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Home My WebLink AboutIR 10079 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10079 To the Mayor and Members of the City Council December 12, 2017 ter$4 Page 1 of 2 �i s SUBJECT: 2017 TRANSPORTATION IMPACT FEE STUDY RESULTS AND 1q �rA 1675 AMENDING ORDINANCE The purpose of this report is to provide an overview of the Transportation Impact Fee Study results and provide a schedule for the actions required to adopt the Study and amend the ordinance. The Texas Local Government Code Chapter 395 governs the imposition of impact fees. It and Chapter 30, Division VIII of the City Code require that the land use assumptions, capital improvements plan and maximum assessable fees be updated at least every five years. The 2017 land use assumptions, capital improvements plan and maximum fees, also known as Schedule 1 fees, are required to be adopted on or before February 5, 2018. The land use assumptions update includes amending the service area boundaries and growth projections for each service area over a 10-year horizon. The capital improvements plan update includes amending the list of impact fee-eligible projects and costs for the same time period based on the amended land use assumptions for each service area. The determination of the maximum assessable fees is based on the amended land use assumptions and capital improvements plan that were completed as part of the study. On 12/13/2016 the City Council approved a contract with Kimley-Horn and Associates, Inc. in City Secretary Contract No. 48543, M&C P-11980 to prepare the 2017 Transportation Impact Fee Study (2017 Study). The 2017 Study is comprised of the land use assumptions, capital improvements plan and a determination of the maximum assessable fees. With the study, two new active fee service areas have been identified; Service Area V in the southwest part of the City and Service Area PI for Panther Island. Service Area V was previously a "no-fee" area because of the low predicted growth in 2006 and 2013 in that area but the predicted development and capital needs over the next 10 years justifies converting it to and "active-fee" area. Service Area PI has been created in order to provide a funding source for the arterial network improvements necessary to serve the projected growth on Panther Island over the next 10 years. The net effect of the amendments is a citywide increase in the maximum assessable fees of 19 percent due to increased construction costs of the capital improvements plan. The 2017 Study is available for public review on the City's Transportation Impact Fee website (www.fortworthtexas.gov/impactfees/transportation) and the executive summary and PowerPoint summary are attached to this informal report. City staff has provided briefings on the updated land use assumptions, capital improvements plan and maximum assessable rates to the following stakeholder groups: the Capital Improvements Advisory Committee for Transportation Impact Fees (CIAC), the Development Advisory Committee (DAC), the Greater Fort Worth Builders Association, and the Real Estate Council. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10079 To the Mayor and Members of the City Council December 12, 2017 ter$4 Page 2 of 2 �i s SUBJECT: 2017 TRANSPORTATION IMPACT FEE STUDY RESULTS AND 1q �rA 1675 AMENDING ORDINANCE Staff are also scheduled to brief the Greater Fort Worth Association of Realtors. Multiple options for the collection rates, also known as Schedule 2 fees, were included in those briefings. The adopted 2013 collection rates are below the revenue-neutral cost sharing split between developers and the City. The staff proposed 2018 collection rates are approximately 40/60 cost sharing between developers and the City and are uniform across the City. The CIAC has unanimously endorsed the staff proposed collection rates. A public hearing on the Study is scheduled for January 9, 2018 for the purpose of hearing additional public input and comment. Staff and the consultant will present the results of The 2017 Study at the City Council Work Session on January 9, 2018. The proposed amendments to the Impact Fee Ordinance and adoption of the Study are scheduled for City Council action on January 23. If you have any questions comments or concerns please contact Randle Harwood at Randle.Harwood(a)-fortworthtexas.gov or 817-392-6101 . David Cooke City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS