Development Impact Fees

Frequently Asked Questions

• Determining whether or not your property is located in an Impact Fee area
• When do I have to pay Impact Fees?
• Single-family residential Impact Fee charges
• Obtaining Impact Fee estimates for multi-family and non-residential projects
• Can I obtain credits for dedicated land and facilities?
• What restrictions are associated with the provision of credits?
• How do I obtain credits for dedicated land and facilities?
• What is a credit agreement, and how do I obtain one if I need one?
• Impact Fees and development agreements
• Impact Fees and repayment agreements
• Should I call for assistance?
  

Determining whether or not your property is located in an Impact Fee area

Most of the impact fee area boundaries are associated with major streets, waterways or other distinguishing features. General maps are provided in section 3 that show the boundaries of the impact fee areas. If the property in question is located on or near a boundary, and you are concerned that you may have to pay fees, call or visit the Development Services Department 602-534-7397 or the Planning Department 602-534-9624 to speak with someone about impact fees. If you have a good description of the property's location, Planning or DSD staff should be able to quickly identify which, if any, of the impact fee areas affects your property (even when in the county).

When do I have to pay Impact Fees?

Impact fees are paid when an improvement is made to a property or existing structure. Impact fees are not required when a change in zoning takes place or when property is subdivided. In situations where the property is still part of the County, but will soon be annexed, the City generally requires that permits be acquired and impact fees be paid for new construction once annexation has taken place. In those cases where a property owner attempts to avoid impact fees by building while under County jurisdiction and then applying for annexation, the City will likely refuse to annex the property.

Impact fees are paid to the Development Services Department at the time building permits are purchased. In those cases where a water and/or wastewater hookup is being provided, the fee is paid when the permit is issued for the water meter.

Single-family residential Impact Fee charges

Unless impact fee credits are involved or other special situations exist, single-family residential impact fees are relatively easy to determine, and will be calculated at the cashier’s counter when building permits are acquired. Impact fees for single-family residences can be found in the table provided with this document. To find the impact fees payable, first determine which particular impact fee area or sub-area contains your property, then look up the impact fees based on that fee area or sub-area. If you have problems identifying the proper impact fee area, call 602-262-7888 for assistance.

Obtaining Impact Fee estimates for multi-family and non-residential projects

Calculating the gross impact fees, offsets and net impact fees for multi-family and non-residential projects can be a complicated and difficult task. If the project is large enough to involve the dedication of arterial streets, major water or wastewater facilities, or other major facilities, credit issues will probably be involved and a consultation is highly recommended. If the proper information is provided, Development Services and Planning Department staff can provide detailed estimates of projected impact fees usually within a few days. The following information will be needed to provide impact fee estimates:

• Specific type of use

• Size of project in square feet

• Number of units (for multi-family)

• Size of property in acres

• Number and type of water meter (specify domestic or landscape use)

• Number of drainage fixture units

Certain uses will require more information. Some of these additional requirements include:

• Fueling positions for gas stations and convenience stores with gas pumps

• Number of rooms for motels and hotels

• Size of overall office or retail development (in addition to project size), if the project is part of a larger retail or office complex

Can I obtain credits for dedicated land and facilities?

Impact fee credits can generally be obtained for dedication of facilities that have been included in the infrastructure-financing plans. Credits are often provided for the following types of facility dedications:

• Provision of arterial street right-of-way and construction of arterial streets and associated facilities (sidewalks, landscaping, curb and gutter, lighting, etc.)

• Construction of oversized water and wastewater transmission lines, booster and lift stations, reservoirs, and pressure reduction valves.

• Provision of land for neighborhood parks and trails, and construction of trails and park amenities.

• Provision of land and facilities associated with regional flood control channels, basins, barriers, or storm drains.

• Provision of land and facilities associated with libraries, police stations, fire stations or equipment repair locations.

If a facility has not been explicitly included in the inventory of facilities that was used to develop the relevant infrastructure-financing plan, then credit can only be provided if EACH of the following requirements have been met:

• The facility should have been in the plan, but wasn’t because facility designs in the area changed (e.g. water distribution system specifications changed), because the facility was incorrectly omitted, or because important new information has become available.

• The facility is of a class normally included in the relevant infrastructure-financing plan. Note that in some cases, such as those involving regional drainage facilities or storm sewers in streets, certain classes of facilities are included in the calculation of fees in some areas but not others (e.g. credit is not available for any type of drainage facility in north Desert View).

• The director of the relevant department agrees that credit should be provided for the facility.

What restrictions are associated with the provision of credits?

