Title
Conduct a Public Hearing to Consider/Discuss/Comment on the Updated Capital Improvements Plans and Potential Amendments to Impact Fees for the 2019 Roadway Impact Fee Update
Summary
MEETING DATE: October 27, 2020
DEPARTMENT: Planning
CONTACT: Aaron Bloxham, Planning Manager
Mitchell Corona, CNU-A, Planner I
APPROVAL PROCESS:
• The Capital Improvements Advisory Committee (CIAC) is required to provide written comments to the City Council prior to Council action on the updated Capital Improvements Plans or Impact Fee amendments for the 2019 Roadway Impact Fee Update. The minutes of this Public Hearing will serve as the written comments and will be forwarded to the City Council at the December 1, 2020 meeting.
Upon receiving the Committee’s written comments, City Council will hold a Public Hearing to consider adoption of the updated Capital Improvements Plans and the updated Roadway Impact Fee Ordinance, including any fee amendments. As required by state law, a 30-day Legal Notice for the Public Hearing has been posted in the McKinney Courier-Gazette.
STAFF RECOMMENDATION:
• After closing the Public Hearing, Staff recommends that the Commission make a motion to forward the updated Capital Improvements Plans and potential impact fee amendments for the 2019 Roadway Impact Fee Update to the City Council.
ITEM SUMMARY:
Status of the 2019 Roadway Impact Fee Update:
• Kimley-Horn and Associates, serving as consulting transportation engineers on this project, has completed a preliminary draft of the Capital Improvements Plan for Roadway Impact Fees (more commonly referred to as the Roadway Improvements Plan or RIP). The draft RIP identifies the transportation infrastructure needed to accommodate projected growth over the next ten years and the probable costs associated with each infrastructure project. Only projects listed in the RIP are eligible for the assessment of impact fees.
• Kimley-Horn has also completed a draft Roadway Impact Fee Update Report, which includes the draft RIP as well as considerable technical analyses, a detailed discussion of the computation of the maximum calculated impact fees, and a presentation of the data that establishes the maximum assessable roadway fee. Once finalized, this report will become a supporting document for the updated Roadway Impact Fee Ordinance.
• The maximum assessable fees included in the Roadway Impact Fee Update Report establish the maximum roadway impact fees per service unit and service area allowed by state law. This serves as a useful tool when City Council begins to consider the actual fee amounts to charge and who should bear the burden of paying for necessary roadway infrastructure.
Potential Amendments to Roadway Impact Fees:
• Potential fee amendments for the 2019 Roadway Impact Fee Update were presented at a Work Session of the City Council on October 6, 2020. The purpose of the Work Session was to provide an opportunity for the Council to generate policy discussion associated with establishing the actual impact fee amounts to charge and grace period of any fee increases.
• At the Council Work Session, Staff made the following recommendations for roadway impact fee amendments and the phase-in of fee increases:
o Roadway Impact fees for all residential and non-residential land uses should be adjusted to reflect the cost of construction increases (18%) from 2013-2020.
o Tables depicting Staff’s recommendation is shown in the attachments titled “Proposed Roadway Impact Fee - Common Land Use Summary Tables” and “Proposed Roadway Impact Fees Summary Table.”
o Staff has also created a series of city comparison charts to illustrate how the current and recommended fee amounts compare to other cities in the region. This comparison is included as an attachment to this Staff Report and titled “City Comparisons - Roadway Impact Fees.”
o Staff recommends a 9-month grace period (based on date of building permit) starting from the date the ordinance becomes effective before the new fees be imposed.
• Staff’s recommendation for roadway impact fees generally seeks to strike a balance between the construction cost increases and the City’s goals for strategic and economic growth and a financially sound government.
• Staff feels as though the recommendation to increase impact fees at a slower rate than residential roadway impact fees helps accomplish the City’s goal for attracting and growing the residential and non-residential tax base while still enabling the City to continue providing necessary roadway infrastructure through construction or the negotiation of development agreements.
Ordinance Administration Improvements
• Staff has been working with the City attorney to strengthen the legal framework of the Roadway Impact Fee Ordinance as it relates to the determination of required public infrastructure. Ordinance improvements for the determination of required public infrastructure will be presented to Council in December.
City Council Feedback
• Feedback received from Council regarding Staff’s recommendation for fee amendments, targeted incentives, ordinance improvements was generally supportive. Therefore, Staff will continue moving forward with the recommendations as they were presented to City Council on October 6th.
Remaining Project Schedule
• Over the next few weeks/month, Staff will adjust fee recommendations based on the feedback received from the Capital Improvements Advisory Committee and direction from City Council. We will then immediately publicize the fee recommendations via the study webpage and our builder/developer email distribution list (being sure to communicate this information directly to the Development Community and providing ample opportunity for feedback).
• The Public Hearing process for the approval of the capital improvements plans for impact fees and updated ordinances (including fee amendments) is scheduled to occur on December 1, 2020.
BACKGROUND INFORMATION:
• Chapter 395 of the Texas Local Government Code mandates that impact fees be reviewed and updated at least every 5 years.
• Updating Impact Fees involves 3 parts (as required by state law):
• Land Use Assumptions
The Land Use Assumptions contain growth projections on which an Impact Fee Ordinance is based. Projections for residential units and square footage of non-residential uses determine the infrastructure needed over the next ten years.
The updated Land Use Assumptions were considered by Capital Improvements Advisory Committee on August 27, 2019 and were approved by the City Council at the September 17, 2019 meeting.
• Capital Improvements Planning
Capital Improvement Plans for Impact Fees identify the infrastructure that will need to be constructed or expanded to accommodate the additional demand generated by development over the next ten years.
Staff has posted the draft Capital Improvements Plans on the City of McKinney’s website.
• Fee Setting / Adopting the Amended Ordinance
The final phase of the process includes the majority of policy discussion as the City Council considers the actual fee amounts to charge, the phase-in of any fee increases, improvements to the administration of the Ordinances, and how credits should be calculated.