FORT WORTH Kimley>>� Horn EXECUTIVE SUMMARY Introduction Impact Fees are a mechanism for funding the public infrastructure necessitated by new development. Across the country, they are used to fund police and fire facilities, parks, schools, roads and utilities. In Texas, the legislature has allowed their use for water, wastewater, roadway and drainage facilities. Since 1989, they have been used to fund public water and wastewater improvements in the City of Fort Worth. Since 2008, they have been used to fund transportation infrastructure. In the most basic terms, impact fees are meant to recover the incremental cost of the impact of each new unit of development creating new infrastructure needs. In the case of Transportation Impact Fees, the infrastructure need is the increased capacity on arterial and collector roadways that serve the overall transportation system. The purpose of the 2017 Transportation Impact Fee Study is to identify the fee per unit of new development necessary to fund these improvements in accordance with the enabling legislation, Chapter 395 of the Texas Local Government Code. Impact Fee Basics Transportation Impact Fees are determined by several key variables, each described below in greater detail. Impact Fee Study The primary purpose of the 2017 Transportation Impact Fee Study is to determine the maximum impact fee per unit of new development chargeable as allowed by the state law. This determination is not a recommendation; the actual fee amount ultimately assessed is at the discretion of the Fort Worth City Council, so long as it does not exceed the maximum assessable allowed by law. The study looks at a period of 10 years to project new growth and corresponding capacity needs, as required by state law. The study and corresponding maximum fees must be restudied at least every five years. However, the study can be updated at any time to accommodate significant changes in any of the key variables of the impact fee equation. The 2017 Transportation Impact Fee Study was initiated prior to the five-year requirement due to the recent adoption of an updated Master Thoroughfare Plan. 2017 Roadway Impact Fee Study 1 November 2017 City of Fort Worth,Texas FORT WORTH Kimley>>� Horn Service Areas A Service Area is a geographic area within which a unique maximum impact fee is determined. All fees collected within the Service Area must be spent on eligible improvements within the same Service Area. For Transportation Impact Fees,the Service Area may not exceed 6 miles. In Fort Worth, this restriction necessitated the creation of 28 separate Service Areas. A map of the Service Areas can be found on Page 14. However, no impact fees may be collected in seven (7) of these Service Areas because no capacity related transportation improvement projects have been designated. Previously, there were eight (8) no fee service areas. With the 2017 Transportation Impact Fee Update Service Area V now has a calculated fee, and Service Area PI (Panther Island) was created as a new service area. In defining the Service Area boundaries, the project team considered the corporate boundary, required size limit, adjacent land uses, and topography. Since each Service Area has a unique maximum impact fee, the per-unit maximum fee for an identical land use will vary from one Service Area to the next. For this reason, the team avoided drawing a Service Area boundary through uniform land uses where possible. The service areas in the 2017 Transportation Impact Fee Study are consistent with those in the previous Transportation Impact Fee Study with slight modifications to include annexations since the previous study. Land Use Assumptions The Impact Fee determination is required to be based on the projected growth and corresponding capacity needs in a 10-year window. This study considers the years 2017-2027. Acknowledging that the parameters of the study (the corporate boundaries, Master Thoroughfare Plan, Comprehensive Plan, zoning maps, platting history, etc.) are changing constantly, this study is based on conditions as they were on July 1 1, 2017. One of the key elements in the determination of the impact fee is the amount of new development anticipated over 10 years. In order to arrive at a reasonable projection of growth, staff compiled a team of subject-matter experts from the Transportation and Public Works and Planning and Development departments to evaluate each of