The credit given for the dedication of land and facilities is determined by the infrastructure-financing plan for the area. In preparing the infrastructure-financing plans, the City developed a set of standards and costs for each of the facilities included in the plans. Credits are determined from these documents. A recent change to the ordinance allows for the valuation of land (for credit purposes) by an independent appraiser in those circumstances where the relevant department director feels it is appropriate.

Credits for a specific type of facility may only be used to reduce impact fees for that type of facility. Thus, credits for the construction of arterial streets may only be used to reduce the street impact fees owed, not to reduce the police, solid waste, or water fees owed. And credits may be used to reduce fees only for the relevant development or contiguous developments. This last restriction may be eliminated by a development agreement approved by City Council.

Credits are generally not granted until a facility and/or land has actually been dedicated to the City. In certain cases, especially those involving very large projects, some credits may be given before all facilities are dedicated when the developer has provided the City an irrevocable letter of credit adequate to cover the cost of constructing the facility for which credits are granted.

How do I obtain credits for dedicated land and facilities?

Credits for dedicated facilities and land will be given when all relevant departments are satisfied that the facilities to be provided meet the standards anticipated in the Infrastructure-Financing Plan. In practice this means that a list of facilities and associated specifications must be provided to the City for review and verification well before impact fees must be paid. In cases such as street or trail construction where the facilities conform to the City’s requirements and the City’s requirements are clear-cut, the submission of appropriate design plans, drawings and specifications will be adequate. In more complicated situations, such as those involving the dedication of water or wastewater facilities or neighborhood parkland, consultations must be held with representatives of the relevant department to ensure that the facilities meet the requirements of the City.

Staff in the Planning or Development Services Departments can provide basic information on all of the types of facilities for which credits could be provided, and can also provide contacts in the different departments that deal with credit issues. Developers are encouraged to follow the City’s standard procedure for street credits and to consider contacting representatives of the Parks, Recreation and Library Department when land may be available for dedication for neighborhood parks. Credits will be formally granted by DSD staff once the Planning Department and other involved departments give their consent. At that point, impact fee charges will be reduced by the amount of credits granted or fees already paid will be refunded.

What is a credit agreement, and how do I obtain one if I need one?

In complicated situations involving numerous parcels, multiple property owners, and/or several types of facilities, the City will enter into a credit agreement with a developer or developers that dedicate land and facilities. Credit agreements do not have to be approved by City Council and are relatively easy to prepare and administer. Credit agreements generally are used to establish an agreement between the City and others on such matters as:

• The description and value of the facilities and land that are to be dedicated to the City in return for impact fee credits.

• The distribution of the resulting credits to the different properties benefiting from the allocation of credits.

• Any agreements involving the provision of a letter of credit or other assurances of financial obligation, or the timing of the completion and dedication of the facilities.

DSD and Planning Department staff can prepare credit agreements that will be reviewed and approved by the Law Department and then signed by the parties involved. These agreements will be kept on file and DSD will honor these agreements as long as the facilities are dedicated in the manner specified.

Impact Fees and development agreements

In some extremely complicated situations, the City will enter into a development agreement that involves impact fees. Because development agreements must go to City Council for approval, and involve extensive legal review, these types of agreements are very rarely used to specify the amount and distribution of credits. Instances that may require development agreements include:

• Situations involving large-scale over-sizing of water or wastewater facilities where the credits must be spread over several non-contiguous areas to make the project viable for the developer or development consortium. These are special situations where the City encourages a developer or other entity to provide a very large facility such as a lift station, reservoir, or booster station.

• Situations involving complicated, large-scale developments where the City and the developer or development consortium are both providing infrastructure improvements according to a particular schedule and program. These agreements may include specific language on the types and amounts of credits that will be granted, since a whole range of other infrastructure-financing issues are being dealt within the agreement.

Impact Fees and repayment agreements

The City only enters into repayment agreements when oversized water or wastewater facilities are being constructed by developers. When these agreements are used, the City requires other subsequent users of the oversized facilities to repay a portion of the construction costs to the initial developer before connecting to the City’s water or wastewater system. Impact fee credits are given to the original developer who provides the oversized facilities ONLY FOR THE PORTION OF THE FACILITIES THAT THE INITIAL DEVELOPER ACTUALLY FUNDS once the repayment agreement is taken into consideration. The impact fee credits for the remainder of the facilities will go to the other developers that hook in to the oversized facilities and have to make payments to the initial developer.

Should I call for assistance?

Staff in the Development Services and Planning Departments are available to provide assistance to anyone who needs more information on potential or actual impact fees, or related issues such as impact fee credits. It is better to discuss impact fee and credit issues well before building permits are sought, particularly when the issues involved are complicated and involve several City departments. For additional information, please contact us.