset value of the street sweepers citywide is only about $1.5 million. TA recommends that the street sweepers be reflected under the municipal facilities (general services administration) impact fee category. In conclusion, TA recommends that the solid waste category be eliminated from the new impact fee schedule. STREETS The City of Miami is somewhat unique for cities collecting street impact fees. Because Dade County has authority for all transportation, the City is responsible for capital expenditures for local and some collector streets only. By definition, the local and collector streets have a relatively small geographic area in which there is a direct benefit to those using the street. Consequently, because of recent impact fee case law, there would need to be a multitude of collection and expenditure zones within each of the geographic subareas of the City in order to meet this more strict rational nexus requirement. This would dramatically dilute the impact fees collected for streets for any one specific project. Another issue is the need to identify street projects which enhance capacity. Most of the local and collector street projects do not truly expand capacity. Therefore, there would be relatively few projects that would be likely candidates for continued collection of a street impact fee. A third issue pertains to who benefits from the local and collector street improvements, assuming that there is capacity enhancement. Although new trips would definitely benefit, it is likely existing trips as well as possibly some through trips would also benefit. Therefore, additional 4 local monies would have to supplement the impact fees that night be provided within this small collection and expenditure zone. At the time the original impact fees were prepared, it was estimated that approximately $1 million would be collected on average annually from the streets category. Assuming that the street impact fee is eliminated in the next impact fee schedule, the questions becomes what other revenue sources might there be to cover this lost revenue. One is the increased monies from the gas tax fund. Approximately $3.5 million per year has been utilized from the gas tax fund to pay the street light bill. This will be released from the gas tax fund and in the future paid by the General Fund. In addition, TA recommends that equipment utilized by the City for street operations be reflected in the municipal facilities and equipment category. This inclusion of equipment should generate hundreds of thousands of dollars. STORM SEWER Since the adoption of the original storm sewer impact fees, the City has wisely implemented a stormwater utility. This stormwater utility benefits existing and new development and also covers operating expenses and will continue to enable the City to address the stormwater issues. The current storm sewer impact fee, which is very low, is almost exclusively being utilized to pay for storm sewer lines being built on the local streets for which impact fees were used. Many of the same reasons for recommending against continued implementation of streets under a new impact fee schedule pertain to the storm sewer. New capacity of storm sewer lines is only being provided along with the local and relevant collector streets. To meet the recent impact fee case law findings, there may need to be multiple collection and expenditure districts. There is also the issue of whether other demand sources besides new growth benefit from the new storm sewer lines. TA recommends that the storm sewer expenditures currently being paid utilizing impact fees be reviewed to ascertain whether they are more appropriate for the stormwater utility. Those projects which are not applicable should be paid for by the same expenditure source as the local streets for which they are being constructed. MUNICIPAL FACILITIES The municipal facilities category is currently referred to as general services administration. TA recommends that this impact fee category be expanded and renamed to include all municipal facilities funded by the General Fund not discussed in the above categories. In addition, there should be at one other category, equipment. This would include all vehicles and relevant equipment paid for by the City General Fund that are not included in the other impact fees recommended above. It is likely that for the vast majority of the facilities and equipment there will be one collection and expenditure zone. It is also likely that the municipal facilities fee amount would be substantially higher than the current general services administration amount. 5 • • Pik NEXT STEPS TA recommends that the City proceed with a Phase II analysis for the suggested impact fee categories of police, fire/rescue, parks and municipal facilities and equipment. Work Scope The tasks which should be pursued for each of the fees is as follows: Task 1: Recommend Land Use Assumptions Task 2: Ascertain Demand Factors and Level of Service for Relevant Public Facilities Task 3: Review Capital Needs and Costs and Allocate to Growth Task 4: Determine Need for and Calculate "Credits" to be Applied Against Capital Costs Task 5: Complete Impact Fee Methodology and Calculation Task 6: Conduct Funding and Cash Flow Analysis Task 7: Preparation of Impact Fee Report Task 8: Preparation of Impact Fee Ordinance Task 9: Presentations/Meetings Timing The time estimated to complete the impact fee report from the startup date is approximately four months. This assumes sufficient time for City staff to review the appropriate products. 6