the twenty fee-charging service areas individually. A map of each service area was overlaid with an aerial photograph, preliminary and final plats, and 2017 Roadway Impact Fee Study 2 November 2017 City of Fort Worth,Texas FORT WORTH Kimley>>� Horn the Future Land Use Plan defined in the Comprehensive Plan. The team that studied these maps was comprised of the staff that administers zoning, platting and pre-development applications; Master Thoroughfare Plan alignments; construction plan reviews; and planning efforts. Vacant parcels were discussed and projected to either develop by 2027 or to remain undeveloped at that time, based on zoning, platting and pre-development history, utility availability, and any additional information regarding development potential or stated intentions. It was assumed that vacant parcels without recorded zoning or platting information would develop according to the land use specified in the Comprehensive Plan. Finally, tables were created to compare existing residential and employment data to the ultimate residential and employment figures anticipated in the Comprehensive Plan. The effort described above generated a percentage of the ultimate residential and employment figures anticipated within each service area by the year 2027. These projections can be found in the Residential and Employment Projections tables beginning on Pages 16-18. It is worth noting that the percentage of residential and employment expected by 2027 does not directly correlate to the percentage of the planned arterial network that will be required by that date. The Master Thoroughfare Plan, which defines the future arterial network, is not based solely on future growth projections; therefore, the percentage of the planned arterial network needed to accommodate future growth may exceed 100% of the total available thoroughfare network in some service areas. Transportation Impact Fee Transportation Improvement Plan (TIP) The Transportation Improvements Plan is distinct and separate from the City's traditional Capital Improvements Plan (CIP). The TIP is simply the list of projects eligible for funding through impact fees. Only those capacity improvements included in the City's adopted Master Thoroughfare Plan are included in the TIP. Capacity improvements may include the addition of lanes, intersection improvements, or the extension of a new road. Resurfacing or other maintenance activities do not qualify as capacity improvements under impact fee law in Texas. The cost of the TIP is one of the fundamental factors in the calculation of the per-unit maximum impact fee. The TIP's cost was calculated through systematic evaluation of each eligible project. The project team visited each project site to determine the project scope, the presence of any special conditions (such as the need for significant drainage improvements or railroad crossings) and whether 2017 Roadway Impact Fee Study 3 November 2017 City of Fort Worth,Texas FORT WORTH Kimley>>� Horn various additional construction costs were applicable (such as construction phase traffic control). In determining project limits, the team identified roadway segments with uniform need. For example, Beach Street is separated into several projects in the TIP. From the SH 170 Eastbound Frontage Road to 2,045' south of the SH 170 Eastbound Frontage Road Beach Street is a new project; from 410' north of Saratoga Downs to Timberland Boulevard Beach Street is a median lanes project; and from Timberland Boulevard to Golden Triangle Boulevard Beach Street is a previously completed project still eligible for impact fees. The team utilized a standard methodology for estimating construction costs once the project scope was defined. Referencing multiple arterial projects within Fort Worth and the immediate vicinity, uniform costs were determined for the major items of work, additional construction items, and project delivery costs. Section III provides a listing of the 10-Year Transportation Improvements Plan by service area in Tables 2.A — 21 and maps of the TIP by service area in Exhibits 3.A — 31. Finally, detailed cost projections by project can be found in Appendix A. It should be noted that these cost projections are based on conceptual level planning, and are subject to refinement upon final design. Also, note that on the detailed cost projections, where applicable, funds previously collected by the City for future improvements have