Item 6ACity of Southlake, Texas
M E M O R A N D U M
April 7, 2008
TO: Shana Yelverton, City Manager
FROM: Greg Last, Director of Economic Development
Consider Ordinance 657-B, an ordinance revising impact fees on new land
SUBJECT:
development in the City of Southlake, Texas for water, wastewater and
roadway facilities necessitated by such new development; adopting revised
land use assumptions for the city; adopting revised Capital Improvements
Plans for water, wastewater and roadway improvements; providing for the
assessment, payment and time of payment of water, wastewater, and
roadway impact fees; providing for review of water, wastewater and
roadway impact fees and the fee schedules; providing for the placement of
revenue collected from water, wastewater and roadway impact fees into
water and wastewater impact fee accounts and roadway impact fee accounts
established for that purpose; providing for offsets and credits, providing for
refund of unexpended funds; providing for use of funds derived from water,
wastewater and roadway impact fees; providing that impact fees may be
pledged toward payment of bond issues and similar debt instruments.
______________________________________________________________________________
Action Requested:
Approve the 2nd reading of the ordinance cited above.
Background
Information:
The Local Government Code, Chapter 395, allows for cities to charge
impact fees for water, wastewater, and roadway capital improvements.
Southlake has charged water and wastewater impact fees since 1990 and
roadway impact fees since 1996. One of the provisions of this chapter
calls for periodic updates to the ordinances and related studies adopting
the impact fees. City staff have been working with a variety of consultants
over a year to prepare and update the required reports and capital
improvement plans.
A briefing on the status of these items was presented during your work
session on March 4, 2008 at which time Council directed staff to evaluate
many variables related to the actual fees adopted and make a
recommendation for Council to consider.
Staff met soon thereafter to discuss various aspects of fee determination
and formulated the following recommendation:
Water Impact Fee: Increase current fee by 10%
Wastewater Impact Fee: Increase current fee by 5%
Roadway Impact Fee: Increase the current fee by 15% across most
land use categories with the following exceptions:
Hold the five (5) “Office” categories at the current fees (i.e.
o
0% increase)
Two other categories of land use were limited in the
o
amount of increase to the current fee based on the
“maximum fees” identified by the studies. These were
“Apartment / multi-family” which is limited to a 5%
increase so as not to exceed the maximum fee and
“Retirement Community” for which the current fee exceeds
the maximum fee, resulting in a recommendation at the
maximum fee level.
On March 24, 2008 staff met with representatives of the development
community, both residential and commercial, to discuss the impact fee
research and reports to date, as well as the fee recommendation from staff.
Their comments are represented by:
Increases to development fees stifle development.
Impact fees are only a part of the overall fees paid for
development.
The summaries do not include the Fort Worth “pass-thru” fees.
Even the simplest of plat revisions imposes the new fees.
Impact fees can be in multiples on a particular development due to
individual business / restaurants either desiring or demanding
individual water meters.
Larger projects are charged exponentially increased fees based on
the equivalency factors required for larger water meters.
There was considerable discussion related to the proposed fees, the time
evolved since the last fee changes and the actual fee increases in
comparison to the percentage fee increases. In conclusion there was a
general consensus that the fee increases as proposed by staff would be a
rational compromise they would be willing to support if approved as
recommended, with one addition:
They would like a transition period from the date of Council
adoption of the ordinance until the new fees are actually assessed.
This is primarily requested due to projects that are either “in
progress” or near term and financial aspects are already in place.
Recognizing this, staff is proposing the fees be assessed beginning
October 1, 2008, the beginning of the new fiscal year.
On April 1, 2008 City Council approved the first reading of the ordinance
with the fees as recommended by staff, with the understanding that there
would be additional research and benchmarking of proposed fees and
nd
continued discussion on the fees to be adopted at the 2 reading.
Financial
Considerations:
The Capital Improvements Advisory Committee approved a Status Report
on August 24, 2007 which was provided to Council on September 12,
2007.
Citizen Input/
Board Review:
This process has been led by the Capital Improvements Advisory
Committee (Planning and Zoning Commission) and they have been
intimately involved in all aspects of the update.
All documents required to be made available to the public for review have
been made available prior to the date of publication of the public hearings
in the newspapers.
Legal Review:
The City Attorney’s office (Wayne Olson) has been involved throughout
this update process.
Alternatives:
1. Approve the fees as recommended by staff.
2. Approve fees as determined by City Council.
Supporting
Documents:
The following documents are attached for your reference.
Ordinance No. 657-B (150+ pages)
Land Use Assumptions Report
Water and Wastewater Capital Improvements Plan
Roadway Capital Improvements Plan
CIAC summary comments to Council
Staff
Recommendation:
Approve ordinance No. 657-B adopting fees as recommended by staff, and
to be assessed beginning October 1, 2008.