been deducted from a project's eligible total. Only those projects listed in the TIP are eligible to utilize impact fee funds. In order to optimize future flexibility, all capacity improvements included in the Master Thoroughfare Plan are included in the TIP and will be eligible to utilize impact fee funds. The recently approved Master Thoroughfare Plan identified several facilities that were downgraded from their previous functional classification. These identified downgraded facilities were removed from the TIP project list in the 2017 Transportation Impact Fee Study. Only the costs associated with providing the additional capacity necessitated by 10 years of growth can be used to calculate the maximum impact fee. In order to calculate the maximum impact fee, the total cost of the TIP at build-out was reduced to account for (1) the portion of new capacity that will address existing needs, and (2) the portion of new capacity that will not be necessitated until beyond the 10-year growth window. A ratio that compares 10 years' demand for capacity to the net supply of capacity (total new capacity in the TIP minus existing needs) can be calculated. That ratio, which may not exceed 100%, is then applied to the cost of the net capacity supplied. The result is a determination of the costs attributable to the next 10 years' growth, which is then used to 2017 Roadway Impact Fee Study 4 November 2017 City of Fort Worth,Texas FORT WORTH Kimley>>� Horn calculate the maximum impact fee in accordance with state law. The result is known as the recoverable cost of the TIP. Impact Fee Calculation In simplest terms, the maximum impact fee allowable by law is calculated by dividing the recoverable cost of the TIP by the number of new service units of development. In accordance with state law, both the cost of the TIP and the number of new service units of development used in the equation are based on the growth and corresponding capacity needs projected to occur within a 10- year window. This calculation is performed for each service area individually; each service area has a stand-alone TIP and 10-year growth projection. In practice, there are many factors that complicate this calculation. The maximum impact fee allowable by law for each service area is calculated in Table 7. A detailed discussion of the calculation precedes Table 7, found on Pages 102-107. Notice that Service Areas H, I, J, K, P, Q, and R are not included in Table 7. These Service Areas are "No Fee" areas, where no impact fee will be assessed for new development as consistent with the previous Transportation Impact Fee Study. Collection and Use of Transportation Impact Fees Transportation Impact fees are assessed when a final plat is recorded. The assessment defines the impact of each unit at the time of platting, according to land use, and may not exceed the maximum impact fee allowed by law. Transportation Impact Fees are collected when a building permit is issued. Therefore, funds are not collected until development-impacts are introduced to the transportation system. Funds collected within a service area can be used only within the same service area. Finally, fees must be utilized within 10 years of collection, or must be refunded with interest. Adoption Process Chapter 395 of the Texas Local Government Code stipulates a specific process for the adoption of Transportation Impact Fees. An Advisory Committee is required to review the Land Use Assumptions and TIP used in calculating the maximum fee, and to provide the Committee's findings for consideration by the City Council. This Advisory Committee also reviews the Transportation Impact Fee ordinance and provides its findings to the City Council. The composition of the Advisory 2017 Roadway Impact Fee Study 5 November 2017 City of Fort Worth,Texas FORT WORTH Kimley>>� Horn Committee is required to adequately represent the building and development communities. The City Council then conducts a public hearing on the Land Use Assumptions, TIP and Impact Fee Ordinance. Since Transportation Impact Fees are already in place in the City Fort Worth, the 2017 Transportation Impact Fee Study only requires one public hearing. However, two public hearings may be held to assist in further educating the public and allowing time for review. Following policy adoption, the Advisory Committee is tasked with advising the City Council of the need to update the Land Use Assumptions or the TIP at any time within five years of adoption. Finally, the Advisory Committee oversees the proper administration of the Impact Fee, once in place, and advises the Council as necessary. 2017 Transportation Impact Fee Study Results Below is the listing of the 2017 Transportation Impact Fee Study's Maximum Assessable Impact Fee Per Service Unit (Vehicle-Mile): Service Maximum Fee Per Area Service Unit (per Vehicle-Mile) A $2,025 AA $205 B $3,316 C $1,144 D $463 E $3,449 F $675 G $1,799 L $441 M $3,164 N $845 O $3,560 PI $492 S $2,984 T $1,826 U $3,457 V $3,269 W $1,356 X $3,806 Y $2,348 Z $3,706 2017 Roadway Impact Fee Study 6 November 2017 City of Fort Worth,Texas FORT 1 ` FORT WORTH 2017 Transportation Impact Fee Study City Council Public Hearing K coley*Horn January 9 2018 FORT WORTH,, No Overview • Impact Fee Basics • Impact Fee Methodology • Stakeholder Involvement • Impact Fee Results and Collection Rates • Comparison Cities • Schedule 1 ` i ` Now Impact Fee Basics 1 ` i ` Impact Fee Basics: Overview • What Are They? • One-time fee assessed to recover infrastructure costs required to serve new development • Governed by Chapter 395 of the Texas LGC • Why impact fees? • Provides an additional funding tool for infrastructure systems • Provides for the orderly growth of the community 1 ` i ` Impact Fee Basics: Why Update? • Chapter 395 requires an update every 5 years • Update needed due to significant changes in 2016 Master Thoroughfare Plan update 1 ` 1 ` Impact Fee Basics: Components • What Are The Components? • Service Areas • Land Use Assumptions (LUA) • Transportation Improvements Plans (TIP) • Service Units • Maximum Fee Calculation • Results 1 ` i ` Impact Fee Basics: Service Areas • Impact Fee Service Areas • Funds collected within a service area must be spent on projects within the same service area within 10 years • Water (Service Area: Citywide) • Wastewater (Service Area: Citywide) • Transportation (Service Area: 6 miles) • Limited to Corporate Limits for roadways; Cannot include ETJ • 27 Service Areas; Currently 17 Fee Service Area • Updated Service Areas with new City Limits (Annexations) • One no-fee Service Area converted to a fee Service Area (v) • One new service area (PI) 1 ` i ` Impact Fee Basics: �= Service Areas , 1..r ,.� H L` M - T R- „ I.. u ❑. 1 -"�' �+ ,....r... ze»n.Aso•n.� iap.er eer satyr /�.IIi^,,/' ��~r•+•w Vie,—+i-�. 7150 n 4' �� nir• xewmprsas. Rsnky±Xnm •ri..rx 1 ` i ` Impact Fee Basics- Land Use Assumptions • Goal- Identify 10-Year Growth • Establishes Infrastructure Demands and Master Plans • Population and Employment Projections • Build upon 2013 assumptions. • 2017 - Updated based on permit data 1 ` i ` 10- Year Growth Prea°e� m� re�. ®per , r SAB-d., M, r • Based on Recent Plats and PDCs � • Reasonable Density Estimates based onf Future Land Use Plan �`� • Compared to Historic Growth s 1 ! WORTH, Example Land Use Table Service Year Dwelling Employment (Square Feet) Area Units Basic Service Retail Total 2017 10,618 7,325,000 1,163,000 59,000 8,547,000 77% 46% 26% 3% 38% A 2027 12,274 1 9,800,000 2,523,000 1,369,000 13,691,000 90% 1 62% 1 56% 67% 1 61% Carrying Capacity 13,701 1 15,818,000 1 4,480,000 2,055,000 1 22,354,000 1 ' 1 ' Impact Fee Basics: Transportation Improvements Plan • Design, Construction, Legal, Fiscal, ROW, etc. • 2016 Cross Sections (Task 2) • 5-yr C I P vs. 10-yr Impact Fee C I P (TIP) • Completed, Underway, and Future Projects • Development Ordinances • Zoning • Development Rules and Regulations • Construction Standards and Details Impact Fee Basics: -I p Transportation Improvements Plan r - FORTWORTH, MOM 7 Impact Fee Basics: Transportation - Improvements Plan Y FORT 1 ` Impact Fee Basics: Transportation Improvements Plan Items Payable with Impact Fees • Components that can be Components that cannot paid for through an impact be paid for through an fee program: impact fee program: J Construction cost of capital Projects not included in the improvements on the CIP CIP • Roadway to thoroughfare Repair,operation and standard maintenance of existing or • Traffic signals,bridges, new facilities sidewalks,etc. Upgrades to serve existing J Survey and Engineering fees development J Land acquisition costs, Administrative costs of including court awards operating the program J Debt Service of impact fee CIP J Study/Update Costs ORT WORTH. Impact Fee Basics: . Transportation AA Improvements Plan a Legend I Impact Fee Eligible-Median Impact Fee Eligible-New Impact Fee Eligible-Previously Completed =Impact Fee Eligible-Widening cm�arwnr�5.a� —Non-Impact Fee Eligible 5 T Local Roads 1 ` i ` Impact Fee Methodology • How are Impact Fees Calculated? • Land Use and Population Projections • Develop 10-Year Impact Fee TIP • Remove costs associated with existing development and growth at 10+ years • Calculate Pre-Credit Max Assessable Impact Fee Impact Fee Per Service Unit Recoverable Cost of the CIP($) New Service Units • Credit Calculation 1 ' 1 ' Calculate Max Fee Determine the max assessable fee per service unit Impact Fee Per Service Unit Recoverable Cost of the TIP($) New Service Units Recoverable Cost of TIP $63,078,617 Vehicle-Miles 34,446 Max Impact Fee per Service $2,025 per Veh-Mile Unit Max Impact Fee per Single $9,821 Family 2013 Max Impact Fee Per $12,948 Single Family Unit 2013 Adopted Rate Per Single $3,000 Family Unit 1 ' i ' Council Sets the Collection Rate Growth Pays for Growth City Pays for Growth 0% Range of Allowable 100% (No Fee) Collection Rates (Maximum Assessable Fee) 1 ` 1 ` Impact Fee Process • One-time fee • Only assessed to new development • Maximum Impact Fee is assessed at Final Plat • Collection Rate Impact Fee is charge pgiLat Building Permit 1 ` i ` Stakeholder Involvement 1 ` i ` Stakeholder Presentations • CIAC (Planning Commission) • August 23, 2017 • September 27, 2017 • October 25, 2017 • November 17, 2017 • Development Advisory Committee • November 16, 2017 • Fort Worth Builder's Association • November 14, 2017 • Fort Worth Real Estate Council • November 27, 2017 1 ` i ` Impact fee results and proposed collection rates 1 ' 1 ' Collection Rate Options RATE •• • lflzmmr� A—Business as Usual Maintain current fee amounts (34.4%of Maximum*) (2013 Collection Rates) B—40%of Maximum New collection rate would be 40%of city-wide average maximum fee C-Business as Usual Apply a 25% inflation factor to current fee amounts plus Inflation to account for future inflation and construction cost (43.3%of Maximum*) increases (2013 Collection Rates *1.25) D—50%of Maximum New collection rate would be 50%of city-wide average maximum fee *Percent of Maximum Based on 2017 Study FORT 1 ' Comparison Cities vs. Fort Worth Collection Rate Options Roadway Impact Fees Comparison-Single Family $6,000 $5,000 $4,000 $3,000 Current Fort Worth(2013) $2,000 $1,000 $0 Burleson Denton(2015) Mansfield Keller(2015) Frisco(2012) FlomrMound Mclunney Colleyville (2017) (2015) (2015) (2013) (2012) FORT WORTH., Collection Rate Options MMMMM Single Family $3,000 $3,489 $3,750 $4,361 Home Apartment Unit $1,860 $1,971 $2,325 $2,464 3,000 ft2 restaurant* $15,143 $27,401 $18,928 $34,250 10,000 ft2 $30,525 $37,223 $38,156 $46,530 office* 50,000 ft2 $147,938 $189,638 $184,922 $237,038 Retail* 300,000 ft2 $194,625 $258,975 $243,281 $323,775 Warehouse* 'Non-residential collection rates would continue to have a 25%reduction from residential collection rates 1 ' i ' Comparison Cities vs. Fort Worth Collection Rate Options Roadway Impact Fees Comparison-Single Family $5,000 Option D $4,000 Option C Option B $3,000 Option A $2,000 $1,000 $0 Burleson Denton(2015) Mansfield Keller(2015) Frisco(2012) Flower Mound Mclunney Colleyville (2017) (2015) (2015) (2013) (2012) FORT WORTH.; FORT WORTH ROADWAY FUNDING SOURCES(2017) Impact Fees(Paid) $78,436,001 Developer Built(Credits) $42,400,000 Bond Funded (2007,2008,2014) $446,740,000 28 rORT WORTH. Roadway Funding Needs Over Time (2017 Dollars) $1,600,000,000 $1,476,413,238 $1,400,000,000 $1,200,000,000 $946,878,849 $1,000,000,000 / $843,280,386 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $0 2008 2013 2017 29 FORT WORTH., Collection Rate Options MM M Single Family $3,000 $3,489 $3,750 $4,361 City staff and Home CIAC recommend Apartment Unit $1,860 $1,971 $2,325 $2,464 Option C 3,000 ft2 restaurant* $15,143 $27,401 $18,928 $34,250 10,000 ft2 $30,525 $37,223 $38,156 $46,530 office* 50,000 ft2 $147,938 $189,638 $184,922 $237,038 Retail* 300,000 ft2 $194,625 $258,975 $243,281 $323,775 Warehouse* 'Non-residential collection rates would continue to have a 25%reduction from residential collection rates 3U 1 ` i ` ON Schedule 1 ` i ` Schedule: • January 9, 2018 — Council Public Hearing and Council Consideration of Transportation Impact Fee Study • January 23, 2018 — Council Meeting to Adopt the Transportation Impact Fee Ordinance • March 1, 2018 — Effective Date QUESTIONS Thank you